Description
The report for the financial year 2009 - 2010 of siemens.
Contents
Financial Highlights Chairman’s Statement Board of Directors 3 4 6
Siemens Ltd. Notice Directors’ Report Annexure I - Conservation of energy, etc. Annexure II - Management’s Discussions and Analysis Annexure III - Corporate Governance Report Annexure IV - General Shareholder Information Corporate Social Responsibility Auditors’ Report Financial Statements 8 18 22 24 30 43 50 57 60
Siemens Group Auditors’ Report Financial Statements Proxy & Attendence Slip 101 102 135
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Financial Highlights - Siemens Limited
2008-09 *Orders received *Sales *Pro?t before tax As % of sales *Pro?t after tax As % of sales ** Net worth per share^ ** Earning per share *Dividend Dividend % Debt/equity ratio *Investment in ?xed assets No. of employees No. of shareholders 87964 83888 14319 17% 10449 12% 86.51 30.99 1686 250% 1522 6683 193342 2007-08 87722 82955 8918 11% 5933 7% 61.37 17.60 1011 150% 1913 6502 200389 2006-07 95720 77268 8742 11% 5965 8% 94.37 17.69 809 240% 2574 6505 100135 2005-06 82025 45103 5055 11% 3601 8% 64.48 21.36 641 190% 843 5971 79118 2004-05 41233 27485 3631 13% 2548 9% 47.12 15.72 481 145% 277 4777 31315
* Rs In millions ** Rupees ^ From 2005 - 06 the face value is Rs.2 per share (upto 2003-04 the face value was Rs.10 per share) ^ Bonus shares issued in the year 2007-08.
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Chairman’s Statement
Performance Highlights On our part, Siemens Ltd. has managed to turn in a satisfactory performance in a fairly challenging environment and sustained a steady momentum of pro?tability and growth. For the ?nancial year ended September 30, 2009, Pro?t from Operations increased by 32% to Rs.945 crore as compared to the corresponding period of the previous year. Sales rose marginally to Rs.8,389 crore for the year ended September 30, 2009 as compared to Rs.8,296 crore in the corresponding period of the previous year. Siemens Ltd. received New Orders valued at Rs.8,796 crore despite tough market conditions in the 12 months ended September 30, 2009 as compared to Rs.8,718 crore in the corresponding period of the previous year. For the year ended September 30, 2009, the Company’s Pro?t Before Tax stood at Rs.1,432 crore as compared to Rs.892 crore in the previous year, registering an increase of 61%. This increase was primarily on account of a substantial one-time increase in Financing & Investment Income resulting from the Company’s sale of Siemens Information Systems Ltd. (SISL) and Siemens Information Processing Services Pvt. Ltd. (SIPS). The Pro?t After Tax rose by 76% and stood at Rs.1,045 crore as compared to Rs.593 crore in the previous year. The Unexecuted Order Value as of September 30, 2009 stood at Rs.10,292 crore - a rise of 5% (September 30, 2008: Rs.9,834 crore). The Board of Directors has recommended a dividend of Rs.5 for an equity share of Rs.2 each for the ?nancial year ended September 2009. During the previous ?nancial year, the Company had paid a dividend of Rs.3 for an equity share of Rs.2 each. Performance Analysis Despite a challenging market environment with signi?cant pricing pressures, our company maintained a steady focus on growth areas and secured a stable order intake. Our revenues increased marginally with a strong order backlog. Our operating pro?ts rose and the pro?t margin improved signi?cantly with an increased focus on Project and Asset Management. A true measure of how effective our Asset Management initiatives were can be gauged from the fact that our cash generated from operations is at the same level as the Pro?t from Operations (PFO), despite the liquidity crisis that we went through. Some new technologies that we introduced during the year in India included the Somatom De?nition Flash - 2nd Generation Dual source CT by our Healthcare sector and the Power Plant Control system ‘SPPA-T3000’ by our Energy sector. We also increased our local footprint. We set up a gas insulated switchgear factory at Aurangabad, expanded our steam turbine factory at Vadodara and we also enhanced our operations at the HVDC transformer factory at Kalwa. Annual Report 2009
Dear Shareholders, If there has been one de?nitive theme that has been occupying our minds constantly over the last twelve months, it has been the unfolding of a totally unanticipated change in the economic paradigm. After enjoying successive terms of year-on-year growth, the world’s leading economies slipped into a recession and are now reconciled to a signi?cant decline in economic growth. Looking back on the year that was, India Inc. had started the last ?scal under the general impression that the domestic market was insulated from the scenarios impacting the world economy. Although India has a domestic-driven economy, the drastic change in the global macro economic environment took a toll on the Indian economy, resulting in an overall slowdown in business volumes in the initial quarters of FY’08-09. The stimulus package unveiled by the government, comprising of a series of monetary and ?scal measures, has helped ease the scenario to a considerable extent. If at all there was an encouraging sign in this gloom, it was the resilience shown by certain emerging economies, including India that recorded positive growth rates. At present, as we stand in the midst of a new business year, the market outlook for India is more optimistic and con?dent and it does appear that the worst is behind us. I would now like to present a brief overview of Siemens Ltd.’s business performance during the previous ?nancial year.
