1. We have audited the attached Balance Sheet of Balsara Hygiene
 Products Limited as at March 31, 2003 and the Profit and Loss Account
 for the year ended on that date, annexed thereto (together referred to
 as `financial statements). These financial statements are the
 responsibility of the Companys management. Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 2. We conducted our audit in accordance with auditing standards
 generally accepted in India. These Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of 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 statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3. As required by the Manufacturing and Other Companies (Auditors
 Report) Order, 1988, issued by the Central Government of India in terms
 of Sub-Section (4A) of Section 227 of the Companies Act, 1956, and on
 the basis of such checks of the books and records as we considered
 necessary and appropriate and according to the information and
 explanations given to us during the course of the audit, we enclose in
 the Annexure, a statement on the matters specified in paragraphs 4 and
 5 of the said Order.
 
 4. As stated in note B-5 in Schedule 21 of the financial statements,
 no provision has been made for Rs 30.92 lacs being amount recoverable
 from an agent. The extent to which this is doubtful of recovery is not
 ascertainable and, accordingly, the effect thereof on financial
 statements cannot be ascertained.
 
 Further to our comments in the Annexure referred to in paragraph 3
 above, 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 purposes 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 and Profit and Loss Account dealt with by this
 report are in agreement with the books of account;
 
 d. in our opinion, the Profit and Loss Account and the Balance Sheet
 dealt with by this report comply with the accounting standards referred
 to in sub-section (3C) of Section 211 of the Companies Act, 1956;
 
 e. on the basis of the written representations received by the Company
 from its directors, and taken on record by the Board of Directors, we
 report that none of the directors are disqualified as on March 31, 2003
 from being appointed as a director under clause (g) of sub-section (1)
 of Section 274 of the Companies Act, 1956;
 
 f. Subject to our comments in paragraph 4 above, in our opinion and to
 the best of our information and according to the explanations given to
 us, the said financial statements give the information required by the
 Companies Act, 1956 in the manner so required and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 i. in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2003;
 
 ii. in the case of the Profit and Loss Account, of the loss of the
 Company for the year ended on that date. and
 
 iii. in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
                                                           For RSM & Co.
                                                   Chartered Accountants
                                                       Natraj Ramkrishna
                                                                 Partner
                                            (Membership Number: F-32815)
 Place: Mumbai
 Dated: 16th June, 2003
 
 ANNEXURE TO THE AUDITORS REPORT
 
 (Referred to in paragraph 3 of our report of even date to the members
 of Balsara Hygiene Products Limited for the year ended March 31, 2003)
 
 1. The Company has maintained proper details, showing full particulars
 including quantitative details and situation of fixed assets. The fixed
 assets register is in the process of being updated. As explained to us,
 the fixed assets were physically verified by the management at the
 year-end. Discrepancies, if any, will be adjusted on the completion of
 the updation of the fixed assets register.
 
 2. None of the fixed assets were revalued during the year.
 
 3. The stocks of finished goods were physically verified during the
 year by the management. In our opinion, having regard to the size of
 the Company and the nature of its business, the frequency of
 verification is reasonable. As at the balance sheet date, the Company
 did not carry any inventories.
 
 4. The procedures followed by the management for the physical
 verification of inventories, are adequate in relation to the size of
 the Company and the nature of its business.
 
 5. The discrepancies noticed during the year on physical verification
 of stocks, between physical stocks and book records, were not of a
 material nature and have been properly dealt with in the books of
 account.
 
 6. In our opinion, the valuation of inventories during the year was
 fair and proper in accordance with the normally accepted accounting
 principles. Inventories were valued on the same basis as in the
 previous year.
 
 7. The Company has not taken loans, secured or unsecured, from any
 parties listed in the register maintained under Section 301 of the
 Companies Act, 1956 or from companies under the same management within
 the meaning of sub-section (1-B) of Section 370 of the Companies Act,
 1956.
 
 8. During the year, the Company has not granted any loans, secured or
 unsecured, to any parties listed in the register maintained under
 Section 301 of the Companies Act, 1956 or to companies under the same
 management within the meaning of sub-section (1-B) of Section 370 of
 the Companies Act, 1956.
 
 9. In respect of loans granted by the Company to its employees/other
 parties, the employees/other parties are regular in the repayment of
 principal amounts as stipulated, together with interest, wherever
 applicable.
 
 10. In our opinion and according to the information and explanations
 given to us, having regard to the explanation that goods purchased by
 the Company were of a special nature and quotations for goods of
 comparable specifications were not available, the Company has adequate
 internal control procedures commensurate with its size and the nature
 of its business, for the purchase of goods, plant and machinery,
 equipment, other assets and sate of goods.
 
 11. In our opinion, and according to the information and explanations
 given to us, having regard to the explanation mentioned in paragraph 10
 above, in respect of the transactions for the purchase of goods and
 materials, made in pursuance of contracts or arrangements entered in
 the register maintained under Section 301 of the Companies Act, 1956
 aggregating during the year to Rs. 50,000 or more in respect of each
 party, the question of comparison of rates with prevailing market
 prices, or with prices at which transactions for similar goods have
 been made with other parties, does not arise. There have been no
 transactions for the sales of goods, materials or services made in
 pursuance of contracts or arrangements entered in the said register.
 
 12. The Company has not accepted any deposits from the public as
 defined under the provisions of Section 58A of the Companies Act, 1956
 and the rules made thereunder.
 
 13. In our opinion, the Company has an internal audit system that is
 commensurate with its size and the nature of its business.
 
 14. The Central Government has not prescribed maintenance of cost
 records under Section 209 (1)(d) of the Companies Act, 1956 for any of
 the activities of the Company.
 
 15. The Company has been regular in depositing Provident Fund and
 Employees State Insurance dues with the appropriate authorities.
 
 16. According to the information and explanations given to us, no
 undisputed amounts payable in respect of income tax, wealth-tax,
 sales-tax, custom duty and excise duty were outstanding as at March 31,
 2003 for a period of more than six months from the date they became
 payable.
 
 17. According to the information and explanations given to us, no
 personal expenses of employees or directors have been charged to
 revenue account, other than those payable under contractual obligations
 or in accordance with generally accepted business practice.
 
 18. As explained to us, the Company is a Small-scale industrial
 undertaking, and therefore the provisions of the Sick Industrial
 Companies (Special Provisions) Act, 1985 do not apply.
 
 19. Since the Company did not engage in any manufacturing activities
 during the period under report, clauses (xii) and (xiv) of paragraph
 4(A) of the Order are not applicable.
 
 20. As explained to us, in respect of its trading activity, the Company
 has determined damaged goods and in respect thereof, has made adequate
 provision in the accounts.
 
                                                           For RSM & Co.
                                                   Chartered Accountants
                                                       Natraj Ramkrishna
                                                                 Partner
                                            (Membership Number: F-32815)
 Place: Mumbai
 Dated: 16th June, 2003