schneider electric president systems ltd Directors report

4Mr. Subhrendu Sarkar, appointed as member of the Finance Committee with effect from January 01,2023.

The details with respect to powers, roles, terms of reference of the Committee(s) held during the financial year 2022-23 are as under:

(I) Audit Committee

As on March 31, 2023, the Audit Committee of the Board comprises of three (03) Non-Executive Directors, out of which two (02) are Independent Directors. The composition of the Committee is compliant and follows the provisions of Section 177 of the Act. The Chairperson of the Audit Committee is a Non-Executive Independent Director. All the members of the Audit Committee are financially literate. The Audit Committee met four (04) times viz. May 31, 2022, August 16, 2022, December 06, 2022, and March 06, 2023, during the financial year.

The Internal Auditor, Statutory Auditors and Cost Auditors are invited to the meetings on requirement basis.

The role and terms of reference of the Audit Committee covers the areas as contemplated under Section 177 of the Act, besides other terms as referred by the Board of Directors.

(II) Nomination and Remuneration Committee

As on March 31, 2023, the Nomination and Remuneration Committee of the Board comprises of three (03) Non-Executive Directors, out of which two (02) are Independent Directors. The Chairperson of the (NRC) is an Independent Director. The Composition of the Committee complies with the provisions of Section 178 of the Act.

During the financial year 2022-23, the Committee met two (2) times viz. May 31, 2022, and December 06, 2022.

The role and terms of reference of the NRC covers the areas as contemplated under Section 178 of the Act, besides other terms as referred by the Board of Directors.

(III) Stakeholders Relationship Committee

In Compliance with the requirement of Section 178 of the Act, the board has constituted a Stakeholders Relationship Committee (SRC). The Committee investigates redressal of complaints/ grievances of Shareholders and Investors. The Committee oversees and reviews performance of the Registrar and Share Transfer Agent and recommends measures for overall improvement in the quality of investor services and the functions as defined in the Act and delegated by the Board of Directors.

As on March 31, 2023, the SRC comprises of three (03) Non- Executive Directors, out of which one (01) is an Independent Director. The Chairperson of the SRC is an Independent Director. During the financial year 2022-23, the members of the Committee met once i.e., March 06, 2023.

(IV) Corporate Social Responsibility Committee

In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has constituted a Corporate Social Responsibility (CSR) Committee.

The Committee oversees, inter-alia, CSR activities and other related matters and discharges the roles as prescribed under Section 135 of the Act which includes formulating and recommending to the Board, a CSR Policy indicating the activities to be undertaken by the Company, as per Schedule VII of the Act, recommending the amount of CSR budget or expenditure to be incurred during the year, formulating and monitoring of the plan as per the CSR Policy of the Company etc.

The Companys policy on CSR can be accessed at https://www.apwpresident.com/Pages_investors_Policies.html.

As on March 31, 2023, the CSR Committee comprises of three (03) Non-Executive Directors, out of which one (01) is an Independent Director. There is no designated chairperson for the CSR Committee, the Committee appoints chairperson for each meeting. During the financial year 2022-23, the Committee met twice i.e., May 31, 2022, and March 06, 2023.The details of the composition, attendance etc. forms part of the Annual Report on CSR Activities annexed as Annexure I.

(V) Finance Committee

To facilitate seamless operations and cater to various day-to-day requirements, the board has formed a functional Committee known as the Finance Committee. The Committee meets as and when deem necessary to cater to the day-to-day requirements of the Company. The Committee comprises of three (03) Non-Executive Directors. There is no appointed chairperson for the Finance Committee. During the financial year 2022-23, the Committee meetings were conducting physically on May 31, 2022, and March 28, 2023.The Committee operates within the overall responsibilities and powers entrusted by the Board.

13. Risk Management

The Company has set up a robust risk management framework across the organization which facilitates identification, assessment, communication, and management of risk in effective manner. All five essential components of Committee of Sponsoring Organization (COSO) framework i.e., control environment, risk assessment, control activities, information communication and monitoring are considered while defining the control objective, as the intent is to ensure adherence to Company defined guidelines along with value addition through improvement in existing Company processes.

These procedures are periodically reviewed to ensure that the executive management controls risk through means of a properly defined framework, which is in line with best practices of current risk management. The primary objective of Risk Management is to assess the level of impact from any negative outcome of risks and the measures required to cover the organization from such risks.

14. Related Party Transactions

The Company has formulated a policy on Related Party Transaction pursuant to provisions of the Act and rules made thereunder and may be referred from the website of the Company at https://www.apwpresident.com/Pages_investors_Policies.html.

All transactions entered with the Related Parties during the financial year 2022-23 were on arms length basis and in ordinary course of business. Accordingly, no transaction was reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014.

