Report on the Financial Statements
We have audited the accompanying financial statements of MONNET ISPAT &
ENERGY LIMITED (''the Company''), which comprise the Balance Sheet as at
March 31, 2013, the Statement of Profit and Loss and Cash Flow
Statement for the year ended, and a summary of significant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position and
financial performance of the Company in accordance with the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956 (the Act). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
(i) in the case of the balance sheet, of the state of affairs of the
Company as at 31 March 2013;
(ii) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
(iii) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 as
amended by the Companies (Auditor''s Report) order 2004 (the Order)
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Act, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
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
iii) the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
iv) in our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956; and
v) on the basis of written representations received from the directors
as on 31 March 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS'' REPORT ON ACCOUNTS
FOR THE YEAR ENDED 31st MARCH, 2013
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 loan to a Company covered in the registers
maintained under section 301 of the Companies Act, 1956. The balance
amount outstanding at the year end was `12413 lacs. 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, 1956. 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) In our opinion, the transactions made in pursuance of contracts/
arrangements entered in the register maintained under Section 301 of
the Companies Act,1956 and exceeding the value of `500,000 in respect
of each party during the year have been made at prices which appear
reasonable as per information available with the Company.
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 an 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 broadly
reviewed such records and are of the opinion that prescribed accounts
and records have been made and 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.
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.
13. The Company has not granted any loans and advances on the basis of
security by way 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.
15. 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. In our opinion, and according to information and explanations
given to us, proper records have been maintained of the transactions
and contracts relating to investments in shares and other securities
and debentures. These investments have been held by the company, in its
own name, except certain investments made under portfolio management
18. During the year, the Company has not made any preferential
allotment of shares to parties or companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
19. The Company has created security / charge in respect of debentures
20. Since the Company has not raised money by way of Public Issue
during the year, paragraph 4 (xx) of the order is not applicable.
21. 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, 2013.
22. Other clauses of the order are not applicable to the Company for
the year under report.
For O. P. BAGLA & CO.
Firm Regn No. 000018N
Place : New Delhi (ATUL BAGLA)
Dated : May 29, 2013 Partner
M No. 91885