1.  I have audited the attached Balance Sheet of Multi Arc- India
 Limited as at March 31, 2009, the related Profit and Loss Account for
 the year ended on that date annexed thereto, and the Cash-flow
 Statement for the year ended on that date. .  These financial
 statements are the responsibility of the Companys management. My
 responsibility is to express an opinion on these financial statements
 based on my audit.
 
 2.  I have conducted my audit in accordance with the auditing standards
 generally accepted in India. Those standards require that I 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 the 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. I believe that my audit provides a reasonable basis for
 my opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004
 (together the Order) issued by the Central Government of India in
 terms of sub-section (4A) of section 227 of the Companies Act, 1956, I
 enclose in the Annexure a statement on the matters specified in
 paragraph 4 and 5 of the said order.
 
 Further to my comments in the Annexure referred to above, I report
 that:
 
 i) I have obtained all information and explanations, which to the best
 of my knowledge and belief were necessary for the purposes of the
 audit;
 
 ii) In my opinion, proper books of acceunts as required by law have
 been kept by the Company so far as appears from my examination of those
 books;
 
 iii) The Balance Sheet, Profit and Loss Account and Cash-flow Statement
 dealt with by this report are in agreement with the books of account;
 
 iv) In my opinion, the Balance Sheet, Profit and Loss Account and
 Cash-flow Statement dealt with by this report comply, with the
 accounting standards referred to in sub-section (3C) of section 211 of
 the Companies Act, 1956
 
 v) On the basis of information and explanations provided and the
 written representations received from the Directors as on March 31,
 2009 and taken on record by the Board of Directors , I report that none
 of the directors is disqualified as on March 31,2009 from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 section 274 of 4 the Companies Act, 1956
 
 vi) Attention is invited to the following in Schedule L
 
 a) Note 2 (ii) regarding non provision of retirement benefits of
 employees, pursuant to application of the Accounting Standard 15
 (Revised 2005) -Employee Benefits, in the financial statements.
 
 b) Note (iv) regarding the notices received by the company under the
 Securitization and Reconstruction of Financial Assets Enforcement Of
 Security Act 2002, SARFAESI ACT whereby in view of the secured assets
 under the control of the Banks the going concern concept needs to be
 reviewed.
 
 Since no data is made available, the overall impact/effect of the
 above,on the financial statements for the year March 31, 2009 could not
 be determined.  vii) Subject to the above and the observations in the
 annexure attached herewith, in my opinion and to the best of my
 information and according to the explanations given to me, the said
 accounts, read together with the significant accounting policies and
 other notes thereon, give the information required by the Companies
 Act, 1956, in the manner so required and give a true and fair view in
 conformity with the accounting principles generally accepted in India:
 
 a.  in the case of the Balance Sheet, of the state of affairs of the
 company as at March 31, 2009;
 
 b.  in the case of the Profit and Loss Account, of the loss for the
 year ended on that date; and
 
 c.  in the case of the Cash-flow Statement, of the cash-flow for the
 year ended on that date.
 
 Annexure referred to in paragraph 3 of the audit report of even date to
 the members of Multi Arc- India Limited on the accounts for the year
 ended March 31, 2009.
 
 I Fixed Assets:
 
 a.  The company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets on the
 basis of available information.
 
 b.  As explained, all the fixed assets have not been physically
 verified by the management during the year, but a major portion of the
 fixed assets have been physically verified by the management, as per
 their verification programme. In my opinion, the frequency of
 verification of those fixed assets by the management is reasonable
 having regard to the size of the Company and nature of its assets. To
 the best of my knowledge, no material discrepancies were noticed on
 such verification.
 
 c.  In my opinion and according to the information and explanations
 provided, no substantial part of the fixed assets has been disposed off
 during the current financial year but, pursuant to the notices received
 by the company under the SARFAESI ACT the going concern concept needs
 a review. (Refer Note (iv) forming part of Schedule L)
 
 2 Inventory:
 
 a.  As per the explanations and information provided, the management
 has not conducted physical verification of all the inventory during the
 year, but a major portion of the inventory has been verified as per the
 managements verification programme. In my opinion, having regard, to
 the nature of the Companys business the frequency of verification is
 reasonable.
 
 b.  In my, opinion and according to the information and explanations
 provided the procedures of physical verification of
 
 inventories followed by the management are reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 c.  In my opinion and on the basis of information and explanations
 provided, the Company has maintained proper records of inventory and
 the discrepancies noted on physical verification between the physical
 stocks and book records were not material.  3 Loans and Advances:
 