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On the cost side, we critically looked at all areas however small, maintained a strict ?nancial discipline and eliminated all inef?ciencies. Our clear focus on operational excellence has helped us to keep our performance on track. At this juncture, I would like to share some developments that have unfolded in our subsidiary companies. As you may be aware, Siemens Ltd. currently holds an 86% stake in Siemens Building Technologies Pvt. Ltd (SBTPL). Our board has now approved a proposal to acquire the remaining 14% stake for a consideration of Rs. 70 crore. This company will then become a wholly owned subsidiary of Siemens Ltd. The Board has also approved the proposal to integrate SBTPL into Siemens Ltd. This strategic decision to buy the remaining stake in SBTPL was undertaken with a long-term perspective, taking into consideration the revenue potential of this segment. To cite an instance, SBTPL was recently selected by one of India’s leading IT companies to implement a multi-million Euro contract for delivering an enterprise-wide converged security solution. Moreover, to raise further synergies by fully integrating the company into Siemens Ltd., it is vital that we buy the balance stake and gain complete management control. In yet another signi?cant development, the Board of Directors has approved the merger of Siemens Healthcare Diagnostics Ltd. (SHDL) with our company. With this merger, we will be able to strengthen our healthcare portfolio and make Siemens one of the leading integrated healthcare companies to provide in-vitro and in-vivo diagnostic solutions in the Indian market. The complimentary portfolios of the two companies will raise synergies in leveraging a combined customer base and thus expand the installed base in India. People Excellence Our employees continue to be the most vital pillar of success in all our endeavours. During the year, we continued with our focus on developing the capabilities of our workforce even further through several HR initiatives. In the area of leadership development, the existing Programme for Business Managers (PBM), meant for our talent at the midmanagement level, was re-designed with greater focus on business strategy. Additionally, a specialised programme was designed for the Senior Management team, known as Strategic Leadership Development Programme (SLDP) in collaboration with the Indian Institute of Management, Ahmedabad (IIM-A). Moreover, for the ?rst time in the history of Siemens India, one of our employees has been certi?ed as a Project Director by Siemens AG. This not only endorses our strong project management skills, but also con?rms the recognition of talent from India. As ever, we shall continue with our consistent focus on the development of our people.
The Road ahead - Outlook for Siemens The Indian economy, with its strong fundamentals, has managed to tide over the global downturn with greater resilience than many other countries, as indicated by its GDP growth. Going forward, many economists believe that the economic recovery will be driven by a new phenomenon growing consumer spending in emerging markets, with India at the forefront. Initiatives undertaken by the Government to develop infrastructure will play a crucial role in establishing the pace of recovery. In what is a positive sign in these tough times, the manufacturing sector has bene?ted from the government’s stimulus packages and also leaner operating costs and has shown some encouraging numbers for the September’09 quarter. Sectors such as metals, cement, paper and real estate, which have been largely impacted, will be in a phase of consolidation in the coming months. The buoyancy in the automobile industry continues, with carmakers and twowheeler companies bettering their sales. Conclusion At present, the market sentiment continues to be on a cautious outlook and FY 2009-10 will be a year of stabilisation and a steady recovery of the growth momentum. On our part, Siemens Ltd. will continue to keep a close watch on potential growth markets in the business environment and strive to achieve pro?table growth by catering to the specialised requirements of our valued customers. For instance, our green portfolio presents a huge business opportunity for us. Customers are more discerning now and are demanding environment friendly technologies. We are already one of the global leaders in the ?eld of climatefriendly technologies. In conclusion, I would like to heartily thank the Board, the management and especially our vibrant team of employees for their consistent support and commitment to Siemens Ltd. India is an important market in the global strategy of Siemens and our company remains as committed as ever to leverage opportunities and continue its efforts to achieve pro?table growth in this vibrant market.
Mumbai December, 2009
Deepak Parekh Chairman
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Siemens Ltd.
