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Siemens

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Directors Report Year End : Sep '15    « Sep 14
Dear Members,
 
 The Directors have pleasure in presenting the 58th Annual Report of
 your Company and the Audited Financial Statements for the year ended
 30th September, 2015.
 
 1.  Financial Performance
 
                                                    (Rs, in Millions) 
 
                                                     Standalone 
 
                                              2014-15       2013-14
 
 Turnover                                     105,124       106,783
 
 Less: Expenses                                97,519       103,131
  
 Profit from operations before 
 other income and finance costs                 7,605         3,652
 
 Add: Other income                              1,604         1,039
 
 Less: Finance cost                                73            82
 
 Profit before exceptional items and tax        9,136         4,609
 
 Add: Exceptional items                         7,828         3,827
 
 Profit before Tax                             16,964         8,436
 
 Less: Tax                                      5,131         2,404
 
 Profit for the year                           11,833         6,032
 
 Balance in the Statement of 
 Profit and Loss brought forward                9,374         5,906
 
 Amount available for appropriation            21,207        11,938
 
 Appropriations:
 
 Proposed Dividend                              3,561         2,137
 
 Dividend Distribution Tax                        725           427
  
 Balance in the Statement of Profit 
 and Loss carried forward                      16,921         9,374
 
 2.  Operations
 
 The Turnover of the Company decreased by approximately 2% and stood at
 Rs, 105,124 million as compared to Rs, 106,783 million in the previous
 year. The Company''s Profit from Operations for the year ended 30th
 September, 2015 was Rs, 7,605 million as compared to Rs, 3,652 million
 in the previous year.
 
 The Profit after Tax for the year ended 30th September, 2015 was Rs,
 11,833 million, compared to Rs, 6,032 million during FY 2013-14.
 
 3.  Dividend
 
 The Board of Directors recommend a Dividend of Rs,6 per equity share
 and a Special Dividend of Rs,4 per equity share (in view of the large
 exceptional income during the FY 2014-15) having face value of Rs, 2
 each. This Dividend is subject to the approval of the Members at the
 58th Annual General Meeting of the Company. In the previous year, the
 Company paid a Dividend of Rs, 6 per equity share of Rs, 2 each.
 
 4.  Divestment
 
 Sale and Transfer of Metals Technologies Business (MT Business) of the
 Company
 
 Pursuant to the approval granted by the Members by way of Postal Ballot
 on 15th December, 2014, MT Business of the Company was sold and
 transferred as a going concern on a Slump Sale basis to VAI Metals
 Technologies Private Limited (VAI), the then subsidiary of Siemens
 VAI Metals Technologies GmbH, Germany, with effect from the close of
 business hours on 31st December, 2014, for a consideration ofRs, 10,233
 million and recorded a gain of Rs, 7,120 million, which forms part of
 exceptional items.
 
 5.  Subsidiary company
 
 Siemens Rail Automation Private Limited (SRAPL) became a wholly-owned
 subsidiary of the Company with effect from 1st October, 2014. SRAPL is
 a non-material and non-listed subsidiary of the Company pursuant to
 Clause 49 of the Listing Agreement. SRAPL is engaged in the business of
 manufacture, supply, design, installation and commissioning of Railway
 Signaling equipment consisting of trackside and on board equipment.
 
 Your Company has obtained a certificate from the Statutory Auditors
 certifying that the Company is in compliance with the Foreign Exchange
 Management (Transfer or issue of security by a person resident outside
 India) Regulations, 2000 with respect to the downstream investments
 made in SRAPL during the year.
 
 A summary of performance of SRAPL is provided below.
 
 The Turnover of SRAPL decreased by approximately 3% and stood at Rs,
 577 million as compared to Rs, 591 million in the previous year and
 Loss from Operations for the year ended 30th September, 2015 was Rs, 1
 5 million as compared to Profit from Operations of Rs, 43 million in
 the previous year.
 
 SRAPL has reported Loss after Tax for the year ended 30th September,
 2015 of Rs,19 million as compared to Profit after Tax of Rs, 15 million
 during FY 2013-14.
 
