Siemens Chairman's Speech > Engineering - Heavy > Chairman's Speech from Siemens - BSE: 500550, NSE: SIEMENS
BSE: 500550|NSE: SIEMENS|ISIN: INE003A01024|SECTOR: Infrastructure - General
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« Sep 12
Chairman's Speech (Siemens) Year : Sep '13
Dear Shareholders,
 Financial year 2012-13 was yet another challenging year for the Indian
 economy.  The investment scenario was weighed down by numerous factors
 such as delays in statutory approvals, slow decision-making, land
 acquisition issues, volatility in commodity prices and exchange rates,
 higher capital costs and non-availability of raw material. Accentuating
 the low business and investor confidence, the Reserve Bank of India
 (RBI) revised downward, the GDP growth forecast to 4.8 percent for the
 period April 2013 to March 2014.
 The uncertain macro-economic environment also affected Siemens Ltd.,
 which operates in the business segments of infrastructure, power,
 industrial automation and healthcare. While order growth was
 reasonable, revenues declined and the Company''s profitability was also
 impacted due to increased project costs, lower off-take of finished
 goods and project delays.
 Performance highlights
 For the financial year ended September 30, 2013, the Company received
 new orders valued at X 10,957.3 crores, a 7% increase over X 10,235.1
 crores in the financial year ended September 30, 2012. Sales were down
 by 12% to X 11,145.2 crores, compared with X 12,708.1 crores in the
 previous year.
 The order backlog as of September 30, 2013 stood at X 12,926.4 crores -
 a decline of 5% compared with X 13,660.4 crores in the previous year.
 Profits from operations stood at X 170.5 crores, down by 75% compared
 with X 690.3 crores in financial year 2011-12.
 For the year ended September 30, 2013, the Company''s profit before tax
 stood at X 218.6 crores, down by 58% compared with X 520.9 crores in
 the previous year. The profit after tax for the year was X 194 crores,
 down by 43% compared with X 343.2 crores in the previous year.
 The Board of Directors has recommended a dividend of X 5 per equity
 share of face value of X 2 per share for the financial year ended
 September 30, 2013. The Company had paid a dividend of X 6 per equity
 share during the previous financial year.
 Performance analysis
 Keeping the challenging economic conditions in perspective, all four
 Sectors - Energy, Healthcare, Industry and Infrastructure & Cities -
 performed at par with the market.
 Among the highlights of the financial year 2012-13, the Energy Sector
 won an order to install a state-of-the-art distributed control system
 for the renovation and modernization of the Korba Stage-II plant of
 National Thermal Power Corporation. The Sector was awarded a contract
 by Bangladesh Steels Re-Rolling Mills Ltd. to supply the first private
 sector funded gas-insulated switchgear substation project in
 Bangladesh. It also established Global Engineering Centres in
 Coimbatore and Mumbai in order to strengthen its capability to support
 global customers with high quality, end-to- end solutions.
 The Healthcare Sector received a major order from Sir HN Hospital and
 Research Centre, Mumbai (Reliance) for the complete imaging package.
 Additionally, NM Medical, a diagnostic imaging chain with a pan-India
 presence, selected Siemens MAGNETOM Spectra 3T MRI scanner for
 installation in its new diagnostic center at Sancheti Hospital in Pune.
 This will be one of the first installations of MAGNETOM Spectra with
 the newly introduced 3T MRI in the country. Other major highlights
 include the installation of India''s first simultaneous PET MRI at
 Indraprastha Apollo, New Delhi and Somatom Definition Edge, the
 newly-introduced Cardiac CT scanner at PSG Hospital, Coimbatore.
 The Industry Sector received an order from Rashtriya Ispat Nigam Ltd.
 to modernize the Visakhapatnam steel plant.  The Steel Authority of
 India Ltd. signed a three-year Memorandum of Understanding (MoU) with
 the Sector''s SITRAIN unit to provide training for its technical staff.
 The Sector also unveiled the Siemens Productivity Tour, a nationwide,
 multi-city mobile road show aimed at providing small and medium
 manufacturing enterprises across India with technologies that will
 enhance their productivity and efficiency.
 The Infrastructure & Cities Sector secured two new contracts to
 construct 38 sub-stations that will improve power distribution
 throughout Bangladesh. The Sector continued to support Bangladesh''s
 Rural Electrification Board in its efforts to provide reliable power
 supplies and improve economic development in western Bangladesh. In
 this connection, the Sector installed and upgraded existing power
 distribution facilities in the country. The Sector also won orders to
 supply rolling stock, electrification and a signaling system for the
 Gurgaon Metro and Delhi Metro, thereby improving travel for over 30,000
 passengers per hour.
 The Company continued its focus on its localization initiatives under
 the SMART (simple-to-use, maintenance-friendly, affordable, reliable
 and timely-to-market) strategy and launched additional solutions such
 as SMART@MT packages for the metals industry and SMART numerical
 relays. The SMART products provide a competitive edge to the Company
 over local and Asian competitors through a combination of quality
 features and affordability.
 Corporate Responsibility
 Siemens Ltd. has been conscious of its responsibilities as a corporate
 towards all its key stakeholders - society, employees, customers and
 the environment.
 During the financial year 2012-13, Siemens Ltd. increased its focus on
 the social and education sector through corporate citizenship
 initiatives. I am glad to inform you about the success of ''Project
 Asha'', an integrated, sustainable development initiative that is
 transforming the lives of around 300 villagers in Amle village, around
 130 kilometers from Mumbai.
 Among other corporate citizenship initiatives at Siemens in India is
 Sanjeevan Mobile Clinic that provides accessible and affordable primary
 healthcare focusing on community outreach, health promotion, preventive
 education and curative services in remote rural areas. The Company has
 also undertaken upgradation of various Industrial Training Institutes
 (ITIs). The Company has also awarded scholarships for engineering
 students from less-privileged communities and continues to provide
 support for the development of children at the Welfare Society for
 Destitute Children, Mumbai.  These initiatives are already
 content-wise, fully in line with the recent amendment to the Company''s
 In addition, our sustainability initiatives were also acknowledged by
 the Confederation of Indian Industry (CII), when the Company was ranked
 Number 1 in the Capital Goods Sector (as per BSE classification) and
 graded as a Sustainable Plus Platinum Company as part of CII''s
 Sustainability Rating. The Company was amongst the Top 6 out of the Top
 100 listed companies in India.
 People excellence
 Siemens Ltd. continued to focus on the sustained development of its
 dynamic workforce, an important asset to the Company. New learning and
 development programs launched included the ''Local Key Expert Career
 Program'' aimed at developing customized career paths linked to critical
 business roles in research and development, engineering and
 Various HR processes were simplified and made flexible, such as medical
 insurance, group personal accident insurance, parents'' insurance and
 superannuation fund.
 As of September 30, 2013, the Company''s employee strength was 11,539 as
 compared to 12,041 as of September 30, 2012. This includes an addition
 of 908 employees as a result of the merger of Siemens Power Engineering
 Pvt. Ltd. and Winergy Drive Systems India Pvt. Ltd. The new employees
 have been integrated into the Energy Sector and Industry Sector
 During the financial year 2012-13, the Company initiated measures to
 optimize capacity and resource utilization across locations to counter
 the lack of market demand.
 The Company continues to have a cordial relationship with its unions.
 The road ahead - the outlook for Siemens Ltd.
 While the company has already initiated measures to optimize its cost
 position and productivity in the factories, the growth of the Company
 is also dependent on the implementation of government policies to
 promote infrastructure development within the country and create an
 environment conducive to investment in capital goods.
 It is therefore imperative that the government and the RBI work in
 unison to take urgent steps to create an investment friendly
 environment. The recent clearances given by the Project Monitoring
 Group and the Cabinet Committee on Investment for projects in the power
 and infrastructure space are positive signs, but more needs to be
 urgently done.
 In conclusion, I would like to sincerely thank our customers, the
 board, management, unions and most importantly, the dedicated employees
 for their consistent support and commitment to Siemens Ltd. during a
 very challenging year.
 Deepak Parekh Chairman
Source : Dion Global Solutions Limited
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