 As per the information and explanations provided, there are
 transactions with one Company-UCT Coatings Pvt. Ltd.  covered in the
 Register maintained under section 301 of the Companies Act, 1956. The
 Company has advanced Rs.  312.40 lacs towards investment in Equity to
 UCT Coatings Pvt. Ltd, taken Rs. 628.95 lacs from the same company
 towards project advance and the company also maintains current account
 transactions with the same company- closing balance Dr- Rs 21,23,965/-.
 The terms and conditions of these advances are such that either the end
 utilization of the amount involved is fixed for specific purposes or
 are long term in nature or are current account transactions; hence no
 repayment or interest stipulations have been adhered to. The terms and
 conditions of the transactions prima facie does not appear to be
 prejudicial to the interest of the company.
 
 4.  Internal Control System:
 
 In my opinion and according to the information and explanations given
 to me, having regard to the explanation that for the purchase of gold,
 being an integral and high value inventory item and also considering
 the high quality aspect maintained by the Company for its services
 rendered, the Company has certain fixed sources/vendors for the
 purchase of gold, for re-moulding of used gold bars and for recovery of
 gold, and the market being customer driven the sale prices of articles
 vary from customer to customer and from process to process. There are
 certain cases wherein lapses in the internal control system have been
 observed which are not capable of precise quantification.
 
 Subject to the above, there is an adequate internal control system
 commensurate with the size of the Company and the nature of its
 business, for the purchase of inventory and fixed assets and for the
 sale of services. -
 
 Further, on the basis of my examination and according to the
 information and explanations given, during the course of the audit,
 subject to the foregoing I have not observed any continuing failure to
 correct major weakness in internal control system.
 
 5.  Related Party Transactions:
 
 On the basis of information and explanations made available to me, the
 transactions that were required to be entered  in the Register
 maintained under section 301 of the Companies Act, 1956 have been so
 entered and are made at the prevailing market prices at the relevant
 time.
 
 6.  Public Deposits:
 
 The company has not accepted any deposits from the public within the
 meaning of the provisions of section 58A and 58AA or any other relevant
 provisions of the Act and the Rules framed thereunder.
 
 7.  Internal Audit System:
 
 Based on the information and explanations provided, no internal audit
 has been conducted during the current financial year and in my opinion,
 there has not been an adequate internal audit system commensurate with
 its size and nature of its business.
 
 8.  Maintenance of Cost Records:
 
 To the best of my knowledge and as explained, the Central Government
 has not prescribed maintenance of cost records under section 209(1) (d)
 of the Companies Act, 1956.
 
 9.  Statutory Dues:
 
 a. According to the information and explanation given by the management
 and according to the books and records produced and examined by me, in
 my opinion the Company lias not been regular in depositing with
 appropriate authorities undisputed statutory dues including Provident
 Fund, Income-Tax, Service Tax, Cess, Value Added Tax, Electricity Bills
 and other material statutory dues including salary of existing
 employees and final settlement dues of left employees.  me undisputed
 statutory dues outstanding at the year end for a period of more than
 six months from the date they became payable are as given in the Table
 below;
 
 Sr.   Name of the Statute       Nature of             Amount
 No.                             the Dues              (Rs.)
 
 1.  The Employees Provident    Provident Fund       39,88,703
     Fund Scheme & Pension
      Scheme,1995     
 
 2.  The Income Tax Act, 1961  Tax deduced at source  6,31,900
                               Salary                                 
 
                               Tax Deducted at Source   72,418
                               Professional Fees
 
                               Tax Deducted ar Square 11,59,010
                               Contractors
 
 
 
 
      
 
 Name of the Statue           Period to which         Date of
                               the amount             Payment
                               related
 
 The Employees Provident
 Fund Scheme & Pension
 Scheme ,1995                 April 2007 to       Not paid till date
                              March 2009
 
 The Income Tax Act,1961      April 2008 to         ------do------
                              March 2009
 
                              April 2008 to         ------do------
                              March 2009
 
                              April 2008 to         ------do-----
                              March 2009
 
 Sr.    Name of the Statute        Nature of            Amount
 No.                               the Dues             (Rs.)
 