 The Company does not have any joint venture or associate companies
 during the year.
 
 Pursuant to the provisions of Section 129 (3) of the Companies Act,
 2013 (Act), a statement containing salient features of financial
 statements of SRAPL in the prescribed Form AOC-1 is provided in
 Annexure I forming part of this Report. The Audited Financial
 Statements of SRAPL are available on the Company''s website at
 www.siemens.co.in/en/index/investor/financials-of-our-subsidiaries.htm
 and the same are also available for inspection at the Registered Office
 of the Company as per the details mentioned in Notice of the 58th
 Annual General Meeting. Your Company will also make available these
 documents upon request by any Member of the Company interested in
 obtaining the same.
 
 Consolidated Financial Statements
 
 The Annual Audited Consolidated Financial Statements together with the
 Report of Auditors'' thereon forms part of this Annual Report.
 
 6.  Conservation of Energy, Technology Absorption, Foreign Exchange
 Earnings and Outgo
 
 Information as required to be given under Section 134(3)(m) of the Act
 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided
 in Annexure II forming part of this Report.
 
 7.  Business Responsibility Report
 
 Pursuant to Clause 55 of the Listing Agreement entered into with the
 Stock Exchanges (''''Listing Agreement''''), your Company is required to
 include as part of the Annual Report, Business Responsibility Report
 (BRR) which provides a suggested framework of a BRR, describing
 initiatives taken by the Company from an environmental, social and
 governance perspective.
 
 As a Green Initiative, the complete BRR for the year FY 2014-15 has
 been hosted on the Company''s website, which can be accessed at
 http://www.siemens.co.in/en/index/investor/annual_report.htm and
 http://www.siemens.co.in/en/about_us/ index/sustainability.htm
 
 Any Member interested in obtaining a copy of BRR may write to the
 Company Secretary of the Company.
 
 8.  Corporate Governance
 
 A detailed review of the operations, performance and future outlook of
 the Company and its business is given in the Management''s Discussion
 and Analysis, which forms part of this Report as Annexure III.
 
 As required by Clause 49 (X) of the Listing Agreement, a detailed
 report on Corporate Governance along with the Auditor''s Certificate
 thereon, forms part of this Report as Annexure IV.
 
 General Shareholder Information forms part of this Report as Annexure
 V.
 
 9.  Audit Committee
 
 The Company has in place an Audit Committee in terms of the
 requirements of the Act read with the Rules framed there under and
 Clause 49 of the Listing Agreement. The details relating to the same
 are given in the Report on Corporate Governance forming part of this
 Report. The recommendations of the Audit Committee were duly approved
 and accepted by the Board of Directors.
 
 10.  Directors and Key Managerial Personnel
 
 The Board of Directors offers its deep condolence for the sad demise of
 Mr. Narendra J. Jhaveri (DIN: 00198912), who passed away on 6th June,
 2015, peacefully in his sleep. Mr. Jhaveri, 79, was a Member
 (Independent Director) of the Board of Directors of the Company since
 November 2000. Mr. Jhaveri''s visionary foresight and business acumen
 had helped to steer the Company in the right direction. His legacy
 shall continue to guide the Company in the future as well.
 
 At 58th Annual General Meeting, Mr. Johannes Apitzsch (DIN: 05259354)
 retires by rotation and being eligible, offers himself for
 re-appointment.
 
 The resolution for the above re-appointment along with the brief
 profile forms part of the Notice of the 58th Annual General Meeting and
 the resolution for his re-appointment is recommended for your approval.
 
 The Members at the 57th Annual General Meeting held on 30th January,
 2015, appointed Independent Directors for the Company viz. Mr. Deepak
 S. Parekh (DIN: 00009078), Mr. Yezdi H. Malegam (DIN: 00092017), Mr.
 Darius C. Shroff (DIN: 00170680), Mr. Narendra J. Jhaveri (DIN:
 00198912), Mr. Keki B. Dadiseth (DIN: 00052165) and Mr. Pradip V. Nayak
 (DIN: 00032403) as Independent Directors for a term of five years as
 per requirements of the Act.
 
