INFORMATION TO SHAREHOLDERS...CONTENT PAGE No. Financial Statistics 1 Notice to the Shareholders 2...

CONTENT PAGE No.

Financial Statistics 1 Notice to the Shareholders 2Directors’ Report 7Management Discussion and Analysis 23Independent Auditor’s Report 28Balance Sheet 32Statement of Proit and Loss 33Cash Flow Statement 34Notes to Financial Statements 35Attendance Slip and Proxy Form 59

INFORMATION TO SHAREHOLDERS

INDEX

Schneider Electric President Systems Limited(Formerly APW President Systems Limited)

Annual Report 2015 -2016

32nd Annual General Meeting

Date: Thursday, 29th September, 2016, Time: 11.00 am

Venue: 5C/1, KIADB Industrial Area, Attibele, Bangalore, 562107, Karnataka

Board of Directors

Shravan Sharma, Chairman

Ganesh Vaidyanathan (Up to 19th March, 2016)

Javed Ahmad

Nikhil Pathak (Up to 1st March, 2016)

Pankaj Sharma (Uo to 14th March, 2016)

Rachna Mukherjee

S. Venkatraman, Managing Director

Sugata Sircar

V. S Vasudevan

Main Bankers

Citi Bank NA, No.5, 2nd Floor, M G Road,Bangalore – 560 001

Company Secretary

Vighneshwar G Bhat

Chief Financial Oficer Damodar Kalavala

Registered Ofice5C/1, KIADB Industrial Area, Attibele, Bangalore 562107 Karnataka

Auditors

Messrs. S.R. Batliboi & Associates LLPUB City, Canberra Block,12th & 13th FloorNo. 24, Vittal Mallya Road,Bangalore-560001

Registrar & Transfer Agent

Universal Capital Securities Pvt. Ltd.,#21, Shakil Nivas, Mahakali Caves Road,Andheri (E), Mumbai 400093 Tel.: (022) 2836 6620, 2826 2920

Correspondent Address

Mr. Vighneshwar G Bhat Company Secretary C/o Schneider Electric President Systems Limited5C/1, KIADB Industrial Area, Attibele, Bangalore, 562107, KarnatakaTel. No. 91 080 43333058Fax: (080) 27820333Email : [email protected]

1Schneider Electric President Systems Limited(Formerly APW President Systems Limited)


FINANCIAL STATISTICS(` in Lakhs)

Particulars 31.03.2016 31.03.2015 31.03.2014 31.03.2013 31.03.2012

Sale of Products 19,468.56 15,695.70 15,692.66 10,375.58 9,705.70

Sale of Services 505.63 573.85 645.77 550.26 193.70

Other Operating Income 183.07 256.54 192.20 105.47 135.14

Other Income 69.71 55.15 15.86 62.37 45.37

Total Income 20,226.97 16,581.24 16,546.49 11,093.68 10,079.91

EBITDA 1,650.83 383.85 171.80 219.87 (158.89)

Financial Expenses (Net) 317.93 254.58 233.14 233.56 224.89

Depreciation 518.90 501.10 420.58 414.06 489.73

(Loss)/Proit before Taxation 814.00 (371.83) (481.92) (427.75) (873.51)

(Loss)/Proit after Taxation 638.72 (371.83) (481.92) (332.95) (577.92)

Dividend Payout - - - - -

Corporate Tax on Dividend - - - - -

Retained earnings 638.72 (371.83) (481.92) (332.95) (577.92)

Dividend (%) - - - - -

Earning per Share 10.56 (6.15) (7.97) (5.51) (9.56)

Particulars 31.03.2016 31.03.2015 31.03.2014 31.03.2013 31.03.2012

Equity and Liabilities

Share Capital 604.80 604.80 604.80 604.80 604.80

Reserves & Surplus 3,127.83 2,489.11 2,972.26 3,454.19 3,787.14

Total Shareholder's Funds 3,732.63 3,093.91 3,577.06 4,058.99 4,391.94

Non Current Liabilities

Long-term borrowings 2,099.36 1,999.70 1,503.60 1,507.10 1,049.21

Deferred tax liability (net) - - - - 94.80

Other long-term liabilities - 4.99 9.47 27.93 88.09

Long-term provisions 191.09 156.58 229.80 190.02 131.38

2,290.45 2,161.27 1,742.87 1,725.05 1,363.48

Current Liabilities

Short-term borrowings 1,201.34 798.21 1,586.20 281.72 679.82

Trade Payables 4,022.86 5,745.78 4,419.60 3,117.64 1,821.68

Other current liabilities 1,217.99 973.85 820.19 644.76 641.57

Short-term provisions 243.87 183.48 146.82 158.10 159.91

6,686.06 7,701.32 6,972.81 4,202.22 3,302.98

Total 12,709.14 12,956.50 12,292.74 9,986.26 9,058.40

Non Current Assets

Fixed assets

Tangible assets 3,829.15 3,747.50 3,856.57 4,012.83 4,160.08

Intangible assets 92.5 141.96 179.54 51.89 77.26

Capital work-in-progress 104.91 127.46 66.13 31.79 13.52

Non-current investments - - - - -

Long-term loans and advances 626.23 639.43 464.70 751.19 107.65

Other Non current assets 1.96 1.81 1.65 - -

4,654.75 4,658.16 4,568.59 4,847.70 4,358.51

Current assets

Inventories 2,517.50 2,856.88 2,247.21 1,417.51 1,045.96

Trade receivables 4,208.37 4,186.07 4,494.74 2,699.36 2,312.23

Cash and bank balances 398.71 171.50 68.20 71.51 318.38

Short-term loans and advances 906.15 1,058.57 862.15 689.41 1,023.06

Other current assets 23.66 25.32 51.85 260.77 0.26

8,054.39 8,298.34 7,724.15 5,138.56 4,699.89

Total 12,709.14 12,956.50 12,292.74 9,986.26 9,058.40

Statement of Accounting Ratios of the Company

Particulars 31.03.2016 31.03.2015 31.03.2014 31.03.2013 31.03.2012

EBIDTA `* 1,650.83 383.85 175.09 224.24 -158.89

EBIDTA % to Net Product Sales 8.48 2.45 1.12 2.16 -1.64

Return on Net Worth (%) 17.11 -12.02 -13.47 -8.20 -13.16

Net Asset Value per share 61.72 51.16 59.14 67.11 72.62

*Includes interest income



SCHNEIDER ELECTRIC PRESIDENT SYSTEMS LIMITEDRegd. Ofice: 5C/1, KIADB Industrial Area, Attibele, Bangalore -562107. CIN: L32109KA1984PLC079103

Phone:(080) 33437104, (080) 43333058 Fax: (080) 27820333 Website: www.schneiderelectricpresident.com e-mail: [email protected]

NOTICE

NOTICE is hereby given that the Thirty Second Annual General Meeting of the Members of Schneider Electric President Systems Limited will be held on Thursday, 29th September, 2016 at 11.00 a.m. at 5C/1, KIADB Industrial Area, Attibele, Bangalore- 562107, Karnataka, to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Financial Statements of the Company for the inancial year ended 31st March, 2016 and

the Reports of the Directors and the Auditors thereon.

2. To appoint a Director in place of Mr. Sugata Sircar (holding DIN No: 01119161) who retires by rotation and being eligible, offers himself for re-appointment.

3. To appoint Messrs S. R. Batliboi & Associates LLP, Chartered Accountants, (Reg. No. 101049W /E300004) as Auditors of the Company to hold ofice from the conclusion of this Annual General Meeting upto the conclusion of the Thirty Seventh Annual General Meeting of the Company subject to ratiication by the shareholders annually, and to authorise the Board of Directors of the Company to ix their remuneration.

SPECIAL BUSINESS

4. To consider, and if thought it, to pass with or without modiication(s), the following Resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Section 148 and other applicable provisions of the Companies Act, 2013 and

the Companies (Audit and Auditors) Rules 2014, the remuneration payable to M/s. Rao Murthy & Associates, Cost Accountants, (ICWA Registration No. 000065), who were appointed as the Cost Auditors of the Company by the Board of Directors, for conduct of the audit of the cost records of the Company for the inancial year 2016-17 at a remuneration of ` 1,10,000 (Rupees one lakh ten thousand only) plus applicable taxes and out-of-pocket expenses, be and is hereby ratiied and conirmed.”

5. To consider, and if thought it, to pass with or without modiication(s) the following Resolution as a Special Resolution: “RESOLVED THAT in accordance with the provisions of Section 67 and other applicable provisions of the Companies Act, 2013 and

the rules, regulations, circulars, guidelines prescribed by any other authority, from time to time, to the extent applicable, approval of the Shareholders be and is hereby accorded to participate in the Worldwide Employee Share Ownership Plan (WESOP) Scheme

(the Scheme) of the Ultimate Holding Company, Schneider Electric SE, France and to ratify the inancial assistance provided by the Company pursuant to the Scheme to the employees of the Company during the year 2015-16.

RESOLVED FURTHER THAT the Board be and is hereby authorized to make modiication(s), suspend, withdraw or revive the Scheme as suggested by Schneider Electric SE, France, from time to time, and to approve, support by means of inancial assistance or any other kind of support for the beneit of such person(s) who are/will be in the employment of the Company including Managing Director, Whole-time Director(s), Executive Director(s), Key Managerial Personnel of the Company and to approve such number of shares and at such price, in such manner, during such period in one or more tranches as it may deem it under the Scheme.

RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or any of its powers to any Committee of Directors of the Company or to any oficer of the Company to give effect to this Resolution and to do all such acts, deeds, matters and things as it may in its absolute discretion deem necessary and to settle any question, dificulty or doubt, whatsoever, as may arise with respect to the Scheme.”

6. To consider, and if thought it, to pass with or without modiication(s) the following Resolution as a Special Resolution: “RESOLVED THAT pursuant to the provisions of Section 188 and other applicable provisions if any, of the Companies Act,

2013 and the Rules framed thereunder including any amendment, modiication, variation or re-enactment thereof, consent of the Members of the Company be and is hereby accorded to the Board of Directors of the Company to enter into the transactions for sale, purchase of goods, materials, equipment and rendering/availing/sharing service to / from Schneider Electric Logistics Asia Pte.

Ltd., Singapore a related party, subject to a maximum aggregate transactions value of ` 50 crores (Rupees Fifty crores only) in any

inancial year with the said related party. RESOLVED FURTHER THAT the Board of Directors and/ or any of the Key Managerial Personnel of the Company be and is/ are

hereby authorized jointly and/or severally to do all acts, deeds and things that may be necessary, proper, expedient or incidental for the purpose of giving effect to this Resolution.”

Vighneshwar G Bhat

Company Secretary

ACS: 16651

Address: No. 14, Sapthagiri Nilaya, 6th Cross,

Kavery Layout, G. M. Palya, New Tippasandra, Bangalore-560075, Karnataka

By Order of the Board

For Schneider Electric President Systems Limited

Place : Bangalore

Date : 9th August, 2016

Registered Ofice : 5C/1, KIADB Industrial Area, Attibele, Bangalore - 562107



Notes:

a. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING, IS ENTITLED TO APPOINT ONE OR MORE PROXIES TO

ATTEND AND VOTE ON A POLL ONLY INSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER OF

THE COMPANY.

A proxy form duly completed and stamped, must reach the Registered Ofice of the Company not less than 48 hours before the time for holding the aforesaid Meeting. A person can act as proxy on behalf of members not exceeding ifty (50) and holding in the aggregate not more than ten percent of the total share capital of the Company.

Provided that a member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as proxy for any other person or shareholder.

Proxies submitted on behalf of the companies, societies etc., must be supported by an appropriate resolution/authority, as applicable.b. The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, setting out material facts relating to the business

at items 4 to 6 of the Notice as set out above, is annexed hereto.c. The Register of Members and Share Transfer Books of the Company will remain closed from Friday, 23rd September, 2016 to

Thursday, 29th September, 2016 (both days inclusive).d. The Register of Directors and Key Managerial Personnel and their Shareholding and Register of Contracts or Arrangements in

which Directors are interested, will be available for inspection by the members at the Annual General Meeting.e. Pursuant to the provisions of Section 124 of the Companies Act, 2013 (corresponding Section 205A of the Companies Act,1956),

unclaimed dividend for the inancial year ended 31st March, 2008 was transferred to the Investors Education and Protection Fund (IEPF) established by the Central Government.

f. Members are requested to intimate immediately change of address, if any, to the Company’s Registrar and Transfer Agents or Depository Participant, as the case may be.

g. Members are requested to bring their copy of the Annual Report to the Annual General Meeting. Members/ Proxies should bring the Attendance Slip to the Meeting duly illed in, for attending the Meeting.

h. Members, who hold shares under more than one folio in name(s) in the same order, are requested to send the related Share Certiicate(s) to the Company’s Registrar and Transfer Agents for consolidating the holdings into one account. The Share Certiicate(s) will be returned after consolidation.

i. Pursuant to Section 72 of the Companies Act, 2013, Members who hold shares in the physical form can nominate a person in respect of all the shares held by them singly or jointly. Members who hold shares in single name are advised, in their own interest, to avail of the nomination facility. Members holding shares in the dematerialized form may contact their Depository Participant for recording the nomination in respect of their holdings.

j. All documents, transfers, dematerialization requests and other communications in relation thereto may be addressed to the Company’s Registrar & Share Transfer Agents, at the address mentioned below:

Universal Capital Securities Private Limited

21, Shakil Nivas, Mahakali Caves Road, Andheri (E) Mumbai 400 093 Telephone: +91-22-28207203-05 Fax : +91- 22-28207207 E-mail: [email protected] Contact Person: Mr. Rajesh Karlekar/ Mr. Ravi Utekar k. Details in respect of the Director seeking re-appointment at the Annual General Meeting, forms integral part of the Notice. The

Director has furnished the requisite declarations for his re-appointment.l. Electronic copy of the Annual Report for the year 2015-16 is being sent to all the members whose email IDs are registered with the

Company/Depository Participants(s) for communication purposes unless any member has requested for a hard copy of the same. For members who have not registered their email address, physical copies of the Annual Report for the year 2015-16 is being sent to them in the permitted mode.

Members may also note that the Notice of the Annual General Meeting and the Annual Report for the year 2015-16 will also be available on the Company’s website www.schneiderelectricpresident.com and NSDL e-voting website for their download. The physical copies of the aforesaid documents will also be available at the Company’s Registered Ofice in Bangalore for inspection during normal business hours on working days. Even after registering for e-communication, members are entitled to receive such communication in physical form, upon making a request for the same, by post, free of cost. For any communication, the shareholders may also send requests to the Company Secretary at email id: [email protected]

m. Voting through electronic means: In compliance with provisions of Section 108 of the Companies Act, 2013 read with Companies (Management and Administration)

Rules, 2014, the Company is pleased to provide members facility to exercise their right to vote at the Annual General Meeting (AGM) by electronic means and the business may be transacted through e-Voting Services provided by National Securities Depository Limited (NSDL). A separate document containing e-Voting details is enclosed in this Annual Report.

n. All documents referred to in the accompanying Notice and the Explanatory Statement shall be open for inspection at the Registered Ofice of the Company during normal business hours (9.00 am to 5.00 pm) on all working days, up to and including the date of the Annual General Meeting of the Company.

EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

As required by Section 102 of the Companies Act, 2013 the following Explanatory Statement sets out all material facts relating to the business at Items 4 to 6 of the accompanying Notice.



Resolution No. 4

The Board on the recommendation of the Audit Committee, appointed M/s. Rao Murthy & Associates, Cost Accountants, (ICWA

Registration No. 000065) as Cost Auditors of the Company for the inancial year 2016-17. As per Rule 14 of Companies (Audit and Auditors) Rules 2014, the remuneration payable to the Cost Auditors has to be ratiied by

the Shareholders. It is proposed to pay a remuneration of ` 110,000./- + applicable taxes + out-of-pocket expenses at actual for the year 2016-17 to M/s. Rao Murthy & Associates.

None of the Directors, Key Managerial Personnel of the Company and their relatives are concerned or interested, inancial or otherwise, in this Resolution.

The Board of Directors recommend the Resolution for your approval and ratiication.

Resolution No. 5

Schneider Electric, at the group level has an Employee Stock Option Scheme called Worldwide Employee Share Ownership Plan

(WESOP) Scheme (the Scheme) whereby employees of the Schneider Group have the option to subscribe the shares of Schneider Electric SE, France (“SE France”) as employees of the group company.

The Scheme is available in 33 countries, covering approximately 1,30,000 employees of Schneider Electric. This evolution is due to Schneider Electric Group commitment to step up and to put an even greater part of our company in the hands of its employees so as to inculcate a sense of participation in the fortunes of the Company.

SE France is Ultimate Holding Company of your Company. Accordingly, employees of your Company are also entitled to subscribe shares of SE France.

Pursuant to Section 67 of the Companies Act, 2013, no public company shall give, whether directly or indirectly and whether by means of a loan, guarantee, the provision of security or otherwise, any inancial assistance for the purpose of, or in connection with, a purchase or subscription made or to be made, by any person of or for any shares in the company or in its holding company unless the same is approved by the Company through a special resolution.

Under the Scheme, since the employer makes a matching contribution up to a limit, the net gains to the employees are expected to be positive, subject to unforeseen circumstances. This scheme has been found to be very effective for retention of key talent and hence will beneit the Company.

The full scheme is available for inspection by the members at the Registered Ofice of the Company and on its website. None of the Directors except Mr. S. Venkatraman, Managing Director, Mr. Damodar Kalavala, Mr. Vighneshwar G Bhat, Key

Managerial Personnel of the Company and their relatives are concerned or interested, inancial or otherwise and do not have any conlict of interest in the Resolution.

The Board recommends the Resolution as set out in the accompanying Notice for your approval in the interest of the Company.

Resolution No. 6

The Audit Committee and the Board of Directors of the Company at the Board Meeting held on 9th August, 2016, approved the

enhancement of the limit of related party transactions with Schneider Electric Logistics Asia Pte. Ltd for Sale / Purchase of Goods, Materials, Equipments/ rendering/ availing/sharing of services from / to Schneider Electric Logistics Asia Pte. Ltd, a related party,

subject to a maximum aggregate transactions value of ̀ 50 crores (Rupees Fifty crores only) in a inancial year. The transactions with Schneider Electric Logistics Asia Pte. Ltd. Singapore as detailed below are estimated to be upto ` 50 crores (Rupees Fifty Crores

only) in a inancial year, which exceeds the 10% of the annual turnover of the Company as per the audited inancial statements as on

31st March, 2016. The said transactions are in the ordinary course of business of the Company and wherever required are on a cost plus appropriate mark-up in adherence with the arm’s length principle.

