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Notes to Accounts of Schneider Electric Infrastructure Ltd.

Mar 31, 2014

Nature of operations

Schneider Electric Infrastructure Limited was incorporated on March 12, 2011. It is a Public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on three stock exchanges in India. The Company is engaged in the business of manufacturing, designing, building and servicing technologically advanced products and systems for electricity distribution including products such as distribution transformers, medium voltage switchgears, medium and low voltage protection relays and electricity distribution and automation equipments.

Basis of preparation

The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956, read with general circular 8/2014 dated 4th April 2014 issued by Ministry of Corporate Affairs. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1. Capital and other commitments

a. At March 31, 2014, the company has commitments of Rupees 140.87 Millions (March 31, 2013: Rupees 358 Millions) relating to purchase of tangible assets.

b. There are no significant other commitments.

2. Contingent liabilities

a. Post demerger, Company and ALSTOM T&D India Limited (ALSTOM) have bifurcated the total outstanding demands of Excise/ Service Tax and Sales tax in accordance with the arrangement agreed between the two Companies. Accordingly, ALSTOM is contesting the total outstanding demands, before various appellate authorities, including the share of the Company

(i) Total outstanding demands of Excise / Service tax aggregates to Rupees 277.81 Million out of which Company share is Rupees 67.27 Million. The Company has considered NIL demand as contingent as at March 31, 2014, net of provisions of Rupees 50.45 Million.

(March 31, 2013- Total outstanding demands of Excise / Service tax aggregates to Rupees 277.81 Million out of which Company share is Rupees 67.27 Million. The Company has considered demands amounting to Rupees 3.84 Million as contingent , net of service tax provision of Rupees 46.61 Million)

The deposits pertaining to Excise/ Service tax considered as contingent aggregates to Rupees 17.92 Million (March 31, 2013 - NIL).

(ii) Total outstanding demands of Sales Tax aggregates to Rupees 2,193.17 Million out of which Company share is Rupees 628.20 Million. The Company has considered demands amounting to Rupees 397.92 Million as contingent, net of provisions of Rupees 227.43 Million.

(March 31, 2013- Total outstanding demands of Sales Tax aggregates to Rupees 820.17 Million out of which Company share is Rupees 324.90 Million. The Company has considered demands amounting to Rupees 171.30 Million as contingent, net of provisions of Rupees 144.24 Million).

The deposits pertaining to Sales tax cases considered as contingent aggregates to Rupees 160.15 Million (March 31, 2013- Rupees 61.20 Million).

a. For the demands pertaining to the Company only (with no ALSTOM share being there), the Company has considered Excise/ Service Tax demands amounting to Rupees 361.59 Million as contingent , net of provisions of Rupees 10.34 Million . (March 31, 2013 - NIL).

The deposits pertaining to Excise/ Service tax considered as contingent aggregates to Rupees 2 Million (March 31, 2013 - NIL).

b. For the demands pertaining to the Company only (with no ALSTOM share being there), the Company has considered Sales Tax demands amounting to Rupees 144.81 Million as contingent, net of provisions of Rupees 74.59 Million. (March 31, 2013 - Rupees 195.74 Million, net of provision of Rupees 42 Million).

The deposits pertaining to Sales Tax cases considered as contingent aggregates to Rupees 8.91 Million (March 31, 2013 - Rupees 2.94 Million).

The Company has preferred appeals against the above demands which is pending before various appellate authorities, and has been advised by the reputed professional advisers, engaged by it, that there are reasonable chances of success in these appeals.

3. Minimum public shareholding

Consequent to the closure of " "Open Offer" " in February 2013, the shareholding of the Acquirer/Promoter Group in the Company had increased from 73.40% to 78.13%. Also, shareholding of holding company (Energy Grid Automation Transformers and Switchgears India Limited) had increased from 73.40% to 73.70%. Accordingly, in order to achieve minimum 25% public shareholding in the Company in terms of Rule 19(2)(b) and 19A of the Securities Contracts Regulation Rules,1957, read with Clause 40A (ii) (c) of the Listing Agreement, the holding company sold 7,479,178 equity shares of the Company (i.e 3.13%) in the secondary market by way of " "Offer for Sale" " of shares through the Stock exchange mechanism in the month of January, 2014.