 The abovenamed Independent Directors except Late Mr. Narendra J.
 Jhaveri have furnished declarations to the Company under Section 149(7)
 of the Act, confirming that they meet the criteria prescribed for
 independent directors under Section 149(6) of the Act as well as Clause
 49(II)(B) of the Listing Agreement.
 
 Mr. Sunil Mathur, Managing Director and Chief Executive Officer (DIN:
 02261944), Mr. Christian Rummel, Executive Director and Chief Financial
 Officer (DIN: 01992982) and Mr. Ketan Thaker, Company Secretary, are
 the Key Managerial Personnel of the Company as on the date of this
 Report.
 
 11.  Board Meetings
 
 During the financial year ended 30th September, 2015, five meetings of
 the Board of Directors were held. The details of the attendance of
 Directors at the Board Meetings are mentioned in the Corporate
 Governance Report annexed hereto.
 
 12.  Annual evaluation of Board, its Committees and individual
 Directors
 
 The details of the Annual evaluation of Board, its Committees and
 individual Directors are mentioned in the Corporate Governance Report.
 
 13.  Corporate Social Responsibility
 
 The Company has always endeavored to be an integral part of the society
 for more than 5 decades - as an employer, customer, investor, vendor
 and corporate citizen. The initiatives in the social sphere, generally
 known as Corporate Social Responsibility, are referred to as Corporate
 Citizenship in the Company. Corporate Citizenship is the Company''s
 contribution to sustainable communities and are built on the Company''s
 Values of being Responsible, Excellent and Innovative. The Company
 considers it as its economic, environmental and social responsibility
 to foster sustainable local development as well as add value to the
 local economy in which it operates.
 
 Further, in accordance with the provisions of Section 135 of the Act
 and Rules framed there under, the Company has constituted a Corporate
 Social Responsibility (CSR) Committee of Directors comprising of Mr.
 Deepak Parekh (Chairman), Ms. Mariel von Schumann, Mr. Sunil Mathur and
 Mr. Christian Rummel. The Committee on a regular basis reviews and
 monitors the CSR projects and expenditure undertaken by the Company.
 
 The Company has implemented CSR projects directly and / or through
 implementing partners. The Company''s initiatives towards sustainable
 communities have been addressed under the areas of enhancing living
 conditions, skill development, technical education, healthcare and
 sanitation and conservation of water. The details of such initiatives,
 CSR spend, CSR Policy, etc., have been provided as Annexure VI to this
 Report, as required under the Companies (Corporate Social
 Responsibility Policy) Rules, 2014.
 
 14.  Remuneration Policy
 
 The details of the Remuneration Policy are mentioned in the Corporate
 Governance Report.
 
 A Statement of Disclosure of Remuneration pursuant to Section 197 of
 the Act read with Rule 5(1) of Companies (Appointment and Remuneration
 of Managerial Personnel) Rules, 2014, is provided as Annexure VII
 forming part of this Report.
 
 15.  Extracts of Annual Return
 
 The extracts of Annual Return in Form MGT-9 as required under Section
 92(3) of the Act read with Rule 12 of the Companies (Management and
 Administration) Rules, 2014 forms part of this Report as Annexure VIII.
 
 16.  Particulars of contracts or arrangements with Related Parties
 
 The particulars of contracts or arrangements with Related Parties
 referred to in Section 188(1) of the Act in the prescribed Form AOC -
 2, is provided as Annexure IX forming part of this Report.
 
 17.  Particulars of Loans, Guarantees or Investments
 
 A statement providing particulars of Loans, Guarantees or Investments
 under Section 186 of the Act is provided as Annexure X forming part of
 this Report.
 
