MAESTROS MEDILINE SYSTEMS LIMITED

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2 NOTICE is hereby given that the Fortieth Annual General Meeting of Maestros Mediline Systems Limited will be held at Hotel Celebrations, Plot No. L-1, Sector 19, Vashi, Navi Mumbai on Monday, December 30, 2013 at 3.30 p.m. to transact the following business: ORDINARY BUSINESS: 1. To receive, consider and adopt the Directors Report, Auditors Report and Audited Balance Sheet as at 31 st March, 2013 and Profit and Loss Account for the year ended on that date together with notes and schedules attached thereto. 2. To appoint the retiring auditors, M/s. R A R and Associates (Formerly known as M/s. Anil Goyal & Co.), Chartered Accountants, as statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting and to authorize the Board of Directors to fix their remuneration. The retiring auditors are eligible for re-appointment and have confirmed their willingness to accept office, if re-appointed. 3. To appoint a director in place of Mr. Rajiv Nair who retired by rotation and being eligible, offers himself for re-appointment. SPECIAL BUSINESS: Appointment of directors:- 4. To consider and, if thought fit, to pass, with or without modifications, the following resolution as an ordinary resolution: RESOLVED THAT Mr. Muralidharan Nair, who was appointed as additional director by the Board of directors of the company pursuant to section 260 of the Companies Act, 1956 and who holds office only upto the date of Annual General Meeting and in respect of whom the Company has received notice in writing, under Section 257 of the Companies Act, 1956, from Mr Bipin Wali member signifying his intention to propose Mr. Muralidharan Nair as candidate for the office of Director of the Company, be and is hereby appointed a Director of the Company liable to retire by rotation. 5. To consider and, if thought fit, to pass, with or without modifications, the following resolution as an ordinary resolution:- RESOLVED THAT Mr. Niladri Mondal, who was appointed as additional director by the Board of directors of the company pursuant to section 260 of the Companies Act, 1956 and who holds office only upto the date of Annual General Meeting and in respect of whom the Company has received notice in writing, under Section 257 of the Companies Act, 1956, from Mr. Sudhir Shetty member signifying his intention to propose Mr. Niladri Mondal as candidate for the office of Director of the Company, be and is hereby appointed a Director of the Company liable to retire by rotation. By Order of the Board of Directors Dr. Krishnakumar Menon (Chairman & Managing Director) Place: Navi Mumbai Date: 7 th December,

3 BOARD OF DIRECTORS DR. KRISHNA KUMAR MENON : CHAIRMAN & MANAGING DIRECTOR MR. RAJIV NAIR : EXECUTIVE DIRECTOR MR. MURALIDHARAN NAIR : INDEPENDENT NON EXECUTIVE DIRECTOR MR. NILADRI MONDAL : INDEPENDENT NON EXECUTIVE DIRECTOR REGISTERED OFFICE PLOT NO. EL-63 T.T.C INDUSTRIAL AREA ELECTRONIC ZONE, M.I.D.C, MAHAPE, NAVI MUMBAI MAHARASHTRA TEL. NO.: / 3200 FAX NO.: accounts@maestros.net WEBSITE: PLANT LOCATIONS: UNIT I: PLOT NO.EL-63 T.T.C INDUSTRIAL AREA, ELECTRONIC ZONE, M.I.D.C., MAHAPE, NAVI MUMBAI UNIT II: PLOT NO.82-A, SECTOR I, INDUSTRIAL AREA, PARWANOO, DIST. SOLAN HIMACHAL PRADESH AUDITORS R A R & ASSOCIATES CHARTERED ACCOUNTANTS BANKERS STATE BANK OF INDIA REGISTRAR & SHARE TRANSFER AGENTS LINK INTIME INDIA PRIVATE LIMITED C-13 PANNALAL SILK MILLS COMPOUND, L. B. S MARG, BHANDUP (WEST), MUMBAI TEL NO.: FAX NO.:

4 NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER. The instrument of proxy should, however, be deposited at the Registered Office of the Company not less than 48 hours before the Meeting. 2. All documents referred to in the above Notice are open for inspection at the Registered Office of the Company on all working days (except Saturdays, Sundays and holidays) between a.m. to p.m. upto the date of the Annual General Meeting. 3. Members/ Proxies should bring the Attendance slips duly filled in for attending the meeting. 4. The Register of Members and the Share Transfer Books of the Company will remain closed from 25 th December, 2013 to 30 th December, 2013 (both days inclusive). 5. The explanatory statement pursuant to Section 102 of the Companies Act, 2013 is annexed herewith. By Order of the Board of Directors Registered Office: Dr. Krishnakumar Menon (Chairman & Managing Director) Plot No. EL-63, TTC Indl. Area, Electronic Zone, M.I.D.C, Mahape, Navi Mumbai , Maharashtra. Date: 7 th December,

