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
 above:
 
 (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
 audit.
 
 (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
 verification.
 
 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
 strengthen.
 
 11.  We are informed that the Central Govt. has not prescribed the
 maintenance of cost records under section 209 (1) (d) of the Companies
 Act, 1956.
 
 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
 became payable.
 
 (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
 2001-2002) 
 
 (iii) Rajasthan Sales Tax demand of Rs.6,94,412/- (Assessment Year
 2002-2003)
 
 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
 applicable.
 
 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.
 3,42,973/-
 
 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
                                                 Chartered Accountants
 
 Place: Jaipur                                          R.R Khandelwal
 
 Date: 30th May 2011                                           Partner