| The Directors are glad to present the 32nd Annual Report of the
company together with Audited Annual Accounts for the year ended 31st
March, 2015.
FINANCIAL RESULTS:[Section 134(3)(i)]
The financial performance of the Company for the year ended 31st March,
2015 is summarized below:
(Rs. in lacs)
Particulars Financial Year Financial Year
2014-15 2013-2014
Revenue from operations 3274.79 3134.45
Sales Turnover(net) 2915.07 2788.92
Gross Profit / (Loss)
for the year (47.45) (2209.67)
Less: Interest &
Financing Charges 209.56 143.89
Cash Profit / (Loss) (257.01) (2353.56)
Less: Depreciation 110.24 114.68
Profit / (Loss) for the year (367.25) (2468.24)
Add: Prior Period Adjustments 10.21 14.23
Net Profit (Loss) (377.46) (2482.47)
RESERVES: [Section 134(3)(j)):
Company has not transferred any amount to reserves due to the loss.
DIVIDEND: [Section 134(3)(k)]
In view of the accumulated losses at the end of the Financial Year
2014-15 are carried forward, no dividend was declared on equity shares
for the year ended 31.03.2015.
OPERATIONS AND OVERALL PERFORMANCE
Your Company has made Net loss of Rs.377.46 lacs from operations as
against the net loss of Rs. 2482.47 lacs of the previous year. During
the year, the sales turnover (net) was Rs.2915.07 lacs as against
Rs.2788.92 lacs in the previous year. This is mainly due to decrease in
sales realization of main product PTFE. During the year under report
production of PTFE was 107 MT as against 184 MT in the previous year.
During the year, 726.58 MT of CFM-22 was sold in the market against
555.17 MT in the previous year and balance quantity was used as feed
stock to manufacture various products including Fluoro Specialty
Chemicals and PTFE. Quality of all company's products continued to be
well accepted by our customers. Company has achieved 88% capacity
utilization was achieved as against 86% in the previous financial year.
In spite of better physical performance, financial performance was
badly affected due to the reasons mentioned above.
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
officers at all the units/ offices 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, the company has also appointed a
transparency officer that company has created necessary mechanism to
meet the objective to bring out transparency in the functioning of
organization as envisaged by RTI Act.
CORPORATE SOCIAL RESPONSIBILITY:
Companies act provisions related to the CSR is not applicable to the
Company for the financial year 2014-15.
Recognizing the obligation to the society both in the areas of
environment protection and social development, company has taken
initiatives towards implementing welfare schemes for uplifting the
quality of living of the community surrounding the area around the
factory. Company is giving aid to schools by way of paying salaries to
two Vidya Volunteers.
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.
THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL Act, 2013
Company has not received any cases relating to the sexual harassment of
women at work place.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
There was no contract or arrangements made with related parties as
defined under Section 188 of the Companies Act, 2013 during the year
under review.
COMPANY'S POLICY RELATING TO APPOINTMENT AND PAYMENT OF REMUNERATION
AND DISCHARGE OF THEIR DUTIES OF KEY MANAGERIAL PERSONNEL AND OTHER
EMPLOYEES.
Company has complied all the provisions related to the constitution of
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.
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Company had five Board meetings during the financial year under
review.
HEALTH AND ENVIRONMENT:
The management has taken the great responsibilities for continuous
monitoring and protecting the health and environment as per statutory
compliance. The environment is maintained clean as per standard
emissions norms and with respect to noise pollution norms prescribed by
Central Pollution Control Board and under guidelines of Ministry of
Environment and Forests, Govt. of India.
The health record of employees working in production Division is
maintained in the Health Register in Form 7.
FIRE & SAFETY PERFORMANCE:
The Company pays special attention to ensure safety of the factory and
workers employed therein.
The Company accords the same priority 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 is very good.
The Company continued to maintain good safety record without any major
accident of fire. The financial year 2014-15 was a zero accident year.
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.
A surprise Mock drill was conducted at site to analyze the capacities
of Plant, Equipment operating & employees skills towards Emergency
preparedness & response.
We are conducting Emergency Mock drill often or once in a year in
presence of external Authority i.e Director of Factories Telangana &
higher management of HFL in compliance with ISO 2000 - 2001.
BOARD OF DIRECTORS
Smt. Anitha Rajendra,IAS was ceased as Nominee Director with effect
from 09.09.2014.
Sri. Sanjeeva Narayan was appointed as BIFR Special Director with
effect from 04.02.2015.
Three Directors viz. Shri. Suresh Kumar R, Nominee Director (HOCL), Dr.
N J Gaikwad, HOCL Independent Director and Shri. Arun Agarwal, Nominee
Director (GOVT) is due for retirement by rotation at the ensuing 32nd
Annual General Meeting of the Company and eligible for re- appointment.
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. Official Language Implementation Cell of the
Company continued to function effectively.
ISO CERTIFICATION:
Company's quality management system is accredited as an ISO 9001:2008.
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 read
with 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, From A to this Report.
RESEARCH & DEVELOPMENT:
The company is continuously conducting the research and development to
deliver goods through innovative development;
a. It is actively involved in collaborative program with IICT &
Defense Research and Development Organization (DRDO).
b. Development of filled grades with modified PTFE are given at
Annexure I, Form B to this Report.
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. A statement showing representation of employees belonging
to Scheduled Castes/ Scheduled Tribes/ Backward classes /Minorities
categories is appended as Annexure-II to this report.
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.
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 lacunae in the
existing systems and procedures through periodic checks. The
instructions of the Central Vigilance Commission received from time to
time have been implemented to strengthen the vigilance machinery in the
company.
