1. The above land is revalued as per Ind AS and the original land value before Ind AS revaluation is Rs.59 Lakhs. Factory land of 126.13 acres is located at Rudraram P.O., Kandi Mandal, Sangareddy Dist. Telangana State and land is freehold. HOCL is secured part of land to the extent of 84.31 acres.

2. Fair value of total land as on 31.03.2024 is Rs. 14663.57 Lakhs. Since the fair value of the land is higher than the carrying value as per books of accounts, carrying value of the land held for sale continues to be reported in accordance with para 15 of Ind AS 105.

3. Buildings include Time Office building (Gross value of Rs.4.33 Lakhs), Security Post (Gross value of Rs. 4.55 Lakhs) and Fencing & Compound Wall (Gross value of Rs.145.58 Lakhs). Total Gross value Rs.154.46, Accumulated depreciation: Rs.39.56 Lakhs and Net value Rs.114.90. Depreciation not provided during the year since there are no operations in the company.

9.6 Rights, preferences and restrictions attached to equity shares:

The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholdei is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject tc the approval of the shareholders in the ensuing Annual General Meeting. The equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferentia amounts, in proportion to their shareholding. There are no restrictions attached to equity shares except as contained in the Articles of Association of the Company.

*GOI has disbursed loan of Rs.7370 Lakhs on 26.05.2020 for settling the dues of Employees, Creditors and closure of Loans and disbursed Rs.217 Lakhs on 15.03.2022 as per decision of CCEA.

(A) . The Term loan from HOCL is secured by part of the land to the extent of 84.31 acres of the Factory

& Plant and Buildings at Rudraram Village.

(B) . The Term loan from HOCL of Rs. 2744.06 lakhs is Zero coupon loan as per terms of the BIFR

agreement and is repayable in seven equal annual instalments as per the loan agreement commencing from FY 2010-11. The instalment due for FY 2010-11,2011-12, 2012-13, 2013-14,

2014- 15, 2015-16 & 2016-17 amounting to Rs.2744.06 lakhs is not paid by the company and the total loan amount due to HOCL is Rs.3197.08 lakhs.

(C) . The Term loan from HOCL of Rs.753.02 lakhs is Interest bearing @ 10.25% to 14.50% repayable

in 5 annual instalments commencing from FY 2010-11 as per the loan agreement. The company is continuing default in payment of all the instalments due and interest during the F Y 2010-11 to

2015- 16 amounting to Rs.453.01 lakhs is not paid by the company. Since HOCL Board approved for waiver of interest from 01.04.2023 onwards, no interest has been provided from 01.04.2023 onwards.

(D) . The company had outstanding plan loan of Rs.360 Lakhs availed from Government of India for

manufacture of MPTFE and Rs. 1320 Lakhs availed for refurbishment of the Plant @11.5% p.a. and both the loans repayable in 5 annual installments commencing from F.Y. 2015-16. The Company had repaid Rs.1.00 Crore with interest of Rs.24.92 lac during the month of March, 2017 and accordingly principal and interest outstandings were adjusted. The instalment due for F.Y. 201516,2016-17, 2017-18, 2018-19 and 2019-20 amounting to Rs. 1,580.00 lakhs shown in Note-14. Company had received letter no.P.51015/06/2019-Ch.III(Vol.II) dated 29.01.2020 on closure of HFL in which interest on Rs.15.80 crore will be freezed upto 31.03.2019. Hence interest has not been provided from the year 2019-20 onwards.

The Company’s Provident Fund was exempted under section 17 of Employees’ Provident Fund and Miscellaneous Provisions Act,1952. As per the directives of Closure letter received from DCPC on 29.01.2020, company had started giving VRS to employees from May, 2020 onwards to Sept, 2022 and even non-regular employees were relieved on VSS during Oct, 2022. Remaining five (5) regular employees of HFL were transferred and posted to HOCL rolls w.e.f Sept, 2022. Since there is no employee in HFL, the Board in its meeting held on 30.01.2023 has approved to close the Employees Provident Fund Trust and surrender the balance amount with the Trust with Employees Provident fund Organisation after audit. Based on the application submitted to the Employees Provident Fund Organisation, they withdrawed the exemption vide letter dt.16.04.2024.

