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GFL Ltd.

BSE: 500173 Sector: Financials
NSE: GFLLIMITED ISIN Code: INE538A01037
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OPEN 78.90
CLOSE 75.85
VOLUME 6401
52-Week high
52-Week low
P/E
Mkt Cap.(Rs cr) 834
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

GFL Ltd. (GFLLIMITED) - Auditors Report

Company auditors report

to the members of GFL Limited (earlier known as Gujarat FluorochemicalsLimited)

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of GFLLimited ("the Company") earlier known as Gujarat Fluorochemicals Limited whichcomprise the Standalone Balance Sheet as at 31st March 2020 the StandaloneStatement of Profit and Loss (including Other Comprehensive Income) the StandaloneStatement of Changes in Equity and the Standalone Statement of Cash Flows for the yearthen ended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information ("the standalonefinancial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 ("Ind AS") and other accounting principles generallyaccepted in India of the state of affairs of the Company as at 31st March2020 the profit and total comprehensive income changes in equity and its cash flows forthe year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the ‘Auditor's Responsibilities for the Auditof the Standalone Financial Statements' section of our report. We are independent ofthe Company in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India ("ICAI") together with the ethical requirements that arerelevant to our audit of the standalone financial statements under the provisions of theAct and the Rules made there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics.We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Emphasis of Matter

Commission of H 15.56 lakhs to a non-executive director requiresapproval of the shareholders in the forthcoming Annual General Meeting as per therequirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations. Ourreport is not modified in respect of this matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. Key Audit Matter Auditor's Response
1 Demerger of Chemical Business Undertaking To address this key audit matter our audit procedures included the following:
As described in Note 1 and 22 to the standalone financial statements the Chemical Business Undertaking of the Company is demerged and vested with the resulting company w.e.f. 1st April 2019 as per the Scheme of Arrangement approved by NCLT on 16th July 2019. • Examination of the Scheme of Arrangement pursuant to which the demerger was carried out along with the regulatory approvals required for the Scheme of Arrangement to take effect;
This has been identified as a key audit matter since it is a significant event requiring compliances of the terms of the Scheme accounting as per the relevant Ind AS and also complexities involved in the presentation in financial statements • Evaluation of the appropriateness of the accounting treatment followed by the Company in this regard including the adjustments given in the reserves and surplus with reference to the Scheme relevant Ind AS and the requirements of the accounting principles generally accepted in India;
• Testing the adjustment given in the reserves and surplus for net assets transferred to the resulting company; and
• Examination the disclosures given in the standalone financial statements for adequacy and appropriateness including disclosure of comparative figures.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Board's Report including Annexures to Board's ReportManagement Discussion and Analysis Business Responsibility Report Corporate GovernanceReport and Shareholder Information but does not include the standalone financialstatements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income changes in equity and cash flows of theCompany in accordance with the Ind AS and other accounting principles generally acceptedin India. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system withreference to financial statements in place and the operating effectiveness of suchcontrols.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcomunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of section143(11) of the Act we give in the Annexure I a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act based on our audit wereport that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.

(c) The Standalone Balance Sheet the Standalone Statement of Profitand Loss including Other Comprehensive Income the Standalone Statement of Changes inEquity and the Standalone Statement of Cash Flows dealt with by this Report are inagreement with the books of account.

(d) In our opinion the aforesaid standalone financial statementscomply with the Ind AS specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from thedirectors as on 31st March 2020 taken on record by the Board of Directors noneof the directors is disqualified as on 31st March 2020 from being appointed asa director in terms of Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controlswith reference to financial statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in Annexure II. Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company'sinternal financial controls with reference to financial statements.

(g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actin our opinion and to the best of our information and according to the explanations givento us the remuneration paid by the Company to its director during the year is inaccordance with the provisions of section 197 of the Act.

(h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company does not have any pending litigations which would impactits financial position;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There are no delays in transferring the amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For Kulkarni and Company
Chartered Accountants
Firm's Registration No. 140959W
A.D Talavlikar
Partner
Place: Pune Membership No. 130432
Date: 30th July 2020 UDIN: 20130432AAAAAV4616

Annexure I to Independent auditor's report to the members of GFLLimited (earlier known as Gujarat Fluorochemicals Limited) on the standalone financialstatements for the year ended 31st March 2020 – referred to in paragraph 1under the heading "Report on Other Legal and Regulatory Requirements" of ourreport of even date.

