You are here » Home » Companies ยป Company Overview » Magadh Sugar & Energy Ltd

Magadh Sugar & Energy Ltd.

BSE: 540650 Sector: Agri and agri inputs
NSE: MAGADSUGAR ISIN Code: INE347W01011
BSE 00:00 | 03 Feb 315.25 0.50
(0.16%)
OPEN

317.90

HIGH

319.60

LOW

308.60

NSE 00:00 | 03 Feb 312.15 -3.05
(-0.97%)
OPEN

310.55

HIGH

318.70

LOW

310.55

OPEN 317.90
PREVIOUS CLOSE 314.75
VOLUME 6291
52-Week high 455.95
52-Week low 247.00
P/E 9.58
Mkt Cap.(Rs cr) 444
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 317.90
CLOSE 314.75
VOLUME 6291
52-Week high 455.95
52-Week low 247.00
P/E 9.58
Mkt Cap.(Rs cr) 444
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Magadh Sugar & Energy Ltd. (MAGADSUGAR) - Auditors Report

Company auditors report

To the Members of

Magadh Sugar & Energy Limited

Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of MagadhSugar & Energy Limited ("the Company") which comprise the Balance sheetas at March 31 2022 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2022 its profitincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance withthe Standards on Auditing (SAs)as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Financial Statements' section of our report. Weare independent of the Company in accordance with the ‘Code of Ethics'issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements for the financial yearended March 31 2022. These matters were addressed in the context of our audit of thefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For each matter below our description of how ouraudit addressed the matter is provided in that context. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report. We havefulfilled the responsibilities described in the Auditor's responsibilities for theaudit of the financial statements section of our report including in relation to thesematters. Accordingly our audit included the performance of procedures designed to respondto our assessment of the risks of material misstatement of the financial statements. Theresults of our audit procedures including the procedures performed to address the mattersbelow provide the basis for our audit opinion on the accompanying financial statements.

Key audit matters How our audit addressed the key audit matter
(a) Determination of net realizable value of inventory of Sugar as at the year ended March 312022 (Refer note 3.7 and 9 of the financial statements)
The inventory of Sugar is valued at the lower of cost and net realizable value (‘NRV'). As on March 31 2022 the Company has inventory of Sugar with the carrying value of Rs.36807.62 lakhs. Our audit procedures included among others Considering the appropriateness of the Company's accounting policies relating to the valuation of finished goods of sugar and assessing the compliance with the applicable accounting standards. Testing the effectiveness of the Company's control over calculation of cost of finished goods for each sugar unit and estimation of corresponding NRV.
The Sugar industry being seasonal in nature the assessment of carrying value at each reporting date involves ascertainment of cost incurred till that reporting period for each Sugar Unit and estimation of corresponding NRV. We considered various factors including the actual selling price prevailing around and subsequent to the year end minimum selling price & monthly quota and other notifications of the Government of India initiative taken by the Government with respect to sugar industry as a whole.
We considered this to be a key audit matter given the relative size of the balance in the financial statements and significant judgment involved in the consideration of factors such as minimum selling price monthly quota fluctuation in selling prices and the related notification of the Government in determination of net realizable value. Based on the above procedures performed we concluded that management's process for determination of NRV and comparing that with cost of inventory of sugar is considered to be reasonable.
Accounting for Government Grants (Refer note 3.14 and 43 of the financial statements)
The Company operates in the sugar industry and accordingly it has to comply with the various applicable directives notifications orders etc issued by the relevant authorities from time to time. Our audit procedures included among others
In order to determine the timing of recognition of grants the Company evaluates the achievement of reasonable assurance in respect of: Evaluating eligibility requirements of schemes issued by the Central Government.
– the Company complying with the conditions attaching to them and Understanding and testing the design and operating effectiveness of controls as established by the management in recognition and assessment of the recoverability of the grant.
– the certainty that these grants will be received. Significant judgement is involved in assessing such assurance. Considering the relevant notifications to ascertain the basis for determination completion of performance obligation and assessing the appropriateness of the management estimates for accounting of government grant and timing of recognition.
Due to the significant level of judgement as stated aforesaid and quantum of grants we have identified recognition of government grants as a key audit matter Based on the above procedures performed we concluded that income from grant has been appropriately accounted for.

Other Information

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the AnnualReport but does not include the financial statements and our auditor's reportthereon. Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon. In connection with our auditof the financial statements our responsibility is to read the other information and indoing so consider whether such other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of Management for the Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the FinancialStatements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also: Identifyand assess the risks of material misstatement of the financial statements whether due tofraud or error design and perform audit procedures responsive to those risks and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. Therisk of not detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the auditin order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause theCompany to cease to continue as a going concern. Evaluate the overall presentationstructure and content of the financial statements including the disclosures and whetherthe financial statements represent the underlying transactions and events in a manner thatachieves fair presentation. Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planingthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant de_ciencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements for the financial year ended March 31 2022 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order2020("the Order") issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the "Annexure 1"astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

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 bestof 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 theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to the adequacy of the internal financial controls with reference tothese financial statements and the operating effectiveness of such controls refer to ourseparate Report in "Annexure 2" to this report ;

(g) In our opinion the managerial remuneration for the year ended March 31 2022 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note 40 to the financial /statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. a) The management has represented that to the best of its knowledge and belief asdisclosed in the note 47 to the financial statements no funds have been advanced orloaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other person(s) or entity(ies) includingforeign entities ("Intermediaries") with the understanding whether recorded inwriting or otherwise that the Intermediary shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Company ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;

b) The management has represented that to the best of its knowledge and belief asdisclosed in the note 47 to the financial statements no funds have been received by theCompany from any person(s) or entity(ies) including foreign entities ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures performed that have been considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (a) and (b) contain any materialmisstatement.

v. (a) The dividend paid by the Company during the year in respect of the same declaredfor the previous year is in accordance with section 123 of the Act to the extent itapplies to payment of dividend.

(b) As stated in note 20(a) to the financial statements the Board of Directors of theCompany have proposed dividend for the year which is subject to the approval of themembers at the ensuing Annual General Meeting. The dividend declared is in accordance withsection 123 of the Act to the extent it applies to declaration of dividend.

FOR Singhi & Co.
Chartered Accountants
Firm Registration No.302049E
(Aditya Singhi)
Partner
Place: Kolkata Membership No. 305161
Date: May 11 2022 UDIN: 22305161AITKHH7077

ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ONOTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE TO THE MEMBERS OFMAGADH SUGAR & ENERGY LIMITED AS AT AND FOR THE YEAR ENDED MARCH 31 2022

(i) (a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant andEquipment.

(B) The Company has maintained proper records showing full particularsof intangibles assets.

(b) Property Plant and Equipment were physically verified by themanagement during the year in accordance with a planned programme of verifying all of themonce in three years which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. No material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties (other than properties where the Company is the lessee and the lease agreementsare duly executed in favour of the lessee) disclosed in note 4 to the financial statementsincluded in property plant and equipment are held in the name of the Company except titledeeds of the immovable Properties in the nature of freehold land as indicated below arenot held in the name of the Company.

Description of Property Gross carrying value Held in name of Whether promoter director or their relative or employee Period held – indicate range where appropriate Reason for not being held in the name of Company
Freehold Land Rs. 230.72 lakhs Erstwhile Company No Since April 12015 Transferred to the Company pursuant to Composite Scheme of Arrangement mutation in the name of the Company is pending as on the Balance Sheet date

(d) The Company has not revalued its Property Plant and Equipment(including Right of use assets) or intangible assets during the year.

(e) There are no proceedings initiated or are pending against theCompany for holding any benami property under the Prohibition of Benami PropertyTransactions Act 1988 and rules made thereunder.

(ii) (a) The inventory has been physically verified by the managementduring the year. In our opinion the frequency of verification by the management isreasonable and the coverage and procedure for such verification is appropriate.Discrepancies of 10% or more in aggregate for each class of inventory were not noticed.

(b) As disclosed in note 21 to the financial statements the Companyhas been sanctioned working capital limits in excess of Rs. five crores in aggregate frombanks during the year on the basis of security of current assets of sugar units of theCompany. The quarterly returns/statements filed by the Company with such banks are inagreement with the books of accounts of the Company except the discrepancies as under:

Quarter ending Value per books of account in respect of Stock of Sugar Mollasses and Stores & Spares (Rs. In lakhs) Value per quarterly return/statement (Rs. In lakhs) Di_erence (Rs. In lakhs) Reason for discrepancies
June 302021 42738.16 43992.23 -1254.07 Discrepancies is mainly on account of valuation basis considered in stock statements and books of account.
September 302021 26935.16 27753.29 -818.13
December 312021 34179.15 37208.47 -3029.32
March 312022 44266.78 45110.70 -843.92

(iii) During the year the Company has not made any investmentprovided any guarantee or security or granted any loans or advances in the nature ofloans secured or unsecured to companies firms Limited Liability Partnerships or anyother parties. Accordingly the requirement to report on clause 3(iii)(a) to (f) of theOrder are not applicable to the Company.

(iv) In our opinion and according to the information and explanationsgiven to us there are no loans investments guarantees and securities granted in respectof which provisions of section 185 and 186 of the Companies Act 2013 are applicable andand accordingly the requirement to report on clause 3(iv) of the Order is not applicableto the Company.

(v) The Company has neither accepted any deposits from the public noraccepted any amounts which are deemed to be deposits within the meaning of sections 73 to76 of the Companies Act and the rules made thereunder to the extent applicable.Accordingly the requirement to report on clause 3(v) of the Order is not applicable tothe Company.

(vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under section 148(1) of the Companies Act 2013 related to manufacture of itsproducts and are of the opinion that prima facie the specified accounts and records havebeen made and maintained. We have not however done a detailed examination of the same.

(vii) (a) The Company is regular in depositing with appropriateauthorities undisputed statutory dues including goods and services tax provident fundemployees' state insurance income-tax sales-tax service tax duty of customs dutyof excise value added tax cess and other statutory dues applicable to it. According tothe information and explanations given to us and based on audit procedures performed byus no undisputed amounts payable in respect of these statutory dues were outstanding atthe year end for a period of more than six months from the date they became payable.

(b) According to the records of the Company the dues of goods andservices tax provident fund employees' state insurance income-tax sales-taxservice tax duty of custom duty of excise value added tax cess and other statutorydues have not been deposited on account of any dispute are as follows:

Name of Statue Nature of dues Amount in Rs. Lakhs Period to which amount relates Forum where dispute is pending
Bihar VAT Act 2005 Differential VAT on Denatured Sprit. 56.23 2010-11 & 2011-12 Appellate tribunal Patna / Joint Commissioner Appeals.
Bihar Molasses (Control) Act 1947 VAT on exempted Sales.
Administration Charges on Molasses 116.29 1995-96 to 1999-2000 Supreme Court of India
The Bihar Electricity Duty Act 1948 Demand for Electricity Duty on Sale of Electricity 162.99 2009-10 to 2012-13 Supreme Court of India
Central Excise Act 1944 Disallowance of CENVAT credit on certain input / capital items / input services. 535.07 2004-05 to 2007-08 October 2014 to December 2016 CESTAT / Commissioner (Appeal)
Bihar Sugarcane (Supply & Regulation) Act 1981 Interest on Cane cess 3.37 1984-85 to 1986-87 1991-92 1994-95 to 1998-99 2003-04 & 2004-05. Certificate Officer Samastipur

(viii) According to the information and explanations given to us theCompany has not surrendered or disclosed any transaction previously unrecorded in thebooks of account in the tax assessments under the Income Tax Act 1961 as income duringthe year. Accordingly the requirement to report on clause 3(viii) of the Order is notapplicable to the Company.

(ix) (a) According to the information and explanations given to us and as per the booksand records examined by us in our opinion the Company has not defaulted in repayment ofloans or other borrowings or in the payment of interest thereon to any lender.

(b) According to the information and explanations given to us and the records of theCompany examined by us the Company has not been declared wilful defaulter by any bank orfinancial institution or government or any government authority.

(c) In our opinion and according to the information and explanations given by themanagement term loans were applied for the purpose for which the loans were obtained.

(d) On an overall examination of the financial statements of the Company no fundsraised on short-term basis have been used for long-term purposes by the Company.

