Schneider Electric Infrastructure Auditors Report


To the Members of Schneider Electric Infrastructure Limited

Report on the Audit of the Ind AS Financial Statements

Opinion

We have audited the Ind AS financial statements of Schneider Electric Infrastructure Limited ("the Company"), which comprise the Balance Sheet as at March 31,2023, and the Statement of Profit and Loss (including other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the Ind AS Financial Statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and net profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Ind AS Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("the ICAI") together with the ethical requirements that are relevant to our audit of the Ind AS financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

The key audit matter

How the matter was addressed in our audit

1 Revenue Recognition

In view of the significance of the matter, following audit procedures were applied in this area, amongst others to obtain sufficient and appropriate audit evidence:

Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

• We assessed the appropriateness of the revenue recognition accounting policies and its compliance in terms of Ind AS 115 ‘Revenue from contracts with customers.

The Company has concluded that as principal, it typically controls the goods or services before transferring them to the customers. There is an inherent risk and presumed fraud risk around the accuracy and existence of revenues recognised. Further, revenue is an important element of how the Company measures its performance. The Company focuses on revenue as a key performance measure, which could create an incentive for revenue to be recognized before the controls have been transferred.

• We obtained an understanding of managements internal controls over the revenue recognition process and evaluated the design and tested the operating effectiveness of key controls.

Accordingly, due to the significant risk associated with revenue recognition in accordance with terms of Ind AS 115 ‘Revenue from contracts with customers, it has been determined a key audit matter in our audit of the Ind AS financial statements.

• We carried out analytical procedures on revenue recognised during the year to identify unusual variances and discussed with designated management personnel.

In view of the above and given the Company and its stakeholders focus on revenue as a key performance indicator, we determined this to be a key audit matter.

• We performed substantive procedures by testing the underlying documents on samples selected based on a representative sampling of revenue transactions recorded during the year.

• We performed cut-off testing on sales transactions made near the year-end on sample basis by obtaining supporting documentation including customer confirmation of receipt of goods to establish that sales and corresponding trade receivables are properly recorded in the correct period.

We tested the relevant disclosures made in the Ind AS financial statements.

2 Trade Receivables

In view of the significance of the matter, following audit procedures were applied in this area, amongst others to obtain sufficient and appropriate audit evidence:

Trade receivables, including retention money with customers, amounted to Rs. 5,459.27 million at year-end, which is significant part of the total assets of the Company. Impairment loss on trade receivables is recognized in accordance with accounting policies as detailed in "significant accounting policies" in the financial statements.

• Obtained an understanding of the processes implemented to estimate impairment provision against trade receivables.

The Company is required to assess the recoverability of its trade receivables on a regular basis. It makes an impairment allowance for specific customers on case-to-case analysis. It further makes an estimate of impairment allowance for balance receivables on the basis of lifetime expected credit loss method based on provision matrix in accordance with Ind AS 109, Financial Instruments. The Company further considers impact of external environment, such as possible effect from the COVID-19 pandemic.

• Tested key controls (both design and operating effectiveness) over estimation of impairment loss.

In assessing the recoverability of trade receivables, management also exercised significant judgements to evaluate the collectability from individual customers after considering their creditworthiness, whether they have financial difficulties, experience of default or delinquency in payments and ageing analysis. The judgements applied by management have a significant impact on the level of provision required for trade receivables.

• In respect of significant provisions made for specific trade receivables, we obtained and evaluated specific assessment from the Company and examined related available information such as correspondences with customers and publicly available information.

In view of above, we determined this area to an area of audit focus, and accordingly, a key audit matter.

• Evaluated the "expected credit loss" model adopted to estimate the impairment allowance and tested the related assumptions and computations.

• Obtained and tested the base data used in the above- mentioned model such as trade receivables ageing, historical billing and collection data.

• Evaluated the various assumptions and judgements applied such as discount rate, period of delays of receipts from customers, etc.

• Circulated the balance confirmation letter to the customers and analysed the responses in balance confirmation letter obtained from the customers.

We tested the relevant disclosures made in the Ind AS financial statements.