In term of the Companies (Auditor's Report) Order 2016 ("theOrder") on the basis of information and explanation given to us and the books andrecords examined by us in the normal course of audit and such checks as we consideredappropriate to the best of our knowledge and belief we state as under:

1. The Company does not have any fixed assets and hence the provisionsof clause 3(i) of the Order are not applicable to the Company.

2. The Company does not have any inventories and hence the provisionsof clause 3(ii) of the Order are not applicable to the Company.

3. The Company has granted unsecured loans to three companies coveredin the register maintained under section 189 of the Companies Act 2013. The terms andconditions of the said loans are not prima facie prejudicial to the interest of theCompany. The said parties are regular in repayment of principal and payment of interestas stipulated and there are no overdue amounts.

4. The Company has complied with the provisions of section 185 andsection 186 of the Act in respect of investments made or loans given or guarantee orsecurity provided.

5. The Company has not accepted any deposits within the meaning ofsection 73 to 76 of the Companies Act 2013 and the Rules framed thereunder and hence theprovisions of clause 3(v) of the Order are not applicable to the Company.

6. The Central Government has not prescribed maintenance of costrecords under section 148(1) of the Companies Act 2013 for the activities of the Companyand hence the provisions of clause 3(vi) of the Order are not applicable to the Company.

7. The Company is generally regular in depositing with appropriateauthorities undisputed statutory dues including income-tax Goods and Service Tax andother material statutory dues applicable to it. There are no undisputed amounts payable inrespect of such statutory dues which were in arrears as at 31st March 2020 fora period of more than six months from the date they become payable.

There are no dues of income-tax sales tax service tax duty ofcustoms duty of excise value added tax or Goods and Service Tax which have not beendeposited on account of disputes.

As per the Scheme of Arrangement the Chemical Business Undertaking ofthe Company is demerged and all assets and liabilities of the said undertaking as definedin the Scheme are transferred and vested with the resulting company w.e.f. 1stApril 2019 (see note 1 and 22 of the standalone financial statements). Accordingly thestatutory dues in respect of income-tax service tax duty of customs duty of excisevalue added tax pertaining to the said Chemical Business Undertaking are also transferredand vest with the resulting company and hence the same are not included for reportingunder this clause.

8. The Company does not have any borrowings from financial institutionsor bank or Government or by way of debentures and hence the provisions of clause 3(viii)of the Order are not applicable to the Company.

9. The Company has not raised any moneys by way of initial public offeror further public offer (including debt instruments) or term loans and hence theprovisions of clause 3(ix) of the Order are not applicable to the Company.

10. No fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the course of our audit.

11. The Company has paid or provided managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act.

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

13. All transactions with the related parties are in compliance withsections 177 and 188 of Companies Act 2013 and the details have been disclosed in thestandalone financial statements etc. as required by the applicable accounting standards.

14. The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year under reviewand hence the provisions of clause 3(xiv) of the Order are not applicable to the Company.

15. The Company has not entered into any non-cash transactions withdirectors or persons connected with them and hence the provisions of clause 3(xv) of theOrder are not applicable to the Company.

16. The Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934 during the year ended 31st March 2020. TheCompany has applied for obtaining registration as Type-II NBFC-ND Company w.e.f. 1stApril 2020.

For Kulkarni and Company
Chartered Accountants
Firm's Registration No. 140959W
A.D Talavlikar
Partner
Place: Pune Membership No. 130432
Date: 30th July 2020 UDIN: 20130432AAAAAV4616

Annexure II to Independent auditor's report to the members of GFLLimited (earlier known as Gujarat Fluorochemicals Limited) on the standalone financialstatements for the year ended 31st March 2020 - referred to in paragraph 2(f)under the heading ‘Report on Other Legal and Regulatory Requirements' of ourreport of even date

Report on the Internal Financial Controls with reference to financialstatements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")

We have audited the internal financial controls with reference tofinancial statements of GFL Limited ("the Company") earlier known as GujaratFluorochemicals Limited as of 31st March 2020 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal controls 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'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingdeemed 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 that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to financial statements was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness.

Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgementincluding the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to FinancialStatements

A company's internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles.

A company's internal financial controls with reference tofinancial statements includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference toFinancial Statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us 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 2020 based on the internal controls over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the ICAI.

For Kulkarni and Company
Chartered Accountants
Firm's Registration No. 140959W
A.D Talavlikar
Partner
Place: Pune Membership No. 130432
Date: 30th July 2020 UDIN: 20130432AAAAAV4616

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