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Gujarat Fluorochemicals Ltd.

BSE: 542812 Sector: Industrials
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OPEN 2409.00
VOLUME 45669
52-Week high 2539.95
52-Week low 525.00
Mkt Cap.(Rs cr) 27,344
Buy Price 0.00
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Sell Price 0.00
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OPEN 2409.00
CLOSE 2316.60
VOLUME 45669
52-Week high 2539.95
52-Week low 525.00
Mkt Cap.(Rs cr) 27,344
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gujarat Fluorochemicals Ltd. (FLUOROCHEM) - Director Report

Company director report

The Scheme of Arrangement ("the Scheme") between Gujarat FlurochemicalsLimited now known as GFL Limited ("the demerged company") and InoxFlurochemicals Limited now known as Gujarat Flurochemicals Limited ("theCompany" or "the resulting company") for demerger of the Chemicals BusinessUndertaking of the demerged company into the resulting company was approved by Hon'bteNatioanl Company Law Tribunat Ahmedabad Bench on 4th July 2019. The said NCLTOrder was fited by both the companies with the Registrar of Companies on 16thJuly 2019 making the Scheme operative from that date. Accordingly att the assets andliabilities pertaining to the Chemical Business Undertaking as defined in the Schemeincluding employees and investment in subsidiaries and joint venture pertaining to thesaid Chemicals Business stand transferred and vested into the Company from its AppointedDate i.e. 1st April 2019. The name of the Company was changed from InoxFlurochemicals Limited to Gujarat Flurochemicals Limited w.e.f. 26th July2019.The shares of the Company were listed on the stock exchanges w.e.f. 16thOctober 2019.


The Member(s)

Gujarat Fluorochemicals Limited

(Eartier known as Inox Flurochemicals Limited)

Your Directors take Pleasure in presenting to you their Second Annual Report of yourCompany together with Audited Fianancial Statements for the Financial Year ended on 31stMarch 2020.

1. Financial Performance

The financial performance of your Company for the Financial Year ended 31stMarch 2020 is highlighted below:

Sr. no. Particulars



2019-20 2018-19 2019-20 2018-19
I. Revenue from Operations 260637 272927 249639 273055
II. Other Income 21628 8597 22127 8386
III. Totat Revenue (I+II) 282265 281524 271766 281441
IV. Less Totat Expenses 246452 216159 236859 216379
V. Share of Loss of joint venture (*) (12.19) - -
VI. Profit before exceptionat items (III-IV+V) 35813 65353 34907 65062
VII. Exceptionat Items (2604) (824) (2604) (824)
VIII. Profit before tax (VI+ VII) 33209 64529 32303 64238
IX. Total Tax Expenses 14278 (60080) 13308 (60380)
X. Profit/(Loss) for the period (VIII-IX) 18931 124608 18995 124618
XI. Other comprehensive income 855 134 (209) (110)
XII. Total Comprehensive Income (X+XI) Attributabte to 19786 124742 18786 124508
Owners of the Company 20540 124985 - -
Non-controlling Interest (754) (244) - -

The figures of the profit and toss account of the demerged Chemicals BusinessUndertaking vested in the Company are regrouped or recomputed for the entire FinancialYear 2018-19. Detaited anatysis of the Financial and Operational Performance of theCompany has been given in the Management Discussion and Anatysis forming part of thisAnnual Report.

2. Consolidated Financial Statements

As per Regulation 33 of the Securities and Exchange Board of India (Listing Obtigationsand Disctosure Requirements) Regulations 2015 (hereinafter referred to as "ListingRegulations") and appticabte provisions of the Companies

Act 2013 read with the Rutes issued there under the Consotidated FianancialStatements of the Company for the FinancialYear 2019-20 have been prepared in comptiancewith appticabte Accounting Standards and on the basis of audited Fianancial Statementsapproved by the Board of Directors of the Company and its joint venture and management ofthe foreign subsidiary companies.

The Consotidated Fianancial Statements together with the Auditors' Report form part ofthis Annual Report. The Audited Standalone and Consotidated Fianancial Statements for theFinancialYear 2019-20 shatt be taid before the Annual Generat Meeting for approval of theMembers of the Company.

3. Scheme of Arrangement

During the Financial Year under review The Hon'ble National Company Law BoardTribunal Ahmedabad Bench (NCLT) vide its order dated 04th July 2019 hasapproved a Scheme of Arrangement between the Company (Resulting Company) and GFL Limited(Demerged Company) for transfer of Chemical Business Undertaking of Demerged Company tothe Resulting Company. In view of the said order the Demerged Company has transferred allAssets and Liabilities pertaining to Chemical Business Undertaking to the ResultingCompany with effect from 1st April 2019.

