We have audited the attached Balance Sheet of Messrs CONTINENTAL
CHEMICALS LIMITED, as at 31st March, 2012 and also the Profit & Loss
Account for the year ended on that date annexed thereto. 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 financial statements
are free of material mis-statement. An audit includes examining, on a
test basis, evidence supporting the amounts and is closures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by the management, as
well as evaluating the overall financial statements presentation.
We believe that our audit provides a reasonable basis for our opinion.
As required by the Companies (Auditor''s Report) Order, 2003, issued
by the Department of Companies Affairs, in terms of section 227(4A) of
the Companies Act, 1956 and on the basis of such checks of the books
and records of the company as we considered appropriate and according
to the information and explanation given to us, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the said
Further to 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 purpose of our
(b) In our opinion, proper books of accounts 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 & Loss Account dealt with by this
report are in agreement with the books of accounts;
(d) In our opinion, the Balance Sheet and Profit & Loss Account dealt
with by this report comply with the accounting standards refer to in
sub-section (3C) of section 211 of the Companies Act, 1956 ;
(e) On the basis of written representations received from the
directors, as on 31st March, 2012 and taken on record by the board of
directors, we report that none of directors is disqualified as on 31st
March, 2012 from being appointed as director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts 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 31st March, 2012 ; and
(ii) in the case of the Profit & Loss Account, PROFIT for the year
ended on that date.
ANNEXURE TO THE AUDITORS'' REPORT
As required by the Companies (Auditors Report) order, 2003 issued by
the Central Government and on the basis of such checks as we considered
appropriate we further state that :
1) (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
(b) The management during the year has physically verified the fixed
assets of the company and no material discrepancies between the book
records and the physical inventory have been noticed. In our opinion,
frequency of verification is reasonable.
(c) In our opinion, a substantial part of fixed assets has not been
disposed off by the Company during the year.
2) (a) The inventory has been physically verified by the management
with reasonable frequency of verification during the year.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the company is maintaining proper records of inventory. No
material discrepancies were noticed on physical verification of
inventory as compared to book records.
3) The Company has not granted any loans, secured or unsecured to/from
companies, firms or other parties covered in the register maintained
under section 301 of the companies Act, 1956. In the cases of unsecured
loans taken from the Directors & their relatives covered in the
register maintained under Section 301 of the Act, the rate of interest
and other terms & conditions are not prima facie prejudicial to the
interest of the Company.
4) In our opinion and according to the information and explanations
give to us there are adequate internal control procedures commensurate
with the size of the Company and the nature of its business for
Purchase of Inventory and fixed assets and for the sale of goods. In
our opinion an according to the information and explanations given to
us, there is no continuing failure to correct major weaknesses in
5) Based on the audit procedures performed by us and according to the
information and explanations given by the management, we are of the
opinion that there are no transactions that need to be entered into the
register maintained under section 301 of the Companies Act.
6) The Company has not accepted deposits from the public and
consequently, the directives issued by the Company Law board or
National Company Law Tribunal or Reserve Bank of India or any court or
any other Tribunal and the provisions of section 58A, 58AA or any other
relevant provisions of the Companies Act, 1956 and the rules framed
there under wherever applicable, have been complied with.
7) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
8) In terms of clause (d) of sub-section (1) of section 209 of the Act,
the Central Government has not prescribed maintenance of cost records
by the Company.
9) (a) According to the information and explanations given to us and
the records of the company examined by us, in our opinion, the Company
is regular in depositing the undisputed statutory dues including
provident fund, investor education and protection fund, employee''s
state insurance, income-tax, sales tax, wealth tax, service tax,
customs duty and other material statutory dues, as applicable, with the
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of income-tax,
sales tax, service tax, excise duty / cess, customs duty and wealth tax
as at 31st March, 2012 which have not been deposited on account of any
10) In our opinion, the accumulated losses of the Company are not more
that 50% of its net worth. The Company has not incurred cash losses in
the financial year immediately preceding such financial year.
11) According to the records of the company examined by us and the
information and explanations given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at balance sheet date.
12) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13) No provisions of any special statute in respect of chit fund etc.
are applicable to the Company.
14) In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
15) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
16) In our opinion and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
17) On the basis of our examination of the books of accounts and the
information and explanations given to us, in our opinion, the funds
raised on the short-term basis have not been used for long- term
18) The Company has not made any preferential allotment of shares to
the Directors & their relatives.
19) The Company has not issued any debentures during the year.
20) The company has not raised any money by public issue during the
21) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Hari Bhushan & Associates
M. No. 076688
Date: 29th June 2012