|BSE: 505854||Sector: Engineering|
|NSE: TRF||ISIN Code: INE391D01019|
|BSE 00:00 | 27 Jun||141.70||
|NSE 00:00 | 27 Jun||140.90||
|Mkt Cap.(Rs cr)||156|
|Mkt Cap.(Rs cr)||155.87|
TRF Ltd. (TRF) - Auditors Report
Company auditors report
To the Members of TRF Limited
Report on the audit of the Standalone financial statements
1. We have audited the accompanying standalone financial statements ofTRF Limited ("the Company") which comprise the balance sheet as at March 312021 the statement of Profit and Loss (including Other Comprehensive Income) statementof changes in equity and statement of cash flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.
2. In our opinion and to the best of our information and according tothe explanations 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 accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 312021and total comprehensive income (comprising of loss and other comprehensive income)changes in equity and its cash flows for the year then ended.
Basis for opinion
3. 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 Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
4. We draw attention to Note 45.02 to the Standalone FinancialStatements with respect to the losses incurred by the Company erosion of its net worthand preparation of the Standalone Financial Statements on going concern assumption basedon the reasons and assumptions stated in the aforesaid note. These events along with theother matters set out in the aforementioned Note indicate that a material uncertaintyrelated to the going concern assumption exists and the Company's ability to continue as agoing concern is dependent on the financial support from the promoter and generation ofthe expected cash flows through operations to be able to meet its obligations as and whenthey arise.
Our opinion is not modified in respect of this matter.
Emphasis of Matter
5. We draw your attention to the following matters:
a) Note 45.04 to the Standalone Financial statements which states thatthe Company had submitted a composite application dated February 08 2021 for compoundingof various contraventions with the regulations made under the Foreign Exchange Management(Transfer or Issue of Any Foreign Security) (Amendment) Regulations 2004 dated July 072004 along with the necessary details to the Reserve Bank of India (RBI). The RBI videits email dated May 07 2021 has returned such compounding application and has directedthe Company to submit a fresh compounding application upon receipt of memorandum ofcompounding from RBI.
b) Note 45.05 of the Standalone Financial statements which describesthe management's assessment of the financial impact of the events arising out ofCoronavirus (Covid-19) pandemic for which a definitive assessment of the impact in thesubsequent period is dependent upon the circumstances as they evolve.
Our opinion is not modified in respect of these matters.
Key audit matters
6. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the 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. In addition to the matter described in theMaterial Uncertainty Related to Going Concern' section of our report we havedetermined the matters described below to be the key audit matters to be communicated inour report.
Appropriateness of estimation of cost to complete the projects
Description of Key Audit Matter
(Refer to Note 45.03 to the Standalone Financial Statements)
The Company recognizes revenue from construction contracts onpercentage completion method as specified under Indian Accounting Standards (Ind AS) 115 -Revenue from Contracts with Customers. Determination of revenue requires estimation oftotal contract costs which is done based on the actual cost incurred till date and thecost expected to be incurred to complete the projects. The estimation of cost to completeinvolves exercise of significant judgement by the management and assessment of projectdata making forecasts and assumptions.
This has been considered as a key audit matter given the involvement ofmanagement judgement and any variation may have consequential impact on the recognisedrevenue.
How our audit addressed the key audit matter
We have performed the following procedures among others:
a) Understood and evaluated the design and tested the operatingeffectiveness of controls around estimation of costs to complete including the review andapproval of estimated project cost.
b) Verified on test check basis the contracts entered into by theCompany for the consideration and relevant terms and conditions relating to variations tothe cost.
c) Obtained computation of estimated costs to complete and thepercentage of project completion and verified the same against the contractual terms andthe work orders placed with vendors.
d) Verified invoices purchase orders receipts etc. for the actualcosts incurred upto the year end date.
e) Discussed the status of the projects with the Company's projectmanagement team and evaluated the reasonableness of the estimates made by the managementof costs to be incurred for completion of the respective projects.
f) Verified the revision in total cost of the contracts by comparingthe management estimates revised during the current year with the estimate made in earlieryears and obtained reasons for such revision including verification of correspondencewith the vendors in case of renegotiation of prices and the approvals for the same.
Based on the above procedures performed we considered themanagement's estimation of cost to complete the project to be reasonable.
7. The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Board'sreport but does not include the financial statements and our auditor's reportthereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of management and those charged with governance forthe financial statements
8. 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 changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
9. In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the Company's financial reporting process.
Auditor's responsibilities for the audit of the financialstatements
10. Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
11. As part of an audit in accordance with SAs we exerciseprofessional judgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances underSection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.
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 financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
12. 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.
13. We also provide those charged with governance with a statement thatwe have 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.
14. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on other legal and regulatory requirements
15. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the Annexure B a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
16. As required by Section 143(3) of the Act we report 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 have beenkept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss (including othercomprehensive income) the Statement of Changes in Equity and Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
d) In our opinion the aforesaid standalone financial statements complywith the Accounting Standards specified under Section 133 of the Act.
e) In our opinion the matter described in the MaterialUncertainty related to Going Concern' section of our report may have an adverseeffect on the functioning of the Company.
f) On the basis of the written representations received from thedirectors as on March 312021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312021 from being appointed as a director in termsof Section 164 (2) of the Act.
g) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure A".
