To,
The Members of,
MAXIMAA SYSTEMS LIMITED
Report on the Audit of Standalone Ind-AS Financial Statements for F.Y. 2019-20
Opinion
We have audited the accompanying Standalone financial statements of M/s. MAXIMAA
SYSTEMS LIMITED,("the Company") which comprise the Balance Sheet as at March
31, 2020, the Statement of Profit and Loss (including other comprehensive income), the
Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and
Notes to the financial statement including summary of significant accounting policies and
other explanatory information. (herein after referred to as "Standalone Ind-AS
Financial Statements").
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone financial statements give the information required
by the Companies Act, 2013 (the Act) in the manner so required and give a true and fair
view in conformity with the Indian Accounting Standards prescribed under section 133 of
the Act read with Companies (Indian Accounting Standards) Rules, 2015, as amended,
("Ind AS") and other accounting principles generally accepted in India, of the
state of affairs of the Company as at 31st March 2020, its Loss (including other
comprehensive income), changes in equity and its cash flows for the year ended on that
date.
Basis of Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Act. Our responsibilities under those Standards are further
described in the Auditors Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Company in accordance with the Code of
Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the
ethical requirements that are relevant to our audit of the standalone financial statements
under the provisions of the Act and the Rules made there under, and we have fulfilled our
other ethical responsibilities in accordance with these requirements and the Code of
Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the standalone financial statements of the current period.
These matters were addressed in the context of our audit of the standalone financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. We have determined the matters described below to be
the Key Audit matter to be communicated in our Report.
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| Key Audit Matter |
How the matter was addressed in our audit |
| Accuracy of recognition, measurement, presentation and disclosures of revenues and
other related balances in view of adoption of Ind-AS 115 "Revenue from Contracts with
Customers" (new revenue accounting standard) The application of the new revenue
accounting standard involves certain key judgements relating to identification of distinct
performance obligations, determination of transaction price of the identified performance
obligations, the appropriateness of the basis used to measure revenue recognised over a
period. Additionally, new revenue accounting standard contains disclosures which involves
collection of information in respect of disaggregated revenue and periods over which the
remaining performance obligations will be satisfied subsequent to the balance sheet date. |
We assessed the Companys process to identify the impact of adoption of the new
revenue accounting standard. Our audit approach consisted testing of the design and
operating effectiveness of the internal controls and substantive testing as follows: |
|
Evaluated the design of internal controls relating to implementation of the new
revenue accounting standard. Selected a sample of continuing and new contracts and
performed the following procedures: |
|
1. Read, analysed and identified the distinct performance obligations in these
contracts. |
|
2. Compared these performance obligations with that identified and recorded by the
Company. |
|
3. Considered the terms of the contracts to determine the transaction price including
any variable consideration to verify the transaction price used to compute revenue and to
test the basis of estimation of the variable consideration. |
|
4. Samples in respect of revenue recorded for material contracts were tested using a
combination of customer acceptances, subsequent invoicing and historical trend of
collections and disputes. |
|
In respect of samples relating to fixed price contracts, progress towards satisfaction
of performance obligation used to compute recorded revenue was verified with actual and
estimated efforts. |
|
Performed analytical procedures for reasonableness of revenues disclosed. |
| Contingent Liabilities |
Principal Audit Procedures |
| The company has few on-going legal matters relating to statutory taxes which require
management judgement to be applied in order to determine the likely outcome. |
In assessing the potential exposures to the Company, we have completed a range of
procedures including: |
|
assessing the design and implementation of controls in relation to the monitoring of
known exposures; |
|
reading Board and other meeting minutes to identify areas subject to Company
consideration; reviewing third party correspondence and reports; and |
|
reviewing the proposed accounting and disclosure of actual and potential legal
liabilities, drawing on third party assess- ment of open matters. |
Information Other than the Standalone Financial Statements and Auditors report thereon
The Companys Board of Directors is responsible for the preparation of other
information. The Other information comprises the information included in the Management
Discussion and Analysis, Boards Report including Annexures to the Board report, Corporate
Governance report and Shareholders information, but does not include the standalone
financial statement and our auditors report thereon.
Our opinion on the standalone financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the standalone financial statements or our knowledge
obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we required to report that fact. We have nothing
to report in this regard.
Responsibilities of Management and those charged with Governance for the Standalone
Financial Statements
The Companys Board of Directors is responsible for the matters stated in section
134(5) of the Act with respect to the preparation of these standalone financial statements
that give a true and fair view of the financial position, financial performance (including
other comprehensive income), changes in equity and cash flows of the Company in accordance
with the accounting principles generally accepted in India, including the accounting
Standards specified under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of the assets of the Company
and for preventing and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments and estimates that are
reasonable and prudent; and design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and presentation of
the standalone financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management is responsible for
assessing the Companys ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Companys financial
reporting process.