Other details as required as per the Companies (Meetings of Board and its Powers) Rules, 2014.

1. Name of the Related Party

Schneider Electric Logistics Asia Pte Ltd.,

2. Name of the Director or key managerial personnel who is related, if any

Nil

3. Nature of relationship

Fellow Subsidiary



4. Nature, material terms, monetary value and particulars of the contract or arrangement:

Nature Particulars of the contracts and the material terms Term of the Contracts Monetary value

Sale, Purchase of

goods, materials,

equipment and rendering/availing/

sharing service

For Sale / Purchase of Goods, Materials, Equipments

etc., :

On a cost plus mark-up basis:The Company shall pay to Schneider Electric Logistics

Asia Pte. Ltd., Singapore all relevant direct and indirect

costs (Including the overhead costs, other allocable costs and such other category of costs as mutually agreed to

by both the Parties) plus an appropriate mark-up up to 5% determined in adherence to the arm’s length principle in respect of purchase of Raw Materials. The Company shall charge all relevant direct and indirect costs (Including

the overhead costs, other allocable costs and such other category of costs as mutually agreed to by both the Parties) plus an appropriate mark up of up to 8% in respect of sale of goods to Schneider Electric Logistics Asia Pte. Ltd. The

mark-up shall be determined on a year to year basis.For rendering/ availing/sharing of services etc., :

On a cost plus mark-up basis:In consideration of the performance of services, the

Company shall pay to Schneider Electric Logistics Asia

Pte. Ltd a consideration determined based on cost plus mark up principle. Cost shall mean all direct and indirect costs incurred by Schneider Electric Logistics Asia Pte. Ltd in fulilling the provisions for each Project (including the overhead costs, other allocable costs and such other category of costs as mutually agreed to by both the Parties). The mark-up shall be up to 6% determined in adherence to the arm’s length principle. The Mark up shall be up to cost plus 16% in case the Company provides service to Schneider Electric Logistics Asia Pte. Ltd.

The mark-up shall be determined on a year to year basis.In case the goods are purchased for further trading, a

speciic method of mark-down will be followed. Mark-Down Method refers to the inter-company pricing model used by all Schneider Electric entities who act as routine sales and marketing entity. The goal of this pricing model is to provide the selling entity with a target proit of 3%.

The contracts with the said related party shall be in effect and shall continue unless terminated by either Party with a notice period of Three (3) months

Upto ` 50 crores

(Rupees Fifty crores

only) in aggregate, in

any inancial year

5. Any other information relevant or important for the members to take a decision on the proposed resolution.

None

The Board recommends the above item of the notice for approval of members.

By Order of the Board

For Schneider Electric President Systems Limited

Vighneshwar G Bhat

Company Secretary

ACS: 16651

Address: No. 14, Sapthagiri Nilaya, 6th Cross,

Kavery Layout, G. M. Palya, New Tippasandra, Bangalore-560075, Karnataka

Place : Bangalore


Registered Ofice : 5C/1, KIADB Industrial Area, Attibele, Bangalore - 562107



Details of Director seeking re-appointment in the forthcoming Annual General Meeting

Name of Director Mr. Sugata Sircar

Date of Birth 20/12/1963

Date of Appointment 13/11/2014

Qualiication FCA

Expertise in speciic functional area Expert in the Business Planning and Strategy, Business Analysis and Performance

Management, Risk Management, Processes and Controls and other areas in Finance.

List of Companies in which Directorship is held Schneider Electric Infrastructure Limited, Schneider Electric India Private Limited,

Schneider Electric Systems India Private Limited, Eurotherm India Private Limited

and Spreading Happiness Indiya Foundation

Chairman/Member of the Committee (s) of Board of Directors of Other Companies

Member of Audit Committee of Schneider Electric Infrastructure Limited

Committee Membership if any in Schneider Electric President Systems Limited

Member of Audit Committee, CSR Committee, Stakeholders’ Relationship Committee and Risk Management Committee

No. of Shares held in the Company Nil

Route Map to the Venue of the Annual General Meeting:



DIRECTORS REPORT

The Members,

SCHNEIDER ELECTRIC PRESIDENT SYSTEMS LIMITED

Your Directors take pleasure in presenting the Thirty Second Annual Report together with audited accounts for the year ended 31st March, 2016.

1. Financial details

2. Dividend

In view of low proit during the year, your Directors have not recommended any dividend for the year.

3. Performance

The Net Revenues (net of duties and taxes) during the year were ̀ 20,227 lakhs as against ̀ 16,581 lakhs in the previous year. Net Sales Turnover increased by 22% over the previous year.During the year, there was increase in employee costs of ` 65 lakhs over previous year due to merit increase during the year.Casual Labour cost was ` 667 lakhs as against ` 555 lakhs in previous year due to increase in sales volume. Power and fuel costs was ` 418 lakhs as against ` 384 lakhs in previous year due to tariff revision by Karnataka Electricity department. Legal and professional expenses were increased to ` 534 lakhs as against ` 442 lakhs in previous year. Advertising and sales promotion expenses increased to ` 91 Lakhs as against ` 30 lakhs in previous year. Loss on account of foreign exchange luctuations (net) increased to ` 50 lakhs as against income of ̀ 45 lakhs in previous year. Improved business scenario and effective plant utilization resulted in to increase in EBIDTA of ` 1,651 lakhs as against EBIDTA of ` 384 lakhs in the previous year.Revenue from processing at Zinc Plant decreased to ` 337 lakhs against ` 495 lakhs in previous year. Also revenue from services like Commissioning and Installation increased to ` 86 lakhs from ` 33 lakhs in previous year.

4. Directors and Key Managerial Personnel

Mr. Sugata Sircar, Director is liable to retire by rotation and being eligible and offers himself for re-appointment. Mr. Nikhil Pathak, Mr. Pankaj Sharma, Directors and Mr. Ganesh Vaidyanathan Independent Director have resigned from the Board effective 1st March, 2016, 14th March 2016 and 19th March, 2016 respectively.

The following were Key Managerial Personnel during the year:1) Mr. Swaminathan Venkatraman, Managing Director2) Mr. Vighneshwar G Bhat, Company Secretary3) Mr. Neeraj Garg, Chief Financial Oficer (Up to 14th May, 2015)

4) Mr. Damodar Kalavala, Chief Financial Oficer (From 21st May, 2015)

5. Auditors

The members of the Company, by passing a resolution at the Thirtieth Annual General Meeting of the Company, had appointed M/s. S. R. Batliboi & Associates LLP, Chartered Accountants (Reg. No. 101049W/E300004) as the Statutory Auditors of the Company till the conclusion of Thirty Second Annual General Meeting subject to yearly ratiication by the Shareholders. Their appointment will

` in Lakhs

Particulars 31.03.2016 31.03.2015

Gross Revenue from Operations 21,539.54 17,389.41

Net Revenue 20,226.97 16,581.24

Earning before interest and Depreciation (EBITDA) 1,650.83 383.85

Less: Interest 317.93 254.58

Depreciation 518.90 501.10

Proit / (Loss) before Tax 814.00 (371.83)

Less: Provision for Tax 175.28 --

Less: Deferred Tax Liability -- --

Proit After Tax 638.72 (371.83)

Add: Balance brought forward 1,230.50 1,713.64

Less: Adjustment on account of depreciation -- (111.32)

Proit available for distribution 1,869.21 1,230.49

Appropriation -- --

Total Balance carried forward 1,869.21 1,230.49



be ceased from the conclusion of the ensuing Annual General Meeting. Considering they are eligible for a term of another 5 years, the Board at its Meeting held on 30th May, 2016 approved the appointment for a further period of ive years i.e. from the conclusion of Thirty Second Annual General Meeting till the conclusion of Thirty Seventh Annual General Meeting. The Statutory Auditors have conirmed their eligibility and the Board proposed to re-appoint them for a further period of 5 years. The Board on the recommendation of the Audit Committee, has appointed M/s. Rao, Murthy & Associates, Cost Accountants as Cost

Auditors of the Company for the Financial Year 2016-17.

6. Deposits

The Company has neither accepted nor renewed any deposits from public within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year under review.

7. Subsidiary Companies

Your Company has no Subsidiary Company.

8. Technical Knowhow

The Company is fully capable of evolving its own designs as well providing the support required for the operations of the Company.

9. Conservation of Energy etc.

Information as per the Companies (Disclosure of particulars in the Report of Board of Directors) Rules 2014 relating to conservation of

energy, technology absorption, foreign exchange earnings and outgo are given in Annexure ‘I’ forming part of this report.

10. Secretarial Audit

Secretarial audit report as provided by M/s. Nesar & Associates, Practicing Company Secretaries is annexed to this Report as Annexure II.

11. Reserves

` 638.72 lakhs was transferred to General Reserves for the year ended 31st March, 2016.

12. Share Capital

The paid up Equity Share Capital of the Company as on 31st March 2016 was ` 60,480,000. During the year under review, there has been no change in the Equity Share Capital of the Company.

13. Board Meetings

The Board of Directors met four (4) times (21st May 2015, 6th August 2015, 5th November 2015 and 9th February 2016) during this inancial year.

14. Declaration from Independent Directors on Annual Basis

The Company has received necessary declaration from all Independent Directors of the Company under Section 149(7) of the Companies

Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6). The Board has duly taken note of the same.

15. Composition of the Committees

Composition of the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee are given below :

(A) Audit Committee

Audit Committee of the Company comprises three Directors. Out of three Directors, two are Independent Directors. The composition of the Audit Committee during the year was as under:

Mr. Shravan Sharma Chairman - Independent Director

Mr. Ganesh Vaidyanathan Member - Independent Director (Up to 9th February, 2016)Mr. V. S. Vasudevan Member - Independent Director (From 9th February, 2016)Mr. Sugata Sircar Member

Mr. Vighneshwar G Bhat is Secretary to the Committee.Required Executives of the Company, The Internal Auditor, representatives of the Statutory Auditors and Cost Auditors are invitees to the relevant meetings of the Audit Committee. The Managing Director is the permanent invitee to the Audit Committee Meetings.

The terms of reference and powers of the Audit Committee include overseeing the Company’s inancial reporting process and the disclosure of its inancial information, reviewing with the management the inancial statements and the adequacy of the internal audit function and to discuss signiicant internal audit indings, reviewing reasons for the substantial defaults in the payment to depositors, shareholders and creditors if any and review the function of the Whistle Blower Mechanism.

The Audit Committee acts as a link between the management, external and Internal Auditors and the Board of Directors.

(B) Nomination and Remuneration Committee

The Nomination and Remuneration Committee of the Company comprises of following three Non Executive Directors.



Mr. V. S. Vasudevan Chairman - Independent Director

Mr. Shravan Sharma Member - Independent DirectorMr. Ganesh Vaidyanathan Member - Independent Director (Up to 19th March, 2016)

Ms. Rachna Mukherjee Member (Effective 30th May, 2016)

(C) Stakeholders Relationship Committee

The Board of Directors have constituted Stakeholders Relationship Committee pursuant to Section 179 of the Companies Act, 2013, which is responsible for all matters concerning the share transfers, transmissions, issue of duplicate share certiicates and attending to the grievances of the shareholders.

The composition of the Committee is as under:

Name of the Director Designation on the Committee

Mr. Ganesh Vaidyanathan Chairman - Independent Director (Up to 19th March, 2016)

Mr. Shravan Sharma Chairman - Independent Director (Effective 30th May, 2016)

Mr. Sugata Sircar Member (Effective 30th May, 2016)

Mr. S. Venkatraman Member (Effective 30th May, 2016)

(D) Risk Management Committee

As a proactive measure, the Board has constituted the Risk Management Committee.

Composition of the Committee is as under:

Name of the Director Designation on the Committee

Mr. Shravan Sharma Chairman- Independent Director

Mr. Nikhil Pathak Member (Up to 1st March, 2016)

Mr. S. Venkatraman MemberMr. Sugata Sircar Member (Effective 30th May, 2016)

16. Extract of the Annual ReturnAs required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return for the inancial year ended March 31, 2016 in MGT 9 is attached as Annexure III to the Report.

17. Composition of the Corporate Social Responsibility Committee is as under

Mr. V. S. Vasudevan Chairman- Independent Director

Mr. Sugata Sircar MemberMr. S. Venkatraman Member

18. Related Party Transactions

The Company has formulated a policy on Related Party Transaction and also on dealing with the Material Related Party Transactions. The Policy has been put up on the website of the Company. All transactions entered into with the Related Parties were as per the RPT Policy adopted by the Company.

19. Annual Evaluation of the Board and Committees

Pursuant to the provisions of the Companies Act, 2013, during the year, the Board adopted a mechanism for evaluating the performance as

well as that of its Committees and individual Directors including the Chairman of the Board. The Board has carried out an annual performance evaluation of its own performance and that of its statutory committees viz. Audit Committee, Stakeholder Relationship Committee, Nomination and Remuneration Committee and that of the individual directors.

20. Remuneration to Directors

We conirm that the remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

21. Particulars of Employees

The Information as per Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report. However, as per the provisions of Section 136 of the Act, the report and accounts are being sent to the Members and others entitled thereto, excluding the information on employees’ particulars which is available for inspection by the Members at the Registered Ofice of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

22. Directors’ Responsibility Statement

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, the Directors hereby conirm that :



(a) in the preparation of the annual accounts for the year ended 31st March 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the inancial year and of the proit and loss of the company as at 31st March, 2016;

(c) the directors have taken proper and suficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts on a going concern basis; (e) the directors, have laid down internal inancial controls to be followed by the Company and that such internal inancial controls are

adequate and are operating effectively; and(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems

are adequate and operating effectively.

23. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal ) Act, 2013Pursuant to the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rules amended upto date, the Company has constituted Internal Complaints Committee(s) at its Ofice at 5C/1, KIADB Industrial Area, Attibele, Bangalore - 562107 and other places where the Ofices of the Company are located. The Committees have been given the responsibility to address the complaint received, if any. The Company has also taken certain steps to create awareness about familiarization to the said policy. There was no instance of alleged sexual harassment reported during the year under review.

24. Internal Audit

The in-house internal audit department is an independent unit, responsible to provide reasonable assurance with regard to the effectiveness and adequacy of internal control system and processes. The in-house internal audit department, along with third party audit irms, provides audit assurance on the end-to-end spectrum of the area/processes of the Company. It also adds value for improvement of the Company

processes through a systematic disciplined approach from inception, through ieldwork, to inal reporting streamlined to it in the COSO framework to improve the effectiveness of risk management, control and governance processes.

The audit plan for the year is based on business risk and Internal Control assessment which is approved by the Audit Committee and Board of Directors of the Company. The Company has set up a robust risk management and Internal Control assessment framework across the organization which facilitates identiication, assessment, communication and management of risk in effective manner.

As per the requirement of Companies Act 2013, for the frame work for internal control on inancial reporting, the Company has developed Risk and Control Matrix (RCMs). Post-diagnostic review of the Company’s processes and testing are also completed in compliance with requirements of ICFR guidelines.

25. Particulars of Loans, Guarantees or Investments

The details of Loans, Guarantees and Investments are given in the Schedule and Notes to the Financial Statements.

26. Material Changes and Comments affecting the Financial Position of the Company after 31st March, 2016

No material changes and commitments affecting the inancial position of the Company occurred between the end of the inancial year, to which this inancial statement relate and the date of this Report.

27. Details of signiicant and Material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company’s Operation in future

There was no signiicant and material order passed by any regulator or court or tribunal impacting the going concern status of the company and its future operations.

28. Vigil Mechanism/Whistle Blower PolicyPursuant to the provisions of Section 177 of the Companies Act, 2013 read with the Rules made thereunder, the Company has formulated and implemented Vigil Mechanism for disclosing of any unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct and other improper practice or wrongful conduct by employees or directors of the company.

During the year under review, the Company has not received any complaints relating to unethical behaviour, actual or suspected fraud or violation of Company’s code of conduct from any employee or directors.

29. Risk Management Policy

As a proactive measure, the Company has put in place the Risk Minimization and Assessment procedures. The Objective of any risk identiication and assessment process is to evaluate the combination of likelihood and level of negative impacts from and event. The three main components of a risk assessment are business risk, service /operational risk and external risk. The Company manages the risk in line with current risk management best practices. This facilitates the achievement of our objectives, operational effectiveness and protection of people and assets, informed decision-making and compliance with applicable laws and regulations.

30. Buy back of Securities

The Company has not bought back any of its securities during the year under review.



31. Sweat Equity

The Company has not issued any Sweat Equity Shares during the year under review.

32. Bonus Shares

No Bonus shares were issued during the year under review.

33. Status Report-Equity Shares of the Company

The Listing Agreement was entered into by the Company with the erstwhile Regional Stock Exchanges- Bangalore Stock Exchange and the Pune Stock Exchange. Consequent to the listing on the Regional Stock Exchanges, the equity shares of the Company were traded on the Bombay Stock Exchange under the “Permitted to Trade” category till 21st May 2015.

Securities and Exchange Board of India (SEBI) de-recognized the Bangalore Stock Exchange and Pune Stock Exchange vide its orders dated December 26, 2014 and April 13, 2015 respectively.

Consequent to de-recognition of Pune Stock Exchange, the Bombay Stock Exchange issued a notiication on 18th May, 2015 stating that the

shares of the Company are suspended for trading with effect from 22nd May, 2015.

As per SEBI circular dated May 22, 2014, it was the responsibility of the de-recognized exchange to place companies like ours (which were listed at the regional Stock Exchange only) on the Dissemination Board.

As required under SEBI Circulars dated 17th April, 2015, Pune Stock Exchange did not put the Company on the Dissemination Board of National Stock Exchange(NSE) in spite of continuous follow up by the Company with them.

In the absence of relevant provisions from SEBI in this regard, as a pro active measure and to address the concerns of the minority shareholders, the Company has submitted a letter dated July 07, 2015 to SEBI to seek its guidance/clariication on the way forward with a copy to the erstwhile Pune and Bangalore Stock Exchanges .

SEBI vide its letter dated August 21, 2015 advised the Pune Stock Exchange to ensure compliance with regard to moving the Company to the Dissemination Board of NSE.

The Company vide letters dated October 7, 2015, 17th December, 2015 and July 8th 2016 submitted further representations to SEBI to seek its guidance/clariication on the way forward.

Finally, the Company’s shares were moved to the Dissemination Board of NSE effective 25th July, 2016. Till date, the Company has not received any guidance/clariication from SEBI, on the way forward.

