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Schneider Electric Infrastructure Ltd.

BSE: 534139 Sector: Engineering
NSE: SCHNEIDER ISIN Code: INE839M01018
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OPEN 125.35
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VOLUME 57815
52-Week high 141.00
52-Week low 68.45
P/E 253.40
Mkt Cap.(Rs cr) 3,029
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Schneider Electric Infrastructure Ltd. (SCHNEIDER) - Auditors Report

Company auditors report

To the Members of Schneider Electric Infrastructure Limited Report on the Audit ofthe Ind AS Financial Statements Opinion

We have audited the accompanying Ind AS financial statements of Schneider ElectricInfrastructure Limited ("the Company") which comprise the Balance sheet as atMarch 31 2020 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the Ind AS financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2020 its loss includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.

Basis for Opinion

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Ind AS Financial Statements' section of our report.We are independent of the Company in accordance with the ‘Code of Ethics' issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the Ind AS financial statements.

Material Uncertainty Related to Going Concern

We draw attention to Note 43 in the Ind AS financial statements which indicate thatthe Company has accumulated losses and its net worth has been substantially eroded theCompany has incurred a net loss during the current and previous years. These conditionsalong with other matters set forth in Note 43 indicate the existence of a materialuncertainty that may cast significant doubt about the Company's ability to continue as agoing concern. Our opinion is not qualified in respect of this matter.

Emphasis of Matter

We draw attention to Note 40 to the accompanying Ind AS financial statements whichdescribes the management's assessment of the impact of uncertainties related to COVID 19and its consequential effects on the business operations of the Company. Our opinion isnot modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements for the financial year endedMarch 31 2020. These matters were addressed in the context of our audit of the Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For each matter below our description of how ouraudit addressed the matter is provided in that context.

