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Notes to Accounts of Maestros Electronics & Telecommunications Systems Ltd.

Mar 31, 2018

1. Company Overview

Maestros Electronics & Telecommunications Systems Limited ("the Company") is a public limited company domiciled in India and incorporated under the provisions of the Companies Act 1956. The registered office of the Company is located at Plot No. EL/66, TTC Industrial Area, Electronic Zone, Mahape Navi Mumbai Thane- 400710 Maharashtra. The Company is listed on the Bombay Stock Exchange (BSE).

The financial statements are approved for issue by the Company''s board of directors on May 29, 2018.

Property, plant and equipment, and Intangible assets

The Company has elected to measure all items of property, plant and equipment and intangible assets at its carrying value at the transition date.

Leasehold land

In terms of Ind AS, the Company has identified, classified and presented transaction of leasehold land as finance lease upon the terms and conditions in existence as on date of transition to Ind AS.

Investments in debt instruments - interest free loans

Loans given is a financial asset, which needs to be measured at amortised cost. As per Previous GAAP interest free loans was measured at transaction amount. In accordance with Ind AS 109 Financial Instruments, the Company has measured the loan given restrospectively at amortised cost on the date of transition. Accordingly, the difference between the transaction amount and its fair value at the date of transaction has been recorded as deferred interest expense with a corresponding impact to the loans.

Deferred tax

Under Previous GAAP, deferred tax were accounted for using the income statement approach which focuses on differences between taxable profit and accounting profit for the period. Ind AS requires entities to account for deferred taxes using the Balance Sheet approach which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred taxes on temporary differences which were not required to be recorded under Previous GAAP. In addition, the various transitional adjustments have led to deferred tax implications which the Company has accounted for. Deferred tax adjustments are recognised in correlation to the underlying transaction either in Retained earnings or Other Comprehensive Income on the date of transition.

Excise duty

Under Previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive excise duty. Excise duty paid is presented on the face of the Statement of Profit and Loss as separate line item as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended March 31, 2017 by Rs. 93,23,566. There is no impact on the total equity and profit.

Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements that is actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in Other Comprehensive Income instead of profit or loss. Under the Previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2017 increased by Rs. 3,72,389 Lakhs. There is no impact on the total equity as at April 1, 2016.

Retained earnings

Retained earnings as at April 1, 2016 have been adjusted consequent to the above Ind AS transition adjustments.

Other Comprehensive Income

Under Ind AS, all items of income and expense recognised in a period are to be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss, but are shown in the Statement of Profit and Loss as Other Comprehensive Income which includes remeasurement of defined benefit plans, effective portion of gain | (loss) on cash flow hedging instruments and fair value gain | (loss) on FVOCI equity instruments. The concept of Other Comprehensive Income did not exist under Previous GAAP.

2. Terms/Rights attached to equity shares

The Company has only one class of equity shares having face value of INR 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended March 31, 2018, the amount of dividend proposed for distribution to equity shareholders is INR Nil per share (March 31, 2017 - INR Nil per share ). In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

Hypothication

Overdraft facility has secured by way of, exclusive hypothecation charge on Fixed Deposit, it carries interest rate of 7.51% p.a. repayable monthly.

Cash Credit Facility has secured by way of, exclusive hypothecation charge on entire book debts & Stock, it carries interest rate of 10.80% p.a. repayable on demand.

3. FINANCIAL RISK

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The company''s financial risk management policy is set by the managing board.

Market risk is the risk of loss of future earnings fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates foreign currency exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including loans and borrowings foreign currency receivables and payables.

3.1 Management of liquidity risk

The company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. Liquidity risk is defined as the risk that the company will not be able to settle or meet its obligations on time or at a reasonable price. Typically the company ensures that it has sufficient cash on demand to meet expected operational expenses and servicing of financial obligations.

3.2 Management of market risk

The Company''s size and operations result in it being exposed to the following market risks that arise from its use of financial instruments:

i) Interest rate risk; and

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risk as at the respective reporting dates.

ii) Foreign exchange risk

The Company is exposed to exchange fluctuation risk for its purchase from overseas suppliers in various foreign currencies. The following table analyzes foreign currency risk from financial instruments as of:

The above risks may affect the Company''s income and expenses, or the value of its financial instruments. The objective of the Company''s Management of market risk is to maintain this risk within acceptable parameters, while optimising returns.

3.3 Management of credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations.

Trade receivables

Credit risk refers to the risk of default on its obligation by the counter party resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to Rs. 2.3 Crore and Rs.3.4 Crore as of March 31 2018 and March 31 2017 respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed by the company through credit approvals establishing credit limits and continuously monitoring the credit worthiness of customers to which the company grants credit terms in the normal course of business Our historical experience of collecting receivables is supported by low level of past default and hence the credit risk is perceived to be low.

3.4 CAPITAL MANAGEMENT

Risk management

The primary objective of the Company''s Capital Management is to maximise shareholder value. The Company monitors capital using Net Debt-Equity ratio. For the purposes of the Company''s capital management, the Company considers the following components of its Balance Sheet to be managed capital. Total equity as shown in the Balance Sheet includes General reserve, Retained earnings, Share capital, Security premium. Total debt includes current debt plus non-current debt.

3.5 Financial Instruments Valuation

All financial instruments are initially recognized and subsequently re-measured at fair value as described below: The fair value of quoted investment is measured at quoted price or NAV.