Auditors Responsibility for the Audit of the Standalone Ind-AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone
financial statements are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional scepticism throughout the audit.
We also:
Identify and assess the risks of material misstatement of the standalone financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the
Act, we are also responsible for expressing our opinion on whether the Company has
adequate internal financial control system in place and the operating effectiveness of
such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of Managements use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the entitys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the standalone financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditors report.
However, future events or conditions may cause the entity to cease to continue as a
going concern.
Evaluate the overall presentation, structure and content of the standalone financial
statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
During our audit we have observed that Company has became NPA with the Bank since
five years due to failure of repayment of long term borrowings received from the Companys
Banker.
During the audit period we have noticed that Production Unit of Storage Division of
the Company situated at Dharampur, Valsad, Gujarat, has been sealed by the Bank vide
letter dated October 11, 2019.
Materiality is the magnitude of misstatements in the standalone financial statements
that individually or in aggregate makes it probable that the economic decisions of a
reasonably knowledgeable user of the standalone financial statements may be influenced. We
consider quantitative materiality and qualitative factors in (i) Planning the scope of our
audit work and in evaluating the results of our work and (ii)To evaluate the effect of ant
identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters. We describe these matters
in our auditors report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditors 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 A" a statement on the matters specified
in paragraphs 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 best
of our knowledge and belief were necessary for the purpose of our audit;
b) In our opinion proper books of account as required by law have been kept 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 other comprehensive
income) the Cash Flow Statement and the Statement of Changes in Equity dealt with by this
Report are in agreement with the books of account.
d) In our opinion, the aforesaid Standalone financial statements comply with the Indian
Accounting Standards specified under section 133 of the Act, read with Rule 7 of the
Companies (Account) Rules, 2014.
e) On the basis of written representations received from the directors as on March 31,
2020 taken on record by the Board of Directors, none of the directors is disqualified as
on March 31, 2020 from being appointed as a director in terms of Section 164 (2) of the
Act. f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in "Annexure B" and
g) With respect to the other matters to be included in the Auditors Report in
accordance with the requirements of Sec 197(16)of the Act, as amended:
In our opinion and to the best of our information and according to the explanations
given to us, the remuneration paid by the Company to its directors during the year is in
accordance with the provisions of section 197 of the Act.
h) With respect to the matters to be included in the Auditors 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 the explanations given to us:
a) The Company has disclosed the impact of pending litigations on its financial
position in its Ind AS financial statements;
b) The company does not have any long term contracts including derivative contracts for
which there were any material foreseeable losses;
c) There has been no delay in transferring amounts, required to be transferred, to the
Investor Education and Protection Fund by the company.
FOR C D KHAKHKHAR & CO. Firm Registration No. 141767W CHARTERED ACCOUNTANTS
Sd/-
(CHETAN KHAKHKHAR) PROPRIETOR
M. No. 122647
Place: Valsad Date: 31/07/2020
Annexure A" to the Independent Auditors Report"
Referred to in paragraph 1 under the heading ‘Report on Other Legal &
Regulatory Requirement of our report of even date to the Standalone financial statements
of the
Company for the year ended March 31, 2020; we report that
1) (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of Property, Plant and Equipments.
(b) As explained to us, the Plant and Equipment have been physically verified by the
management in a phased manner, designed to cover all the items over a period of three
years, which in our opinion, is reasonable having regard to the size of the company and
nature of its business. Pursuant to the program, a portion of the Property, Plant and
Equipments has been physically verified by the management during the year and no material
discrepancies between the books records and the physical property, plant and equipment
have been noticed.
(c) According to the information and explanations given to us and on the basis of our
examination of the record of the company, the title deeds of immovable properties are held
in the name of the company.
2) The Inventory of finished goods, raw materials, components, stores and spare parts
has been physically verified at reasonable intervals by the management. In our opinion,
the frequency of such verification is reasonable. No material discrepancies were noticed
on physical verification of inventories as compared to books records.
3) The Company has granted interest free loans, secured or unsecured to companies,
firms, Limited Liability Partnerships or other parties covered in the Register maintained
under section189 of the Act and as detailed in the related party transactions disclosure
in the notes. According to the information and explanations given to us and in our opinion
the terms and condition on which such advances have been given to parties listed in
register maintained under section 189 of the Companies Act are not prima facie prejudicial
to the interest of the Company. The parties are regular in repaying the advances, or they
are either being adjusted or being repaid regularly.