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Board of Directors
Non-executive Directors
Deepak S. Parekh Chairman
D. C. Shroff Director
Y. H. Malegam Director
N. J. Jhaveri Director
K. Dadiseth Director
Pradip V. Nayak Director
Joe Kaeser Director
Committees and Organisation Structure
Committees of Directors
Audit Committee
Y. H. Malegam (Chairman) Deepak S. Parekh K. Dadiseth J. Kaeser / Dr. O. Schmitt Ajai Jain (Secretary)
Investors Grievance Committee
D. C. Shroff (Chairman) Pradip V. Nayak Dr. Armin Bruck Ajai Jain (Secretary)
Remuneration Committee
N. J. Jhaveri (Chairman) D. C. Shroff Deepak S. Parekh Pradip V. Nayak Ajai Jain (Secretary)
Corporate Governance Committee
K. Dadiseth (Chairman) Deepak S. Parekh Y. H. Malegam D. C. Shroff J. Kaeser / Dr. O. Schmitt Dr. Armin Bruck Ajai Jain (Secretary)
Sectors
Industry
V. V. Paranjape 1
Cross Sector Services
Energy
A. K. Dixit 1
Healthcare
D. Ragavan 1
Siemens Real Estate
A. S. Shikarwar 1*
Key Management & Support Functions
Reporting to CEO
Chief Financial Of?cer Sunil D. Mathur Legal Dr. K. Stadelmann ^ Human Resources K. Ghatge Communication S. Joshi Compliance A. Chopra Strategy & Business Excellence R. Dalvi @ Supply Chain Management - Indirect Material & Logicstics V. D. Kale Siemens One & Key Account Management NN Siemens Ltd. Representative Of?ce, Sri Lanka V. Saxena
Location In-charge
Ahmedabad A. Mehta Sri Lanka V. Saxena
Notes: 1 @
Jaipur A. Sinha Coimbatore K. A. Prakash
Pune R. Likhitkar Kalwa G. D’Silva
New Delhi, Ring Road Worli M. Vasudeva A. Singh Gurgaon M. Vasudeva
# ^ *
Baroda N. Dewaji Kharghar M. K. Vig
Kolkata B. B. Tanna
indicate reporting to CEO Includes top+, Manufacturing Strategy, Quality and PM@Siemens
Mr. Sant is also Export Control Of?cer Including Company Secretary Including Corporate Security
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Annual Report 2009
Whole-time Directors and Corporate Management
Wolfgang Dehen Director
Dr. O. Schmitt Alternate Director for Mr. J. Kaeser
S. Schnieder Alternate Director for Mr. W. Dehen
Dr. Armin Bruck 1 Managing Director and Chief Executive Of?cer
Sunil D. Mathur Executive Director and Chief Financial Of?cer
V. V. Paranjape Whole-time Director
Committees of Management
Investment Committee
Deepak S. Parekh (Chairman) Y. H. Malegam Pradip V. Nayak J. Kaeser / Dr. O. Schmitt Sunil D. Mathur Ajai Jain (Secretary)
Company Secretary
Delegation of Powers Committee
Ajai Jain Vice President (Legal) & Company Secretary
Share Transfer Committee
Finance Committee
Dr. Armin Bruck (Chairman) Sunil D. Mathur (Chairman) Dr. Armin Bruck (Chairman) Sunil D. Mathur Dr. Armin Bruck Sunil D. Mathur Ajai Jain Ajai Jain Ajai Jain
Key Management & Support Functions
Reporting to CFO
Accounting & Controlling K. Alleraun Information Technology N. Sharan Finance P. Bhambani Taxation N. D. Rao Import/Export Admin & Travel P. Sant #
Key Management & Support Functions
Reporting to Head HR
Compensation & Bene?ts P. Choudhury Recruitment J. Prabhudesai Learning & Development Dr. M. Vyas Industrial Relations G. D’Silva Environment Protection & Safety J. Rao Healthcare Management Dr. G. K. Kulkarni International Delegation Centre, India S. S. Jaswal
Nashik S. Pate Goa H. Usgaonkar
Hyderabad P. Rama Murthy Hyderabdad - Saifabad T. Srikant
Aurangabad M. Wani Bangalore R. Lala
Bangalore K. Nadkarni Nagpur S. Deosthali
Kalwa G. D’Silva Chandigarh N. Gandhi
Chennai G. V. R. Rao
Lucknow A. K. Chaudhary Cochin NN
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Siemens Ltd.
