We have audited the attached Balance Sheet of SBEC Systems (India)
 Limited as at 31st March, 2011 and also the Profit & Loss Account and
 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.
 
 1.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement.  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 statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 2.  As required by the Companies Auditor''s Report Order, 2003, issued
 by the Company Law Board in terms of Section 227(4A) of the Companies
 Act, 1956, we Annex hereto a statement on the matters specified in
 paragraphs 4 & 5 of the said Orders.
 
 3.  Further to our comments in the Annexure, referred to above, we
 report that:
 
 i. We have obtained all the information and explanations, which, to the
 best of our knowledge and belief, were necessary for the purposes of
 our audit;
 
 ii. In our opinion, proper books of accounts as required by Law, have
 been kept by the Company so far as appears from our examination of the
 books of the Company.
 
 iii The Balance Sheet, Profit & Loss Account and Cash Flow Statement,
 dealt with by this Report, are in agreement with the books of account
 of the Company.
 
 iv In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement dealt with by this report comply with the applicable
 Accounting Standards, referred to in Sub-section (3C) of Section 211 of
 the Companies Act, 1956 and Companies (Accounting Standard) Rule 2006,
 issued by the central government in exercise of the power conferred
 under sub section (1) (a) of section 642 of the Companies Act, 1956 to
 the extent applicable except :
 
 A.) Accounting Standard-13  Accounting for Investments referred note
 no B-08 of schedule no. 12
 
 B.) Accounting Standard-11 The Effect of change in foreign exchange
 rate referred note no.B-09 of schedule no 12.
 
 v Based on the declaration made by the directors of the company and the
 information and explanations given to us, none of the Directors is, as
 at 31.03.2011, prima-facie disqualified from being appointed as a
 director in terms of clause (g) of Sub-section (1) of Section 274 of
 the Companies Act, 1956..
 
 vi In our opinion and to the best of our information and according to
 the explanations given to us the said Balance Sheet, Profit and Loss
 Account and Cash Flow Statement read with the Schedules and Notes
 thereon specifically note no. B-6 regarding Going concern basis and
 subject to the consequential impact on the result for the period of
 Note No B (5) regarding non-provision of expenses related to deputation
 charges of foreign technicians , Note No B(7) regarding Non provision
 of interest on foreign currency loan, Note No. B (8) regarding non
 reversal of diminution of current investments and Note No. B (9)
 regarding non provision of exchange rate fluctuation of foreign
 liabilities Note No B(10) regarding unaccounted of consequential effect
 of suppliers settlement order(s) passed by the Hon''ble Delhi High Court
 give the information required by the Companies Act, 1956, in the
 manners so required and a true and fair view:-
 
 (a) In the case of the Balance Sheet of the state of affairs of the
 Company as at 31st March, 2011 and
 
 (b) In the case of the Profit & Loss Account of the Profit for the year
 ended on that date.
 
 (c) In the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 Annexure referred to in paragraph 2 of our Report of even date to the
 Member of SBEC SYSTEMS (INDIA) LIMITED on the accounts as at and for
 the year ended 31st March, 2011
 
 1.  (a) The company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) As explained to us, the fixed assets have been physically verified
 by the management during the year in a phased periodical manner, which
 in our opinion is reasonable having regard to the size of the company
 and nature of its assets.  No material discrepancies between the book
 records and the physical inventory were noticed in respect of the
 assets physically verified.
 
 (c) In our opinion, the company has not disposed of substantial part of
 fixed assets during the year and the going concern status of the
 company is not affected.
 
 2.  (a) Inventories have been physically verified by the management
 at reasonab''e intervals during the year.
 
 (b) In our opinion, the procedure of physical verification of inventory
 followed by the management is reasonable and adequate in relation to
 the size of the company and the nature of its business.
 
 (c) On the basis of our examination of records of inventory produced to
 us, in our opinion, the company has maintained proper records of
 inventories. There were no material discrepancies noticed on physical
 verification of inventory as compared to the book record.
 
 3.  The company has not taken/granted any loan, secured or unsecured,
 from companies, firms or other parties listed in the register
 maintained under Section 301 of the Companies Act, 1956.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the company and the nature of its
 business with regard to purchase of inventory and fixed assets and for
 the sale of goods. During the course of our audit, no major weakness
 has been noticed in the internal control in respect of these areas.
 
 5 (a) According to the information and explanations given to us, we are
 of the opinion that the transactions that need to be entered into the
 register maintained under section 301 have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 and exceeding the value of Rupees five Lakhs in
 respect of any party during the year have been made at prices, which
 are reasonable, having regard to the prevailing market prices at the
 relevant time.
 
 6.  The company has not accepted any deposits from the public.
 
 7.  In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  We are informed that the provisions of Section 209(1 )(d) of the
 Companies Act, 1956 relating to the maintenance of cost records are not
 applicable to the Company.
 
 9.  (i) Undisputed statutory dues including Provident Fund, Investor
 Education & Protection fund, Employees State Insurance, Income Tax,
 Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess have
 generally been regularly deposited with the appropriate authorities.
 
 (ii) According to the information and explanations given to us, no
 undisputed amounts payable in respect of Provident Fund, Investor
 Education and Protection Fund, Employee State Insurance,Income-Tax,
 Sales-Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess
 were outstanding at the year end for a period of more than six months
 from the date they became payable.
 
 (iii) According to the information and explanation given to us, there
 are no dues of Income Tax, Custom Duty, Wealth Tax, service Tax, Excise
 Duty, Sales Tax and Cess which have not been deposited on account of
 any dispute except the Trade Tax dues of Rs. 2.55 lakh under U P Trade
 Tax Act for which an appeal is pending before the Assistant
 Commissioner - Trade Tax.
 
 10.  The Company''s accumulated losses at the end of the financial year
 are more than fifty percent of its net worth. The Company has not
 incurred cash loss during the year and immediately preceeding financial
 year.
 
 11.  Based on our audit procedures and as per the information and
 explanation given by the management we are of the opinion that the
 company has not taken any loans from any financial institutions, banks
 or debenture holders and hence no default on repayment of the same.
 
 12.  According to the information and explanations given to us and
 based on the documents and records produced to us the company has not
 granted any loans and advances on the basis of security by way of
 pledge of shares, debentures and other securities.
 
 13.  The provisions of clause 4 (xiii) of the Companies (Auditor''s
 Report) Order, 2003 are not applicable to the company.
 
 14.  The company is not dealing or trading in shares, securities,
 debentures and other investments.
 
 15.  According to the information and explanations given to us, the
 Company has not given any guarantee for loan taken by others from banks
 or financial institutions.
 
 16.  The company has not obtained any term loan during the year ended
 31st March, 2011.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the Balance Sheet and Cash Flow Statement of
 the company, we report that no funds raised on short-term basis have
 been used for long-term investments.
 
 18.  The company has not made any preferential allotment of shares to
 parties or companies covered in the register maintained under section
 301 of the Companies Act, 1956, during the year.
 
 19.  No debenture were issued by the company. Therefore, no securities
 have been created.
 
 20.  The company has not raised any money by a public issue during the
 year.
 
 21.  Based upon the audit procedures performed for the purpose of
 reporting true and fair view of the financial statements and as per the
 information and explanations given by the management, we report that no
 fraud on or by the company has been noticed or reported during the
 course of our audit.
 
 
                                            For K. K. JAIN & COMPANY,
                                               Chartered Accountants, 
                                                  Firm Reg. No.02465N
 
 
 
                                                       (R. K. MITTAL)
 Place : New Delhi                                          (PARTNER)
 Date : 16th August, 2011                        Membership No. 95459