As per the directives of Closure letter received from DCPC on 29.01.2020, all the employees were relieved by Sept. 2022. Since there is no employee in HFL, the Board in its meeting held on 30.01.2023 has approved to close the Employees Group Gratuity Trust and surrender the Insurance Policies available with LIC. Accordingly the Trust was closed, settled the account by LIC and closed the bank account on 04.04.2024.

i) Claims against the company not acknowledged as debt: Details

a) ESI: Rs.13.46 Lakhs

ESI demand by ESI Corporationdues of Rs.15,99,902/- towards contribution of 153 employees for the period from 01.01.1997 to 30.09.2000. HFL has remitted Rs.7,99,951/- as per court order towards 50% of the principal amount. Interest claimed upto 31.03.2001 was Rs.5,46,139. Therefore, the balance amount of Rs.13,46,090 (1599902 546139-799951) shown as contingent liability.

b) Damages on Delayed Payment of Provident Fund with Interest: Rs.94.89 Lakhs

This is the damages demanded by EPFO towards delayed payment of PF dues during the period 2000-01 to 2010-11. The Company has written to Central Provident Fund Commissioner for waiver of damages for delayed payment of PF dues during the period 2000-01 to 2010-11 considering the fact that the company was a BIFR referred Company.

c) Other Claims (Legal cases): Rs.1112.50 Lakhs

1. WP/24588/2013 before Hon’ble High court judicature for the state of Telangana & for AP: Mr. T.Eshwaraiah, Ex-Chief Mgr (HR) had opted VRS in 2009 and relieved from the services on 31.01.2009. Consequent to revision of pay scales of 1997 & 2007 a writ petition was filed by him in June, 2013 on account of wage revision arrears. Vakalat and Counter is filed by the company. Matter pending before Hon’ble High Court; The HFL Board had also clarified that VRS-2009 optees are not eligible for wage revision arrears. Even the DCPC also clarified the same. Hence, in the view of the Company, the case is not tenable in law.

2. WP/12909/2013 before Hon’ble High court Judicature for the state of Telangana and for AP: Mr. V. Giridhar & others had opted VRS in 2009 and relieved from the services on 31.01.2009. Consequent to revision of pay scales of 1997 & 2007 a writ petition was filed by them in June, 2013 on account of wage revision arrears. Vakalat and counter filed by the company. Matter pending before Hon’ble High Court; The HFL Board had also clarified that VRS-2009 optees are not eligible for wage revision arrears. Even the DCPC also clarified the same. Hence, in the view of the Company, the case is not tenable in law.

3. LC ID-1 of 2015, before Hon’ble Central Govt. Industrial Tribunal, Hyd.: Mr. N. Rambabu, Production Chemist filed ID before ALC (Central), Hyd. A Counter has been filed by the respondent company. The Company had terminated the employee during January, 2014 after following the laid down provisions of Certified standing orders of the company. Since the Company had terminated him by following the approved procedures, hence the case will not tenable before the Honorable Court.

4. ID No.72 of 2012 before the Hon’ble Central Govt. Industrial Tribunal-cum labour Court, Hyderabad: The HFL workers’ trade union-A 4397 has raised an ID before ALC (Central), Hyd with a request to intervene in the matter of non-payment of overtime wages. In this connection, joint proceedings were held and issue could not settle amicably, having divergent views, the conciliation officer has submitted its failure report to Govt. of India. The respondent company has filed counter petition. As per GOI guidelines, the financial impact on account of Pay revisions for both 1997 and 2007 need to be borne by the company, since no budgetory support was not extended. Based on the commitment to DPE in writing by the recognized representative union A-3954, the GoI, had issued orders for pay revision was approved by the Board of HFL and implemented. The non-representative union -A 4397 had approached court of law for non-payment of overtime wages and filed a petition, hence this case is pending before court of law. Since existing employees are already availing the compensatory off in lieu of over time, the case will not tenable before the Honourable Court. On 25.04.2023 the case was heard and reserved for Judgement.

5. WP/9697/2000 & WA 483/2013 WA No.1194/ 2012 before Hon'ble High court, AP Hyd: Mrs. K. Nagaratnam, Asst. Mgr (Finance) has reinstated into service without back wages. Aggrieved on the order, she has filed writ appeal and counter was filed by the respondent company. The employee was re-instated as per High court order without back wages and superannuated from the services of the company on 31-Aug-2016. She has filed an appeal for back wages in the Hon'ble High court, Hyderabad and case is pending. The case is pending under CAV. The case is listed again on 28.02.2024 and continuing.

