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GFL Ltd.

BSE: 500173 Sector: Industrials
NSE: GFLLIMITED ISIN Code: INE538A01037
BSE 00:00 | 05 Dec 66.50 0.55
(0.83%)
OPEN

67.35

HIGH

67.90

LOW

66.50

NSE 00:00 | 05 Dec 66.75 0.65
(0.98%)
OPEN

66.85

HIGH

67.90

LOW

66.50

OPEN 67.35
PREVIOUS CLOSE 65.95
VOLUME 2626
52-Week high 140.00
52-Week low 48.55
P/E 1.02
Mkt Cap.(Rs cr) 731
Buy Price 64.45
Buy Qty 1.00
Sell Price 67.70
Sell Qty 15.00
OPEN 67.35
CLOSE 65.95
VOLUME 2626
52-Week high 140.00
52-Week low 48.55
P/E 1.02
Mkt Cap.(Rs cr) 731
Buy Price 64.45
Buy Qty 1.00
Sell Price 67.70
Sell Qty 15.00

GFL Ltd. (GFLLIMITED) - Auditors Report

Company auditors report

to the members of Gujarat Fluorochemicals Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of GujaratFluorochemicals Limited ("the Company") which comprise the StandaloneBalance Sheet as at 31st March 2018 the Standalone Statement of Profit andLoss (including Other Comprehensive Income) the Standalone Statement of Cash Flows andthe Standalone Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information ("thestandalone Ind AS financial statements").

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards (Ind AS) prescribed underSection 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thefinancial position of the Company as at 31st March 2018 and its financialperformance including other comprehensive income its cash flows and changes in equity forthe year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act we give in theAnnexure I a statement on the matters specified in paragraph 3 and 4 of the said Order.

2. As required by Section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Standalone Balance Sheet the Standalone Statement of Profit and Loss includingOther Comprehensive Income the Standalone Statement of Cash Flows and the StandaloneStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act.

(e) On the basis of the written representations received from the Directors as on 31stMarch 2018 taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2018 from being appointed as a Director in termsof Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure II. (g) With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – see Note 38 to the standalone Ind AS financialstatements; ii. The Company has made provision as required under the applicable law oraccounting standards including the Ind AS for material foreseeable losses on long-termcontracts including derivative contracts see Note 44. iii. There has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company.

Other Matters

The standalone Ind AS financial statements of the Company for the year ended 31stMarch 2017 were audited by another auditor who expressed an unmodified opinion on thosefinancial statements on 29th May 2017.

For Kulkarni and Company

Chartered Accountants Firm's Registration No. 140959W

A D Talavlikar

Partner Membership No. 130432

Place : Noida

Dated: 25th May 2018

ANNEXURE I TO INDEPENDENT AUDITOR'S REPORT

to the Members of Gujarat Fluorochemicals Limited on the standalone Ind AS financialstatements for the year ended 31st March 2018 – referred to in paragraph1 under the heading "Report on Other Legal and Regulatory Requirements" of ourreport of even date.

In term of the Companies (Auditor's Report) Order 2016 ("the Order") on thebasis of information and explanation given to us and the books and records examined by usin the normal course of audit and such checks as we considered appropriate to the best ofour knowledge and belief we state as under:

1. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. The fixed assets have been physicallyverified by the management at reasonable intervals and no material discrepancies have beennoticed on such verification. The title deeds of all immovable properties are held in thename of the Company.

2. The inventories were physically verified by the management at reasonable intervalsduring the year and no material discrepancies were noticed on physical verification ofinventories as compared to book records.

3. The Company has granted unsecured loans to two companies covered in the registermaintained under section 189 of the Companies Act 2013. The terms and conditions of thesaid loans are not prima facie prejudicial to the interest of the Company. The saidparties are regular in repayment of principal and payment of interest as stipulated andthere are no overdue amounts.

4. The Company has complied with the provisions of section 185 and section 186 of theAct in respect of investments made or loans given or guarantee or security provided.

5. The Company has not accepted any deposits within the meaning of sections 73 to 76 ofthe Companies Act 2013 and the Rules framed thereunder and hence the provisions of clause3(v) of the Order are not applicable to the Company.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Government for maintenance of cost records under section148(1) of the Companies Act 2013 for activities of the Company to which the said Rulesare made applicable and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained.

7. The Company is generally regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax sales-tax service tax duty ofcustoms duty of excise value added tax goods and service tax cess and any otherstatutory dues with the appropriate authorities and no amounts in respect of suchstatutory dues were in arrears as at the end of the year for a period of more than sixmonths from the date they became payable.

