Notes to Accounts of Scan Projects Ltd.

Mar 31, 2015

A) The Company has started the new activities i.e. Erection, commissioning, supervision, project drawing and designing services and trading of fabricating material, equipment parts, electrical material/components and other items etc. Accordingly, the management has changed the name and main objects of the company as per their present activities and all the current year revenue is related to new activities.

b) The Company is engaged in single business activity (i.e. Erection, commissioning, supervision, project drawing and designing and Trading of fabricating material, equipment parts, electrical material/components and other material etc.) and there is no separate reportable segment as per AS-17.

c) Pursuant to enactment of the Companies Act, 2013, effective from 1st April 2014, the company has revised the estimated useful life of its fixed assets in accordance with Schedule II of the Companies Act, 2013. Accordingly, an amount of Rs, 35179.00 (net of deferred tax liability Rs, 15731.00) has been adjusted in the opening balance of retained earnings in respect of assets useful life exhausted as at 1st April 2014. Further, the consequential impact of depreciation charged for the current year ended 31st March 2015 is higher by Rs, 358331.00.

d) Management has periodically reviewed the value in use/net realizable value of all its assets and ascertained that the value in use/net realizable value of all its assets at the end of the year is more than the book value after depreciation (amortization), hence no provision for impairment has been made during the year.

e) In respect Branch Office/Permanent establishment at Nepal for execution of job contracted there, the Company has prepared and obtained the audited necessary additional financial statement as on 31st March 2015 in compliance with the local laws and applicable accounting standards. The same are duly incorporated in the overall financial results of the company as if the transactions of the foreign operation have been those of the Company itself. All monetary assets and liabilities are translated by using closing exchange rates, non-

f) The Balance Sheet as on March 31, 2015 and the Statement of Profit and Loss for the year ended March 31, 2015 are drawn and presented as per the new format prescribed under Schedule III to the Companies Act, 2013.

g) Previous year figures have been re-grouped/re-classified where ever necessary to confirm to the current presentation. monetary items carried at historical cost denominated in foreign currency and all revenue and expenses by using average exchange rate prevailing during the period. Exchange differences (if any) arising on conversion are recognized in the Statement of Profit and Loss.

i) RELATED PARTY DISCLOSURES:

During the year, the company has carried out some transactions with the following persons, firms (in which the directors of the company are interested) related to expenditure and other transactions. The details of the same areas under: - A. Related parties and their relationship

1. Key Management Personnel

-Sh. Sunil Chandra (Managing Director)

-Sh. Akshay Chandra (Nonexecutive Director)

-Sh. Chaitanya Chandra (Whole Time Executive Director)

2. Relatives of Key Personnel

-Smt. Kavita Chandra w/o Sh. Sunil Chandra -Smt. Alka Chandra w/o Sh. Sudhir Chandra -Sh. Sudhir Chandra brother of Sh. Sunil Chandra

3. Associate Concerns owned or significantly influenced by key management personnel or their relatives M/s Chanderpur Works Private Limited, Yamuna Nagar M/s Chanderpur Renewal Power Company Private Limited, Yamunanagar M/s Chanderpur Industries Private Limited, Yamunanagar

h) In respect of provision for retirement gratuity benefits to employees, the company has decided to give the benefit out of its own funds and creates the provision of Rs, 180757.00 by charging to statement of profit and loss as accruing liability during the year. Due to few persons being employed in the company, the accruing liability has been calculated as per method on the assumption that such benefits are payable to all the employees at the end of the accounting year, reviewable every year. The total accumulated provision for retirement gratuity benefits to employees as on March 31, 2015 amounts to Rs, 430882.00 (Previous year Rs, 250125.00).

l) Operating Leases:

1. As a Less or: The Company has given certain assets - Land, building and equipment's on operating leases. These lease arrangements range for a shorter period and include cancellable clause and the same are also renewable for further period on mutually agreeable terms and also include escalation clauses.

2. As a Lessee: The Company has taken office premises on operating lease. These lease arrangements range for shorter period and include cancellable clause and the same are also renewable for further period on mutually agreeable terms and also include escalation clauses.

