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CG Power & Industrial Solutions Ltd.

BSE: 500093 Sector: Engineering
NSE: CGPOWER ISIN Code: INE067A01029
BSE 00:00 | 16 Jun 81.75 -3.35
(-3.94%)
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85.50

HIGH

86.80

LOW

81.00

NSE 00:00 | 16 Jun 81.25 -3.50
(-4.13%)
OPEN

85.40

HIGH

85.40

LOW

80.90

OPEN 85.50
PREVIOUS CLOSE 85.10
VOLUME 270976
52-Week high 92.00
52-Week low 6.01
P/E 12.75
Mkt Cap.(Rs cr) 11,051
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 85.50
CLOSE 85.10
VOLUME 270976
52-Week high 92.00
52-Week low 6.01
P/E 12.75
Mkt Cap.(Rs cr) 11,051
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

CG Power & Industrial Solutions Ltd. (CGPOWER) - Auditors Report

Company auditors report

Report on the Audit of the Standalone Ind AS Financial Statements Disclaimer of Opinion

We were engaged to audit the accompanying standalone Ind AS financial statements of CGPower and Industrial Solutions Limited (“the Company”) which comprise theStandalone Balance sheet as at March 31 2020 the Standalone Statement of Profit andLoss including the Standalone Statement of Other Comprehensive Income the StandaloneCash Flow Statement the Standalone Statement of Changes in Equity for the year then endedand notes to the Standalone Ind AS financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas ‘Standalone Financial Statements').

We do not express an opinion on the accompanying Standalone

Financial Statements of the Company. Because of the significance of the mattersdescribed in the Basis for Disclaimer of Opinion section of our report we have not beenable to obtain sufficient appropriate audit evidence to provide a basis for an auditopinion on these Standalone Financial Statements.

Basis for Disclaimer of Opinion

As explained in the note 2.1 and note 3A(a) of the Standalone Financial StatementsNational Company Law Tribunal (NCLT) has passed an order allowing the Ministry ofCorporate Affairs (MCA) to reopen the books of accounts and recast of financial statementsof the Company and its subsidiaries (‘Proposed Revision') under Section 130 of theCompanies Act 2013. As stated in note 2.1 the Board of Directors of the Company takinginto significance of the basis of preparation and the matters described in notes to theStandalone Financial Statements believes that the accompanying Standalone FinancialStatements have not been prepared in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended hence could be materially misstated and thus do not present a true and fairview. We are unable to determine the consequential impact of the aforesaid ProposedRevision and the impact of certain specific transactions / matters and disclosures on theStandalone Financial Statements. Such specific transactions / matters include:

1. We draw attention to note 3A(c) note 3A(j) and note 3A(l) Standalone FinancialStatements. There are certain outstanding identified receivables and identifiedliabilities as at March 31 2019 aggregating Rs 2439.94 crores and Rs 320.00 croresrespectively which as explained to us were dues from / dues to promoter affiliatecompanies connected parties and a subsidiary and the transactions that resulted in suchidentified receivables and identified liabilities were approved by erstwhile CertainIdentified Personnel (CIP). Out of the above receivables during the year ended March 312020 the Company has made provision of Rs 68.50 crores in relation to receivables from apromoter affiliate company since that is subjected to insolvency process. Further as morefully explained in the note 3A(m) during the year ended March 31 2020 the Company hadextended loans and advances aggregating to Rs 137.59 crores to an erstwhile subsidiary andunrelated parties which were approved by the CIP and were in relation to the earlier yeartransactions. These balances were either provided or settled subsequently during the yearand are not carried forward as at year end. The Board of Directors had initiatedinvestigation to evaluate the business and commercial rationale of the underlyingtransactions and balances.

During the year ended March 31 2020 the Board of Directors issued recovery notices tothese promoter affiliate companies connected parties and unrelated parties. Subsequent tothe year end March 31 2020 the management has filed suit against three of the identifiedpromoter affiliate companies (including on behalf of a subsidiary) as more fullyexplained in note 3A(d) and note 3A(e) of the Standalone Financial Statements.

During the year the Board of Directors issued recovery notices to various unrelatedparties as more fully explained in note 3A(f) of the Standalone Financial Statements.Basis the unsatisfactory and unsuccessful attempt to complete the recovery as explained innote 3A(f) of the Standalone Financial Statements management has made provision of Rs266.40 crores during year ended March 31 2020.

