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Arrow Coated Products
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« Mar 13
Auditor's Report (Arrow Coated Products) Year End : Mar '14
We have audited the accompanying financial statements of Arrow Coated
 Products Limited (the Company), which comprise the Balance Sheet as
 at March 31, 2014, and Statement of Profit and Loss and Cash Flow for
 the year then ended, and a summary of significant accounting policies
 and other explanatory information.
 
 Management''s Responsibility for the Financial Statements
 
 The Company''s management is responsible for the preparation of these
 financial statements that give a true and fair view of the financial
 position, financial performance and cash flows of the Company in
 accordance with the Accounting Standards referred to in sub-section
 (3C) of section 211 of the Companies Act, 1956 (the Act) read with
 the General Circular 15/2013 dated 13 September 2013 of the Ministry of
 Corporate Affairs in respect of Section 133 of the Companies Act,2013
 and in accordance with the accounting principles generally accepted in
 India. This responsibility includes the design, implementation and
 maintenance of internal control relevant to the preparation and
 presentation of the financial statements that give a true and fair view
 and are free from material misstatement, whether due to fraud or error.
 
 Auditors'' Responsibility
 
 Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. Those Standards require that we comply with
 ethical requirements and plan and perform the audit to obtain
 reasonable assurance about whether the financial statements are free
 from material misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and disclosures in the financial statements. The procedures
 selected depend on the auditor''s judgment, including the assessment of
 the risks of material misstatement of the financial statements, whether
 due to fraud or error. In making those risk assessments, the auditor
 considers internal control relevant to the Company''s preparation and
 fair presentation of the financial statements in order to design audit
 procedures that are appropriate in the circumstances, but not for the
 purpose of expressing an opinion on the effectiveness of the entity''s
 internal control. An audit also includes evaluating the appropriateness
 of accounting policies used and the reasonableness of the accounting
 estimates made by management, as well as evaluating the overall
 presentation of the financial statements. We believe that the audit
 evidence we have obtained is sufficient and appropriate to provide a
 basis for our audit opinion.
 
 Basis for Qualified Opinion
 
 a) The company has not made provisions for overdue advances aggregating
 to Rs. 20616.610(''000). Had this observation made by us been considered
 Profit after Tax would have been Rs. 24992.501(000) (as against the
 reported figure of Profit of Rs. 45609.111(''000)); reserves and surplus
 would have been surplus of Rs. 51682.559 (''000) (as against the
 reported figure of surplus of Rs. 72299.169 (000)): long term loans and
 advances would have been Rs. 8795.092 (''000) (as against reported
 figure of Rs. 29411.702 (''000)),
 
 b) As more fully explained in note 39 to the financial statements the
 Company has not complied with Accounting Standard 24 Discontinuing
 Operations.
 
 Qualified Opinion
 
 In our opinion and to the best of our information and according to the
 explanations given to us, except for the effects of the matter
 described in the Basis for Qualified Opinion paragraph ,the financial
 statements give the information required by the Act 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, 2014;
 
 b) In the case of the Statement Profit and Loss, of the profit for the
 year ended on that date; and
 
 c) In the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 Report on Other Legal and Regulatory Requirements
 
 1. As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order) issued by the Central Government in terms of Section 227(4A) of
 the Act, we give in the Annexure a statement on the matters specified
 in paragraphs 4 and 5 of the Order.
 
 2. As required by section 227(3) of the Act, we report that:
 
 a) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 b) In our opinion proper books of account as required by law have been
 kept by the Company so far as appears from our examination of those
 books
 
 c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account.
 
 d) except for the effects of the matter described in the Basis for
 Qualified Opinion paragraph, in our opinion, the Balance Sheet,
 Statement of Profit and Loss, and Cash Flow Statement comply with the
 Accounting Standards referred to in subsection (3C) of section 211 of
 the Companies Act, 1956) read with the General Circular 15/2013 dated
 13 September 2013 of the Ministry of Corporate Affairs in respect of
 Section 133 of the Companies Act,2013;
 
 The Annexure referred to in paragraph 1 of the Our Report of even date
 to the members of Arrow Coated Products Limited on the financial
 statements of the company for the year ended 31st March, 2014.
 
 i) In respect of its Fixed Assets.
 
 The company is maintaining proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 Some of the fixed Assets were physically verified during the period by
 the management in accordance with a program of verification, which in
 our opinion provides for physical verification of all the fixed assets
 at reasonable intervals. The reconciliation work with the available
 records is in progress and necessary entries will be passed in the
 accounts to give to material discrepancies if any, observed on such
 reconciliation.
 
 In our opinion and according to the information and explanations given
 to us, the company has made substantial disposal of Fixed Assets during
 the period, however such disposal has not affected the going concern
 status of the company.
 
 ii) In respect of its Inventories.
 
 As explained to us, major inventories were physically verified during
 the year by the management at reasonable intervals.
 
 In our opinion and according to the information and explanations given
 to us, the procedures of physical verification of inventories followed
 by the management are reasonable and adequate in relation to size of
 the company and the nature of its business.
 
 In our opinion and according to the information and explanations given
 to us, the company has maintained proper records of its inventories and
 no material discrepancies were noticed on physical verification.
 
 iii) According to the information and explanation given to us:
 
 The company has not granted any loans, secured or unsecured to
 companies, firms or other parties covered in register maintained u/s
 301 of the Companies Act 1956.
 
 During the period company has not taken loan from any party covered in
 register maintained u/s 301 of the Companies Act 1956 and the balance
 of loan taken from such one party was Rs. 902.390 (''000).
 
