Hindustan Fluoro Carbons Ltd Management Discussions

The Management of Hindustan Fluorocarbons Ltd (HFL) presents its Analysis Report covering the Performance and Outlook of the Company. The Report contains business perspective and prospects based on the current environment and strategic options to steer the Company through unforeseen and uncontrollable external factors. The Financial year of the company consists of 12 months ended as on 31st March, 2025.

INDUSTRY STRUCTURE & FUTURE OUTLOOK:

HFL manufactures HCFC 22 which is used as Refrigent gas and the same is used for conversion to PTFE. Due to uneconomical plant capacity, old technology conversion of HCFC 22 to PTFE is not financially viable. Therefore, HFL has represented the same before its administrative ministry and the company is under the process of closure as directed by CCEA.

KEY OPPORTUNITIES: Company is under the process of closure as directed by CCEA.

KEY THREATS INCLUDE: Not Applicable

SEGMENT WISE PERFORMANCE: The company is primarily having one segment i.e., PTFE

OUTLOOK & INITIATIVE FOR CURRENT YEAR

Company is in the process of closure as directed by CCEA.

INTERNAL CONTROL SYSTEM AND ADEQUANCY

Internal controls are supported by Internal Audit and Management reviews. Company ensures existence of adequate internal control through documented policy and procedures to be followed by the executives at various levels.

REVIEW OF FINANCIAL PERFORMANCE

The financial statements have been prepared in accordance with the requirements of the Companies Act, 2013 and generally accepted accounting principles. During the year under review pursuant to CCEA order for closure and shutting of operations, HFL had stopped its operations. During the year, the sales turnover is Nil as against Nil in the previous year.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

Pursuant to CCEA order for closure and shutting of operations of HFL, only Skelton staff were retained to look after the closure related activities and day to day matters of the Company. These skelton staff were transferred to Parent Company HOCL. Now, there are no employees on the rolls of HFL.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS

As per communication received from Ministry of Chemicals and Fertilizers, Department of Chemicals and Petrochemicals vide File. No. 9-5101506 /2019-Ch.IM dated 29.01.2020 informing the decision of Cabinet Committee on Economic Affairs (CCEA) on closure of Unit of HFL, during the year 2024-25 there were no significant changes to the key financial ratios, as no revenue was generated due to discontinuation of operations.

DISCLOSURE OF ACCOUNTING TREATMENT

As regards preparation of the annual accounts on a going concern basis is concerned, it is submitted that as per communication received from Ministry of Chemicals and Fertilizers, Department of Chemicals and Petrochemicals vide File. No. 9-5101506 /2019-Ch.IM dated 29.01.2020 informing the decision of Cabinet Committee on Economic Affairs (CCEA) on closure of Unit of HFL, together with timelines for implementation of the said directions, the process of closure is initiated by the Board. Accordingly, HFL has adopted IND AS 105 ‘Assets held for Sale and Discontinuing Operations and prepared the annual accounts on the basis of IND AS 105. The Company is no longer a Going Concern Entity and the same is also referred in the Statutory Auditors Report.

CAUTIONARY STATEMENT

Statement in this Management Discussion Analysis describing the Companys objectives, Projections, estimates and expectations may be forward looking statements within the meaning of applicable laws and regulations.