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CESC Ltd.

BSE: 500084 Sector: Infrastructure
NSE: CESC ISIN Code: INE486A01021
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NSE 00:00 | 16 Aug 79.05 -0.40
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OPEN 79.60
PREVIOUS CLOSE 79.45
VOLUME 91107
52-Week high 102.45
52-Week low 68.00
P/E 12.83
Mkt Cap.(Rs cr) 10,479
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 79.60
CLOSE 79.45
VOLUME 91107
52-Week high 102.45
52-Week low 68.00
P/E 12.83
Mkt Cap.(Rs cr) 10,479
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

CESC Ltd. (CESC) - Auditors Report

Company auditors report

To

The Members of CESC Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements ofCESC Limited ("the Company") which comprise the Balance Sheet as at March 312022 the Statement of Profit and Loss including the statement of Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and notes to the standalone 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 standalone financial statements give theinformation required by the Companies Act 2013 as amended ("the Act") in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2022 its profit including other comprehensive income its cash flows and the changesin equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) as specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the‘Auditor's Responsibilities for the Audit of the Standalone FinancialStatements' section of our report. We are independent of the Company in accordancewith the ‘Code of Ethics' issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements for thefinancial year ended March 31 2022. These matters were addressed in the context of ouraudit of the standalone financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters. For each matter belowour description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the standalone financialstatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the standalone financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone financial statements.

1. Accrual of regulatory income/expense and corresponding asset/ liability (as described in note 39 of the standalone financial statements)

Key Audit Matter:

The Company recognizes regulatory income / expense / assets/ liabilitybasis its understanding and interpretation of Tariff orders and regulations notified bythe West Bengal Electricity Regulatory Commission (WBERC) which are subject matter ofAnnual Performance Review (APR) and will be adjusted in tariffs to be notified in thefuture years. Management exercises judgement in estimating such amounts using pastexperience from the issued Tariff/ APR orders including interpretation of the regulations.Such regulatory deferral balances are discounted over an estimated period of recoveryusing a discounting rate.

In consideration of the significance of the amount of the regulatorybalances complexity and high degree of estimation involved in computation thereof andpending annual performance reviews we identified accrual of regulatory balances as a keyaudit matter.

How our audit addressed the key audit matter:

Our audit procedures included the following:

• We considered the Company's accounting policies withrespect to accrual for regulatory deferrals and assessed compliance with Ind AS 114"Regulatory Deferral Accounts".

• We have understood and carried out testing of the design andimplementation of key financial controls related to accrual of such regulatory balancesand its disclosure in the financial statements of the Company.

• We discussed with the management on the key assumptions andestimates used for recognition of these regulatory balances and corroborated them with theapplicable regulatory provisions APR orders Tariff orders and underlying records of theCompany.

• We discussed with the management on the consistency of its keyassumptions and basis of estimation for all the years for which APR assessments arepending to be completed and also verified the arithmetical accuracy of such workings.

• We enquired from the management for notifications andcorrespondences with the regulator on the pending APR assessments.

• We also assessed the discounting rate and the estimated periodof recovery considered by the management with reference to the APR process and the tariffregulations.

• We have assessed the adequacy of disclosures in accordance withthe requirements of Ind AS 114 "Regulatory Deferral Accounts".

2. Investments in subsidiaries of the Company (as described innote 7 of the standalone financial statements)

Key Audit Matter:

The company carries its investment in subsidiaries at cost and performsan impairment assessment wherever required as per applicable Ind AS.

For these assessments the company involves a valuer to determine therecoverable value of such investments using the discounted cash flow method of valuationwhich is highly sensitive to changes in inputs used in valuation and involves judgementdue to inherent uncertainty in the assumptions used for forecasting the future cash flows.

Accordingly the impairment assessment of investments in subsidiarycompanies was determined to be a key audit matter in our audit of the standalone financialstatements.

How our audit addressed the key audit matter:

Our audit procedures included the following:

• We evaluated the objectivity and competence of the externalvaluation specialist involved by the management for such valuation and obtainedconfirmation of independence from them.

• We discussed with the management the methodology and assumptionsused in the valuation including discount rates expected growth rates and terminal growthrates.

• We obtained suitable management representation on theprojections of future cash flows and the various assumptions used in the valuation.

• We read and evaluated the audited financial statements of thesesubsidiary companies since the year of commencement of their operations.

We discussed with the management the reported improvement inperformance of these companies over the years.

• We tested the arithmetical accuracy of the financialprojections.