3 Tax Litigations

In view of the significance of the matter, following audit procedures were applied in this area, amongst others to obtain sufficient and appropriate audit evidence:

The Companys operations are subject to complexities arising from applicability of various laws and regulations with respect to positions on matters relating to income tax, sales tax, goods and services tax, service tax, excise, customs etc. (either past or present). Provision for taxes is recognized or contingent liabilities are disclosed in accordance with accounting policies as detailed in "significant accounting policies" in the financial statements.

• We obtained an understanding of the process of identification of tax litigations, related contingent liabilities and the key uncertain tax positions.

Due to complexity of cases, significant amount involved and timescales for resolution, significant judgment and estimations are required in assessing the range of possible outcomes for some of these matters. These judgments could change over time as each of the matter progresses depending on experience on actual assessment proceedings by tax and other authorities and other judicial precedents.

• Obtained the list of ongoing litigations of the Company and discussed the same with the management to understand the details of the underlying matters.

The Company makes an assessment to determine the outcome of these tax positions and decides to make an accrual or consider it to be a possible contingent liability. This affects the measurement and accuracy of provision for taxes.

• Tested key controls (both design and operating effectiveness) over the estimate of provisions for various taxes.

In view of the above-mentioned factors, we have determined this to be a key audit matter.

• We analysed the Companys judgment regarding the eventual resolution of matters with various tax authorities. In this regard, we understood how the Company has considered past experience, where available, with the authorities in the respective jurisdictions.

• We obtained representations from relevant consultants and legal counsels. We also evaluated the objectivity, competence, and relevant experience of those consultants / legal counsels.

• Involved specialists to evaluate estimates on the basis of the facts of each case, internal evaluations, legal precedence, assumptions made and external legal opinions.

We tested the relevant disclosures made in the Ind AS financial statements.

4 Impairment assessment of property plant and equipment, capital work in progress, right-of-use assets and intangible assets

In view of the significance of the matter, following audit procedures were applied in this area, amongst others to obtain sufficient and appropriate audit evidence:

The carrying amount of property, plant and equipment, capital work in progress, right of use assets and intangible assets, amounted to Rs. 3,339.00 million at year-end, which is significant part of the total assets of the Company. The Company has accumulated losses aggregating to Rs. 2,090.36 million including the net loss in recent most previous years. As a result, there is risk that carrying value of property, plant and equipment may be higher than their recoverable amount.

• We evaluated the method and models used to determine whether the recoverable amounts were appropriate by comparing them with the requirements of Ind AS 36 - ‘Impairment of Assets.

Management carried out an impairment assessment to determine whether the recoverable amounts of these assets are less than the respective carrying amounts using a discounted cash flow method.

• We assessed the valuation methodology and assumptions developed and applied by the valuation expert appointed by the management by assessing:

The evaluation of the recoverable amount of these assets requires the significant estimates in determining the key assumptions supporting the expected future cash flows of the business, the utilisation of the relevant assets, the forecast revenue, profit, Weighted Average Cost of Capital (WACC) and discount rates.

- Key judgements and assumptions applied against industry norms and the asset type.

Considering the above factors, we considered this area to be a key audit matter.

- The evaluation of the expectation of future cash flow projections

- Agreed the base data of the valuation to underlying support.

- Compared the discount rate and WACC used by the management to independent external sources, where possible.

• We considered the revenue and margin growth rate used by the management by comparing the rate with the historical trend in revenue and margin within the Company and considering our own understanding about developments in the industry

• We compared the Companys margin percentage to similar sized companies in the region and to historical trend in the industry

• We performed a sensitivity analysis to understand the effect of changes in key variables on the outcome of the model.

We considered the adequacy of the disclosures of the assumptions and judgements applied to determine whether they were in accordance with Ind AS 36 ‘Impairment of Assets.

Information Other than the Ind AS Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the Ind AS financial statements and our auditors report thereon. The annual report is expected to be made available to us after the date of this auditors report.

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

In connection with our audit of the Ind AS financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether such other information is materially inconsistent with the Ind AS financial statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

Managements Responsibility for the Ind AS Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. This responsibility also 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 design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Ind AS financial statements, the Management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Ind AS financial statements.

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

• Identify and assess the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management.