 18.  Vigil Mechanism
 
 As per the provisions of Section 177(9) of the Act, the Company is
 required to establish an effective Vigil Mechanism for Directors and
 employees to report genuine concerns. The Company has a Policy for
 Prevention, Detection and Investigation of Frauds and Protection of
 Whistleblowers (Whistleblower Policy) in place and the details of the
 Whistleblower Policy are provided in the Report on Corporate Governance
 forming part of this Report.  The Company has disclosed information
 about the establishment of the Whistleblower Policy on its website
 http://www.siemens.co.in/pool/investor_relations/whistleblower-
 policy---oct-2014--01.pdf
 
 19.  Risk Management Policy
 
 Siemens Enterprise Risk Management (ERM) is a company-wide framework of
 methods and processes used to identify, assess, monitor and mitigate
 risks and seize opportunities related to achievement of Siemens
 business objectives. The Siemens ERM approach is based on the globally
 accepted The Committee of Sponsoring Organizations of the Treadway
 Commission (COSO) framework i.e. ERM - Integrated Framework. The
 COSO framework provides a generic concept which has been customized to
 reflect Company''s requirements.
 
 Major risks identified by the business Divisions and Corporate
 Departments are systematically addressed through mitigating actions on
 a continuing basis. During the financial year under review, the Company
 has set up a Risk Management Committee (RMC) in accordance with the
 requirements of the Listing Agreement, inter alia, to monitor the risks
 and their mitigating actions. The Board of Directors of the Company
 also reviews the Risk Assessment and Mitigation Report annually.
 
 Details in respect of adequacy of internal financial controls with
 reference to the Financial Statements are given in the Management''s
 Discussion and Analysis, which forms part of this Report.
 
 20.  Directors'' Responsibility Statement
 
 Pursuant to the provisions of Section 134 (3)(c) and 134 (5) of the
 Act, the Directors confirm, to the best of their knowledge and belief:
 
 a) that in the preparation of the annual Financial Statements for the
 year ended 30th September, 2015, the applicable accounting standards
 have been followed along with proper explanation relating to material
 departures, if any;
 
 b) that such accounting policies have been selected and applied
 consistently and judgment and estimates have been made that are
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company as at 30th September, 2015 and of the profit
 of the Company for the year ended on that date;
 
 c) that proper and sufficient care has been taken for the maintenance
 of adequate accounting records in accordance with the provisions of the
 Act for safeguarding the assets of the Company and for preventing and
 detecting fraud and other irregularities;
 
 d) that the annual Financial Statements have been prepared on a going
 concern basis;
 
 e) that proper internal financial controls are in place and that such
 internal financial controls were adequate and were operating
 effectively;
 
 f) that proper systems have been devised to ensure compliance with the
 provisions of all applicable laws and are adequate and operating
 effectively.
 
 21.  Reporting of frauds
 
 There have been no instances of fraud reported by the Statutory
 Auditors under Section 143(12) of the Act and Rules framed there under
 either to the Company or to the Central Government.
 
 22.  Fixed Deposits
 
 Your Company has not accepted any fixed deposits and, as such, no
 amount of principal or interest was outstanding as of the Balance Sheet
 date.
 
 23.  Amount, if any, proposed to be transferred to Reserves
 
 The Company has made no transfers to Reserves during the financial year
 2014-1 5.
 
 24.  Employees:
 
 Your Directors place on record their deep appreciation for the
 contribution made by the employees of the Company at all levels.
 
 The information on employees particulars as required under Section 197
 (12) of the Act read with Rule 5 (2) and 5 (3) of the Companies
 (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is
 provided in the Annexure forming part of the Report. In terms of
 Section 136 of the Act, the Report and Financial Statements are being
 sent to the Members and others entitled thereto, excluding aforesaid
 Annexure. The said information is available for inspection by the
 Members at the Registered Office of the Company as per the details
 mentioned in the Notice of the 58th Annual General Meeting on any
 working day of the Company up to the date of the 58th Annual General
 Meeting. Any Member interested in obtaining a copy of the same may
 write to the Company Secretary of the Company.
 