Information Other than the Financial Statements and Auditor'sReport Thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the Directors Report Management Discussionand Analysis Report on Corporate Governance Additional Shareholder Information Reporton Corporate Social Responsibility Activities Business Responsibility and SustainabilityReport and Statement containing salient features of the financial statements ofSubsidiaries/Joint Venture but does not include the standalone financial statements andour auditor's report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whethersuch other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management for the Standalone 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 standalonefinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income cash flows and changes in equity of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting 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 StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in 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 thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies 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 standalonefinancial statements for the financial year ended March 31 2022 and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the "Annexure 1" a statement on thematters 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including theStatement of Other Comprehensive Income the Cash Flow Statement and Statement of Changesin Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withCompanies (Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2022 from being appointed as a director in termsof Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controlswith reference to these standalone financial statements and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure 2" to this report;

(g) In our opinion the managerial remuneration for the year endedMarch 31 2022 has been paid / provided by the Company to its directors in accordance withthe provisions of section 197 read with Schedule V to the Act;

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

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements – Refer Note 31 to thestandalone financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

iv. a) The management has represented that to the best of itsknowledge and belief no funds have been advanced or loaned or invested (either fromborrowed funds or share premium or any other sources or kind of funds) by the Company toor in any other person(s) or entity(ies) including foreign entities("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theCompany ("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 knowledgeand belief no funds have been received by the Company from any person(s) or entity(ies)including foreign entities ("Funding Parties") with the understanding whetherrecorded in writing or otherwise that the Company shall whether directly or indirectlylend or invest in other persons or entities identified in any manner whatsoever by or onbehalf of the Funding Party ("Ultimate Beneficiaries") or provide any guaranteesecurity or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures performed that have been consideredreasonable and appropriate in the circumstances nothing has come to our notice that hascaused us to believe that the representations under sub-clause (a) and (b) contain anymaterial misstatement.

v. The interim dividend declared and paid by the Company during theyear and until the date of this audit report is in accordance with section 123 of the Act.

For S.R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Kamal Agarwal
Partner
Place of Signature: Kolkata Membership Number: 058652
Date: May 13 2022 UDIN: 22058652AIXHBH7486

Annexure ‘1' referred to in paragraph under theheading "Report on other legal and regulatory requirements" of our report ofeven date Re: CESC Limited ("the Company")

In terms of the information and explanations sought by us and given bythe company and the books of account and records examined by us in the normal course ofaudit and to the best of our knowledge and belief we state that:

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

(i) (a) (B) The Company has maintained proper records showing fullparticulars of intangibles assets.

(i) (b) The Company has verified part of its Property Plant andEquipment during the year in accordance with its regular programme of verification ofthese assets whereby all the assets except those in distribution system for which we havebeen informed that physical verification is not possible are physically verified over aperiod of 3 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.

(i) (c) The title deeds of immovable properties (other than propertieswhere the Company is the lessee and the lease agreements are duly executed in favour ofthe lessee) disclosed in note 4 to the standalone financial statements included inProperty Plant and Equipment are held in the name of the Company except the following:

Description of Property Amount in INR crores Held in the 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
Leasehold land at Pagladanga DS 2.72 West Bengal Small Industries Corporation Ltd No 1999 The Company has applied for renewal with the West Bengal Small Industries Corp. Ltd.
Leasehold land at Rabindra Sadan DS 3.80 Governor of State Of West Bengal No 1985 The Company has applied for renewal with the Public Works Department (PWD) Govt of West Bengal.
Leasehold land at Auckland Square DS 5.09 The Kolkata Municipal Corporation No 1994 The Company applied for renewal with the Kolkata Municipal Corporation.
Leasehold land at Southern Generating Station 169.85 Kolkata Port Trust No 1925 The Company is in the process of renewal of the expired lease with Kolkata Port Trust.
Leasehold Land at 0.93 Governor of No 1968 The Company is in the
Taltala DS State Of West process of renewal of the
Leasehold land- Saint James Square Rectifier Station 4.27 Bengal No 1964 lease deed with Government of West Bengal.
Leasehold land- Budge Budge Generating station 79.89 Governor of State Of West Bengal No 1991 The Company has applied with Land Department of Govt. of West Bengal for renewal of the lease

(i) (d) The Company has not revalued its Property Plant and Equipment(including Right of use assets) or intangible assets during the year ended March 31 2022.

(i) (e) As represented to us by the management there are noproceedings initiated or are pending against the Company for holding any benami propertyunder the Prohibition of Benami Property Transactions Act 1988 and rules made thereunder.