• Conclude on the appropriateness of the Managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Ind AS financial statements, including the disclosures, and whether the Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("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 A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 purposes 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, except that the back-up of the books of account and other records and papers maintained in electronic mode has not been maintained on servers physically located in India, on a daily basis.

(c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March 31,2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2023 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

(g) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of Section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid/ provided by the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.

(h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements - refer note 33 to the Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or Indian Accounting Standards, for material foreseeable losses, if any, on long-term contracts - refer note 16(ii)(d) to the Ind AS financial statements. The Company did not have any material foreseeable losses on derivative contracts.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company

iv. (a). The Management has represented that, to the best of its knowledge and belief, as disclosed in the note 45(ii) to the Ind AS financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) . The Management has represented, that, to the best of its knowledge and belief, as disclosed in the note 45(ii) to the Ind AS financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under subclause (a) and (b) of Rule 11(e) contain any material misstatement.

v. The Company has not declared or paid any dividend during the year.

vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, as amended is applicable for the Company only w.e.f. 1 April 2023, therefore, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, as amended, is not applicable.

For S.N. Dhawan & Co LLP

Chartered Accountants

Firm Registration No.: 000050N/N500045

Pankaj Walia

Partner

Membership No.: 509590

UDIN No.: 23509590BGWRYR8246

Place: Gurugram

Date: May 23, 2023

Annexure A to the Independent Auditors Report

Referred to in paragraph 1 under ‘Report on other legal and regulatory requirements section of the Independent Auditors Report of even date to the members of Schneider Electric Infrastructure Limited on the Ind AS financial statements as of and for the year ended March 31,2023

(i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

(a) (B) The Company has maintained proper records showing full particulars of intangible assets.

(b) The Company has a regular program of physical verification of its Property Plant and Equipment under which Property, Plant and Equipment are verified in a phased manner over a period of 3 years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this program, certain Property, Plant and Equipment were verified during the year and according to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds of all the immovable properties, as stated in Note 3 to the financial statements (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company, except for the following properties:

Description of property

Gross carrying value (Rs in million)

Held in the name of

Whether promoter, director or their relative or employee

Period held

Reason for not being held in name of Company

Unit 3 on 3rd Floor & 6,7,8 & 9 on 4th Floor, Saran Chambers, 5 Park Road, Lucknow 0.30 The English Electric Co. of India Ltd. Not applicable Since

FY 2011-12 (Refer comment for reason for not being held in the name of Company)

Property was acquired in the scheme of demerger. The application is pending with Land authorities Lucknow for regularisation and effecting change in the name of the Company.

(d) The Company has not revalued its Property, Plant and Equipment (including Right of Use assets) and intangible assets during the year Accordingly, the provisions of clause 3(i)(d) of the Order are not applicable.

(e) There are no proceedings which have been initiated or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) (as amended in 2016) and rules made thereunder. Accordingly, the provisions of clause 3(i)(e) of the Order are not applicable.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit and stocks lying with third parties. For stocks lying with third parties at the year- end, written confirmations have been obtained by the management. According to the information and explanations given to us, and based on the audit procedures performed by us, we are of the opinion that the coverage and procedure of such verification by the management is appropriate and no material discrepancies of 10% or more in the aggregate for each class of inventory were noticed on physical verification as compared to the book records.

(b) In our opinion and according to the information and explanations given to us, during the year, the Company has not been sanctioned any working capital from banks or financial institutions on the basis of security of current assets. Accordingly, the provisions of clause 3(ii) (b) of the Order are not applicable.

(iii) In our opinion and according to the information and explanations given to us, the Company has not made investments in, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured to companies, firms, Limited Liability Partnerships (LLPs) or any other parties. Accordingly, the provisions of clause 3(iii)(a) - (f) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, the Company has not entered into any transaction covered under Sections 185 and 186 of the Act. Accordingly, the provisions of clause 3(iv) of the Order are not applicable.

(v) In our opinion and according to the information and explanations given to us, the Company has neither accepted any deposits nor the amounts which are deemed to be deposits during the year and further the Company had no unclaimed deposits at the beginning of the year within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013 in respect of Companys products/ services. We have broadly reviewed the books of account maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government for the maintenance of cost records under subsection (1) of Section 148 of the Act in respect of Companys products/services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained by the Company. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including goods and services tax, provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess, and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no statutory dues referred to in sub-clause

(a) that have not been deposited with the appropriate authorities on account of any dispute except for the following cases:

Sl.