In addition to the matter described in the ‘Material Uncertainty Related to GoingConcern' section we have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the Ind AS financial statements sectionof our report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Ind AS financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter
Tax Litigations (as described in Note 33 of the Ind AS financial statements)
The Company is subject to number of significant tax litigations. The total contingent liabilities as of March 31 2020 in relation to tax matters are Rs 1581.21 Million. Our audit procedures included the following:
Due to complexity of cases significant amount involved and timescales for resolution significant judgement and estimates are required by the management to assess the impact of these litigations on the financial positions results of operations and cash flows and thus there is a risk that such litigations may not be adequately provided for or disclosed in the Ind AS financial statements. Accordingly tax litigations have been identified as a key audit matter in our audit of the Ind AS financial statements. Obtained an understanding of the process of identification of tax litigations and related contingent liabilities and tested the operating effectiveness of 3management's key controls over recognition and disclosures of tax provisions and contingencies.
Obtained the details of the tax litigations of the
Company and discussed with the management to understand the detail of the underlying matters and basis for management's judgement and estimates on both the probability of success in significant cases and the magnitude of any potential loss.
Obtained confirmation where appropriate from relevant third-party legal counsel. Evaluated the objectivity competence and relevant experience of third-party legal counsel. Engaged tax specialists to assess management's application and interpretation of tax legislation affecting the Company and to consider the quantification of exposures and settlements arising from disputes with tax authorities in the various tax jurisdictions.
Assessed the relevant disclosures made within the Ind AS financial statements.
Revenue Recognition
For the year ended March 31 2020 the Company has recognized revenue from contracts with customers of Rs 13809.31 Million. Our audit procedures included the following:
Evaluated the Company's revenue recognition accounting policies and its compliance in terms of Ind AS 115 ‘Revenue from contracts with customers'.
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has concluded that as principal it typically controls the goods or services before transferring them to the customers. The variety of terms that define when control is transferred to the customer give rise to the risk that revenue is not recognized in the correct period.
Obtained an understanding of management's internal controls over the revenue recognition process and evaluated the design and tested the operating effectiveness of key controls.
Performed sales transactions testing based on a representative sampling of sales to check recording of related revenues and trade receivables taking into consideration the terms and conditions of the agreements with customers including the shipping terms.
Revenue is also an important element of how the
Company measures its performance. The Company focuses on revenue as a key performance measure which could create an incentive for revenue to be recognized before the controls have been transferred. Accordingly due to the significant risk associated with revenue recognition in accordance with terms of Ind AS 115 ‘Revenue from contracts with customers' it has been determined a key audit matter in our audit of the Ind AS financial statements. Tested sales transactions made near the year end by agreeing a sample of sales transactions occurring around the year end to supporting documentation including customer confirmation of receipt of goods to establish that sales and corresponding trade receivables are properly recorded in the correct period.
Performed monthly analytical reviews to identify any unusual sales trends.
Assessed the relevant disclosures made within the Ind AS financial statements.
Impairment – Trade Receivables (as described in Note 5 and 8 of the Ind AS financial statements)
Trade receivables represent a significant portion of the Our audit procedures included the following:
total assets of the Company as at March 31 2020. The Company has trade receivables of Rs 4257.26 Million as at March 31 2020.
The Company is required to regularly assess the recoverability of its trade receivables. Management has designed and adopted the expected credit loss (ECL) model for creating impairment allowance. In assessing the recoverability of trade receivables management has further considered the specific provision on customer to customer basis and accounted the impairment if recoverability of outstanding amount is considered doubtful. Obtained an understanding of the process of recoverability assessment of outstanding amount from customers and evaluated the design and tested the operating effectiveness of key controls.
Evaluated the assumptions used to calculate the expected credit loss (ECL) model to create impairment allowance for doubtful debts.
Tested the aging of trade receivables for a sample of transactions with customers and discussed with the management for their assessment of receivables which were due for more than their respective credit periods.
In assessing the recoverability of trade receivables management also exercised significant judgements to evaluate the collectability from individual customers after considering their creditworthiness whether they have financial difficulties experience of default or delinquency in payments and aging analysis. The judgements applied by management have a significant impact on the level of provision required for trade receivables. Circulated the balance confirmation letter to the customers and analysed the responses in balance confirmation letter obtained from the customers.
The recoverability assessment of trade receivables was significant to our audit and accordingly this matter has been determined to be a key audit matter in our audit of the Ind AS financial statements. We evaluated management's continuous assessment of their assumptions used in the impairment assessment of trade receivables. These considerations include whether there are regular receipts from the customers past collection history as well as an assessment of the customers' credit ability to make payments and various communications with the customers.
Assessed the relevant disclosures made within the Ind AS financial statements.
Recoverability of carrying value of property plant and equipment capital work in progress right-of-use assets and intangible assets (as described in Note 3 4 and 32 of the Ind AS financial statements)
The Company has incurred losses in the recent years and loss for the year inclusive of other comprehensive income amounts to Rs 392.24 Million and as at March 31 2020 accumulated losses of the Company aggregates to Rs 3587.10 Million. As a result there is risk that carrying value of property plant and equipment may be higher than their recoverable amount. As at March 31 2020 the carrying value of property plant and equipment and capital work in progress including right of use assets and intangible assets are Rs 3169.96 Million which represents a significant portion of the total assets of the Company. Our audit procedures included the following:
Understood management and board's controls over the assessment of the carrying value of property plant and equipment capital work in progress right to use assets and intangible assets to determine whether any asset impairment was required.
Assessed management's forecasting accuracy by comparing prior year forecasts to actual results and assessing the potential impact of any variances.
Our audit focused on this area because the assessment of recoverable value of property plant and equipment requires the management of the Company to make a number of key judgements and estimates with respect to the future performance and profitability of the Company including judgment and estimate on future growth rate and the impact of the general economic environment in the sector in which it operates. Tested the adequacy of the weighted average cost of capital used to discount the impairment model through engaging valuation experts.
Tested the integrity of the models together with their clerical accuracy.
The assessment of the recoverable amount also involves significant judgements about the future cash flow forecasts and the discount rate that is applied. Assessed the relevant disclosures made within the Ind AS financial statements.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Director's Report Secretarial Audit Report ManagementDiscussion and Analysis (but does not include the Ind AS financial statements and ourauditor's report thereon) which we obtained prior to the date of this auditor's report.

Our opinion on the Ind AS financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS financial statements our responsibility isto read the other information and in doing so consider whether such other information ismaterially inconsistent with the Ind AS financial statements or our knowledge obtained inthe audit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Ind AS 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 Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting 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 Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.