4. Actions arising out of approval of the Scheme of Arrangement

During the Financial Year under review pursuant to NCLT order and Scheme ofArrangement referred to in Para 3 above the Company has taken following actions:

Change of name of the Company

Pursuant to NCLT Order referred to Para 3 above the name of the Company is changedfrom Inox Fluorochemicals Limited to Gujarat Fluorochemicals Limited with effect from 26thJuly 2019.

Increase in Authorised Capital of the Company

The Authorized Capital of the Company was increased from H 100000 to H 200000000divided into 200000000 Equity Shares of Re 1 each pursuant to the NCLT Order referredto in Para 3 above by way of an Ordinary Resolution passed at the Extra Ordinary GeneralMeeting held on 05th July 2019.

Allotment of Shares and increase in Paid-up Capital of the Company

The Company has issued and allotted 109850ooo equity shares having face value of Re1 each as fully paid-up to the Shareholders of GFL Limited (Demerged Company) for every 1(One) Equity Share of face value of Re. 1 each fully paid up held in the Demerged Company.

Listing of Shares

109850000 equity shares of Re 1 each of the Company were listed on BSE Limited andNational Stock Exchange of India Limited with effect from 16th October 2019.

5. Dividend

Your Directors after considering various external factors that may have an impact onthe business as well as internal factors such as the long-term growth strategy of theCompany have not recommended any dividend for the Financial Year ended 31stMarch 2020.

In accordance with Regulation 43A of the Listing Regulations the Company hasformulated a ‘Dividend Distribution Policy' and details of the same have beenuploaded on the Company's website and is annexed to this report as AnnexureA

6. Transfer to Reserves

During the Financial Year under review Hon'ble National Company Law Board TribunalAhmedabad Bench vide its order dated 04th July 2019 has approved a Scheme ofArrangement between the Company (Resulting Company) and GFL Limited (Demerged Company) fortransfer of Chemical Business Undertaking from the Demerged Company to the ResultantCompany with effect from 01st April2019. In view of the said order theDemerged Company has transferred all Assets and Liabilities pertaining to ChemicalBusiness Undertakings to the Company with effect from 01st April2019.Therefore on account of the said transfer the Company has accounted for transfer ofvarious Reserves in its Books of Account including Rs. 320000 lakhs on account of theGeneral Reserve.

7. Directors and Key Managerial Personnel Directors

Appointments / Re-appointments:

The following Directors are proposed for appointments/reappointments at the SecondAnnual General Meeting of the Company:

• Appointment of Shri Sanjay Borwankar (DIN: 08640818) as Whole time Director ofthe Company and approve payment of remuneration to him.

• Re-appointment of Shri Sanath Kumar Muppirala (DIN: 08425540) as Whole-timeDirector of the Company and approve payment of remuneration to him.

• Re-appointment of Shri Devendra Kumar Jain (DIN: 00029782) who retires byrotation and being eligible offers himself for re-appointment.

Necessary Resolutions in respect of Directors seeking reappointment and their briefresume pursuant to Clause 36 of the Securities and Exchange Board of India ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) areprovided in the Notice of the Annual General Meeting forming part of this Annual Report.

The following Directors have resigned during the Financial Year 2019-20:

• Shri Anand Bhusari resigned as Whole Time Director of the Company with effectfrom 28th April 2019 due to his personal reasons.

• Shri Rajagopalan Doraiswami resigned as Non-Executive Independent Director ofthe Company with effect from 25th September 2019 due to his personal reasons.

• Shri Dinesh Kumar Sachdeva resigned as Whole-time Director of the Company witheffect from 15th February 2020 due to his pre occupations.

Key Managerial Personnel

The services of the following Key Managerial Personnel are transferred to the Companyin terms of Para 1.7 of the Scheme of Arrangement referred to in Para 3 above with effectfrom 1st August 2019:

• Shri Vivek Jain - Managing Director and Chief Executive Officer

• Mr. Manoj Agrawal - Chief Financial Officer

• Mr. Bhavin Desai - Company Secretary and Compliance Officer

8. Nomination and Remuneration Policy

The Nomination and Remuneration Policy of the Company is uploaded on the Company'swebsite Salient features and objectives of the Policy are as follows:

a. To lay down criteria for identifying persons who are qualified to become Directorsand who may be appointed in Senior Management of the Company in accordance with thecriteria laid down by Nomination and Remuneration Committee and recommend to the Boardtheir appointment and removal.

b. To formulate criteria for determining qualification positive attributes andIndependence of a Director;

c. To determine the composition and level of remuneration including reward linked withthe performance which is reasonable and sufficient to attract retain and motivateDirectors KMP Senior Management Personnel & other employees to work towards the longterm growth and success of the Company.