6. WP No. 20076/2019 before Hon'ble High Court Hyderabad: Smt K Rajani, Ex-Company Secretary, T.No. 262 had filed the WP against the reverification of “Pay Scale / Basic Pay anomaly fixed in September 2011”. Some of the Officers have represented the company that there is an anomaly in fixation of Pay Scale and Basic Pays against 1997 Pay Revision and have requested for refixation. The same is refixed in September 2011 to 18 Officers, one of them being Smt K Rajani. whose Pay scale and Basic Pay also refixed under anomaly. She had filed a case in High Court that the reverification and refixation of her pay scale / basic pay in February 2019 is not correct.

7. CGIT No. 134/2018: HFL Employees Union A 3954. For implementation of 2017 Wage Revision.

8. OS 414/2008 before Hon'ble city civil court, Sec-bad, CCA No. 250/2017 before High Court: M/s. Shanthi boiler & Pressure Vessels Pvt Ltd, Sec-bad had delivered the boiler and failed to comply the contractual terms as agreed. Aggrieved on the supply of items a case was filed and counter was filed by the respondent company. The Company is pleading the case in the Court of Law and is of the view that the case will be in our favour as understood from the Legal advisors and the approximate legal implication in this matter is about Rs. 13.5 Lakh, in case HFL losses the case.

9. OP No. 709/1998 before CCC, Hyderabad. CMA 2861/203 before High Court, CMA 918/2018 before High Court, COP No. 42/2019 before XXIV Addl. Chief Judge, CCC, Hyderabad, COMCA 16/ 2020 before XXIV Chief Judge, CCC, Hyderabad. Now CMA 918/2018 and COMCA 16/2020 are tagged: Case filed by M/s Rockwell Industries Limited relating to supply of CFM-22 Gas. IDBI was impleaded in the case and IDBI has filed the counter. This dispute is going on since 1998 at various Forums - Arbitration in 1998, Hon'ble Chief Judge in 2001, Hon'ble High Court later which was sent back for fresh consideration. Again in 2017, Hyd Civil Court confirmed Order of Arbitrator, party filing fresh COP before Addl Chief Judge, City Civil Court and HFL filed case in Hon'ble High Court of Telangana. Matter presently is still before Hon'ble High Court of Telangana, which had vide its Order dated 04.11.2020 has given stay on disposal of the assets of the Company. The Case is Pending now. On 02.11.2022 the case was heard on vacating of Stay. The permission was granted to dispose of Plant and Machinery through MSTC and the Order copy is received on 04.11.2022. In this regard the court has directed HFL to open a separate Bank Account to deposit the sale proceeds of Plant and Machinery. The plant sale proceeds were received on 29.03.2023 and the amount of Rs.14.21 crore was deposited in SBI as as FD .

10. WP No. 35920/2021 in Hon'ble High Court, Hyderabad: The TSSPDCL has levied the differential wheeling charges and issued notice to pay the wheeling charges around Rs.6.14 Crores for the period 2002 to 2004. If the same is not paid within fifteen days alongwith the monthly power bill the service will be disconnected. Aggrieved by the Notice of TSSPDCL, HFL has approached the Hon'ble High Court and the matter was heard and the Hon'ble High Court had granted Stay on 24.12.2021.

21. Taxes on Income

The company has not provided deferred tax asset due to huge accumulated losses incurred since there is no virtual certainty to realise in future.

22. Balances in respect of Trade payables, Other Liabilities, Trade Receivables and Other Loans and Advances are subject to Confirmation.

24. Segment Reporting

The Company’s operations consist only of manufacturing and sales of fluoro-carbons, and incidental/ ancillary activities. Hence, there are no other reportable segments under Ind AS - 108 “Operating Segment”. During the year, substantial part of the Company’s business has been carried out in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary. The Company does not have operations outside India and there is no other reportable segment on that account. There are no other reportable segments.

26. Financial Instruments

a) Capital Management

The Company’s capital management objective is to maximize the total shareholder return by optimizing cost of capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/enhance credit rating.

The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

For the purpose of capital management, capital includes issued equity capital, securities premium and all other revenue reserves. Net debt includes all long and short-term borrowings as reduced by cash and cash equivalents

c) Financial Risk Management Objectives

The company’s business activities exposed to a variety of financial risks viz., market risk, credit risk and liquidity risk. The company’s focus is to estimate a vulnerability of financial risk and to address the issue to minimize the potential adverse effects of its financial performance.

d) Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The company’s exposure to market risk is primarily on account of foreign currency exchange rate risk.

i) Interest rate risk

Out of total borrowings, large portion represents short term borrowings and the interest rate primarily basing on the company’s credit rating and also the changes in the financial market. Company continuously monitoring over all factors influence rating and also factors which influential the determination of the interest rates by the banks to minimize the interest rate risks.

ii) Foreign currency risk

The company has no balances in foreign currency and consequently the company is not exposed to foreign exchange risk.