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Mar 31, 2014

GENERAL INFORMATION

Scan Projects Limited (''the Company'') is a Public limited company engaged in Engineering Services (i.e. Erection, commissioning, supervision, project drawing and designing services) and trading of fabricating material, equipment parts and other items etc. The Company''s registered office is at Village Jorian, Delhi Road, Yamunanagar (Haryana). The.company is also listed on Bombay Stock Exchange Limited (BSE), Delhi Stock Exchange Limited (DSE), Jaipur Stock Exchange and Ahcmdabad Stock Exchange.

The Company has forfeited 2138400 Equity Shares (against which the call money amounting to Rs. 10126500.00 were in arrears) in the Board of Directors meeting held on 24/03/2001, in terms of Articles of Association of the Company, in consequence of having failed to pay the call money due thereon on 12/03/2001.

Terms/rights attached to equity shares:

The Company has only one class of share capital, i.e. equity shares having face value of 10/- per share. Each holder of fully paid equity share is entitled to one vote per share.

The Crane I.oan from HDFC Bank Limited, Yamunanagar are secured against hypotheciatton of crane alongwith the personal guarantee given by the Managing director of the company Sh. Sunil Chandra.

In accordance with the Accounting Standard 22" Accounting for Taxes on Income" the deferred tax liabilities (net) Rs. 2190.00 has been created by debited to Statement of Profit and Loss during the current year and the total accumulated deferred tax assets (net) as on 31 st March 2014 amounts to Rs. 70541.00 [Previous year Rs. 72731.00]

The amount outstanding to Micro, Small & Medium Enterprises has not been given separately, because, the identification of the Micro, Small & Medium Enterprises in terms of The Micro, Small & Medium Enterprises Development Act, 2006, could not be made as the company has not received any information from the creditors/suppliers regarding there status of being a Micro, Small and Medium Enterprises.

a) Provision for taxation on current profit: Tire Company has made the provision for current income tax liability based on the assessable profit as computed in accordance with the Income Tax Act, 1961.

b) In accordance with the Accounting Standard 22" Accounting for Taxes on Income" the deferred tax liabilities (net) Rs. 2190.00 has been created by debited to Statement of Profit and Loss during the current year and the total accumulated deferred tax assets (net) as on 31st March 2014 amounts to Rs. 70541.00 [Previous year Rs. 72731.00]

[I] OTHER NOTES FORMING PART OF THE ACCOUNTS

a) The Balance Sheet as on March 31, 2014 and the Statement of Profit and Loss for the year ended March 31, 2014 are drawn and presented as per the new format prescribed under Schedule VI to the Companies Act, 1956.

b) Previous year figures have been re-grouped/re-classified where ever necessary to confirm to the current presentation.

c) Contingent Liabilities and Commitments (To the extent not provided for)

2013-14 2012-13

*Contingent Liabilities (if any) NIL NIL

*Commitments NIL NIL

d) The Company has started the new activities i.e. Erection, commissioning, supervision, project drawing and designing services and trading of fabricating material, equipment parts, electrical material/components and other items etc. Accordingly, the management has changed the name and main objects of the company as per their present activities and all the current year revenue is related to new activities.

e) The Company is engaged in single business activity (i.e. Erection, commissioning, supervision, project drawing and designing and Trading of fabricating material, equipment parts, electrical material/components and other material etc.) and there is no separate reportable segment as per AS-17.

f) Management has periodically reviewed the value in use/net realizable value of all its assets and ascertained that the value in use/net realizable value of all its assets at the end of the year is more than the book value after depreciation (amortization), hence no provision for impairment has been made during the year.

g) During the year the Company has opened Branch Office/Permanent establishment for execution of job contracted in Nepal. The Company has prepared and obtained the audited necessary additional financial statement as on 31st March 2014 in compliance with the local laws and applicable accounting standards. The same are duly incorporated in the overall financial results of the company as if the transactions of the foreign operation have been those of the Company itself. All monetary assets and liabilities are translated by using closing exchange rates, non-monetary items carried at historical cost denominated in foreign currency and all revenue and expenses by using average exchange rate prevailing during the period. Exchange differences (if any) arising on conversion are recognized in the Statement of Profit and Loss.