(ii) (a) The inventory has been physically verified by the managementduring the year except for inventories lying with third parties. In our opinion thefrequency of verification by the management is reasonable and the coverage and procedurefor such verification is appropriate. No material discrepancies were noticed on suchphysical verification. Inventories lying with third parties have been confirmed by them asat March 31 2022 and discrepancies were not noticed in respect of such confirmations.

(ii) (b) As disclosed in note 26 to the standalone financialstatements the Company has been sanctioned working capital limits in excess of Rs. fivecrores in aggregate from banks during the year on the basis of security of current assetsof the Company. The quarterly returns/statements filed by the Company with such banks arein agreement with the books of accounts of the Company. The Company does not have anysanctioned working capital limits from financial institutions.

(iii) (a) During the year the Company has not provided advances in thenature of loans stood guarantee or provided security to companies firms LimitedLiability Partnerships or any other parties. The Company has provided loan to a company asfollows:

Particulars Amount in INR crores
Aggregate amount granted/ provided during the year
- Subsidiaries -
- Joint Ventures -
- Associates -
- Others 14.50
Balance outstanding as at balance sheet date in respect of above cases
- Subsidiaries -
- Joint Ventures -
- Associates -
- Others 14.50

(iii) (b) During the year the Company has not provided guarantees andsecurity and not granted advances in the nature of loans to companies firms LimitedLiability Partnerships or any other parties. The investments made and the terms andconditions of the loans granted are not prejudicial to the Company's interest.

(iii) (c) The Company has not granted advances in the nature of loansto companies firms Limited Liability Partnerships or any other parties. The Company hasgranted interest free loans during the year to a company where the schedule of repaymentof principal has been stipulated and the same are not due for repayment as on March 312022.

(iii) (d) The Company has not granted advances in the nature of loansto companies firms Limited Liability Partnerships or any other parties during the year.There are no amounts of loans granted to companies firms limited liability partnershipsor any other parties which are overdue for more than ninety days.

(iii) (e) The Company has not granted advances in the nature of loansto companies firms Limited Liability Partnerships or any other parties during the year.There were no loans granted to companies firms Limited Liability Partnerships or anyother parties which was fallen due during the year that have been renewed or extended orfresh loans granted to settle the overdues of existing loans given to the same parties.

(iii) (f) The Company has not granted any loans or advances in thenature of loans either repayable on demand or without specifying any terms or period ofrepayment to companies firms Limited Liability Partnerships or any other parties.Accordingly the requirement to report on clause 3(iii)(f) of the Order is not applicableto the Company.

(iv) The Company has not advanced loans to directors / to a Company inwhich the director is interested to which provisions of section 185 of the Companies Act2013 apply and hence not commented upon. Provisions of section 186 of the Companies Act2013 in respect of loans and advances given investments made and guarantees andsecurities given have been complied with by 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 2013 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 the generation anddistribution of electricity and are of the opinion that prima facie the specifiedaccounts and records have been made and maintained. We have not however made a detailedexamination 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.

(vii) (b) The dues of goods and services tax provident fundemployees' state insurance income-tax sales-tax service tax duty of custom dutyof excise value added tax cess and other statutory dues have not been deposited onaccount of any dispute are as follows:

Name of the Statute Nature of the Dues Amount (Rs. in crores) Period to which the amount relates Forum where the dispute is pending
The Customs Act 1962 Customs Duty 19.38 2011- 12 and 2012-13 Customs Excise and Service Tax Appellate Tribunal.
Finance Act 1994 Service Tax 14.71 April 2016- June 2017 The Commissioner Central Tax and Central Excise

(viii) As represented to us by the management the Company has notsurrendered or disclosed any transaction previously unrecorded in the books of accountin the tax assessments under the Income Tax Act 1961 as income during the year.Accordingly the requirement to report on clause 3(viii) of the Order is not applicable tothe Company.

(ix) (a) The Company has not defaulted in repayment of loans or otherborrowings or in the payment of interest thereon to any lender.

(ix) (b) As represented to us by the management the Company has notbeen declared wilful defaulter by any bank or financial institution or government or anygovernment authority.

(ix) (c) Term loans of Rs. 300 crores were raised towards the end ofthe year (March 2022) out of which Rs. 125 crores have not been utilized by the end of theyear and is lying in cash and cash equivalents as on March 31 2022. This matter has beendisclosed in note 21(c) to the standalone financial statements.

(ix) (d) On an overall examination of the financial statements of theCompany the Company has used short term funds aggregating to Rs. 893.19 crores forlong-term purposes representing financing of regulatory assets.