 25.  Policy on Prevention of Sexual Harassment at Workplace
 
 The Company has in place a Policy on Prevention of Sexual Harassment at
 Workplace in line with the requirements of the Sexual Harassment of
 Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
 and Rules framed there under and Internal Complaints Committee has also
 been set up to redress complaints received regarding sexual harassment.
 During the year, no complaint with allegations of sexual harassment was
 received by the Company.
 
 26.  Statutory Auditors
 
 Pursuant to provisions of Section 139 of the Act read with the
 Companies (Audit and Auditors) Rules, 2014, Messrs S R B C & CO LLP,
 Chartered Accountants (Firm Registration No. 324982E), were appointed
 as Statutory Auditors of the Company for a term of four years, to hold
 office from the conclusion of 57th Annual General Meeting held on 30th
 January, 2015, until the conclusion of 61st Annual General Meeting,
 subject to ratification of their appointment at every subsequent Annual
 General Meeting.
 
 A certificate from them has been received to the effect that their
 appointment as Statutory Auditors of the Company, if ratified at
 ensuing Annual General Meeting, would be according to the terms and
 conditions prescribed under Section 139 of the Act and Rules framed
 there under.
 
 A resolution seeking ratification of their appointment, forms part of
 the Notice convening the 58th Annual General Meeting and the same is
 recommended for your consideration and approval.
 
 27.  Cost Auditors
 
 In terms of the provisions of Section 148 of the Act read with the
 Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of
 Directors, on the recommendation of the Audit Committee, have appointed
 Messrs R. Nanabhoy & Co., Cost Accountants (Firm Registration No.
 7464), as Cost Auditors of the Company, for the financial year ending
 30th September, 2016, at a remuneration as mentioned in the Notice
 convening the 58th Annual General Meeting for conducting the audit of
 the cost records maintained by the Company for the various products as
 mandated by the Central Government, pursuant to its order dated 30th
 June, 2014 and any amendments thereof, subject to the approval of the
 Members on the remuneration to be paid to the Cost Auditor.
 
 A certificate from them has been received to the effect that their
 appointment as Cost Auditors of the Company, if made, would be in
 accordance with the limits specified under Section 141 of the Act and
 Rules framed there under.
 
 A resolution seeking Member''s ratification for the remuneration payable
 to Cost Auditors forms part of the Notice of the 58th Annual General
 Meeting of the Company and same is recommended for your consideration
 and approval.
 
 The Company had filed the Cost Audit Report for FY 2013-14 on 9th
 March, 2015, which is within the time limit prescribed under the
 Companies (Cost Audit Report) Rules, 2011.
 
 
 28.  Secretarial Audit
 
 Pursuant to provisions of Section 204 of the Act read with the
 Companies (Appointment and Remuneration of Managerial Personnel) Rules,
 2014, the Company has appointed Messer Parikh Parekh & Associates,
 Practicing Company Secretaries (C.P.No.1228), for conducting the
 Secretarial Audit of the Company for the financial year ended 30th
 September, 2015. The Secretarial Audit Report is provided as Annexure
 XI to this Report.
 
 29.  Material changes and commitment, if any, affecting financial
 position of the Company from the end of financial year and till the
 date of this Report
 
 There have been no material changes and commitments, if any, affecting
 the financial position of the Company which have occurred between the
 end of the Financial Year of the Company to which the Financial
 Statements relate and the date of this Report.
 
 30.  Significant and Material Orders passed by the Regulators or Courts
 
 There are no significant and material orders passed by the Regulators
 or Courts or Tribunals impacting the going concern status and
 operations of the Company in future.
 
 31.  Acknowledgements
 
 The Board of Directors take this opportunity to thank Siemens AG - the
 Parent Company, customers, members, suppliers, bankers, business
 partners / associates and Central and State Governments for their
 consistent support and co-operation to the Company.
 
 On behalf of the Board of Directors 
 
 For Siemens Limited
 
 Deepak S. Parekh
 
 Chairman
 
 DIN : 00009078
 
 Mumbai
 
 Friday, 27th November, 2015
Source : Dion Global Solutions Limited
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