DIRECTOR'S REPORT Dear Shareholders, The Directors of Multi-Arc India Ltd. take pleasure in presenting their 22nd Annual Report on the Business and Operations of your company together with Audited Accounts for the year ended 31st March 2009. OPERATIONS REVIEW During the year under review, due to recessionary trend in gold economy and various industrial segments, the gross revenue and profits of the company are at lower level. During the last quarter, the company has introduced a new black DLC (Diamond Like Carbon) Coating which is being well received in the market and has a lower demand for Working Capital. The Company is in process of completing the restructuring. DIVIDEND In view of the current financial position of the company your Directors express their inability to recommend the declaration of Dividend for the year ended 31st March 2009. OUTLOOK FOR 2009-10 The future outlook remains cautions though some sectors in economy are posting the signs of improvement. In order to address future challenges, the Management is looking at rationalization of production facility, man power, disposal of surplus assets, introduction of new coatings where use of expensive, raw material is less or almost absent. SUBSIDIARY The working results of the subsidiary Company Multi Arc Coatings & Straps Ltd. reflected in the consolidated accounts forming of part of the Annual Report. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT Management's Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges, is presented as a separate section forming part of the Annual Report. CORPORATE GOVERNANCE The Company, being a value driven organization, believes in coherent and self-regulatory approach in the conduct of its business to achieve the highest levels of good corporate governance practices. Your Directors adhere to the requirement of Corporate Governance as stipulated by SEBI. Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement of the Stock Exchanges forms part of the Annual Report and is attached as Annexure B to this report. Certificate from the Auditors of the Company Mr.J.C.Bhatt, Chartered Accountant confirming compliance of the conditions of Corporate Governance as stipulated in Clause 49 is also attached and forms a part of Annexure B. HUMAN RESOURCES Employee relations were a little less cordial during year under review because of delays in paying wages. Your Directors place on record their appreciation to all the employees for their commendable understanding despite all odds and constraints. The provision of section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules,1975 is annexed to the Directors Report. FIXED DEPOSITS During the period under review, the Company has not received any deposits from the public pursuant to Section 58- A of the Companies Act, 1956. DIRECTORS Mr. Peter D.Flood, Mr.K.Ravindranath retire by rotation at the Annual General Meeting and being eligible, offer themselves for re-appointment. Mr.Duane Decara has been appointed as Additional Director from 31st July 2009 and holds the office till the ensuing Annual General Meeting. Brief resume of the Directors proposed to be re-appointed nature of their expertise in special functional areas and the number of Companies in which they hold directorship and membership/chairmanship of the Board Committees, as stipulated under clause 49 of the Listing Agreement with the Stock Exchange is provided in the Notice and Explanatory statement of the Annual General Meeting. Mr.Lincoln Schomer was appointed as Additional Director on 01.10.2008 and resigned on 31st July 2009. Mr.Umesh Gala and Dr.Yancy Riddle resigned as Directors of the Company with effect from 31st July 2009. The Board places on record its appreciation for the valuable services rendered by the Directors during their tenure of the office. DIRECTOR'S RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to the Directors Responsibility Statement, it is hereby confirmed that: (i) in preparation of the annual accounts, the applicable accounting standards have been followed along with a proper explanation relating to any material departures from the same; (ii) the Directors have selected such accounting policies, applied them consistently, and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2009 and of the profit or loss of the Company for the year ended on that date. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the asset of the Company and for preventing and detecting fraud and other irregularities; and (iii) the Directors have prepared the annual accounts on a going concern basis. CONSOLIDATED FINANCIAL STATEMENT In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements, your Directors provide the audited Consolidated Financial Statement in the Annual Report. REMARKS IN AUDITORS REPORT Due to the continued liquidity crunch, investment in subsidiary, there have been delays in payment of statutory dues, employee related dues and Banks. Due to senior management attention focused in crisis Management there has been lapses in internal control system. The same will be corrected in the current ensuing year. The Management taking effective steps for resolving the liquidity crunch which will resolve all the issues and lead to improvement in gross revenue and profitability. AUDITORS M/s. J.C.Bhatt., Chartered Accountants, Statutory Auditors of the Company retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO. This information pursuant to Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 is given in Annexure 'A' to this report. ACKNOWLEDGEMENT Your Directors wish to place on record their deep appreciation for the whole hearted and sincere co-operation and guidance received from all Institutions, Financial Creditors. Your Directors also wish to extend their sincere thanks to all the customers, shareholders and vendors for their continuous support and to the employees for their unstinting co-operation and support extended to the management in achieving the desired performance from time to time. FOR AND ON BEHALF OFTHE BOARD OF DIRECTORS ASHOK K. JANI Executive Chairman Place: Mumbai Date: 30th July 2009 |