34. Code of conduct and ethics

The Company has adopted a Code of Conduct and Ethics for the Directors and Senior Executives of the Company. The objective of the code is to conduct the Company’s business ethically and with responsibility, integrity, fairness, transparency and honesty. The Code sets out a broad policy for one’s conduct in dealing with the Company, fellow Directors and Employees and with the environment in which the Company operates. The code is available on the Company’s website.

35. Acknowledgement

Your Directors would like to thank all stakeholders, namely, customers, shareholders, dealers, suppliers, bankers, employees and all other business associates for the continuous support given by them to the Company and its Management.

For and on Behalf of the Board

Shravan Sharma

Chairman

Place : BangaloreDate : 9th August, 2016



Annexure I

A. Conservation of Energy:

1. The Company’s Production activity is not energy intensive. However, all measures are being taken for optimizing energy usage.2. Additional investments and proposals for reduction in consumption of energy-Nil.

3. Total energy consumption is 28,05,554.53 KWH. Consumption per unit data cannot be provided as the products are not of a standardized nature.

B. Technology Absorption

I. Research & Development

1. Speciic areas in which R & D Carried by the Company

This is an ongoing process in the Company.

2. Beneits derived as a result of the above R & D Improving quality and product reliability keeping to the international market demands.3. Future plan of action Development of new products to improve product range and products application for

other ields.4. Expenditure on R & D

a) Capital

b) Recurring

Development work on products is continuous and is debited to Proit & Loss Account under respective heads therein.

II. Technology Absorption

1. Efforts made towards technology absorption The Company has in house R & D facilities, in which new product development and improvements in processes are carried out.

2. Beneits derived due to above All products are designed in-house. Prototypes are then developed and tested

before introducing these products into the manufacturing range. The process of manufacturing established is based on the product features.

C. Foreign Exchange Earnings & Outgo

Sr. No. Particulars 31.03.2016

`

31.03.2015

`

1. Foreign Exchange earneda) Export of goods on FOB basisb) Sale of Services

331,298,731

600,131

251,813,272

--

2. Foreign Exchange outgo :

a) Import of Capital Goods

b) Import of Raw Materials & Components

c) Import of Traded Goods

d) Legal and Professional Fees

e) Staff Welfare Expenses-Others

f) Freight and forwarding charges

g) Repairs and Maintenance –Others

h) Travelling and Conveyance

i) Miscellaneous

20,486,341

195,953,845

30,902,108

26,327,866

2,040,534

552,539

139,189

--

282,280

321,254

173,322,287

16,297,795

30,617,465

9,567,854

--

1,062,737

196,444

--


Shravan Sharma

Chairman

Place : BangaloreDate : 9th August, 2016



ANNEXURE II

FORM NO. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2016

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies

(Appointment and Remuneration Personnel) Rules, 2014]

NESAR & Associates “SANKALP” Tel.:(011)-29536312, 29536642Company Secretaries C-227, Ground Floor Tele-Fax: (011)-29536642 Paryavaran Complex Mobile No. 98181 56340 New Delhi - 110 030 Email: [email protected]

To,

The Members

Schneider Electric President Systems Limited

Bangalore

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Schneider Electric President Systems Limited. Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on our veriication of the Schneider Electric President Systems Limited books, papers, minute, books, forms and returns iled and other records maintained by the company and also the information provided by the Company, its oficers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the company has, during the audit period covering the inancial year ended on 31st March, 2016 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minute books, forms and returns iled and other records maintained by Schneider Electric President Systems Limited (the Company) for the inancial year ended on 31st March, 2016 according to the provisions of:

i. The Companies Act, 2013 and the rules made thereunder (the Act); ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; iii. The Depositories Act, 1996, the rules & the regulations and Bye-laws framed thereunder; iv. The Foreign Exchange Management Act, 1999, the rules and regulations read with guidelines, master circulars and press note

made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’);

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;d. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)

Guidelines, 1999;e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding

the Companies Act and dealing with client;g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; andh. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

vi. Other laws speciically applicable to the company during the year under review which are enumerated hereunder:1. Factories Act 1948, the Karnataka Factories Rules, 1969 and the Maharashtra Factories Rules, 1963 with respect to factory

situated at:a. Bangalore Works, Unit-I, Plot 5C/1, KIADB Industrial Area, Attibele, Bangalore-562 107, Karnataka, Indiab. Bangalore Works, Unit-II, Plot 6A, KIADB Industrial Area, Attibele, Bangalore-562 107, Karnataka, Indiac. S-73 & S-74, MIDC Bhosari, Pune – 411026, Maharashtra, India

2. Shops and Commercial Establishments Act, 1958 read with Shops and Commercial Establishments Rules with respect to corporate ofice situated at:a. 4th Floor, Electra Wing ‘A’, Exora Business Park, Marathahli, Sarjapur Outer Ring Road, Bangalore- 560103 b. D.No. 1-8-271, # 401, Ashoka Bhoopal Chambers, SP Road, Secundrabad- 500003 c. 9th Floor, DLF Building No. 10, Tower C, DLF Cyber City, Phase II, Gurgaon- 122002d. IInd Floor, R.B Business Center, ABobe Dass Electronics, Sangvi Nagar, Aundh, Pune- 411007e. BP-4, Technolpolis Building, 3rd Floor, Salt Lake, Sector V, Kolkata- 700091



f. Sales Ofice, # 172, Poonamallee Bypass Road, Poonamallee, Chennai- 600056g. Marwah House, 2nd Floor, Krishanlal Marwah Marg, Andheri East, Mumbai

3. The Contract Labour (Regulation & Abolition) Act - 1970 and the Karnataka Rules 1974 and the Maharashtra Rules 1971 with respect to factory situated at:a. Bangalore Works, Unit-I, Plot 5C/1, KIADB Industrial Area, Attibele, Bangalore-562 107, Karnataka, Indiab. Bangalore Works, Unit-II, Plot 6A, KIADB Industrial Area, Attibele, Bangalore-562 107, Karnataka, Indiac. S-73 & S-74, MIDC Bhosari, Pune – 411026, Maharashtra, India

4. The Equal Remuneration Act 1976 and rules framed thereunder5. The Maternity beneit Act 1961, Karnataka Maternity Beneit Rules 1966 and Maharashtra Maternity Beneit Rules 19656. The Minimum wages Act 1948, Karnataka Minimum wages Rules 1958 and Maharashtra Minimum wages Rules 19637. The Payment of wages Act 1936, Karnataka Payment of Wages Rules 1958 and Maharashtra Payment of Wages Rules 19638. Employees Compensation Act, 1923 read with State Workmen’s Compensation Rules, 1924 and Workmen’s Compensation

Returns, 1963

9. The Karnataka and Maharashtra Industrial Establishments (National & Festival Holidays) Act 1963 & Rules 1964

10. The Payment of Wages Act, 1936 and Bombay and Karnataka Payment of Wages Rules 196311. The Payment of Gratuity Act 1972 and Central Rules 1972 framed thereunder12. The Karnataka Labour Welfare fund Act 1965 & Rules 1968 and Maharashtra Labour Welfare fund Act 1961 and rules made

thereunder

13. The Karnataka and Maharashtra Industrial Employment (Standing Orders) Act - 1946 and respective rules made thereunder14. The Payment of Bonus Act 1965 and rules framed thereunder

15. The Employment Exchanges (Compulsory Notiication of Vacancies) Act 1959 and rules framed thereunder16. The Employees' Provident Funds and Miscellaneous Provisions Act – 1952

17. The Employees' State Insurance Act, 1948

18. The Karnataka and Maharashtra Tax on Professions Trades, Callings and Employment Act, 197619. Apprenticeship Act 1961

20. Workmen Compensation Act, 192321. Industrial Dispute Act, 1947

22. Employees Liability Act, 193823. Child Labour (Prohibition and Regulation) Act 198624. The Indian Electricity Act 1910 (Amended 2003) read with The Indian Electricity Rules-1956(Amended 2002)25. The Petroleum Act 1934 read with The Petroleum Rules 2002 to the extent applicable to the Company26. The Environmental (Protection) Act 1986 (Amended 1991) read with Environment (Protection) Rules 1986 (Amended 2006)27. Industrial Employment (Standing Orders) Act, 1946 read with State Industrial Employment (Standing Orders) Rules28. The Air (Prevention & Control of Pollution) Act – 1981(Amended – 1987) read with The Air (Prevention & Control of Pollution)

Rules – 1982 with respect to factory situated at:a. Bangalore Works, Unit-I, Plot 5C/1, KIADB Industrial Area, Attibele, Bangalore-562 107, Karnataka, Indiab. Bangalore Works, Unit-II, Plot 6A, KIADB Industrial Area, Attibele, Bangalore-562 107, Karnataka, Indiac. S-73 & S-74, MIDC Bhosari, Pune – 411026, Maharashtra, India

29. The Water (Prevention & Control of Pollution) Act – 1974(Amended – 1988) read with The Water (Prevention & Control of Pollution) Rules – 1975 with respect to factory situated at:a. Bangalore Works, Unit-I, Plot 5C/1, KIADB Industrial Area, Attibele, Bangalore-562 107, Karnataka, Indiab. Bangalore Works, Unit-II, Plot 6A, KIADB Industrial Area, Attibele, Bangalore-562 107, Karnataka, Indiac. S-73 & S-74, MIDC Bhosari, Pune – 411026, Maharashtra, India

30. The Water (Prevention & Control of Pollution) Cess Act – 1977(Amended – 2003)

31. The Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008 (Amended 2010) read with Terms and conditions for Handling Hazardous Waste with respect to factory situated at:a. Bangalore Works, Unit-I, Plot 5C/1, KIADB Industrial Area, Attibele, Bangalore-562 107, Karnataka, Indiab. Bangalore Works, Unit-II, Plot 6A, KIADB Industrial Area, Attibele, Bangalore-562 107, Karnataka, Indiac. S-73 & S-74, MIDC Bhosari, Pune – 411026, Maharashtra, India

32. The Noise Pollution (Regulation and Control) Rules 2000 (Amendment - 2006 )

33. Batteries (Management & Handling) Rules – 2001 (Amended 2010) to the extent applicable to the Company34. The Recycled Plastics Manufacture and Usage Rules, 1999 (Amended – 2011)

35. Motor Vehicles Act 1988 (Amended 2001) read with The Central Motor Vehicles Rules 1989 (Amended 2006) & Karnataka Motor Vehicles Rules



36. Municipal Solid Wastes (Management and Handling) Rules, 1999

37. The Environment (Protection) second Amendment Rules, 2002 for Diesel Generators38. Petroleum Rules 2002 (PESO) to the extent applicable to the Company39. Compliances under Treatment and Disposal of Efluents under Water (Prevention and Control of Pollution) Act 1974 and

emissions under the Air (Prevention and Control of Pollution) Act 1981

40. Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act 2013 and rules framed thereunder as amended upto date.

41. Environmental, Health and Safety Lawsa) The Company is not discharging the contaminated water at the public drains/rivers. The Company has eficient water

treatment plants at its factory premises (if applicable).b) The Company has been disposing the hazardous waste as per applicable rules.

We have also examined compliance with the applicable clauses of the following:

i. The Secretarial Standards formulated by the Institute of Company Secretaries of India.ii. The Listing Agreement was entered into by the Company with the erstwhile Bangalore Stock Exchange and the Pune Stock

Exchange. The Bangalore Stock Exchange and Pune Stock Exchange were derecognized by the Securities and Exchange Board of India (SEBI) vide its order December 26, 2014 and April 13, 2015 respectively. The Company has complied with the provisions of the listing agreement till the same were applicable to it. Thereafter, the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 were not applicable to the Company as the Company has not entered into an Agreement with any of the Recognised Stock Exchanges. Keeping in view of the interest of the minority shareholders, the Company has submitted a letter dated July 07, 2015 addressed to SEBI with a copy to the erstwhile Pune and Bangalore Stock Exchanges seeking further guidance. Further, the shares of the Company were not placed to the Dissemination Board as required under SEBI Circulars dated May 22, 2014 and 17th April, 2015 and therefore sought guidence/clariication from SEBI on the way forward. The SEBI vide its letter dated August 21, 2015 advised the Pune Stock Exchange to ensure compliance with regard to moving the Company to the Dissemination Board of NSE. The Company has submitted further representation on this matter vide letters dated October 7, 2015 to SEBI marking a copy to Pune Stock Exchange and a letter dated 17th December, 2015 to SEBI Bombay Stock Exchange and Pune Stock Exchange. Till date, the Company has not received any guidance/clariication from SEBI, BSE, NSE and Pune Stock Exchange.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines mentioned above subject to the following observations:

1. The Company, during the year under review, has entered into transactions with related parties as contemplated in Section 2(76) read with Section 188 of the Act on arm’s length and in the ordinary course of business and these transactions were presented to the Audit Committee with majority of Independent Directors. The other Schneider entity namely, Schneider Electric Infrastructure Limited has taken an opinion from M/s. Amarchand & Mangaldas & Suresh A. Shroff & Co dated 01.08.2014 and M/s. BMR Legal dated 16.09.2014 vide which it was opined by both the irms that transactions with related parties are considered to be at arm’s length and in the ordinary course of business. The Company has relied upon the said opinion with regard to the transactions with all the related parties.

We further report thatThe Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non Executives Directors Independent Directors, and the Women Director. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice along with detailed agenda were given to all directors for the Board Meetings and a system exists for seeking and obtaining further information and clariication on agenda items before the meeting and for meaningful participation at the meeting.

As per the minutes maintained by the Company for the Board/ Committee and Shareholders, we noticed that most of the decisions were approved by the respective Board/ Committee and Shareholders without any dissent note.

We further report that the Company, during the year, has implemented online software named as “Compliance Tool” to monitor and ensure compliance with applicable laws, rules, regulations and guidelines and we have been given access to the said ‘Tool’ for veriication.

We also report that the compliances of other applicable laws, as listed in Para (vi) above, are based on the management certiications, further reporting to the Board through agenda papers and limited review of the compliance at factories located at Bangalore Works, Unit-I & II, Plot 5C/1, KIADB Industrial Area, Attibele, Bangalore-562 107, Karnataka, India.

For Nesar & Associates

Company Secretaries

Nesar Ahmad

Company Secretary

FCS: 3360; CP-1966

Place : Delhi Date : 11.07.2016



ANNEXURE III

Form No. MGT-9

EXTRACT OF ANNUAL RETURN

as on the inancial year ended on March 31, 2016

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the

Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

(i) CIN: L32109KA1984PLC079103(ii) Name of the Company: Schneider Electric President Systems Limited(iii) Category / Sub-Category of the Company: Company Limited by shares/Indian Non-Government Company(iv) Address of the Registered ofice and contact details: 5C/1, KIADB Industrial Area, Attibele, Bangalore -562107.

Tel. No. 91 080 43333058, Fax: (080) 27820333, Email : [email protected](v) Whether listed company : No Name, Address and Contact details of Registrar and Transfer Agent, if any: Universal Capital Securities Private Limited, 21,

Shakil Nivas, Mahakali Caves Road, Andheri (E) Mumbai 400 093, Telephone : +91-22-28207203-05 Fax : +91- 22-28207207, E-mail : [email protected] Contact Person : Mr. Rajesh Karlekar/ Mr. Ravi Utekar

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

SI. No. Name and Description of main products/ servicesNIC Code of the

Product/ service% to total turnover of the company

1.Designer, Manufacturer and supply of Standard /

Customized enclosures 26,209 100

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

Sl. No.Name and Address of the

CompanyCIN/GLN

Holding/ Subsidiary/

Associate% of shares held Applicable Section

1

Schneider Electric South

East Asia (HQ) Pte. Ltd.,

10, ANG KIO, Street-65, Singapore

NA Holding Company 75% 2(46)

IV. SHARE HOLDING PATTERN:

Shareholding Pattern (Equity Share Capital Breakup as percentage of Total Equity)

i) Category - wise Share Holding

Category

code

Category of

Shareholder

No. of shares held at the beginning of the

yearNo. of shares held at the end of the year

Demat Physical Total% of Total

SharesDemat Physical Total

% of Total

Shares

(A) Promoters

1 Indian

(a)Individuals/ Hindu

Undivided Family0 0 0 0.00 0 0 0 0.00

(b) Central Govt(s) 0 0 0 0.00 0 0 0 0.00

(c) State Govt(s) 0 0 0 0.00 0 0 0 0.00

(d) Bodies Corporate 0 0 0 0.00 0 0 0 0.00

(e) Banks / FI 0 0 0 0.00 0 0 0 0.00

(f) Any Others(Specify)

(e-i)

(e-ii)

Sub Total(A)(1) 0 0 0 0.00 0 0 0 0.00



2 Foreign

a NRIs - Individuals 0 0.00 0 0.00

b Other Individuals 0 0.00 0 0.00

c Bodies Corporate 4,535,994 0 4,535,994 75.00 4,535,994.00 0 4,535,994 75.00

d Banks / FI 0 0.00 0 0.00

e Any Others(Specify)

e-i

e-ii

Sub Total(A)(2) 4,535,994 0 4,535,994 75.00 4,535,994 0 4,535,994 75.00

Total Shareholding

of Promoter (A)= (A)

(1)+(A)(2)

4,535,994 0 4,535,994 75.00 4,535,994 0 4,535,994 75.00

(B) Public shareholding

1 Institutions

(a) Mutual Funds 0 0 0 0.00 0 0 0.00

(b) Banks / FI 2,650 0 2,650 0.04 2650 0 2,650 0.04

(c) Central Govt(s) 0 0.00 0 0 0.00

(d) State Govt(s) 0 0.00 0 0 0.00

(e) Venture Capital Funds 0 0.00 0 0 0.00

(f) Insurance Companies 0 0.00 0 0 0.00

(g) FIIs 0 0 0 0.00 0 0 0.00

(h)Foreign Venture Capital

Funds 0 0.00 0 0.00

(i) Any Other (specify)

(i-ii)

(i-ii)

Sub-Total (B)(1) 2,650 0 2,650 0.04 2,650 0 2,650 0.04

B 2 Non-institutions

(a) Bodies Corporate

(i) Indian 189,757 846 190,603 3.15 159,345 846 160,191 2.65

(ii) Overseas 0 0.00 0 0.00

(b) Individuals

(i)

Individual shareholders

holding nominal share

capital up to ` 1 lakh

741,401 76,979 818,380 13.53 768,555 75,079 843,634 13.95

(ii)

Individual shareholders

holding nominal share

capital in excess of ` 1 lakh.

