Siemens
BSE: 500550 | NSE: SIEMENS | ISIN: INE003A01024 | Telecommunications - Equipment
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Directors Report | Year End : Sep '08 |
The Directors have pleasure in presenting the 51st Annual Report of
your Company and the Audited Accounts for the year ended on 30th
September, 2008.
1. Financial Performance
(Rs. in million)
2007-08 2006-07 Growth
%
Gross Profit before Interest,
Depreciation and Exceptional Income 8,329.78 8,453.17 -1.46
Less : Interest 20.54 2.12
Depreciation 637.34 492.28
Profit before Tax and Exceptional Income 7,671.90 7,958.77 -3.60
Add : Exceptional Income
Profit on sale of Information and
Communication Division - 524.20
Profit on sale of long term
investment - 259.25
Profit on sale of SBT Division 10.64
Profit on sale of SVDO Division 1,235.15 -
Profit before Tax 8,917.69 8,742.22 2.01
Less : Tax 3,493.16 2,660.45
Deferred Tax (629.04) 3.37
Fringe Benefit Tax 120.30 113.00
Profit after Tax 5,933.27 5,965.40 -0.54
Amount available for appropriation 5,933.27 5,965.40
Appropriations:
General Reserve 4,577.25 5,018.70
Net deficit on account of amalgamation
of erstwhile
Siemens Industrial Turbomachinery
Services Private Ltd. 172.64 -
Proposed Dividend 1,011.48 809.18
Dividend Distribution Tax 171.90 137.52
2. Operations
The performance of the Company during the year was satisfactory and the
base business grew strongly.
The Turnover of the Company increased by 7.36% and stood at Rs.82,955
million as compared to Rs.77,268 million in the previous year. While
all the businesses contributed to the growth, the key drivers were
Power, Automation & Drives and Industrial Solutions and Services
business.
The profit after tax remained steady at Rs. 5,933 million, compared to
Rs. 5,965 million during 2006-07 mainly due to additional cost impacts
in certain large projects. The new orders booked during the Financial
Year were on a healthy note.
In line with Siemens Global strategy and in order to achieve better
portfolio synergy, the Companys businesses have been classified into
three new Sectors namely Industry, Energy and Healthcare.
3. Bonus Issue
Pursuant to the approval of the Members given at the 50th Annual
General Meeting held on 31st January, 2008, for the 1:1 Bonus Issue,
the Company issued and allotted 168,580,100 Equity Shares of Rs.2 each
on 12th March, 2008 to those Shareholders who held Shares as on 3rd
March, 2008 (the Record Date). Consequently, the Paid-up Share Capital
of the Company increased to Rs. 674,320,400.
4. Dividend
Considering the performance and to appropriately reward the Members
while conserving the resources to meet the future financial
requirements, the Board of Directors recommends a dividend of Rs.3 per
Equity Share of Rs.2 each (150%). This dividend is subject to the
approval of the Members at the forthcoming Annual General Meeting. The
dividend will entail an outflow of Rs. 1,011,480,600 on the Paid-up
Equity Share Capital of Rs.674,320,400. In the previous year, the
Company paid a dividend of Rs.4.80 per Equity Share of Rs.2 each
(240%).
5. Managements Discussion and Analysis
A detailed review of the operations, performance and future outlook of
the Company and its businesses is given in the Managements Discussion
and Analysis, which forms part of this Report as Annexure II.
6. Mergers, Divestments and Acquisitions
a. Merger of Siemens Industrial Turbomachinery Services Pvt. Ltd.
(SITS)
The Honble High Court of Karnataka vide its Order dated 25th
September, 2008, sanctioned the Scheme of Amalgamation of SITS, a
wholly-owned subsidiary, with the Company. As per the Scheme of
Amalgamation, the Appointed Date is 1st April, 2008. Thus, with
effect from 1st April, 2008, SITS stands merged with the Company and
the legal entity of SITS stands dissolved without winding-up. Further,
the entire business and undertaking of SITS gets transferred to and
vested in the Company.
b. Acquisition of balance 50% stake in Flender Ltd., Kolkata
The Company has decided to acquire the balance 50% stake in Flender
Ltd. comprising of 2,160,000 Equity Shares of Rs. 10/- each from
A.Friedr.Flender AG (a Siemens AG company). With this acquisition,
Flender Ltd. would be a 100% subsidiary of the Company.
Further, it is proposed to merge Flender Ltd. with the Company, subject
to all statutory and regulatory approvals in this regard.
c. Divestment of 51% stake in Siemens Information Processing Services
Pvt. Ltd. (SIPS) Bangalore
The Company has decided to divest its 51% stake in SIPS comprising of
2,123,800 Equity Shares of Rs. 10/- each to Siemens Corporate Finance
Pvt. Ltd., Mumbai (a Siemens AG Company).
7. Subsidiary companies
a. Siemens Information Systems Ltd., Mumbai (SISL) - a 100% subsidiary
SISL is a systems integrator and total solutions provider, having
extensive domain expertise and technology specialisation. For the year
ended on 30th September, 2008, SISL reported a total income of Rs.