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:
ii. The Company has made provision as at March 31 2021 as requiredunder the applicable law or accounting standards for material foreseeable losses if anyon long-term contracts - Refer Note 20. The Company did not have any derivative contractsas at March 312021.
iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended March 312021.
iv. The reporting on disclosures relating to Specified Bank Notes isnot applicable to the Company for the year ended March 312021.
17. The Company has paid/ provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.
Annexure A to Independent Auditors' Report
Referred to in paragraph 16(g) of the Independent Auditors' Reportof even date to the members of TRF Limited on the standalone financial statements for theyear ended March 312021
Report on the Internal Financial Controls with reference to financialstatements under Clause (i) of Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls with reference tofinancial statements of TRF Limited ("the Company") as of March 31 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
2. 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 control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
3. 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 on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing deemed to be prescribed under section 143(10) of the Act to the extent applicableto an audit of internal financial controls both applicable to an audit of internalfinancial controls and both issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements was established and maintained and if such controls operatedeffectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficientand appropriate 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
6. A company's internal financial controls 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 internalfinancial controls with reference to financial statements includes those policies andprocedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference tofinancial statements
7. Because of the inherent limitations of internal financial controlswith reference 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 control controls with reference to financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.
8. In our opinion the Company has in all material respects anadequate internal financial controls system with reference to financial statements andsuch internal financial controls with reference to financial statements were operatingeffectively as at March 312021 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. (Also refer paragraph5(b) of the main audit report)
Annexure B to Independent Auditors' Report
Referred to in paragraph 15 of the Independent Auditors' Report ofeven date to the members of TRF Limited on the standalone financial statements as of andfor the year ended March 312021
i. (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) The fixed assets are physically verified by the Managementaccording to a phased programme designed to cover all the items over a period of threeyears which in our opinion is reasonable having regard to the size of the Company andthe nature of its assets. Pursuant to the programme a portion of the fixed assets hasbeen physically verified by the Management during the year and no material discrepancieshave been noticed on such verification.
(c) The title deeds of immovable properties as disclosed in Note 3 onfixed assets to the standalone financial statements are held in the name of the Company.
ii. The physical verification of inventory have been conducted atreasonable intervals by the Management during the year. The discrepancies noticed onphysical verification of inventory as compared to book records were not material
iii. The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Therefore the provisions of Clause 3(iii)(iii)(a) (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
iv. The Company has not granted any loans or made any investments orprovided any guarantees or security to the parties covered under Section 185 and 186.Therefore the provisions of Clause 3(iv) of the said Order are not applicable to theCompany.
v. The Company has not accepted any deposits from the public within themeaning of Sections 73 74 75 and 76 of the Act and the Rules framed there under to theextent notified.
vi. Pursuant to the rules made by the Central Government of India theCompany is required to maintain cost records as specified under Section 148(1) of the Actin respect of its products. We have broadly reviewed the same and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Wehave not however made a detailed examination of the records with a view to determinewhether they are accurate or complete.
vii. (a) According to the information and explanations given to us andthe records of the Company examined by us in our opinion the Company is generallyregular in depositing undisputed statutory dues in respect of professional tax andemployees' state insurance though there has been a slight delay in a few cases andis regular in depositing undisputed statutory dues including provident fund income taxduty of customs goods and service tax and other material statutory dues as applicablewith the appropriate authorities. Also refer note 45.06 to the standalone financialstatements regarding management's assessment on certain matters relating to providentfund.
Further for the months of April 2020 and May 2020 the company haspaid Goods and Service Tax filed GSTR-3B after the due date allowed by Ministry of Financeunder the Notification No. 32/2020 and 36/2020 dated April 3 2020 on fulfilment ofconditions specified therein.
(b) According to the information and explanations given to us and therecords of the Company examined by us there are no dues of duty of customs duty ofexcise goods and service tax which have not been deposited on account of any dispute. Theparticulars of dues of income tax sales tax service tax value added tax as at March312021 which have not been deposited on account of a dispute are as follows:
Annexure B to Independent Auditors' Report
Referred to in paragraph 15 of the Independent Auditors' Report ofeven date to the members of TRF Limited on the standalone financial statements for theyear ended March 312021
*Net of Rs. 179.29 lakhs paid under protest
**Net of Rs. 53.15 lakhs paid under protest
***Net of Rs. 157.89 lakhs paid under protest
viii. According to the records of the Company examined by us and theinformation and explanation given to us the Company has not defaulted in repayment ofloans or borrowings to any financial institution or bank or Government or dues todebenture holders as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial publicoffer and further public offer (including debt instruments). In our opinion and accordingto the information and explanations given to us the moneys raised by way of term loanshave been applied for the purposes for which they were obtained.
x. During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the Management.
xi. The Company has paid/ provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act. Also refer paragraph 17 of our main audit report.
xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014are not applicable to it the provisions of Clause 3(xii) of the Order are not applicableto the Company.
xiii. The Company has entered into transactions with related parties incompliance with the provisions of Sections 177 and 188 of the Act. The details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired under Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specifiedunder Section 133 of the Act.
xiv. The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of Clause 3(xiv) of the Order are not applicable tothe Company.
xv. The Company has not entered into any non cash transactions with itsdirectors or persons connected with him. Accordingly the provisions of Clause 3(xv) ofthe Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934. Accordingly the provisions of Clause 3(xvi) ofthe Order are not applicable to the Company.