Dear Shareholders extend my hearty welcome to you to this 37th AnnualGeneral Meeting of your Company. I am sure you must have received the Directors' Reportand Audited Annual Accounts of the Company for the year ended 31st March 2020and with your permission I take them as read.
I now proceed to share with you briefly the performance of the company and ouractivities.
1. OPERATIONS AND OVERALL PERFORMANCE
Your Company during the year under review has incurred a net loss of Rs. 412 lacs asagainst Rs. 478.07 lacs for the previous year. During the year the sales turnover (net)was Rs. 3132.46 lacs as against Rs. 3886.03 lacs in the previous year.
CFM-22 sale quantity was 961 MT as against 1056 MT in the previous year and balancequantity was used as feed stock to manufacture of PTFE. Quality of all companysproducts continued to be well accepted by our customers. Company has achieved 74% capacityutilization as against 94% in the previous financial year.
2. DECISION FOR CLOSURE OF HFL
HFL Board at its meeting held on 30.07.2019after considering all options concludedthat sustainable operations of HFL are not feasible and recommended for closure of theunit subject to approval of the administrative Ministry. The Board of HOCL parent companyof HFL at its meeting on 09.08.2019 has given in principle' approval for closure ofHFL subject to approval of Administrative Ministry.
3. CCEA APPROVAL
The company had received letter from Ministry of Chemicals And Fertilizers Departmentof Chemicals and Petrochemicals vide File. No. 9-5101506/2019-Ch.III dated 29.01.2020informing the decision of Cabinet Committee on Economic Affairs (CCEA) directing closureand shutting of operations of HFL.
4. SALE / DISPOSAL OF HFL FREEHOLD LAND
As per DPE guidelines for time bound closure of sick/loss making CPSE and disposal ofmovable and immovable assets DPE/5(1)/ 2014-Fin.(Part-1) dated 14.06.2018 guideline 4.2states that the CPSE shall carry out the processes of disposal of movable assetsincluding plant & machinery in a transparent manner under the supervision ofAdministrative Ministry's Guideline 4.3.2 on Disposal of Freehold land states that thecompany has to appoint Land Management Agencies (LMA) for disposal of land as per theguidelines of Ministry of Housing and Urban Affairs (MoH&UA). The sale of land issubject to receipt of NOC from TSICC/TS Govt.
5. PLANT AND MACHINERY AND OTHER MOVABLE ASSETS
Sale of Plant & Machinery and other movable assets would be done through MSTCe-Auction as per decision taken by CCEA on 22-Jan-2020 and will be executed as per DPEguidelines. HFL has one plant/unit located at Rudraram District Sangareddy in Telangana.
6. RECEIPT OF GOI INTEREST FREE LOAN
HFL had received interest free loan of Rs.73.70 crore from GoI vide LetterNo.P.51015/06/2019-Ch. III (Vol.II) dated 19.05.2020 and received funds on 26-May-2020. Asper GoI order HFL to utilize funds for payment of liabilities viz. VRS/VSS to existingemployees Clearing liabilities of Ex- employees Statutory dues and secured / unsecuredcreditors etc. related to shutting down of plant / unit of HFL as per CCEA decision dated22.01.2020.
The VRS sums paid to employees' towards VRS/VSS and arrears to retired employees etc.are made after audit by One Independent auditor Internal Auditor and Statutory Auditor.Further as directed VRS payments are made as per DPE guidelines and verified by DCPCMoC&F.
7. SAFETY ENVIRONMENT & ISO CERTIFICATION
The company continued to lay emphasis on the consciousness about safety among theemployees and periodic reviews of safety measures have enabled the company to maintainsafe operations during the year.
Management is maintaining all the required environmental norms and quality systems asper ISO 9001:2015.
8. INDUSTRIAL RELATIONS
Employee relations continued to be cordial throughout the year. Company continued tofollow Govt. policy for reservation in recruitment of SC/ST/OBC. During the year therewere no strikes or lock outs affecting the production/ profitability.
5. CORPORATE GOVERNANCE
Your Company lays emphasis in conducting its affairs within the frame work of policiesand guidelines set by the Government in a transparent manner. It is the endeavor of theCompany to build trust between shareholders Employees and Customers based on the basicprinciples of Corporate Governance. The detailed Report on the Corporate Governance aswell as Management Discussion Analysis Report is enclosed as a part of the Director'sReport. This Report analyses in brief the potentialities of the Company as well as thefocus of the Company's business.
6. ACKNOWLEDGEMENTS :
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 India.Especially from the Ministry of Chemicals & Fertilizers Department of Chemicals andPetrochemicals the Finance Ministry Ministry of Environment Forest and Climate ChangeGovt. of India Govt of Telangana Promoter Company i.e. HOCL and Board Members. I wouldlike to convey my sincere appreciation to our valued customers suppliers StatutoryBodies Investors our bakers State Bank of India Statutory/Govt Auditors etc. for theircontinued support.
Sd/-(S B BHIDE)