h) RELATED PARTY DISCLOSURES:

During the year, the company has carried out some transactions with the following persons, firms (in which the directors of the company are interested) related to expenditure and other transactions. The details of the same are as under: -

A. Related parties and their relationship

1. Key Management Personnel

*Sh. Sunil Chandra (Managing Director)

*Sh. Krishan Kumar (Non-Executive Director resigned w.e.f.31/05/2013)

*Sh. Akshay Chandra (Non Executive Director w.e.f. 01/07/2013)

*Sh. Chaitanya Chandra (Whole Time Executive Director w.e.f. 15/07/2013)

2. Relatives of Key Personnel

*Smt. Kavita Chandra w/o Sh. Sunil Chandra *Smt. Alka Chandra w/o Sh. Sudhir Chandra

*Sh. Sudhir Chandra brother of Sh. Sunil Chandra

3. Associate Concerns owned or significantly influenced by key management personnel or their relatives

M/s Chanderpur Works Private Limited, Yamuna Nagar

M/s Chanderpur Renewal Power Company Private Limited, Yamunanagar

M/s Chanderpur Industries Private Limited, Yamunanagar

i) In respect of provision for retirement gratuity benefits to employees, the company has decided to give the benefit out of its own funds and creates the provision of'' Rs. 55942.00 by charging to statement of profit and loss as accruing liability during the year. Due to few persons being employed in the company, the accruing liability has been calculated as per method on the assumption that such benefits are payable to all the employees at the end of the accounting year, reviewable every year. The total accumulated provision for retirement gratuity benefits to employees as on March 31,2014 amounts to Rs. 250125.00 (Previous year Rs. 194183.00).

1. As a Lessee: The Company has taken office premises on operating lease. These lease arrangements range for a shorter period and include cancellable clause and the same are also renewable for further period on mutually agreeable terms and also include escalation clauses.

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Mar 31, 2013

[1A] GENERAL INFORMATION

Scan Projects Limited (''the Company'') is a Public limited company engaged in Engineering Services (i.e. Erection, commissioning, supervision, project drawing and designing services) and trading of fabricating material, equipment parts and other items etc. The Company''s registered office is at Village Jorian, Delhi Road, Yamunanagar (Haryana). The company is also listed on Bombay Stock Exchange Limited (BSE), Delhi Stock Exchange Limited (DSE), Jaipur Stock Exchange and Ahemdabad Stock Exchange.

[2] OTHER NOTES FORMING PART OF THE ACCOUNTS

a) The Balance Sheet as on March 31, 2012 and the Statement of Profit and Loss for the year ended March 31, 2012 are drawn and presented as per the new format prescribed under Schedule VI to the Companies Act, 1956. The amounts pertaining to previous year have been recast to confirm with new format.

b) Previous year figures have been re-grouped/re-classified where ever necessary to confirm to the current presentation.

c) Contingent Liabilities and Commitments (To the extent not provided for)

2012-13 2011-12

-Contingent Liabilities (if any) NIL NIL

-Commitments NIL NIL

d) The Company has started the new activities i.e. Erection, commissioning, supervision, project drawing and designing services and trading of fabricating material, equipment parts, electrical material/components and other items etc. Accordingly, the management has changed the name and main objects of the company as per their present activities and all the current year revenue is related to new activities.

e) The Company is engaged in single business activity (i.e. Erection, commissioning, supervision, project drawing and designing and Trading of fabricating material, equipment parts, electrical material/components and other material etc.) and there is no separate reportable segment as per AS-17.

f) Management has periodically reviewed the value in use/net realizable value of all its assets and ascertained that the value in use/net realizable value of all its assets at the end of the year is more than the book value after depreciation (amortization), hence no provision for impairment has been made during the year.

g) RELATED PARTY DISCLOSURES:

During the year, the company has carried out some transactions with the following persons, firms (in which the directors of the company are interested) related to expenditure and other transactions. The details of the same are as under: - A. Related parties and their relationship