In preparing the Ind AS financial statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the Ind AS financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Ind AS financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Ind AS financial statements forthe financial year ended March 31 2020 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("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:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of accounts;

(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting

Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) The going concern matter described in Material Uncertainty Related to Going Concernparagraph above in our opinion may have an adverse effect on the functioning of theCompany;

(f) 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;

(g) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Ind AS financial statements and theoperating effectiveness of such controls refer to our separate Report in "Annexure2" to this report;

(h) In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

(i) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements – Refer Note 33 to the Ind AS financialstatements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts – Refer Note 16 to the Ind AS financial statements;

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. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Vishal Sharma
Partner
Membership Number: 096766
UDIN: 20096766AAAABD8038
Place of Signature: New Delhi
Date: June 16 2020

Annexure 1 referred to in paragraph 1 under the heading "Report on other legal andregulatory requirements" of our report of even date

Re: Schneider Electric Infrastructure Limited ("the Company")

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular program of physical verification of its fixed assetsunder which fixed assets are verified in a phased manner over a period of three yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the Company.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification. Inventories lying with third parties have beenconfirmed by them as at year end and no material discrepancies were noticed in respect ofsuch confirmations.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii) (a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities granted in respect of whichprovisions of section 185 and 186 of the Companies Act 2013 are applicable and hence notcommented upon.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the manufacture of powertransformers switchgears and other related products and are of the opinion that primafacie the specified accounts and records have been made and maintained. We have nothowever made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of custom duty of excise value addedtax goods and service tax cess and other material statutory dues have generally beenregularly deposited with the appropriate authorities though there has been a slight delayin a few cases.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax goods and service tax cessand other material statutory dues were outstanding at the year end for a period of morethan six months from the date they became payable.

(c) According to the records of the Company the dues outstanding of sales-tax servicetax duty of custom duty of excise value added tax income tax and cess on account ofany dispute are as follows:

