Your Board of Directors takes pleasure in presenting their 42^ndAnnual Report on the performance of the
Company, together with the Audited Annual Accounts for the year ended 31^st March, 2025 and reports of
the Statutory Auditors and the Comptroller and Auditor General of India thereon.

1. FINANCIAL RESULTS

The financial performance of the Company for the year ended 31^st March, 2025 is summarized
below: (Rs. in Lakhs)

2. RESERVES (Section 134(3)(i))

Company has not transferred any amount to reserves due to continuous losses.

3. DIVIDEND (Section 134(3)(k))

The Board of Directors did not recommend any dividend on the equity shares for the year ended 31^st
March, 2025 as HFL had stopped its operations and in the process of closure.

4. OPERATIONS AND OVERALL PERFORMANCE

Pursuant to CCEA order for closure and shutting of operations, HFL had stopped its operations.

5. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE
COMPANY:

i. DECISION FOR CLOSURE OF HFL

HFL Board at its meeting held on 30.07.2019, after considering all options, concluded that sustainable
operations of HFL is not feasible and recommended for closure of the unit subject to approval of the
administrative Ministry. The Board of HOCL, parent company of HFL, at its meeting on 09.08.2019
has also given ‘in principle’ approval for closure of HFL subject to approval of Administrative Ministry.

ii. CCEA APPROVAL

HFL had received letter from Ministry of Chemicals and Fertilizers, Department of Chemicals and
Petro chemicals vide File. No. 9-5101506/2019-Ch.NI dated 29.01.2020 informing the decision of
Cabinet Committee on Economic Affairs (CCEA) for closure and shutting of operations of HFL.
HFL has received approval of shareholders for the shutting down of the plant/unit and closure of the
company and to sell or otherwise dispose of the whole or substantially the whole of the undertaking
of the company through postal ballot notice dated February 10, 2020.

iii. SALE/DISPOSAL OF HFL FREEHOLD LAND

HFL is in the process of sale of land and the subject to receipt of NOC from TSICC/TS Govt.

iv. PLANT AND MACHINERY AND OTHER MOVABLE ASSETS

Sale of Plant & Machinery and other movable assets was done through MSTC as per decision taken
by CCEA on 29.01.2020 and was executed as per DPE guidelines. HFL has only one plant/unit
located at Rudraram, District Sangareddy in Telangana.

v. RECEIPT OF GOI INTEREST FREE LOAN

HFL had received for interest free loan of Rs.75.87 crore from GoI for closure related activities. As
per GoI order HFL to utilize funds for payment of liabilities viz. VRS/VSS to existing employees,
Clearing liabilities of Ex- employees, Statutory dues and secured / unsecured creditors, etc. related
to shutting down of plant / unit of HFL as per CCEA decision dated 29.01.2020.

vi. OBTAINING MLF FUNDING FROM MOEFCC FOR THE PLANT CLOSURE

In case of closure of HCFC-22 plant, Multilateral Fund (MLF) is providing the financial assistance for
this process through World Bank. HFL is in touch with DCPC and MoEFCC on MLF funding.

A DO letter No.42/31/2017-PMU-OC dated 28-Sep-2021 addressed to Director (C&PC), from Hon’ble
Additional Director (Ozone Cell), MoEFCC and intimated that an email was received from World
bank and informed that MLF funding will not be provided to HFL since closure decision was taken by
GoI and HFL would be closed by December, 2021 no further intervention from MoEFCC is admissible
as per the rules and procedures of Ex-Com of the MLF.

vii. VRS -2020 SCHEME

The VRS-2020 scheme is implemented in the company vide Part-I Order No.01/2020, Dated:
19.02.2020, accordingly the employees were relieved on 30-May-2020 (30), 30-Jun-2020 (25) 20 -
Jul-2020(9) and 31.07.2021 (1), 16 employees got superannuated, one employee left the organisation
on lien, 02 employees were resigned and other 05 employees were transferred to Hindustan Organic
Chemicals Limited (HOCL).

viii. Delisting

HFL is in receipt of in-principle approval from BSE for voluntary delisting of its equity shares.

6. SHARES

There was no change in the equity share capital of the company during the year. The Authorized
Share Capital of the company is Rs. 21,00,00,000 and the paid up capital of the company is
Rs.19,59,91,000. The company’s shares are listed in BSE (Scrip ID: 524013). During the period
under review, the company has not: (i) bought back any of its securities (ii) issued any sweat equity
shares (iii) issued any bonus shares (iv) provided any stock option scheme to employees.

7. 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 officer at the office 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 number of RTI applications received and disposed off during the year 2024-25 is given below:

8. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The company was not required to transfer any amount towards IEPF

9. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Board of Directors met six (6) times during the financial year 2024-25 on: 20^th May, 2024, 7^th
August, 2024; 21^st October, 2024; 30^th October, 2024; 7^th November, 2024 and 11^th February, 2025.
For details of meetings of the Board, refer to Corporate Governance Report, which is a part of this
report.

