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SBEC Systems (India) Ltd.

BSE: 517360 Sector: Others
NSE: N.A. ISIN Code: N.A.
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SBEC Systems (India) Ltd. (SBECSYSTEMS) - Auditors Report

Company auditors report

TO THE MEMBERS OF SBEC SYSTEMS (INDIA) LIMITED

Report on the Financial Statements

1 We have audited the accompanying financial statements of SBEC Systems (India) Limited("the Company") which comprise the Balance Sheet as at March 312015 theStatement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information

Management’s Responsibility for the Financial Statements

2 The management and Board of Directors of the Company are responsible for the mattersstated in Section 134(5) of the Companies Act 2013 (‘the act') with respect to thepreparation of these financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with rule 7 of Companies (Accounts) Rules2014. This responsibility includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; design implementation and maintenance of adequate internal financial controlsthat are operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error

Auditor’s Responsibility

3 Our responsibility is to express an opinion on these financial statements based onour audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement

4 An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by the Company's management and Board of Directors aswell as evaluating the overall presentation of the financial statements

5 We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion

Basis for Qualified Opinion

6. The company has not made provision of Rs.7.66 lacs for expenses related todeputation charges of foreign technicians. Consequently the loss for the year andliability are shown lower by Rs.7.66 lacs respectively & its consequential impact onEPS.

7. We draw attention to Note No.28 of the financial statement where in as at March312015 the company has not complied with the AS 13 "Accounting for investment"regarding reversal of diminution of current quoted investment aggregating to Rs.8.46 lacs.As a result of such non reversal of diminution the loss for the year are shown higher andInvestment are shown lower by Rs. 8.46 lacs

Qualified Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the basis for qualifiedopinion paragraph the aforesaid financial statements give the information required by theAct in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:-

i) in the case of the Balance Sheet of the state of affairs of the company as at March312015;

ii) in case of the Statement of Profit and Loss of the loss for the year ended on thatdate

iii) in case of the Cash Flow Statement of the cash flows for the year ended on thatdate

Emphasis of Matters

9 We draw attention to note 27 to the financial statements according to which thecompany has prepared its accounts on a going concern basis even though the net worth ofthe Company has been fully eroded. These facts cast significant doubt about the Company'sability to continue as a going concern

Report on Other Legal and Regulatory Requirements

10 As required by the Companies (Auditor's Report) Order 2015 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section143 ofthe Act we give in the Annexure a statement on the matters Specified in paragraphs 3 and4 of the Order.

11 As required by section 143(3) of the Act we further report that:

a. we have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as appears from our examination of those books;

c. The company did not have any branch during the year.

d. the Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

e. except for the possible effects of the matter described in the basis for qualifiedopinion paragraph in our opinion the aforesaid financial statements comply with theapplicable Accounting Standards specified under Section 133 of the Act read with Rule 7of the Companies (Accounts) Rules 2014

f. in our opinion the going concern matter described in the Emphasis of Mattersparagraph above may have an adverse effect on the functioning of the company

g on the basis of written representations received from the directors as on March312015 and taken on record by the Board of Directors none of the directors isdisqualified as on March 312015 from being appointed as a director in terms of Section164(2) of the Act

h. In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014::

(i) The Company does not have any pending litigations which would impact its financialposition

(ii) The Company did not have any long-term contracts including derivative contracts;as such the question of commenting on any material foreseeable losses thereon does notarise

(iii) There has not been an occasion in case of the Company during the year underreport to transfer any sums to the Investor Education and Protection Fund. The question ofdelay in transferring such sums does not arise

For K. K. JAIN & CO.
Chartered Accountants
Firm Registration No.002465N
(R. K. Mittal)
Place: Delhi Partner
Date :21.05.2015 M. No.95459

Annexure referred to in paragraph 10 Our Report of even date to the members of M/s SBECSystems (India) Limited on the accounts of the company for the year ended 31st March 2015

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) As explained to us fixed assets have been physically verified by the management atregular intervals; as informed to us no material discrepancies were noticed on suchverification;

(ii) The Company had no Inventory during the year.

(iii) The company has not granted any loans secured or unsecured to companies firmsor other parties covered in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to usthere is adequate internal control system commensurate with the size of the Company andthe nature of its business for the purchase of fixed assets and for the sale of services.Further on the basis of our examination of the books and records of the Company andaccording to the information and explanations given to us no major weakness has not beennoticed or reported.

(v) The Company has not accepted any deposits from the public covered under Section 73to 76 of the Companies Act 2013

(vi) As informed to us the Central Government has not prescribed maintenance of costrecords under sub-section (1) of Section 148 of the Act

(vii) (a) According to the information and explanations given to us and based on therecords of the company examined by us the company is regular in depositing the undisputedstatutory dues including Provident Fund Employees' State Insurance Income-taxSales-tax Wealth Tax Service Tax Custom Duty Excise Duty and other material statutorydues as applicable with the appropriate authorities in India ;

(b) According to the information and explanations given to us and based on the recordsof the company examined by us there are no dues of Income Tax Wealth Tax Service TaxSales Tax Customs Duty and Excise Duty which have not been deposited on account of anydisputes;

(c) There has not been an occasion in case of the Company during the year under reportto transfer any sums to the Investor Education and Protection Fund. The question ofreporting delay in transferring such sums does not arise

(viii) The company's accumulated losses as at 31.03.2015 were more than fifty percentof its net worth. The Company has incurred cash losses both in the current financial yearand in the immediately preceding financial year.

(ix) According to the records of the company examined by us and as per the informationand explanations given to us the company has not availed of any loans from any financialinstitution or banks and has not issued debentures

(x) In our opinion and according to the information and explanations given to us theCompany has not given any guarantee for loan taken by others from a bank or financialinstitution during the year

(xi) In our opinion and according to the information and explanations given to us thecompany has not raised any term loans during the year

(xii) During the course of our examination of the books and records of the companycarried in accordance with the auditing standards generally accepted in India we haveneither come across any instance of fraud on or by the Company noticed or reported duringthe course of our audit nor have we been informed of any such instance by the Management.

For K. K. JAIN & CO.
Chartered Accountants
Firm Registration No.002465N
(R. K. Mittal)
Place: Delhi Partner
Date :21.05.2015 M. No.95459