Arrow Coated Products – Update based on AR

Based on recent Annual Report, Company is trying to give more details about its future operation plans.

Following are taken from the latest Annual Report, which I found to be interesting and need a second look. That's why reproducing it here for all the investors.

(Point 1)

 Item No. 10:

Presently the existing Authorised Share Capital of the Company is 12,00,00,000 (Rupees Twelve Crores only) divided into 1,20,00,000 (One Crore Twenty Lakhs only) Equity Shares of 10/- each (Rupees Ten only). In order to augment further capital raise, it is necessary to increase the Authorised Share Capital to 15,00,00,000 (Rupees Fifteen Crores only) comprising of 1,50,00,000 (One Crore Fifty

Lakh only) Equity Shares of 10/- each (Rupees Ten only).

The alteration to the Capital Clause of Memorandum of Association of the Company is consequent upon increase in the Authorised Share Capital.

In order to augment further capital raise, the Authorised Share Capital of the Company needs to be increased.

(Point 2)

D. Arrow Care Division:

Arrow Care Division mainly comprises of products based on Health and Hygiene. This year Arrow plans to introduce atleast 3 Products Via this division. Arrow Carez, a soap and shampoo strip, which totally dissolves in water, Arrow Klenz, an innovative “Sausage” shaped WSF capsule containing precise quantities of active ingredients in liquid form. The container bottles (which were hitherto dispensed away, creating an environmental mess) will be re-used atleast 20 times. It’s a simple innovation, which bring down the prices of cleaning liquids and make it affordable for even rural India to use and clean their  table tops, glass windows, kitchens, cooking vessels, floors, toilets etc. In the near future, more products will be added on the same platform technology. Arrow has appointed atleast two exclusive franchisees for promoting this technology. It is expected to cover 30% of the Indian market in the coming 2 years.

With thrust on hygiene and sanitation, as per hour PM’s speech, these products will find their way into rural india, as we intend to make them most affordable and cost efficient products.

 (Point 3)

Notes to the Consolidated Financial Statements for the year ended March 31, 2014

(` in '000)
Particulars	As at 31st March, 2014	As at 31st March, 2013
Note 14 Non Current Investments Investment in Mutual Funds (Quoted) (Non Trade)
ICICI Prudential Regular Savings Fund - Regular Plan - Quarterly Dividend - 1483679 units (P.Y Nil)	15,000	--
ICICI Prudential Short Term - Regular Plan - Monthly Dividend - 1279252 units (P.Y Nil)	15,000	--
IDFC Arbitrage Fund-Regular Plan - Dividend 1599015.007 units (P.Y Nil)	20,000	--
HDFC Cash Management Fund - Call Plan - Daily Dividend Reinvestment - 1953612 units (P.Y Nil)	20,370	--

(Point 4)

Notes to the Consolidated Financial Statements for the year ended March 31, 2014

(` in '000)
Particulars	Year Ended 31st March, 2014	Year Ended 31st March, 2013
Note 22 Revenue from Operation
Sales of Products	30,841	37,785
Consultancy Fees	105,251	34,655
Royalty Income - Patent	221,325	77,805
	357,418	150,245

My Analysis & Explenation 

(Analysis of Point 1)

Company looking for tie up/ investment from PE funds, with some large players, that’s why planning to increase authorized capital

(Analysis of Point 2)

A lot of opportunities are there in these consumer sectors.

(Analysis of Point 3)

Point 3 increases my confidence in the published results! They have invested in mutual funds. Total investment amount (quotable) is 7.03 Crores. Shows that the reported figures and cash is real.

(Analysis of Point 4)

A consolidated patent income of Rs 22.1 Crore (Previous year 7.8 Cr), an increase of 183 % from the last year. Even if the company can increase this income by half the present rate, the share price will be more than 1000, with in next 3 years.