470,545 0 470,545 7.78 475,235 0 475,235 7.86

(c) Others (specify)

(i) Clearing Members 26,451 0 26,451 0.44 26,108 0 26,108 0.43

(ii) Trusts 0 0.00 0 0.00

(iii) NRI / OCBs 3,377 0 3,377 0.06 4,188 0 4,188 0.07



(iv) Foreign Nationals 0 0.00 0 0.00

(v) Foreign Corporate Body 0 0.00 0 0.00

Sub-Total (B)(2) 1,431,531 77,825 1,509,356 24.96 1,433,431 75,925 1,509,356 24.96

(B)

Total Public

Shareholding (B)= (B)

(1)+(B)(2)

1,434,181 77,825 1,512,006 25.00 1,436,081 75,925 1,512,006 25.00

TOTAL (A)+(B) 5,970,175 77,825 6,048,000 100.00 5,972,075 75,925 6,048,000 100.00

(C)

Shares held by

Custodians for GDRs

& ADRs

0.00

GRAND TOTAL

(A)+(B)+(C)5,970,175 77,825 6,048,000 100.00 5,972,075 75,925 6,048,000 100.00

(ii) Shareholding of Promoters:

Sl. No. Shareholder’s

Name

Shareholding at the beginning of the year

(1.04.2015)

Share holding at the end of the year

(31.04.2016)

No. of

Shares

% of total

Shares of

the compa

ny

%of Shares

Pledged /

encumbe

red to total

shares

No. of

Shares

% of

total

Shares

of the

company

%of Shares

Pledged /

encumbered

to total

shares

% change in share

holding during the

year

1. Schneider

Electric South

East Asia (HQ)

Pte. Ltd.,

4,535,994 75 Nil 4,535,994 75 Nil Nil

Total 4,535,994 75 4,535,994 75

(iii) Change in Promoters’ Shareholding ( please specify, if there is no change): No Change

Sl. No. Name of the

Shareholder

Shareholding at the beginning of

the year

Cumulative Shareholding during

the year

1.

Schneider Electric South

East Asia (HQ) Pte. Ltd.,

No. of shares % of total

shares of the

company

No. of shares % of total

shares of the

company

At the beginning of the year

4,535,994 75 4,535,994 75

At the End of the year 4,535,994 75 4,535,994 75

Note: There was no change in the promoters shareholding during the year.

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sl. No. Name of the shareholderShareholding at the beginning of the

year [01-April -2015]

Cumulative Shareholding during the year

[31-March-2016]

At the beginning of the year No. of shares% of total shares of

the companyNo. of shares

% of total shares of the

company

1 Raj Kumar Lohia 63,062 1.04

31/07/2015 Transfer -63,062 -1.04 0 0.00

At the end of the year 00 00 00 00

2 Hitesh Satishchandra Doshi 57,021 0.94 57,021 0.94

At the end of the year 57,021 0.94 57,021 0.94

3 Radhika Sharma 51,349 0.85

01/05/2015 Transfer -51,349 -0.85 0 0.00


4 Bhanu Satishchandra Doshi 40,636 0.67 40,636 0.67




5 Pat Financial Consultants Pvt Ltd 39,175 0.65

10/04/2015 Transfer -25,475 -0.42 13,700 0.23

21/08/2015 Transfer -13,700 -0.23 0 0.00


6 Globe Capital Market Ltd 37,429 0.62

10/04/2015 Transfer -7,329 -0.12 30,100 0.50

08/05/2015 Transfer 250 0.00 30,350 0.50

18/09/2015 Transfer -300 0.00 30,050 0.50

31/12/2015 Transfer -50 0.00 30,000 0.50


7 Ketan Dedhia 30,038 0.50 30,038 0.50


8 Rahul Kantilal Vardhan 25,845 0.43 25,845 0.43


9 Sunita Kantilal Vardhan 25,672 0.42 25,672 0.42


10 Lincoln P Coelho 25,000 0.41 25,000 0.41


11 Dhiraj Kumar Lohia 0 0.00

31/07/2015 Transfer 63,062 1.04 63,062 1.04

25/03/2016 Transfer 11,594 0.19 74,656 1.23

At the end of the year 74,656 1.23 -- --

12 Alka Dua 0 0.00

01/05/2015 Transfer 30,748 0.51 30,748 0.51


13 Camel Foods Pvt Ltd 13,435 0.22

10/04/2015 Transfer -3,600 -0.06 9,835 0.16

17/04/2015 Transfer -283 0.00 9,552 0.16

01/05/2015 Transfer 5,401 0.09 14,953 0.25

08/05/2015 Transfer 1,705 0.03 16,658 0.28

22/05/2015 Transfer 10,534 0.17 27,192 0.45

At the end of the year 27,192 0.45 -- --



(vi) Shareholding of Directors and Key Managerial Personnel:

Shareholding at the

beginning of the year

Cumulative Shareholding

during the year

Sl. No. Name of the Directors

/ KMP

Remark Shareholding/

Transaction

Date

No. of

shares

% of total shares

of the company

No. of

shares

% of total shares

of the company

1 Mr. Shravan Sharma At the beginning of the year

01-04-2015 00 00 00 00

At the end of the year 31-03-2016

2 Mr. Ganesh Vaidyanathan

At the beginning of the year

01-04-2015 00 00 00 00


3. Mr. Javed Ahmad At the beginning of the year

01-04-2015 00 00 00 00


4. Mr. Nikhil Pathak At the beginning of the year

01-04-2015 00 00 00 00


5 Mr. V.S. Vasudevan At the beginning of the year

01-04-2015 00 00 00 00


6 Mr. Pankaj Sharma At the beginning of the year

01-04-2015 00 00 00 00


7 Mr. Sugata Sircar At the beginning of the year

01-04-2015 00 00 00 00


8 Mr. S. Venkatraman At the beginning of the year

01-04-2015 00 00 00 00


9 Ms. Rachna Mukherjee At the beginning of the year

01-04-2015 00 00 00 00


10 Mr. Neeraj Garg At the beginning of the year

01-04-2015 00 00 00 00


11 Mr. Vighneshwar G Bhat At the beginning of the year

01-04-2015 00 00 00 00


12 Mr. Damodar Kalavala At the beginning of the year

01-04-2015 00 00 00 00




V. INDEBTEDNESS:

Indebtedness of the Company including interest outstanding/accrued but not due for payment:

Secured Loans

excluding depositsUnsecured Loans

(In `)

Deposits Total Indebtedness

(In `)

Indebtedness at the beginning of the inancial year(i) Principal Amount

(ii) Interest due but not paid(iii) Interest accrued but not due

-

-

389,648

254,069,234

-

4,308,693

-

-

-

254,069,234

-

4,698,341

Total (i+ii+iii) 389,648 258,377,927 - 258,767,575

Change in Indebtedness during the inancial year (355,343) 54,326,372 - 54,326,372

Net Change (355,343) 54,326,372 - 53,971,129

Indebtedness at the end of the inancial year i) Principal Amount

ii) Interest due but not paidiii) Interest accrued but not due

-

-

34,405

308,355,333

-

4,348,966

-

-

-

308,355,333

-

4,383,371

Total (i+ii+iii) 34,405 312,704,299 - 312,738,704

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

SI.

No.

Particulars of Remuneration Name of MD/WTD/ Manager `

S.Venkatraman

Total Amount

`

1. Gross Salary(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

(c) Proits in lieu of salary under section 17(3) Income-tax Act, 1961

7,520,798

1,219,599

7,520,798

1,219,599

2. Stock Option

3. Sweat Equity

Commission (Performance Incentive) 1,909,676 1,909,676

Others- Relocation Allowances

Total 10,650,073 10,650,073

B. Remuneration to other directors:

Particulars of Remuneration Name of Directors Total Amount

(i) Independent Directors Mr. Shravan Sharma

(In `)

Mr. Ganesh Vaidyanathan (In `)

Mr. V. S. Vasudevan

(In `)(In `)

• Fee for attending board committee meetings

• Commission

• Others, please specify

228,000 178,000 89,000 495,000

Total (1) 228,000 178,000 89,000 495,000

(ii) Other Non-Executive

Directors

• Fee for attending board committee meetings

• Commission

• Others, please specify

Total (2)

Total (B)=(1+2) 228,000 178,000 89,000 495,000

Total Managerial Remuneration

Overall Ceiling as per the Act

The remuneration was paid as per the provisions of the Companies Act, 2013.



C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD:

SI. No. Particulars of Remuneration Key Managerial Personnel

Vighneshwar G Bhat

(Company Secretary)

(Amount in `)

Damodar Kalavala

(CFO)

(Amount in `)

Total

(Amount in `)

1. Gross Salary(a) Salary as per provisions contained in section 17(1) of

the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961(c) Proits in lieu of salary under section 17(3) Income-tax Act, 1961

2,371,996 2,591,339

75,436

4,963,335

75,436

2. Stock Option

3. Sweat Equity

4. Commission as % of proit

5. Others, please specify

Total 2,371,996 2,666,775 5,038,771

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the

Companies Act

Brief Description Details of Penalty

/ Punishment/

Compounding fees

imposed

Authority

[RD / NCLT /

COURT]

Appeal made, if any

(give Details)

A. COMPANY

Penalty Nil Nil Nil Nil Nil

Punishment Nil Nil Nil Nil Nil

Compounding Nil Nil Nil Nil Nil

B. DIRECTORS




C. OTHER OFFICERS IN DEFAULT






MANAGEMENT DISCUSSION AND ANALYSIS

Industry Trends:

IT Infrastructure Market

The Indian IT infrastructure (Data Center and network) market, comprising enterprise networking, storage and servers, will total USD 1.9 Billion in 2016, a 1 percent increase from 2015 revenue, said information technology research irm Gartner in its latest report, which projects IT infrastructure growth from 2016 to 2020.

Emergence of Bimodal IT

In the latest report, Gartner has focused on the emergence of bimodal IT, the practice of managing two separate, coherent modes of IT delivery, one focused on stability and the other on agility.

Gartner predicts that, though it is in the early stages, DevOps is another area which is gaining traction in India within IT operations teams. DevOps represents a change in IT culture, focusing on rapid IT service delivery through the adoption of agile, lean practices in the context of a system-

oriented approach. According to Gartner, enterprise networking is the biggest segment within the Indian IT infrastructure market with revenue expected to total USD 848 million in 2016. This is an area where enterprises are focusing heavily in terms of their optimization efforts and evaluating software driven networking, as this is becoming a barrier to a seamless digital experience.

Indian IT Infrastructure Revenue By Technology (Millions of U.S. Dollars)

The storage market is projected to reach USD 253 million in 2016. Storage modernization and consolidation, backup and recovery, and disaster recovery are some of the key drivers to this market, and they are likely to remain relevant drivers over the forecast period through 2020. “In 2016, storage investment will witness a decline from last year primarily due to improved price performance, because of Software deinted storage.

The strong push towards cloud-based infrastructure as a service (IaaS) from within the SMB segment will negate the increase in storage spends within the enterprise space. While it is the early days, Gartner also expects the emerging hyper converged integrated systems and storage technologies based on software-deined storage to encroach on the traditional ECB storage market.

According to Gartner, mobile, and the proliferation of data, are having a dramatic impact, and pressure, on the supporting infrastructure and operations (I&O) infrastructure. All this data is having an impact upstream on servers, storage, networking, facilities and IT operations, not to mention creating new security challenges.

Cloud Services

The public cloud services market in India is projected to grow 30.4 percent in 2016 to total USD 1.26 billion, according to Gartner. Gartner’s latest report projects public cloud services growth from 2016 to 2020. The highest growth will come from cloud system infrastructure services, or infrastructure as a service (IaaS), which is projected to grow 32.5 percent in 2016, with cloud application infrastructure services, or platform as a service (PaaS) projected to grow 31.7 percent.

India Public Cloud Services Forecast (Millions of U.S. Dollars)

Segment 2015 2016 2017 2018 2019 2020

Enterprise Networking 812 848 903 942 959 965

Storage 275 253 262 269 275 281

Serves 822 834 862 863 874 891

Total 1,909 1,935 2,028 2,073 2,109 2,138

Source: Gartner (April 2016)

2015 2016 2017 2018 2019 2020

Cloud Business Process Services (BPaaS) 92.5 114.3 146.9 188.8 242.4 311.5

Cloud Application Services (SaaS) 299.3 389.8 514.4 654.2 792.4 959.6

Cloud Application Infrastructure Services (PaaS) 62.4 82.1 106.9 135.0 160.4 184.7

Cloud System Infrastructure Services (IaaS) 338.9 448.9 615.4 839.7 1,140.6 1558.0

Cloud Management and Security Services 79.4 104.2 134.5 167.7 206.2 247.8

Cloud Advertising 95.6 123.2 158.0 189.0 222.8 266.0

Total 968.1 1,262.6 1,676.2 2,174.3 2,764.7 3527.6

Source: Gartner (March 2016)

The IaaS segment will remain the fastest-growing segment in 2016, predicted to reach USD 448.9 million.” IaaS continues to be the strongest-growing segment as enterprises move away from data center build-outs and move their infrastructure needs to the public cloud.

Platform as a service (PaaS), which represents cloud application infrastructure services, is forecast to grow 31.7 percent in 2016, to USD 82.1 million.



Gartner predicts high rates of spending on cloud services in India to continue through 2020 when the aggregate market is expected to reach USD 3.527 billion. [1]

Cloud Service Market Trends

Despite challenges with infrastructure, security and trade policy, India remains a top market for the leading global cloud service vendors due to its large number of commercial users with Internet access. India boasts 250 million web-connected devices, which generally rely on cloud services for applications and other functionality. Both businesses and the government are buying and using cloud services.

As of 2015, Amazon had “tens of thousands” of customers in India, while Microsoft has said it is adding 2,000 new cloud customers per month. Other foreign companies with a presence in this fast growing and competitive market include HP, Red Hat, SAP and Oracle.

Despite optimistic predictions and clear interest from global players, a variety of challenges to India’s cloud potential continue to persist. Fortunately, the government is acutely aware of these challenges. India’s ambitious Digital India program aims to address some of the weaknesses in its infrastructure. Moreover, the interest expressed by major cloud providers in establishing Indian data centers suggests that their electrical infrastructure is either improving or they are becoming better at managing it.

Key Market Developments

Several factors that drive growth in demand for IT infrastructure (data center and network) in India can enable Company’s plans in 2016 and 2017. These growth drivers mainly came into effect in 2014, with the ushering in of a new government. Their scope covers different aspects of information and communications technologies (ICT), and the implications are further discussed in the “Outlook” section of this paper. The Digital India Program is a major initiative that is expected to change the ICT landscape in India.

Digital India Program

As mentioned earlier, the Digital India program aims to address some of the weaknesses in India’s ICT infrastructure. The Digital India program deals with all projects involving IT and communication technology such as pan-India broadband connectivity and e-governance. According to a report by technology research irm Forrester, India will feel the impact of Digital India only beginning in 2018 once private players start leveraging broadband infrastructure to expand products and services.

“Digital India is composed of many pieces, but the largest piece is last-mile connectivity, While government is looking to connect all the gram panchayats (GPs) and common service centers through iber optics, that’s not the only thing that they need.” Government will be investing through BSNL for this initiative.

Meanwhile, the private sector remains bullish about tech spending by Indian companies fuelled by the Digital India initiative and steadily growing Indian economy. India’s tech purchases, which include computers and peripheral equipment, communications equipment software, tech consulting services, tech outsourcing and hardware maintenance, will grow by 12% in rupee terms in 2016 and 2017, the report said.

Technology expenditure will reach INR 2.32 trillion in 2016 and INR 2.59 trillion in 2017 from INR 2.08 trillion in 2015. A third of that spending will be on hardware, which remains the biggest area of expense for Indian companies. However, communications equipment spending will grow more slowly than the rest as the market continues to mature and prices drop.

As of December 2015, 32,272 Gram Panchayats were covered with 76,624 km of ibre laid, according to government data. The BharatNet project aims to establish a scalable network by 2017 towards providing affordable broadband connectivity of 2 Mbps to 20 Mbps to all rural households and institutions. [2]

Datacenter Infrastructure Trends

Indian CIOs still prefer on-premise datacenters over excessive dependence on cloud services. This is because they prefer comfortable execution of on-premise functionality, control over core business processes, access to all operational data and better security.

Hybrid infrastructures provide a viable solution for enterprises to manage a mix of in-house datacenters along with public or private cloud services to survive the transition to a total cloud facility. As they put hybrid datacenter plans in place, business organizations will require more support infrastructure for their data centers. CIOs should start evaluating eficiency technologies, as the future datacenters will be governed by cost economics, and start investing in skills and training, as datacenter automation will require highly skilled professionals. [3]

The Data Center Market

IDC estimates that the number of datacenters being built around the world will continue growing until it peaks at 8.6 million in 2017, and estimates that the amount of datacenter space worldwide will grow to 1.94 billion square feet in 2018. Many of the trends identiied by industry watchers last year will continue to impact the datacenter in 2016.

Harnessing IoT Technologies

The Internet of Things (IoT) is deined as the proliferation of intelligent sensor devices. These devices send data by the second to a cloud backend and the data is analyzed on real-time via big data analytics. This is changing the way datacenters are being managed. Reports from various analyst irms suggest that between 18 to 50 billion devices will be connected by 2020 – all sending back data every second or so. Sensors that measure temperature, humidity and electricity will be combined with network equipment monitoring to help data centers maintain a high level of uptime and reduce capital and operational expenditures. Data centers will have more platforms available to them, including IoT integrating data from many different sources to keep their computing facilities functioning at optimum capacity.



Co-location for Economical Operations

The evolution of affordable enterprise cloud services has made it more and more dificult for companies to justify the cost of managing on-premise datacenters. Public cloud services also allow enterprises to deliver content and services provided by outward-facing applications from datacenters closer to their customers. And yet many organizations are still reluctant to rely on public clouds, largely, it seems, because of concerns about security, but also performance. Consequently, a current trend -- enterprises using highly connected colocation datacenters -- will continue in 2016, and possibly accelerate as datacenter providers compete for this business. In fact, industry watchers predicted in a recently published report that the colocation market will grow from an estimated USD 25.70 billion in 2015 to USD 54.13 billion by 2020.

Telecom Market

The year 2015 was a landmark for Indian telecom as the industry entered a new phase of growth led by data services. A consolidated voice market, data-driven growth, aggressive 3G-network roll-outs, the start of 4G launches, increased smart phone uptake, and more applications/content in the market were the key industry trends during the year. Meanwhile, the successful spectrum auction in early 2015 and the clearance of spectrum trading and sharing norms marked the policy and regulatory landscape.

