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Accounting Policies of Maestros Electronics & Telecommunications Systems Ltd. Company

Mar 31, 2015

(a) Corporate Information

Brief Business Activity:

Manufacturer and trader of Electronically, Medical & Telecommunication Instruments

(b) Basis of Preparation of Financial Statements

The financial statements have been prepared to comply in all material respects with the accounting standards notified by Companies (Accounting Standards) Rules 2006, (as amended) and the relevant provisions of the Companies Act, 2013 ("the Act"). The financial statements have been prepared under the historical cost convention on an accrual basis in accordance with accounting principles generally accepted in India. The accounting policies have been consistently applied by the Company and are consistent with those used in previous year.

(c) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

(d) Revenue recognition

All incomes and expenditure are recognized as per 'Accounting Standard- 9' accounted on accrual basis except where stated otherwise.

(e) Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

(f) Foreign Currency Transactions

(i) Transaction denominated in foreign currencies are recorded at the exchange rate prevailing at the time of transaction.

(ii) Any gain or losses on account of exchange difference either on settlement or on transaction is recognized in the Profit & Loss Account

(g) Fixed Assets

(i) Tangible fixed assets

Tangible fixed assets are stated at cost, less a cumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any a attributable cost of bringing the asset to its working condition price. Borrowing costs directly attributable to acquisition of fixed assets which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase be put to use.

(ii) Intangible fixed assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortized on a basis which is estimated to be the useful life of the asset.

(h) Depreciation

Depreciation has been provided on Straight line method at the rates and in the manner prescribed in Schedule II of the Companies Act, 2013 on pro-rata basis from the date assets have been put to use.

(i) Impairment of assets

Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized in accordance with Accounting Standard-28 "Impairment of Assets", for the amount by which the asset's carrying amount exceeds its recoverable amount as on the carrying date. The recoverable amount is higher of the asset's fair value less costs to sell vis-à-vis value in at the lowest levels for which there are separately identifiable cash flows.

(j) Investments

Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such decline is of a permanent nature.

Current investments are carried individually, at the lower of cost and fair value. Costs of investments include acquisition charges such as brokerage, fees and duties.

(k) Inventories

Inventories are valued at cost or net realizable value whichever is lower.

(l) Taxation

Provision for current tax is made as per the provisions of the Income-tax Act, 1961.

Deferred tax for the year is recognized on timing difference, being the difference between taxable incomes and accounting income that originates in one period and is capable of reversal in one or more subsequent periods.

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is a reasonable certainty that the assets can be realized in future, however when there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets.

(l) Retirement Benefits

Liabilities in respect of bonus, gratuity, retirement benefit & leave encashment is being accounted for on Accrual basis.

(m) Earnings per share

The earnings considered in ascertaining the company's EPS comprise of the net profit after tax as per Accounting Standard 20 on "Earnings Per Share", issued by the Institute of Chartered Accountants of India. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares unless the effect of the potential dilutive equity shares is anti-dilutive.

(n)Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

(o) Prior Year Comparatives

Figures for the previous year have been regrouped and rearrange wherever necessary.


Mar 31, 2014

I) Basis of Accounting

The financial statements of the Company are prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act 1956. The financial statements are prepared on an accrual basis and under the historical cost convention.

ii) Presentation and disclosure of financial statements

During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI did not have any impact on recognition and measurement principles followed for preparation of financial statements. However, it has significantly impacted the presentation and disclosures made in the financial statements.

iii) Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis. The principles of revenue recognition are given below:

(a) Revenue from goods sold is recognised at the point of dispatch of goods to the customers.

(b) Sales are reflected at net of trade discounts.

(c) Revenue from the sale of software products is recognised when the sale is completed with the passing of title.

(d) Income from annual maintenance contracts and annual subscriptions is accounted for in the ratio of the period expired to the total period of contract and amount received from customers towards unexpired portion of annual maintenance contracts and annual subscriptions is shown as advances received from customers which is accounted as income in the following financial year(s).

(e) Dividend income is recognised when the right to receive dividend is established.

(f) Incomes from services rendered are booked based on agreements/arrangements with the concerned parties.

iv) Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles require estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Differences between the actual results and estimates are recognised in the period in which the results are known / materialized.

v) Fixed Assets and Depreciation

a) Fixed Assets

All fixed assets are stated at cost of acquisition/construction less depreciation. Cost includes acquisition and all identifiable expenditure incurred to bring the assets to its present condition and location.

Fixed Assets are eliminated from financial statements, either on disposal or when retired from active use. Such assets are removed from fixed asset records on disposal.

b) Depreciation

Depreciation is provided (except in case of Leasehold Land & Licensing Fees which are being amortised over the period of lease & License respectively ) on straight-line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956. Depreciation on additions/deletions to assets during the period is provided on a pro-rata basis from / up to date of addition or deletion, as the case may be.

c) Capital Work –In –Progress

Capital Work-in–progress includes all the expenses and payments incurred / made for fixed assets under construction, till such assets are ready for intended use.

vi) Investments

Long Term investments are stated at cost. Provision for diminution in value of long- term investments is made only if such a decline is other than temporary.

vii) Borrowing Costs

Borrowing costs attributable to the acquisition and construction of assets are capitalised as part of the cost of respective assets up to the date when such assets are ready for its intended use. Other borrowing costs are charged to the revenue in the period in which they are incurred.

viii) Inventories

Inventories are valued on the following basis:

(a) Raw material at lower of cost and net realizable value.

(b) Work-In-Progress at lower of cost and net realizable value.

(c) Finished goods at lower of cost and net realisable value.

Cost includes direct labour and direct overheads. ix) Retirement Benefits

(a) Contributions are made by the Company to provident fund on a monthly basis and charged to Profit & Loss Account.

(b) Provision has been made in respect of gratuity & leave encashment on accrual basis

x) Foreign Currency Transactions

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the time of transaction.

(b) Any gain or losses on account of exchange difference either on settlement or on translation is recognised in the Profit & Loss Account

xi) Research and Development

Revenue Expenditure on research and development is charged to Profit and Loss account in the year of incurrence except in case of development of new products undertaken where the same are deferred and expensed out over a reasonable period for which the benefit is received after commercial development of the products.

xii) Income Tax

Income Tax is accounted for in accordance with Accounting Standard 22 (AS 22) on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India. Tax expense comprises both current and deferred tax. Current tax is measured at the amount expected to be paid to / recovered from the tax authorities using the applicable tax rates. Deferred tax assets and liabilities are recognised for future tax consequences attributable to timing differences between taxable income and accounting income that are capable of reversing in one or more subsequent periods and are measured using the relevant enacted tax rates. At each Balance Sheet date, the Company reassesses unrealised deferred tax assets to the extent they have become reasonably certain or virtually certain of realisation, as the case may be.

xiii) Contingencies & Events occurring after the Balance Sheet Date

(a) Accounting for contingencies (gains and losses) arising out of contractual obligations, are made only on the basis of mutual acceptances. These are disclosed by way of notes to the Balance Sheet.

(b) Provision is made in the accounts in respect of those contingencies which are likely to materialise into liabilities after the year-end, till the date of approval of the accounts by the Board of Directors and have material effect on the position stated in the Balance Sheet.

 
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