We have audited the accompanying financial statements of MONNET ISPAT
AND ENERGY LIMITED (the Company), which comprise the Balance Sheet as
at March 31, 2015, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information, which we have
signed under reference to this report.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 (the Act) with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, 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 standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. 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 the 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
financial control relevant to the Company''s preparation of the financial
statements that give a true and fair view in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates made by the
Company''s Directors, as well as evaluating the overall presentation of
the financial statements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit
opinion on the standalone financial statements.
Emphasis of Matter
We draw attention to the following matters in the Notes to the financial
(a) Note no. 47 (a) and (b) regarding cancellation of coal blocks and
impact thereof in the financial statements. Our opinion is not modified
in respect of these matters.
In our opinion, and to the best of our information and according to the
explanations given to us, the accompanying 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 India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2015;
(b) in the case of the Statement of Profit and Loss, of the Loss for the
year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash fows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by ''the Companies (Auditor''s Report) Order, 2015'',
issued by the Central Government of India in terms of sub-section (11)
of section 143 of the Act (hereinafter referred to as the Order), 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
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
(f) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 27 to the
ii. In our opinion and as per the information and explanations provided
to us, the Company has made appropriate provision regarding long-term
contracts including derivative contracts, requiring provision under
applicable laws or accounting standards, for material foreseeable
losses during the year.
iii. The Company has deposited the amounts, required to be transferred,
to the Investor Education and Protection Fund. However there was some
delay in transferring the amounts to the fund.
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS'' REPORT ON ACCOUNTS
FOR THE YEAR ENDED 31st MARCH, 2015
1. a) In our opinion, the company is maintaining proper records
showing full particulars, including quantitative details and situation
of fxed assets.
b) As explained to us, major fixed assets have been physically verified
by the management in a phased periodical manner, which in our opinion
is reasonable, having regard to the size of the Company and nature of
its assets. 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.
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
nature. We were informed that physical verification of ores and coal was
made on the basis of volume and density.
(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 granted unsecured loans to companies covered in the
register maintained under section 189 of the Companies Act. In our
opinion and as informed to us, receipt of the principal amount and
interest are regular and there are no overdue amounts as at the end of
4. In our opinion there is an adequate internal control system
commensurate with the size of the company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods and services. During the course of audit, we have not
observed any continuing failure to correct major weaknesses in internal
5. According to the information and explanations given to us the
company has not accepted any deposits, in terms of the directives
issued by the Reserve Bank of India and the provisions of sections 73
to 76 or any other relevant provisions of the Companies Act 2013 and
the rules framed there under.
6. The central government has prescribed the maintenance of cost
records under sub-section (l) of section 148 of the Companies Act 2013,
read with Rules framed thereunder in respect of the manufacturing
activities of the Company. We have broadly reviewed the accounts and
records of the Company in this connection and are of the opinion, that
prima facie, the prescribed accounts and records have been made and
maintained. We have not, however, carried out a detailed examination of
7. a) As per information and explanations given to us, the company is
regular in depositing undisputed statutory dues including provident
fund, employees'' state insurance, income-tax, sales-tax, wealth tax,
service tax, duty of customs, duty of excise, value added tax, cess and
other statutory dues with the appropriate authorities, except for some
delays. There are no outstanding statutory dues as at the last day of
the financial year under audit for a period of more than six months from
the date they became 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 as per details given below:
No.Nature of Unpaid Forum where
Demand Amount* appeal is
(In Lacs) pending
1.Sales Tax 135.69 Deputy
2.Entry Tax 102.94 Deputy
3.Central 428.09 Commissioner
4.Central 2820.35 CESTAT
5.Income 7583.28 Commissioner
Tax Income Tax
* Basic amount, excluding interest, if any.
c) In our opinion, and according to the information and explanations
given to us, amounts required to be transferred to investor education
and protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made thereunder have been
transferred to such fund. However there was some delay in transferring
the amounts to the fund.
8. There are no accumulated losses of the company as at the end of the
year. The company has incurred cash losses during the financial year
covered by our audit but has not incurred cash losses in the
immediately preceding financial year.
9. Based on our audit procedures and on the basis of information and
explanations given to us by the management, there is a default in
repayment of dues to the bank/financial institutions as at the year end,
as per detail below :
Particulars Amount Period of default
Principal 133.20 Crores Less than 90 days
Interest 59.45 Crores Less than 90 days
10. According to information and explanations given to us the Company
has given guarantees for loan taken by others from banks or financial
institutions. However, in our opinion, the terms and conditions
thereof are not prima facie prejudicial to the interest of the company.
11. 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.
12. According to the information and explanations given to us and as
represented by the Management and based on our examination of the books
and records of the Company and in accordance with generally accepted
auditing practices in India, we have been informed that no case of
frauds has been committed on or by the Company during the year.
For O. P. BAGLA & CO.
Firm Regn No. 000018N
PLACE : NEW DELHI
DATED : 29.05.2015
M No. 091885