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Siemens Ltd. Notice
NOTICE is hereby given that the 52nd Annual General Meeting of the Members of the Company will be held at Nehru Centre Auditorium, Dr. Annie Besant Road, Worli, Mumbai – 400 018 on Friday, 29th January, 2010, at 3.00 p.m. to transact the following business: ORDINARY BUSINESS: 1. 2. 3. 4. 5. 6. To receive, consider and adopt the audited Pro?t and Loss Account for the year ended 30th September, 2009, Balance Sheet as at that date together with the Reports of the Directors and Auditors thereon. To declare a Dividend on Equity Shares. To appoint a Director in place of Mr. Joe Kaeser, who retires by rotation and being eligible, offers himself for re-appointment. To appoint a Director in place of Mr. Vijay V. Paranjape, who retires by rotation and being eligible, offers himself for re-appointment. To appoint a Director in place of Mr. Narendra J. Jhaveri, who retires by rotation and being eligible, offers himself for re-appointment. To re-appoint Messrs S. R. Batliboi & Associates, Chartered Accountants, as Statutory Auditors of the Company to hold of?ce from the conclusion of the 52nd Annual General Meeting upto the conclusion of the next i.e. 53rd Annual General Meeting of the Company and to authorise the Board of Directors of the Company to ?x their remuneration.
SPECIAL BUSINESS: To consider and if thought ?t, to pass with or without modi?cations, the following Resolutions: 7. Payment of commission to Non- Executive Directors As a Special Resolution: “RESOLVED THAT pursuant to the provisions of Sections 198, 309 and other applicable provisions if any, of the Companies Act, 1956 and Article 113 of the Articles of Association of the Company such sum by way of commission not exceeding in the aggregate 1%(one percent) per annum or such other percentage as may be speci?ed by the Companies Act, 1956 from time to time in this regard of the Net Pro?ts of the Company computed in the manner referred to in Section 309(5) of the Companies Act, 1956 be paid for each of the ?ve ?nancial years of the Company commencing from 1st October, 2009 to those Directors of the Company other than the Managing Director, Executive Director and the Whole-time Directors as may be determined by the Board of Directors of the Company from time-to-time.” 8. Revision in remuneration of Dr. Armin Bruck, Managing Director As an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309, 310 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, and subject to the approval of the Central Government, if required, the Company hereby accords its approval to the revision in remuneration payable to Dr. Armin Bruck, Managing Director with effect from 1st January, 2010 as set out under Serial No. 2 of the Explanatory Statement annexed to this Notice.” 9. Revision in remuneration of Mr. Sunil Mathur, Executive Director As an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309, 310 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, and subject to the approval of the Central Government, if required, the Company hereby accords its approval to the revision in remuneration payable to Mr. Sunil Mathur, Executive Director with effect from 1st January, 2010 as set out under Serial No. 2 of the Explanatory Statement annexed to this Notice.” 10. Revision in remuneration of Mr. Vijay V. Paranjape, Whole-time Director As an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309, 310 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, and subject to the approval of the Central Government, if required, the Company hereby accords its approval to the revision in remuneration payable to Mr. Vijay V. Paranjape, Whole-time Director with effect from 1st January, 2010 as set out under Serial No. 2 of the Explanatory Statement annexed to this Notice.” 11. One-time special payment to Mr. Vilas B. Parulekar (former Whole-time Director) As an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 198, 309, 310 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, the Company hereby accords its approval for the one-time special payment of Rs. 5,000,000 (Rupees Five Million only) to Mr. Vilas B. Parulekar, who ceased to be the Whole-time Director and as Director of the Company with effect from 1st October, 2009.
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Annual Report 2009
12.
Siemens Limited – Share Matching Plan As a Special Resolution: “RESOLVED THAT in accordance with the provisions contained in the Memorandum and Articles of Association of the Company and the applicable provisions of the Companies Act, 1956 (hereinafter referred to as the “Act”) and subject to compliance, if required, of the provisions contained in the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, (if applicable)(hereinafter referred to as the “SEBI ESOP Guidelines”) (including any statutory modi?cation(s) or re-enactment of the Act or SEBI ESOP Guidelines, for the time being in force), and all other regulations / guidelines prescribed by any other relevant authority, from time to time to the extent applicable, and subject to such other approvals, permissions or sanctions as may be necessary, and subject to such conditions and modi?cations as may be prescribed or imposed while granting such approvals, permissions and