Equity Risks

The company does not have any financial instruments which are exposed to listed and non listed equity investments.

e) Credit risk management

Credit Risk refers to the risk for a counter party default on its contractual obligation resulting a financial loss to the company. The maximum exposure of the financial assets represents trade receivables, work in progress and receivables from group companies. Credit risk on trade receivables, work in progress is limited as the customers of the company mainly consist of the Government promoted entities having strong credit worthiness. For doubtful receivables the company uses a provision matrix to compute the expected credit loss allowances for trade receivables. The provision matrix takes into account ageing of accounts receivables and the company’s historical experience of the customers and financial conditions of the customers. The company has not made any provision towards amounts doubtful to receive during the year ended March 31,2024 and March 31,2023 respectively.

f) Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. As per CCEA approval for Shutdown of the company, HFL has received an amount of Rs.75.87 Crores for implementation of VRS/ VSS, Statutory dues, payment to suppliers/contractors/utilities and other dues. The proceeds from sale of Land, Building, Plant & Machinery and other assets shall be utilised for meeting its contractual obligations. Note no.37 about CCEA procedure for disinvestment and sanction of loan from GOI details that the Company has financial assets at its disposal to reduce liquidity risk.

27. Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company is currently evaluating the requirements of the amendment and has not yet determined the impact on the financial statements.

28. During the year under review, the Company had revisited its status on the reporting of Financial Instruments through OCI at amortized cost based on updated developments. Accordingly, based on realistic assessment of the underlying transactions, the Company is of view that there are no Financial Instruments which are receivable/payable in future at discounted values and hence these are shown at actual values. Accordingly, the corresponding effect between previous year and current year is passed through OCI.

29. As per the letter dated 29.01.2020 from the Ministry of Chemicals and Fertilizers, Department of Chemicals & Petrochemicals, under which the Company functions, Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 22^nd Jan, 2020 had approved.

a) Shutting down the operations of the plant/unit of HFL & closure of the Company.

a) Separating the employees (regular and non-regular/adhoc) rendered surplus due to closure of plant through VRS/VSs, after payment of all their outstanding salary/wages and statutory dues, except for skeletal staff required to implement the full and final closure of the company. Employees not opting for VRS/VSS will be retrenched as per the provisions of Industrial Disputes Act, 1947.

b) Grant of interest free loan of Rs.77.20 crore by Govt. Of India to HFL to be utilized exclusively for closure related expenditure including (a) implementation of VRS/VSs for HFL employees, their dues, statutory dues, payment to suppliers/contractors/utilities dues and repayment of SBI working capital loan (b) salary/wages and administrative expenses of HFL’s skeletal staff to be temporarily retained for completing the closure of HFL for two years.

c) Above interest free loan will be repaid by HFL to Govt. of India from the sale proceeds of land and other assets of the company, as and when disposed off and after settling all the liabilities related to closure of the company

d) after settlement of all liabilities related to closure of HFL and repayment of interest free loan, surplus proceeds from disposal of land and other assets, if any, will be used for repayment of HFL’s outstanding Govt of India (Rs.15.80 crore) and interest thereon, with freezing of interest upto 31.3.2019. Full or part of the principal loan amount (Rs.15.80 crore) and interest thereon upto 31.3.2019 remaining unpaid due to insufficient sale proceeds is to be written off/waived.

e) for facilitating disposal of HFL’s land, M/s NBCC (India) Ltd may be appointed as Land Management Agency (LMA) to manage and assist in the land disposal subject to outcome of the decision of Telangana Govt/TSIIC on purchasing land of HFL.

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f) Disposal of plant, machinery and movable assets were done in March 2023 by HFL through e-auction by MSTC Ltd.

g) In pursuance of the said decision, HFL had received an amount of Rs.73.70 Crores on 26.05.2020 and Rs.2.17 crores on 15.03.2022 as interest free loan from GoI. As per the above CCEA Order and as at 31.03.2023, all the employees were relieved before 31.08.2022 except five skeleton staff who were transferred to the roll of HOCL in Sept 2022. All the undisputed dues except Govt. loans and HOCL loans were settled by utilising the interest free loan sanctioned by the Govt. of India. The total amount utilized upto 31.03.2024 was Rs.67.41 Crores. The balance amount will be utilized for settling the other dues and other operating expenditure for completing the closure of the Company. The said process is still going on.

30. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.