These developments, supported by a favorable merger and acquisition (M&A) policy and the trend towards industry consolidation are favorable for SEPSL. With considerable expertise in telecom infrastructure projects and with its range of customized outdoor telecom enclosures, as well as the extensive portfolio of products for datacenter and network infrastructure, power and security management, SEPSL will gain from a projected increase in the telecom market in 2016 and beyond.

One Billion Mobile Subscribers

In October 2015, India became the second country only after China to have billion-plus mobile connections. China achieved that landmark in 2012 and is today the world leader in driving telecom trends globally. Overall too, the year 2015 has been a good one in terms of subscriber growth. A total of over 65 million mobile subscribers have been added between January 2015 and November 2015, which means that 6 million subscribers have been added on average every month. In comparison, the year 2014 witnessed an addition of just over 50 million subscribers. The number of wired broadband users increased from 15.23 million as of November 2014 to 16.38 million as of November 2015.

Accord on Spectrum Trading

Early in 2015, the country witnessed the biggest auction of spectrum with the government garnering INR 1.1 trillion (USD 17.6 billion) to licence 380.75 MHz of airwaves in the 800 MHz, 900 MHz, 1,800 MHz, and 2100 MHz bands across 17 out of 22 telecom circles. While the outcome of the auction led to a signiicant outlow of funds for operators, it helped resolve the long-standing spectrum crunch issue.

Key Market Developments

Reliance Communications (RCOM) and Reliance Jio Infocomm Limited (RJIL) became the irst set of players to strike a spectrum-sharing deal. The two irms have signed agreements for a change in spectrum allotment in the 800 MHz band across nine circles from RCOM to RJIL and for sharing of spectrum in the 800 MHz band across 17 circles. This sharing strategy will lead to the optimal use of spectrum, leading to greater network reach, lower network capital expenditure and thereby, lower operational expenditure.

Consolidation

During the past few years, most telecom operators were stretched for inances as they had committed huge capital for 2G and 3G network rollouts and spectrum acquisition. The high cost of spectrum and aggressive tariff wars left many operators, especially the smaller ones, in a weak inancial position. The new M&A norms and the spectrum trading guidelines enabled operators to rationally explore prospective buying and selling opportunities. During the year, the market witnessed several buyouts by larger players. The key among these were Bharti Airtel’s acquisition of Augere Wireless, Idea Cellular’s acquisition of Videocon’s spectrum in some circles and RCOM’s merger with Sistema Shyam TeleServices

Limited’s (SSTL) Indian subsidiary.

Another key trend during the year was consolidation in the tower industry. RCOM signed a non-binding agreement with US-based Tillman Global

Holdings and TPG Asia to sell its nationwide tower assets and related infrastructure for an undisclosed amount. Industry sources valued it at INR 220 billion (nearly USD 3.4 billion). State-run Bharat Sanchar Nigam Limited also received cabinet approval to hive off its tower assets into a separate company.

Kick-starting The 4G Data Era

Several telecom operators expanded their data services in 2015. They not only invested heavily in rolling out 3G services, but also stepped up their 4G network rollouts. As of December 2015, Idea had completed the rollout of its 4G service in 183 towns in seven service areas. It aims to expand its 4G footprint to the three remaining regions in which it has 4G spectrum this year and cover more than 750 towns. Similarly, Bharti Airtel rolled

out these services in over 350 towns and cities. Vodafone launched 4G services in December 2015, starting with Kochi, and intends to extend coverage in ive service areas in 2016.

Make in India Makes An Impact

The government’s Make in India initiative has helped the telecom manufacturing segment, which witnessed a major setback in 2014 with the winding up of Nokia’s handset manufacturing operations, followed by many other players. Amongst the biggest announcements in 2015, Taiwan-based manufacturing giant Foxconn stated its plans to invest up to USD 2 billion to set up 10-12 units for electronic products by 2020.

In October 2015, Asus partnered with Foxconn to begin local manufacturing of smartphones in Sri City in Andhra Pradesh. Following this, handset manufacturer OnePlus has also collaborated with Foxconn to manufacture handset devices at its Rising Stars factory located in Sri City.



Even though their are several outstanding areas of concern remain, such as call drops, the net neutrality debate, and infrastructure bottlenecks, particularly for setting up transmission towers, 2015 was, in general, a positive year for the industry. Taking into account the range of incentives for growth and positive developments in business expansion, the telecom industry is well set to evolve rapidly in 2016 and beyond. [4]

The ICT Market

Following international trends, the convergence of information and communications technologies (ICT) has created a combined market opportunity for Company’s IT and telecom infrastructure management solutions. The Indian government’s Smart Cities Mission, outlined here, will be an exponential driver for massive growth in telecom and data management services. It is an innovative initiative of the Indian government that is aimed at improving the quality of life by enabling local development and harnessing technology for creating smart outcomes. The government has envisaged the creation of 100 smart cities with an initial investment of INR 1 billion per city per year for the next ive years. An equal amount is to be contributed by state governments/urban local bodies.

Given the signiicance of ICT in the proposed architecture, the Smart Cities Mission is being viewed as the next big opportunity in the Indian telecom sector, as well as the associated high volume datacenter businesses. Smart cities will require high speed and high-capacity communication networks for transportation, security and energy, making well-established telecom infrastructure a vital aspect in their development. Here are the signiicant ICT technologies that would be needed to build smart cities.

1. Machine-To-Machine (M2M) communications: 2. The Internet of Things (IoT): 3. Cloud services:

Industrial Electronics Market

In the context of the “Make In India” program launched in 2014 by the government, Company’s industry solutions (processes automation, machine control and monitoring, power supply and distribution, energy monitoring and utility management, as well as energy management services) are particularly relevant to the industrial electronics business, which is valued at USD 94.2 billion.

The ‘Make in India’ program aims to encourage domestic manufacturing of electronic products in order to cut imports to zero by 2020. It is currently engaging with various large global enterprises which are eager to establish production units in the country. Chinese companies alone are expected to invest USD 2-3 Billion (INR 13,400 Cr to INR 20,100 Cr) in the Indian mobile manufacturing sector over the next two years, according to the Indian Cellular Association.

The National Policy on Electronics (NPE) aims to attract USD 100 billion (INR 6.5-lakh Cr) worth of investment and generate employment for nearly 28 million individuals. It entails setting up of at least 200 electronic manufacturing clusters by 2020.

An ASSOCHAM-EY study titled ‘Turning the Make in India dream into a reality for electronics and hardware industry’ estimates that the Indian electronics and hardware industry will grow at a CAGR of 13%–16% during 2013–18 to reach USD 112–130 billion by 2018 from current level of USD 75 billion. The growth is expected on the back of rising consumer demand, growing disposable incomes, declining prices of electronics, and numerous government initiatives such as wider broadband connectivity and e-governance programs.

Key Market Developments on Electronic components

The government has cleared 74 investment proposals worth INR 17,300 Cr (USD 2.5 billion) in the electronics manufacturing sector.

There has been a six-fold jump in proposed investments in local electronic manufacturing to INR 114,000 Cr (USD 16.8 billion), according to India Electronics and Semiconductor Association (IESA), which promotes local manufacture of computer hardware and electronic items.

Global electronic contract manufacturers are witnessing this shift. The world’s largest contract manufacturer, Foxconn has pledged to invest USD 5 billion in India over the next ive years, supporting not just smartphone makers but also other electronics vendors by manufacturing components. Jabil, a US electronic contract manufacturer, has near term plans to continue its investments to total about USD 100 million since it entered the market in 2005. [5]

The market for electronic components is likely to be impacted by projects that are being built with the Internet of Things (IoT), including the associated services. In the context of industrial electronics, SEPSL’s industry solutions (processes automation, machine control and monitoring, power supply and distribution, energy monitoring and utility management) can particularly beneit from these developments in IoT.

Risks and concerns:

Supply Proile: The ongoing luctuation in the prices for Steel and other key materials is an area of constant concern to the Company.

Mitigants: The Company continues to develop and maintain a wide supplier network. It also makes continuous efforts to develop alternative sources for major components and strives to develop substitutes wherever possible for reducing the material cost content of the product. Besides, the company does alter the pricing for its standard products from time to time whenever the input costs have varied.

Internal Control System and their Adequacy

The Company has a proper and adequate system of internal controls commensurate with its nature and size of its business to ensure that its assets are safeguard and protected against loss from unauthorized use or disposition, and that the transactions are authorized, recorded and reported correctly.

Various other measures are being implemented to further improve the quality and effectiveness of the Company’s internal checks and controls. The internal controls system as established in the organization is supplemented by an extensive scheme of quarterly internal audits, management reviews, established policies, guidelines & procedures. The system are designed to generate accurate inancial statements, other data and for



maintaining accountability of assets. The organization has also started following Key Internal Controls (KICs) as recommended by Group company covering all functions.

All capex purchases are supported by minimum of 3 competitive quotations. The Group Company is also extending its Internal Control department’s involvement to Organization.

Discussion on Financial Performance with respect to Operational Performance

The Net Revenues (net of duties and taxes) during the year were ̀ 20,227 lakhs as against ̀ 16,581 lakhs in the previous year. Net Sales Turnover increased by 22% over the previous year.

During the year, there was increase in employee costs of ` 65 lakhs over previous year due to merit increase during the year.

Casual Labour cost was ` 667 lakhs as against ` 555 lakhs in previous year due to increase in sales volume. Power and fuel costs was ` 418 lakhs as against ̀ 384 lakhs in previous year due to tariff revision by Karnataka Electricity department. Legal and professional expenses were increased to ` 534 lakhs as against ` 442 lakhs in previous year. Advertising and sales promotion expenses increased to ` 91 Lakhs as against ` 30 lakhs in previous year. Loss on account of foreign exchange luctuations (net) increased to ` 50 lakhs as against income of ` 45 lakhs in previous year. Improved business scenario and effective plant utilization resulted in to increase in EBIDTA of ` 1,651 lakhs as against EBIDTA of ` 384 lakhs in the previous year.

Revenue from processing at Zinc Plant decreased to ̀ 337 lakhs against ̀ 495 lakhs in previous year. Also revenue from services like Commissioning and Installation increased to ` 86 lakhs from ` 33 lakhs in previous year.

Material development in Human Resource / Industrial Relations Front

At the factory locations, several activities were undertaken by the Personnel Department on industrial safety and production related aspects. The industrial relations at both units during the year under review were cordial.

The Company had 302 employees on its roll as on 31st March, 2016 as against 331 as on 31st March, 2015 at its production facilities and ofices across the country.

Cautionary Statement

The Management Discussion and Analysis Statements made above are on the basis of available data as well as certain assumptions as to Government policies, economic and political developments. The Company cannot guarantee the accuracy of the assumptions and expectation of future events. The Company’s actual results, performance or achievements could thus differ materially from projected performance in future.

Place : Bangalore


REFERENCES

[1] Gartner Says Public Cloud Services in India Forecast to Reach $1.26 Billion in 2016 (May 5, 2016) http://www.gartner.com/newsroom/id/3308117

[2] Digital India will create impact by 2018: Forrester (8 Feb 2016) http://www.livemint.com/Industry/VQM3DN2Mi0ZCR2WBzMejfO/Digital-India-will-create-impact-by-2018-Forrester.html

[3] Datacenters 2016: The Age of Hybrid (28 Jan 2016) http://www.cio.in/itroadmap/feature/2016-India-outlook-datacenters

[4] Exciting Times: 2015 marked by consolidation and 4G launches (17 Feb 2016) http://www.tele.net.in/sales-a-marketing/item/18775

[5] India sees $16.8-bn electronic manufacturing proposals (3 Feb 2016) http://www.business-standard.com/article/economy-policy/india-to-see-16-8-bn-investment-in-electronic-manufacturing-proposals-iesa-116020200378_1.html


Shravan Sharma

Chairman



INDEPENDENT AUDITOR’S REPORT

To the Members of Schneider Electric President Systems Limited

Report on the Financial Statements

We have audited the accompanying inancial statements of Schneider Electric President Systems Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2016, the Statement of Proit and Loss and Cash Flow Statement for the year then ended, and a summary of signiicant accounting policies and other explanatory information.

Management’s Responsibility for the Financial 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 inancial statements that give a true and fair view of the inancial position, inancial performance and cash lows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards speciied 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 inancial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the inancial 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 inancial 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 thereunder. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as speciied 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 inancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the inancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the inancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal inancial control relevant to the Company’s preparation of the inancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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 inancial statements. We believe that the audit evidence we have obtained is suficient and appropriate to provide a basis for our audit opinion on the standalone inancial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone inancial 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, 2016, its proit and its cash lows for the year ended on that date.

Emphasis of Matter

We draw attention to Note 39 of the accompanying inancial statements which indicates that the Company’s equity shares are not being traded at Bombay Stock Exchange. As mentioned in Note 39, the Company is currently in discussions with Securities Exchange Board of India (SEBI) on the way forward. Pending conclusions from SEBI on this matter, the Company does not expect any inancial implication in this regard. Accordingly, no adjustments have been recorded in the accompanying inancial statements.

Our opinion is not qualiied in respect of this matter.

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 of the Act, we give in the Annexure 1 a statement on the matters speciied 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 Proit 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 standalone inancial statements comply with the Accounting Standards speciied under section 133

of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and;(e) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of

Directors, none of the directors is disqualiied as on March 31, 2016, from being appointed as a director in terms of section 164 (2) of the Act;



(f) With respect to the adequacy of the internal inancial controls over inancial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report dated May 30, 2016 in “Annexure 2” to this report;

(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 inancial position in its inancial statements – Refer Note

29 to the inancial statements;ii. The Company did not have any long-term contracts including derivative contracts for which there were any material

foreseeable losses.iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund

by the Company

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Mahendra Jain

Partner

Membership Number: 205839

Place of Signature: Bengaluru

Date: May 30, 2016

Annexure 1 referred to in paragraph 1 under the heading “Report on Other Legal and Regulatory Requirements” of our report of even date

Re: Schneider Electric President Systems Limited (“the Company”)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of ixed assets.(b) All ixed assets have not been physically veriied by the management during the year but there is a regular programme of

veriication 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 veriication.

(c) According to the information and explanations given by the management, the title deeds of immovable properties included in ixed assets are held in the name of the Company.

(ii The management has conducted physical veriication of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical veriication. Inventories lying with third parties have been conirmed by them as at the year end and no material discrepancies were noticed in respect of such conirmations.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to

companies, irms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) 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 are no loans, investments, guarantees, and

securities granted in respect of which provisions of section 185 and 186 of the Companies Act 2013 are applicable and hence not commented upon.

(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 equipment and mechanical appliances and are of the opinion that prima facie, the speciied 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, 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 signiicant delays in 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, 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 information and explanations given to us, the dues outstanding of income tax, sales tax, service tax, customs

duty, excise duty, value added tax and cess on account of any dispute, are as follows:



Name of the Statute Nature of dues Amount

`

Period to which

it relates

Forum where he dispute is pending

The Karnataka VAT Act Value added tax1,327,595 FY 2010-11* Deputy Commissioner of Commercial tax,

Karnataka1,789,270 FY 2011-12*

The Maharashtra VAT Act Value added tax

1,475,718 FY 2004-05* Assistant Commissioner of Sales Tax, Maharashtra

2,846,978 FY 2006-07 Deputy Commissioner of Commercial tax,

Maharashtra3,494,843 FY 2009-10

The Central Excise Act, 1944 Excise duty

3,061 FY 2014-15

Assistant Commissioner Central Excise, Bangalore98,947 FY 2012-13

25,080FY 2009-10 to

2012-13

The Customs Act, 1962 Custom duty 2,651,825FY 2011-12,

2012-13Deputy Commissioner of Customs, Bangalore

The Finance Act, 1994 Service Tax 387,972 FY 2010-11 Assistant Commissioner Central Excise, Pune

*The above amounts have been paid under protest by the Company

(viii) According to information and explanations given by the management, the Company does not have any dues to a inancial institution, bank or debenture holders or government hence; reporting under clause 3(viii) of the Order is not applicable to the Company and hence not commented upon.

(ix) According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer / further public offer / debt instruments and term loans hence; reporting under clause 3(ix) of the Order is not applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the inancial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the oficers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the Company has accounted for managerial remuneration which is payable over and above approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013, aggregating ` 2,401,385 as at March 31, 2016, as mentioned below:

Sl.No. Name of the Managing

Director to whom remuneration is provided

or paid which is not in accordance with section 197

Amount involved

(in excess of the

limit prescribed)

Amount due

for recovery

as at Balance

sheet date

Steps taken to recover the amount

Remarks

1 Venkatraman S 2,401,385 - Not paid the amount

and hence not

applicable

Amount not paid as at the balance sheet date. As explained, the

Company has applied for approval

to the Central Government in this regard.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 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 management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the inancial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of the Companies Act, 2013.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.




per Mahendra Jain

Partner

Membership Number: 205839Place of Signature: Bengaluru

Date: May 30, 2016



ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF SCHNEIDER

ELECTRIC PRESIDENT SYSTEMS LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal inancial controls over inancial reporting of Schneider Electric President Systems Limited (“the Company”) as of March 31, 2016 in conjunction with our audit of the standalone inancial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internal inancial controls based on the internal control over inancial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal inancial controls that were operating effectively for ensuring the orderly and eficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable inancial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal inancial controls over inancial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as speciied under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal inancial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal inancial controls over inancial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal inancial controls system over inancial reporting and their operating effectiveness. Our audit of internal inancial controls over inancial reporting included obtaining an understanding of internal inancial controls over inancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the inancial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is suficient and appropriate to provide a basis for our audit opinion on the internal inancial controls system over inancial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal inancial control over inancial reporting is a process designed to provide reasonable assurance regarding the reliability of inancial reporting and the preparation of inancial statements for external purposes in accordance with generally accepted accounting principles. A company's internal inancial control over inancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly relect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of inancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the inancial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal inancial controls over inancial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal inancial controls over inancial reporting to future periods are subject to the risk that the internal inancial control over inancial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal inancial controls system over inancial reporting and such internal inancial controls over inancial reporting were operating effectively as at March 31, 2016, based on the internal control over inancial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.




per Mahendra Jain

Partner

Membership Number: 205839

Place of Signature: Bengaluru

Date: 30 May 2016



Balance sheet as at 31st March 2016

31-Mar-16

`

31-Mar-15

`Notes

Equity and liabilities

Shareholders’ funds

Share capital 3 60,480,000 60,480,000

Reserves and surplus 4 312,783,332 248,911,630

373,263,332 309,391,630

Non-current liabilities

Long-term borrowings 5 209,935,461 199,969,865

Deferred tax liability (net) 6 - -

Other long-term liabilities 7 - 498,556

Long-term provisions 8 19,108,676 15,658,000

229,044,137 216,126,421

Current liabilities

Short-term borrowings 9 120,134,366 79,820,772

Trade payables 7

- total outstanding dues of micro enterprises and small enterprises 28,079,025 13,729,978

- total outstanding dues of creditors other than micro enterprises and

small enterprises374,206,871 560,847,972

Other current liabilities 7 121,798,956 97,385,228

Short-term provisions 8 24,387,251 18,347,754

668,606,469 770,131,704

TOTAL 1,270,913,938 1,295,649,755

Assets

Non-current assets

Fixed assets

Tangible assets 10 382,914,762 374,750,327

Intangible assets 11 9,249,671 14,195,740

Capital work-in-progress 10,491,152 12,746,009

Long-term loans and advances 12 62,622,555 63,943,076

Other non-current assets 14.2 195,536 181,059

465,473,676 465,816,211

Current assets

Inventories 13 251,750,611 285,688,097

Trade receivables 14.1 420,837,770 418,606,949

Cash and bank balances 15 39,870,723 17,150,250

Short-term loans and advances 12 90,615,449 105,857,225

Other current assets 14.2 2,365,709 2,531,023

805,440,262 829,833,544

TOTAL 1,270,913,938 1,295,649,755

Summary of signiicant accounting policies. 2.1 1,295,649,755 -

The accompanying notes are an integral part of the inancial statements.

As per our report of even date.

For S.R.Batliboi & Associates LLP



For and on behalf of the Board of Directors of


Venkatraman S

Managing Director

DIN: 03139440

Shravan Sharma

Director

DIN: 00041009per Mahendra Jain

Partner

Membership Number: 205839 Vighneshwar G Bhat

Company Secretary

Damodar Kalavala

Chief Financial Oficer

Place: Bengaluru Place: GurugramDate: May 30, 2016 Date: May 30, 2016



Statement of proit and loss for the year ended 31st March 2016

Notes 31-Mar-16

`

31-Mar-15

`

Income

Revenue from operations (gross) 16 2,153,954,031 1,738,941,379

Less - excise duty (138,227,669) (86,332,440)

Revenue from operations (net) 2,015,726,362 1,652,608,939

Other income 17 6,971,061 5,515,158

Total revenue (i) 2,022,697,423 1,658,124,097

ExpensesCost of materials and components consumed 18 1,165,205,174 1,025,286,364

Purchase of traded goods 19 123,585,752 87,279,400

(Increase)/ decrease in inventories of inished goods, work-in-progress and traded goods

19 21,534,565 (18,335,057)

Employee beneits expenses 20 245,260,947 238,738,835

Depreciation and amortization expense 21 51,890,010 50,109,662

Finance costs 22 31,792,805 25,458,107

Other expenses 23 302,028,117 286,769,555

Total expenses (ii) 1,941,297,370 1,695,306,866

Proit / (loss) before tax (i - ii) 81,400,053 (37,182,769)

Tax expensesCurrent tax (Minimum Alternate Tax (MAT)) 17,528,351 -

Proit / (loss) after tax 63,871,702 (37,182,769)

Earnings per equity share [nominal value of share ` 10 (31 March 2015: ` 10)]

Basic 10.56 (6.15)

Diluted 10.56 (6.15)

Number of shares used in computing earning per share

Basic 6,048,000 6,048,000

Diluted 6,048,000 6,048,000

Summary of signiicant accounting policies. 2.1

The accompanying notes are an integral part of the inancial statements.


Venkatraman S

Managing Director

DIN: 03139440

Shravan Sharma

Director


Partner

Membership Number: 205839Vighneshwar Bhat

Company Secretary

Place: Bengaluru Place: GurugramDate: May 30, 2016Date: May 30, 2016

Damodar Kalavala









Cash low statement for the year ended 31st March 201631-Mar-16 31-Mar-15

Note ` `A. CASH FLOW FROM OPERATING ACTIVITIES

Net proit / (loss) before tax 81,400,053 (37,182,769)Adjustments for:Depreciation and amortisation 51,890,010 50,109,662 (Gain) / loss on sale/disposal of ixed assets (net) - (61,709)Provision for doubtful debts/advances (net) 7,298,103 7,174,531 Liabilities/provisions no longer required written back 2,894,952 - Unrealised foreign exchange (gain)/ loss 9,303,349 (3,180,384)Interest expense 30,431,281 24,568,149 Interest income (463,106) (370,285)Operating proit before working capital changes 182,754,642 41,057,195 Movements in working capital:(Increase) / decrease in trade receivables (8704,701) 24,813,730 (Increase) / decrease in other current assets 164,757 2,653,303 (Increase) / decrease in loans and advances 13,810,959 (30,254,217)(Increase) / decrease in inventories 33,937,486 (60,966,983)Increase / (decrease) in trade payables (178,099,719) 137,511,527 Increase / (decrease) in other liabilities and provisions 21,937,464 9,004,663 Cash generated from operations 65,800,888 123,819,218 Direct taxes paid (net of refunds) (21,742,503) (1,791,863)NET CASH (USED IN) / GENERATED FROM OPERATING ACTIVITIES (A) 44,058,385 122,027,355

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of tangible and intangible ixed assets (including capital work in progress and capital advances)

(47,046,392) (60,910,824)

Proceeds from sale/discard of tangible ixed assets - 386,438 Maturity of bank deposits (having original maturity of more than three months) 3,253,637 3,000,000 Investments in bank deposits (having original maturity of more than three months) (3,492,748) (3,253,637)Interest received 449,186 355,058 NET CASH (USED IN) / GENERATED FROM INVESTING ACTIVITIES (B) (46,836,317) (60,422,965)

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds from short term borrowings, net 47,862,914 10,000,000 Repayment of long term borrowings including lease obligations (389,647) (349,892)Repayment of short term borrowings, net - (38,799,543)Interest paid (22,097,767) (22,350,910)

NET CASH (USED IN) / GENERATED FROM INVESTING ACTIVITIES (C) 25,375,500 (51,500,345)

Net increase in cash and cash equivalents (A+B+C) 22,597,568 10,104,045 Cash and cash equivalents at the beginning of the year 13,896,613 3,819,861 Effects of changes in exchange rates on cash and cash equivalents (116,206) (27,293)Cash and cash equivalents at the end of the year 36,377,975 13,896,613

Components of cash and cash equivalents (note 15)Balance with scheduled banks *- in current accounts 36,143,285 13,536,058 - in unpaid dividend accounts ** 234,690 360,555

36,377,975 13,896,613

*Excluding ixed deposits with maturity greater than three months of ` 3,657,748 (31 March 2015: ` 3,418,637)

** The Company can utilize these balances only towards settlement of unpaid dividend (note 7)

Summary of signiicant accounting policies. 2.1 (0)

The accompanying notes are an integral part of the inancial statements.As per our report of even date.

For S.R.Batliboi & Associates LLP For and on behalf of the Board of Directors of

Chartered Accountants Schneider Electric President Systems Limited

ICAI Firm Registration Number: 101049W/E300004Venkatraman S

Managing Director

DIN: 03139440

Shravan Sharma

Director


Partner

Membership Number: 205839 Vighneshwar Bhat

Company Secretary

Damodar Kalavala





Notes to inancial statements for the year ended 31st March 2016.

1. Corporate Information

Schneider Electric President Systems Limited (‘SEPSL’ or ‘the Company’) is a designer, manufacturer and supplier of standard and customized enclosure systems for over 30 years in 19-inch enclosures for IT and Telecom infrastructure, systems management and operations.

The Company’s operations predominantly relate to manufacture of enclosures, card frames, components and accessories and trading of electrical equipments. The Company is a manufacturer in India offering standard and customized enclosure solutions, including card frames and components, with a focus on the IT/Networking and ITES, Telecom, General and Industrial Electronics sectors. The Company also has a nationwide network of sales ofices, representatives and distributors to support customer wherever they may need assistance for installation, commissioning and on-going services.

2. Basis of preparation

The inancial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has prepared these inancial statements to comply in all material respects with the accounting standards notiied under section 133 of the Companies Act 2013 (‘the Act’), read together with paragraph 7 of the Companies (Accounts) Rules 2014.

The Company has earned proit before tax amounting to ` 81,400,053 year ended March 31, 2016. Although, the Company has incurred

losses amounting to ` 37,182,769 and ` 48,192,526 for the year ended March 31, 2015 and 2014 respectively, the receipt of inancial and operating support from the parent company, including increased borrowing limits and extension to repay the borrowing on October 31, 2018 from a group company in India, mitigates the uncertainties faced by the Company and has enabled the Company to revive itself and has put the Company on a growth path. Consequently, no adjustments have been made to the carrying value, or classiication of the balance sheet accounts.The inancial statements have been prepared on an accrual basis and under the historical cost convention unless stated otherwise. The accounting policies adopted in the preparation of inancial statements are consistent with those of the previous year.

2.1. Summary of signiicant accounting policies

a. Change in accounting estimate

Depreciation / amortization on tangible and intangible assetsDue to application of Schedule II to the Act with effect from 1 April 2014, the management had re-established useful lives and residual values of all its ixed assets and determined separate useful life for each major component of the ixed assets, if they had useful life that is materially different from that of the remaining asset. The management believes that depreciation rates currently used fairly relect its estimate of the useful lives and residual values of ixed assets, though these rates in certain cases are different from lives prescribed under Schedule II.

The carrying amount of other components, i.e. components whose remaining useful life was not nil on 1 April 2014, is depreciated over their remaining useful life. Accordingly, during the year ended 31 March 2015, depreciation of ` 11,131,797 (net of tax impact) had been adjusted to the opening balance of surplus in the Statement of proit and loss, with corresponding adjustment to net book value of ixed assets, in accordance with the transitional provision of Schedule II of the Act.

Further, basis such change the depreciation / amortization expenses for the year ended 31 March 2015 were higher by ` 4,947,555 (net of tax).

b. Use of estimates

The preparation of inancial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

c. Tangible ixed assetsFixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises

purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.Subsequent expenditure related to an item of ixed asset is added to its book value only if it increases the future beneits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing ixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of proit and loss for the period during which such expenses are incurred.

Gains or losses arising from derecognition of ixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of proit and loss when the asset is derecognized.Advances paid towards the acquisition of ixed assets are disclosed as “Capital advances” under Loans and Advances and the cost of assets not ready to be put to use as at the balance sheet date are disclosed as ‘Capital work-in-progress’.



d. Depreciation on tangible ixed assetsDepreciation on ixed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management. The Company has used the following rates to provide depreciation on its ixed assets.

Useful lives estimated by the management (years)

Factory buildings* 3-30

Ofice buildings 30

Plant and equipment 15

Computer hardware* 1-3

Furniture and ixtures 10

Vehicles 5

Tools, dies and jigs* 1-15

Ofice equipment 5

*For these classes of assets, where the estimated useful lives are different from lives prescribed under Schedule II, management has estimated these useful lives after taking into consideration technical assessment, prior asset usage experience and the risk of technological obsolescence.

Leasehold land is amortised on a straight line basis over the period of lease.Depreciation is provided on pro-rata basis from/up to the date of purchase or disposal, for asset purchased or sold during the year.

e. Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortized on a straight line basis over the estimated useful economic life. Patents and trademarks, computer software and designs and copyrights are amortised over a period of nine years, six years and ive years respectively, from the date available for use. All other intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired.The amortization period and the amortization method are reviewed at least at each inancial year end. If the expected useful life of the asset is signiicantly different from previous estimates, the amortization period is changed accordingly. If there has been a signiicant change in the expected pattern of economic beneits from the asset, the amortization method is changed to relect the changed pattern. Such changes are accounted for in accordance with AS 5 Net Proit or Loss for the Period, Prior Period Items and Changes in Accounting Policies.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of proit and loss when the asset is derecognized.

f. Leases

Finance leases, which effectively transfer to the Company substantially all the risks and beneits incidental to ownership of the leased item, are capitalized at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the inance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized as inance costs in the statement of proit and loss. Lease management fees, legal charges and other initial direct costs of lease are capitalized.A leased asset is depreciated on a straight-line basis over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, the capitalized asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term.

Leases, where the lessor effectively retains substantially all the risks and beneits of ownership of the leased item, are classiied as operating leases. Operating lease payments are recognized as an expense in the statement of proit and loss on a straight-line basis over the lease term.

g. Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

h. Impairment of tangible and intangible assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating units (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inlows that are largely independent of those from other assets or groups of assets.



Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash lows are discounted to their present value using a pre-tax discount rate that relects current market assessments of the time value of money and the risks speciic to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identiied, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Company's cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of ive years. For longer periods, a long term growth rate is calculated and applied to project future cash lows after the ifth year.Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of proit and loss.After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

i. Inventories

Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the inished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components and stores and spares is determined on irst-in-irst-out basis.Work-in-progress and inished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of work in progress and inished goods (including excise duty) is determined on irst-in-irst-out basis.Traded goods are valued at lower of cost and net realizable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on irst-in-irst-out basis.Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.Provision for inventory obsolescence is assessed and adjusted from the gross value of the inventory.

j. Revenue recognition

Revenue is recognized to the extent that it is probable that the economic beneits will low to the Company and the revenue can be reliably measured. The following speciic recognition criteria must also be met before revenue is recognized:

Sale of goods

Revenue from sale of goods is recognized when all the signiicant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic beneits lowing to the Company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.The amount recognised as sale is exclusive of trade discounts.

Income from services

Service income primarily comprises income from commissioning and installation, service charges, processing charges and consulting

engineering and is recognized on accrual basis as per the terms and over the period of the contract with the customers, as and when the services are rendered. The Company collects service tax on behalf of the government and therefore, it is not an economic beneit lowing to the Company. Hence it is excluded from revenue.

Interest Income

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

Other Income

Export incentives are recognised as income when the right to receive credit as per the terms of the scheme is established in respect of the exports made and where there is no signiicant uncertainty regarding the ultimate collection of the relevant export proceeds.

k. Foreign currency translation

Foreign currency transactions and balances

Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, measured

in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

Exchange differencesThe Company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as income or as

expenses in the period in which they arise.



l. Retirement and other employee beneitsRetirement beneit in the form of provident fund is a deined contribution scheme. The contributions to the provident fund are charged to the statement of proit and loss for the year as an expenditure, when an employee renders the related service. The Company has no obligation, other than the contribution payable to the provident fund.The Company operates deined beneit plan for its employees, viz. gratuity. The costs of providing beneits under the plan are determined on the basis of actuarial valuation at each year-end. Actuarial valuation is carried out for the plan using the projected unit credit method. Actuarial gains and losses for deined beneit plan are recognized in full in the period in which they occur in the statement of proit and loss.

Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee beneit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee beneit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of proit and loss and are not deferred. The Company presents the entire leave as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

The Company recognizes termination beneit as a liability and an expense when the Company has a present obligation as a result of past event, it is probable that an outlow of resources embodying economic beneits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the termination beneits fall due more than 12 months after the balance sheet date, they are measured at present value of future cash lows using the discount rate determined by reference to market yields at the balance sheet date on government bonds.

m. Income taxesTax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of proit and loss.Deferred income taxes relect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of proit and loss.Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that suficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable proits.At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that suficient future taxable income will be available against which such deferred tax assets can be realized.The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that suficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that suficient future taxable income will be available.Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.Minimum Alternate Tax (MAT) paid in a year is charged to the statement of proit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the speciied period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of proit and loss and shown as “MAT Credit Entitlement.” The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the speciied period.

n. Segment reporting

Identiication of segmentsThe Company's operating businesses are organized and managed separately according to the nature of products and services provided; with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Inter-segment transfers

The Company generally accounts for intersegment sales and transfers at cost plus appropriate margins.



Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated items

Unallocated items include general corporate income and expense items which are not allocated to any business segment.

Segment accounting policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the inancial statements of the Company as a whole.

o. Earnings Per Share

Basic earnings per share are calculated by dividing the net proit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net proit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. The effects of anti-dilutive potential equity shares are not considered in calculating dilutive earnings per share. As at the balance sheet date, the Company does not have any dilutive potential equity shares.

p. Provisions

A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outlow of resources embodying economic beneits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to relect the current best estimates.Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of proit and loss net of any reimbursement.

Warranty Provisions:Provisions for warranty-related costs are recognized when the product is sold or service is provided. Provision is based on historical experience. The estimate of such warranty related costs is revised at each reporting date.

q. Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be conirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outlow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the inancial statements.

r. Cash and cash equivalents

Cash and cash equivalents for the purposes of cash low statement comprise cash at bank and on hand, demand deposits and short-term investments with an original maturity of three months or less.



Notes to inancial statements for the year ended 31st March 2016

3 Share capital 31-Mar-16 31-Mar-15

` `

Authorized shares

12,000,000 (31 March 2015: 12,000,000) equity shares of ` 10 each 120,000,000 120,000,000

Issued, subscribed and fully paid-up shares 6,048,000 (31 March 2015: 6,048,000) equity shares of ` 10 each

fully paid up (note 39)

(includes 1,243,500 (31 March 2015: 1,243,500) bonus shares issued by capitalisation of reserves and securities premium)

60,480,000 60,480,000

Total issued, subscribed and fully paid-up share capital 60,480,000 60,480,000

(a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

Equity Shares

31-Mar-16 31-Mar-15

No. ` No. `

At the beginning of the period 6,048,000 60,480,000 6,048,000 60,480,000

Outstanding at the end of the period 6,048,000 60,480,000 6,048,000 60,480,000

(b) Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in ensuing Annual General meeting.In event of liquidation of the Company, the holders of equity shares would be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(c) Shares held by ultimate holding company and subsidiaries and associates of holding company and ultimate holding company

Out of equity shares issued by the Company, shares held by its Holding Company are as below:

31-Mar-16

`

31-Mar-15

`

Schneider Electric South East Asia (HQ) Pte Limited

4,535,994 (31 March 2015: 4,535,994) equity shares of ` 10 each fully paid up 45,359,940 45,359,940

(d) Details of shareholders holding more than 5% shares in the

Company

31-Mar-16

No. % holding

31-Mar-15

No. % holding

Equity shares of ` 10 each fully paid

Schneider Electric South East Asia (HQ) Pte Limited 4,535,994 75% 4,535,994 75%

As per records of the Company, including its register of shareholders/ members and other declaration received from shareholders regarding beneicial interest, the above share holding represent both legal and beneicial ownership of shares.