sanctions which may be agreed to by the Board of Directors of the Company (hereinafter referred to as ‘the Board’ which term shall be deemed to include any committee(s) which the Board may constitute to exercise its powers, including the powers conferred by this resolution), consent of the Members be and is hereby accorded to the Board for the introduction and implementation of the “Siemens Limited – Share Matching Plan (“SMP Scheme”), the salient features of which are furnished in the Explanatory Statement to this Notice, and to offer shares, which will be acquired either throughan employee bene?t trust (to be constituted by the Board) or any other entity or service provider (“Third Party”) which may be appointed by the Board in a permissible manner, by means of purchase from the secondary market, to such employees and Whole-time Directors (excluding expatriates) who are in the permanent employment of the Company, and to such other person(s) as may from time to time be allowed to enjoy the bene?ts of the SMP Scheme under applicable laws and regulations made by the Company from time to time (hereinafter collectively referred to as “Company Employees”), except those who are promoters or belong to the promoter group, under the SMP Scheme, at such price or prices, in one or more tranches and on such terms and conditions, as may be ?xed or determined by the Board and/or Third Party in accordance with the SMP Scheme.” “RESOLVED FURTHER THAT for the purpose of giving effect to the above, such acquisition of equity shares by the trust, other entity or service provider (as the case may be) and implementation and administration of the SMP Scheme, the Board be and is hereby authorised on behalf of the Company to evolve, decide upon and bring into effect the SMP Scheme, and to make such modi?cations, changes, variations, alterations or revisions in the SMP Scheme from time to time or to suspend, withdraw or revive the SMP Scheme as may be speci?ed by any statutory authority and to do all such acts, deeds, matters and things as may in its absolute discretion deem ?t, necessary or desirable for such purpose and with authority on behalf of the Company to settle any issues, questions, dif?culties or doubts that may arise in this regard without being required to seek any further consent or approval of the Members and further to execute all documents and writings as may be necessary, proper, desirable or expedient and to give such directions and or instructions as it may from time to time decide and to accept and give effect to such modi?cations, changes, variations, alterations, deletions, additions as regards the terms and conditions and all things incidental and ancilliary thereto.” “RESOLVED FURTHER THAT all actions taken by the Board in connection with the above resolutions and all incidental and ancilliary things done are hereby speci?cally approved and rati?ed.” “RESOLVED FURTHER THAT the Company shall conform to the accounting policies prescribed from time to time under the SEBI ESOP Guidelines, to the extent relevant and applicable to the SMP Scheme.” “RESOLVED FURTHER THAT the Board, be and is hereby authorised to do all such acts, deeds, matters and things, as may, in its absolute discretion, deem necessary, expedient, useful or proper including the appointment of Merchant Bankers, Brokers, Solicitors, Registrars, Advertisement Agency, Compliance Of?cer, Investors Service Centre and other Advisors, Consultants or Representative, incidental to the implementation of the SMP Scheme as also to prefer all applications to the appropriate authorities, parties and the institutions for their requisite approvals as also to initiate all necessary actions for preparation and issue of public announcement and ?ling of public announcement, if required, with SEBI/Stock Exchange(s), and all other documents required to be ?led in the above connection and to settle all such questions or dif?culties whatsoever which may arise and take all such steps and decisions in this regard.”
13.
Siemens Limited - Share Matching Plan to the Employees of Indian subsidiaries of the Company As a Special Resolution: “RESOLVED THAT in accordance with the provisions contained in the Memorandum and Articles of Association and the applicable provisions of the Companies Act, 1956 (hereinafter referred to as the “Act”) and subject to compliance, if required, of the provisions contained in the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, (if applicable)(hereinafter referred to as the “SEBI ESOP Guidelines”) (including any statutory modi?cations or re-enactments of the Act or the SEBI ESOP Guidelines, for the time being in force) and all other regulations/guidelines prescribed by any other relevant authority, from time to time, to the extent applicable, and subject to such other approvals, permissions and sanctions as may be necessary, and subject to such conditions and modi?cations as may be prescribed or imposed while granting such approvals, permissions and sanctions which may be agreed to by the Board of Directors of the Company (hereinafter referred to as ‘the Board’ which term shall be deemed to include any committee(s) which the Board may constitute to exercise its powers, including the
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Siemens Ltd.