9. Declaration of Independence

The Independent Directors of the Company have given the declaration and confirmation tothe Company as required under Section 149 (7) of the Companies Act 2013 and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015confirming that they meet the criteria of independence and that they are not aware of anycircumstance or situation which exist or may be reasonably anticipated that could impairor impact their ability to discharge their duties with an objective independent judgementand without any external influence.

10. Familiarisation Programme for Independent Directors

The details of Familiarisation Programme for Independent Directors are given in theCorporate Governance Report of the Company at Annexure G to this Report.

11. Performance Evaluation

Performance Evaluation forms containing criteria for evaluation of Board as a wholeCommittees of the Board and individual Directors and Chairperson of the Company were sentto all the Directors with a request to provide their feedback to the Company on the AnnualPerformance Evaluation of Board as a Whole Committees of Board Individual Directors andChairperson of the Company fulfillment of the independence criteria and independence ofIndependent Directors from the Management for the Financial Year 2019-20. Further basedon the feedback received by the Company the Nomination and Remuneration Committee at itsMeeting held on 14th February 2020 had noted that the Annual Performance ofeach of the Directors is highly satisfactory and decided to continue the terms ofappointment of all the Independent Directors of the Company.

12. Meetings of the Board

During the year under review the Board met eight times and details of Board Meetingsheld are given in the Corporate Governance Report at Annexure G to this Report. Theintervening gap between the two Meetings was within the time limit prescribed underSection 173 of the Companies Act 2013 and Regulation 17 of the Listing Regulations.

13. Directors' Responsibility Statement as per Sub Section (5) of Section 134 of TheCompanies Act 2013

To the best of their knowledge and belief and according to the information andexplanations obtained by your Directors they make the following statements in terms ofSection 134(3) (c) of the Companies Act 2013:

i. in the preparation of the Annual Accounts for the Financial Year ended 31stMarch 2020 the applicable Accounting Standards and Schedule III of the Companies Act2013 have been followed and there are no material departures from the same;

ii. 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 of the Company for that period;

iii. 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;

iv. the Directors had prepared the Annual Accounts on a going concern basis;

v. the Directors had laid down Internal Financial Controls to be followed by theCompany and that such Internal Financial Controls were adequate and were operatingeffectively and

vi. the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

14. Significant and Material Orders passed by The Regulators or Courts or TribunalsImpacting The Going Concern Status and Company's operations in future

Except details given in Para 3 above there are no orders passed by the regulators orcourts or tribunals impacting the going concern status and the Company's operations infuture.

15. Particulars of Loans given Investments made Guarantees given and Securitiesprovided

Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the Standalone Financial Statements of theCompany. For details please refer to Note no 8 9 38 46 and 49 of the StandaloneFinancial Statements of the Company.

16. Contracts and Arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company during the yearunder review with Related Parties are approved by the Audit Committee and/or Board as perthe provisions of Section 188 of the Companies Act 2013 read with the Rule 15 of theCompanies (Meetings of Board and its Powers) Rules 2014 and Regulation 23 of the ListingRegulations. During the Financial Year under review the Company had not entered into anycontract / arrangement / transaction with Related Parties which could be consideredmaterial in accordance with the Policy of the Company on materiality of Related PartyTransactions review except as stated at Item No 11 of the Notice of Second Annual GeneralMeeting seeking approval of the Shareholders by way of Ordinary Resolution under theRegulation 23 of the Listing Regulations.

The Policy on materiality of Related Party Transactions and dealing with Related PartyTransactions as approved by the Board may be accessed on the Company's website at thelink: Party%20Transaction%20Policy.pdf

All transactions entered with Related Parties for the year under review were on arm'slength basis and hence disclosure in Form AOC -2 is not required to be annexed to thisreport.

17. Deposits

The Company has not accepted any deposits covered under Chapter V of the Act.

18. Subsidiaries and Joint Ventures

A separate statement containing the salient features of financial statements of allSubsidiaries Associates and

Joint Ventures of the Company forms a part of Consolidated Financial Statements incompliance with Section 129 and other applicable provisions if any of the Companies Act2013. In accordance with Section 136 of the Companies Act 2013 the Financial Statementsof the subsidiaries joint ventures associate companies are available for inspection bythe members at the Registered Office of the Company during business hours on all daysexcept Saturdays Sundays and public holidays upto the date of the Annual General Meeting(AGM'). Any member desirous of obtaining a copy of the said Fnancial Statements may writeto the Company Secretary at the Registered Office of the Company. The Financial Statementsincluding the Consolidated Financial Statements Financial Statements of subsidiaries andall other documents required to be attached to this report have been uploaded on thewebsite of the Company www.gfl. The Company has formulated a policy for determiningmaterial subsidiaries. The Policy may be accessed on the website of the

The Report on the performance and financial position of each of the SubsidiariesAssociates and Joint Venture Companies of the Company is annexed to this report in Form noAOC- 1 pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act2013 and Rule 5 of Companies (Accounts) Rules 2014 is annexed to this report as AnnexureB.