As of the date of this report investigations are ongoing yet concluded by the Board ofDirectors and thus we are unable to quantify the adjustments to the Standalone FinancialStatements in relation to such outstanding identified receivables aggregating to Rs2371.44 crores and identifiedliabilities of Rs 320.00 crores and provisions in relation tounrelated parties balances amounting to Rs 266.40 crores as at year end.

2. We draw attention to note 3A(k) of the Standalone Statements which describes thatduring February 2020 the Court of Belgium has ordered bankruptcy proceedings against CGHoldings Belgium NV and CG Power Systems Belgium NV subsidiaries located in Belgium whichin turn hold investments in four downstream wholly owned subsidiary companies(‘Belgium Group'). The Company believes that carrying value of outstanding balancesrecoverable from CG International B.V. (‘CGIBV') the subsidiary of the Company whichholds investments in Belgium and underneath operations and investments of CGIBV may not berecoverable. Thus during the year the Company has made a provision for impairment of Rs1292.18 crores in relation to the investments in CGIBV and CG International HoldingsSingapore Pte. Limited and other receivables from CGIBV pertaining to Belgium Group.

The Company however has not accounted provision corporate guarantees amounting to Rs642.29 crores extended to Belgium Group as the management believes that the recoverablevalue of assets in the Belgium Group will be sufficient to meet all liabilities postliquidation process and the Company will not of the liable to fulfil any furtherobligations for such liabilities / corporate guarantees. The Company has also not madeprovision towards corporate guarantees provided to other overseas subsidiaries other thanBelgium Group amounting to Rs 499.26 crores on the assumption that the recoverable valueof assets of operations other than Belgium Group will be sufficient to meet all relatedliabilities and the Company will not be liable to fulfil any further obligations for suchliabilities / corporate guarantees.

Pending outcome of bankruptcy / liquidation proceedings and management assessment onobligation towards corporate guarantees we are unable to obtain sufficient appropriateaudit evidence in respect of potential impact of any unforeseen liabilities postliquidation obligation towards corporate guarantees extended to these subsidiariesimpairment provision and its consequential impact on the Standalone Financial Statements.

3. We draw attention to note 3A(j) and note 3A(l) of the Financial Statements theCompany has entered into various transactions with certain identified connected partieswherein some of the Company's employees owned beneficial ownership in such connectedparties and further certain senior management personnel of the Company were directors ofthese connected parties. Pending ongoing investigation the Company has not yet completedits assessment to determine the nature of its relationship with these connected partiesand whether the

Company holds control over these connected parties. We were unable to obtain sufficientappropriate audit with respect of completeness of the list of related parties and thecompleteness of disclosure of related party transactions as disclosed in note 3A(l) of theStandalone Financial Statements.

4. As at March 31 2020 we have sent independent confirmation to banks / financialinstitutions for borrowings details of securities lien collaterals guarantees etc. andbank balances of the Company. Other than responses in relation to balances we have notreceived responses in respect of the details of securities lien collaterals guaranteesetc. on confirmations from banks / financial institutions. We have also not receivedresponses to our direct confirmation request from 24 legal counsels and 6 counselshandling indirect tax matters for the Company. Further direct confirmation request to 40customers identifiedon sample basis having receivable balance as per books amounting toRs 122.69 crores were not delivered due to non-availability of communication details.

In the absence of independent confirmations from financial institutions towards detailsof securities lien collaterals guarantees and unsent confirmations pending response inrespect of legal and tax matters and further considering the proposed restatement of prioryears we are unable to determine whether any adjustments are required to the saidbalances as on March 31 2020 and related disclosures in these Standalone FinancialStatements.

5. We draw your attention to note 3A(c) note 3A(h) note 46(b) note 56 and note39(vi) of the Standalone Financial Statements which describes that identified litigationsand contingencies are pending to be evaluated by the management and the management has notascertained the legal position of the Company the possible cash outflow and itsconsequential impact on these Standalone Financial Statements.

Pending management evaluation of legal positions and possible cash outflows we areunable to obtain sufficient appropriate audit evidence with respect to completeness anddisclosure of litigation and contingencies and consequential impact on these StandaloneFinancial Statements.