S. Name of No. Statute Nature of Dues Amount (Rs Millions) Amount Deposited (Rs Millions) Period to which the amount relates Forum where dispute is pending
1 Central Excise Act 1944 Non-inclusion of 15% Profit Margin in Transfer Pricing 5.13 - 1993-94 and 1994-95 Kolkata High Court
2 Central Excise Act 1944 Rejection of refund claim towards CENVAT reversals as insisted during Excise audit 4.44* - 2012-13 CESTAT – Chennai
3 Central Excise Act 1944 Refund of excise duty denied for cases where proof of Export submitted after payment of Excise Duty after 180 days of export 3.07 - 2012-13 Tribunal Gujarat
4 Central Excise Act 1944 Demand of duty for Exemption u/n 108/95 0.47* - 2003-04 Commissioner (Adj.) New Delhi
5 Central Excise Act 1944 CENVAT Credit availed on SAP maintenance charges 0.21* - 2008-09 High Court- Chennai
6 Central Excise Act 1944 Levy of penalty 0.02 - 2011-12 CESTAT – Chennai
7 Central Excise Act 1944 Seizure of spares while being transported to Railway Station alleging transportation without Invoice. 0.01 - 1996-97 Commissioner (Appeals) Allahabad
8 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 73.12* 41.99 2010-11 & 2011-12 Joint Commissioner (Corporate Circle)
9 Central Sales Tax Act 1956 Non submission of declaration forms Input tax claim disallowed 168.38 - 2007-08 Revision Board at Beliaghata
10 Central Sales Tax Act 1956 Non submission of Form C/I/E-1 and export documents 49.09* 45.02 2009-10 Joint Commissioner (Allahabad)
11 Central Sales Tax Act 1956 Non collection of declaration forms 22.52* 37.97 2007-08 Joint Commissioner Allahabad
12 Central Sales Tax Act 1956 Non collection of declaration forms & CST treated as local VAT Sale 40.93* 14.59 2010-11 Additional Commissioner Appeals
13 Central Sales Tax Act 1956 Non submission of form C/I/E-1 and export documents 50.28* 48.56 2008-09 Joint commissioner (Allahabad)
14 Central Sales Tax Act 1956 Non-Submission of C Forms -* 10.58 2009-10 Tribunal Ahmedabad
15 Central Sales Tax Act 1956 Non submission of Declaration forms 14.96* 20.65 2010-11 & 2011-12 Tribunal
16 Central Sales Tax Act 1956 Non collection of declaration forms 28.05* 21.19 2006-07 Deputy Commissioner Allahabad
17 Central Sales Tax Act 1956 Non collection of declaration forms 1.57* 1.73 1993-94 1997- 19982003-042004-05 & 2005-06 Assessing Officer Charge Office West Bengal
18 Central Sales Tax Act 1956 Non submission of Declaration forms 4.18* 7.14 2008-09 & 2009-10 Deputy Commissioner Allahabad
19 Central Sales Tax Act 1956 Non collection of declaration forms 17.21* - 2005-06 2006-07 & 2007-08 Deputy Commissioner U.P. Sales Tax
20 Central Sales Tax Act 1956 Input tax claim disallowed non- submission of declaration forms 7.53* - 2009-10 West Bengal Commercial Taxes Appellate & Revisional Board
21 Gujarat Value Added Tax 2003 Non collection of declaration form 1.08* 3.35 2007-08 & 2008-09 Joint Commissioner (Corporate)
22 Central Sales Tax Act 1956 Non collection of declaration forms 6.36* - 2002-03 Calcutta High Court
23 Uttar Pradesh Trade Tax Act 1948 Ex Parte Assessment Order Passed. Records not submitted at the Time of Assessment. 5.50* 4.61 2005-06 Deputy Commissioner U.P. Sales Tax
24 Central Sales Tax Act 1956 Non collection of declaration forms 3.68* - 2001-02 2002-03 & 2011-12 Deputy Commissioner
25 Central Sales Tax Act 1956 Disallowance of stock transfers made within the state Denial of input tax credit Difference in interpretation of rates and Non submission of documents to substantiate the purchases 3.58* 3.58 2008-09 Joint Commissioner (Allahabad)
26 West Bengal Sales Tax Act 1994 Non collection of declaration forms 3.20 - 1997-98 West Bengal Tribunal
27 Delhi Value Added Tax Act 2004 Non submission of Statutory Form such as C/H/F/E-1 and export documents 1.83 - 2007-08 Commercial Tax Officer
28 Central Sales Tax Act 1956 Non submission of declaration forms Input tax claim disallowed 1.00* 1.00 2006-07 Assessing Officer Charge Office West Bengal
29 Central Sales Tax Act 1956 Non collection of declaration form CST Documents like PO Endorsed ARE 1 E1 Forms 0.54* - 2009-10 Deputy Commissioner Comm Tax
30 Uttar Pradesh Trade Tax Act 1948 Levy of purchase Tax due to Unregistered purchases made 0.33* - 2006-07 Deputy Commissioner Sales Tax Noida
31 Central Sales Tax Act 1956 Non collection of declaration forms 0.26* - 2008-09 Deputy Commissioner Jaipur
32 Madhya Pradesh Value Added Tax Act 2002 Non collection of declaration form CST treated as local VAT Sale 0.18* 0.06 2010-11 Deputy Commissioner Appeal
33 Rajasthan Value Added Tax Act 2003 Input tax claim disallowed 0.08* - 2008-09 Deputy Commissioner Jaipur
34 Madhya Pradesh Value Added Tax Act 2002 Entry Tax on High Sea Sales Imported Material 0.07* 0.02 2010-11 Deputy Commissioner Appeals
35 Central Sales Tax Act 1956 Provisional Assessment 0.52 0.91 2014-15 Additional Commissioner Appeals
36 Gujarat Value Added Tax 2003 Input tax claim disallowed non- submission of declaration forms 146.50* 28.27 2011-12 Joint Commissioner Appeals
37 Central Sales Tax Act 1956 Non collection of declaration forms 11.02 5.67 2011-12 2013-14 Deputy/Additional Commissioner Appeal
38 Central Sales Tax Act 1956 Non collection of declaration forms 1.94 8.79 2013-14 Deputy Commissioner
39 Central Sales Tax Act 1956 Non collection of declaration forms - 2.53 2012-13 Joint Commissioner Appeals
40 Central Sales Tax Act 1956 Non collection of declaration forms 0.68* 0.07 2008-09 2011-12 Deputy Commissioner Appeals
41 Central Sales Tax Act 1956 Non collection of declaration forms 11.09* - 2009-10 Deputy Commissioner Appeal
42 Central Sales Tax Act 1956 Non collection of declaration forms 12.10* 2.42 2011-12 Joint Commissioner Appeals
43 Central Sales Tax Act 1956 Non collection of declaration forms 0.26* - 2009-10 Deputy Commissioner Appeals