No.

Name of the statute

Nature of dues

Disputed amount (Rs in million) Deposited amount (Rs in million)

Period to which the amount relates

Forum where dispute is pending

1 Central Sales Tax Act, 1956 Non submission of declaration forms 10.11* - 2005-06, and 2007-08 Deputy Commissioner, U.P. Sales Tax
2 Central Sales Tax Act, 1956 Non submission of declaration forms, Input tax claim disallowed 1.00* 2.34 2006-07 Assessing Officer, Charge Office, West Bengal
3 Central Sales Tax Act, 1956 Non collection of declaration forms 3.67* - 2001- 02 and

2002- 03

Deputy Commissioner
4 Central Sales Tax Act, 1956 Non submission of statutory form such as C/H/F/E-1 and export documents 6.77* 2006-07 Deputy Commissioner, Allahabad
5 Central Sales Tax Act, 1956 Non submission of statutory form such as C/H/F/E-1 and export documents 18.00* 36.06 2007-08 Joint Commissioner, Allahabad
6 Central Sales Tax Act, 1956 Disallowance of stock transfers made within the state, denial of input tax credit, difference in interpretation of rates and non-submission of documents to substantiate the purchases 3.58* 4.82 2008-09 Joint Commissioner (Allahabad)
7 Uttar Pradesh Trade Tax Act, 1948 Ex-Parte assessment order Passed. Records not submitted at the time of assessment 5.50* 4.61 2005-06 Deputy Commissioner, U.P. Sales Tax
8 Delhi Value Added Tax Act, 2004 Non submission of statutory form such as C/H/F/E-1 and export documents 1.83 2007-08 Commercial Tax Officer
9 Central Sales Tax Act, 1956 Non collection of declaration forms 11.09* - 2009-10 Deputy Commissioner Appeal
10 Central Sales Tax Act, 1956 Non collection of declaration forms 0.26* - 2009-10 Deputy Commissioner Appeals
11 Gujarat Value Added Tax, 2003 Non collection of declaration form 1.08* 2.47 2007-08 Joint Commissioner (Corporate)
12 Central Sales Tax Act, 1956 Non submission of statutory form such as C/H/F/E-1 and export documents 39.94* 45.02 2009-10 Joint Commissioner (Allahabad)
13 Madhya Pradesh Value Added Tax Act, 2002 Entry tax on high sea sales imported material 0.38* 0.02 2010-11 Deputy Commissioner Appeals
14 Central Sales Tax Act, 1956 Non collection of declaration forms & CST treated as local VAT Sale 26.70* 14.59 2010-11 Additional Commissioner Appeals
15 Central Sales Tax Act, 1956 Non collection of declaration forms 6.82* 1.82 2010-11 Deputy Commissioner Appeals
16 Central Sales Tax Act, 1956 Non collection of declaration forms 11.02 5.50 2011-12 and 2013-14 Deputy/Additional Commissioner Appeal
17 Gujarat Value Added Tax, 2003 Input tax claim disallowed, nonsubmission of declaration forms 111.01* 28.27 2011-12 Joint Commissioner Appeal
18 Central Sales Tax Act, 1956 Non submission of statutory Form such as C/H/F/E-1 and export documents 9.21* 2.42 2011-12 Joint Commissioner Appeal
19 Central Sales Tax Act, 1956 Non submission of declaration forms, Input tax claim disallowed 46.25 2007-08 Revision Board at Beliaghata
20 Central Sales Tax Act, 1956 Non collection of declaration forms 1.94 1.96 2013-14 Deputy Commissioner