10. BOARD OF DIRECTORS

Changes in the Board of Directors during the year is given below:

1. Consequent to superannuation, Shri L Shanil Lal was ceased to be HOCL Nominee Director
w.e.f 30.06.2024.

2. Shri P Ravi Kumar was appointed as HOCL Nominee Director w.e.f 01.07.2024.

3. Shri Ram Sajeevan was ceased as Government Nominee Director w.e.f 02.12.2024.

4. Consequent to completion of tenure, Dr Bharat J Kanabar was ceased as HOCL Nominee
Independent Director w.e.f 23.12.2024

5. Consequent to completion of tenure, Smt Archana K was ceased as Independent Director w.e.f
23.12.2024.

6. Consequent to superannuation, Shri P Ravi Kumar was ceased as HOCL Nominee Director
w.e.f 31.12.2024.

7. Shri M J Jagadeesh was appointed as HOCL Nominee Director w.e.f 01.01.2025.

8. Shri Anurag Chandra was appointed as Government Nominee Director w.e.f 15.01.2025.

9. Consequent to superannuation, Shri Sajeev B was ceased as Managing Director w.e.f 31.05.2025
Pursuant to the provisions of Section 203 of the Companies Act, 2013 the Key Managerial
Personnel of the Company as on March 31,2025 are:

1. Shri. P O Luise, Chief Financial Officer;

2. Shri Subramonian H, Company Secretary.

11. COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Company being a CPSE, appointment of all the Directors on the Board of the Company are
made by the Government of India/President of India and under the supervision, control and directions
of the Department of Chemicals & Petrochemicals (DCPC) and by parent company (HOCL) and the
prescribed DPE Guidelines are also followed.

12. COMPANY’S POLICY RELATING TO APPOINTMENT AND PAYMENT OF REMUNERATION AND
DISCHARGE OF THEIR DUTIES OF KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

Company has constituted 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.

13. FORMAL ANNUAL EVALUATION OF PERFORMANCE OF BOARD, ITS COMMITTEES AND
INDIVIDUAL DIRECTORS

The Company being a CPSU is governed by the DPE Guidelines and the Annual Evaluation of
Performance of Board, its committees and of individual Directors are carried out by the Administrative
Ministry.

14. RATIO OF DIRECTORS REMUNERATION TO MEDIAN EMPLOYEES REMUNERATION AND OTHER
PRESCRIBED ELABORATE DISCLOSURES AND DETAILS

The Company being a CPSE which is under the supervision, control and direction of the Administrative
Ministry the prescribed DPE Guidelines are being followed in respect of employee’s remunerations
and DPE Guidelines are being followed, as regards other prescribed Perquisites

15. 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. Besides, the Directors also attend various training/workshops organized by the Department
of Public Enterprises (DPE).

16. COMMITTEES OF THE BOARD

The Committees of the Board includes, Audit Committee, Nomination and Remuneration Committee,
and Stakeholders Relationship Committee. For details of Composition and meeting of Committee,
refer to Corporate Governance Report, which is a part of this report.

17. INDEPENDENT DIRECTORS DECLARATION

Company has obtained necessary declarations from the Independent Directors as stipulated under
Section 149(7) of the Companies Act, 2013.

18. 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 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, Form A and B to this Report.

19. RESEARCH & DEVELOPMENT:

As the company is in the process of closure of operations, R&D operations were not carried out
during the period.

20. INDUSTRIAL RELATIONS

As on 31.3.2025, there are no employees in the rolls of your company.

21. ANNUAL RETURN

Pursuant to sub-section 3(a) of Section 134 of the Companies Act 2013, read with Section 92 (3) and
Rule 12 of the Companies (Management and Administration) Rules, 2014 an extract of the Annual
Return as at March 31,2025 is available in the website of the company at http://www.hfl.co.in/investors

22. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015,
the Management Discussion and Analysis Report is annexed hereto in Annexure - II and forms
part of the Directors’ Report.

23. CORPORATE GOVERNANCE

The Company has complied with the requirements of Corporate Governance Code. Report on the
Compliance with Corporate Governance Code is attached as Annexure-III

The certificate obtained from Practicing Company Secretary regarding compliance of the conditions
of corporate governance are attached in Annexure - IV.

24. 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 have 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 have 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) Cabinet Committee on Economic Affairs [CCEA], Government of India has approved the closure
and shut down of operations of the Company. Accordingly, company is no longer a Going Concern
Entity and

e) The directors have laid down internal financial controls to be followed by the company and that
such internal financial controls are adequate and were operating effectively.

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 have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively

25. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company do not have any Subsidiary, Joint venture or Associate Company.

26. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review and the
company has not accepted any deposits during the previous years

27. 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.

28. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

There were no contract or arrangements made with related parties as defined under Section 188 of
the Companies Act, 2013 during the year under review accordingly disclosure in form AOC 2 is not
required.

29. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS U/S 143 OTHER THAN THOSE
REPORTABLE TO CENTRAL GOVERNEMENT:

During the year, no frauds were reported by the auditors and the same is not applicable to the company.