(e) The Company does not have any subsidiary associate or joint venture. Accordinglythe requirement to report on clause 3(ix) (e) of the Order is not applicable to theCompany.

(f) The Company does not have any subsidiary associate or joint venture. Accordinglythe requirement to report on Clause 3(ix)(f) of the Order is not applicable to theCompany.

(x) (a) The Company has not raised any money during the year by way of initial publicoffer / further public offer (including debt instruments) hence the requirement to reporton clause 3(x)(a) of the Order is not applicable to the Company.

(b) The Company has not made any preferential allotment or private placement of shares/fully or partially or optionally convertible debentures during the year under audit andhence the requirement to report on clause 3(x)(b) of the Order is not applicable to theCompany.

(xi) (a) Based upon the audit procedures performed for the purpose of reporting thetrue and fair view of the financial statements and according to the information andexplanations given by the management we report that no fraud by the Company or nomaterial fraud on the Company has been noticed or reported during the year.

(b) During the year no report under sub-section (12) of section 143 of the CompaniesAct 2013 has been filed by cost auditor/ secretarial auditor or by us in Form ADT –4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014 with theCentral Government.

(c) As represented to us by the management there are no whistle blower complaintsreceived by the Company.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) (a) to (c) of the order are not applicable to the Company.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv) (a) The Company has an internal audit system commensurate with the size andnature of its business.

(b) The internal audit reports of the Company issued till the date of the audit reportfor the period under audit have been considered by us.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.

(xvi) (a) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.Accordingly the requirement to report on clause (xvi) (a) & (b) of the order is notapplicable to the Company.

(b) The Company is not a Core Investment Company as defined in the regulations made byReserve Bank of India. Accordingly the requirement to report on clause 3(xvi) (c) of theOrder is not applicable to the Company.

(c) According to the information and explanations given to us the Group has one CoreInvestment Company as part of the Group.

(xvii) The Company has not incurred cash losses in the current financial year and inthe immediate preceding financial year.

(xviii) There has been no resignation of the statutory auditors during the year andaccordingly requirement to report on Clause 3(xviii) of the Order is not applicable to theCompany.

(xix) On the basis of the financial ratios disclosed in note 46 to thefinancial statements ageing and expected dates of realization of financial assets andpayment of financial liabilities other information accompanying the financial statementsour knowledge of the Board of Directors and management plans and based on our examinationof the evidence supporting the assumptions nothing has come to our attention whichcauses us to believe that any material uncertainty exists as on the date of the auditreport that Company is not capable of meeting its liabilities existing at the date ofbalance sheet as and when they fall due within a period of one year from the balance sheetdate. We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.

(xxa) In respect of other than ongoing projects there are no unspentamounts that are required to be transferred to a fund specified in Schedule VII of theCompanies Act (the Act) in compliance with second proviso to sub section 5 of section 135of the Act. This matter has been disclosed in note 36(b) to the financial statements.

(xxb) There are no ongoing projects as specified in sub section (6) ofsection 135 of Companies Act2013 and hence reporting under this clause is not applicableto the Company.

FOR Singhi & Co.
Chartered Accountants
Firm Registration No.302049E
(Aditya Singhi)
Partner
Place: Kolkata Membership No. 305161
Date: May 11 2022 UDIN: 22305161AITKHH7077

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THEFINANCIAL STATEMENTS OF MAGADH SUGAR & ENERGY LIMTED

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference tofinancial statements of Magadh Sugar and Energy Limited ("the Company") as ofMarch 31 2022 in conjunction with our audit of the financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing as specified under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls and both issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to financialstatements was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of suchinternal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgementincluding the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on theinternal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financialstatements

A company's internal financial control with reference to financialstatement is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial control with reference to financial statements includes those policies andprocedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference tofinancial statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial control with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system with reference to financial statements and suchinternal financial controls were operating effectively as at March 31 2022 based on theinternal control with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

FOR Singhi & Co.
Chartered Accountants
Firm Registration No.302049E
(Aditya Singhi)
Partner
Place: Kolkata Membership No. 305161
Date: May 11 2022 UDIN: 22305161AITKHH7077

.