5 Explanatory statement pursuant to section 102 of the Companies Act, Item number 4:- Mr. Muralidharan Nair was appointed as an Additional Director on the Board of the Company w.e.f. 1 st April, Pursuant to the provisions of Section 260 of the Companies Act, 1956 the above Director holds office upto the date of the ensuing Annual General Meeting of the Company. The Company has received notices under Section 257 of the Companies Act, 1956 from Mr. Bipin Wali member holding 1500 equity shares in the company proposing candidature of Mr. Murlidharan Nair as Director of the Company, liable to retire by rotation along with the prescribed deposit of Rs The Board recommends appointment of Mr. Murlidharan Nair as Director liable to retire by rotation. None of the directors other than Mr. Muralidharan Nair is interested in the Resolution. Item number 5:- Mr. Niladri Mondal was appointed as an Additional Director on the Board of the Company w.e.f. 16 th November, Pursuant to the provisions of Section 260 of the Companies Act, 1956 the above Director holds office upto the date of the ensuing Annual General Meeting of the Company. The Company has received notices under Section 257 of the Companies Act, 1956 from Mr. Sudhir Shetty member holding 4000 equity shares in the company proposing candidature of Mr. Niladri Mondal as Director of the Company, liable to retire by rotation along with the prescribed deposit of Rs The Board recommends appointment of Mr. Murlidharan Nair as Director liable to retire by rotation. None of the directors other than Mr. Niladri Mondal is interested in the Resolution. By Order of the Board of Directors Registered Office: Dr. Krishnakumar Menon (Chairman & Managing Director) Plot No. EL-63, TTC Indl. Area, Electronic Zone, M.I.D.C, Mahape, Navi Mumbai , Maharashtra. Date: 7 th December,

6 To The Board of Directors Maestros Mediline Systems Limited Navi Mumbai, I, Krishnakumar Nandkumar Menon, Managing Director of Maestros Mediline Systems Limited, to the best of my knowledge and belief, certify that: (a) I have reviewed financial statements and the cash flow statement for the year and that to the best of my knowledge and belief: i. these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; ii. these statements together present a true and fair view of the company s affairs and are in compliance with existing accounting standards, applicable laws and regulations. (b) There are, to the best of my knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the company s code of conduct. (c) I accept responsibility for establishing and maintaining internal controls for financial reporting and that I have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and I have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which I am aware and the steps I have taken or propose to take to rectify these deficiencies. (d) I have indicated to the auditors and the Audit committee i. significant changes in internal control over financial reporting during the year; ii. significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and iii. instances of significant fraud of which I have become aware and the involvement therein, if any, of the management or an employee having a significant role in the company s internal control system over financial reporting. Place: Navi Mumbai Date: 5 th December, 2013 For and on behalf of Board of Directors Krishnakumar Menon Managing Director 6

7 DIRECTORS REPORT Your Directors take pleasure in presenting the Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the year ended 31 st March, Financial Results Current Year Previous Year Total Income 9,98,26,542 32,25,71,464 Less: Expenditure 19,09,25,972 24,92,87,791 Profit/(Loss) before Depreciation, Finance Charges and Tax (9,10,99,430) 7,32,83,673 Less: Interest and Financial Charges 4,67,38,355 3,77,46,600 Less: Depreciation 1,87,91,752 1,81,16,552 Profit/(Loss) before Tax (15,66,29,537) 1,74,20,521 Less: Provision for Taxation - 10,00,000 Less: Prior Period Taxation Adjustments (1,17,60,179) (15,52,840) Add: Deferred Tax (7,25,195) (8,54,759) Profit/(Loss) for the Year (14,41,44,163) 1,88,28,120 Add: Balance brought forward from previous year 6,09,63,530 8,93,36,836 Less: Appropriated as per Scheme of Arrangement - - Profit available for appropriation - 10,81,64,956 Less: Appropriations Transfer to General Reserve - (4,72,01,426) Balance carried forward (8,31,80,134) 6,09,63, Management Discussion And Analysis (a) Industry Structure and Development: The performance of your Company during the year under report has shown not good improvement over the previous year. The total revenue from the operations for the year ended March 31, 2013 amounted to Rs.9.82 crore, as against Rs crore, has decreased by 69.56% over the last year as last year s revenue also includes Electrocnis & Infra activity. (b) Segment wise operational performance: Your Company has three main segments of business viz. Medical Embedded Systems ( MES ),Electronics and Instrumentation and Telemedicine. The sale of MES division has decreased by 67.49%. During the year under review your Company has upgraded its existing products with better technology and features. (c) Threats and Concerns: The most important threat continues to be competition from low cost imported products. Manpower costs are rising as many large companies are mopping the available talent pool supply of which is limited. Thus for small and mid-range companies, retaining high quality manpower is a concern. 7

8 (d) Internal control systems and their adequacy: Your Company has well established and adequate systems for internal control to provide reasonable assurance that all assets are safeguarded; transactions are authorized and reported correctly. The internal control system provides well documented policies, guidelines authorization and approval procedures for its operations. Your Company maintains controls of high norms both in raw material as well as finished goods. The percentage of rejection from market has reduced drastically due to controls set up in this division. To achieve high level of customer satisfaction, your company is regularly conducting training programs for its engineers and technical staff on continuous basis, this has resulted in call solving at the initial level itself. The distribution activity of your Company is mainly controlled through appointing well established dealers who are experienced in this field and setting up targets for sales and service. (e) Human Resources: Your Company continuously endeavors to improve the work environment for its employees. Competitive compensation package, innovative and challenging environment to work, transportation facilities, etc., are some of the steps taken by the Company for the welfare of its employees. 3. Dividend Considering the need for conservation of resources, the Board does not recommend any dividend. 4. Directors Responsibility Statement To the best of their knowledge and belief, and according to the information and explanations provided to them, your Directors make the following statement, pursuant to Section 217 (2AA) of the Companies Act, 1956: (i) that in the preparation of the annual accounts, the applicable accounting standards have been followed; (ii) the appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company as at March 31,2013 and of the profit of the Company for the year April 1, 2012 to March 31, 2013; (iii) the proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for detecting fraud and other irregularities; (iv) the annual accounts have been prepared on a going concern basis 5. Corporate Governance The Company has complied with the mandatory provisions of Corporate Governance as prescribed in the Listing Agreement. A separate report on Corporate Governance compliance is included as a part of the Annual Report along with the Auditors Certificate. 8