6. We draw your attention to note 3A(n) of the Standalone Statements which describesthat the Board of Directors have instructed the management to undertake a detailedinvestigation in relation to the matters of possible non-compliance with respect tovarious provision of the Companies Act 2013 the Income Tax Act 1961 the Foreign ExchangeManagement Act 1999 SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (as amended) Prevention of Money Laundering Act 2002 and other regulations asapplicable to the Company (Applicable Laws). The Company is in process of investigationand evaluation of implication of potential non compliances of Applicable Laws.

Further as stated in note 3A(a) of the Standalone Financial Statements there areinvestigations and enquiries been conducted for reasons explained in the notes to theStandalone Financial Results by Securities and Exchange Board of India Serious FraudInvestigation Office and Enforcement Directorate Further Department of Income Tax has alsoissued notices and is seeking explanations by the Company. The Company is engaging andproviding details and responses to all such investigations enquiries and demands asraised on the Company.

Pending outcome of the investigation initiated by the Company and conducted on theCompany by regulators and management assessment thereon we are unable to determine thepotential impact of non-compliances with Applicable Laws and determine the outcome of suchenquiries and any further adjustments that evidence may be necessary to these StandaloneFinancial Statements.

7. Going Concern Assessment

We draw attention to note 57 in the Standalone Financial balance Statements whichindicate that (a) the Company has incurred a net loss during the current and previousyears; (b) the Company's current liabilities exceeded its current assets as at the balancesheet date; (c) Certain lenders of the Company are yet to conclude the Inter CreditorAgreement (‘ICA') till the date of adoption of these Standalone FinancialStatements.

Pending the outcome of the matters described in the paragraph 1 to 6 and the mattersdisclosed in (a) to (c) above and possible impact thereof we are unable to obtainsufficient appropriate audit evidence as to whether the Company will be able to serviceits debts realize its assets and discharge its liabilities as and when they become dueover the period of next 12 months. Accordingly we are unable to comment on whether theCompany banks /will be able to continue as Going Concern.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors are responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the 3A(i) 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 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 is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those charged with governance are also responsible for overseeing the Company'sfinancial reporting process.

However the Board of Directors taking into consideration the matters stated under theheading Basis of Disclaimer of Opinion upon MCA appointing a firm for reopening andrecasting previous year standalone financial information and basis the outcome ofinvestigations and other related actions may revise these Standalone Financial Statementsafter making necessary adjustments to give a true and fair view of Standalone FinancialStatements of the Company in accordance with the accounting principles generally acceptedin India including the Indian Accounting Standards (Ind AS) specified under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our responsibility is to conduct an audit of the Company's Standalone FinancialStatements in accordance with Standards on Auditing and to issue an auditor's report.However because of the significance of the matters described in the Basis for Disclaimerof Opinion section of our report we were not able to obtain sufficient appropriate auditevidence to provide a basis for an audit opinion on these Standalone Financial Statements.

We are independent of the Company in accordance with the ethical requirements inaccordance with the requirements of the Code of Ethics issued by ICAI and the ethicalrequirements as prescribed under the laws and regulations applicable to the Company.

Other Matter

I. In relation to certain identifiedtransactions before March 31 and balances as atMarch 31 2019 we had issued a letter under section 143(12) of the Companies Act 2013 tothe Company seeking investigation and outcome. Based on the interim response received fromthe Board of Directors of the Company we filed our preliminary response to the CentralGovernment reporting the suspected fraudulent transactions and balances. Managementinvestigation are not yet concluded.

II. The comparative Ind AS financial information for the March 31 2019 are included inthese Standalone Financial Statements on which we have issued a disclaimer of opiniondated August 30 2019.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order (“the Order”)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the “Annexure 1” a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that: i. Due to the possibleeffects of the matters described in the Basis for Disclaimer of Opinion paragraph we areunable to obtain all the information and explanations which to the best of our knowledgeand belief were necessary for the audit; ii. Due to the possible effects of the mattersdescribed in the Basis for Disclaimer of Opinion paragraph we are unable to state whetherproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books;

iii. Due to the possible effects of the matters described in the Basis for Disclaimerof Opinion paragraph we are unable to state whether the Balance Sheet the Statement ofProfit and Loss including the Statement of Other Comprehensive Income the Cash FlowStatement and Statement of Changes in Equity dealt with by this Report are in agreementwith the books of account;

iv. Due to the possible effects of the matters described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether the aforesaid Standalone FinancialStatements comply with the Accounting Standards specified under Section 133 of the Actread with Companies (Indian Accounting Standards) Rules 2015 as amended; v