21 Central Sales Tax Act, 1956 Non submission of statutory form such as C/H/F/E-1 and export documents 4.84 8.85 2014-15 Deputy Commissioner
22 Central Sales Tax Act, 1956 non-submission of waybill Form 402 6.41 2.10 2016-17 Deputy Commissioner, Commercial Taxes, Gujarat
23 Central Sales Tax Act, 1956 Non submission of statutory form such as C/H/F/E-1 and export documents 32.89 3.29 2013-14 Additional Commissioner (Appeals), Noida
24 Central Sales Tax Act, 1956 Non submission of statutory forms and alleged short payment of duty 126.73 7.65 2014-15 Joint Commissioner, Sales Tax, West Bengal
25 Central Sales Tax Act, 1956 Non submission of statutory form such as C/H/F/E-1 and export documents 20.90 0.89 2014-15 Joint Commissioner, Sales Tax, Noida
26 Central Sales Tax Act, 1956 Non submission of statutory form such as C/H/F/E-1 and export documents 0.13 0.03 2014-15 Joint Commissioner, Sales Tax, Delhi
27 Central Sales Tax Act, 1956 Non submission of statutory forms 32.93 23.46 2015- 16 and 2016- 17 Deputy Commissioner
28 Central Sales Tax Act, 1956 ITC disallowance 18.72 - 2015-16 Deputy Commissioner, West Bengal
29 Entry Tax Act Telangana Entry tax 2.71 2.71 2012- 13, 2013- 14 and 2014- 15 Joint Commissioner, Telangana
30 Central Sales Tax Act, 1956 Non submission of Statutory form such as C/H/F/E-1 and export documents 18.42 9.21 2017-18 Deputy Commissioner, Tamil Nadu
31 Central Sales Tax Act, 1956 Non submission of Statutory Forms 4.84 4.84 2014-2015 Joint Commissioner, Andhra Pradesh
32 Central Sales Tax Act, 1956 Non submission of statutory form such as C 3.73 4.60 2014-15 Deputy Commissioner, Commercial Taxes, Gujarat
33 Maharashtra Value Added Tax Act, 2002 ITC disallowance 11.11 1.00 2012-13 Tribunal
34 Delhi Value Added Tax Act, 2004 ITC disallowance 0.23 2015-16 Assistant Commissioner, Delhi
35 Central Sales Tax Act, 1956 Non submission of statutory form such as C/H/F/E-1 and export documents 111.58 10.98 2016-17 Additional Commissioner of Sales Tax
36 West Bengal VAT Act 2003 VAT assessment (Export/ SEZ sales) 18.85 2.27 2016-17 Additional Commissioner of Sales Tax
37 Central Sales Tax Act, 1956 Non submission of statutory forms 51.95 16.02 2015- 16, 2016- 17 and 2017- 18 Deputy Commissioner, Commercial Taxes, Gujarat
38 Central Sales Tax Act, 1956 Non submission of statutory forms 3.48 - 2015-16 Deputy Commissioner
39 Central Sales Tax Act, 1956 Non submission of statutory forms 2.16 0.21 2017-18 Senior Joint Commissioner, Pargana Circle
40 West Bengal VAT Act 2003 ITC disallowance 0.10 2017-18 Senior Joint Commissioner, Pargana Circle
41 Central Sales Tax Act, 1956 Non submission of statutory forms 1.37 1.37 2015-16 Appellate Deputy Commissioner, Vijayawada -II Division
42 Central Sales Tax Act, 1956 Non submission of Statutory Forms and ITC disallowance 7.44 3.75 2016- 17 and 2017- 18 Deputy Commissioner Appeal
43 Central Sales Tax Act, 1956 Non submission of Statutory Forms 7.44 0.74 2016-17 Additional

Commissioner Appeal, Bhubaneshwar

44 Central Excise Act, 1944 Non-inclusion of 15% profit margin in transfer pricing 5.13 - 1993- 94 and 1994- 95 Kolkata High Court
45 Central Excise Act, 1944 Seizure of spares while being transported to railway station alleging transportation without Invoice 0.01 1996-97 Commissioner (Appeals) Allahabad
46 Central Excise Act, 1944 Levy of penalty 0.02 - 2011-12 CESTAT - Chennai
47 Central Excise Act, 1944 Refund of excise duty denied for cases where proof of Export submitted after payment of excise duty after 180 days of export 3.07 2012-13 CESTAT - Ahmedabad
48 Central Excise Act, 1944 Duty on removal of inputs "as such" 2.37 0.18 2011-16 Additional Commissioner, Sec-62, Noida
49 Central Excise Act, 1944 Excise duty on freight charges recovered from customer to be included in assessable value 11.65 0.87 2011-16 Additional Commissioner, Vadodara-II
50 Central Excise Act, 1944 Short payment of duty 6.60 0.66 2016-17 Tribunal, Ahmedabad
51 Finance Act, 1994 Service tax on testing and technical analysis service 0.45 0.04 2011- 12 and 2012- 13 Dy. Commissioner, CGST & Central Excise, Allahabad
52 Finance Act, 1994 Short payment of service tax on GTA 0.08* - 2009-10 High Court- Chennai
53 Central Excise Act, 1944 CENVAT credit availed on SAP maintenance charges 0.21* - 2008-09 High Court- Chennai
54 Finance Act, 1994 Non-payment of service tax on provision created in books /short payment of service tax on royalty and technical knowhow payments made under intellectual property right services. 0.65* 2011-12 CESTAT - Chennai
55 Central Excise Act, 1944 Rejection of refund claim towards CENVAT reversals as insisted during excise audit 4.44* 2012-13 CESTAT - Chennai
56 Finance Act, 1994 Non-payment of service tax on manpower supply services 0.62* - 2012-13 CESTAT - Chennai
57 Central Excise Act, 1944 Irregular availment of CENVAT credit on certain ineligible service alleged 0.46* 2010-11 CESTAT - Chennai
58 Finance Act, 1994 Non-payment of service tax on amount paid for the use of trademark 23.18* 2010-11 Honble Supreme Court
59 Finance Act, 1994 Non-payment of service tax on amount paid for the use of trademark 10.12* 2011-12 Honble Supreme Court
60 Finance Act, 1994 Non-payment of service tax on amount paid for the use of trademark 6.74* 2011-12 Honble Supreme Court
61 Finance Act, 1994 Non-payment of service tax on provision created in books/ short payment of service tax on royalty and technical knowhow payments made under intellectual property right services 5.92* 2010-11 Honble Supreme Court
62 The Custom Act, 1962 Incorrect classification of relays under custom tariff heading 316.27 23.72 2014- 15, 2015- 16, 2016- 17, 2017- 18 and 2018- 19 CESTAT-Mumbai
63 Income Tax Act, 1961 Disallowance on account of bad debts written off and various other disallowances 142.01 60.95 AY 2012-13 Commissioner of Income Tax (Appeals)
64 Income Tax Act, 1961 Disallowance on account of bad debts written off and various other disallowances 104.31 AY 2013-14 Commissioner of Income Tax (Appeals)
65 Income Tax Act, 1961 Disallowance on account of transfer pricing related matters 280.85 56.17 AY 2017-18 Income Tax Appellate Tribunal (ITAT)

* Represents Companys share of Rs. 307.54 million of dues pending in forums jointly with GE T&D India Limited (Refer note 33 of the accompanying Ind AS financial statements)

(viii) According to the information and explanations given to us, there were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961). Accordingly, the provisions of clause 3(viii) of the Order are not applicable.

(ix) (a) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender

(b) According to the information and explanations given to us, we report that the Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

(c) According to the information and explanations given to us, the Company did not have any term loans outstanding during the year. Accordingly, the provisions of clause 3(ix)(c) of the Order are not applicable.

(d) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that no funds raised on short-term basis have been used for long-term purposes by the Company.

(e) According to the information and explanations given to us, the Company does not have any subsidiary, associate or joint venture. Accordingly, the provisions of clause 3(ix)(e) of the Order are not applicable.

(f) The Company does not have any subsidiary, associate or joint venture. Accordingly, the provisions of clause 3(ix)(f) of the Order are not applicable.

(x) (a) According to the information and explanations given to us, the Company did not raise moneys by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, the provisions of clause 3(x)(a) of the Order are not applicable.

(b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally). Accordingly, provisions of clause 3 (x)(b) of the order are not applicable.

(xi) (a) To the best of our knowledge and according to theinformation and explanations given to us, no fraud by the Company or on the Company has been noticed or reported during the period covered by our audit.

(b) No report under sub-section (12) of Section 143 of the Act has been filed in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 (as amended) with the Central Government, during the year and upto the date of this report.