The fair value of the remaining financial instruments is determined using discounted cash flow analysis.

All foreign currency denominated assets and liabilities are translated using exchange rate at reporting date.

The financial instruments are categorized into two levels based on the inputs used to arrive at fair value measurements as:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have a quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing net assets value (NAV).

Level 2: The fair value of financial instruments that are not traded in an active market (for example over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

There were no transfers between any levels during the year.

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

i) the use of quoted market prices or dealer quotes for similar instruments

ii) the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on

iii) the fair value of forward foreign exchange contracts are determined using forward exchange rates at the Balance Sheet

iv) the fair value of foreign currency option contracts is determined using the Black Scholes valuation model.

v) the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

All of the resulting fair value estimates are included in level 1 and 2.

iii) Valuation processes

The finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values.

The carrying amounts of trade receivables, trade payables, other receivables, short-term security deposits, bank deposits with more than 12 months maturity, capital creditors and cash and cash equivalents including bank balances other than cash and cash equivalents are considered to be the same as their fair values due to the current and short-term nature of such balances.

The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

4.1 Unrecognsied temporary differences

The Company has not recognised deferred tax liability associated with fair value gains on equity share measured at OCI as based on Management projection of future taxable income and existing plan it is not probable that such difference will reverse in the foreseeable future.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change as compared to the prior year.

Ind AS 108 establishes standards for the way that pu blic business enterprise s report information about operating segments and related disclosures about products an d services, geographic areas, and major customers. The Company''s operations predominantly relate to manufacturing, trading and leasing of assets. Based on the "management approach” as defined in Ind /AS 108, the Chief Operating Decision Maker (CODM) evaluates the Company''s performance and allocates resources based on an analysis of various perfocmance indicators by business segments and geographic segments. Accordingly, information as been presented both along business segments and geographic segments. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the significant accounting policies.

5. The company being listed company required to follow section 203 & 134 (1), However, the view of absence of appropriate candidate for filing vacancy of Company Secretary have not appointed. The said Key Managerial Personnel as per section 203 and to the extent 134(1) Signing of financial statement have been considered only by director. However, the management has considered the matter in the process of appointing company Secretary.

6. The company has not appointed internal auditor required as per section 138 of Companies Act, 2013.

7. Previous year''s figures have been Rearranged , Wherever Necessary.


Mar 31, 2015

1. Balances of Loans and Advances, Secured Loans, Trade Payables & Others are subject to confirmation and reconciliation and consequential adjustments, if any.

2. In the opinion of the Board & to the best of their knowledge & belief the value of realization of current assets, loans & advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet & the provisions for all the loans & determined liabilities is adequate and not in excess of the amount.

3. Provision for retirement benefits to employees was provided on accrual basis, which is in conformity with Accounting Standard-15 issued by ICAI and the amount has not been quantified because actuarial valuation report is not available. However, in the opinion of the management the amount involved is negligible and has no material impact on the Statement of Profit & Loss.

4. According to a technical assessment carried out by the Company, there is no impairment in the carrying cost of cash generating units of the Company in terms of accounting standards-28 issued by the Institute of Chartered Accountants of India.

5. The Company has not received the required information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Hence disclosures, if any, relating to amounts unpaid as at the yearend together with interest paid/payable as required under the said Act have not been made.

6. According to a technical assessment carried out by the Company, there is no impairment in the carrying cost of cash generating units of the Company in terms of accounting standards-28 issued by the Institute of Chartered Accountants of India.

7. Related Party Transaction :

Related Parties and Nature of Relationship:


Mar 31, 2014

Previous year''s figures have been regrouped / rearranged wherever necessa ry to conform to current year ''s classification.

Rights and preferences attached to (e) Equity Shares

The Company has only one class of equity sha res having a par value of Rs.10 per share. Each holder of the equity shares is entitle to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company the holders of Equity shares are entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

ii Amounts due to small scale industrial undertaking

Amounts due to small scale industrial undertaking if any could not be disclosed as such parties could not be identified from the records of the company

iii The information as required by Accounting Standard 18 relating to ''Related Party

Disclosures'' is given below:

a List of related parties:

(As identified by the management)

Individuals Controlling the Company

Dr. K. K. Menon Mr. B.T. Tendulkar

Key Management Personnel

Mr. B.T. Tendulkar

Entity in which controlling shareholder has significant influence

Maestros Mediline Systems Ltd. Maestros Equipment Services Pvt. Ltd.

iv Leases

Leasehold Land includes land taken on lease from Maharashtra Industrial Development Corporation for a period of 95 years.

v

Balances in certain accounts of Trade receivables, Advances given, Trade Payables and advance received against products are subject to reconciliation / confirmation. In the opinion of the management, the difference as may be noticed on such reconciliation will not be material.

vi Segment Information for the period ended

The Company''s financial reporting is organized into two major operating divisions'' viz Electronics & Instrumentation and Information Technology activities. These divisions are the basis on which the Company reports its primary segment. The composition of these segments is given below.

Segment Capital Employed :

Fixed assets used in Company''s business or liabilities have not been identified to any reportable segment, as the fixed assets are used interchangeably between segments. It is currently not possible to furnish segmental disclosure relating to total assets and liabilities.

vii Prior Year Comparatives

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

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