                              Tax Deducted at Source -   4,64,805
                             Interest other than Interest
                              on  Securities
 
                              Tax Deducted at Source -   7,48,506
                                  Rent
  
                              Fringe Benefit Tax        17,78,850
 
 3. Service Tax, under the     Service Tax             15,416,056
 Finance Act, 1994
 
 4. Value Added Tax           Gujarat State             3,724,320
                              & Tamilnadu
 
 5. Water/Notified Area Tax                              1,69,117
 
 6. Payment under Gratuity                              5,269,910
 Act, 1872 and payment to
 ex-employees
 
 7. Salary of existing 
    employees                                           6,549,166
 
    Total                                               3,997,761
 
 
 
 
 Name of the Statue            Period to which          Date of
                               the amount               Payment
                                related
 
                              April 2008 to         ------do-----
                              March 2009
 
                              April 2008 to         ------do-----
                              March 2009
 
                              April 2007 to         ------do-----
                              March 2009
 
 Service Tax, under the
 Finance Act, 1994            April 2007 to        ------do------
                              March 2009
 
 Value Added Tax              April 2007 to        ------do------
                              March 2009
 
 Water/Notified Area Tax      April 2008 to         ------do-----
                              March 2009
 
 Payment under Gratuity
 Act, 1872 and payment to
 ex-employees                 April 2007 to         ------do-----
                              March 2009
 
 Salary of existing employees June 2008 to          ------do-----
                              March 2009
 
 Total
 
 b. The Company has disputed the Income Tax Arrears of Dura Coaters Pvt
 Ltd. amounting to Rs. 65,75,302/- (including interest) Dura Coaters
 Pvt. Ltd. was amalgamated with the Company on and from November 1, 1988
 and the matter is pending before the Income Tax Appellate Tribunal for
 decision.
 
 10.  Accumulated Losses:
 
 In my opinion, according to the information and explanations given and
 on an overall examination of the Balance Sheet, the Companys
 accumulated losses at the end of the financial year are more than 50%
 of its net worth as at March 31, 2009 and the Company has incurred cash
 losses during the financial year ended on that date but not in the
 immediately preceding financial year.
 
 11.  Repayment of Loans from Banks and Financial Institutions:
 
 According to the information and explanations given by the management,
 there have been delays in the repayment of dues to financial
 institutions and banks. The Company has defaulted in repayment of
 secured loan from Technology Information Forcast & Ass.Council, the
 amount outstanding as on 31st March 2009 being Rs. 73.55 Lacs
 (including interest) outstanding, for a period of more than 1.5 years.
 Also, the company has been unable to repay the credit facilities
 availed and utilized, from Canara Bank and Union Bank of India
 amounting to Rs. 3.05 Crores and Rs. 49.88 Lacs respectively (excluding
 interest and penalty).
 
 12.  As per the information and explanations given by the management,
 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.  According to the information and explanations given by the
 management, the terms and conditions of the guarantee given by the
 Company for loans taken by others from banks and financial
 institutions, are not prima facie prejudicial to the interests of the
 Company(Refer note 2 (i) (c) forming part of the notes to accounts)
 
 14.  In my opinion, and according to the information and explanations
 given to me, the terms and conditions of the various term loans raised
 by the Company have been re-structured and as explained, the term loans
 raised have been applied for the purpose for which they were raised.
 
 15.  In my opinion, according to the information and explanations given
 by the management, and on an overall examination of the Balance Sheet
 of the Company, prima-facie, there are no funds raised on short term
 basis that have been utilized for long term investments.
 
 16.  As per the books and records verified and according to the
 information, explanations and management representation provided to me,
 the Company has not made any preferential allotment of shares to
 parties and companies covered in the Register maintained under section
 301 of the Companies Act, 1956, during the year.
 
 17.  As per the books and records verified and according to the
 information and explanations given to me there are no debentures
 outstanding as on March 3109
 
 18.  During the year covered under audit, the Company has not raised
 any money by way of public issue(s) of shares.
 
 19.  Reference is invited to Note (xiv) forming part of Notes on
 accounts, wherein during the current financial year, one case of
 dishonored cheque, issued by the Company, have been reported to the
 management for which the Company ha: received a legal notice.
 
 20.  As per information and explanations given to me & taking into
 consideration, the nature of business of the Compan clauses (xiii),
 (xiv) of the paragraph 4 of the Order are not applicable and
 therefore not commented upon.
 
 Place: Mumbai                                          J.C.Bha
 
 Date: 30th July 2009                        Chartered Accountants