Your Directors are glad to present the 33rd Annual Report of the companytogether with Audited Annual Accounts for the year ended 31st March 2016.
FINANCIAL RESULTS:[Section 134(3)(i)]
The financial performance of the Company for the year ended 31st March 2016is summarized below:
(Rs. in lacs)
|Particulars ||Financial Year ||Financial Year |
| ||2015-16 ||2014-2015 |
|Revenue from operations ||3963.29 ||3274.79 |
|Sales Turnover(net) ||3527.38 ||2915.07 |
|Gross Profit / (Loss) for the year ||(629.38) ||(47.45) |
|Less: Interest & Financing Charges ||345.36 ||209.56 |
|Cash Profit / (Loss) ||(974.74) ||(257.01) |
|Less: Depreciation ||136.57 ||110.24 |
|Profit / (Loss) for the year ||(1111.31) ||(367.25) |
|Add: Prior Period Adjustments ||0.08 ||10.21 |
|Net Profit (Loss) ||(1111.39) ||(377.46) |
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 2015-16 are carriedforward no dividend was declared on equity shares for the year ended 31.03.2016.
OPERATIONS AND OVERALL PERFORMANCE
Your Company has incurred a net loss of Rs.1111.39 lacs from operations as against thenet loss of Rs. 377.46 lacs of the previous year. During the year the sales turnover(net) was Rs.3527.38 lacs as against Rs.2915.06 lacs in the previous year. CFM-22 salequantity was 1116 MT as against 726.58 MT in the previous year and balance quantity wasused as feed stock to manufacture various products including Fluoro Specialty Chemicalsand PTFE. Quality of all companys products continued to be well accepted by ourcustomers. Company has achieved 96% capacity utilization as against 88% in the previousfinancial year. In spite of better physical performance financial performance was badlyaffected in spite of increase in sales loss was more mainly due to non-operational incomein the financial year 2014-15.
THE RIGHT TO INFORMATION ACT 2005
In consonance with the provisions of the Right to information Act 2005 Company hasappointed
Appellate Authorities/ Public Information officers at all the units/ offices of thecompany to respond effectively to the request of the applicants under the acts insynchronization with the direction of Central Information Commission(CIC) for promotionof Institutional transparency with in the public authority through proactive and effectiveimplementation of section 4 of the RTI Acts 2005 the company has also appointed atransparency officer that company has created necessary mechanism to meet the objective tobring 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 thefinancial year 2015-16.
Recognizing the obligation to the society both in the areas of environment protectionand social development company has taken initiatives towards implementing welfare schemesfor uplifting the quality of living of the community surrounding the area around thefactory. Company is sparing two Vidya Volunteers to the surrounding areas.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.
THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL Act2013
Company has not received any cases relating to the sexual harassment of women at workplace.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
There was no contract or arrangements made with related parties as defined underSection 188 of the Companies Act 2013 during the year under review.
COMPANYS POLICY RELATING TO APPOINTMENT AND PAYMENT OF REMUNERATION AND DISCHARGEOF THEIR DUTIES OF KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES.
Company has complied all the provisions related to the constitution of Nomination andRemuneration Committee under section 178(1) of the Companies Act 2013 and complied thecriteria for determining qualifications positive attributes and independence ofappointment and remuneration of a Key Managerial Personnel and other employees as providedunder 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 andprotecting the health and environment as per statutory compliance. Company is followingall pollution norms.
The health record of employees working in production Division is maintained in theHealth Register in Form 7.
FIRE & SAFETY PERFORMANCE:
The Company pays special attention to ensure safety of the factory and workers employedtherein. The Company accords the same priority attention to safety aspects as it does toproduction and productivity be it in a personal safety process safety environmentsafety or product stewardship and allocated adequate resources of men machine moneytime and energy to maintain the standards thus performance during the year is very good.
The Company continued to maintain good safety record in the financial year 2015-16.
A Mock drill is a practice which trains an individual about the course of action to betaken in case of real emergency occurs. This is one of the most effective technique totrain aware & alert people in a process plant location. A surprise Mock drill wasconducted at site to analyze the capacities of Plant Equipment operating & employeesskills towards Emergency preparedness & response. We are conducting Emergency Mockdrill oftenly or once in a year in presence of external Authority i.e Director ofFactories Telangana & higher management of HFL in compliance with ISO 2000-2001.