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powers conferred by this resolution), consent of the members be and is hereby accorded to the Board to extend the bene?ts of the Siemens Limited – Share Matching Plan (“SMP Scheme”), the salient features of which are furnished in the Explanatory Statement to this Notice, and to offer shares, which will be acquired by either through an employee bene?t trust (to be constituted by the Board), or any other entity or service provider (“Third Party”) which may be appointed by the Board in a permissible manner, by means of purchase from the secondary market, to such employees and Whole-time Directors (excluding expatriates) who are in the permanent employment of the Indian subsidiaries of the Company and to such other person(s) as may from time to time be allowed to enjoy the bene?ts of the SMP Scheme under applicable laws and regulations made by the Company from time to time (hereinafter referred to as “Subsidiaries Employees”), except those who are promoters or belong to the promoter group, under the SMP Scheme, at such price or prices, in one or more tranches and on such terms and conditions, as may be ?xed or determined by the Board and/ or Third Party in accordance with the SMP Scheme.” “RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby authorised on behalf of the Company to evolve, decide upon and bring into effect the SMP Scheme, and to make such modi?cations, changes, variations, alterations or revisions in the SMP Scheme from time to time or to suspend, withdraw or revive the SMP Scheme as may be speci?ed by any statutory authority and to do all such acts, deeds, matters and things as may in its absolute discretion deem ?t, necessary or desirable for such purpose and with authority on behalf of the Company to settle any issues, questions, dif?culties or doubts that may arise in this regard without being required to seek any further consent or approval of the Members and further to execute all documents and writings as may be necessary, proper, desirable or expedient and to give such directions and or instructions as it may from time to time decide and to accept and give effect to such modi?cations, changes, variations, alterations, deletions, additions as regards the terms and conditions and all things incidental and ancilliary thereto.” “RESOLVED FURTHER THAT all actions taken by the Board in connection with the above and all incidental and ancilliary things done are hereby speci?cally approved and rati?ed.” “RESOLVED FURTHER THAT the Board, be and is hereby authorised to do all such acts, deeds, matters and things, as may, in its absolute discretion, deem necessary, expedient, useful or proper including the appointment of Merchant Bankers, Brokers, Solicitors, Registrars, Advertisement Agency, Compliance Of?cer, Investors Service Centre and other Advisors, Consultants or Representative, incidental to the implementation of the SMP Scheme as also to prefer all applications to the appropriate authorities, parties and the institutions for their requisite approvals as also to initiate all necessary actions for preparation and issue of public announcement and ?ling of public announcement, if required, with SEBI/Stock Exchange(s), and all other documents required to be ?led in the above connection and to settle all such questions or dif?culties whatsoever which may arise and take all such steps and decisions in this regard.” By Order of the Board of Directors For Siemens Ltd.
Ajai Jain Vice President (Legal) & Company Secretary Registered Of?ce: 130, Pandurang Budhkar Marg Worli, Mumbai - 400 018 Mumbai Monday, 30th November, 2009 Notes: a. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. Proxies, in order to be effective, must be received by the Company, duly ?lled, stamped and signed, at its Registered Of?ce not less than 48 hours before the Meeting. b.
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The relevant Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956, in respect of the Special Businesses in the Notice is annexed hereto. Annual Report 2009
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c.
Corporate Members intending to send their authorised representatives to attend the Annual General Meeting are requested to send a duly certi?ed copy of their Board Resolution authorising their representatives to attend and vote at the forthcoming 52nd Annual General Meeting. Members/Proxies/Representatives should bring the enclosed Attendance Slip, duly ?lled in, for attending the Meeting. Copies of the Annual Report or Attendance Slips will not be distributed at the Meeting. Pro?le of the Directors seeking re-appointment, as required in terms of Clause 49 of the Listing Agreement entered into with the Stock Exchanges, are annexed to this Notice. The Register of Members and Share Transfer Books of the Company will remain closed from Thursday, 21st January, 2010 to Friday, 29th January, 2010, both days inclusive, for the purpose of payment of Dividend, if declared. The Dividend, as recommended by the Board of Directors, if declared at the 52nd Annual General Meeting, will be paid on or before Wednesday, 24th February, 2010, to those Members who hold Shares in physical form and whose name appears on the Company’s Register of Members as holders of Equity Shares on Friday, 29th January, 2010. In respect of Shares held in electronic form, to the Bene?cial Owners of the Shares as at the close of business hours on Wednesday, 20th January, 2010, as per details to be furnished by National Securities Depository Limited and Central Depository Services (India) Limited.
d. e. f. g.
h.
Members holding Shares in electronic form may please note that their bank details, as furnished by their respective Depository Participants to the Registrar and Share Transfer Agent – TSR Darashaw Ltd., will be mandatorily printed on their dividend warrants as advised by the Securities and Exchange Board of India. Further, instructions if any, given by them in respect of Shares held in physical form will not be automatically applicable to the dividend payable on Shares held in electronic form. Such Members are therefore requested to give instructions regarding bank accounts in which they wish to receive dividend, to their respective Depository Participants directly. The Company or its Registrar and Share Transfer Agent will not act on any direct request from such Members for change / deletion of such bank details. Unclaimed / Unpaid Dividend: Pursuant to the provisions of Section 205A and 205C of the Companies Act, 1956, the dividend which remains unclaimed / unpaid for a period of seven years from the date of transfer to the unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) of the Central Government. The status of Dividend remaining unclaimed / unpaid is given hereunder: Dividend for the Financial Year Up to and including the Financial Year 1994-95 Contact The Registrar of Companies Central Government Of?ce Building, “A” Wing, 2nd Floor, CBD Belapur, Navi Mumbai, Maharashtra- 400 614. Non-recoverable since the unpaid amount has been transferred to IEPF of the Central Government. Action by Shareholder Application to be made in Form II prescribed by the Companies Unpaid Dividend (Transfer to the General Revenue Account of the Central Government) Rules, 1978.
i.