19. Internal Financial Controls

The Company has adequate Internal Financial Controls commensurate with its size andnature of its business. The Board has reviewed Internal Financial Controls of the Companyand the Audit Committee monitors the same in consultation with Internal Auditors of theCompany. One of the Internal Auditors of the Company also tests the internal controlsindependently.

20. Vigil Mechanism

As per the provisions of Section 177(9) of the Act read with Regulation 22(1) of theListing Regulations the Company is required to establish an effective vigil mechanism forDirectors and Employees to report improper acts or genuine concerns or any leak or suspectleak of Unpublished Price Sensitive Information. The Company has accordingly establish aVigil Mechanism and "Whistle Blower Policy" for all its Employees and Directorsto report improper acts. The details of the said mechanism and policy are available on theCompany's website

21. Independent Auditor's Report

There are no reservations modifications or adverse remarks in the IndependentAuditor's Report. The notes forming part of the accounts are self-explanatory and do notcall for any further clarifications under Section 134 (3) (f) of the Companies Act 2013.

22. Independent Auditors

Members at their 1st Annual General Meeting held on 6th August2019 had appointed M/s Patankar and Associates Chartered Accountants Pune as IndependentAuditors of the Company from the conclusion of 1st Annual General Meeting untilconclusion of 6th Annual General Meeting. They have confirmed that they are notdisqualified from continuing as Auditors of the Company.

The requirement to place the matter relating to appointment of Auditors forratification by members at every Annual General Meeting is done away with videnotification dated 7th May 2018 issued by the Ministry of Corporate AffairsNew Delhi. Accordingly no resolution is proposed for ratification of appointment ofAuditors who were appointed in the Annual General Meeting held on 06th August2019.

23. Cost Auditor

In terms of Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyare required to be audited by a Cost Accountant in practice who shall be appointed by theBoard. In view of the above the Company has appointed M/s Kailash Sankhlecha &Associates to audit the cost audit records maintained by the Company for Financial Year2019-20 on a remuneration of H 400000/-. As required under the referred Section of theCompanies Act 2013 and relevant Rules the remuneration payable to the Cost Auditor isrequired to be placed before the Members in a General Meeting for their ratification.Accordingly a resolution seeking Members' ratification for the remuneration payable toM/s Kailash Sankhlecha & Associates Cost Auditors is included at Item No. 10_of theNotice convening the Annual General Meeting. The Cost Audit Report for the Financial Year2018-19 submitted by M/s Kailash Sankhlecha & Associates was filed with Ministry ofCorporate Affairs on 24th December 2019 as per the statutory requirements.

24. Secretarial Auditor

In terms of Section 204 of the Companies Act 2013 read with Rule 9 of the Companies(Appointment & Remuneration of Managerial Personnel) Rules 2013 the Company hasappointed M/s Samdani Shah & Kabra a firm of Practising Company Secretaries toconduct Secretarial Audit of the Company.

The Secretarial Audit Report given by M/s Samdani Shah & Kabra for the FinancialYear 2019-20 is annexed herewith as Annexure C in Form no. MR-3. The SecretarialAudit Report does not contain any qualification reservation or adverse remark.

During the year under review the Company has complied with the applicable provisionsof the Secretarial Standards.

25. Management Discussion and Analysis Report

Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the Listing Regulations read with para B of Schedule V is presentedin a separate Section forming part of this Annual Report.

26. Corporate Governance Report

Pursuant to Regulation 34 read with Para C of Schedule V of Listing Regulations theCorporate Governance Report of the Company for the year under review and the Auditors'Certificate regarding compliance of conditions of Corporate Governance is annexed to thisreport as Annexure G.

In compliance with the requirements of Regulation 17 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a certificate from the Managing Director andChief Financial Officer of the Company who are responsible for the finance function wasplaced before the Board.

All the Board Members and Senior Management Personnel of the Company had affirmedcompliance with the Code of Conduct for Board and Senior Management Personnel. Adeclaration to this effect duly signed by the Managing Director is annexed as a part ofthe Corporate Governance Report.