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11 Directors Profile:- Dr. Krishna Kumar Menon Dr. Krishna Kumar Menon holds doctorate in Macro Economics and Marketing from University of London. Besides he holds Diploma in Management Studies and Diploma and Masters in Marketing Management. He was Management Trainee with Philips India from 1983 to 1985 in the area of sales promotion, marketing displays, dealer development and monetary controls. Dr. Krishna Kumar Menon did a short stint as Senior Sales Executive with Blow Plast Ltd. and as Area Manager with Amtrex Air Conditioners. Subsequently he joined Ulmer Spatz (a subsidiary of Unilever Plc.) as Regional Manager for Middle East operations. He is looking after Finance and Marketing of Maestros for the past 14 years. Mr. Rajiv. K. Nair Mr. Rajiv Nair holds a diploma in instrumentation and telecommunication certified by MCSE. He also gives training in MS Technologies for all infrastructural products. He also has a vast experience in field of Information Technology. Since association with the Company, he is handling Information Technology related area in the Company. Mr. B. K. Tendulkar Mr. B. K. Tendulkar is B.E. (Instrumentations) from University of Mumbai. Besides he has done Post Graduate Diploma in Business Management from University of Mumbai. He had been with K.E.M. Hospital, Mumbai, Research & Development team for almost 8 years and developed many new technologies with the help of physicians. He has led the embedded systems and medical instrument division since its beginning with a vision to foray into adaptation of new technologies in the field of medicine for the Indian subcontinent with a dream to make affordable medical aid to the masses. He is the instrumental in establishing the Electronics and Instrumentations division and his expertise has led to the development of OEM products having applications in various industries. 2. Number of Board Meetings held and the dates on which held. During the period April 1, 2012 to March 31, 2013, 5 Board Meetings were held. The date on which the said meetings were held as follows: 03 rd April, 2012, June 13, 2012, September 25, 2012 (adjourned to October 1, 2012), October 31, 2012, February 08, The details in respect of attendance of directors in Board meetings and General Meetings are as under: Name of director Number of board Meetings Whether AGM dated 11

12 attended 07/12/2012 attended (Y/N) Dr. Krishnakumar Menon 5 Y Mr. Rajiv K. Nair 1 N Mr. Balkrishna Tendulkar 5 Y Dr. Nitin S. Paranjape 3 N Mr. Narendra Mahajani 4 Y 4. Remuneration of Directors Details of remuneration during are as follows:- Sr. No. Name Designation Total Salary and Perquisites Sitting Fees 1 Dr. Krishnakumar Menon Chairman & Managing Director (Rs.) (Rs.) 4,02,140-2 Mr. Balkrishna Tendulkar Executive Director 12,58,124-3 Mr. Rajiv K. Nair Executive Director Dr. Nitin S. Paranjape Non-Executive Director Mr. Narendra Mahajani Non-Executive Director - - Dr. Krishnakumar Menon, Managing Director and Mr. Balkrishna Tendulkar, Whole-time Director of the Company are in the whole time employment, and their employment is contractual in nature. They were re-appointed in the board meeting held on October 31, 2012 to hold office up to 25 th November Mr. Balkrishna Tendulkar resigned from office of Whole-time directorship w.e.f. 1 st April, Tenure As per the provisions of the Companies Act, 1956 and Articles of the Company, out of total directors two third directors are liable to retire by rotation. Out of this two third, one third is liable to retire in every Annual General Meeting. Accordingly, the tenure of each director is 3 years but they are eligible for reappointment. Mr. Krishnakumar Menon, Managing Director is permanent member of the Board. Mr. Balkrishna Tendulkar, Executive Director has resigned from the Board with effect from 1 st April, Accordingly, Mr. Rajiv Nair is liable to retire by rotation and is eligible for reappointment. B. Audit Committee Due to resignation by independent and other directors and unavoidable circumstances making it difficult for the Company to fill the vacancy so created on time, the composition of Audit Committee was not as per the requirements of clause 49 of listing agreement in The Board is in the process of taking appropriate steps to make its composition compliant with provisions of listing agreement. 12

13 . C. Investors Grievance Committee Due to disproportionate composition of Board of directors and unavailability of Nonexecutive directors on Board throughout the year, the composition of Investor Grievance Committee was unbalanced in The Board has started taking suitable measures to make the composition balanced and in accordance with the requirements of the listing agreement. E. General Body Meeting 1. Location and time for the last three Annual General meetings were: Year ended Date Time Location 31/03/ th September, p.m Hotel Days-Inn, Plot no. L-1, Sector 19, Near Truck Terminal, Opp. Modern College, Near Palm Beach Marg, Vashi, Navi Mumbai /03/ th September, p.m. Hotel Celebrations, Plot no. L-1, Sector 19, Near Truck Terminal, Opp. Modern College, Near Palm Beach Marg, Vashi, Navi Mumbai /03/ th December, p.m. Hotel Celebrations, Plot no. L-1, Sector 19, Near Truck Terminal, Opp. Modern College, Near Palm Beach Marg, Vashi, Navi Mumbai F. Disclosures During the year under review, the Company has not entered into transactions of material nature with its Promoters, Directors, etc., that may have potential conflict with the interests of the Company. There are no penalties or strictures imposed on the Company by Stock Exchanges, SEBI or any other statutory authority on any matter related to capital markets during the last three years. G. Means of Communication Half yearly report sent to each household of shareholders No, as the unaudited financial results of the Company are published in the newspapers every quarter. 13

