We have audited the attached Balance Sheet of MONNET ISPAT & ENERGY
LIMITED as at 31 st March, 2009 and also the Profit & Loss Account and
the cash flow statement for the year ended on that 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.
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 misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in 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 statement
presentation. We believe that our audit provides a reasonable basis for
1. As required by the Companies (Auditors Report) Order 2003 as
amended by the Companies (Auditors Report) (Amendment) Order 2004
issued by the Central Government in terms of Section 227(4A)ofthe
Companies Act, 1956, we enclose in the annexure, a statement on the
matters specified in paragraph 4 & 5 of the said order as far as
applicable to the Company.
2. Furthertoourcomments in theannexure referredto in paragraph 1
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 account as required by law have been
kept by the Company so far as appears from our examination of such
c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the applicable
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956.
e) On the basis of written representation received from the directors
and taken on records by the Board of Directors, we report that, none of
the director is disqualified as on 31st March, 2009 from being
appointed as Director u/s 274(1 )(g)ofthe 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 read together with
Significant Accounting Policies and other Notes thereon in Schedule-20,
give the information as required by the Companies Act, 1956 in the
manner so required and give 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, 2009.
ii. In the case of the Profit & Loss Account, of the PROFIT for the
year ended on that date.
iii. In case of cash flow statement, of the cash flow of the Company
for the year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS REPORT ON ACCOUNTS
FOR THE YEAR ENDED 31 st MARCH, 2009
1. a) The Company has maintained proper records to show full
particulars including quantitative details and situation of fixed
b) As explained to us, major fixed assets have been physically verified
by the management during the year. We have been informed that the
discrepancies noticed on such verification as compared to book record
were not material and have been properly dealt with in the books of
account. In our opinion the frequency of verification is reasonable.
c) The Company has disposed off an insignificant part of fixed assets
during the year, hence paragraph 4 (i) (c) of the said order is not
2. a) Physical verification has been conducted by the management at
reasonable intervals in respect of finished goods, stores, spare parts
and raw materials except ores & coal. We were informed that physical
verification of the same was difficult due to its volume and loose
b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of these stocks
followed by the management is reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) In our opinion the Company is maintaining proper records of
inventories. The discrepancies noticed on such verification between the
physical stocks and book records were not significant and the same have
been properly dealt with in the books of account.
3. The Company has given loans aggregating to Rs. 14934 lacs to two
Companies covered in the register maintained under Section 301 of the
Companies Act, 1956. The terms and conditions of the loan are not prima
facie prejudicial to the interest of the Company. There are no overdue
amounts outstanding at the year end regarding this loan.
4. According to the information and explanations given to us, the
Company has not taken any loans, secured or unsecured, from Companies,
Firms or other Parties covered in the register maintained under section
301 of the Companies Act, 1 956. Accordingly, paragraph 4 (iii) (e)to
(g) of the order are not applicable.
5. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventories, fixed assets and with regard to the sale of
goods. During the course of audit, no major weakness has been noticed
in the underlying internal control system.
6. a) In our opinion and according to information and explanations
given to us, the transactions that needed to be entered
in the register maintained under section 301 of the Companies Act, 1956
have been entered in the register. b) As per information and
explanations given to us, the aforesaid transactions have been made at
prices which are reasonable having regard to the prevailing market
price at the relevant time.
7. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits within the
meaning of provisions of section 58A and 58AA of the Companies Act,
1956 and the Companies (Acceptance of Deposits) Rules, 1975.
8. In our opinion and according to the information and explanations
given to us, the Company has adequate internal audit system
commensurate with its size and nature of its business.
9. The Central Government has prescribed the maintenance of cost
records under section 209(1 )(d) of the Companies Act, 1956 in respect
of certain manufacturing activities of the Company. We have been
informed that such accounts and records have been maintained.
10. a) As per information and explanations given to us, the Company
has been regular in depositing the undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess, Octroi, Entry
Tax and other statutory dues with the appropriate authorities. There
are no undisputed statutory dues at the year end outstanding for a
period of more than six months from the date they become payable.
b) We have been informed that following disputed demands in respect of
Income Tax, Excise Duty, Sales Tax and Entry Tax have not been
deposited on account of pending appeals.
S.No Nature of Demand Amount (Gross) (Rs. In Lacs) Forum where appeal
1. Sales Tax 1073.19 Deputy Commissioner
of Sales Tax (Appeals)
2. Sales Tax 30.29 Sales Tax Tribunal
3. Entry Tax 415.46 Deputy Commissioner
of Sales Tax (Appeals)
4. Central Excise 31.07 Commissioner
5. Central Excise 653.23 CESTAT
11. The Company does not have any accumulated losses at the end of the
financial year. Further, there are no cash losses during the financial
year under audit and in the immediately preceding financial year.
12. Based on our audit procedures and on the basis of information and
explanations given to us by the management, we are of the opinion that
there is no default in repayment of dues to the Financial Institution,
Banks or Debenture holders as at the year end.
1 3. The Company has not granted any loans and advances on the basis of
security byway of pledge of shares, debentures and other securities.
Paragraph 4 (xii) of the order is not applicable.
14. According to information and explanations given to us, the Company
has not given any guarantee for loans taken by others from
Banks/Financial Institutions, terms and conditions whereof are
prejudicial to the interest of the Company.
1 5. According to the information and explanations given to us, the
term loans taken by the Company have been applied for the purposes for
which the loans were obtained.
16. According to the information and explanations given to us, the
funds raised on short term basis have not been utilized for long term
17. During the year, the Company has no1 made any preferential
allotment of shares to parties and companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
1 8. The Company has created security / charge in respect of
19. Since the Company has not raised money by way of Public Issue
during the year, paragraph 4 (xx) of the order is not applicable.
20. Based upon the audit procedures performed and information and
explanations given by the management, we report that, no fraud on or by
the Company has been noticed or reported during the course of our audit
for the year ended 31st March, 2009.
21. Other clauses of the order are not applicable to the Company for
the year under report.
PLACE: NEW DELHI PARTNER
DATED : 30.06.2009 M.No. 8858