1. Key Management Personnel

-Sh. Sunil Chandra (Managing Director) -Sh. Krishan Kumar (Non-Executive Director) -Sh. Akshay Chandra (Executive Director)

2. Relatives of Key Personnel

-Smt. Kavita Chandra w/o Sh. Sunil Chandra -Smt. Alka Chandra w/o Sh. Sudhir Chandra -Sh. Sudhir Chandra brother of Sh. Sunil Chandra

3. Associate Concerns owned or significantly influenced bv key management personnel or their relatives M/s Chanderpur Works Private Limited, Yamuna Nagar

M/s Chanderpur Renewal Power Company Private Limited, Yamunanagar M/s Chanderpur Industries Private Limited, Yamunanagar

i) In respect of provision for retirement gratuity benefits to employees, the company has decided to give the benefit out of its own funds and creates the provision of Rs. 21416.00 by charging to statement of profit and Joss as accruing liability during the year. Due to few persons being employed in the company, the accruing liability has been calculated as per method on the assumption that such benefits are payable to all the employees at the end of the accounting year, reviewable every year. The total accumulated provision for retirement gratuity benefits to employees as on March 31,2013 amounts to Rs. 194183.00 (Previous year Rs. 172767.00).

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Mar 31, 2010

1. Contingent liabilities not provided as on 31-03-2010 is NIL.

2. Previous year figures have been regrouped and rearranged to make their classification comparable with that of the current year.

3. In the opinion of the Board, the Current Assets, loans and advances are approximately of the value as stated, if realized in the ordinary course of business. The provisions for all known liabilities are adequate and not in excess of the amount considered necessary.

4. The balance appearing under the head sundry Creditors, other creditors advances recoverable and sundry debtors are not confirmed.

5. As explained to us, the company has no confirmed information with respect to all of its suppliers, whether they constitute small scale industrial undertakings and therefore the amount due to the suppliers cannot be ascertained.

6. The amount outstanding under the head capital work-in-progress amounting to Rs. 893395.13 (Previous year Rs.893395.13), which consist of capital expenditure on plant & Machinery and Electrical equipments etc., has been disposed off during the current year for Rs. 540730.00, thereby suffering a loss of Rs. 352663.11.

7. In respect of the Loan availed from Lloyd Finance Ltd., Chandigarh against equipments, the total overdue amount is Rs. 1298600.98 (including interest and principal as on 31-03-2010) as per revised re-schedulement. For recovery of their dues, the Lolyd Finance Ltd., has filled the litigation case against the company in the Honorable punjab and Harayan High Court and the hearing is still pending.

8. The company had repaid all its dues towards financial institution / Bank under on time settlement scheme by disposing off substantial part of its fixed assets. In the current year the Company has also disposed off the part of remaining assets (i.e. plant & Machinery, Electrical / Pollution / laboratory Equipments, other assets and assets acquired under capital work-In-Progress new expansion scheme, which cost / W.D.V. as on 31-03-2009 Rs. 3456166.11) for Rs. 2293530.00 thereby suffering a loss of Rs. 1162636.11. Due to that and other substantial factors (i.e. profit form new business activities) the accumulated losses of the company has been reduced to some extent in current year as compared to preceding year, but it was still equivalent to its entire net worth of the Company. The accounts have, however been prepared by the company. Because the company has already repaid all the dues towards Financial Institution / Bank under one time settlement scheme after disposing off substantial part of the fixed assets. Previously, the management has started new trading activity (i.e. trading of Store and spares / Machinery spares and material for Cement and allied industry) and achieved the turnover of Rs. 29.36 Lacs and Rs. 127.65 Lacs in the year 2008-09 and 2009-10 respectively. During the last quarter of the current financial year the management of the company has also added new the of activity (i.e. Service for Installation of Machinery parts of Cement and Allied industry) and earned the receipt of Rs. 26.00 Lacs. All these above efforts reflect that the Management of the Company is serious for revival of the company from the existing crisis. Hence, the management is hopeful to re-establish the business activities in the ensuing years.