Consequently, shareholding of holding company has decreased from 73.70% to 70.57% and overall shareholding of Acquirer/ Promoter group reduced to 75%.

4. The Company had entered into transactions of purchase and sale of goods and availing and rendering of services with a company covered under section 297 of the Companies Act, 1956. The Company has received approval from Central Government for goods transactions starting from March 6, 2013 and services transactions starting April 1, 2013. Pending Government approval on compounding the goods transactions prior to March 6, 2013 and services transactions prior to April 1, 2013, no adjustments have been considered in financial statements as Management is of the view that it will not have any material impact on the results.

5. Previous year figures

The company has reclassified previous year figures, wherever necessary, to conform to this year''s classification.


Mar 31, 2013

1. Nature of Operations

Schneider Electric Infrastructure Limited was incorporated on March 12, 2011. It is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on three stock exchanges in India. The Company is engaged in the business of manufacturing, designing, building and servicing technologically advanced products and systems for electricity distribution including products such as distribution transformers, medium voltage switchgears, medium and low voltage protection relays and electricity distribution and automation equipments.

2. Basis of preparation

The financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

3. Employee Benefits

25.1 The company operates two defined plans, viz., gratuity and PF fund trust, for its employees. Under the gratuity plan, every employee who has completed atleast one year of service gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans.

4. Leases

Operating Lease: Company as Lessee

The company has entered into non-cancellable lease for an office at Noida. As per contract, this lease has an average life of nine years with renewal option and 15% escalation clause at the end of every three years

There is an initial lock-in period of three years and after that each renewal is at the option of the lessee. There are no restrictions placed upon the company by entering into this lease

The lease rental expense recognized in the Statement of Profit and Loss during the year in respect of this lease transaction is Rupees 55.86 Millions (Including a Provision of Lease Equalization of Rupees 5.30 Millions) (March 31, 2012 - Nil)

5. Accounting for Demerger

By a Scheme of arrangement, between the Company and Areva T&D India Limited and their respective shareholders and creditors under section 391-394 of the Companies Act, 1956, the distribution undertaking of Areva T&D India Ltd, now known as ALSTOM T&D India Limited (Transferor) was transferred to the Company ( Transferee ). The said Scheme was sanctioned by Hon''ble High Courts of Gujarat and Delhi, on September 19, 2011 and October 24, 2011 respectively. The certified true copies of the orders of the Hon''ble High Courts of Gujarat and Delhi were filed with the respective Registrar of Companies on November 26. 2011 ( effective date ) . In terms of the aforesaid Scheme the distribution business of Areva T&D India Limited was demerged to the Company w.e.f. April 1, 2011.

As per the terms of the Scheme, the Company has issued and allotted 239,104,035 equity shares of Rupees 2/- each fully paid to the shareholders of Areva T&D India Limited (now Alstom T&D India Limited), as on the record date (December 15, 2011) on a proportionate basis, for every 1 (one) fully paid-up equity share of Rupees 2 /- each held in Areva T&D India (now Alstom T&D India Limited), 1 (one) fully paid-up equity shares of Rupees 2 /- each of the Company. In terms of the Scheme, there are no fractional entitlements. Simultaneous to the issue of these shares, as per Scheme, existing shares (500,000 shares of Rupees 21- each) issued to Areva T&D India Limited and its nominees stands cancelled. The shares have been issued at fair value.

In terms of the Scheme of arrangement for demerger ("Scheme"), upon the Scheme becoming effective (effective date - November 26, 2011), the assets and liabilities of the ''distribution undertaking'' demerged from the Transferor Company, were transferred and vested unto the Company at the book values appearing in the books of account of the Transferor Company as on the close of business on the date immediately preceding the appointed date -April 1, 2011 and the net balance between the book value of assets and liabilities as given below were adjusted from the reserves in the books of the Transferor Company in the manner specified in the Scheme.