4) In our opinion and according to the information and explanations given to us, the
company has complied with the provisions of section 185 and 186 of the Companies Act, 2013
in respect of loans and investments.
5) The Company has not accepted any deposits from the public and hence the directives
issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other
relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with
regard to the deposits accepted from the public are not applicable.
6) The maintenance of cost records has been specified by the Central Government under
section 148(1) of the Act. We have broadly reviewed the cost records maintained by the
Company pursuant to Companies (Cost Records and Audit) Rules, 2014, as amended by the
Central Government of India, maintenance of cost records has been prescribed under
sub-section (1) of Section 148 of the Companies Act and is of the opinion that prima
facie, the prescribed accounts and records have been made and maintained. However, we have
not made a detailed examination of the cost records with a view to determine whether they
are accurate or complete.
7) (a) According to the records of the company and the information and explanations
given to us and on the basis of our examination of the books of account, and records, the
Company has been generally regular in depositing undisputed statutory dues including
Provident Fund, Employees State Insurance, Income-Tax, Custom Duty, Goods and Service Tax
Act, Cess and other material statutory dues, as applicable to it to the appropriate
authorities. According to the information and explanations given to us, no undisputed
amounts payable in respect of the above were in arrears as at March 31, 2020 for a period
of more than six months from the date they became payable.
b) According to the information and explanation given to us, there are no dues of
income tax, sales tax, service tax, duty of customs, duty of excise, value added tax
outstanding on account of any dispute.
8) In our opinion and according to the information and explanations given to us, the
Company has not defaulted in the repayment of dues to any financial institutions and
banks.
9) Based upon the audit procedures performed and the information and explanations given
by the management, the company has not raised moneys by way of initial public offer or
further public offer including debt instruments and term Loans. Accordingly, the
provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not
commented upon.
10) Based upon the audit procedures performed and the information and explanations
given by the management, we report that no fraud by the Company or on the company by its
officers or employees has been noticed or reported during the year.
11) Based upon the audit procedures performed and the information and explanations
given by the management, the managerial remuneration has been paid in accordance with the
provisions of section 197 read with Schedule V to the Companies Act;
12) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of
clause 3 (xii) of the Order are not applicable to the Company.
13) According to the information and explanations given to us and on the basis of our
examination of the record of the company, in our opinion all transactions with the related
parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details
have been disclosed in the Ind AS Financial Statements as required by the applicable
accounting standards.
14. The Company has neither made any preferential allotment of shares nor fully or
partly convertible debentures during the year under audit.
15) According to the information and explanations given to us and on the basis of our
examination of the records of the company, the company has not entered into any non-cash
transactions with directors or persons connected with the company. Accordingly, the
provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not
commented upon.
16) In our opinion, the company is not required to be registered under section 45 IA of
the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of
the Order are not applicable to the Company and hence not commented upon.
FOR C D KHAKHKHAR & CO. Firm Registration No. 141767W CHARTERED ACCOUNTANTS
Sd/-
(CHETAN KHAKHKHAR) PROPRIETOR
M. No. 122647
Place: Valsad
Date: 31/07/2020
"Annexure B" to the Independent Auditors Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of M/S.
MAXIMAA SYSTEMS LIMITED ("the Company") as of March 31, 2020 in conjunction
with our audit of the Standalone financial statements of the Company for the year ended on
that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities
include the design, implementation and maintenance of adequate internal financial controls
that were operating effectively for ensuring the orderly and efficient conduct of its
business, including adherence to companys policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable financial information, as
required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting (the
"Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be
prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to
an audit of internal financial controls, both applicable to an audit of Internal Financial
Controls and, both issued by the Institute of Chartered Accountants of India. Those
Standards and the Guidance Note require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether adequate internal
financial controls over financial reporting was established and maintained and if such
controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company;(2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with
authorisations of management and directors of the company; and(3) provide reasonable
assurance regarding prevention or timely detection of unauthorised acquisition, use, or
disposition of the companys assets that could have a material effect on the financial
statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanation given
to us, the Company has, in all material respects, an adequate internal financial controls
system over financial reporting and such internal financial controls over financial
reporting were operating effectively as at March 31, 2020, based on the criteria for
Internal Financial control over Financial Reporting established by the company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls over Financial Reporting issued by the Institute of Chartered
Accountants of India.
FOR C D KHAKHKHAR & CO. Firm Registration No. 141767W CHARTERED ACCOUNTANTS
Sd/-
(CHETAN KHAKHKHAR)
PROPRIETOR
M. No. 122647
Place: Valsad
Date: 31/07/2020
+91-9892691696