27. Business Responsibility Report

A Business Responsibility Report as per Regulation 34 of the Listing Regulationsdetailing the various initiatives taken by the Company on the environmental social andgovernance front forms an integral part of this report. The said report is available onthe website of the Company

28. Extract of Annual Return

In terms of Section 92 (3) of the Companies Act 2013 read with Rule 12 of theCompanies (Management & Administration) Rules 2013 the extract of Annual Return asprovided in Form no. MGT -9 is annexed to this report as Annexure D.

29. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo

Information in respect of conservation of energy technology absorption foreignexchange earnings and outgo pursuant to Section 134 of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 in the manner prescribed is annexed tothis report as Annexure E.

30. Particulars of Employees

Disclosure pertaining to remuneration and other details as required under Section 197(12) read with Rule 5 (1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are annexed to this report as Annexure F.

In accordance with the provisions of Section 197 (12) of the Companies Act 2013 readwith Rules 5 (2) and 5 (3) of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the name and other particulars of theemployees drawing remuneration in excess of the limits set out in the said rule is annexedto this report.

In terms of Section 136 of the Companies Act 2013 the Report and Accounts are beingsent to the Members of the Company excluding information on employees' particulars whichis available for inspection by the Members at the Registered Office of the Company duringthe business hours on working days of the Company up to the date of the ensuing AnnualGeneral Meeting. If any Member is interested in obtaining such information may write tothe Company Secretary at the Registered Office of the Company.

31. Corporate Social Responsibility Activities

The provisions of Section 135 (5) of the Companies Act 2013 which requires Company tospend 2% of average net profits of last three financial years on CSR activities is notapplicable to the Company as the Company had no profit in its first Financial Year2018-19.

The Company has constituted its Corporate Social Responsibility (CSR) Committee whichcomprises of Shri Shanti Prashad Jain Chairman and Independent Director Shri Vivek JainManaging Director and Shri Deepak Asher Non-Independent Director of the Company. The CSRPolicy adopted by the Company is disclosed on the website of the Company which can beviewed at gfcl csr policy 13082019.pdf

32. Safety Health and Environment

Safety health and environment are of prime concern to the Company and necessaryefforts were made in this direction in line with the safety health and environment policylaid down by the Company. The Company has achieved certification of ISO: 14001:2004(Environment Management System) ISO 18001:2007 (Occupational Health and Safety ManagementSystem) and ISO 9001:2008 (Quality Management System) for its Ranjitnagar and Dahej Unit.Health of employees is being regularly monitored and environment has been maintained asper statutory requirements. Please refer to Nature Capital section of the IntegratedAnnual Report for more details.

33. Insurance

The Company's property and assets have been adequately insured.

34. Risk Management

The Company has Enterprise Risk Management (ERM) Framework of the Company which isderived from COSO ERM - Aligning Risk with Strategy and Performance 2016 (Draft) frameworkestablished by committee of sponsoring organizations. According to this Enterprise RiskManagement is "The culture capabilities and practices integrated withstrategy-setting and its execution that organizations rely on to manage risk in creatingpreserving and realizing value". The Company has therefore adopted Residual riskapproach and the Board of Directors have at its Meeting held on 29th June2020approved revised Risk Reporting and its

Monitoring system. In the Board's view one of the Internal Auditors of the Companyhave reviewed ERM and reported that there are no material or additional risks identifiedwhich may threaten the existence of the Company. Please refer to Risk Management sectionof the Integrated Annual Report for more details.

35. Reporting of Frauds

There have been no instances of fraud reported by the Statutory Auditors under Section143(12) of the Act and rules framed there under either to the Company or to the CentralGovernment.

36. Information Under The Sexual Harassment Of Women At Workplace (PreventionProhibition And Redressal) Act 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. Your Company has formed an Internal Complaints Committee (ICC) to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this Policy.

The following is the summary of sexual harassment complaints received and disposed ofduring the year 2019-20.

No. of Complaints Received Nil
No. of Complaints disposed of Not Applicable

Hence the company has complied with provisions relating to the constitution ofInternal Complaints Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

37. Material Changes and Commitments if any affecting the Financial Position of theCompany which have occurred between the end of the Financial Year of the Company to whichthe Financial Statements relate and the date of the Report

There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the Financial Year of the Company to whichthe Financial Statements relate and the date of this report.

38. Acknowledgement

Your Directors express their gratitude to all other external agencies for theassistance co-operation and guidance received. Your Directors place on record their deepsense of appreciation for the dedicated services rendered by the workforce of the Company.

By order of the Board of Directors

Place: New Delhi Devendra Kumar Jain
Date: 30th July 2020 Chairman