Schneider Electric President Systems Ltd.

We have audited the accompanying financial statements of Schneider Electric President Systems Limited (the Company), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management''s Responsibility for the Statements The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the Act) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash fows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor''s Responsibility Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, its loss and its cash flows for the year ended on that date. Emphasis of Matter We draw attention to Note 2 of the accompanying financial statements which indicates that the Company incurred loss after tax of Rs. 37,182,769 for the year ended March 31, 2015. Further, the Company incurred loss after tax amounting to Rs. 48,192,526 and Rs. 33,295,488 for the year ended March 31, 2014 and 2013, respectively. These conditions, along with other matters as set forth in note 2 to the accompanying financial statements indicate the existence of a material uncertainty that may cast substantial doubts regarding the Company''s ability to continue as a going concern. Our opinion is not qualified in respect of this matter. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor''s report) Order, 2015 (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 the matters specified in paragraphs 3 and 4 of the Order. 2. As required by section 143 (3) of the Act, we report that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; (b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books; (c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account; (d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014; (e) The going concern matter described under the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company; (f) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164 (2) of the Act; (g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements � Refer Note 29 to the financial statements; ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts � Refer Note 6 to the financial statements; iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. The Annexure referred to in our report to the members of Schneider Electric President Systems Limited (''the Company'') for the year ended March 31, 2015. We report that: i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification. ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year. Inventories lying with outside parties have been confirmed by them as at year end. (b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory except that the process of recording issues of raw materials for consumption accurately and on a timely basis needs to be strengthened. Discrepancies noticed on physical verification of inventories were material and have been properly dealt with in the books of accounts. iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a) and (b) of the Order are not applicable to the Company and hence not commented upon. iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the sale of goods and services and for the purchase of inventory and fixed assets. However, in our opinion, the internal control procedures for accurate and timely recording of issue of raw materials for consumption including the process of reconciliation of sub-ledger and general ledger for sale of goods and services need to be strengthened. During the course of our audit, other than the foregoing, we have not observed any other major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas. v) The Company has not accepted any deposits from the public. vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act 2013, related to the manufacture of Enclosures and related accessories including electrical and electronic equipments appliances and machinery and mechanical appliances and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same. vii) (a) Undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases of remittance of tax deducted at source and professional tax and significant delays in a few cases of remittance of service tax dues. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. (c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax and cess on account of any dispute, are as follows: Name of Nature Amount Period to the Statute of dues (Rs.) which it relates 1,229,638 FY 2007-09 The Central Excise Act, Excise Duty 1944 64,813 FY 2011-14 The Finance Act, 1944 Service Tax 387,972 FY 2010-11 The Karnataka VAT Act 1,327,595* FY 2010-11 Value Added The Maharashtra VAT Tax 1,475,718* FY 2004-05 Act Name of the Statute Forum where dispute is pending The Central Excise Act, 1944 The Commissioner of Central Excise [Appeals], Bangalore The Assistant Commissioner of Central Excise, III Division, Bangalore The Finance Act, 1944 Assistant Commissioner Central Excise, Pune The Karnataka VAT Act The Joint Commissioner (Appeals), Bangalore The Maharashtra VAT Act The Deputy Commissioner of Sales Tax (Appeals), Pune *The above amounts have been paid under protest by the Company. (d) According to the information and explanations given to us, the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 2013 and rules made there under has been transferred to such fund within time. viii) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year. ix) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank or debenture holders. x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. xi) Based on the information and explanation given to us by the management, terms loans were applied for the purpose for which the loans were obtained. xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year. For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W per Mahendra Jain Partner Membership Number: 205839 Place: Bengaluru Date : May 21, 2015