Notes to Accounts of MBI Intercorp Ltd.

Mar 31, 2013

1.1 Managing Director Remuneration Rs Nil (Pr Yr Rs NIL)

Note: Computation of Net Profit in accordance with Section 349 of the Companies Act, 1956 has not been given as commission by way of percentage of profit has not been paid for the year to any of the directors.

1.2 The doubtful insurance claims amounting to Rs. 42,25,784.00 has been settled during the year along with interest.

1.3 The company had certain disputes with M/s Hit Ads Pvt. Ltd. As per Order of Delhi High Court an amount of Rs 742772.00 is payable to them. The liability towards Hit Ads has been provided in the books after adjusting advance of Rs 81000.00 recoverable from the party.

1.4 In the opinion of the Board of Directors, the aggregate value of current Assets, Loans and Advance on realization in ordinary course of business will not be less than the amount at which these are stated in the Balance Sheet.

1.5 The Stocks have been taken as per inventories taken valued and certified by the management of the company.

1.6 Bank of India Public issue refund Account has not been reconciled. However as per company''s record an amount of Rs.36,602.50 is lying in this account.

1.7 Additional Information:

a) Expenditure in Foreign Exchange – Rs. NIL (Pr.Yr. Rs. NIL)

b) Earning in foreign exchange – Rs. NIL (Pr.Yr. Rs. NIL))

1.8 Deferred Tax Liability / (Asset) – The company has implemented accounting standard – 22, "Accounting for Taxes on Income" issued by Institute of Chartered Accountants of India. deferred tax liabilities based on depreciation differences as on 31/03/2013 is adequately covered by deferred tax assets based on the benefits of unabsorbed depreciation, carried forward losses etc. that are available to the company as at 31/03/2013 and as such there is no impact of the same on these accounts. No further deferred tax asset has been recognized since there is no certainty of future taxable income to take benefit of deferred tax assets.

1.9 Impairment of Assets: - In pursuance of Accounting Standard 28-Impairment of assets (AS-28) issued by the chartered Accountants of India, the company has reviewed it''s carrying cost of assets with value in use (determined based on future earnings) / net selling price (determined based on estimation).Based on such review, management is of the view that in the current financial year impairment of assets is not considered necessary.

1.10 The company has only one reportable business segment and geographical segment and hence no further disclosure is required under Accounting Standard – 17 on Segment Reporting.

1.11 Related Parties Disclosures:-The Company has implemented Accounting Standard –18, "Related Party Disclosures" issued by Institute of Chartered Accountants of India. Consequently disclosures in respect of Related Party transactions are annexed in Annexure-I.

1.12 There was no outstanding due to entities covered under Micro, Small and Medium Enterprises Development Act, 2006 as on 31/03/2013.

1.13 None of the employee was in receipt of remuneration exceeding limits specified under section 217 (2-A) of Companies Act, 1956.

1.14 The company has no provision in the books of account regarding accrued leave salary and Gratuity. However this been taken on the time of payment to employee''s at the time of retirement or otherwise.

1.15 C.I.F. VALUE OF IMPORTS

- Capital Goods NIL NIL

1.16 EXPENDITURE IN FOREIGN CURRENCY NIL NIL

1.17 EARNING IN FOREIGN CURRENCY FOR EXPORTS NIL NIL

1.18 Debit/Credit balances are subject to confirmation.

1.19 Previous year figures have been regrouped / rearranged wherever necessary to conform to current year classification.

1.20 Note 1 to 2.42 forms an integral part of Balance Sheet and Statement of Profit & Loss.

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Mar 31, 2012

Note: Computation of Net Profit in accordance with section 349 of the Companies Act, 1956 has not been given as commission by way of percentage of profit has not been paid for the year to any of the directors.

1.1 Balance grouped under Sundry Debtors, Advances from Customers, Sundry Creditors and Loan and Advances, Other Liabilities are subject to reconciliation and confirmation.

1.2 (a) No provisions have been made for doubtful insurance claims amounting to Rs. 42, 25,784.00 and other doubtful claim of Rs. 81,000.00. The sole Arbitrator had given an award sanctioning Rs. 62,88,5369.00 to company as insurance claim against damaged stock. The insurance company preferred an appeal to Hon' able Delhi High Court against said award. However the insurance company has made on interim payment of Rs. 20, 62,752.00. The company is hopeful that the balance awarded amount shall be recovered hence no provision has been made in this regard. Management is hopeful that the debts and other claims shall also be recovered.

(b) No provision has been made for gratuity and leave encashment of erstwhile employee as required by Accounting Standard-15. The same shall be made at the time of actual payment.

(c) No provision has been made for Income tax for the current year in view of brought forward losses and depreciation.

1.3 In the opinion of Board of Directors, the aggregate value of current Assets, Loans and Advance on realization in ordinary course of business will not be less than the amount at which these are stated in the Balance Sheet.

1.4 The Stock has been taken as per inventories taken valued and certified by the management of the company.

1.5 The company had certain disputes with M/s Hit Ads Pvt. Ltd which were referred to the arbitration. In the books of the company, Rs. 81,000.00 are shown as recoverable from M/s Hit Ads Pvt. Ltd where as per the award of the arbitrator Rs. 1,91,280.00 and Rs. 5,000.00 towards costs are payable to M/s Hit Ads Pvt. Ltd. However the company has filed objections before the Hon 'able Delhi High Court against the said Awards which are pending for adjudication. Company is hopeful that appeal/ objections shall be decided in its favour.

1.6 As supplier covered under the interest on Delayed Payment to "Micro, Small and Medium Enterprises Development Act, 2006" are yet to be identified, liabilities towards interest remained as unpaid to such small scale and /or ancillary Industrial undertakings as on 31.03.2011 is unascertainable.

1.7 Insurance claim recoverable of Rs. 42,25,587.00 (Previous Year Rs. 42,25,587.00) on account of insurance claim lodged with United India Insurance Co. Ltd. for stocks lost during the fire for which the claim was not settled as at the date of Balance Sheet.

1.8 Bank of India Public issue refund account has not been reconciled. However as per company's record an amount of Rs.36, 602.50 are lying in this account.

1.9 Impairment of Assets: - In pursuance of Accounting Standard28- Impairment of assets (AS-28) issued by the Chartered Accountants of India, the company has reviewed it's carrying cost of assets with value in use (determined based on future earnings)/net selling price (determined based on estimation).Based on such review, management is of the view that in the current financial year impairment of assets is not considered necessary.

1.10 The company has only one reportable business segment and geographical segment and hence no further disclosure is required under Accounting Standard-17 on Segment Reporting. 2.32 Disclosure s as per Accounting Standard 18- " Related Party Disclosure" issued by the Institute of Chartered Accountants of India :-

1.11 In accordance with the Accounting Standard 22" Accounting for Taxes on Income" issued by the ICAI , deferred tax liabilities based on depreciation differences as on 31/03/2012 is adequately covered by deferred tax assets based on the benefits of unabsorbed depreciation, carried forward losses etc. that are available to the company as at 31/03/2012 and as such there is no certainty of future taxable income to take benefit of Deferred Tax Assets.

1.12 Previous Years figure have been re-grouped/re-arranged wherever possible.