15. Conservation of Energy and Technology absorption and Foreign Exchange Earnings and Outgo

The information as per the Companies relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed as Annexure II.

16. Auditors

(i) Statutory Auditors and Audit Report

M/s. S.N. Dhawan and Co, LLP, Chartered Accountants (Firm Registration No. 000050N/ N500045), are the Statutory Auditors of the Company, appointed for a period of five (05) consecutive years, until the conclusion of the 42nd AGM of the Company.

The Report given by the Auditors on the Financial Statements of the Company for financial year 2022-23 forms part of this annual report. There has been no qualification, reservation, adverse remarks, or disclaimer given by the Auditors in their report except emphasis of matter on pending litigation with SEBI. Further, the Auditors Report being self-explanatory does not call for any further comments from the Board of Directors.

During the financial year 2022-23, no instances of fraud has been reported by the Statutory Auditors under Section 143(12) of the Act and the rules framed thereunder, neither to the Company nor to the Central Government.

Voluntary Adoption of Indian Accounting Standards (Ind As)

In terms of the provisions of Section 133 of the Companies Act 2013 and rules made thereunder read with Companies (Indian Accounting Standards) Rules 2015, the Company has voluntarily adopted an Indian Accounting standard (IND AS) and opted to incorporate the same in the financial statements effective from March 31, 2023.

In this regard, the Board on recommendation of Audit Committee, approved the voluntary adoption of the IND-AS in their meeting held on March 06, 2023 effective from the financial year ending March 31,2023, and accordingly, the Company has prepared its financial statements for March 31,2023, with a comparative of previous years.

(ii) Cost Auditors & Cost Audit Report

M/s. Rao, Murthy & Associates, Cost Accountants, Bengaluru (ICWA Registration No.000065), reappointed by the Board of Directors based on the recommendation of Audit Committee, to audit the cost records of the Company for the financial year 2023-24. As per the requirement of the Act, a resolution seeking members approval for the remuneration payable to the Cost Auditors forms part of the Notice convening the 39^th AGM.

A Certificate from M/s. Rao, Murthy & Associates has been received to the effect that their appointment as Cost Auditors of the Company, would be in accordance with the limits as specified under Section 141 of the Act and Rules made thereunder.

Pursuant to the provision of Section 148 of the Act and applicable Rules as amended from time to time, the Company is required to maintain cost records and accordingly, such accounts are being made and records has been maintained in respect of the applicable products for the financial year ended March 31,2023.

The Cost Audit Report for the financial year 2022-23 will be adopted as per rules of the Act and the Cost Audit Report of the Company for the financial year March 31, 2022, was adopted and approved by the Audit Committee and Board of Directors in their meeting held on August 16, 2022. There has been no qualification, reservation, adverse remarks, or disclaimer given by the Auditors in their report.

(iii) Secretarial Auditors and Secretarial Audit Report

The Board has appointed M/s. Chandrasekaran Associates, Practicing Company Secretaries, New Delhi (ICSI Firm Registration No. PI988DE002500) as Secretarial Auditors, to conduct the Secretarial Audit of the Company for the financial year 2022-23 as required under Section 204 of the Act and rules made there under. The Board has reappointed M/s. Chandrasekaran Associates as Secretarial Auditors of the Company for the financial year 2023-24 in compliance with the Act.

The Secretarial Audit Report for the financial year 2022-23 is attached as Annexure III to the Boards Report and the Board took note that the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. and there has been no qualification, reservation, adverse remarks, or disclaimer given by the Auditors in their report except matter of emphasis on pending litigation with SEBI and a comment w.r.t non-filing of an e-form w.r.t appointment of an Additional Director, with Registrar of Companies.

Management Reply: Due to the technical issues on the portal of Ministry of Corporate Affairs arising on account of transition of Version2 to Version 3 aforesaid form could not be filed and continuously trying to file the same with the ROC.

(iv) Internal Audit and Internal Financial Controls

The Company has an Internal Control System, commensurate with the size, scale, and complexity of its operations. In compliance to requirements of the Act, your Company has put in place, an independent and objective inhouse internal audit department designed to provide reasonable assurance with regards to the effectiveness and adequacy of the internal control system, processes, and reliability of financial reporting.

The Board appointed Mr.Vinay Kumar Awasthi as Internal Auditor of the Company to conduct the Internal Audit for the financial year 2022-23. The audit plan for the year is based on risk assessment, which is approved by the Audit Committee.

The in-house internal audit department, along with assistance from third party audit firms, provides audit assurance, add value to improve the Companys end to end processes through a systematic disciplined approach, from inception, through fieldwork to final reporting.

Also, as per requirements of the Act, a detailed internal financial control framework has been documented, reviewed, and updated annually. Control self-assessments are also performed by respective process owners annually for the defined key internal controls. Operating effectiveness of such framework is tested on annual basis and results are presented to Board/Audit Committee.

The Audit Committee does a regular review of the internal audit reports submitted by the Internal Auditor and the action plan status. The Committee also meets the Companys statutory auditors to ascertain, inter alia, their views on the adequacy of internal control systems in the Company and keeps the Board of Directors informed of its major observations, if any.

The Company confirms that the Internal financial controls were adequate and operating effectively.

The Board on the recommendation of Audit Committee, in its meeting held on June 20, 2023, appointed Mr. Vinay Kumar Awasthi, as Internal Auditor of the Company for conducting the internal audit of the financial year 2023-24.

17. Subsidiary/ Joint Venture/ Associate Companies

As on March 31, 2023, the Company does not have Subsidiary/ Joint Venture/ Associate Company.

18. Share Capital

As on March 31, 2023, the Authorised Share Capital of the Company was INR 12,00,00,000/-(Indian Rupees Twelve Crores Only) divided into 1,20,00,000 Equity Shares of INR 10/- (Indian Rupee Ten Only) each and Issued, Subscribed and Paid-Up Equity Share Capital of the Company stands at INR 6,04,80,000/- (Indian Rupees Six Crore Four Lakh Eighty Thousand Only) divided into 60,48,000 Equity Shares of INR 10/- (Indian Rupee Ten Only) each. During the financial year 2022-23, there has been no change in the Share Capital structure i.e., Equity Share Capital of the Company. Shareholding Pattern

As on March 31, 2023, Schneider Electric South East Asia (HQ) Pte Ltd. (the "Promoters") of the Company hold 80.49% of the total share capital of the Company. Remaining shares i.e., 19.51% were held by "Public Shareholders".

19. Status update on litigation - SEBI/SAT

The equity shares of the Company were listed on the Bengaluru Stock Exchange and Pune Stock Exchange (Regional Stock Exchanges) and permitted to be traded on the BSE Limited (the BSE) Consequent to de-recognition of the Regional Stock Exchange by Securities and Exchange Board of India (SEBI). The BSE had suspended the trading of the equity shares of the Company effective from May 22, 2015.

As per the circular issued by SEBI for the exclusively listed companies of de-recognized stock exchanges, placed in the Dissemination Board, Schneider Electric South East Asia (HQ) Pte Ltd. ("the Promoter") had provided an exit offer on February 14, 2017 to the public shareholders of the Company at an offer price of INR 200.40 per share. The offer price was as per the valuation carried out by an independent valuer empaneled with the National Stock Exchange of India (NSE) as per the circular issued by SEBI.

The public shareholders had an option to tender their shares to the Promoter until March 11, 2018, at the said price. In the exit offer provided to the public shareholders of the Company, 344 shareholders have tendered 331,939 equity shares i.e. (5.49% of the total share capital of the Company) to the Promoter of the Company.

In respect of the exit offer given, an appeal was filed by certain public shareholders ("Appellants") of the Company before the Securities Appellate Tribunal ("SAT") contending that SEBI has failed to consider the issues raised by the Appellants in their SCORES complaint and the SEBI Circulars regarding exit of regional stock exchanges and Exclusively Listed Companies (ELCs) and further contending that the fair value price calculated as per the valuation report was incorrect.

SAT after considering the submissions made by the parties, disposed of the Appeal vide its order dated November 26, 2019 ("Order") and directed SEBI to consider the issues raised by the Appellants and pass a reasoned order within three (3) months from the date of Order. In furtherance to this, on February 07, 2020, SEBI filed a Review Application before SAT seeking review of its Order, which was dismissed by SAT on February 21, 2020, and passed an order remanding the matter to SEBI, to reconsider the complaint and pass a reasonable order.

SEBI aggrieved by the SAT Order, approached the Honble Supreme Court in Civil Appeal. Honble Supreme Court by its order dated October 15, 2020, dismissed SEBIs appeal with a direction to SEBI, to decide the matter without being influenced by any observations made by SAT before.

SEBI Order:

SEBI passed an Order dated January 19, 2021, and revised order dated January 21, 2021 ("SEBI Order") disposing of the complaints and, inter alia, directed the Company to either:

(i) list the equity shares of the Company on a nationwide stock exchange; or

(ii) delist the Company in terms of the Delisting Regulations within a period of six (6) months from SEBI Order.

SEBI further directed that Company shall provide an opportunity to the shareholders who have tendered their shares in the exit offer (which closed on March 10, 2017) to buy back the shares at the exit price of INR 200.40/- per share.

Current Status:

The Company on advice of its law firm, representing before the Authorities, had filed a Writ Petition with Honble Bombay High Court against the SEBI order dated January 19, 2021. The Honble High Court by its order dated February

15, 2021, has directed the Company to approach the SAT in an Appeal, to review of the Order passed by the SEBI with an observation that the SAT shall not be influenced with its earlier order and dismissed the Writ petition.

