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BSE: 500550|NSE: SIEMENS|ISIN: INE003A01024|SECTOR: Infrastructure - General
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Sep 15
Chairman's Speech (Siemens) Year : Sep '16

Chairman’s Statement

Dear Shareholders,

During the financial year 2015-16, the global macro-economic situation was impacted by various events, which also had an effect on the business environment in India. While the Indian economy is in a strong position compared to the continued tepid global economic growth, many sectors such as infrastructure, power generation, transmission and distribution, mobility, steel and cement are in need of investments to drive their growth. Similarly, the manufacturing industry across verticals also witnessed sub-optimal capacity utilization and new investments are expected to happen only after this situation improves.

The growth of Siemens Limited is linked to the overall growth of the Indian economy and sustainable public capital expenditure. Keeping in view the market conditions, the Company performed well across businesses, delivering strong order growth.

Performance Highlights

For the financial year ended 30th September, 2016, the Company received New Orders valued at Rs. 121,199 million, a 20 percent increase over Rs.101,322 million in the financial year ended 30th September, 2015. Sales (excluding Other Operating Revenues) were up by 3 percent to Rs.105,442 million, compared with Rs.102,831 million in the previous year.

The Order Backlog as of 30th September, 2016 stood at Rs.99,463 million - an increase of 4 percent compared with Rs.95,894 million in the previous year. Profits from Operations stood at Rs.7,468 million compared to Rs.7,580 million in the previous year.

For the year ended 30th September, 2016, the Company''s Profit before Tax stood at Rs.38,971 million (including exceptional income of '' 29,923 million) compared to Rs.16,964 million (including exceptional income of Rs.7,828 million) in the previous year -- an increase of 130 per cent. The Profit after Tax for the year was Rs.28,880 million, up by 144 percent compared with Rs.11,833 million in the previous year.

The Board of Directors has recommended a final dividend of Rs.6/- per equity share of face value of Rs.2/- each (300%) for the financial year ended 30th September, 2016, which together with the special dividend (interim dividend) of Rs.27.50 per equity share paid in August 2016, aggregates to a dividend of Rs.33.50 per equity share for FY 2015-16. In the previous year, the Company had declared a dividend of Rs.10/- per equity share (including a special dividend of Rs.4/- per equity share).

Performance Analysis

From an operational perspective, the Company continued to focus on profitable growth and operational excellence, which was evident by the growth in New Orders.

Among the key highlights during the financial year, the Energy Management Division won an order to supply switch yard equipment for a 500 MW High Voltage Direct Current (HVDC) Station for Power Grid Company of Bangladesh and for supply and installation of Synchronous Compensator (STATCOM) solutions from Power Grid Corporation of India Limited. Other orders won included an order from PSI International for Gas Insulated Switchgear and an order for Air Insulated Switchgear from Rajasthan Rajya Vidyut Prasaran Nigam Limited. It also dispatched the largest-ever ''Made in India'' single-phase Generator Transformer. The State Load Dispatch Center implemented by the Energy Management Division for Uttar Pradesh Power Transmission Corporation Limited in Lucknow was inaugurated by the Honorable Chief Minister of the state.

The Mobility Division won multiple orders for traction motors and Alternating Current Traction Systems to be supplied to the Indian Railways'' Diesel Locomotive Works, Varanasi.

The Building Technologies Division set up the Smart Buildings Experience & Training Centre at Kalwa to showcase systems and solutions that make buildings smart, safe, secure, comfortable and energy-efficient.

In the area of Smart Cities, Siemens signed a Memorandum of Understanding with Infrastructure Leasing & Financial Services (IL&FS) and Gujarat International Finance Tec-City Company Limited (GIFTCL) to develop Smart Mobility Solutions.

Digitalization at Siemens drives productivity for customers across the whole value chain. Siemens is working on marquee projects across key sectors to help customers leverage the opportunities of digitalization.

Business Responsibility

Siemens'' focus on Corporate Social Responsibility (CSR) includes rehabilitation work in 17 villages, introduction of an apprenticeship training program under the German Dual Vocational Educational Training concept, four year scholarships and mentorship for over 130 students, amongst several other CSR activities. Work in these areas is expected to be enhanced further in the years ahead. The board has followed and fully supported these initiatives through the year.

People Excellence

During the financial year, the Company continued to focus on nurturing its employees. Many initiatives have been undertaken by the Company to make Siemens the most preferred engineering company in India. These initiatives are ongoing and focus on learning and development, health management, environmental protection and safety.

Outlook

As regards the outlook of the Company, the growth driver continues to lie in increased public sector investments in power generation, transmission and distribution as well as mobility and smart cities. Private sector capital expenditure will pick up once capacity utilization improves. The Company continues to actively seek opportunities in areas such as Smart Cities, Metros, Electric Multiple Unit Locomotives, High-Voltage Direct Current solutions and Ultra-Mega Power Projects.

With the introduction of a digital platform Mindsphere, the Company is in a position to offer its customers enhanced digital services to enable greater efficiency and flexibility, higher productivity as also increased cost benefits. As Indian industry expands, these benefits across all of Siemens verticals will enable the Company''s customers to compete effectively at an international level.

While there are challenges in any business environment, India''s overall macro fundamentals are strong. India is a consumption driven economy and given the strong demand, the country has tremendous growth potential. India will remain amongst the world''s fastest growing economies with immense investment opportunities. Against this milieu, the Company will continue to focus on sustaining profitable growth in new orders, maintain operational excellence and be selective in pursuing large orders.

With the Company''s strength and competence in electrification, automation and digitalization, I am confident that it can deliver on the government''s initiatives of Make in India, 24/7 Power for All, Digital India, Smart Cities Mission and Rail Vision 2030. In conclusion, I would like to sincerely thank our customers, the board, management, unions and most importantly, the dedicated employees for their constant support and commitment to Siemens Limited.

Deepak Parekh

Chairman

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