44 Central Sales Tax Act 1956 Non collection of declaration forms 0.42* 0.14 2010-11 Deputy Commissioner Appeals
45 Central Sales Tax Act 1956 Non collection of declaration forms 6.82* 1.82 2010-11 Deputy Commissioner Appeals
46 Central Sales Tax Act 1956 Non collection of declaration forms 2.80 - 1997-98 Tribunal
47 Central Sales Tax Act 1956 Non collection of declaration forms 16.79 - 1993-94 Revision Board at Beliaghata
48 Finance Act 1994 Irregular availment of CENVAT Credit of Service Tax 4.98* - 2012-13 CESTAT – Chennai
49 Finance Act 1994 Disallowance of CENVAT credit availed on certain input services 0.79* - 2012-13 CESTAT – Chennai
50 Finance Act 1994 Non-payment of service tax on provision created in books /short payment of service tax on royalty and technical knowhow payments made under intellectual property right services. 0.66* - 2011-12 CESTAT – Chennai
51 Finance Act 1994 Non-payment of Service Tax on Manpower supply services 0.62* - 2012-13 CESTAT – Chennai
52 Finance Act 1994 Short payment of service tax on GTA 0.08* - 2009-10 High Court- Chennai
53 The Custom Act 1962 Refund of drawback for non- realisation of export proceeds 5.59 - 2012-13 Commissioner of Customs (Appeals)
54 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 4.40 - 2012-13 Deputy Commissioner Noida-I Uttar Pradesh
55 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents - 5.95 2012-2013 Joint commissioner of Commercial Tax (Appeals) Vadodara
56 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents - 6.17 2011-12 Deputy Commissioner Vadodara
57 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 9.59 2.07 2013-14 Deputy Commissioner Appeal
58 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 3.70 9.75 2014-15 Appellate Deputy Commissioner of Commercial Taxes Chennai (South]
59 Central Sales Tax Act 1956 non-submission of waybill Form 402 6.41 2.10 2016-2017 Deputy Commissioner Commercial Taxes Gujarat
60 Central Sales Tax Act 1956 ITC disallowance 4.72 - 2012-2013 Joint commissioner of Commercial Tax (Appeals) Vadodara
61 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 3.77 - 2013-14 Assistant Commissioner of Commercial Tax Rajasthan
62 Central Excise Act 1944 Irregular availment of Cenvat Credit on certain Ineligible service alleged 0.47* - 2010-2011 CESTAT - CHENNAI
63 Central Excise Act 1944 Duty on removal of Inputs "as such" 2.37 0.18 2011-2016 Additional Commissioner Sec-62 Noida
64 Central Excise Act 1944 Excise duty on Freight charges recovered from customer to be included in Assessable value 11.65 0.87 2011-2016 Additional Commissioner Vadodara-II
65 Income Tax Act1961 Disallowance on account of bad debts written off and various other disallowances 170.92 60.95 AY 2012-13 Commissioner of Income Tax (Appeals)
66 Income Tax Act1961 Disallowance on account of bad debts written off and various other disallowances 104.31 - AY 2013-14 Commissioner of Income Tax (Appeals)
67 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 32.89 3.29 2013-2014 Additional Commissioner (Appeals) Noida
68 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 132.12 7.65 2014-2015 Joint Commissioner Sales Tax West Bengal
69 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents - 9.00 2013-2014 Deputy Commissioner Commercial Taxes Gujarat
70 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 20.90 0.89 2014-2015 Joint Commissioner Sales Tax Noida
71 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 8.50 0.03 2014-2015 Joint Commissioner Sales Tax Delhi
72 Central Excise Act 1944 Denial of excise exemption on account of mismatch of signature on exemption certificate 0.90 0.07 2013-2014 CGST & CEAC WB
73 Central Excise Act 1944 service tax on royalty made at the time of payment and not at the time of provisioning 0.31 - 2011-2012 Joint Commissioner West Bengal
74 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 4.84 4.84 2014-2015 Joint Commissioner Andhra Pradesh
75 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 0.12 - 2014-2015 Joint Commissioner Delhi
76 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 0.72 0.01 2012-2013 Joint Commissioner Telangana
77 Central Sales Tax Act 1956 ITC disallowance 1.41 - 2015-2016 Commercial Tax officer Bhiwadi
78 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 18.42 9.21 2017-2018 Deputy Commissioner Tamil Nadu
79 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 68.95 31.29
2015-16 2016-17 Deputy Commissioner Tamil Nadu
80 Entry Tax Act Telangana Entry Tax 2.72 2.71 2012-13 2013-14 2014-15 Joint Commissioner Telangana
81 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 17.66 1.69 2015-2016 Deputy Commissioner West Bengal
82 Central Sales Tax Act 1956 ITC Disallowance 18.72 - 2015-16 Deputy Commissioner West Bengal
83 Central Excise Act 1944 Short payment of Duty 6.60 0.66 2016-2017 Tribunal Ahmedabad
84 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 23.05 4.60 2014-15 Deputy Commissioner Commercial Taxes Gujarat
85 Maharashtra Value Added Tax Act 2002 ITC disallowance 12.97 0.63 2012-13 2014-15 Deputy Commissioner Mumbai
86 Delhi Value Added Tax Act 2004 ITC disallowance 0.24 - 2015-16 Assistant Commissioner Delhi
87 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 111.58 10.48 2015-16 Additional Commissioner of Sales Tax
88 West Bengal VAT Act 2003 VAT Assessment (Export/SEZ sales) 18.85 1.77 2015-16 Additional Commissioner of Sales Tax
89 Central Sales Tax Act 1956 Non submission of Statutory Form such as C/H/F/E-1 and export documents 109.55 - 2015-16 2016- 172017-18 Deputy Commissioner Commercial Taxes Gujarat
90 The Custom Act 1962 Incorrect classification of relays under custom tariff heading 316.27 - 2014-15 2015-16 2016-17 2017-18 & 2018-19 CESTAT-Mumbai

