Siemens

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