BOARD OF DIRECTORS
Dr. N J. Giakwad was ceased as a HOCL Independent Nominee Director with effect from03.09.2015.
Shri. Suresh Kumar R was ceased as a HOCL Nominee Director with effect from 03.09.2015.Shri J N Suryawanshi was appointed as a HOCL Nominee Director of the Company with effectfrom 03.09.2015 and ceased as a Nominee Director of the Company with effect from03.08.2016. Shri Arun Agarwal was ceased as a Govt Nominee Director with effect from25.09.2015.
Shri V B Ramchandran Nair was ceased as Chairman of the Company with effect from22.02.2016. Shri. S B Bhide was appointed as Chairman of the Company with effect from08.03.2016.
Shri. Dinesh Kumar was appointed as GoI Nominee Director with effect from 24.06.2016.
IMPLMENTATION OF OFFCIAL LANGUAGE POLICY:
During the year under report your Company continued to Promote Hindi as OfficialLanguage in day to day working in line with the Government policies for its intensive andextensive efforts for progressive use of the official language. Official LanguageImplementation Cell of the Company continued to function effectively.
Companys 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 Section134(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 ForeignExchange Earning and outgo are given at Annexure I Form A to this Report.
RESEARCH & DEVELOPMENT:
The company is continuously conducting the research and development to deliver goodsthrough innovative development; a. Company is actively involved in partial conversion ofTelomar. b. Development of filled grades with modified PTFE are given at Annexure I FormB to this Report.
Employee relations continued to be cordial throughout the year. Your Company has beenimplementing reservation policies of GOI for SCs/ STs / OBCs / Persons with disabilities.Representatives of SCs/ STs Categories are associated in Recruitment of DepartmentalPromotion Committees. A statement showing representation of employees belonging toScheduled Castes/ Scheduled Tribes/ Backward classes / Minorities categories is appendedas Annexure-II to this report.
PARTICULARS OF EMPLOYEES:
None of the employees of the company is drawing remuneration requiring disclosurepursuant to the provisions of the Companies (Particulars of Employees) Rules 1975.
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 takecare of Vigilance functions. Vigilance activities have mainly been directed to check thelacunae in the existing systems and procedures through periodic checks. The instructionsof the Central Vigilance Commission received from time to time have been implemented tostrengthen the vigilance machinery in the company.
The Statutory Audit of your Company was conducted by M/s.SPAD & Associates ChartedAccountants who were appointed as Statutory Auditors for the Financial year 2015-16 byComptroller and Auditor General of India (C &AG) as per Section 139(5) of theCompanies Act 2013 Auditors Report on the Accounts of the Company for the financial yearended 31st March 2016 is at Annexure- III.
The comments of the Comptroller and Auditor General of India u/s 143(6)(b) ofthe Companies Act 2013 on the Accounts of the company for the year 2015-16 has beenannexed to the Annual Report for the period 2015-16 and forms part of the Annual Report.
The Company has complied with all the legal provisions effectively. Although it hasfiled two petition to Company Law Board during the financial year 2011-12 regardingcondolation of delay in filing of satisfaction of charge documents of Life InsuranceCorporation of India with the Registrar of Companies.
All properties and insurable interest of the company including building plant andmachinery and goods are adequately insured. As required under Public Liability InsuranceAct 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.INE806J01013 and demat facilities with Central Depository Services (India) Limited (CDSL)and with National Securities Depository Limited (NSDL) for the equity shares of thecompany.
84.70% of the Share Capital of the Company has been Dematerialize the shares theCompany has been Dematerialized as on 31st March 2016- total accountsDematerialized is 1850 involving 16599950 shares (which constitutes 84.70% of the sharecapital) .
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
In accordance with the Listing Agreement and SEBI (Listing Obligations & DisclosureRequirements)
Regulations 2015 the Management discussion and analysis report is annexed hereto inAnnexure IV and forms part of the Directors Report.