4 Reserves and surplus31-Mar-16

`

31-Mar-15

`

Securities premium account

Balance as per the last inancial statements 81,695,875 81,695,875

Closing Balance 81,695,875 81,695,875

Capital Reserve (represents capital proit on equity shares forfeited)Balance as per the last inancial statements 166,000 166,000

Closing Balance 166,000 166,000

General reserve

Balance as per the last inancial statements 44,000,000 44,000,000

Closing Balance 44,000,000 44,000,000

Surplus in the statement of proit and lossBalance as per last inancial statements 123,049,755 171,364,321

Adjustments on account of depreciation (note 2.1(a)) - (11,131,797)

Proit / (loss) for the year 63,871,702 (37,182,769)

Net surplus in the statement of proit and loss 186,921,457 123,049,755

Total reserves and surplus 312,783,332 248,911,630



5 Long-term borrowings Non-current portion Current maturities

31-Mar-16 31-Mar-15 31-Mar-16 31-Mar-15

` ` ` `

Other loans and advances

Finance lease obligation (secured) (i) - 34,404 34,405 389,648

Loans from Fellow Subsidiary (unsecured) (ii) (note 27) 209,935,461 199,935,461 - -

209,935,461 199,969,865 34,405 389,648

The above amount includes

Secured borrowings - 34,404 34,405 389,648

Unsecured borrowings 209,935,461 199,935,461 - -

Amount disclosed under the head “other current liabilities” (note 7) - - (34,405) (389,648)

Net amount 209,935,461 199,969,865 - -

i) Finance lease obligation is secured by hypothecation of vehicles taken on lease. The same is payable in 60 monthly instalments of ` 34,712 (including interest) each carrying an effective interest rate of 10.81% p.a.

ii) Loans from Fellow Subsidiary amounting to ` 149,935,461 (31 March 2015: ` 149,935,461) carry interest @ 7.5% p.a. The loan is repayable on 31 October 2018, although the Company has an option to prepay the aforesaid borrowing at its own discretion.

Further, during the year ended 31 March, 2014, the Company had borrowed `50,000,000 from its fellow subsidiary, primarily to facilitate its working capital requirements, at an interest rate of 7.5 % p.a. The loan was repayable on or before 27 March 2015. However, the Company had entered into an addendum to the agreement on 27 March 2015 basis which the repayment term is extended upto 27 March 2018. Further, the interest rate was revised to 7.85% p.a.

Additionally, during the year ended 31 March, 2015, the Company had borrowed ` 10,000,000 from its fellow subsidiary, primarily to facilitate its working capital requirements, at an interest rate of 8.75 % p.a. The loan was repayable on or before 18 September 2015. However, the Company has entered into an addendum to the agreement on 16 September 2015 basis which the repayment term is extended upto 15 September 2018. Further, the interest rate is revised to 7.80% p.a. (note 9)

6 Deferred tax liability (net) 31-Mar-16 31-Mar-15

` `

Deferred tax liability

Fixed assets: Impact of difference between tax depreciation and depreciation/ amortization charged for the inancial reporting

33,801,480 35,820,621

Gross deferred tax liability 33,801,480 35,820,621

Deferred tax asset

Impact of expenditure charged to the statement of proit and loss in the current year but allowed for tax purposes in subsequent years

24,917,010 22,810,248

Carry forward losses 8,884,470 13,010,373

Gross deferred tax asset 33,801,480 35,820,621

Net deferred tax liability - -

The Company has recognised deferred tax assets on deductible timing differences to the extent of deferred tax liability on taxable timing differences as the Company believes it is virtually certain that deferred tax asset on deductible timing differences (i.e., carry forward losses and losses disallowed for tax purposes u/s 43B of the Income Tax Act, 1961) shall be recovered to the extent of deferred tax liability on taxable timing differences arising on account of depreciation differences on ixed assets.



7 Other liabilities Long-term Short-term

31-Mar-16 31-Mar-15 31-Mar-16 31-Mar-15

` ` ` `

Trade payables *

- total outstanding dues of micro enterprises and small

enterprises (note 31)

- - 28,079,025 13,729,978

- total outstanding dues of creditors other than micro

enterprises and small enterprises

- - 374,206,871 560,847,972

- - 402,285,896 574,577,950

Current maturities of long-term borrowings (note 5) - - 34,405 389,648

Interest accrued and due on long term borrowings* - - 4,348,966 3,882,130

Interest accrued and due on short term borrowings* - - - 426,563

Interest accrued and due on payables to micro and small enterprises (note 31)

- - 5,883,263 2,789,922

Security deposit payable - - 1,359,022 959,014

Advance from customers - - 6,035,656 1,479,332

Unearned revenue - 498,556 20,316,275 6,068,441

Accrued expenses - - 76,755,855 69,670,983

Statutory dues payable - - 6,830,824 11,358,640

Investor education and protection fund credited towards unpaid dividend (as and when due)

- - 234,690 360,555

- 498,556 121,798,956 97,385,228

- 498,556 524,084,852 671,963,178

* Refer note 27 for payables to related parties.

8 Provisions Long-term Short-term

31-Mar-16 31-Mar-15 31-Mar-16 31-Mar-15

` ` ` `

Provision for employee beneits

Provision for gratuity (note 24) 19,108,676 15,658,000 7,034,696 7,135,758

Provision for leave beneits - - 12,515,842 11,211,996

19,108,676 15,658,000 19,550,538 18,347,754

Other provisions

Provision for warranty (i) - - 4,836,713 -

19,108,676 15,658,000 24,387,251 18,347,754

i) Provision for warranty

The Company has a deined warranty policy for manufactured goods sold. The Company is primarily in the manufacture of enclosures and in certain cases these enclosures are assembled with third party bought-out items. Accordingly, the management creates provisions on such products covered under warranty, basis the past failure rates of these buy-out items. It is expected that signiicant portion of these costs will be incurred in the next inancial year. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about returns based on the warranty period for all products sold. The table below gives information about movement in warranty provisions.

31-Mar-16 31-Mar-15

` `

At the beginning of the year - -

Arising during the year, net of reversals 4,836,713 -

Utilized during the year - -

As at the end of the year 4,836,713 -



9 Short-term borrowings 31-Mar-16 31-Mar-15

` `

Foreign currency loan from banks (i) 98,419,872 -

Acceptances (ii) 21,714,494 25,721,403

Cash credit from banks (iii) - 44,099,369

Loans from fellow subsidiary repayable on demand (unsecured) (iv) (note 27) - 10,000,000

120,134,366 79,820,772

The above amount includes

Unsecured borrowings 20,134,366 79,820,772

120,134,366 79,820,772

i) During the year, the Company has availed a Pre-shipment Credit in Foreign Currency (PCFC) against realisation of its export

sales. The loan amount outstanding as at 31 March 2016 is US $ 1,484,302 (31 March 2015: Nil). The due date of repayment was

13 October 2015 which was extended to 4 May 2016 based on extension applied by the Company The interest rate is LIBOR plus 35 basis points.

ii) Includes letter of credit from banks issued to various customers for supply of goods. The tenure of such letter of credit issued ranges from 90 to 180 days.

iii) The Company had unsecured working capital facility with Citibank for ` 60,000,000 with effect from 16 April 2014. The facility was repayable on demand and had a loating rate determined based on market condition and was referenced to the Reserve Bank of India base rate. During the current year, entire loan amount has been repaid by the Company.

iv) The tenure of the loan amounting to ` 10,000,000 is extended during the current year and accordingly, the same has been classiied as long-term borrowings (note 5)


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13 Inventories (valued at lower of cost and net realizable value) 31-Mar-16 31-Mar-15

` `

Raw materials and components (includes in transit ` 18,625,435 (31 March 2015: ` 41,079,332)) (note 18) 136,542,499 148,945,420

Work-in-progress (note 19) 42,131,156 44,777,759

Finished goods (including stock-in-transit ` 18,373,465 (31 March 2015: ` 26,450,898)) (note 19) 44,037,001 65,404,269

Traded goods (including stock-in-transit ` 22,819,497 (31 March 2015: ` 23,834,528)) (note 19) 29,039,955 26,560,649

251,750,611 285,688,097

14 Trade receivables and other assets 31-Mar-16 31-Mar-15

14.1 Trade receivable * ` `

Outstanding for a period exceeding six months from the date they are due for paymentUnsecured, considered good 77,494,420 35,503,672

Doubtful 13,326,589 10,950,098

90,821,009 46,453,770

Provision for doubtful trade receivables (13,326,589) (10,950,098)

77,494,420 35,503,672

Other receivables

Unsecured, considered good 343,343,350 383,103,277

Doubtful 2,399,476 -

345,742,826 383,103,277

Provision for doubtful trade receivables (2,399,476) -

343,343,350 383,103,277

420,837,770 418,606,949

* Refer note 27 for receivable from related parties.

12 Loans and advances Non-current Current

31-Mar-16 31-Mar-15 31-Mar-16 31-Mar-15

` ` ` `

Unsecured, considered doubtful

Dues from statutory authorities 7,486,521 10,880,166 11,118,420 8,058,832

Security deposit - - 2,167,000 2,167,000

Advance to suppliers - - 205,000 1,046,854

(a) 7,486,521 10,880,166 13,490,420 11,272,686

Unsecured, considered good

Dues from statutory authorities 41,666,587 42,221,641 73,906,143 92,146,902

Security deposit 4,172,529 4,112,314 625,084 720,198

Capital advance 2,223,358 8,030,485 - -

Advance to suppliers - - 8,321,188 3,920,585

Advance income-tax

(net of provision for tax (including MAT) ` 44,077,289

(31 March 2015: ` 26,548,938))

13,792,788 9,578,636 - -

Prepaid expenses 767,293 - 6,636,481 5,685,765

Dues from employees - - 1,126,553 3,383,775

(b) 62,622,555 63,943,076 90,615,449 105,857,225

(a+b) 70,109,076 74,823,242 104,105,869 117,129,911

Less: provision for doubtful advances (7,486,521) (10,880,166) (13,490,420) (11,272,686)

62,622,555 63,943,076 90,615,449 105,857,225



Non-current Current

14.2 Other assets (unsecured considered good unless stated

otherwise)

31-Mar-16

`

31-Mar-15

`

31-Mar-16

`

31-Mar-15

`

Interest accrued on ixed deposits 30,536 16,059 30,143 30,700

Non-current bank balances (note 15) 165,000 165,000 - -

Unbilled revenue * - - 2,002,294 -

Other receivables - - 333,272 2,500,323

195,536 181,059 2,365,709 2,531,023

* Refer note 27 for unbilled revenue from related parties.

15 Cash and bank balances Non-current Current

31-Mar-16 31-Mar-15 31-Mar-16 31-Mar-15

` ` ` `

Cash and cash equivalents

Balances with banks:– On current accounts - - 36,143,285 13,536,058

– On unpaid dividend account - - 234,690 360,555

- - 36,377,975 13,896,613

Other bank balances

– Deposits with original maturity for more than 12 months 165,000 165,000 - -

– Deposits with maturity for more than 3 months but less than 12 months

- - 3,492,748 3,253,637

165,000 165,000 3,492,748 3,253,637

Amount disclosed under non-current assets (note 14.2) (165,000) (165,000)

- - 3,492,748 3,253,637

- - 39,870,723 17,150,250

16 Revenue from operations 31-Mar-16 31-Mar-15

` `

Revenue from operations

Sale of products

Manufacturing (note 38) 1,950,298,423 1,549,321,748

Trading 134,785,429 106,580,630

2,085,083,852 1,655,902,378

Sale of services 50,563,176 57,384,777

Other operating revenue

Sale of scrap 5,882,576 8,470,850

Export beneits (note 38) 4,924,427 897,225

Others 7,500,000 16,286,149

18,307,003 25,654,224

Revenue from operations (gross) 2,153,954,031 1,738,941,379

Less - Excise duty # (138,227,669) (86,332,440)

Revenue from operations (net) 2,015,726,362 1,652,608,939

# Excise duty on sales amounting to ` 138,227,669 (31 March 2015: ` 86,332,440) has been reduced from sales in the statement of proit and loss and excise duty on (increase)/decrease in stock amounting to ` 1,816,290 (31 March 2015: ` (1,471,456)) has been considered as (income) / expense in note 19 of the inancial statement.



Details of products sold 31-Mar-16 31-Mar-15

` `

Enclosures 1,174,844,998 908,503,627

Card frames 39,468,917 39,936,020

Components and accessories * 597,756,839 514,549,661

1,812,070,754 1,462,989,308

Traded goods sold

Electrical equipments 134,785,429 106,580,630

134,785,429 106,580,630

1,946,856,183 1,569,569,938

* There are no items, which in value account for 10% or more of the total value of products sold to be shown as separate items.Details of services rendered 31-Mar-16 31-Mar-15

` `

Processing charges 33,672,513 49,502,409

Commissioning and installation 8,575,994 3,337,836

Consulting engineering 5,809,450 1,874,000

Service charges 2,505,219 2,670,532

50,563,176 57,384,777

17 Other income 31-Mar-16 31-Mar-15

` `

Interest income on

Bank deposits 407,437 286,869

Others 55,669 83,416

Gain on sale of ixed assets (net) - 61,709

Gain on account of foreign exchange luctuations (net) - 4,512,795

Liabilities/ provisions no longer required written back 2,894,952 -

Miscellaneous income 3,613,003 570,369

6,971,061 5,515,158

18 Cost of material and components consumed 31-Mar-16 31-Mar-15` `

Inventory at the beginning of the year 148,945,420 106,313,494

Add - Purchases 1,152,802,253 1,067,918,290

Less - inventory at the end of the year (136,542,499) (148,945,420)

Cost of raw material and components consumed (note 38) 1,165,205,174 1,025,286,364

Details of raw materials and components consumed 31-Mar-16 31-Mar-15

` `

CRCA sheets 134,343,829 110,430,128

Aluminium sheets 4,878,235 4,536,098

Aluminium sections 15,351,360 18,157,248

Components and accessories * 1,010,631,750 892,162,890

1,165,205,174 1,025,286,364

Details of inventory

31-Mar-16 31-Mar-15

` `

CRCA sheets 15,620,228 8,021,102

Aluminium sheets 87,539 1,410,912

Aluminium sections 1,813,261 2,202,023

Components and accessories * 119,021,471 137,311,383

136,542,499 148,945,420

* There are no items, which in value account for 10% or more of the total value of raw materials consumed to be shown as separate items.



19 (Increase)/ decrease in inventories of inished goods, work in progress and traded goods31-Mar-16 31-Mar-15 (Increase)/ decrease

` ` `

Inventories at the end of the yearWork-in-progress 42,131,156 44,777,759 2,646,603

Finished goods 44,037,001 65,404,269 21,367,268

Traded goods 29,039,955 26,560,649 (2,479,306)

115,208,112 136,742,677 21,534,565

Inventories at the beginning of the yearWork-in-progress 44,777,759 35,460,409 (9,317,350)

Finished goods 65,404,269 72,244,032 6,839,763

Traded goods 26,560,649 10,703,179 (15,857,470)

136,742,677 118,407,620 (18,335,057)

(Increase) / decrease in inventories 21,534,565 (18,335,057)

Details of purchase of traded goods 31-Mar-16 31-Mar-15

` `


123,585,752 87,279,400

Details of inventory 31-Mar-16 31-Mar-15

` `

Work-in-progressEnclosures 62,679 6,655,700

Card frames 215 1,545,688

Others (including components and accessories)* 42,068,262 36,576,371

42,131,156 44,777,759

Finished goods

Enclosures 23,139,681 47,088,620

Card frames 1,483,041 772,465

Others (including components and accessories)* 19,414,279 17,543,184

44,037,001 65,404,269

Traded goods


29,039,955 26,560,649

* There are no items, which in value account for 10% or more of the total value of inventories to be shown as separate items.

20 Employee beneits expense 31-Mar-16 31-Mar-15

` `

Salaries, wages and bonus 199,728,999 198,712,353

Contribution to provident and other funds 11,001,803 10,258,297

Staff welfare expenses 27,180,531 32,870,015

Gratuity expense/ (reversal) (note 24) 7,349,614 (3,101,830)

245,260,947 238,738,835

21 Depreciation and amortization expense 31-Mar-16 31-Mar-15

` `

Depreciation of tangible assets 46,927,137 44,532,339

Amortization of intangible assets 4,962,873 5,577,323

51,890,010 50,109,662

22 Finance costs 31-Mar-16 31-Mar-15

` `

Interest 30,431,281 24,568,149

Bank charges 1,361,524 889,958

31,792,805 25,458,107



23 Other expenses 31-Mar-16 31-Mar-15

` `

Freight and forwarding charges 15,765,245 28,543,235

Casual labour 66,707,057 55,527,362

Consumables 4,855,497 10,448,094

Power and fuel 41,835,917 38,400,094

Insurance 3,120,667 2,237,684

Repairs and maintenance

Buildings 4,330,432 3,196,278

Plant and machinery 31,413,074 26,324,037

Others 12,556,213 17,339,837

Rent 7,662,766 7,303,423

Rates and taxes 2,308,830 3,624,325

Legal and professional fees (note 38) 53,380,419 44,159,665

Payments to auditor (i) 3,203,583 4,227,118

Directors’ sitting fees 495,000 455,000

Travelling and conveyance 19,710,087 18,168,241

Advertising and sales promotion 9,103,549 3,048,070

Provision for doubtful debts and advances (net) 7,298,103 7,174,531

Loss on account of foreign exchange luctuations (net) 4,957,108 -

Miscellaneous expenses 13,324,570 16,592,561

302,028,117 286,769,555

(i) Payments to auditor 31-Mar-16 31-Mar-15

` `

As auditor:Audit fee 900,000 1,900,000

Limited reviews 2,100,000 2,100,000

Reimbursement of expenses 203,583 227,118

3,203,583 4,227,118



24 Gratuity

The Company has a deined beneit gratuity plan. Under the gratuity plan, every employee who has completed at least ive years of service gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service, except for workers at Pune factory being eligible for gratuity @ 30 days of last drawn salary for each completed year of service. The scheme is funded with insurance companies in the form of qualifying insurance policy. The following tables summarise the components of net beneit expense recognised in the statement of proit and loss and the funded status and amounts recognised in the balance sheet for the respective plans.Statement of proit and loss 31-Mar-16 31-Mar-15

` `

Current service cost 2,721,706 2,537,694

Interest cost on beneit obligation 2,630,782 3,050,136

Expected return on plan assets (964,745) (991,146)

Net actuarial (gain)/losses recognized in the year 2,961,871 (7,698,514)

Net beneit expense / (reversal) 7,349,614 (3,101,830)

Actual return on plan assets 702,051 1,065,144

Balance sheet

Plan asset / liability 31-Mar-16 31-Mar-15

` `

Present value of deined beneit obligation (39,259,508) (33,513,143)

Fair value of plan assets 13,116,136 10,719,385

Plan asset/ (liability) (26,143,372) (22,793,758)

Changes in the present value of the deined beneit obligation as follows: 31-Mar-16

`

31-Mar-15

`

Opening deined beneit obligation 33,513,143 38,855,235

Current service cost 2,721,706 2,537,694

Interest cost 2,630,782 3,050,136

Beneits paid (2,305,300) (3,305,406)

Actuarial (gain)/ losses 2,699,177 (7,624,516)

Closing deined beneit obligation 39,259,508 33,513,143

Changes in the fair value of plan assets are as follows:31-Mar-16

`

31-Mar-15

`

Opening fair value of plan assets 10,719,385 11,012,736

Expected return 964,745 991,146

Contributions by employer 4,000,000 1,946,911

Beneits paid (2,305,300) (3,305,406)

Actuarial gain/ (losses) (262,694) 73,998

Closing fair value of plan assets 13,116,136 10,719,385

The Company expects to contribute ` 7,034,696 to gratuity in the next year (31 March 2015: ` 7,135,758)

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:31-Mar-16 31-Mar-15

Investments with insurer 100% 100%

The principal assumptions used in determining gratuity obligations for the Company's plans are shown below:

31-Mar-16 31-Mar-15

Discount rate 7.85% 7.85%

Expected rate of return on assets 9.00% 9.00%

Salary escalation 5.00% 5.00%

The estimates of future salary increases, considered in actuarial valuation, take account of inlation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.