For the Financial Year 1995 - 96, 1999 - 2000 and 2001-02 (Interim Dividend) No Dividend was declared by the Company for the Financial Years 1996 - 97, 1997 - 98 and 1998 - 99 Financial Years 2001 – 02 (Final Dividend) and thereafter
_
TSR Darashaw Ltd., Registrar and Share Transfer Agent.
Request letter on plain paper.
The tentative dates for transfer to IEPF of the dividend remaining unclaimed / unpaid since 2001 - 02 are provided hereunder: Financial Year 2001 - 02 Final Dividend 2002 - 03 Interim Dividend Final Dividend Siemens Ltd. 35 40 21st July, 2003 21st January, 2004 26th August, 2010 26th February, 2011
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Rate (%)
Date of declaration of dividend
Tentative date for transfer to IEPF
25
21st January, 2003
26th February, 2010
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Financial Year 2003 - 04 Interim Dividend Final Dividend 2004 - 05 Interim Dividend Final Dividend 2005 - 06 Interim Dividend# Final Dividend 2006 - 07 Dividend 2007 – 08 Dividend
#
Rate (%)
Date of declaration of dividend
Tentative date for transfer to IEPF
40 50
22nd April, 2004 27th January, 2005
28th May, 2011 3rd March, 2012
45 100
25th April, 2005 27th January, 2006
31st May, 2012 3rd March, 2013
10 190
23rd December, 2005 18th January, 2007
28th January, 2013 22nd February, 2014
240
31st January, 2008
24th February, 2015
150
30th January, 2009
5th March, 2016
Declared by the erstwhile Siemens VDO Automotive Ltd. (since merged with the Company).
Members are requested to contact TSR Darashaw Ltd. / Investor Relations Team of the Company for encashing the unclaimed dividend standing to the credit of their account. After transfer of the said amounts to IEPF, no claims in this respect shall lie against IEPF or the Company nor shall any payment be made in respect of such claims. j. k. l. Members holding Shares in more than one folio in the same name(s) are requested to send the details of their folios alongwith the Share Certi?cates so as to enable the Company to consolidate their holdings into one folio. The Annual Report 2009 of the Company circulated to the Members of the Company, will be made available on the Company’s website at www.siemens.co.in and also on SEBI’s EDIFAR website at www.sebiedifar.nic.in. Members desirous of getting any information about the Accounts of the Company are requested to write to the Company atleast seven days in advance of the Meeting, so that the information required can be made readily available at the Meeting. All documents referred to in the accompanying Notice and Explanatory Statement are open for inspection at the Registered Of?ce of the Company on all working days between 10.00 a.m. and 12 noon upto the date of the 52nd Annual General Meeting.
m.
Explanatory Statement
As required by Section 173(2) of the Companies Act, 1956, in respect of the items of Special Business mentioned in the Notice. 1. Item No. 7 At the 47th Annual General Meeting held on 27th January, 2005, the Members had given their approval pursuant to Section 309(7) of the Companies Act, 1956, for payment of Commission to Directors (other than the Managing Director, Executive Director and Whole-time Directors) for a period of ?ve ?nancial years commencing from 1st October, 2004 upto 30th September, 2009. The Company is continuously improving its performance and pro?tability. In appreciation of their contribution and for the services they have rendered / will be rendering to the Company, it is proposed that the Non-Executive Directors be paid remuneration by way of Commission not exceeding in aggregate 1% (one percent) per annum or such other percentage as may be speci?ed by the Companies Act, 1956 from time-to-time in this regard, of the Net Pro?ts for that year computed in the manner referred to in Sections 198, 349 and 350 of the Companies Act, 1956 for each of the ?ve ?nancial years of the Company commencing from 1st October, 2009. This remuneration will be distributed amongst such of the Non-Executive Directors and in such proportion as the Board of Directors may decide, from time-to-time.
