We have audited the attached Balance Sheet of M/s Continental
Petroleums Limited, Jaipur as at 31st March 2011 and the Profit & Loss
Account for the year ended on that date annexed and report that:-
We conducted our Audit in accordance with Auditing Standards generally
accepted in India. Those standards required 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 test basis, evidence supporting the amount and disclosures
in the financial statement. 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.
1. As required by the Companies (Auditor''s Report) order 2003 dated
12th June 2003 issued by the Central Government in terms of Sub-Section
(4A) of Section 227 of the Companies Act, 1956. We enclosed in the
Annexure a statement on the matter specified in paragraph 4 and 5 of
the said order.
2. Further to our comments in the Annexure referred to in paragraph 1
(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) Proper Books of Accounts as required by law have been kept by the
Company so far as it appears from our examination of the books.
(c) The Balance Sheet and Profit & Loss Account referred to in this
report are in agreement with the books of account.
(d) During the course of our audit we have not observed any adverse
effect on the working of the Company.
(e) None of the Director of the Company are disqualified from the
appointment as Director under 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 explanation given to us the said accounts read with the notes
thereon given 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 profit & Loss Account of the Profit for the year
ended on that date.
(ii) In the case of Balance Sheet of the state of affairs of the
Company as at 31s1 March, 2011.
Annexure to the Auditor''s Report
Referred to in paragraph 1 above of even date:
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of Fixed Assets. The fixed
assets have been physically verified by the management during the year
and we are informed that no material discrepancies were noticed on such
2. The company has not disposed off substantial part of the fixed
assets which affects the going concern of the company.
3. a) The inventory has been physically verified by the management at
reasonable intervals during the year.
b) In our opinion, the procedures of physical verification of stocks
followed by the management are reasonable and adequate in relations to
the size of the company and nature of its business.
c) The Company has maintained proper record of inventory and no
material discrepancies were noticed on the physical verification of
inventory as compared to book records except minor discrepancies and
the same have been dealt with in the books of accounts.
4. On the basis of our examination of stocks we are satisfied that the
valuation of stocks of finished goods, spare parts and raw material is
fair and proper in accordance with the normally accepted accounting
principles and is generally on the same basis as in the previous year.
5. The Company has taken unsecured loans, (interest free) from
companies, firms and other parties listed in the register maintained
under Section 301 of the Companies Act, 1956. As explained, there is no
company under the same management as the company within the meaning of
Section 370 (1-B) of the companies Act, 1956 which is not prejudicial
to the interest of the company.
6. The Company has not given any loans and advance in the nature of
loans to the employees except the temporary loans given to staff as per
contractual obligation and the same are being recovered as per
stipulation except minor delays.
7. In our opinion and explanations given to us, internal control
procedures for the purchase of stores, raw materials including
components, plant & machinery, equipments and other assets, and for the
sale of goods are commensurate with the size of the company and nature
of its business.
8. There are no transaction of purchase of goods and material and sale
of goods, materials and services aggregation to Rs.5.00 Lacks or more in
respect of each party in pursuance of contracts for arrangements that
need entered in the register maintained under section 301 of the
Companies Act, 1956.
9. The company has not accepted any deposit from public under section
58A & 58AA of the Act.
10. In our opinion the Company''s internal audit system commensurate
with its size and nature its activities. However it require further
11. We are informed that the Central Govt. has not prescribed the
maintenance of cost records under section 209 (1) (d) of the Companies
12. As verified by us, the company is regularly depositing Employees''
State Insurance and Provident fund dues with appropriate authorities.
13. (a) As verified by us, there are no un-disputed amount payable in
respect of income tax, wealth-tax, custom duty, sales-tax and excise
duty, outstanding for a period of more than 6 months from the date they
(b) In respect of following disputed demand, the Company has filed
appeals to various appropriate courts / Appealed Authorities to seek
justice and the same are pending for decision by appropriate
authorities/ courts. (i) Rajasthan Sales Tax demand of Rs.7,89,699/-
(Assessment Year 1994-95)
(ii) Rajasthan Sales Tax demand of Rs 21,21,408/- (Assessment Year
(iii) Rajasthan Sales Tax demand of Rs.6,94,412/- (Assessment Year
14. The Company is not sick unit under SICA.
15. In our opinion and to the best of the information and explanation
given to us the company has not taken any secured loan from any of the
financial institutions except working capital loan from Bank.
16. The company has not granted any loan and advances on the basis of
pledge of shares, debentures and other securities. Accordingly clause 4
(xiii) of the order is not applicable.
17. In our opinion and to the knowledge and explanation given to us
the company is not a chit fund/ nidhi/ mutual benefit fund/ society.
Accordingly clause 4 (xiii) is not applicable.
18. According to the information and explanation given to us, the
company is not dealing or trading in shares securities, debenture and
other investment. Accordingly, clause 4(xiii) of the order is not
19. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantees for loan taken by
others from bank or financial institutions.
20. According to the information and explanation given to us and on
the basis of our examination of the books of account, the term loans
obtained by the company in the past were applied for the purpose for
which such loans were obtained.
21. According to the information and explanation given to us and on an
the basis of our examination of the Balance Sheet of the company, we
are of the opinion that no fund raised on short - term basis have been
used for long term investment. Further the funds of Rs. 3,46,42,827/-
has been generated from the regular job work of Hazardous Waste
Management operation. The company has repaid the Unsecured loan of Rs.
22. The Company has issued 3,15,000 fully convertible warrants of
Rs.10/- each to promoter on preferential basis at a premium of Rs. 13/-
per share i.e. Rs.23/- per warrant out of which 70,000 fully
convertible warrants were converted into equity share capital in equal
number of equity shares. This issue is subject to approval by Bombay
Stock Exchange. (Which is still avaited).
23. The Company has not issued any debenture. Accordingly, cause
4(xix) of the order is not applicable.
24. The Company has not made any public issue, therefore, the clause
of disclosure the end use of money raised by public issues is not
applicable this year.
25. We have been informed that no employee of the company has
misappropriated fund of the company.
For R.P Khandelwal & Associates
Place: Jaipur R.R Khandelwal
Date: 30th May 2011 Partner