AUDITORS:
The Statutory Audit of your Company was conducted by M/s.S Daga & Co
Charted Accountants, who were appointed as Statutory Auditors for the
Financial year 2014-15 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,
2015 is at Annexure- III.
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 2014-15 has been annexed to the Annual Report for the period
2014-15 and forms part of the Annual Report.
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 consolation of delay in filing of
satisfaction of charge documents of Life Insurance Corporation of
India, with the Registrar of Companies.
INSURANCE:
All properties and insurable interest of the company including
building, plant and machinery and goods are adequately insured. As
required under Public Liability Insurance Act, 1991, the company has
taken necessary insurance cover.
TRADING AND DEMAT FACILITIES FOR SHARES:
The company shares are listed in Bombay Stock Exchange (BSE). Company
got ISIN No.INE 806J01013 and demat facilities with Central Depository
Services (India) Limited, (CDSL) and with National Securities
Depository Limited (NSDL) for the equity shares of the company. 84.48%
of the Share Capital of the Company has been Dematerialize the shares,
the Company has been Dematerialized as on 31st March, 2015- total
accounts Dematerialized is 1783 involving 16557950 shares (which
constitutes 84.48% of the share capital) .
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
In accordance with the Listing Agreement, the Management discussion and
analysis report is annexed hereto in Annexure - IV and forms part of
the Directors' Report.
RISK MANAGEMENT
In pursuance to comply with Clause 49(IV) (C) of the Listing Agreement
and Clause 7.3 of the DPE Guidelines on Corporate Governance for CPSEs,
The Risk Management process includes Risk Identification, Risk
assessment, Risk evaluation, categorization, Risks treatment plan for
mitigation of risks and escalation/ reporting of risks to Board. some
of the risks and concerns, which we are facing as follows:
- Energy intensive Technology and uneconomical plant size.
- Manpower cost is high.
- Investment is required to upgrade the technology of old plant to
reduce the cost of production.
- PTFE Prices are continuously reducing.
- Increasing Raw Material cost.
To mitigate the above risks your company has taken following action:
- MPTFE Project; Company has developed superior grades of PTFE and
started exporting the same.
- Company is in the process of refurbishment of the existing plant with
the help of Plan loan from GOI. This will increase the plant
efficiency.
- To reduce the dependency on PTFE Company is developing Fluro
Specialty Chemicals.
- Company is also exploring the possibility of increasing capability
and backward integration.
CORPORATE GOVERNANCE:
The Company has complied with the various requirements of Corporate
Governance. The details in this regard form part of this report in
Annexure-V.
SECRETARIAL AUDIT:
Board has appointed M/s.Ahalada Rao.V Associates, Company Secretaries
as a Secretarial Auditor of the company for the financial year 2014-15.
The explanations /comments made by the Board relating to the
qualifications, reservations or adverse remarks made by the Auditors in
their report are furnished Annexure VI is attached to this report.
There were no adverse comments, qualifications or reservations or
adverse remarks in the Secretarial Audit Report.
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 Annexure VII and is attached to this
Report.
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.
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.
CODE OF CONDUCT:
In line with the requirements of Clause 49 of Listing Agreement, the
Board Members and Senior Management personnel have affirmed compliance
with the code of conduct for the financial year ended 31st March, 2015.
The Company has adopted "Code of Conduct and Ethics" for the Directors
and Senior Executives of the Company. The object is to conduct the
Company's business ethically and with responsibility, integrity,
fairness, transparency and honesty. The code is available on Company's
website www.hfl.co.in. All directors and senior management personnel
have complied compliance with the Code of Conduct and ethics as on 31st
March, 2015.
MISSION/ VISION:
To position itself to be a niche player in the production of
Fluoro specialty chemicals and advanced grades of PTFE by 2015.
OBJECTIVES:
1. To increase the capacity utilization from 75% to 90% during the
financial year 2014-15.
2. To Endeavour to convert entire quantity of TFE into various Fluoro
Specialty Chemicals by 2015-16.
3. To develop advanced grades of PTFE.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:
The Company does not have any Subsidiary, Joint venture or Associate
Company.
DEPOSITS:
The Company has neither accepted nor renewed any deposits during the
year under review.
SHARES:
The Company has not bought back any of its securities during the year
under review.
The Company has not issued any Sweat Equity Shares during the year
under review.
No Bonus Shares were issued during the year under review.
The Company has not provided any Stock Option Scheme to the employees.
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 had 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 had 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) The directors had prepared the annual accounts on a going concern
basis; and
(e) The directors, in the case of a listed company, had laid down
internal financial controls to be followed by the company and that such
internal financial controls are adequate and were operating
effectively.- Not applicable to Private Limited Company.
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 Company's 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 had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
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. especially from the Ministry
of Chemicals & Fertilizers, Department of Chemicals & Petro Chemicals,
The Finance Ministry, Ministry of Environment & Forestry, Government of
India, Government 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 bankers State
Bank of Hyderabad, Statutory/Govt Auditors, etc for the continued
support. In conclusion I am fully confident that with the continued
support from all of you my urge to place your Company in the pedestal
of success will not be unrealistic.
We on our part would continue our efforts to take your Company into the
future by meeting the challenges & grabbing the opportunities in our
endeavor in the path towards turnaround. We look forward to your
continued support in this ongoing process.
In conclusion we are optimistic that the company would attain
significant profits in the near future.
For and on behalf of the Board of Directors
By order of the Board of Directors
of Hindustan Fluorocarbons Ltd.,
Sd/-
(V.B.RAMACHANDRAN NAIR)
CHAIRMAN
PLACE: HYDERABAD
DATE : 14.08.2015
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