6. Related party disclosures

a. Names of related parties and related party relationship Related parties where control exists

Holding company Energy Grid Automation Transformers and Switchgears India Limited

(w.e.f. March 28, 2012) Ultimate holding company Alstom Holdings (by shareholding) and Schneider Electric Services

nternational (by agreement) (Upto February 14, 2013) Schneider Electric SA (w.e.f. February 15, 2013) Parent of holding company and Others Alstom Grid Finance BV, Netherlands; (parent of holding company)

(Upto February 14, 2013) Schneider Electric Singapore Pte. Limited (w.e.f. February 15, 2013)

b. Related parties with whom transactions have taken place: Fellow subsidiaries

Schneider Electric India Pvt Ltd, India

Schneider Electric Protectionale, France

Alstom T&D India Ltd, India (Upto February 14, 2013)

Schneider Electric Sachsenwerk Gmbh, Germany

Schneider Electric Energy, France

Schneider Electric Industries SAS, France

Schneider Electric Service International Sprl, Belgium

Schneider Electric Energy UK Ltd, UK

Schneider Electric Energy Poland Sp. Z O.O., Poland

Schneider Electric Australia Pty Ltd, Australia

Schneider Electric Industries, Malaysia

Schneider Electric Energy, Italy

Schneider Switchgear (Suzhou) Co. Ltd, China

Alstom S A Transport Tarbes, France

(Upto February 14, 2013)

Schneider Electric Nigeria Ltd., Nigeria

Schneider Electric Canada Inc., Canada

Schneider Electric Sa, Uae

Alstom Projects India Ltd, India

(Upto February 14, 2013)

Schneider Enerji Endustri, Turkey

Schneider Electric Ftr, France

ArevaT&D Sas, France (Upto February 14, 2013)

Alstom Grid Uk Ltd, Uk (Upto February 14, 2013)

Schneider Electric Telecontrol, France

Areva Ert Tanzania, Tanzania (Upto February 14, 2013)

Schneider-Electric Energy, Hungary

Shanghai Schneider Electric Power Automation

Co.,Ltd, China

ArevaT&D Enerji Endustrisi A.S.Turkey

(Upto February 14, 2013)

Schneider Electric Huadian Switchgear, China Schneider Electric East Mediterranean S.A. L, Jordan Schneider Electric Brasil Ltda., Brazi

Areva Energietechnik Gmbh, Germany (Upto February 14, 2013) Schneider Electric Taiwan Co., Ltd., Taiwan Alstom Switchgear, South Africa (Upto February 14, 2013) Schneider Electric Energy De, Columbia Schneider Electric It Business India Pvt Ltd, India Schneider Electric Mexico, Mexico

Areva Solar India Private Limited, India (Upto February 14, 2013) ArevaT&D Uk Ltd Systems Produ, Uk (Upto February 14, 2013) Schneider Electric Sri Lanka( Pvt) Ltd, Sri Lanka Alstom Transport SA, France (Upto February 14, 2013) Schneider Electric Vietnam., Ltd, Vietnam

Schneider Electric (China) Investment Co. Ltd., Shanghai, China Schneider Electric D.O.O., Croatia Alstom Grid Sas, France (Upto February 14, 2013) Schneider Electric Sa, South Africa

ArevaT&D Australia Limited, Australia (Upto February 14, 2013)

Alstom Grid Pte Ltd, Singapore (Upto February 14, 2013)

Alstom Grid Italy S.P.A., Italy (Upto February 14, 2013)

Power Measurement Ltd, Canada

Areva Renewable Energies Ltd, India (Upto February 14, 2013)

Schneider Electric(China), China

Schneider Electric, Indonesia

Areva Suzhou High Voltage, Suzhou, China (Upto February 14, 2013)

ArevaT&D Malaysia Sdn Bhd-215632V, Malaysia (Upto February 14, 2013)

Key management personnel Mr. Prakash Kumar Chandraker, Managing director

(From December 16, 2011) Mr. Alexandre Tagger, Whole Time Director (From April 1, 2012)

7. Capital and other commitments

a. At March 31, 2013, the company has commitments of Rupees 358 Millions (March 31, 2012: Rupees 26 Millions) relating to purchase of tangible assets.

b. There are no significant other commitments.

8. Contingent Liabilities

a. Post demerger, Company and ALSTOM T&D India Limited (ALSTOM) have bifurcated the total outstanding demands of Excise/ Service Tax and Sales tax in accordance with the arrangement agreed between the two Companies. Accordingly, ALSTOM is contesting the total outstanding demands, before various appellate authorities, including the share of the Company

(i) Total outstanding demands of Excise / Service tax aggregates to Rupees 277.81 Million out of which Company share is

Rupees 67.27 Million. The Company has considered demands amounting to Rupees 3.84 Million, net of service tax provision of Rupees 46.61 Million, for various years as contingent. (March 31, 2012 - Rupees 46.02 Million, net of provision of Nil)

(ii) Total outstanding demands of Sales Tax aggregates to Rupees 820.17 Million out of which Company share is Rupees 324.90 Million. The Company has considered demands amounting to Rupees 110.10 Million, net of sales tax deposits of Rupees 61.20 Million and provisions of Rupees 144.24 Million, for various years as contingent. (March 31, 2012 - Rupees 136.75 Million, net of deposit of Rupees 52.09 Million and provisions of Rupees 126.70 Million)

b. For the demands pertaining to the Company only (with no ALSTOM share being there), the Company has considered Sales Tax demands amounting to Rupees 192.80 Million, net of sales tax deposit of Rupees 2.94 Million and provisions of Rupees 42 Million, for various years as contingent. (March 31, 2012 - Rupeesl92.80 Million, net of deposit of Rupees 2.94 Million and provision of Rupees 42 Million)

The Company has preferred appeals against the above demands which is pending before various appellate authorities, and has been advised by the reputed professional advisers, engaged by it, that there are reasonable chances of success in these appeals

9. Holding Company

Consequent to the closure of the demerger in India, the ALSTOM Grid Finance BV and Schneider Electric Singapore Pte Ltd entered into a Share purchase agreement whereby ALSTOM Grid Finance BV had agreed to transfer the entire beneficial interest in Energy Grid Automation Transformers and Switchgears India Limited the Holding Company of Schneider Electric Infrastructure Limited. In terms of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,2011 Schneider Electric Singapore Pte Ltd ("Acquirer") and Schneider Electric South East Asia (HQ) Pte Ltd, Schneider Electric Services International and Energy Grid Automation Transformers and Switchgears India Limited, in their capacity as persons acting in concert with the Acquirer (collectively the "PAC"), made an open offer. The process of ''Open Offer'' was completed in February,2013 and in terms of the same, 11,314,680 Equity Shares of the Company were tendered by the Shareholders of the Company. 10,592,659 Equity Shares were acquired by the Acquirer and one of the PAC, Energy Grid Automation Transformers and Switchgears India Limited acquired, 722,021 equity shares. Consequent to the open Offer the shareholding of the Acquirer/ Promoter Group in the Company increased from 73.40% to 78.13%. Also, shareholding of holding company has increased from 73.40% to 73.70%. The Acquirer /Promoter Group have committed themselves to reduce their shareholding in the Company within the regulatory time frame, such that the minimum public shareholding of the voting share capital of the Company is maintained, to enable the Company''s Shares, to continue to remain listed.

10. During the year, the Company has entered into transactions of Purchase of goods and services amounting to Rupees 488.80 Million and sales of goods and services amounting to Rupees 321.70 Million with Schneider Electric India Private Limited (Company covered under Section 297 of the Ccompanies Act, 1956). These transactions are approved by Board of Directors of the Company. Company has also filed an application for approval from Central Government which is awaited as of date. Pending Government approval, no adjustments have been considered in financial statements as Management is of the view that it will not have any material impact on the results.

11. Previous year figures

The company has reclassified previous year figures, wherever necessary, to conform to this year''s classification.


Mar 31, 2012

1. Nature of Operations

Schneider Electric Infrastructure Limited (Formerly Smartgrid Automation Distribution and Switchgear Limited) was incorporated on March 12, 2011. It is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on three stock exchanges in India. The Company is engaged in the business of manufacturing, designing, building and servicing technologically advanced products and systems for electricity distribution including products such as distribution transformers, medium voltage switchgears, medium and low voltage protection relays and electricity distribution and automation equipments.