21
12
Annual Report 2009
Approval of the Members under Section 309(4) of the Companies Act, 1956 is required for payment of Commission, if any, to the Directors. Hence, the Board of Directors commends the Resolution No. 7 for your approval as a Special Resolution. None of the Directors of the Company, other than Mr. Deepak S. Parekh, Mr. D. C. Shroff, Mr. Y. H. Malegam, Mr. Keki Dadiseth, Mr. Pradip V. Nayak, Mr. N. J. Jhaveri, Mr. Joe Kaeser, Dr. O. Schmitt (being Alternate Director to Mr. Kaeser), Mr. Wolfgang Dehen and Mr. S. Schneider (being Alternate Director to Mr. Dehen) being Non-Executive Directors, are interested in the resolution. 2. Item No. 8, 9 and 10 In appreciation of the dedicated efforts which contributed in achieving an excellent performance by the Company and having regard to the increased responsibilities for further improving the performance of the Company in this competitive market, the Remuneration Committee of Directors at its Meeting held on 26th November, 2009 approved a revision in the remuneration of the Managing Director and all Whole-time Directors of the Company. The terms and conditions with respect to the revision in remuneration of the Directors are given below: I. Remuneration: Name of the Director Designation Salary per month (Rs.) 857,100 (w.e.f. 1st January, 2010) 524,400 (w.e.f. 1st January, 2010) Salary Grade Overseas / Special Allowance per month (Rs.)
Dr. Armin Bruck
Managing Director
250,000 – 1,000,000 857,100 * (w.e.f. 1st January, 2010) 200,000 – 750,000 524,400 (w.e.f. 1st January, 2010) Not Applicable
Mr. Sunil Mathur
Executive Director
Mr. Vijay V. Paranjape
Whole-time Director 389,600 (w.e.f. 1st January, 2010)
200,000 – 600,000
*Overseas Allowance; Annual Increments as may be decided by the Remuneration Committee of Directors / Board of Directors. II. Perquisites: i. In addition to the above, they shall also be entitled to Perquisites and Allowances like Rent-free furnished / semi-furnished accommodation / House Rent Allowance / Stay in a hotel; expenditure incurred by the Company on gas, electricity, water and furnishings to be valued as per the Income Tax Rules; Medical Reimbursement; Hospitalisation Expenses; Leave; Leave Travel Concession; Home Leave; Retirement bene?ts as per the laws applicable from time-to-time; Club Fees; Long Service Award; Company maintained car with driver / maintenance cost of the car and reimbursement of fuel expenses at actuals; Communication facility (Personal long distance calls will be borne by them), as per the Rules of the Company, as applicable. The perquisites and allowances shall be valued as per the Income Tax Rules, wherever applicable. In the absence of any such Rules, they shall be evaluated at actual cost. ii. Children’s Education Expenses (only for Dr. Bruck and Mr. Mathur): For Children studying in or outside India, the Education Expenses shall be paid by the Company directly to the school. Income Tax on Children’s Education Expenses to be borne by the Company. iii. Holiday passage for children studying outside India / family staying abroad (only for Dr. Bruck and Mr. Mathur): Return holiday passage is admissible once in a year by economy class or once in two years by ?rst class to children from their place of study abroad to India and to the members of the family from the place of their stay abroad to India if they are not residing in India with him. iv. Reimbursement of expenses incurred on returning to home country after completion of tenure (only for Dr. Bruck and Mr. Mathur): Actual expenses incurred on travel and on packing, forwarding, loading or unloading as well as freight, insurance, customs duty, clearing expenses, local transportation and installation expenses in connection with the moving of personal effects for self and family for joining duty in India (only for Dr. Bruck and Mr. Mathur) may be allowed in case these have not been claimed from the previous employer. After completion of the tenure, such expenses in connection with the moving of personal effects for self and family may be allowed
13
Siemens Ltd.
13
if they are ?nally leaving the employment of the Company. In case they are joining another Siemens Group / Associate Company, the Company to which they are transferred should bear these expenses. “Family” means the spouse and dependent children. III. Performance Linked Incentive They shall also be entitled to remuneration by way of Performance Linked Incentive based on the speci?c goals mutually set and approved by the Board of Directors / Remuneration Committee of Directors, from time-to-time. IV. Compensation under Stock Option Plan(s) of Siemens AG / Siemens Limited - Share Matching Plan (SMP Scheme) They shall also be entitled to payment of the cash equivalent of the fair market value of the Options / Awards as on Exercise Date, to which they may be entitled under the Stock Option Plan(s), as may be applicable from timeto-time of the parent company, Siemens AG, Germany as well as the Cash Incentive under the SMP Scheme, as applicable from time to time. V. Commission They shall also be entitled to remuneration by way of Commission as may be decided by the Board of Directors / Remuneration Committee of Directors from time-to-time. The amount of it based on the net pro?ts of the Company in a particular year shall be subject to the overall ceiling laid down in Sections 198 and 309 of the Companies Act, 1956. VI. Minimum Remuneration Notwithstanding anything hereinabove, where, in any ?nancial year during the currency of their tenure as Managing Director / Executive Director / Whole-time Director the Company has no pro?ts or its pro?ts are inadequate, the Company will pay the aforesaid remuneration by way of Salary, Special Allowance / Overseas Allowance, