Your Board of Directors takes pleasure in presenting their 40thAnnual Report
on the performance of the Company, together with the Audited Annual Accounts for the year
ended 31st March, 2023 and reports of the Statutory Auditors and the Comptroller and
Auditor General of India thereon.
1. FINANCIAL RESULTS
The financial performance of the Company for the year ended 31st March, 2023 is
summarized below: (Rs. in lacs)
Particulars |
2022-23 |
2021-22 |
Revenue from operations |
0.00 |
0.33 |
Other income |
210.90 |
281.43 |
Total Income |
210.90 |
281.76 |
Total expenditure |
722.21 |
894.63 |
Profit/(Loss) before tax |
(511.31) |
(612.87) |
Other Comprehensive income/(loss) |
0.00 |
(4.19) |
Total comprehensive income/(Loss) |
(511.31) |
(617.06) |
2. RESERVES [Section 134(3)(i)]
Company has not transferred any amount to reserves due to continuous losses.
3. DIVIDEND [Section 134(3)(k)]
In view of the losses at the end of the Financial Year 2022-23, the Board of Directors
did not recommend any dividend on the equity shares for the year ended 31st March, 2023.
4. OPERATIONS AND OVERALL PERFORMANCE
During the year under review, pursuant to CCEA order for closure and shutting of
operations, HFL had stopped its operations.
5. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY:
i. DECISION FOR CLOSURE OF HFL
HFL Board at its meeting held on 30.07.2019, after considering all options, concluded
that sustainable operations of HFL is not feasible
and recommended for closure of the unit subject to approval of the administrative
Ministry. The Board of HOCL, parent company of HFL, at its meeting on 09.08.2019 has also
given ‘in principle approval for closure of HFL subject to approval of
Administrative Ministry.
ii. CCEA APPROVAL
HFL had received letter from Ministry of Chemicals And Fertilizers, Department of
Chemicals and Petro chemicals vide File. No. 9-5101506/2019-Ch.III dated 29.01.2020
informing the decision of Cabinet Committee on Economic Affairs (CCEA) for closure and
shutting of operations of HFL.
HFL has received approval of shareholders for the shutting down of the plant/unit and
closure of the company and to sell or otherwise dispose of the whole or substantially the
whole of the undertaking of the company through postal ballot notice dated February 10,
2020.
iii. SALE/DISPOSAL OF HFL FREEHOLD LAND
HFL is in the process of sale of land and the subject to receipt of NOC from TSIDC/TS
Govt.
iv. PLANT AND MACHINERY AND OTHER MOVABLE ASSETS
Sale of Plant & Machinery and other movable assets was done through MSTC as per
decision taken by CCEA on 29.01.2020 and was executed as per DPE guidelines. HFL has only
one plant/unit located at Rudraram, District Sangareddy in Telangana.
v RECEIPT OF GOI INTEREST FREE LOAN HFL had received interest free loan of Rs.73.70
crore from GoI on 26.05.2020. On 15.03.2022 HFL received an additional amount of Rs.2.17
crore from GoI. As per GoI order HFL to utilize funds for payment of liabilities viz.
VRS/VSS to existing employees, Clearing liabilities of Ex- employees, Statutory dues and
secured / unsecured creditors, etc. related to shutting down of plant / unit of HFL as per
CCEA decision dated 29.01.2020.
vi. OBTAINING MLF FUNDING FROM MOEFCC
FOR THE PLANT CLOSURE
In case of closure of HCFC-22 plant, Multilateral Fund (MLF) is providing the financial
assistance for this process through World Bank. HFL is in touch with DCPC and MoEFCC on
MLF funding.
A DO letter No.42/31/2017-PMU-OC dated 28- Sep-2021 addressed to Director (C&PC),
from Honble Additional Director (Ozone Cell), MoEFCC and intimated that an email was
received from World bank and informed that MLF funding will not be provided to HFL since
closure decision was taken by GoI and HFL
L II I \
would be closed by December, 2021 no further intervention from MoEFCC is admissible as
per the rules and procedures of Ex-Com of the MLF.
vii. VRS -2020 SCHEME
The VRS-2020 scheme is implemented in the company vide Part-I Order No.01/2020, Dated:
19.02.2020, accordingly 65 employees were relieved, 16 employees got superannuated, (3)
three employees resigned and other 05 employees were transferred to Hindustan Organic
Chemicals Limited (HOCL).
6. IMPACT OF COVID-19
The pandemic Covid-19 has significantly and adversely affected the business sentiments
and economy in general. Company has evaluated the impact of COVID - 19 on the functioning
of the company till the year end which is insignificant considering the overall operations
of the company for the year and the decision of the Government to close the company.
7. POSTAL BALLOT
HFL has conducted postal ballot process during the year 2022-23 for appointment of Shri
Awijit Rakshit and Shri T P Sachidanandan as Nominee Directors.
8. SHARES
The Authorized Share Capital of the company is Rs. 21,00,00,000 and the paid up capital
of the company is Rs.19,59,91,000. The companys shares are listed in BSE (Scrip ID:
524013). During the period under review, the company has not: (i) bought back any of its
securities (ii) issued any sweat equity shares (iii) issued any bonus shares (iv) provided
any stock option scheme to employees.
i
9. THE RIGHT TO INFORMATION ACT, 2005.
In consonance with the provisions of the Right to information Act, 2005, Company has
appointed Appellate Authorities/ Public Information officer at the office of the company
to respond effectively to the request of the applicants under the acts in synchronization
with the direction of Central Information Commission (CIC), for promotion of Institutional
transparency within the public authority through proactive and effective implementation of
section 4 of the RTI Acts, 2005.
10. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
The company was not required to transfer any amount towards IEPF
11. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
In view of the COVID-19 pandemic and restrictions on the movements apart from social
distancing, the MCA vide circular dated 19th March, 2020 and subsequent
exemptions thereto to Section 173 (2) and Rule 4(2) of Companies (Meeting of Board of
Directors and its Powers) Amendment Rules, 2020, HFL has conducted all its Board Meeting
through physical mode and VC.
The Board of Directors met six (6) times during the financial year 2022-23 on: 24th
May, 2022, 4th August, 2022; 16th September,
2022 ; 9th November, 2022; 30th January,
2023 and 31st March, 2023.
For details of meetings of the Board, refer to Corporate Governance Report, which is a
part of this report.
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12. BOARD OF DIRECTORS
Board of Directors of the company was constituted. During the year, the following
additions / deletions were made:
1. Shri Shanil Lal, Executive Director & Unit-in-charge, was appointed as HOCL
Nominee Director of w.e.f.01.06.2022.
2. Shri. P O Luise, Chief Financial Officer was ceased as HOCL Nominee Director w.e.f.
01.12.2022.
3. Shri Yogendra Prasad Shukla, Director (Finance) was appointed as HOCL Nominee
Director w.e.f. 04.08.2022.
4. Shri T P Sachidanandan, Chief General Manager was appointed as HOCL Nominee Director
w.e.f. 01.12.2022.
5. Shri Sanjay Krishna Navhale was ceased to be Government Nominee Director
w.e.f.16.9.2022.
6. Shri Awijit Rakshit was appointed as Government Nominee Director w.e.f.28.10.2022.
Pursuant to the provisions of Section 203 of the Companies Act, 2013 the Key Managerial
Personnel of the Company as on March 31, 2023 are: 1. Shri. P O Luise, Chief Financial
Officer; 2. Mr Subramonian H, Company Secretary.
13. COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Company being a CPSE, appointment of all the Directors on the Board of the Company
are made by the Government of India/President of India and under the supervision, control
and directions of the DCPC and by parent company (HOCL) and the prescribed DPE Guidelines
are also
14. COMPANYS POLICY RELATING TO APPOINTMENT AND PAYMENT OF REMUNERATION AND DISCHARGE
OF THEIR DUTIES OF KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES Company has constituted
Nomination and Remuneration Committee under section 178(1) of the Companies Act 2013 and
complied the criteria for determining qualifications positive attributes and independence
of appointment and remuneration of a Key Managerial Personnel and other employees as
provided under Section 178(3) of the Companies Act, 2013.
15. FORMAL ANNUAL EVALUATION OF PERFORMANCE OF BOARD, ITS COMMITTEES AND INDIVIDUAL
DIRECTORS
The Company being a CPSU, is governed by the DPE Guidelines and the Annual Evaluation
of Performance of Board, its committees and of individual Directors are carried out by the
Administrative Ministry.
16. RATIO OF DIRECTORS REMUNERATION TO MEDIAN EMPLOYEES REMUNERATION AND OTHER
PRESCRIBED ELABORATE DISCLOSURES AND DETAILS
The Company being a CPSE which is under the supervision, control and direction of the
Administrative Ministry the prescribed DPE Guidelines are being followed in respect of
employees remunerations and DPE Guidelines are being followed, as regards other
prescribed Perquisites.
17. TRAINING OF BOARD OF DIRECTORS: The company furnishes set of documents and booklets
to the Directors on their joining the Board. This includes important data about the
performance of the Company, Memorandum
& Articles of Association, Corporate Governance guidelines, Delegation of powers,
Product line brochures etc. A copy of the monograph on position, duties and liabilities of
Directors is also circulated among the Directors.
18. COMMITTEES OF THE BOARD
The Committees of the Board includes, Audit Committee, Nomination and Remuneration
Committee, Share Transfer Committee and Stakeholders Relationship Committee. For details
of Composition and meeting of Committee, refer to Corporate Governance Report, which is a
part of this report.
19. INDEPENDENT DIRECTORS
DECLARATION
Company has obtained necessary declarations from the Independent Directors as
stipulated under Section 149(7) of the Companies Act, 2013.
20. ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule
12 of the Companies (Management and administration) Rules, 2014 is furnished in hfl.co.in.
21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information in accordance with the provisions required to be disclosed under Section
134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts)
Rules, 2014 Regarding Conservation of energy, Technology Absorption and Foreign Exchange
Earning and outgo are given at Annexure I, Form A and B to this Report.
22. RESEARCH & DEVELOPMENT:
As the company is in the process of closure of operations, R&D operations were not
carried out during the period.
23. INDUSTRIAL RELATIONS
Employee relations continued to be cordial throughout the year. Your Company has been
implementing reservation policies of GOI for SCs/STs/OBCs/Persons with disabilities.
Representatives of SCs/ STs Categories are associated in Recruitment of Departmental
Promotion Committees. As on 31.3.2023, there are no employees in your company.
24. ANNUAL RETURN
Pursuant to sub-section 3(a) of Section 134 of the Companies Act 2013, read with Rule
12 of the Companies (Management and Administration) Rules, 2014 an extract of the Annual
Return as at March 31, 2023 is available in the website of company.
25. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In accordance with the SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015, the Management Discussion and Analysis Report is annexed hereto in
Annexure - II and forms part of the Directors Report.
26. CORPORATE GOVERNANCE
The Company has complied with the requirements of Corporate Governance Code. Report on
the Compliance with Corporate Governance Code is attached as
Annexure-III
The certificate obtained from the Practicing Company Secretary regarding compliance of
the conditions of corporate governance are attached in Annexure - IV.
27. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the
Board hereby submit its responsibility statement:?
a) In the preparation of the annual accounts, the applicable accounting standards had
been followed along with proper explanation relating to material departures;
b) The directors have selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the company at the end of the financial year and of
the profit and loss of the company for that period;
c) The directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the company and for preventing and detecting fraud and other irregularities;
d) Cabinet Committee on Economic Affairs [CCEA], Government of India has approved the
closure and shut down of operations of the Company. Accordingly, company is no longer a
Going Concern Entity and
e) The directors have laid down internal financial controls to be followed by the
company and that such internal financial controls are adequate and were operating
effectively. Internal financial control means the policies and procedures adopted by the
Company for ensuring the orderly and efficient conduct of its business including adherence
to Companys policies, the safeguarding of its assets, the prevention and detection of
frauds and errors, the accuracy and completeness of the accounting records and the timely
preparation of reliable financial information.
f) The directors have devised proper systems to ensure compliance with the provisions
of
!1
all applicable laws and that such systems were adequate and operating effectively
28. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company do not have any Subsidiary, Joint venture or Associate Company.