Amounts for the current and previous four periods are as follows:31-Mar-16 31-Mar-15 31-Mar-14 31-Mar-13 31-Mar-12

` ` ` ` `

Deined beneit obligation 39,259,508 33,513,143 38,855,235 35,619,278 31,636,819

Plan assets 13,116,136 10,719,385 11,012,736 10,956,489 12,059,831

Surplus/ (deicit) (26,143,372) (22,793,758) (27,842,499) (24,662,789) (19,576,988)

Experience adjustments on plan liabilities (2,699,177) 7,624,516 1,351,083 1,800,977 (3,759,548)

Experience adjustments on plan assets (262,694) 73,998 (191,348) 56,872 79,110

25 Leases

Finance lease

The Company has inance leases and hire purchase contracts for vehicles. Future minimum lease payments (MLP) under inance leases together with the present value (PV) of the net MLP are as follows:

31-Mar-16 31-Mar-15

MLP (`) PV (`) MLP (`) PV (`)

Within one year 34,712 34,405 416,544 389,648

After one year but not more than ive years - - 34,712 34,404

Total minimum lease payments 34,712 34,405 451,256 424,052

Less: Amount representing inance charges (307) - (27,204) -

Present value of minimum lease payments 34,405 34,405 424,052 424,052

Lease expense recognised during the year as interest ` 26,897 (31 March 2015: ` 66,653).

Operating lease

The Company has entered into commercial leases on certain premises under cancellable operating lease. These leases expire on various dates upto 28 February 2017 and are renewable by mutual consent. There are no restrictions placed upon the Company by entering into these leases.

The rent expense incurred during the year amounts to ` 7,662,766 (31 March 2015: ` 7,303,423).

26 Segment information

The Company has only one business segment i.e. business relating to enclosure products and accordingly, disclosure requirements as per Accounting Standard - 17 on Segment Reporting are not applicable. Secondary information is reported geographically.

Geographical segments:

The Company's secondary segments are the geographic distribution of activities. Revenue and receivables are speciied by location of the customers while other geographic information is speciied by location of the assets. The following table presents revenue, expenditure and certain asset information regarding the Company's geographical segments:

31-Mar-16 31-Mar-15

` `

Segment revenue

Export 331,898,862 251,813,272

Domestic 1,683,827,500 1,400,795,667

2,015,726,362 1,652,608,939

Segment assets

Export 77,192,068 41,303,551

Domestic 345,647,996 377,303,398

Unallocated 848,073,874 877,042,806

1,270,913,938 1,295,649,755

Note:

Fixed assets (including intangible assets and capital work-in-progress) and current assets (other than trade receivables and unbilled revenue) have not been identiied to any reportable segments as they are used interchangeably between segments. All ixed assets are located in India.



27 Name of the related parties and related party relationship

Related party where control exists

Ultimate Holding Company Schneider Electric SA, France

Holding Company Schneider Electric South East Asia (HQ) Pte Limited, Singapore

Related parties under AS 18 with whom transactions have taken place during the year

Fellow subsidiaries APC (Xiamen) Power Infrastructure, China

Clipsal Manufacturing (M) SDN BHD, Malaysia

Invensys India Private Limited, India

Pelco, Inc., USA

Sarel Appareillage Electrique, France

Schneider Electric (Australia) Pty Limited, Australia

Schneider Electric (China) Co. Ltd, China

Schneider Electric Dc MEA Fzco, U.A.E.

Schneider Electric Espana SAU, Spain

Schneider Electric India Private Limited, India

Schneider Electric Infrastructure Limited, India

Schneider Electric IT America Corp., USA

Schneider Electric IT Australia P/L, Australia

Schneider Electric IT Business India Private Limited, India

Schneider Electric IT Corporation, USA

Schneider Electric IT France, France

Schneider Electric IT Logistic Asia Paciic Pte. Limited, Singapore

Schneider Electric IT SA (Pty) Ltd, South Africa

Schneider Electric Logistics Asia Pte. Limited, Singapore

Schneider Electric Solar Inverters USA Inc. , USA

Schneider Electric USA Inc., USA

Unilair SPA, Italy

Key management personnel

Venkatraman S Managing Director

Additional related parties as per Companies Act, 2013 with whom transactions have taken place during the year:

Key management personnel

Damodar Kalavala Chief Financial Oficer (CFO) (w.e.f. 21 May 2015)

Neeraj Garg Chief Financial Oficer (CFO) (ceased to be a CFO w.e.f 14 May 2015)

Vighneshwar Bhat Company Secretary (w.e.f. 16 April 2014)



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b. Loans taken and repayment thereof

Year ended Loans taken Repayment Interest

accrued

Amount owed

to related

parties

Schneider Electric India Private Limited, India 31-Mar-16 - - 386,100 10,386,100

31-Mar-15 10,000,000 - 426,563 10,426,563

Schneider Electric IT Business India Private

Limited, India

31-Mar-16 - - 3,962,866 203,898,327

31-Mar-15 - - 3,882,130 203,817,591

c. Interest expense on loan 31-Mar-16 31-Mar-15

` `

Schneider Electric IT Business India Private Limited, India 17,709,512 17,486,125

Schneider Electric India Private Limited, India 844,625 473,958

18,554,137 17,960,083

d. Unbilled revenue (included in other current assets) 31-Mar-16

`

31-Mar-15

`

Schneider Electric Logistics Asia Pte. Limited, Singapore 1,084,559 -

Sarel Appareillage Electrique SAS, France 917,735 -

2,002,294 -

e. Remuneration to key managerial personnel 31-Mar-16

`

31-Mar-15

`

Managerial remuneration:

Venkatraman S* 10,650,073 9,110,652

Damodar Kalavala 2,666,775 -

Vighneshwar Bhat 2,371,996 777,780

Neeraj Garg** - 2,500,000

15,688,844 12,388,432

f. Managerial remuneration 31-Mar-16 31-Mar-15

` `

Salaries and allowances 13,847,252 11,944,544

Contribution to provident fund 546,557 311,388

Perquisites’ 1,295,035 132,500

15,688,844 12,388,432

* Out of the above, the Company has recovered ` 7,500,000 (31 March 2015: ` 5,600,000) from a fellow subsidiary based on a cost sharing agreement. The Company has accounted the same as other operating revenues in the statement of proit and loss. Further, out of the above, ` 2,401,385 (31 March 2015: ` 1,968,109) is payable as at 31 March 2016, for which the Company is in the process of obtaining required approvals.

** The above amounts were paid to a group company as reimbursement of expenses.

Note: The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave beneits, as they are determined on an actuarial basis for the Company as a whole.

28 Capital commitments 31-Mar-16 31-Mar-15

` `

Estimated amount of contracts remaining to be executed on Capital Account (net of advances) 10,967,542 10,097,019

29 Contingent liabilities 31-Mar-16 31-Mar-15

` `

Claims against the Company not acknowledged as debts (i) 5,682,862 26,047,976

Excise and service tax matters 3,166,885 1,682,423

Sales Tax matters – Non collection of ‘C’ and ‘I’ forms 72,041,339 53,109,198

Outstanding bank guarantees 58,647,623 74,392,090

139,538,709 155,231,687



(i) During the current year, the Company has undertaken an exercise of reconciling its vendor balances with respect to the conirmations/account statements received from such vendors. The Company did not acknowledge vendor claims amounting to ` 5,682,862

(31 March 2015: ` 26,047,976) as debts in absence of adequate documentation evidencing the proof of delivery of the materials to be received from the vendors. Further the management conirms that the materials are yet to be received by the Company. In absence of availability of adequate documentation/supporting evidences that need to be provided by the vendors, the management does not expect any material adverse effect on the inancial position and the results of operation as at 31 March 2016.

30 Derivative instruments and unhedged foreign currency exposureParticulars of unhedged foreign currency exposure as at the reporting date

Currency 31-Mar-16 31-Mar-15

Foreign

currency` Foreign

currency`

Trade payables EUR 1,716,008 128,864,463 791,658 53,445,144

USD 516,841 34,283,557 140,639 8,802,709

GBP 332 31,522 332 30,650

Other liabilities EUR - - 90,267 6,093,961

USD 5,354 355,156 - -

Short-term borrowings USD 1,484,302 98,419,872 - -

Trade receivables (gross of provision) USD 845,126 56,059,649 481,995 30,168,453

EUR 254,744 19,130,125 164,939 11,135,098

Loans and advances EUR 9,446 709,368 96,887 6,540,877

USD 69,830 4,632,032 33,056 2,069,028

Cash and bank balances USD 54,282 3,600,712 206,089 12,899,278

EUR 38,281 2,874,718 2,480 167,411

Unbilled Revenue USD 16,350 1,084,559 - -

EUR 12,221 917,735 - -

31 Details of dues to micro and small enterprises as deined under the MSMED Act, 200631-Mar-16 31-Mar-15

` `

The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of each accounting year

Principal amount due to micro and small enterprises

Interest due on above28,079,025 13,729,978

87,959 423,676

28,166,984 14,153,654

The amount of interest paid by the buyer in terms of section 16 of the MSMED Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year.

- -

The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest speciied under the MSMED Act, 2006

3,005,382 1,499,361

The amount of interest accrued and remaining unpaid at the end of each accounting year 5,883,263 2,789,922

The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the MSMED Act, 2006

5,883,263 2,789,922

32 Value of imports calculated on CIF basis

31-Mar-16 31-Mar-15

` `

Raw materials and components 179,154,106 184,096,125

Traded goods (net) 25,801,757 16,297,795

Capital goods 22,236,929 321,254

227,192,792 200,715,174



33 Expenditure in foreign currency (accrual basis)31-Mar-16 31-Mar-15

` `

Legal and professional fees 26,327,866 30,617,465

Staff welfare expenses 2,040,534 9,567,854

Freight and forwarding charges 552,539 -

Repairs and maintenance - Others 139,189 1,062,737

Travelling and conveyance - 196,444

Miscellaneous expenses 282,280 -

29,342,408 41,444,500

34 Imported and indigenous raw materials and

components consumed31-Mar-16 31-Mar-15

% of total

consumption ` % of total

consumption `

Raw materials

Imported - - - -

Indigenously obtained 100% 161,248,274 100% 133,123,475

100% 161,248,274 100% 133,123,475

Components

Imported 20% 195,953,845 19% 173,322,287

Indigenously obtained 80% 808,003,055 81% 718,840,602

100% 1,003,956,900 100% 892,162,889

Total cost of raw materials and components consumed 1,165,205,174 1,025,286,364

35 Earnings in foreign currency (accrual basis) 31-Mar-16 31-Mar-15

` `

Export of goods on FOB basis 331,298,731 251,813,272

Sale of services 600,131 -

331,898,862 251,813,272

36 As a part of Schneider Electric SA (Ultimate holding Company) overall pay policy, Schneider Electric SA, has set up a Worldwide Employee Stock Option Plan (WESOP) scheme to the employees of the group companies under which the employees are granted Stock Options of Schneider Electric SA.

The Institute of Chartered Accountants of India has issued a Guidance Note on Accounting for Employee Share-based payments, which is applicable to employee share based payment plans, the grant date in respect of which falls on or after April 1, 2005. The scheme detailed above is managed and administered by the ultimate parent company for its own beneit and do not have any settlement obligations on the Company. Further, the aforesaid scheme pertains to shares of the ultimate parent company and impact of compensation beneits in respect of such scheme is assessed and accounted for in the books of the parent Company. Accordingly, the Company is of the opinion that the same is not required to be accounted for as per the said Guidance Note.

37 The Company is in the process of completing transfer pricing study to ascertain whether international transactions with associated enterprises are in compliance with the transfer pricing norms under the Indian Income-tax Act, 1961. The Management does not anticipate any adjustment with regard to the transactions involved.

38 Proit/ (loss) before tax for the year ended 31 March 2016 includes adjustments pertaining to earlier years amounting to ̀ 3,029,222)

(31 March 2015: (` 18,591,553)) as below.

Particulars 31-Mar-16 31-Mar-15

` `

Reversal of sale of products - Manufacturing 4,847,169 13,713,793

Other operating revenue - Exports beneits (1,817,947) -

Cost of material and components consumed - 2,693,000

Other expenses - Legal and professional fees - 2,184,760

3,029,222 18,591,553



39 The Equity Shares of the Company were listed on the Pune Stock Exchange and permitted to be traded on the Bombay Stock Exchange(BSE). Consequent to de-recognition of the Pune Stock Exchange (PSE) by Securities Exchange Board of India (SEBI), BSE has suspended the trading of the Equity Shares of the Company effective May 22, 2015. The Company is currently in discussions with SEBI to evaluate the way forward and does not expect any inancial implication in this regard.

40 The previous year's igures have been re-grouped/rearranged, wherever necessary to conirm to current years' classiication.







Venkatraman S

Managing Director

DIN: 03139440

Shravan Sharma

Director


Partner

Membership Number: 205839 Vighneshwar G Bhat

Company Secretary

Damodar Kalavala





NOTES



SCHNEIDER ELECTRIC PRESIDENT SYSTEMS LIMITED Regd. Ofice: 5C/1, KIADB Industrial Area, Attibele, Bangalore-562107. CIN: L32109KA1984PLC079103,

Phone:(080) 33437104, (080) 43333058 Fax: (080) 27820333 Website:www.schneiderelectricpresident.com, e-mail:[email protected]

ATTENDANCE SLIP

32nd ANNUAL GENERAL MEETING – 29th SEPTEMBER, 2016

I certify that I am a registered Member/Proxy for the registered Member of the Company. I hereby record my presence at the 32nd Annual General Meeting of the Company to be held at 5C/1, KIADB Industrial Area, Attibele, Bangalore-562107 on Thursday 29th September, 2016, at 11.00 a.m.

Name of the Member/Proxy Signature of Member/Proxy

NOTE: Members/Proxy holders are requested to bring this Attendance Slip to the Meeting and hand over the same at the entrance duly signed.

DP ID No.

Client ID No.

Registered Folio No.

Number of Shares held

SCHNEIDER ELECTRIC PRESIDENT SYSTEMS LIMITED Regd. Ofice: 5C/1, KIADB Industrial Area, Attibele, Bangalore -562107. CIN: L32109KA1984PLC079103,

Phone:(080) 33437104, (080) 43333058. Fax: (080) 27820333 Website: www.schneiderelectricpresident.com, e-mail:[email protected]

PROXY FORM[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

Name of the member (s) :

Registered address: :

E-mail Id :

Folio No/ Client Id :

DP ID :

I/We, being the member (s) of …………………..........…………………………………….. shares of the above named company, hereby appoint

1. Name: ………………………….......……………….................................... E-mail …………………………….........................................

Address:……………………………………………………….....................................................................................................................

Signature:………………………….,or failing him

2. Name: ………………………….......……………….................................... E-mail …………………………….........................................

Address:……………………………………………………….....................................................................................................................

Signature:………………………….,or failing him

3. Name: ………………………….......……………….................................... E-mail …………………………….........................................

Address:……………………………………………………….....................................................................................................................

Signature:………………………….

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 32nd Annual General Meeting of the Company, to be held on the Thursday, 29th September 2016, at 11.00 am at the Registered Ofice at 5C/1, KIADB Industrial Area, Attibele, Bangalore -562107 and at any adjournment thereof in respect of such resolutions as are indicated below:



Resolution No. Resolutions Optional*

Ordinary Business For Against

1 Adoption of Financial Statements of the Company for the inancial year ended 31st March,

2016 and the Reports of the Directors and the Auditors thereon.

2 Appoint a Director in place of Mr. Sugata Sircar (holding DIN No: 01119161) who retires by rotation and being eligible, offers himself for re-appointment.

3 Appointment of Messrs S. R. Batliboi & Associates LLP, Chartered Accountants, (Reg. No. 101049W /E300004) as Statutory Auditors for a period of ive (5) years from the conclusion of 32nd Annual General Meeting till the conclusion of 37th Annual General Meeting.

Special Business

4 Approval and ratiication of payment of the Remuneration of the Cost Auditors.

5 Special Resolution Under Sections 67 of the Companies Act, 2013 for approval of

WESOP Scheme.

6 Special Resolution Under Sections 188 of the Companies Act, 2013 for Related Party

Transactions.

Signed this……............................................................ day of….........…….................... 2016.

Signature of the Member Signature of Proxy

Notes:

(1) This form of proxy in order to be effective should be duly completed and deposited at the Registered Ofice of the Company not less than 48 hours before the commencement of the meeting.

*(2) This is only optional. Please put a ‘X’ in the appropriate column against the resolutions indicated in the Box. If you leave the ‘For’ or ‘Against’ column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate.

AfixRevenue

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INFORMATION TO SHAREHOLDERS...CONTENT PAGE No. Financial Statistics 1 Notice to the Shareholders 2...

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