* Represents Company's share of Rs 522.69 Million of dues pending in forums Jointlywith ALSTOM T&D India Limited (Refer Note 33 of the accompanying Ind AS financialstatements)

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of dues to any bank. Further thecompany did not have any outstanding debentures and did not have any outstanding loans orborrowings dues in respect of a financial institution or to Government.

(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 hence reporting under clause (ix) is not applicable to theCompany and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the Ind AS financial statements and according to the information andexplanations given by the management we report that no fraud by the Company or no fraudon the Company by the officers and employees of the Company has been noticed or reportedduring the year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 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) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe Ind AS financial statements 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 audit and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in 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. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Vishal Sharma
Partner
Membership Number: 096766
UDIN: 20096766AAAABD8038
Place of Signature: New Delhi
Date: June 162020

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE IND AS FINANCIALSTATEMENTS OF SCHNEIDER ELECTRIC INFRASTRUCTURE LIMITED

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

We have audited the internal financial controls over financial reporting of SchneiderElectric Infrastructure Limited ("the Company") as of March 31 2020 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 Ind AS financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")and the Standards on Auditing as specified under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls and both issuedby the Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these Ind AS financial statements was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to these Ind ASfinancial statements and their operating effectiveness. Our audit of internal financialcontrols over financial reporting included obtaining an understanding of internalfinancial controls over financial reporting with reference to these Ind AS financialstatements assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the internal financial controls overfinancial reporting with reference to these Ind AS financial statements.

Meaning of Internal Financial Controls Over Financial Reporting with reference to theseInd AS Financial Statements

A company's internal financial control over financial reporting with reference to theseInd AS financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial control over financial reporting with referenceto these Ind AS financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation ofInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting withreference to these Ind AS Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these Ind AS financial statements including the possibilityof collusion or improper management override of controls material misstatements due toerror or fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls over financial reporting with reference to these Ind ASfinancial statements to future periods are subject to the risk that the internal financialcontrol over financial reporting with reference to these Ind AS financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified in the operating effectiveness of theCompany's internal financial controls over financial reporting with reference to these IndAS financial statements as at March 31 2020:

1. The Company's internal control system for procurement to payment function was notoperating effectively since there were material weaknesses in approval of purchase ordersand processing and recording of invoices. This could potentially result in materialmisstatement in Trade Payables. This has also caused us to qualify our opinion in theearlier year.

2. The Company's internal control system for financial statement closure processparticularly for review of month end journal entries was not operating effectively. Thiscould potentially result in material misstatement in the Company's financial statements.This has also caused us to qualify our opinion in the earlier year.

A ‘material weakness' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.

In our opinion the Company has in all material respects maintained adequate internalfinancial controls over financial reporting with reference to these Ind AS financialstatements as of March 31 2020 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India and except for thepossible effects of the material weakness described above on the achievement of theobjectives of the control criteria the Company's internal financial controls overfinancial reporting with reference to these Ind AS financial statements were operatingeffectively as of March 31 2020.

Explanatory paragraph

We also have audited in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct the Ind AS financial statements of Schneider Electric Infrastructure Limited whichcomprise the Balance Sheet as at March 31 2020 the Statement of Profit and Lossincluding the statement of Other Comprehensive Income the Cash Flow Statement and theStatement of Changes in Equity for the year then ended and a summary of significantaccounting policies and other explanatory information. This material weakness wasconsidered in determining the nature timing and extent of audit tests applied in ouraudit of the March 31 2020 Ind AS financial statements of Schneider ElectricInfrastructure Limited and this report does not affect our report dated June 16 2020which expressed an unqualified opinion on those Ind AS financial statements.

For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
Per Vishal Sharma
Partner
Membership Number: 096766
UDIN: 20096766AAAABD8038
Place of Signature: New Delhi
Date: June 16 2020

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