29. DEPOSITS
The Company has neither accepted nor renewed any deposits during the year under review
and the company has not accepted any deposits during the previous years.
30. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE
COMPANIES ACT, 2013
There were no loans, guarantees or investments made by the Company under Section 186 of
the Companies Act, 2013 during the year under review and hence the said provision is not
applicable.
31. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
There were no contract or arrangements made with related parties as defined under
Section 188 of the Companies Act, 2013 during the year under review.
32. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS U/S 143 OTHER THAN THOSE
REPORTABLE TO CENTRAL GOVERNEMENT:
During the year, no frauds were reported by the auditors and the same is not applicable
to the company.
33. CORPORATE SOCIAL RESPONSIBILITY:
As the Company is making Continuous losses and the company is in the process of closure
the provision of Section 135 of the Companies act related to the CSR is not applicable to
the Company for the financial year 2022-23.
34. RISK MANAGEMENT
The company has put in place Risk Management process which includes risk
identification, risk assessment, risk evaluation, categorization and risk treatment plan
for mitigation of risks and escalation / reporting of risks to Board.
35. VIGILANCE
With the approval of the Ministry, an officer of the company has been nominated as
“Vigilance Officer” (Part time) from amongst the Officers of the Company to take
care of Vigilance functions. Vigilance activities have mainly been directed to check the
improvements in the existing systems and procedures through periodic checks and to
encourage preventive vigilance. The instructions of the Central Vigilance Commission
received from time to time have been implemented to strengthen the vigilance machinery in
the company.
36. MATERIAL ORDERS OF JUDICIAL BODIES/ REGULATORS
In the case of Rockwell Industries Limited vs. HFL, the High Court vide Order Dated:
02.11.2022 (Case No. COM.C.A. 16/2020) has directed HFL (Appellant) permitted to dispose
of the plant, machinery and other equipment through Metal Scrap Trading Corporation
Limited, a Central Government corporation. The appellant shall furnish the inventory of
plant, machinery and other equipment to decree holder, and decree holder shall also be put
on advance notice of date of conducting of auction. After successful auction, the
appellant shall inform the amount realised from out of the sale proceeds to the decree
holder; shall open a separate bank account and the proceeds of auction shall be kept in a
fixed deposit in said bank account and said bank account shall not be operated without
orders of this Court.
37. AUDITORS:
The Statutory Audit of your Company was conducted by M/s.Niranjan & Narayan,
Chartered Accountants, who were appointed as Statutory Auditors for the Financial year
2022-23 by Comptroller and Auditor General of India (C &AG) as per Section 139(5) of
the Companies Act, 2013, Auditors Report on the Accounts of the Company for the financial
year ended 31st March, 2023 forms part of Annual Report.
38. EXPLANATIONS IN RESPONSE TO AUDITORS QUALIFICATIONS
The comments of the Comptroller and Auditor General of India u/s 143(6)(b) of the
Companies Act, 2013 on the accounts of the company for the year 2022-23 is annexed to the
Annual Report. C&AG have decided not to conduct the supplementary audit of the
financial statements of the Company. CAG report is included in the Annual Report.
39. SECRETARIAL AUDIT
Board has appointed M/s. ARS & Associates Company Secretaries LLP (LLPIN: AAG-
3878) as a Secretarial Auditor of the company for the financial year 2022-23. The
explanations / comments made by the Board relating to the qualifications, reservations or
adverse remarks made by the Auditors in their report are furnished and forms part of
Annual Report. There were no adverse comments, qualifications or reservations or adverse
remarks in the Secretarial Audit Report.
40. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has generally complied with the Secretarial Standards issued by the
Institute of Company Secretaries of India.
41. THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL
Act, 2013
The company has complied with the provisions relating to the constitution of Internal
Complaints Committee under the Sexual Harassment of Women at the Workplace (Prevention,
Prohibition and Redressal) Act, 2013. Company has not received any case relating to the
sexual harassment of women at work place.
42. HEALTH AND ENVIRONMENT
The management has taken the great responsibilities for continuous monitoring and
protecting the health and environment as per statutory compliance. Company is following
all pollution norms.
43. FIRE & SAFETY PERFORMANCE
The Company pays special attention to ensure safety of the factory and workers employed
therein. The Company accords the same attention to safety aspects as it does to production
and productivity, be it in a personal safety, process safety, environment safety or
product stewardship and allocated adequate resources of men, machine, money, time and
energy to maintain the standards thus performance during the year was very good.
The Company continued to maintain good safety record in the financial year 2022-23.
A Mock Drill is a practice which trains an individual about the course of action to be
taken in case of real emergency occurs. This is one of the most effective technique to
train, aware & alert people in a process plant location. Since there are no employees
in HFL no Mock Drill was conducted.
44. IMPLMENTATION OF OFFCIAL LANGUAGE POLICY
During the year under report, your Company continued to promote Hindi as official
Language in day to day working in line with the Government policies for its intensive and
extensive efforts for progressive use of the official language.
45. PARTICULARS OF EMPLOYEES:
None of the employees of the company is drawing remuneration requiring disclosure
pursuant to the provisions of the Companies (Particulars of Employees) Rules, 1975.
46. LEGAL COMPLAINCE
The Company has complied with all the legal provisions effectively. Although it has
filed two petition to Company Law Board during the financial year 2011-12 regarding
condonation of delay in filing of satisfaction of charge documents of Life Insurance
Corporation of India, with the Registrar of Companies.
47. INSURANCE
All properties and insurable interest of the company including building, plant and
machinery and goods are adequately insured.
48. TRADING AND DEMAT FACILITIES FOR SHARES
The shares of the Company are compulsorily traded in Dematerialized mode. To facilitate
the shareholders to dematerialize the shares, the Company has signed the agreement with
both i.e. National Securities depositories Limited (NSDL and Central Depositories Services
(India) Ltd., (CDSL) under ISIN No. INE806J01013. 87.08% of the Share Capital of the
Company has been dematerialized, as on 31st March, 2023.
49. COMPLIANCE OF DPE GUIDELINES & POLICIES
The Guidelines & policies issued by the Department of Public Enterprises from time
to time are being complied with and implemented with the approval of the Board of
Directors/ Competent Authority.
50. CODE OF CONDUCT
The Company has adopted “Code of Conduct and Ethics” for the Directors and
Senior Executives of the Company as per DPE guidelines and as per HOCL (Parent Company).
The object is to conduct the Companys business ethically and with responsibility,
integrity, fairness, transparency and honesty.
51. ACKNOWLEDGEMENTS
I place on record my appreciation and gratitude to all the employees and others who had
extended their support and co-operation during the year to achieve the targeted goals of
the Company. In particular I am grateful to various officials of the Govt of India,
especially from the Ministry of Chemicals & Fertilizers, Department of Chemicals and
Petrochemicals, the Finance Ministry, Ministry of Environment, Forest and Climate Change,
Govt. of India, Govt of Telangana, Promoter Company i.e. HOCL and Board Members. I would
like to convey my sincere appreciation to our valued customers, suppliers, Statutory
Bodies, Investors, our bakers State Bank of India, Statutory/Govt Auditors etc. for the
continued support.
For and on behalf of the Board of Directors of Hindustan Fluorocarbons Limited
| Sd/- |
| (SAJEEV B) |
| Managing Director |
| DIN:09344438 |
| Place: Kochi, Kerala |
| Date: 17-05-2023 |
+91-9892691696