Particulars of dues of income-tax sales-tax service tax duty of customs duty ofexcise and value added tax which have not been deposited on account of disputes are asunder:

Name of the Statute Nature of dues and the period to which the amount relates Amount Forum where dispute is pending
(` in Lakhs)
Income Tax Disallowance under section 14A 80IA Employees Contribution to PF Transfer Pricing adjustment & Slump Sale transaction treated as short term capital gain – F.Y. 2012-13 18494.19 Income Tax Appellate Tribunal Ahmedabad
Income Tax Disallowance under section 14A and Employees Contribution to PF Transfer Pricing adjustment & Slump Sale transaction treated as short term capital gain – F.Y. 2014-15 110.83 Commissioner of Income Tax (Appeals)-1 Vadodara
Income Tax Reopening of the assessment in respect of deduction claimed under section 80IA for F.Y. 2009- 10 and F.Y. 2010-11 537.10 Commissioner of Income Tax (Appeals)-1 Vadodara

ANNEXURE I TO INDEPENDENT AUDITOR'S REPORT

to the Members of Gujarat Fluorochemicals Limited on the standalone Ind AS financialstatements for the year ended 31st March 2018 – referred to in paragraph1 under the heading "Report on Other Legal and Regulatory Requirements" of ourreport of even date.

Central Excise Act 1944 Excise Duty on freight recovered from customers – a) April 2007 to November 2007 b) April 2012 to December 2012 c) January 2013 to August 2013 d) September 2013 to May 2014 e) June 2014 to March 2015 f) February 2016 to March 2017 363.34 154.88 57.72 124.38 70.42 44.15 Customs Excise and Service Tax Appellate Tribunal Ahmedabad
Central Excise Act 1944 Cenvat Credit availed on Services for setting up of plant – November 2013 to October 2014 15.89 Customs Excise and Service Tax Appellate Tribunal Ahmedabad
Central Excise Act 1944 Cenvat Credit availed on Insurance auxiliary services in relation to exports and staff – June 2015 to May 2016 45.38 Customs Excise and Service Tax Appellate Tribunal Ahmedabad
Central Excise Act 1944 Cenvat Credit availed on execution of works contract of civil construction – a) April 2011 to December 2015 b) September 2015 to March 2017 141.44 3.52 Customs Excise and Service Tax Appellate Tribunal Ahmedabad
Central Excise Act 1944 Cenvat Credit availed on Insurance service for staff and for export of goods a) February 2012 to December 2012 b) December 2013 to August 2014 2.12 0.52 Commissioner (Appeals-II) Central Excise Customs and Service Tax Surat
Central Excise Act 1944 Excise Duty on freight recovered from customers - April 2015 to January 2016 78.87 Commissioner (Appeals-II) Central Excise Customs and Service Tax Surat
Central Excise Act 1944 Cenvat Credit availed on Service tax paid on outward GTA services - May 2010 and June 2010 August 2010 and September 2010 October 2010 and November 2010 and December 2010 to September 2011 32.29 Commissioner (Appeals-II) Central Excise Customs and Service Tax Vadodara
Central Excise Act 1944 Cenvat Credit availed on Air Travel Agent & Garden Services - June 2015 to May 2016 4.44 Commissioner (Appeals-II) Central Excise Customs and Service Tax Vadodara
Central Excise Act 1944 Cenvat Credit availed on Civil Construction services - January 2016 to March 2017 26.42 Commissioner (Appeals-II) Central Excise Customs and Service Tax Vadodara
Central Excise Act 1944 Interest and Penalty on reversal of Common services availed 13.85 Commissioner (Appeals-II) Central Excise Customs and Service Tax Vadodara.

ANNEXURE I TO INDEPENDENT AUDITOR'S REPORT

to the Members of Gujarat Fluorochemicals Limited on the standalone Ind AS financialstatements for the year ended 31st March 2018 – referred to in paragraph1 under the heading "Report on Other Legal and Regulatory Requirements" of ourreport of even date.