2. Basis of preparation

These financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

3. Employee Benefits

3.1 The company operates two defined plans, viz., gratuity and PF fund trust, for its employees. Under the gratuity plan, every employee who has completed atleast one year of service gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans.

4. Accounting for Demerger

By a Scheme of arrangement, between the Company and Areva T&D India Limited and their respective shareholders and creditors under section 391-394 of the Companies Act, 1956, the distribution undertaking of Areva T&D India Ltd, now known as ALSTOM T&D India Limited ( Transferor) was transferred to the Company ( Transferee ). The said Scheme was sanctioned by Hon'ble High Courts of Gujarat and Delhi, on September 19, 2011 and October 24, 2011 respectively. The certified true copies of the orders of the Hon'ble High Courts of Gujarat and Delhi were filed with the respective Registrar of Companies on November 26, 2011 ( effective date ) . In terms of the aforesaid Scheme the distribution business of Areva T&D India Limited was demerged to the Company w.e.f. April 1, 2011.

As per the terms of the Scheme, the Company has issued and allotted 239,104,035 equity shares of Rs 21- each fully paid to the shareholders of Areva T&D India Limited (now Alstom T&D India Limited), as on the record date (December 15, 2011), on a proportionate basis, for every 1 (one) fully paid-up equity share of Rs. 2 /- (Rupees two) each held in Areva T&D India (now Alstom T&D India Limited), 1 (one) fully paid-up equity shares of Rs. 2 /-(Rupees two) each of the Company. In terms of the Scheme, there are no fractional entitlements. Simultaneous to the issue of these shares, as per Scheme, existing shares (500,000 shares of Rs.2 each) issued to Areva T&D India Limited and its nominees stands cancelled. The shares have been issued at fair value.

In terms of the Scheme of arrangement for demerger ("Scheme"), upon the Scheme becoming effective (effective date - November 26, 2011), the assets and liabilities of the 'distribution undertaking' demerged from the Transferor Company, were transferred and vested unto the Company at the book values appearing in the books of account of the Transferor Company as on the close of business on the date immediately preceding the appointed date - April 1, 2011 and the net balance between the book value of assets and liabilities as given below were adjusted from the reserves in the books of the Transferor Company in the manner specified in the Scheme.

5. Capital and other commitments

a. At 31 March 2012, the company has commitments of Rs. 26 Millions (March 31, 2011: NIL) relating to purchase of fixed assets

b. There are no significant other commitments.

6. Contingent Liabilities

a. The Company considers Sales Tax demands amounting to Rs. 12.47 Millions (Previous Year: NIL) as contingent. The Company has preferred appeals against these demands which is pending before various appellate authorities, and has been advised that there are reasonable chances of success in these appeals.

b. The Company considers demand for Excise / Service tax amounting to Rs. 9.89 Millions (Previous Year: NIL) for various years as contingent. The Company has preferred appeals against these demands which is pending before various appellate authorities, and has been advised that there are reasonable chances of success in these appeals.

7. Holding Company

The company's promoters shareholding comprising of 175,492,524 number of equity shares i.e equivalent to 73.4 % of the equity share capital of the company. The above equity share capital was held by Alstom Grid SAS, Alstom Sextant 5 SAS, T & D Holding and Long & Crawfold Limited and was transferred to Energy Grid Automation Transformers and Switchgears India Limited through a block deal at Bombay stock exchange on March 28, 2012._

8. Change in Company Name_

The company has changed its name from Smartgrid Automation Distribution and Switchgear Limited to Schneider Electric Infrastructure Limited and a 'Fresh Certificate of Incorporation Consequent upon Change of Name' dated December 8, 2011, has been issued by the Registrar of Companies, Gujarat, in this regard.

9. Previous year figures

Till the year ended 31 March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company.

The company has reclassified previous year figures to conform to this year's classification. However, the adoption of revised Schedule VI does not impact recognition, measurement principles, presentation and disclosures.

In some of the notes, previous year figures have not been given as these are the first financials post demerger and the Company did not have any operations in the previous year.



 
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