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
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
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
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
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.
(Membership Number: F-32815)
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
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
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,
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
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
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.
(Membership Number: F-32815)
Dated: 16th June, 2003