 In our opinion, the rate of interest and other terms and condition on
 which loan has been taken from companies, firms or other parties listed
 in the register maintained under section 301 of the Companies Act, 1956
 are not, prima facie, prejudicial to the interest of the company.
 
 The company has taken loans from parties covered under section 301 of
 the Companies Act, 1956 that are interest free and no due date for
 repayment are stipulated. Hence, commenting on regularity of repayment
 of principal / interest does not arise.
 
 iv) In our opinion and according to the information and explanation
 given to us the company has internal control system commensurate with
 the size of the company and the nature of its business with regards to
 purchase of inventories, fixed assets and with regards to the sale of
 the goods and services. During the course of our audit, we have neither
 come across nor have been informed of any continuing failure to correct
 major weaknesses in internal controls system.
 
 v) To the best of our knowledge and belief and according to the
 information and explanation given to us particulars of contracts or
 arrangements referred to in section 301 that need to be entered in the
 register have been so entered.
 
 In our opinion and according to the information and explanation given
 to us, the transaction made in pursuance of contracts or arrangements
 entered in the register maintained under section 301 of the Companies
 Act, 1956 and exceeding the value of rupees five lakhs in respect of
 any party during the year have been made at prices which are reasonable
 having regard to prevailing market prices at the relevant time.
 
 vi) In our opinion and according to the information and explanation
 given to us, the company has not accepted deposits from the public
 during the year as such within the meaning of Section 58A of the Act We
 have been informed that no order has been passed by the Company Law
 Board or National Company Law Board Tribunal or Reserve Bank of India
 or any other Tribunal in India.
 
 vii) In our opinion, there is scope of strengthening internal audit
 system, commensurate with the size and nature of its business.
 
 viii) We have broadly reviewed the books of accounts maintained by the
 company in respect of products where, pursuant to the rules made by the
 central government of India, the maintenance of Cost records under
 section 209(1) (d) of the Companies Act 1956, and are of the opinion
 that, prima facie, the prescribed accounts and records have been made
 and maintained. We have not, however, made a detailed examination of
 the records with a view to determine whether they are accurate or
 complete.
 
 ix) According to the record of the company, the company is generally
 regular in depositing undisputed statutory dues including Provident
 Fund, Investor Education Protection Fund, Employees'' State Insurance,
 Income Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other
 statutory dues applicable to it with appropriate authorities expect for
 serious delays in depositing tax deducted at source and service tax.
 
 According to the information and explanations given to us, there are no
 undisputed amount payable in respect of income tax, wealth tax, custom
 duty, excise duty and cess which were outstanding, at the end for the
 period of more than six months from the date they became payable except
 
 Nature of the Dues      Amount (Rs. in ''000)
 
 Local Sales Tax                       213.35
 Income Tax                            160.69
 Provident Fund                         22.80
 Service Tax                            81.68
 
 According to the information and explanations given to us, there are no
 dues of sales tax, income tax, custom duty, wealth tax, excise duty and
 cess which have not been deposited on account of any dispute except
 
 Nature of the Dues         Amount  Period        Authority Before which 
                      (Rs in ''000)                in Appeal
 
 Local Sales Tax           2838.79  F.Y.2003-04   Assistant Commissioner      
                                                  of Sales Tax, Mumbai
 
 Central Sales Tax          441.87  F.Y.2003-04   Assistant Commissioner
                                                  of Sales Tax, Mumbai
 
 Local Sales Tax           3677.77  F.Y.2004-05   Assistant Commissioner
                                                  of Sales Tax, Mumbai
 
 Central Sales Tax         3520.70  F.Y.2004-05   Assistant Commissioner  
                                                  of Sales Tax, Mumbai
 
 Central Sales Tax         4152.89  F.Y.2008-09   Assistant Commissioner
                                                  of Sales Tax, Mumbai
 
 x) Accumulated losses of the Company are less than fifty per cent of
 its networth. The Company has not incurred cash losses during the
 financial year covered by our audit and but had incurred cash loss of
 Rs. 25410.39 (''000) In the immediate preceding financial year.
 
 xi) In our opinion and according to the information and explanations
 given to us, the company has not defaulted in repayment of dues to the
 financial institution, bank or debenture holders.
 
 xii) According to information and explanation given to us company has
 not granted loans and advances on the basis of security by way of
 pledge of shares, debentures and other securities.
 
 xiii) Clause (xiii) of the order is not applicable to the Company, as
 the Company is not chit fund Company or Nidhi / Mutual benefit fund /
 Society.
 
 xiv) The company has, in our opinion, maintained proper records and
 contracts with respect to its investment where timely entries are made
 in the former. All investment at the end are generally held in the name
 of the company.
 
 xv) According to information and explanation given to us the company
 has not given guarantees for loan taken by others from banks or
 financial institutions.
 
 xvi) According to information and explanation given to us the company
 has not taken term loan during the year.
 
 xvii) According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the company, we report
 that no funds raised on short-term basis have been used for long-term
 investment.
 
 xviii) According to the information and explanations given to us, the
 company has not made preferential allotment of shares to parties and
 companies covered in the register maintained under section 301 of the
 Companies Act 1956.
 
 xix) According to information and explanation given to us Debentures
 have not been issued by the company during the year.
 
 xx) During the year the company has raised money by public issue and we
 have verified the disclosure made in note 48 to the financial
 statements .
 
 xxi) According to the information and explanation given to us, no fraud
 on or by the company has been noticed or reported during the course of
 our audit.
 
 
                                                   For J. A. Rajani & Co.
                                                    Chartered Accountants
                                                    Firm Reg. No. 108331W
 
                                                             P. J. Rajani
 Place: Mumbai                                                 Proprietor
 Date : 3rd May, 2014                               Membership No. 116740
Source : Dion Global Solutions Limited
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