9. The company's old stock of store and spares outstanding in the stock records has been valued and shown in the profit and Loss Account and the Balance Sheet as certified by the management as on 31-03-2010. As explained to us that, the management could not conduct the physical verification of such old stock of store and spares during the year under consideration to work out damaged stock. Hence the company has taken book value as value of the old stock of stores & Spares.

10. Deferred Tax Liability (Net)

a) In accordance with the Accounting Standard 22 "Accounting for taxes on Income" due to earlier year book loss the company has not recognized any accumulated deferred tax liability (net) as on 31st March 2010 due to uncertainty of future taxable income. Hence, no provision for deferred tax liability has been created in the books of accounts.

b) Provision for taxation on current profits:

No provision for taxation has been made in the books in the view of nil taxable income during the year. Moreover, the provision for taxation under MAT as per Income Tax Act, 1961 under section 115JB is also not required due to nill book profit during the year.

11. Schedule 'A' to 'K' are the integrate part of the accounts of the company and the same have been duly authenticated by us.

12. RELATED PARTY DISCLSOURES:

During the year, the company has carried out some transactions with the following persons, firms (in which the directors of the company are interested) related to expenditure and other transactions. The details of the same are as under:-

A. Related Parties and their relationship

1. Key Management Personnel

- Sh. Sunil Chandra (Managing Director)

- Sh. Krishan Kumar (Director)

- Sh. Pradeep Kumar (Director)

2. Relative of Key Personnel

- Smt. Kavita Chandra w/o Sh. Sunil Chandra

- Smt. Alka Chandra w/o Sh. Sidhir Chandra

- Sh. Sudhir Chandra brother of Sh. Sunil Chandra

3. Enterprises owned or significantly influenced by Key management personnel or their relatives

M/s Chanderput Works, Yamuna Nagar.

M/s Chanderpur Renewal Power Company private Limited, Yamunanagar.

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Mar 31, 2009

1. Contingent liabilities not provided as on 31-03-2009 is NIL.

2. Previous year figures have been regrouped and rearranged to make their classification comparable with that of the current year.

3. In the opinion of the Board, the current assets, loans and advances are approximately of the value as stated, if realized in the ordinary course of business. The provisions for all known liabilities are adequate and not in excess of the amount considered necessary.

4. The balance appearing under the head Sundry Creditors, other creditors, advances recoverable and sundry debtors are not confirmed.

5. As explained to us, the company has no confirmed information with respect to all of its suppliers, whether they constitute small scale industrial undertakings and therefore the amount due to the suppliers cannot be ascertained.

6. As per the terms of the prospectus of the company, the expansion scheme has been partially implemented. It could not be fully implemented as per the terms of the prospectus due to norr-receipt of call money from the share holders. The total capital expenditure incurred till date pending for capitalization are shown under the head Capital work-in progress amounting to Rs.895395.13 (Previous year Rs.2541768.96). During the current year the company has disposed off part of Plant & Machinery and demolished/destroyed factory building structure material (Cost as on 31/03/2008 Rs. 1056066.35) for Rs. 1003112.00, thereby suffering a loss of Rs.52954.35.

7. The company has undertaken the new diversification project w Design and installation of oil fired vertical shaft kiln for manufacture of cement clinker in association with Technology Information Fcrcasting and Assessment Council (TIFAC) under Technical Development Assistance Scheme and invested a sum of Rs.l 3034609.39 up to 31/03/2008. Initially, the company had successfully completed the trial run of the manufacturing of Quick Lime urder this Scheme, the ultimate esult of this project couldnt be achieved, which could be commercialized, hence the same has been discontinued/abandoned by the TIFAC vide letter dated 12/10/2006 and assessed the salvage alue of the project Rs 9.00 Lacs, which would be deposited to the TIFAC in single installment. The same has been deposited on dated 17/11/2006, but the no due/objection letter regarding acceptance of the same by the Competent Authority of the TIFAC has not been received up to 31/03/200S, However, the same has duly been accepted by the Competent Authority in the current financial year and we have disposed off all the salvage of the project in the last two quarters of the financial year 20C8-09 by adjusting the contribution of the TIFAC Rs.9100000.00 in the total investment under this scheme and the balance has been shown as loss Rs.2742709.39 by adjusted the sale proceeds of the salvage value of the assets Rs.l191900.00 in the current year.

