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