Clause 7.3 of the DPE Guidelines on Corporate Governance for CPSEs The Risk Managementprocess includes Risk Identification Risk assessment Risk evaluation categorizationRisks 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.
- Refurbishment of old plant.
- PTFE Prices are continuously reducing.
To mitigate the above risks your company has taken following action:
Company has spent about Rs.15 Cr for refurbishment of the plant and additional facilityfor manufacturing of Fluoro Special Chemicals (FSC) this will help to reduce the energycost and it will help to develop new Fluoro Specialty product. Additional facility for FSCwill reduce the dependency on PTFE product because margins are less in PTFE as compared toFSC.
Successful trails were taken for partial conversion of this new facility.
The Company has complied with the various requirements of Corporate Governance. Thedetails in this regard form part of this report in Annexure-V.
Board has appointed M/s. Ahalada Rao.V & Associates Company Secretaries as aSecretarial Auditor of the company for the financial year 2015-16.
The explanations /comments made by the Board relating to the qualificationsreservations or adverse remarks made by the Auditors in their report are furnishedAnnexure VI is attached to this report. There were no adverse comments qualifications orreservations or adverse remarks in the Secretarial Audit Report.
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the
Companies (Management and administration) Rules 2014 is furnished in Annexure VII andis attached to this Report.
COMPLIANCE OF DPE GUIDELINES & POLICIES:
The Guidelines & policies issued by the Department of Public Enterprises from timeto time are being complied with and implemented with the approval of the Board ofDirectors/ Competent Authority.
TRAINING OF BOARD OF DIRECTORS:
The company furnishes set of documents and booklets to the Directors on their joiningthe Board. This includes important data about the performance of the Company Memorandum& Articles of Association Corporate Governance guidelines Delegation of powersProduct line brochures etc. A copy of the monograph on position duties and liabilities ofDirectors is also circulated among the Directors.
CODE OF CONDUCT:
In line with the requirements of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board Members and Senior Management personnel have affirmedcompliance with the code of conduct for the financial year ended 31st March2016.
The Company has adopted "Code of Conduct and Ethics" for the Directors andSenior Executives of the Company. The object is to conduct the Companys businessethically and with responsibility integrity fairness transparency and honesty. The codeis available on Companys website www.hfl.co.in. All directors and senior managementpersonnel have complied compliance with the Code of Conduct and ethics as on 31st March2016.
To position itself to be a niche player in the production of Fluorospeciality chemicalsand advanced grades of PTFE.
1. To increase the capacity utilization from 95% to 98% during the financial year2016-17.
2. To Endeavour to convert entire quantity of TFE into various Fluoro SpecialityChemicals by 2017-18.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
The Company has neither accepted nor renewed any deposits during the year under review.
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 theBoard hereby submit its responsibility Statement:
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively.- Not applicable to Private Limited Company.
Internal financial control means the policies and procedures adopted by the Company forensuring the orderly and efficient conduct of its business including adherence toCompanys policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.
(f) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
I place on record my appreciation and gratitude to all the employees and others who hadextended their support and co-operation during the year to achieve the targeted goals ofthe Company. In particular I am grateful to various officials of the Govt. of Indiaespecially from the Ministry of Chemicals & Fertilizers Department of Chemicals andPetrochemicals the Finance Ministry Ministry of Environment & Forestry Govt. ofIndia Govt of Telangana Promoter Company i.e. HOCL and Board Members. I would like toconvey my sincere appreciation to our valued customers suppliers Statutory BodiesInvestors our bakers State Bank of Hyderabad Statutory/Govt Auditors etc for thecontinued support. In conclusion I am fully confident that with the continued support fromall of you my urge to place your Company in the pedestal of success will not beunrealistic.
We on our part would continue our efforts to take your Company into the future bymeeting the challenges & grabbing the opportunities in our endeavor in the pathtowards turnaround. We look forward to your continued support in this ongoing process. Inconclusion we are optimistic that the company would attain significant profits in the nearfuture.
For and on behalf of the Board of Directors
By order of the Board of Directors Of Hindustan Fluorocarbons Ltd.
Sd/-(S B BHIDE)
PLACE : Mumbai DATE : 08.08.2016