CG Power and Industrial Solutions Ltd., a Murugappa Group firm, has completed recasting of accounts for the five-year period from FY15-19.
Tube Investments of India (TII) had acquired CG Power in November 2020 under a Swiss challenge as part of the resolution process initiated by lenders on the RBI’s directive on prudential framework for resolution of stressed assets.
As part of the deal, TII agreed to pump in ₹700 crore for a 56% stake. It appointed its own directors on the board with S. Vellayan as chairman and N. Srinivasan as managing director.
The National Company Law Tribunal had ordered the reopening, recast and re-audit of the company’s accounts for the five years ending with FY19 and directed it to settle all dues.
The recasting of accounts had been completed from 2014-15 to 2018-19 and then to give effect for the next two years, MD N. Srinivasan said in an investors’ call. The recast accounts were audited by an independent firm of chartered accountants and the audited accounts were taken on record by NCLT, he added.
The recast accounts are certified as true and fair and the auditors have expressed an unmodified opinion on the said accounts for all the years, he pointed out.
Shareholders and investors might be aware that the auditors had earlier expressed a disclaimer on the accounts of the company. The recast of accounts for FY20 and FY21 were circulated to shareholders for their consideration, he said.
According to Mr. Srinivasan, they had recently sold CG Power land at Kanjurmarg and received ₹402 crore, including a security deposit refund of ₹20 crore.
The sale proceeds were utilised to prepay a long-term debt of ₹363 crore. Post this repayment of the long-term debt, the debt of CG Power stands at ₹527 crore.
Talking about the third-quarter performance, he said it was not comparable with the year earlier, since CG Power was at that time under severe financial stress.
“We need to build our own performance data this year onwards. Also, it would take a few more quarters to catch up with the peers, as we fully normalise our operations, resolving several legacy issues,” he added.