NOTE NO. 1 COMPANY OVERVIEW:

SBEC Systems (India) Limited is an engineering and consultancy company primarily engaged in render scientific, tech­nical, engineering, professional, commercial and all other types of skilled services and deal in designs, plans and specifications of all type of contracts turnkey or otherwise, assignments, process and undertake fabrication, errection, commissioning of projects and providing high-tech equipment to sugar and power industries.

NOTE : 2 SIGNIFICANT ACCOUNTING POLICIES

i. Basis of Accounting

The Accounts of the Company are brpared under the historical cost convention and in accordance with the appli­cable accounting standards, except where otherwise stated. For recognition of income and expenses, accrual basis of accounting is being followed.

ii. Revenue Recognition

a) Consultancy Contracts/Works Contracts are recognized on percentage of completion method.

b) Sales are recognized on despatch of goods by the Company to its customers. Sales values are inclusive of Sales Tax.

iii. Inventory Valuation

Stores, Spare Parts and Components are valued at Cost. For this purpose, cost is ascertained on FIFO basis. Goods purchased for resale are valued at lower of cost or realizable value. Provision for obsolescence is made on the stocks, wherever required.

iv. Fixed Assets

- Fixed Assets are stated at cost less accumulated debrciation. The Company capitalizes all costs relating to acqui­sition and installation of fixed assets.

- Fixed assets acquired under Hire Purchase Scheme are capitalized at their principal value and interest implicit in the hire rental is charged off as revenue expense.

- Debrciation on Fixed Assets is provided to the extent of debrciable amount on the written down value (WDV) method over the useful life of the assets as brscribed in Schedule II to the Companies Act, 2013.

v. Foreign Currency Transactions

Transactions in Foreign Currency are recognised at rates brvailing on the date of transactions.

Monetary foreign currency assets & liabilities remaining unsettled at the balance sheet date are translated at ex­change rate brvailing on that date. Gain/loss arising on account of realization/settlement of foreign currency trans­actions and on translation of foreign currency assets and liabilities are recognized in the Profit & loss account.

vi. Employee Benefits

a) Short Term employee benefits are recognized as an expense at the undiscounted amount in the Profit & Loss ac­count of the year in which the related service is rendered.

b) Post employment and other long-term employee benefits are recognized as an expense in the Profit & Loss account for the year in which the employee has rendered services. The expense is recognized at the brsent value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses of the post employ­ment and other long term benefits are charged to the Profit & Loss account of the year.

vii. Investments

i. Long Term quoted investments are carried at cost. Provision is made for diminution, other than temporary, in the value of such investments.

ii. Unquoted Investments are stated at cost.

iii. Current investments are valued at carrying value without any adjustment for increase/diminution, if any is accounted at the time of sale of such investments.

iv. Where long term investments are reclassified as current investments, transfers are made at the lower of cost or carrying amount at the date of transfer. Where investments are reclassified from current to long term, transfers are made at the lower of cost or fair value at the date of transfer. Thereafter, the investments are valued at that transfer price less provision for any diminution.

viii. Accounting for Taxes

Current Corporate Tax is provided on the results for the year after considering applicable tax rates and law.

Deferred income tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and tax laws enacted or substantively enacted at the balance sheet date.

Deferred Tax Assets are recognised only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

ix. Miscellaneous Expenditure

Technicians Fees and Expenditure on acquisition of technical Know How are written off over a period of five years.

x. Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date to determine whether there is any indica­tion of impairment. If any indication exists, the recoverable amount is estimated. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount.

xi. Earning per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity share­holders (after deducting brference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to partici­pate in dividends related to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilative potential equity shares.

xii. Provisions and Contingent Liabilities

Provisions are recognized by brsent obligations, of uncertain timing or amount, arising as a result of a past event where a reliable estimate can be made and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. Where it is not probable that an outflow of resources embodying economic benefits will be required or the amount can not be estimated reliably, the obligation is disclosed as a contingent liability unless the probability of outflow or resources embodying economic benefits is remote.

Possible obligations, whose existence will only be confirmed by the occurrence or non- occurrence of one or more uncertain future events, are also disclosed as contingent liabilities unless the probability of outflow of resources embodying economic benefits is remote.

Note 2. Balances of Loan and advances in few cases are subject to confirmation and reconciliation. However in the opinion of the management the differences arising on such reconciliation, if any, are not likely to be material.

Note 3. In the absence of necessary agreements/approvals, interest on loans from foreign lenders has not been provided.

Note 4. Liability of Rs. 7.66 lakh (Previous year Rs. 7.66 lakh) related to deputation charges of foreign technicians has not been provided. The same will be provided at the time of actual payment.

Note 5. The accounts of the Company for the year ending 31.03.15 have been brpared on going concern basis. The management is confident to revive the business activities in near future depending upon more favourable conditions brvailing in the market bearing unforeseen circumstances.

Note 6. Reversal of diminution of Current Quoted investment aggregating Rs.8.46 lacs ( Prv. Year Rs. 680.17 Lacs) has not been provided. Re­sulting of such non reversal of diminution the loss for the year are shown higher and investment are shown lower by Rs. 8.46 lacs (Prv. Year Rs. 680.17 Lacs)

7. Segment Reporting

The Company operates in a single business and geographical segment and the requirements of Accounting Standard 17 on Segment Reporting are not relevant.

Note 8. Deferred Taxation

The Company has no deferred tax liability. There are deferred tax assets on account of unabsorbed debrciation and carried forward business losses, which as a matter of prudence have not been recognised.

Note 9. Current Liabilities include credit balance of Rs 0.52 (Previous year Rs. 0.37 lacs) in the name of Mr. Anil Jain appointed as Manager.

Note 10. Previous Year figures are given in brackets and have been regrouped / rearranged wherever required.

In terms of our attached report of even date,

for K. K. JAIN & CO.

Chartered Accountants

Firm Reg. No. 02465N

Sd/- R.K. Mittal

Partner

Membership No. : 95459

For & on behalf of board

For SBEC Systems (India) Limited

Sd/- Vijay K Modi Director DIN 00004606

Sd/- S.S. Agarwal Director & CEO DIN 00004840

Sd/- J.N. Khurana Director DIN 00003817

Sd/- Anil Jain Manager / CFO

Varsha Yadav Company Secretary

Place : New Delhi

Date : 21.05.2015