10,182 million and a Net Profit of Rs.339 million. For the year ended
on 30th September, 2008, the Board of Directors of SISL has recommended
a dividend of 3100%.
b. Siemens Information Processing Services Pvt. Ltd., Bangalore (SIPS)
- a 100% subsidiary
The Company holds 51% equity stake in SIPS. The balance 49% is held by
SISL, a 100% subsidiary of the Company. Thus, SIPS is a 100%
subsidiary of the Company. SIPS provide back-office and customer
contract services to Siemens companies in India and other countries,
with the necessary technology and process competence. For the year
ended on 30th September, 2008, SIPS reported a total income of Rs.
1,105 million and a Net Profit of Rs. 117 million. For the year ended
on 30th September, 2008, the Board of Directors of SIPS has recommended
a dividend of 550%.
c. Siemens Building Technologies Pvt. Ltd., Chennai (SBTPL) - a 79.32%
subsidiary
SBTPL is engaged in the Building Technologies business providing a
range of products and services comprising of building automation
systems, fire safety solutions, security solutions, etc. For the year
ended on 30th September, 2008, SBTPL recorded a total income of Rs.
2,228.97 million and a Net Profit of Rs. 93.33 million.
During the period under review, the SBT Group consisting of SBTPL,
Vista Security Technics Pvt. Ltd., Chennai, iMetrex Technologies Pte
Ltd., Singapore, Avenues Hong Kong Ltd., Hongkong and iMetrex
Technologies Ltd., Ireland posted a consolidated turnover of Rs. 3,169
million and a Net Profit of Rs.90.75 million.
d. Siemens Nixdorf Information Systems Pvt. Ltd., Mumbai (SNISL) - a
100% subsidiary
SNISL is a 100% subsidiary of SISL and being a subsidiary of a
subsidiary, SNISL is considered as a subsidiary of the Company. SNISL
ceased its commercial activities since 2000-01. It has been decided to
merge this company within the Siemens Group, subject to all statutory
and regulatory approvals.
e. Siemens Rolling Stock Pvt. Ltd. (SRSPL) - a 100% subsidiary
SRSPL was incorporated on 4th July, 2008 and is engaged in the
manufacture of Railway Rolling Stock.
All the above subsidiary companies are non-material, non-listed
subsidiary companies as defined under Clause 49 of the Listing
Agreement with the Stock Exchanges (Listing Agreement).
The Company has obtained exemption from the Ministry of Corporate
Affairs, Government of India, New Delhi, under Section 212(8) of the
Companies Act, 1956, from annexing to this report, the Annual Reports
of the above subsidiary companies for the year ended 30th September,
2008. However, if any Member of the Company or subsidiary companies so
desires, the Company will make available copies of Annual Accounts of
the above subsidiary companies and related information, free of cost.
The Annual Accounts of the said subsidiaries are also available for
inspection by any investor at the Registered Office of the Company and
of the subsidiary companies concerned, between 10.00 a.m. and 12 noon
on any working day of the Company and of the respective subsidiary
companies, upto the date of the 51st Annual General Meeting.
Consolidated Accounts
The Annual Audited Consolidated Accounts and Cash Flow Statement,
comprising of Siemens Ltd. and its subsidiary / associate companies,
appear in this Report in the section Siemens Group. The Auditors
Report on the Consolidated Accounts is also attached. The Consolidated
Accounts have been prepared in accordance with the Accounting Standards
prescribed by The Institute of Chartered Accountants of India in this
regard.
8. Foreign Exchange Earnings and Expenditure
Details concerning Foreign Exchange Earnings and Expenditure have been
given under the Notes to the Accounts.
9. Conservation of Energy and Technology Absorption
Additional information in terms of Section 217(1)(e) of the Companies
Act,1956, read with Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988, is given as Annexure I to this
Report.
10. Employees
Your Directors place on record their deep appreciation for the
exemplary contribution of the employees at all levels. Their dedicated
efforts and enthusiasm has been integral to your Companys growth. Our
industrial relations continue to be cordial.
The total number of permanent employees of the Company as on 30th
September, 2008, was 6,502 (as on 30th September, 2007: 6,505).
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this Report. However, as per the
provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this
Report and Accounts are being sent to all the Members of the Company,
excluding the Statement of Particulars of Employees under Section
217(2A) of the Companies Act, 1956. Any Member interested in obtaining
a copy of the said Statement may write to the Company Secretary at the
Registered Office of the Company.
11. Corporate Governance
We adhere to the principles of Corporate Governance mandated by the
Securities and Exchange Board of India and have implemented all the
prescribed stipulations. As required by Clause 49 VI of the Listing
Agreement, a detailed report on Corporate Governance forms part of this
Report as Annexure III. The Auditors Certificate on compliance with
Corporate Governance requirements by the Company, is attached to the
Corporate Governance Report.
12. General Shareholder Information
General Shareholder Information forms part of the Directors Report as
Annexure IV.