The Company has filed an appeal before the SAT in Appeal (L) No. 128 of 2021.

The matter is sub-judice and is listed for hearing on June 26, 2023.

As on March 31, 2023, the Company has 238 employees on roll (permanent employees) and none of the employees drawing a remuneration as per provisions of section 197(12) of the Act and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (the Rules). Accordingly, the disclosure in terms of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to the Company.

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Board confirms that:

a) in the preparation of the annual accounts of the Company for the financial year ended March 31, 2023, the applicable accounting standards has been followed and there are no material departures from the same;

b) they have selected such accounting policies and applied them consistently and made judgements 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 financial year and of the profit of the Company for that period;

c) they have taken proper and sufficient 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) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f) they have devised proper systems to ensure compliance with the provision of all applicable laws and that such systems were adequate and operating effectively; and

The Company has complied with the Secretarial Standards-1 (Meetings of Board of Directors) and Secretarial Standards-2 (General Meetings) issued and amended from time to time, by the Institute of Company Secretaries of India.

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

No material changes and commitments affecting the financial position of the Company occurred after the end of the financial year ended March 31,2023, till the date of this report.

However, the Company has conducted Postal Ballot, which was completed on April 14, 2023, as per below:

In furtherance to the approval granted by the Board of Directors of the Company at their Meeting held on March 06, 2023, inter-alia, for conducting the Postal Ballot for "Approval to provide loan/financing assistance to the Companys employees to subscribe to Schneider Electric SEs shares and grant of employers matching shares under Schneider Electric SEs Worldwide Employee Share Ownership Plan 2023 ("2023 WESOP")", a special resolution was approved by the shareholders on April 14, 2023 with requisite majority.

During the financial year 2022-23 no significant and material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and the Companys operations.

25. Disclosure under the Sexual Harassment at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Pursuant to the provisions of the Sexual Harassment at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rules as amended up to date, the Company has constituted Internal Complaints Committee (ICC) as per the requirement under the law and has adopted the policy on Prevention of Sexual Harassment at Workplace. The Policy is also available on the website of the Company at https://www.apwpresident.com/Pages investors Policies.html ICC have been given the responsibility to receive and address the complaints received, if any, at all locations where the Company is located at present. The Company has also taken steps to create awareness about familiarization to the said policy by conducting periodical webinars for its employees in line with the rules and regulation of the Act and providing continuance information on digital platforms along with publishing of information on the notice boards of the premises. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The reporting mechanism has been established in the organisation for reporting the cases, if any, to the Audit Committee and Board of Directors meetings respectively.

During the financial year 2022-23, no case was reported of alleging sexual harassment.

26. Vigil Mechanism/Whistle Blower Policy

Pursuant to the provisions of Section 177 of the Act read with the Rules made thereunder, the Company has formulated and implemented Vigil Mechanism https://www.apwpresident.com/Pages investors Policies.html for disclosing any unethical behaviour, actual or suspected fraud or violation of the Companys code of conduct and other improper practice or wrongful conduct by employees or directors of the Company.

During the financial year 2022-23, the Company has not received complaints relating to unethical behaviour, actual or suspected fraud or violation of Companys Trust Charter (formerly known as Principles of Responsibility) from any employee, director, or any other person except one unsubstantiated alleged incident which was disposed off after due verification

27. Buy back of Securities/ Sweat Equity/ Bonus Shares

The Company has neither bought back any of its securities nor issued any sweat equity or bonus shares during the financial year 2022-23.

28. Code of Business Conduct and Ethics of the Company - Trust Charter

The Board of the Company has adopted a Code of Conduct and Ethics known as Trust Charter (formerly known as Principles of Responsibility) for the directors, senior executives, and employees of the Company. The objective is to conduct the Companys business ethically and with responsibility, integrity, fairness, transparency, and honesty.

It sets out a broad policy for ones 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 Companys website : https://www.apwpresident.com/Pages investors Policies.html.

29. Reconciliation of Share Capital Audit

In compliance with the provisions of Rule 9A sub rule 8 of the Companies (Prospectus and Allotment of Securities) Rules, 2014, the Share Reconciliation Audit Form PAS-6 for the period ended September 30, 2022, and March 31, 2023 duly certified by the Practicing Company Secretary were filed with Registrar of Companies within prescribed timelines. As on March 31,2023, the status of reconciliation of demat & physical shares are appended below wherein the Promoter holds 80.49% shares in demat form.

31. Detail of Factories/Plants

The detail of the Factories/Plants of the Company located in the state of Karnataka are as under:

32. Acknowledgement

Your directors wish to thank all stakeholders, viz, customers, shareholders, dealers, suppliers, bankers, employees, Central and State Governments and all other business associates for the continuous support given by them to the Company and its Management.