(ix) (e) On an overall examination of the financial statements of theCompany the Company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiaries or joint venture. The Company does not have anyassociate during the year.

(ix) (f) The Company has not raised loans during the year on the pledgeof securities held in its subsidiaries or joint ventures companies. The Company does nothave any associate during the year. Hence the requirement to report on clause (ix)(f) ofthe Order is not applicable to the Company.

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

(x) (b) The Company has not made any preferential allotment or privateplacement of shares /fully or partially or optionally convertible debentures during theyear under audit and hence the requirement to report on clause 3(x)(b) of the Order isnot applicable to the Company.

(xi) (a) As represented to us by the management no fraud/ materialfraud by the Company or no fraud / material fraud on the Company has been noticed orreported during the year.

(xi) (b) During the year no report under sub-section (12) of section143 of the Companies Act 2013 has been filed by cost auditor/ secretarial auditor or byus in Form ADT – 4 as prescribed under Rule 13 of Companies (Audit and Auditors)Rules 2014 with the Central Government.

(xi) (c) As represented to us by the management there are no whistleblower complaints received by the Company during the year.

(xii) The Company is not a nidhi Company as per the provisions of theCompanies Act 2013. Therefore the requirement to report on clauses 3(xii)(a) (b) and(c) of the Order is not applicable to the Company.

(xiii) Transactions with the related parties are in compliance withsections 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the notes to the financial statements as required by the applicableaccounting standards.

(xiv) (a) The Company has an internal audit system commensurate withthe size and nature of its business.

(xiv) (b) The internal audit reports of the Company issued till thedate of the audit report for the period under audit have been considered by us.

(xv) The Company has not entered into any non-cash transactions withits directors or persons connected with its directors and hence requirement to report onclause 3(xv) of the Order is not applicable to the Company.

(xvi) (a) The provisions of section 45-IA of the Reserve Bank of IndiaAct 1934 (2 of 1934) are not applicable to the Company. Accordingly the requirement toreport on clause (xvi)(a) of the Order is not applicable to the Company.

(xvi) (b) The Company has not conducted any Non-Banking Financial orHousing Finance activities without obtained a valid Certificate of Registration (CoR) fromthe Reserve Bank of India as per the Reserve Bank of India Act 1934.

(xvi) (c) The Company is not a Core Investment Company as defined inthe regulations made by Reserve Bank of India. Accordingly the requirement to report onclause 3(xvi) of the Order is not applicable to the Company.

(xvi) (d) As represented to us by the management the Group has 5 CoreInvestment Companies as a part of the Group.

(xvii) The Company has not incurred cash losses in the currentfinancial year and in the immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors duringthe year and accordingly requirement to report on Clause 3(xviii) of the Order is notapplicable to the Company.

(xix) On the basis of the financial ratios disclosed in note 54 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.

(xx) (a) In respect of other than ongoing projects there are nounspent amounts that are required to be transferred to a fund specified in Schedule VII ofthe Companies Act (the Act) in compliance with second proviso to sub section 5 of section135 of the Act. This matter has been disclosed in note 51 to the standalone financialstatements.

(xx) (b) All amounts that are unspent under section (5) of section 135of Companies Act pursuant to any ongoing project has been transferred to special accountin compliance of with provisions of sub section (6) of section 135 of the said Act. Thismatter has been disclosed in note 51 to the standalone financial statements.

For S.R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Kamal Agarwal
Partner
Place of Signature: Kolkata Membership Number: 058652
Date: May 13 2022 UDIN: 22058652AIXHBH7486

Annexure ‘2' To the Independent Auditor's Reportof Even Date on the Standalone Financial Statements of CESC Limited

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 tostandalone financial statements of CESC Limited ("the Company") as of March 312022 in conjunction with our audit of the standalone 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 over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors 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's internalfinancial controls with reference to these standalone financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting (the "Guidance Note") and theStandards on Auditing as specified under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both issued by ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to these standalone financial statements was establishedand maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to these standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to standalone financial statements included obtaining anunderstanding of internal financial controls with reference to these standalone financialstatements assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls with reference to these standalone financial statements.

Meaning of Internal Financial Controls With Reference to theseStandalone Financial Statements

A company's internal financial controls with reference to standalonefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial controls with reference to standalone financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (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 timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls With Reference toStandalone Financial Statements

Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at March 31 2022 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note issued by the ICAI.

For S.R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Kamal Agarwal
Partner
Place of Signature: Kolkata Membership Number: 058652
Date: May 13 2022 UDIN: 22058652AIXHBH7486

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