Multi - Arc India Ltd. के अकाउंट के लिये नोट

Mar 31, 2009

[i] Contingent Liabilities: a) Income-tax demand of Rs.65,75,302/- (previous year Rs.65,75,302) for which the company has denied any liability and has disputed the same, whereby the Company has filed an appeal with the ITAT, Mumbai

b) A Criminal Complaint filed by the Assistant Commissioner (Octroi), Pimpri Chinchwad Municipal Corporation, Pimpri, Pune - Claim against the Company not acknowledged as debt (Octroi)- Rs. 40,77,720/- The Company has filed a petition challenging this in the Honourable High Court of Bombay.

c) The Company has given a Corporate Guarantee on behalf of its subsidiary - Multi Arc Coatings and Straps Ltd. - amounting to Rs. 14.81 crores for term loan and overdraft facilities availed by the subsidiary from Bank of India and Punjab National Bank

[ii] Revised Accounting Standard 15:The company has not adopted the revised Accounting Standard 15- Employee Benefits issued by the Institute of Chartered Accountants of India.

[iii] None of the Assets are taken on lease and no rentals are payable pertaining to the current year. From the current year onwards the management has decided to charge depreciation on the basis of actual utilisation of the assets.

[iv] The Company is in receipt of notices, from Canara Bank and Union Bank of India dated 18th May, 2009 and 6th March, 2009 respectively, under section 13(2) of the Securitisation and Reconstruction of Financial Assets Enforcement Of Security Act 2002, "SARFAESI ACT" whereby, in case of failure to discharge the outstanding dues within 60 days of receipt of the notice by the company , the Banks shall have the right to take possession of the secured assets including the right to transfer by way of lease, assignment or sale for realizing the secured asset. The above are in lieu of the credit facilities extended to the company amounting to Rs. 3,05,18,277.68/- plus interest - Canara Bank and Rs. 49,87,930 plus interest- Union Bank of India which are outstanding and due to the Banks.

[v] No provision has been made in the accounts for diminution in the value of unquoted investments, as these are long term in nature and the decline in the value being on account of temporary factors.

[vii] The Company has substantial unabsorbed depreciation and carry forward losses under the Income Tax Act, 1961.In view of the past losses the availability of sufficient^ future taxable income against which such depreciation and losses can be set off cannot be stated with virtual certainty and hence, Deferred Tax Asset, as required by Accounting Standard -22 has not been recognised Nevertheless, the Management expects that sufficient future taxable income will be available against which the timing differences arising will be reversed, which will result in sufficient future income.

[viii] Confirmation of balance from some of the debtors and creditors has not been received; hence their balances are subject to confirmation, reconciliation and subsequent adjustments, if any.

[ix] The company has a single business segment namely "Surface Enhancement". Therefore the companys business does not fall under different business segments as defined by Accounting Standard -17 on Segmental Reporting issued by the Institute of Chartered Accountants of India.

[x] Related Party Disclosures:

a) Related Party Details

Holding Company where control exists

Multi-Arc India Limited

Subsidiary of the Company

Multi-Arc Coatings and Straps Ltd.

Key Managerial Personnel

Mr. Ashok K Jani

[xij. In the opinion of the Board of Directors of the Company, the current assets, loans and advances are approximately of the value stated, if realised in the ordinary course of business.

[xii] Joint VentureThe company had signed a MOU forming a Joint Venture with UCT Coatings Inc. in the financial year ending 2007 and formed a new company in the name of UCT Coatings Pvt. Ltd. The company UCT Coatings Pvt. Ltd. was incorporated on 27/09/ 2005.During the current financial year the Company has advanced Rs. 312.40 Lacs towards investment in Equity to UCT Coatings Pvt. Ltd. UCT Coatings Pvt. Ltd. has advanced Rs.628.95 Lacs to the company towards project advance. The current account transaction balance with UCT is Rs. 21.24 Lacs. UCT Coatings Pvt. Ltd. has not commenced commercial production in the current financial year.

[xiii]. In the absence of declaration from suppliers with regard to their status as Small-scale Industrial Undertakings (SSIs), wherever applicable, it is not possible to determine the amount, if any, payable to sundry creditors falling within the meaning of Small-scale Industrial Undertaking. Further, as the company does not have information as to which of its creditors are registered under the Micro, Small and Medium Enterprises Development Act, 2006, no disclosure as required by the said Act is provided.

[xiv]. During the current financial year, the company has received a notice from Union Bank of India under section 138 of the Negotiable Instrument Act, 1881, as amended up to date, wherein a pheque for Rs.5,12,500/- issued by the company to Union Bank of India was dishonoured and returned back unpaid due to insufficient funds.

[xv]. The company maintains current accounts with certain parties, without any stipulations as to repayment or interest.

[xvi].There are transactions for sale of goods between the Company and UCT Coatings Pvt. Ltd. - having common directors - and the same are for cash at prevailing market prices.

[xvii]Extra-ordinary Item: As required by AS- 5" Events occurring after the Balance Sheet Date, Prior Period Items and Extraordinary Items" the extraordinary item as appearing in the Profit & Loss Account is profit arising out of disposal of unutilised assets. The previous years figures have been regrouped and rearranged wherever necessary. Statement pursuant to Section 212 of the Companies Act, 1956 relating to the Subsidiary Company