(c) We have taken into consideration the whistle blower complaints received by the Company during the year while determining the nature, timing and extent of audit procedures.

(xii) According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, the provisions of clause 3(xii)(a)-(c) of the Order are not applicable.

(xiii) In our opinion and according to the information and explanations given to us, all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable accounting standards.

(xiv) (a) In our opinion and based on our examination, the Company has an internal audit system commensurate with the size and nature of its business.

(b) We have considered the internal audit reports of the Company issued till date, for the period under audit.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.

(xvi) (a) The Company is not required to be registered under Section 45-IA of the RBI Act, 1934. Accordingly, the provisions of clause 3(xvi)(a) of the Order are not applicable to the Company.

(b) The Company has not conducted any Non-Banking Financial or Housing Finance activities without a valid Certificate of Registration from the RBI as per the RBI Act, 1934. Accordingly, provisions of clause 3(xvi)(b) of the order are not applicable.

(c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, the provisions of the Clause 3(xvi) (c) of the Order are not applicable to the Company.

(d) The Group does not have more than one CICs which are part of the Group. Accordingly, the provisions of clause 3(xvi)(d) of the order are not applicable.

(xvii) The Company has not incurred cash losses in the current financial year and in the immediately preceding financial year Accordingly, provisions of clause 3(xvii) of the order are not applicable.

(xviii) There has been no resignation of the statutory auditors during the year. Accordingly, the provisions of the Clause (xviii) of the order are not applicable.

(xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) (a) There is no unspent amount towards Corporate Social

Responsibility (CSR) on other than ongoing projects requiring a transfer to a Fund specified in Schedule VII to the Act in compliance with the second proviso to subsection (5) of Section 135 of the said Act.

(b) There is no unspent amount towards Corporate Social Responsibility (CSR) on ongoing projects requiring a transfer to a special account in compliance with provision of sub-section (6) of Section 135 of the said Act.

(xxi) The reporting under clause 3(xxi) of the Order is not applicable in respect of audit of Standalone Financial Statements. Accordingly, no comment in respect of the said clause has been included in this report.

For S.N. Dhawan & Co LLP

Chartered Accountants

Firm Registration No.: 000050N/N500045

Pankaj Walia

Partner

Membership No.: 509590

UDIN No.: 23509590BGWRYR8246

Place: Gurugram

Date: May 23, 2023

Annexure B to the Independent Auditors Report of even date to the members of Schneider Electric Infrastructure Limited, on the Ind AS financial statements for the year ended March 31,2023

Independent Auditors report on the Internal Financial Controls with reference to the Ind AS financial statements under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls with reference to the Ind AS financial statements of Schneider Electric Infrastructure Limited ("the Company") as of March 31,2023 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys Management is responsible for establishing and maintaining internal financial controls based on the internal financial control with reference to the Ind AS financial statements 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 (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Companys business, including adherence to Companys 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 financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to the Ind AS financial statements 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, issued by the Institute of Chartered Accountants of India ("the ICAI") and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. 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 financial controls with reference to the Ind AS financial statements were 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 financial controls system with reference to the Ind AS financial statements and their operating effectiveness. Our audit of internal financial controls with reference to the Ind AS financial statements included obtaining an understanding of internal financial controls with reference to the Ind AS financial statements, 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 auditors judgement, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system with reference to the Ind AS financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A Companys internal financial controls with reference to the Ind AS financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial controls with reference to IND AS financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the Ind AS financial 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 Companys assets that could have a material effect on the Ind AS financial statements.

Inherent Limitations of Internal Financial Controls with reference to IND AS Financial Statements

Because of the inherent limitations of internal financial controls with reference to the Ind AS financial statements, 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 financial controls with reference to the Ind AS financial statements to future periods are subject to the risk that the internal financial controls with reference to the Ind AS financial statements 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, adequate internal financial controls system with reference to the Ind AS financial statements and such internal financial controls with reference to Ind AS financial statements were operating effectively as at March 31, 2023, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For S.N. Dhawan & Co LLP

Chartered Accountants

Firms Registration No.:000050N/N500045

Pankaj Walia

Partner

Membership No.: 509590

UDIN No.: 23509590BGWRYR8246

Place: Gurugram

Date: May 23, 2023