30. CORPORATE SOCIAL RESPONSIBILITY:

As the Company is making Continuous losses and the company is in the process of closure the
provision of Section 135 of the Companies act related to the CSR is not applicable to the Company
for the financial year 2024-25.

31. RISK MANAGEMENT

As the company is in the process of closure, risk management and risk management committee is
not applicable for the Company.

32. 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 improvements in the existing systems
and procedures through periodic checks and to encourage preventive vigilance. The instructions of the
Central Vigilance Commission received from time to time have been implemented to strengthen the
vigilance machinery in the company. - There is part time Vigilance Chief Vigilance Officer in HFL.

33. MATERIAL ORDERS OF JUDICIAL BODIES/ REGULATORS

In the case of Rockwell Industries Limited vs. HFL, the High Court vide Order Dated: 02.11.2022
(Case No. COM.C.A. 16/2020) has directed HFL (Appellant) permitted to dispose of the plant,
machinery and other equipment through Metal Scrap Trading Corporation Limited, a Central
Government corporation. The appellant shall furnish the inventory of plant, machinery and other
equipment to decree holder and decree holder shall also be put on advance notice of date of conducting
of auction. After successful auction, the appellant shall inform the amount realised from out of the
sale proceeds to the decree holder; shall open a separate bank account and the proceeds of auction
shall be kept in a fixed deposit in said bank account and said bank account shall not be operated
without orders of this Court. As per the directions of the High Court, the sale proceeds of Plant &
Machinery are kept in separate bank account. On 12.06.2025, Case No. COM.C.A. 16/2020 was
allowed by the Hon’ble Hight Court. In accordance with the directions of Board, HFL has submitted
a proposal to obtain opinion from Department of Legal Affairs.

34. AUDITORS:

The Statutory Audit for the FY 2024-25 of your Company was conducted by M/s. AVRSK & Associates
LLP, Chartered Accountants who were appointed as Statutory Auditors for the Financial year 2023¬
24 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 31^st March, 2025
forms part of Annual Report.

35. EXPLANATIONS IN RESPONSE TO AUDITORS’ QUALIFICATIONS

The Statutory Auditors has given unqualified report. 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 2024-25 is annexed to the Annual Report. C&AG have given Nil comment report on the financial
statements of the Company.

36. SECRETARIAL AUDIT

Board of Directors has appointed M/s. ASKBN & Company as Secretarial Auditor of the company
for the financial year 2024-25. The explanations/comments made by the Board relating to the
qualifications, reservations or adverse remarks made by the Auditors in their report are furnished and
forms part of Annual Report. The reply to the observation in the Secretarial Audit Report is given below:

37. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has generally complied with the Secretarial Standards issued by the Institute of
Company Secretaries of India.

38. THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND
REDRESSAL Act, 2013

The company has complied with the provisions relating to the constitution of Internal Complaints
Committee under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and
Redressal) Act, 2013. Company has not received any case relating to the sexual harassment of
women at work place.

Annual Report for the year 2024 The Sexual Harassment of Women at Workplace
(Prevention, Prohibition & Redressal) Act, 2013-:

No. of complaints received: Nil

No. of complaints disposed of: Nil

No. of cases pending for more than 90 days: Nil

39. HEALTH AND ENVIRONMENT

Your Company has shut down the factory/plant. There are no production activities. Therefore,
compliance relating to pollution norms are not applicable.

40. 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.

41. 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.

42. LEGAL COMPLAINCE

The Company has complied with all the applicable legal provisions effectively during the year 2024-25.

43. INSURANCE

All properties and insurable interest of the company including building, plant and machinery and
goods are adequately insured.

44. TRADING AND DEMAT FACILITIES FOR SHARES

The shares of the Company are compulsorily traded in Dematerialized mode. To facilitate the
shareholders to dematerialize the shares, the Company has signed the agreement with both i.e.
National Securities depositories Limited (NSDL and Central Depositories Services (India) Ltd., (CDSL)
under ISIN No. INE806J01013. 87.56% of the Share Capital of the Company has been dematerialized,
as on 31^st March, 2025.

45. 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.

46. CODE OF CONDUCT

The Company has adopted “Code of Conduct and Ethics” for the Directors and Senior Executives of
the Company as per DPE guidelines and as per HOCL (Parent Company). The object is to conduct
the Company’s business ethically and with responsibility, integrity, fairness, transparency and honesty.

47. 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 of India, especially from the Ministry of Chemicals
& Fertilizers, Department of Chemicals and Petrochemicals, the Finance Ministry, Ministry of
Environment, Forest and Climate Change, Govt. of India, Govt 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 bakers State Bank of India, Statutory/Govt Auditors etc.
for the continued support.

For and on behalf of the Board of Directors
Sd/-

(YOGENDRA PRASAD SHUKLA)

Managing Director
DIN:09674122

Date: 12.08.2025
Place: Kochi, Kerala