Report on the Financial Statements : We have audited the accompanying
financial statements of Arrow Coated Products Limited (the Company),
which comprise the Balance Sheet as at March 31, 2013, 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). 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. 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 debts aggregating to Rs. 13720.57 (''000) and advances
aggregating to Rs 31500.92(''000).Had this observation made by us been
considered Loss after Tax would have been Rs. 28459.05(''000) ( as
against the reported figure of Profit of Rs.16322.44 (''000)); reserves
and surplus would have been surplus of Rs. 1316.90(''00 0) ( as against
the reported figure of surplus of Rs. 46098.40 (''000)):trade receivable
would have been Rs. 17755.23 (''000) ( as against the reported figure of
Rs. 31475.80 (''000)): long term loans and advances would have been
Rs.28449.01 (''000) (as against reported figure of Rs 59949.93 (''000)),
b) As more fully explained in note 41 to the financial statements the
Company has not complied with Accounting Standard 24 Discontinuing
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 referred to in
sub-section (3C) of section 211 of the Companies Act, 1956;
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
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 of India in terms of
sub-section (4A) of section 227 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
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
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
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;
e) On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section.(1) of
section 274 of the Companies Act, 1956.
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF 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 2013
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 not made any substantial
disposal of Fixed Assets during the period.
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 taken loan
from five party aggregating to Rs 1818.48 (''000) and the balance of
loan taken from such two parties was Rs 21446.12 (''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 accepted deposits from the public as such
within the meaning of Section 58A of the Act from relatives of director
during the year .In respect of which the provisions of sections 58A and
58AA of the Act and rules framed there under have not been complied
with. 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
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
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 /
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
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
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
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
For J. A. Rajani & Co.
P. J. Rajani
Place: Mumbai Membership No. 116740
Date: 28th May, 2013. Firm Reg. No. 108331W