Name of the Statute Nature of dues and the period to which the amount relates Amount Forum where dispute is pending
(` in Lakhs)
Central Excise Act 1944 Cenvat Credit availed on Travel agent service CHA GTA Insurance etc. - January 2013 to September 2014 6.39 Commissioner (Appeals-II) Central Excise Customs and Service Tax Vadodara
Central Excise Act 1944 Cenvat Credit availed on Setting up of new plant- July 2015 to March 2016 2.10 Commissioner (Appeals-II) Central Excise Customs and Service Tax Vadodara
Service Tax (Finance Act1994) Service tax not paid on Collection of rent on Cylinders 5.73 Commissioner (Appeals-II) Central Excise Customs and Service Tax Vadodara
Service Tax (Finance Act 1994) Non-payment of Service tax on Import of services relating to supply of tangible goods online information database access or retrieval services– May 2008 to March 2015 & April 2015 to March 2016 218.60 Customs Excise and Service Tax Appellate Tribunal Ahmedabad
Custom Act1962 Differential duty on Import of Coal on high seas – a) 17th March 2012 to 28th March 2013 b) April 2013 to May 2013 860.53 113.04 Customs Excise and Service Tax Appellate Tribunal Ahmedabad
Commercial tax Gujarat VAT Proportionate ITC reduced on Capital goods at the rate of 2%. In respect of Ratio of OGS sales to Gross turnover of sales. F.Y. 2011-2012 14.00 Gujarat Value Added Tax Tribunal Ahmedabad
Commercial tax Gujarat CST Proportionate ITC reduced on Capital goods at the rate of 2%. In respect of Ratio of OGS sales to Gross turnover of sales and Sales to SEZ (Gujarat) at Zero rated tax assessed at full rate of tax at 5% F.Y. 2011-2012 38.33 Gujarat Value Added Tax Tribunal Ahmedabad
Commercial tax Gujarat VAT Proportionate ITC reduced on Capital goods at the rate of 2%. In respect of Ratio of OGS sales to Gross turnover of sales – a) F.Y. 2012-2013 b) F.Y. 2013-2014 35.88 38.76 Joint Commissioner of Commercial Tax (Appeal)
Commercial tax Gujarat CST Proportionate ITC reduced on Capital goods at the rate of 2%. In respect of Ratio of OGS sales to Gross turnover of sales – F.Y. 2013-2014 20.21 Joint Commissioner of Commercial Tax (Appeal)

ANNEXURE I TO INDEPENDENT AUDITOR'S REPORT

to the Members of Gujarat Fluorochemicals Limited on the standalone Ind AS financialstatements for the year ended 31st March 2018 – referred to in paragraph1 under the heading "Report on Other Legal and Regulatory Requirements" of ourreport of even date.

8. The Company has not defaulted in repayment of dues to banks or financialinstitutions and the Company did not have any borrowings from Government or by way ofdebentures.

9. The Company has applied the moneys raised by way of term loans for the purposes forwhich the moneys were raised. The Company did not raise moneys by way of initial publicoffer or further public offer (including debt instruments).

10. No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the course of our audit.

11. The Company has complied with the provisions of section 197 of the Companies Act2013 regarding payment of managerial remuneration.

12. The Company is not a Nidhi Company and hence the provisions of clause 3(xii) of theOrder are not applicable to the Company.

13. All transactions with the related parties are in compliance with sections 177 and188 of Companies Act 2013 and the details have been disclosed in the standalone financialstatements etc. as required by the applicable accounting standards.

14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review and hence theprovisions of clause 3(xiv) of the Order are not applicable to the Company.

15. The Company has not entered into any non-cash transactions with directors orpersons connected with them and hence the provisions of clause 3(xv) of the Order are notapplicable to the Company.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 and hence the provisions of clause 3(xvi) of the Order are notapplicable to the Company.

For Kulkarni and Company

Chartered Accountants Firm's Registration No. 140959W

A D Talavlikar

Partner Membership No. 130432

Place : Noida

Dated: 25th May 2018

ANNEXURE II TO INDEPENDENT AUDITOR'S REPORT

to the members of Gujarat Fluorochemicals Limited on the standalone Ind AS financialstatements for the year ended 31st March 2018 – referred to in paragraph2(f) under the heading "Report on Other Legal and Regulatory Requirements" ofour report of even date.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to financial statementsof Gujarat Fluorochemicals Limited ("the Company") as of 31stMarch 2018 in conjunction with our audit of the standalone Ind AS financial statements ofthe Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrols stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India ("the ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing issued by ICAI anddeemed to be prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to financialstatements was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness.

Our audit of internal financial controls with reference to financial statementsincluded obtaining an understanding of internal financial controls with reference tofinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the Ind AS financial statementswhether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

ANNEXURE II TO INDEPENDENT AUDITOR'S REPORT

to the members of Gujarat Fluorochemicals Limited on the standalone Ind AS financialstatements for the year ended 31st March 2018 – referred to in paragraph2(f) under the heading "Report on Other Legal and Regulatory Requirements" ofour report of even date.

Inherent Limitations of Internal Financial Controls with reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as at31st March 2018 based on the internal controls with reference to financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note issued by the ICAI.

For Kulkarni and Company

Chartered Accountants Firm's Registration No. 140959W

A D Talavlikar

Partner Membership No. 130432

Place : Noida

Dated: 25th May 2018