You are here » Home » Companies » Company Overview » Kaytee Cotsynth Industries Ltd

Kaytee Cotsynth Industries Ltd.

BSE: 512401 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
BSE LIVE 05:30 | 01 Jan Stock Is Not Traded.
NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN
PREVIOUS CLOSE
VOLUME
52-Week high 0.00
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 0
Buy Price
Buy Qty
Sell Price
Sell Qty
OPEN
CLOSE
VOLUME
52-Week high 0.00
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 0
Buy Price
Buy Qty
Sell Price
Sell Qty

Kaytee Cotsynth Industries Ltd. (KAYTEECOTSYNTH) - Auditors Report

Company auditors report

KAYTEE COTSYNTH INDUSTRIES LIMITED ANNUAL REPORT 2004-2005 AUDITORS' REPORT To The Members, Kaytee Cotsynth Industries Limited We have audited the attached Balance Sheet of Messrs KAYTEE COTSYNTH INDUSTRIES LIMITED, as at 31st March, 2005 and also the annexed Profit & Loss Account of the Company for the year ended on that date annexed thereto and Cash Flow Statement for the period ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion. We report that: 1. 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. 2. In our opinion, proper Books of Account as required by the law have been kept by the Company so far as it appears from our examination of those books, except for non provision of Depreciation, Interest, Salaries, Wages & Provident Fund, and Electricity Charges as stated in para 1.3 of note 1, notes 5 (a) & (b), (c), (d) & (e) and non provision of Gratuity, bonus & Leave. encashment as stated in notes 9 A, B & C of Schedule 18 respectively. 3. The Balance Sheet and Profit & Loss Account dealt with by the Report are in agreement with the books of account. 4. Subject to para 1.3 of note 1 regarding non provision of Depreciation, note no. 5 (a) & (b), (c), (d) & (e) regarding non provision of Interest, Salaries, Wages & Provident Fund, Electricity Charges & Doubtful Debts, note no. 9 A, B & C regarding non provision of Gratuity, Bonus and Leave encashment and note no. 13 regarding non provision for Impairment of Assets under Schedule 18, in our opinion the Balance Sheet and Profit and Loss Account dealt with by this report comply with the Accounting Standards referred to in sub section (3 C) of Section 211 of the Companies Act, 1956, to the extent applicable. 5. On the basis of the written representations received from the Directors as on 31st March, 2005 and taken on record by the Board of Directors and further certified by the Company, we report that none of the Directors are prima facie disqualified from being appointed as a Director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956. 6. As referred to in Note no. 10 of Schedule 18, despite the Company's net worth being fully eroded due to losses (without considering our remarks in paragraph 4 above with corresponding effects in the loss for the year and period end net assets to the extent indicated in para 7 below and despite significant overdue loans etc., the accounts have been prepared on going concern basis. The Company's ability to continue as going concern is partly dependent on the ultimate outcome of the OTS proposal, which as informed to us is pending with the consortium of Banks. 7. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with para 1.3 of Note 1 regarding non provision of Depreciation, Note 4, (a) & (b), (c), (d) & (e) regarding non provision of Interest, Salaries, Wages & Provident Fund, Electricity Charges & Debts considered doubtful of recovery, Note 8 regarding non creation of Debenture Redemption Reserve, Note 9 A, B & C regarding non provision f Gratuity, Bonus & Leave encashment and Note 10 regarding preparation of accounts on the fundamental accounting assumption of 'going concern' in Schedule 18 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: i) In the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2005 ii) In the case of the Profit & Loss Account of the `Loss' for the year ended on that date. iii) In the case of Cash Flow Statement of the cash flows of the Company for the year ended on that date. 8. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks of books and records of the Company as were considered appropriate and on the basis of information and explanations given to us during the course of our audit, we further state on the matters specified in Paragraphs 4 of the said order to the extent applicable to the Company as follows: a. The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets. However these records need. updating. b. As informed to us the fixed assets have been physically verified by the Management at reasonable intervals. According to the information given to us, no material discrepancies have been noticed by the management on such physical verification as compared to available records. c. The Company has not disposed off any substantial part of fixed assets during the year so as to affect its going concern status. ii. a. Except for the stocks of the Finished Goods, the stocks of Stores, Spares, and Raw Materials were lying in the mills' premises at Charadva. The mill is not in operation from 1st October, 2000 and hence the said stocks lying thereat have not been verified physically. The stocks of finished goods lying at Mumbai sales depot have been physically verified during the year by the management. In our opinion, the frequency of such verification at Mumbai during the year is reasonable. No Discrepancies were noticed on verification between the physical stocks of Finished Goods and the books/records. b. According to the information and explanations given to us, the procedure of physical verification of stocks of finished goods as followed by the management are adequate in relation to the size of the Company and nature of its business. c. On the basis of examination of the inventory, records of the Company, we are of the opinion that the Company is maintaining proper records of inventory. No Discrepancies, were noticed on verification between the physical stocks of Finished Goods and the books/records. iii a. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. In respect of interest free loans granted to the employees, we have been explained that the same would be recovered from the amounts due to them. b. As the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, the Clause (iii)(b) of the Order relating to the rate of interest and terms and conditions being prima facie prejudicial to the interest of the Company, is not applicable. c. Clause (iii)(c) relating to receipt of principal and interest is not applicable. d. Clause (iii)(d) relating to recovery of the principal and interest is not applicable. e. According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. f. Clause (iii)(f) relating to relating to the rate of interest and terms and conditions being prima facie prejudicial to the interest of the Company, is not applicable. g. Clause (iii)(g) relating to payment of principal and interest is not applicable. iv. In our opinion and according to the explanations given to us, 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 goods and services. v. (a) On the basis of the information and explanations given to us and representations made, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section. (b) There were no transactions made, in pursuance of such contracts or arrangements, as per information and explanations given to us. vi. According to the information and explanations given to us, no deposits from the public within the meaning of Reserve Bank of India Directives and Section 58A, 58AA or any other relevant provisions of the Act and the rules framed thereunder have been accepted by the Company. vii. No Internal Audit was carried out during the-year under audit. viii. In view of suspension of manufacturing activities since October 2000 and absence of personnel, no records have been maintained by the Company pursuant to the Order made by the Central Government for the maintenance of Cost Records u/s. 209 (1) (d) of the Companies Act, 1956, in respect of the Company's product viz., Cotton Yarn. ix. (a) Since the Company does not have any employees, the question of depositing with appropriate authorities undisputed statutory dues; including Provident Fund, Investor Education Protection Fund, & E. S. I contribution does not arise. The Company is regular in depositing other dues viz. Income-tax, Sales-tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess & other material statutory dues applicable to it. (b) According to the information and explanations given to us, except for Sales Tax Liability of Rs. 23.54 Lacs & Excise Duty of Rs. 3.38 Lacs, there were no undisputed amounts payable in respect of Income Tax, Sales tax, Wealth Tax, Service. tax, Custom Duty, Excise Duty and Cess which have remained unpaid as on the last date of accounting year for a period of more than six months from the date they became payable. (c) According to the information and explanations given to us, the Company has not deposited Sales Tax demands amounting to Rs. 2,196.57 Lacs which were disputed in appear and were remanded back for fresh hearing which are pending before D.C. Appeals. However, the Hon'ble Gujarat High Court has granted stay on recovery of these demands till the outcome of reference pending before B.I.F.R. x. The accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses in the financial year under audit and so also in the immediately preceding financial year. xi. The Company has defaulted in repayment of installments due to the banks and financial institutions. However, we have been explained by the Company that its references/appeal before B.I.F.R./A.A.I.F.R. and restructuring proposal before the Banks are pending and that in the absence of availability of funds all the dues including principal amount and interest accrued thereon payable to secured lenders as explained in note no. 5 of Schedule 18 are remaining unpaid. xii. As explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii. As the Company is not a chit fund, nidhi, mutual benefit fund or society, the provisions of clause 4 (xiii) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company. xiv. As the Company is not dealing or trading in shares, securities, debentures & other investments, provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company. xv. According to information & explanations given to us and representations made by management, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms & conditions whereof are prejudicial to the interest of the Company. xvi. Based on the examination of the books of account and related records, the Company has, prima facie, applied the term loans for the purpose for which they were obtained. xvii. According to information & explanations given to us and on an overall examination of the financial statements of the Company and after placing reliance on the reasonable assumptions made by the Company for classification of the long term and short term usages of the funds, we are of the opinion that, prima facie, the Company has not applied short term borrowings for long term use, except cross usage, if any, resulting or caused due to transfer of excess drawings in cash credit accounts to term loan account on restructuring of credit facilities. xviii. The Company has not made any preferential allotment of shares during the year. xix. The Company has not issued any debentures during the year. xx. The Company has not raised any money byway of public issue during the year. xxi. According to the information & explanations given to us and to the best of our knowledge and belief, no material fraud on or by the Company has been noticed or reported by the Company during the year. For B. S. MEHTA & CO. Chartered Accountants (D. I. SHAH) Partner M. No. 37326 Place : Mumbai Dated : 5th September, 2005