Schneider Electric President Systems

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