. Due to the possible effects of the matters described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether such matters have any adverse effect onthe functioning of the Company;

vi. On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164(2) of theAct;

vii. With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Standalone Financial Statements and theoperating effectiveness of such controls refer to our separate Report in “Annexure2” to this report;

viii. Due to the possible effects of the matters described in the Basis for Disclaimerof Opinion paragraph we are unable to state whether the managerial remuneration for theyear ended March 31 2020 has been paid / provided by the Company to its directors inaccordance with the provisions of section 197 read with Schedule V to the Act; ix. Withrespect to the other matters to be included in the ended Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinionand to the best of our information and according to the explanations given to us:

i. Due to the possible effects of the matters described in 2016 the Basis forDisclaimer of Opinion paragraph we are unable to state whether the Company has disclosedthe impact of pending litigations on its financial position in its Standalone FinancialStatements;

ii. Except for the possible effects of the matters described in Basis for Disclaimer ofopinion and to the best of our information and according to the explanations given to usthe Company did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses; and

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

For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Shyamsundar Pachisia
Partner
Membership Number: 49237
UDIN: 20049237AAAAAT7975
Place of Signature: Mumbai
Date: June 27 2020

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets except for certain items of plant andmachinery situated at 3 units of the Company where quantitative details were notmaintained.

(b) According to the information and explanations given by the management during theyear fixed assets have not been physically verified as per the approved physicalverification programme and hence we are unable to comment on the discrepancies if any.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment were not availablewith the Company and hence we are unable to comment on the same.

(ii) The inventory has been physically verified by the during the year. In our opinionthe frequency of verification is reasonable. No material discrepancies were noticed onsuch physical verification. Inventories lying with third parties have been confirmed bythem as at March 31 2020 and no material discrepancies were noticed in respect of suchconfirmations.

(iii) Due to the possible effects of the matters described Basis for Disclaimer ofOpinion paragraph in main report we are unable to comment whether the Company has grantedany loans secured or unsecured to companies firms Limited Liability Partnerships orother parties covered in the register maintained under section 189 of the Companies Act2013.

(iv) Due to the possible effects of the matters described Basis for Disclaimer ofOpinion paragraph in main report we are unable to comment whether the Company hascomplied with the provisions of section 185 and 186 of the Companies Act 2013.

(v) Due to the possible effects of the matters described Basis for Disclaimer ofOpinion paragraph in main report we are unable to comment whether the Company hasaccepted any deposits within the meaning of sections 73 to 76 of the Act and the Companies(Acceptance of Deposits) Rules 2014 (as amended).

(vi) Due to the possible effects of the matters described Basis for Disclaimer ofOpinion paragraph in main report we are unable to comment whether the Company hasmaintained the specified accounts and records pursuant to the rules made by the CentralGovernment for the maintenance of cost records under section 148(1) of the Companies Act2013.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance and goods and service tax have generally been regularly deposited with theappropriate authorities though there has been a slight delay in a few cases. Due to thepossible effects of the matters described in the Basis for Disclaimer of Opinion paragraphin main report we are unable to comment whether the Company is regular in depositing withappropriate authorities undisputed statutory dues including income-tax duty of customcess and other statutory dues applicable to it.

(b) Due to the possible effects of the matters described in the Basis for Disclaimer ofOpinion paragraph in main report we are unable to comment whether any undisputed amountspayable in respect of income-tax duty of custom cess and other statutory dues wereoutstanding at the year end for a period of more than six months from the date theybecame payable.

(c) Due to the possible effects of the matters described in the Basis for Disclaimer ofOpinion paragraph in main report we are unable to comment whether any dues of income taxduty of customs and cess which have not been deposited on account of any dispute.

(viii) Due to the possible effects of the matters described in the Basis for Disclaimerof Opinion paragraph in main report we are unable to comment whether the Company has notdefaulted in repayment of loans or borrowing to a financial institution or bank. TheCompany did not have any outstanding dues to debenture holders during the year.

