1. We have audited the attached Balance Sheet of M/s. Bala Techno
Synthetics Ltd. as at 31st March, 2005, the annexed Profit and Loss
Account of the Company for the year ended on that date and also the
Cash Flow Statement for the year ended on lhat date. 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. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. 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 Companies (Auditors Report) Order, 2005 (as
amended) issued by the Central Government of India in terms of Section
227 (4A) of the Companies Act, 1956 and on the basis of such checks as
we considered appropriate and according to information and explanations
given to us, we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred above, we report
i. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
ii. 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 except non-provision of gratuity on accrual basis.
iii. the Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv. in our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in Section 211 (5C) of the Companies Act, 1956
except non-provision of gratuity on accrual basis which is not in
conformity with AS - 15.
v. 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, we report that none of the Directors is disqualified as on
31st March, 2005 from being appointed as a Director in terms of Section
274(1)(g) of the Companies Act, 1956.
vi. in our opinion and to the best of our information and according to
the explanations given to us, the said accounts read in particular with
Note No. 8 of Schedule 17 regarding non-provision of gratuity on
accrual basis, the quantum of which could not be ascertained in the
absence of relevant details, together with other notes thereon, 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;
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2005;
b) in the case of the Profit and Loss Account, of the Profit of the
Company 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.
For AGARWAL & MODI
Place: Kolkata. Partner
Date: 30th August, 2005 Membership No. 60225
ANNEXURE TO AUDITORS REPORT
(Referred to in Paragraph 5 of our Report of even date)
(i) a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
b) All of the fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the company and the nature of its fixed assets. No material
discrepancies were noticed on such verification.
c) During the year, there is no substantial disposal of fixed assets
which would affect the going status of the company.
(ii) a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
c) The company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stock and
the book records were not material.
(iii) a) The Company has granted unsecured loan to a company covered in
the register maintained under Section 501 of the Companies Act, 1956.
The said loan is continuing from last year and is realised in full
during the year. There is only one such party and the amount involved
is Rs 10189040/-.
b) In our opinion, the rate of interest and other terms and conditions
on which loan has been granted to a company listed in the register
maintained under section 50 1 of the companies Act, 1956 are not, prima
facie, prejudicial to the interest of the company.
c) There is no outstanding balance as on balance sheet date of
principal amount and interest thereon.
d) In view of full realization thereof, the clause pertaining to the
overdue amount being more than Rupees one lakh is not applicable.
e) The Company has not taken loans from companies/firms/other parties
covered in the register maintained under section 501 of the Companies
f) In view of clause (iii) (e) above, clause (iii)(f) is not
g) In view of clause (iii) (e) above, clause (iii)(g) is not
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to sale of goods and job work. During the course of our audit,
we have not observed any continuing failure to correct major weaknesses
in internal controls.
(v) a) According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered into
the register maintained under Section 501 of the Companies Act, 1956
have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 501 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
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) As explained to us, no cost records are required to be
maintained by the Company.
(ix) a) The Company has been generally regular in depositing with
appropriate authorities undisputed statutory dues including Provident
Fund, Employees State Insurance, Income Tax, Sales Tax, wealth tax.
Service tax. Custom Duty, Excise Duty, cess and other statutory dues
applicable to it excepting service tax on transport payments. There are
no arrears of outstanding statutory dues at 31st March 2005 for a
period of more than six months from the date they become payable.
b) According to information and explanations given to us, there are no
disputed amounts payable in respect of Income Tax, wealth tax. Service
tax. Sales Tax, Custom Duty and Excise Duty at the year end on 31st
(x) In our opinion, the companys accumulated losses at the end of the
financial year are less than fifty percent of its net worth. The
company has not incurred cash losses during the financial year covered
by our audit and the immediately preceding financial year.
(xi) In our opinion and according to information and explanations given
to us, the company has not defaulted in repayment of dues to financial
institution or bank or debenture holders.
(xii) According to information and explanations given to us the company
has nol granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, clause 4(xiii) of the Companies
(Auditors Report) Order, 2005 are not applicable to the company.
(xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
2005 are not applicable to the company.
(xv) According to the information and explanations given to us, the
company has not given any guarantees for loans taken by others from
banks or financial institutions.
(xvi) In Our opinion, the term loan avafled by the company during the
year has been applied for the purpose for which it was obtained.
(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 any preferential allotment of shares to parties or
companies covered in the register maintained under Section 501 of the
(xix) The company does not have any outstanding debentures during the
(xx) The company has not raised any money through a public issue during
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For AOARWAL & MODI
Place: Kolkata. Partner
Date: 50th August, 2005 Membership No. 60225