8. in respect of the loan availed from Lloyd Finance Ltd., Chandigarh, against equipments, the total overdue amount is Rs. 1298600.98 (including interest and principal as on 31-03-2009) as pei revised reschedulement. For recovery of their dues, the Lloyd Finance Ltd., has filed the litigation case against the company in the Honorable Punjab and Haryana High Court and the hearing is still pending.

9. Previously the company had repaid all its dues towards financial institution under one time settlement scheme by disposing off substantial part*of its fixed assets. In the current year the Company has also disposed off substantial part of assets acquired under Capital work in progress new expansion scheme and Technology Development Assistance scheme (Cost/W.D V. as on 31-03-2008 Rs.4990675.74) for Rs.2195012.00, thereby suffering a loss of Rs.2795663.74. Due to that and other substantial factors (i.e. Wavier of unpaid interest by Bank under one time settlement scheme and Loss arisen due to disposal of substantial part of assets acquired under capital work in progress), :he accumulated losses of the company have been increased to some extent in current as compared to preceding year, which is just equivalent to the entire net worth of the company. The accounts have, however, been prepared by the management, as a going concern basis in view of restructuring process initiated by the management of the company. Because the company has already repaid all the dues towards Financial Institution under one time settlement scheme after disposing off substantial part of the fixed assets and retained one plant (50 TPD Capacity). In the current year the Bank has also accepted the compromise proposal of the company for settlement of its dues and the company has executed this compromise proposal by paying necessary upfront amount to the bank. The management nas also started new trading activity i.e. trading of Store and spares/Machinery spares and achieved the turnover of Rs.29.36 Lacs. All these above efforts reflect that the Management of the Company is serious for revival of the company from the existing crisis. Hence, the management is hopeful to re- establish the business activities in the ensuing years.

10. The company s stock outstanding in the stock records ha* been valued and shown in the Piofit and Loss Account and the Balance Sheet as certified by the management as on 31-03-2009. As explained to us that, the management could not conduct the physical venfication of the stock, i.e. raw material, stores & spares and finished/semi-finisKed goods of the company during the year, in view of plant being closed since January 2002, disposal of substantial part of plant and inadequate manpower to work out the damaged stock. The company has taken book val ue as value of the closing stock of raw material, work-in-progress, finished goods and stores & spares.

11. in respect of loan availed from the Central Bank of India, Ambala Cantt, the bank has recalled its whole amount Rs.l 1004919.70 (as on 31/03/2008) and filed the recovery suit against the company in Debt Recovery Tribunal, Chandigarh. The company has already approached the bank for settlement of dues under one time settlement scheme, which has duly been accepted by the bank vide letter dated 31/03/2009 and the company has paid the necessary upfront fee to the bank for execution of the said compromise proposal. In the said compromise proposal the amount of unpaid interest wavier considered by the bank Rs.705087.70 has been written back by the company by crediting to profit and loss account as exceptional items during the current year.

12. Deferred Tax Liability (Net)

a) In accordance with the Accounting Standard 22 " Accounting for taxes on income" due to earlier year book loss the company has not jecognized any accumulated deferred tax liability (nM) as on 31s March 2009 due to uncertainty of future taxable income. Hence, no provision for deferred tax liability has been created in the books of accounts.

b) Provision for taxation on current profits: No provision for taxation has been made in the books in the view of losses during the year. Moreover, the provision for taxation under MAT as per Income Tax Act, 1961 under Section 115 JB is also not equired due to book losses during the year.

13. Schedule "A" to "M" are the integral part of the accounts of the company and the same have been duly authenticated by us.

Note:

-The installed capacity has been stated on triple shift basis [i.e. for 330 working days] turd is as certified by the management and accepted by the auditors, being a technical matter. -The company has disposed off substantial part of the plani and machinery in the earlier year by retaining one plant (50 TPD Capacity), so the capacity has been amended accordingly.