(ix) According to the information and explanations given by the management the Companyhas not raised any money by way of initial public offer / further public offer / debtinstruments and term loans. Due to the possible effects of the matters in thedescribed inthe Basis for Disclaimer of Opinion paragraph in main report we are unable to commentwhether the Company has raised any money by way of term loans and whether the moneysraised from the term loan has been utilized for the purposes for which it was obtained.

(x) With respect to our reporting on whether any fraud on or by in thethe Company hasbeen noticed or reported during the year we refer to notes 3A of the financial statementswhich states that the Company has based on investigation performed for certaintransactions entered into by or on behalf of the Company noted that there are severalunrecorded loans and transactions accounted incorrectly in the prior years which in thewere approved by certain Key Managerial Persons Company Personnel and certainnon-executive directors. Based on the investigations completed till date and informationand explanations provided by management it appears that a material fraud was perpetratedon the Company by the officers and employees of the Company. The Company's detailed intheinvestigations are still in progress with respect to such transactions and the Companyis yet to identify and conclude on the culpability of the personnel who were involved inthe fraud and the amounts which could be involved.

(xi) Due to the possible effects of the matters described in the Basis for Disclaimerof Opinion paragraph in main report we are unable to comment whether the managerialremuneration has been paid / provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to the Companies Act 2013.

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

(xiii) Due to the possible effects of the matters described in the Basis for Disclaimerof Opinion paragraph in main report we are unable to comment whether transactions withthe related parties are in compliance with section 177 and 188 of Companies Act 2013where applicable and the details have been disclosed in the notes to the financialstatements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company and not commented upon.

(xv) Due to the possible effects of the matters described Basis for Disclaimer ofOpinion paragraph in main report we are unable to comment whether the Company has enteredinto any noncash transactions with directors or persons connected with him as referred toin section 192 of Companies Act 2013.

(xvi) 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.

For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Shyamsundar Pachisia
Partner
in Membership Number: 49237 the
UDIN: 20049237AAAAAT7975
Place of Signature: Mumbai
Date: June 27 2020

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE IND ASFINANCIAL STATEMENTS OF CG POWER AND INDUSTRIAL SOLUTIONS LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We were engaged to audit the internal financial controls over financial reporting of CGPower and Industrial Solutions Limited (“the Company”) as of March 31 2020 inconjunction with our audit of the Standalone Ind AS 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 and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these Standalone Ind AS financialstatements based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls Over Financial Reporting (the “GuidanceNote”) and the Standards on Auditing as specified under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsand both issued by the Institute of Chartered Accountants of India.

Because of the matters described in the Basis for Disclaimer of Opinion in the mainaudit report we were not able to obtain sufficient appropriate audit evidence to provide abasis for our opinion on whether the Company had adequate internal financial controls overfinancial reporting with reference to these Standalone Ind AS financial statements as atMarch 31 2020 and whether such internal financial controls were operating effectively.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to theseStandalone Ind AS Financial Statements

A company's internal financial control over financial reporting with reference to theseStandalone Ind AS financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financial reportingwith reference to these Standalone

Ind AS financial statements includes those policies and procedures that (1) pertain tothe maintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Disclaimer of Opinion

Due to the possible effects of the matters described in the Basis for Disclaimer ofOpinion paragraph in our main audit report we are unable to obtain sufficient appropriateaudit evidence to provide a basis for our opinion on whether the Company had adequateinternal financial controls over financial reporting with reference to these StandaloneInd AS financial statements as at March 31 2020 and whether such internal financialcontrols were operating effectively. Accordingly we do not express an opinion on InternalFinancial Controls Over Financial Reporting with reference to these Standalone Ind ASfinancial statements.

Explanatory paragraph

We were engaged to audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct the Standalone Ind AS financial statements of CG Power and Industrial SolutionsLimited which comprise the Balance Sheet as at March 31 2020 and the related Statementof Profit and Loss and Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information. We have considered thedisclaimer of opinion reported above in determining the nature timing and extent ofaudit tests applied in our audit of the March 31 2020 standalone Ind AS financialstatements of CG Power and Industrial Solutions Limited and this report affects our reportdated 27 June 2020 which expressed an disclaimer of opinion on those Standalone Ind ASfinancial statements.

For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Shyamsundar Pachisia
Partner
Membership Number: 49237
UDIN: 20049237AAAAAT7975
Place of Signature: Mumbai
Date: June 27 2020