14 Quarterly Results published in newspapers Yes, the newspapers are : a) The Financial Express, Mumbai edition b) Apla Mahanagar, Mumbai edition Website, where results or official news are displayed Whether Management Discussion and Analysis is a part of the Annual Report or not Yes H. Shareholders Information Annual General meeting Date, time and venue Financial Calendar (Tentative) Date : December 30, Time : 3.30 p. m. Venue: Hotel Celebrations, Plot no. L-1, Sector 19, Near Truck Terminal, Opp. Modern College, Near Palm Beach Marg, Vashi, Navi Mumbai The financial calendar for the year is as below: First Quarter Results July Second Quarter Results October Third Quarter Results January Fourth Quarter Results April Annual Results June Annual General Meeting September Dates of Book Closure Listing on Stock Exchanges and payment of listing fees Stock Code The Register of Members and Share Transfer Register will remain closed from25th December, 2013 to 30 th December, 2013 (both days inclusive) on account of Annual General Meeting. The Equity Shares of the Company are listed at The BSE Limited, Mumbai. Listing fees for the year have been paid. Market price data Month & Year High (Rs.) Low (Rs.) Volume April May June July August September October November December January

15 February March Share price performance :- Maestros Vs. Sensex Registrar and Transfer Agents Share Transfer System Link Intime India Private Limited. C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai , Maharashtra. Tel: Fax: The share transfer function has been delegated by the Board to a Share Transfer Committee. SHAREHOLDING PATTERN AS ON MARCH 31, Sr. Particulars No. of Shares % to total No. 1 Promoters, Directors and Relatives Bodies Corporate (Domestic) Financial Institutions, Banks Mutual Funds, UTI Foreign Institutional Investors General Public Others (Clearing Members) Non Resident Indians HUF TOTAL 4,373,

16 DISTRIBUTION OF SHAREHOLDING AS ON MARCH 31, No. of Equity Shares held No. of Shareholders Number % to total in Rs. % to total Upto and above TOTAL ,732, Dematerialisation of Equity Shares and liquidity The Company has signed agreements with both National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for making its shares available in dematerialised form. As of March 31, 2013, around 96.37% of the shares of the Company are in dematerialised form. Outstanding GDRs / ADRs / Warrants or any convertible instruments, conversion date and likely impact on equity Plant locations NIL Medical equipment manufacturing plant at: 1) Navi Mumbai - Plot No. EL-63 & 64, TTC Industrial Area, Electronic Zone, M.I.D.C., Mahape, Navi Mumbai , Maharashtra. 2) Himachal Pradesh (Unit I) - Plot No. 82-A, Sector I, Industrial Area, Dist-Solan , Parwanoo, Himachal Pradesh. Address for correspondence Shareholder correspondence should be addressed to the Company s Registrars and Share Transfer Agents at the address mentioned above. 16

17 CERTIFICATE To, The Members, Maestros Mediline Systems Limited We have examined the compliance of the conditions of Corporate Governance by Maestros Mediline Systems Limited for the year ended March, 31, 2013 as stipulated in Clause 49 of the Listing Agreement of the Company with the Stock Exchange, Mumbai. The compliance of the conditions of Corporate Governance is the responsibility of the Company s management. Our examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring and compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, the Company has not complied with the conditions of the Corporate Governance as stipulated in the above mentioned Listing Agreement. We state that the Company has not received any investor grievances during the year ended March, 2013 and no investor grievances are pending against the Company as on date as per the records maintained by the Company. We further state that the Company has informed us that the Company has already started taking appropriate steps to eliminate the above mentioned defects and is in process of assuring total compliances with the conditions of the listing agreement at the earliest. Place: Mumbai Date: 04 th December, 2013 For R A R & Associates Chartered Accountants Anil Goyal. (Partner) Membership No:

18 To the Members of MAESTROS MEDILINE SYSTEMS LIMITED. INDEPENDENT AUDITOR S REPORT Report on the Financial Statements We have audited the accompanying financial statements of MAESTROS MEDILINE SYSTEMS LIMITED, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ( the Act ). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013; b) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and 18

19 c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor s Report) Order, 2003 ( theorder ) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. 2. As required by section 227(3) of the Act, we report that: a) we have 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 appears from our examination of those books c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount. d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; e) on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company. For RAR & Associates. Chartered Accountants Firm Regn. No W Anil Goyal. (Partner) Membership No Place : Mumbai. Date : 4 th September,

20 Annexure to the Auditors Report Referred to in paragraph 3 of our report of even date, (i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) (c) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. The company has not disposed off a substantial part of fixed assets during the year and accordingly going concern is not affected. (ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. (b) (a) (b) In our opinion and according to the information and explanations given to us the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. In our opinion and according to the information and explanations given to us the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material. We have relied upon the management regarding the confirmations of debtors outstanding for more than six months and creditors and inventories, as it was not possible for us to verify the same, nor we have received the confirmations of balances (iii) (a) In our opinion and according to the information and explanations given to us, the company has granted usecured loans of Rs crores during the year to two parties covered in register maintained under section 301 of the Act; (b) (c) (d) (e) (f) In our opinion and according to the information and explanations given to us, the company has not charged any interest on such loan given and terms and conditions of loan given by the company are not prima facie prejudicial to the interest of the company; Receipt of the Principal amount and interest are also not regular and As per information and explanations given to us, Company has taken reasonable steps to for recovery of the Principal amount. Company has taken loans of Rs crores from two parties covered in the register maintained under section 301 of the Act; In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of loans taken by the company, secured or unsecured, are not prima facie prejudicial to the interest of the company; 20

21 (g) Company has been paid principal amount and interest if any applicable whenever demanded (iv) (v) (vi) (vii) (viii) In our opinion and according to the information and explanations given to us, there are not adequate control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls. According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of companies Act during the year to be entered in the register required to be maintained under that section. Accordingly the question of commenting the same does not arise. The company has not accepted any deposits from public. In our opinion, the company does not have an internal audit system commensurate with the size and nature of its business. In our opinion and according to the information and explanations given to us the maintenance of cost records has not been prescribed by the Central Government under section 209 (1) (d) of the Companies Act, (ix) (a) The company is not regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employee s state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it with appropriate authorities and the following statutory dues outstanding as at last day of the financial year concerned for a period of more than six months from the the date they became payable Sr. No. Particulars Amount outstanding as on 31 st March, Sales Tax 3,03,72,715 2 TDS 1,11,81,987 3 Cess 46,88,260 4 PF-ESIC-PT 24,62,827 5 Property Tax 3,81,121 (b) According to the information and explanations given to us, no disputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March, (x) (xi) The company have accumulated losses and has incurred cash losses during the financial year covered by our audit, but not in the immediately preceding financial year. In our opinion and according to the information and explanations given to us, the company has defaulted in repayment of dues to some financial institution or bank. 21

22 (xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xiii) (xiv) (xv) (xvi) (xvii) (xvii) (xviii) (xix) (xx) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor s Report) Order, 2003 are not applicable to the company. Company is not dealing in or trading in shares, securities, debentures and other investments, hence no need to maintain proper records of transactions and contracts. In our opinion and according to the information and explanations given to us the company has not given guarantees for loans taken by others from banks or financial institutions. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit. The company has not raised any money by public issues during the year. The company has not issued any debentures during the year and there are no debentures outstanding at the year end. For RAR & Associates. Chartered Accountants Firm Regn. No W Anil Goyal (Partner) Membership No Place : Mumbai. Date : 4 th September,

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35 27. SIGNIFICANT ACCOUNTING POLICIES & NOTES TO THE ACCOUNTS: A. SIGNIFICANT ACCOUNTING POLICIES: 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 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 recognises income and expenditure on accrual basis. The principles of revenue recognition are given below: (a) (b) Revenue from goods sold is recognised at the point of dispatch of goods to the customers. 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. 35

36 (f) Incomes from services rendered are booked based on agreements/arrangements with the concerned parties. (g) Incomes from subletting of immovable properties 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 / materialised. 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, 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 vi) Investments 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. 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. 36

37 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 realiszable 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 37

38 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. 38

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43 DIRECTORS REPORT Dear Shareholders, Your Directors have pleasure in presenting their Third Annual Report together with the Audited Accounts of the Company for the period ended 31 st March, Financial Results Particulars Current Year Previous Year Total Income 41,88,454 1,12,28,435 Less: Expenditure 1,05,79,905 1,65,83,767 Profit/ (Loss) before Depreciation, Finance Charges and Tax (63,91,451) (53,55,332) Less: Interest and Financial Charges - 33,013 Less: Depreciation 4,908 10,706 Profit/(Loss) before Tax (63,96,358) (53,99,051) Less: Provision for Taxation - - Less: Deferred Tax 1,175 1,778 Profit / (Loss) after tax (63,97,533) (54,00,829) Add: Balance brought forward from previous year (50,18,167) 3,82,661 Profit available for appropriation (Appropriated as per Scheme of Arrangement) - - Less: Appropriations Transfer to General Reserve - - Balance carried forward (1,14,15,700) (50,18,168) 12. Management Discussion And Analysis (b) Industry Structure and Development: The performance of your Company during the year under report has shown not good improvement over the previous year. The total revenue from the operations for the year ended March 31, 2013 amounted to Rs lacs, as against Rs.1.12 crores, have decreased by 63.61% over the last year as last year s revenue. (c) Segment wise operational performance: Your Company has two main segments of business viz. Medical Embedded Equipment (MES) and Servicing of Medical Equipments. The sale of MES division has decreased by 58.45%. During the year under review your Company has upgraded its existing products with better technology and features. (c) Threats and Concerns: The most important threat continues to be competition from low cost imported products. Manpower costs are rising as many large companies are mopping the available talent pool supply of which is limited. Thus for small and mid-range companies, retaining high quality manpower is a concern. 43

44 (d) Internal control systems and their adequacy: Your Company has well established and adequate systems for internal control to provide reasonable assurance that all assets are safeguarded; transactions are authorized and reported correctly. (e) Human Resources Your Company continuously endeavors to improve the work environment for its employees. Competitive compensation package, innovative and challenging environment to work, transportation facilities, etc., are some of the steps taken by the Company for the welfare of its employees. 13. Particulars of Employees Information required pursuant to the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is not applicable to your Company. 14. Public Deposits The Company has not accepted any Fixed Deposits from the Public / Shareholders. 15. Dividend The Company is a newly incorporated company and hence with a view to conserve resources for funding any future business requirements and expansion plans, your Directors have not recommended any dividend for the current period. 16. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo Disclosure of information in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy and technology absorption is not applicable to your Company. 17. Share Capital As on 31st March, 2013, the Authorized and Paid up Share capital of the Company were Rs. 1,00,000 divided into 10,000 Equity Shares of Rs.10/- each. 18. Directors Responsibility Statement Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, and based on representations received from operating management, the Directors hereby confirm that: in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; they have selected such accounting policies in consultation with the statutory auditors and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013; they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and They have prepared the annual accounts on a going concern basis. 44

45 19. Statutory Auditors M/s. R A R & Associates, Chartered Accountants, Mumbai, the statutory auditors of the Company retire at the conclusion of the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment. The Company has received a Certificate from them to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, Acknowledgement The Board of Directors of the Company wish to place on record their thanks and appreciation to Government agencies, all the members and executives for their contribution and support to the Company. On behalf of the Board of Directors Dr. K.K. Menon [Director] Mr. Rajiv Nair [Director] Place: Navi Mumbai Date: 2nd September,

46 Report on Other Legal and Regulatory Requirements 3. As required by the Companies (Auditor s Report) Order, 2003 ( theorder ) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. 4. As required by section 227(3) of the Act, we report that: g) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; h) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books i) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount. j) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; k) on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, l) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company. For RAR & Associates. Chartered Accountants Firm Regn. No W Anil Goyal. (Partner) Membership No Place : Mumbai. Date : 2 nd September,

47 INDEPENDENT AUDITOR S REPORT To the Members of MAESTROS EQUIPMENT SERVICES PRIVATE LIMITED. Report on the Financial Statements We have audited the accompanying financial statements of MAESTROS EQUIPMENT SERVICES PRIVATE LIMITED, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ( the Act ). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: d) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013; e) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and f) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. 47

48 Annexure to the Auditors Report Referred to in paragraph 3 of our report of even date, (xxi) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) (c) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. The company has not disposed off a substantial part of fixed assets during the year and accordingly going concern is not affected. (xxii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. (b) (c) (d) In our opinion and according to the information and explanations given to us the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. In our opinion and according to the information and explanations given to us the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material. We have relied upon the management regarding the confirmations of debtors outstanding for more than six months and creditors and inventories, as it was not possible for us to verify the same, nor we have received the confirmations of balances (xxiii) (a) In our opinion and according to the information and explanations given to us, the company has not granted usecured loans to any parties covered in register maintained under section 301 of the Act, hence disclosure under clause b to e also not require. (e) (f) (g) Company has taken unsecured loans of Rs crores from three parties covered in the register maintained under section 301 of the Act; In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of loans taken by the company, secured or unsecured, are not prima facie prejudicial to the interest of the company; Company has been paid principal amount and interest if any applicable when demanded (xxiv) In our opinion and according to the information and explanations given to us, there are not adequate control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls. 48

49 (xxv) (xxvi) (xxvii) According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of companies Act during the year to be entered in the register required to be maintained under that section. Accordingly the question of commenting the same does not arise. The company has not accepted any deposits from public. In our opinion, the company does not have an internal audit system commensurate with the size and nature of its business. (xxviii) In our opinion and according to the information and explanations given to us the maintenance of cost records has not been prescribed by the Central Government under section 209 (1) (d) of the Companies Act, (xxix) (a) The company is not regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employee s state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it with appropriate authorities and the following statutory dues outstanding as at last day of the financial year concerned for a period of more than six months from the the date they became payable Sr. No. Particulars Amount outstanding as on 31 st March, Sales Tax 4,82,779 2 TDS 17,051 3 Cess 1,143 4 PF-ESIC-PT 7,45,124 5 Service Tax 2,51,752 (b) According to the information and explanations given to us, no disputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March, (xxx) (xxxi) (xxxii) Since the company has been registered for the period less than five years, so this clause is not applicable to the company. In our opinion and according to the information and explanations given to us, the company has not taken loan from any financial institution or bank. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xxxiii) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor s Report) Order, 2003 are not applicable to the company. (xxxiv) Company is not dealing in or trading in shares, securities, debentures and other investments, hence no need to maintain proper records of transactions and contracts. (xxxv) In our opinion and according to the information and explanations given to us the company has not given guarantees for loans taken by others from banks or financial institutions. 49

50 (xxxvi) Company does not have any term loans. (xxxvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for longterm investment. No long-term funds have been used to finance short-term assets except permanent working capital. (xvii) The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. (xxxviii) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit. (xxxix) (xl) The company has not raised any money by public issues during the year. The company has not issued any debentures during the year and there are no debentures outstanding at the year end. For RAR & Associates. Chartered Accountants Firm Regn. No W Anil Goyal (Partner) Membership No Place : Mumbai. Date : 2 nd September,

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61 22. SIGNIFICANT ACCOUNTING POLICIES & NOTES TO THE ACCOUNTS: A. SIGNIFICANT ACCOUNTING POLICIES: 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 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 recognises income and expenditure on accrual basis. The principles of revenue recognition are given below: (h) Revenue from goods sold is recognised at the point of dispatch of goods to the customers. (i) Sales are reflected at net of trade discounts. (j) 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). (k) Dividend income is recognised when the right to receive dividend is established. (l) 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 / materialised. 61

62 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 on straight-line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 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. 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 realiszable value. Cost includes direct labour and direct overheads. ix) Retirement Benefits (c) 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. (d) Any gain or losses on account of exchange difference either on settlement or on translation is recognised in the Profit & Loss Account 62

63 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 (c) 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. (d) 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. 63

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67 Statement pursuant to Section 212 of Companies Act, 1956 regarding subsidiary companies Material changes, if any between the end of the financial year of the subsidiary company and that of the Name of the subsidiary Company Financial year ending of the subsidiary Holding Company :- Number of equity shares held Extent of holding Profits/(Losses) so far it concerns the members of the holding company and not dealt with inthe books of accountof the holdingcompany (except tothe extent dealt with in col. 6 Extent of holding Profits/(Losses) sofar it concerns the membersof the holdingcompany and dealt with in the books of account ofthe holdingcompany For the previous financial years since it became a subsidiary Profits/(Losses) sofar it concerns themembers of theholding companyand not dealt with inthe books of account of the holding company (except tothe extent dealt within col. 8) Profits/(Losses) so far it concernsthe membersof the holdingcompany anddealt with in the books ofaccount ofthe holdingcompany (1) (2) (3) (4) (5) (6) (7) (8) Maestros 31/03/ , % (6,397,533) - (5,400,829) - Equipment Services Pvt Ltd Maestros 31/03/ % (118,320) - 7,386,919 - Middle East [FZE] For and on behalf of the Board Place:-Navi Mumbai Date:- 04/09/2013 Managing Director 67

68 Financial details of subsidiary companies: Particulars regarding subsidiary companies in accordance with General circular No. : 02/2011 dated 8th February, 2011 from the Ministry of Corporate Affairs. Row Particulars Amount (Rs.) Amount (Rs.) No. 1 Name of Subsidiary company Maestros Equipment Services Maestros Middle East (FZE) Pvt ltd 2 Issued, and subscribed share 1,00,000 96,16,425 capital 3 Reserves (1,14,15,700) 1,73,30,455 4 Total Assets 8,59,915 3,85,95,300 5 Total Liabilities 8,59,915 3,85,95,300 6 Investment included in total Asset Turnover 40,85,896 11,55,93,137 8 Profit/ (Loss) before taxation (63,96,388) 1,18,356 9 Provision for Taxation 1, Profit/(loss) after taxation (63,97,533) 1,18, Proposed dividend - - Place:-NaviMumbai For and on behalf of the Board Date:- 04/09/2013 Managing Director 68

69 DIRECTORS REPORT Your Directors take pleasure in presenting the Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the year ended 31 st March, Financial Results Current Year Previous Year Total Income 219,243, ,168,200 Less: Expenditure 320,467, ,750,754 Profit/(Loss) before Depreciation, Finance Charges and Tax (101,223,729) 78,417,446 Less: Interest and Financial Charges 46,738,355 40,414,000 Less: Depreciation 20,616,376 18,622,000 Profit/(Loss) before Tax (168,578,460) 19,381,446 Less: Provision for Taxation - 10,00,000 Less: Prior Period Taxation Adjustments (1,17,60,179) (15,52,840) Add: Deferred Tax (7,29,504) (852,981) Profit/(Loss) for the Year (15,60,88,777) 20,787,267 Add: Balance brought forward from previous year 7,16,73,735 9,80,87,894 Less: Appropriated as per Scheme of Arrangement - (4,72,01,426) Profit available for appropriation - - Less: Appropriations Transfer to General Reserve - - Balance carried forward (8,44,15,042) 7,16,73, Management Discussion And Analysis - (d) Industry Structure and Development: The performance of your Company during the year under report has shown not good improvement over the previous year. The total revenue from the operations for the year ended March 31, 2013 amounted to Rs crore, as against Rs crore, has decreased by 48.69% over the last year as last year s revenue also includes Electrocnis & Infra activity. (b) Segment wise operational performance: Your Company has three main segments of business viz. Medical Embedded Systems ( MES ),Electronics and Instrumentation and Telemedicine. The sale of MES division has decreased by 67.76%. During the year under review your Company has upgraded its existing products with better technology and features. (c) Threats and Concerns: The most important threat continues to be competition from low cost imported products. 69

70 Manpower costs are rising as many large companies are mopping the available talent pool supply of which is limited. Thus for small and mid-range companies, retaining high quality manpower is a concern. (d) Internal control systems and their adequacy: Your Company has well established and adequate systems for internal control to provide reasonable assurance that all assets are safeguarded; transactions are authorized and reported correctly. The internal control system provides well documented policies, guidelines authorization and approval procedures for its operations. Your Company maintains controls of high norms both in raw material as well as finished goods. The percentage of rejection from market has reduced drastically due to controls set up in this division. To achieve high level of customer satisfaction, your company is regularly conducting training programs for its engineers and technical staff on continuous basis, this has resulted in call solving at the initial level itself. The distribution activity of your Company is mainly controlled through appointing well established dealers who are experienced in this field and setting up targets for sales and service. (e) Human Resources: Your Company continuously endeavors to improve the work environment for its employees. Competitive compensation package, innovative and challenging environment to work, transportation facilities, etc., are some of the steps taken by the Company for the welfare of its employees. 23. Dividend: Considering the need for conservation of resources, the Board does not recommend any dividend. 24. Directors Responsibility Statement: To the best of their knowledge and belief, and according to the information and explanations provided to them, your Directors make the following statement, pursuant to Section 217 (2AA) of the Companies Act, 1956: (v) that in the preparation of the annual accounts, the applicable accounting standards have been followed; (vi) the appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company as at March 31,2013 and of the profit of the Company for the year April 1, 2012 to March 31, 2013; (vii) the proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for detecting fraud and other irregularities; (viii) the annual accounts have been prepared on a going concern basis 70

71 25. Corporate Governance- Due to reasons beyond control, the Company was unable to comply with the mandatory provisions of Corporate Governance as prescribed in the Listing Agreement. A separate report on Corporate Governance compliance is included as a part of the Annual Report along with the Auditors Certificate. 26. Conservation of Energy, Technology Absorption & Foreign Exchange Earnings and Outgoings- Disclosure of information in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy and technology absorption is not applicable to your Company. The particulars regarding foreign exchange earnings and foreign exchange expenditure during the year of Rs.1,60,83,106 and Rs.3,92,671 respectively are as appearing in Note no. X(d)I of the Notes to Accounts. 27. Public Deposits- The Company has not accepted any Fixed Deposits from the Public / Shareholders. 28. Auditors and Auditors Report- M/s. R A R & Associates, Chartered Accountants, Mumbai, the statutory auditors of the Company retire at the conclusion of the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment. The Company has received a Certificate from them to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, Directors reply to adverse remarks in Auditors Report: There were certain defaults in depositing with appropriate authorities undisputed statutory dues, but the Company has paid the dues. Even although default in payment to financial institution is happened, but the Company has taken steps to pay the dues. 29. Particulars of Employees- Information required pursuant to the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is not applicable to your Company. 30. Appreciation- Your Board takes this opportunity to express its sincere appreciation of the excellent contribution made by all its employees towards the overall performance of your company. Your Directors also thank all the shareholders, dealers, suppliers, bankers and other business associates for their valuable service and support during the year. For and on behalf of Board of Directors Place : Navi Mumbai Date : 4 th September, 2013 Dr. K. K. Menon (Chairman & Managing Director) 71 Mr. Rajiv Nair (Director)

72 AUDITORS REPORT To the Members of Maestros Mediline Systems Limited 2. We have audited the attached balance sheet of Maestros Mediline Systems Limited and its subsidiary, as at 31 st March 2013, the profit and loss account and also the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company s management. Our responsibility is to express an opinion on these financial statements based on our audit. 3. These financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in India. Those standards require that we plan and perform the audit to obtain reasonable misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. 4. We report that the consolidated financial statements have been prepared by the company s management in accordance with requirements of Accounting Standard 21- Consolidated Financial Statements prescribed by companies (Accounting Standards) Rules, In our opinion and to the best of our information and according to the explanation given to us, the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India : (a) in the case of the balance sheet, of the state of affairs of the company as at 31 st March 2013; (b) in the case of the profit and loss account, of the loss for the year ended on that date; and (c) in the case of the cash flow statement, of the cash flows for the year ended on that date. For RAR & Associates. Chartered Accountants Firm Regn. No W Anil Goyal. (Partner) Membership No Place : Mumbai. Date : 4 th September,

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85 27. SIGNIFICANT ACCOUNTING POLICIES & NOTES TO THE ACCOUNTS: A. SIGNIFICANT ACCOUNTING POLICIES: 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 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 recognises income and expenditure on accrual basis. The principles of revenue recognition are given below: (m) Revenue from goods sold is recognised at the point of dispatch of goods to the customers. (n) Sales are reflected at net of trade discounts. (o) Revenue from the sale of software products is recognised when the sale is completed with the passing of title. (p) 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). (q) Dividend income is recognised when the right to receive dividend is established. 85

86 (r) Incomes from services rendered are booked based on agreements/arrangements with the concerned parties. (s) Incomes from subletting of immovable properties 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 / materialised. 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, 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. 86

87 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 realiszable value. Cost includes direct labour and direct overheads. ix) Retirement Benefits (e) 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. (f) 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. 87

88 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 (e) 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. (f) 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. 88

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93 DIRECTORS REPORT Your Directors are pleased to place before the Sixth Annual Report of your Company together with the audited Accounts and Auditors Report thereon for the year ended March 31, The highlights of the Company s financial results are as follows: 31. Financial Results Current Year (Amount in AED) Previous Year Total Income 80,47,924 65,90,989 Less : Expenditure 80,12,184 59,93,200 Profit before Depreciation, Finance Charges and Tax 35,740 5,97,789 Less : Interest and Financial Charges - 30,633 Less : Depreciation 43,740 35,723 Profit before Tax (8,000) 5,31,433 Less : Provision for Taxation - - Profit / (Loss) after tax (8,000) 5,31,433 Add : Short provision for tax on earlier years - - Add : Prior period items - - Add : Balance brought forward from previous year 11,79,412 6,47,979 Profit available for appropriation 11,71,412 11,79,412 Less : Appropriations Transfer To General Reserve - - Balance carried forward 11,71,412 11,79, About the Company Maestros Middle East (FZE) is a 100% subsidiary of Maestros Mediline Systems Ltd., India. The subsidiary has been setup to focus on the Middle East Market. The subsidiary is engaged in providing IT & IT enabled services and has competencies like advance infrastructure solutions, business process and integration solutions, data management solutions etc. and specialisations like active directory, database management, exchange migration and deployment, identity & secure access etc. During the year the performance of Company was very good. The total revenue of subsidiary has reached to 8,047,924 AED as compared to 6,590,989 AED of last year. 3. Outlook: The overall outlook for the Middle East economy continues to be positive and growth oriented. We see a very good and promising market in the near future & this will certainly lead to increase in revenue manifold. 4. Internal control systems and their adequacy: Your Company has well established and adequate systems for internal control to provide reasonable assurance that all assets are safeguarded; transactions are authorized and reported correctly. The internal control system provides well documented policies, guidelines authorization and approval procedures for its operations. 5. Human Resources: Your Company continuously endeavors to improve the work environment for its employees. Competitive compensation package, innovative and challenging environment to work, etc., are some of the steps taken by the Company for the welfare of its employees. 93

94 6. Equity Capital The Company has not issued any additional shares during the year under review. 7. Auditors The present auditors Tamim, Chartered Accountants, Sharjah - UAE, retire and being eligible, offer themselves for re-appointment. 8. Appreciation Your Board takes this opportunity to express its sincere appreciation of the excellent contribution made by all its employees towards the overall performance of your company. Your Directors also thank all the shareholders, dealers, suppliers, bankers and other business associates for their valuable service and support during the year. 9. Previous Year Comparatives The financial statements for the year ended March 31, 2013 are presented with comparative figures of previous year. Registered Office: P.O. Box , Saif Zone, Sharjah, UAE. Dr. K. K. Menon (Director) 94

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