13. Health and Safety
In keeping with the Corporate Safety, Health & Environment Policy of
Siemens Ltd., various safety & environmental initiatives are
implemented through the concept of Education, Engineering &
Enforcement. Our Safety, Health & Environment Policy has been revised
to incorporate necessary changes as per legal & international standards
like ISO 14001:2004 & OHSAS 18001:2007. In the year 2007-08, we
enhanced our focus on Safety at Siemens Construction Projects in
addition to our Manufacturing Units.
In the year 2007-08, total 860 employees were imparted safety and
environment training. Additionally, the Company released safety hand
books, organised Siemens Asia-Pacific Environment & Safety Conference
and conducted Emergency Drills at various locations.
The Company continued its system of Safety Tool Box Talk and
successfully covered our contract employees through 1,711 safety tool
box talks.
14. Directors Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Directors confirm that, to the best of their knowledge and
belief:
1. in the preparation of the annual accounts, the applicable
accounting standards have been followed alongwith proper explanation
relating to material departures;
2. appropriate accounting policies have been selected and applied
consistently and such judgments 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, 2008 and of the profit
of the Company for the year ended on that date;
3. proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
4. the annual accounts have been prepared on a going concern basis.
15. Directors
Mr. Sunil D. Mathur was appointed as an Additional Director as well as
a Whole-time Director of the Company with effect from 22nd July, 2008
to 21st July, 2013. Mr. Mathur has been re-designated as an Executive
Director with effect from 1st October, 2008. He is also the Chief
Financial Officer of the Company with effect from 1st December, 2008.
The terms and conditions of his appointment, including his
remuneration, are subject to the approval of the Members.
Mr. Vijay V. Paranjape has been re-appointed as a Whole-time Director
of the Company for a further period of two years with effect from 1st
October, 2008. The terms and conditions of his appointment, including
his remuneration, are subject to approval of the Members.
Mr. Wolfgang Dehen has been appointed as a Special Director (Siemens
AGs nominee) with effect from 19th December, 2008. Mr. Dehen is the
Chief Executive Officer of Energy Sector and a member of the Managing
Board of Siemens AG, Germany.
Mr. Stephan Schneider has been appointed as an Alternate Director for
Mr. Wolfgang Dehen with effect from 19th December, 2008.
Prof. Dr. Klaus Wucherer resigned as a Director, with effect from 31st
March, 2008. Consequent to the said resignation, Mr. Stephan Schneider,
also ceased to be an Alternate Director for Prof. Dr. Wucherer,
effective same date. Mr. K. R. Upili, on completion of his term,
ceased to be a Whole-time Director and Director of the Company with
effect from 27th July, 2008. Mr. Patrick de Royer would be taking up a
new assignment with Siemens Netherlands and hence he has resigned as an
Executive Director and Director of the Company with effect from 1st
January, 2009. Prof. Dr. Hermann Requardt who was appointed as a
Special Director with effect from 1st April, 2008, resigned from the
Board of Directors of the Company with effect from 19th December, 2008.
Consequent to the said resignation, Mr. Stephan Schneider, also ceased
to be an Alternate Director for Prof. Dr. Requardt, effective same
date.
The Board places on record its appreciation for the services rendered
by Prof. Dr. Wucherer, Mr. Upili, Mr. de Royer and Prof. Dr. Requardt
during their respective tenures.
At the 51st Annual General Meeting, Mr. Deepak S. Parekh, Mr. Y. H.
Malegam and Mr. D. C. Shroff retire by rotation and being eligible,
offer themselves for re-appointment.
The above appointments and re-appointments (other than appointment of
Mr. Schneider as an Alternate Director) forms part of the Notice of the
51st Annual General Meeting and the respective resolutions are
recommended for your approval.
Profile of these Directors as required under Clause 49 of the Listing
Agreement entered into with the Stock Exchanges, are given in the
Notice of the 51st Annual General Meeting.
16. Auditors
The present Auditors of the Company, Messrs B S R & Co., Chartered
Accountants, have expressed their unwillingness to be re-appointed as
Auditors of the Company on their retirement at the forthcoming Annual
General Meeting. The Board records its appreciation for the assistance
and guidance provided by them during their long tenure with the
Company. The Board recommends the appointment of Messrs S. R. Batliboi
& Associates, Chartered Accountants, as Auditors of the Company from
the conclusion of the 51st Annual General Meeting until the conclusion
of the 52nd Annual General Meeting of the Company on such remuneration
as may be fixed by the Board of Directors of the Company.
17. Cost Auditors
The Central Governments Cost Audit Order dated 17th March, 1993,
requires audit of Cost Accounting records of the Company for the
product Electric Motors, for every financial year. Messrs R. Nanabhoy
& Co., Cost Accountants, Mumbai, have been conducting this audit since
1972.
18. Acknowledgments
The Board of Directors wishes to express its sincere appreciation for
the excellent support and co-operation extended by Siemens AG - the
parent company, members, customers, suppliers, bankers and other
business associates.
On behalf of the Board of Directors
For Siemens Ltd.
Deepak S. Parekh
Chairman
Mumbai
Friday, 19th December, 2008
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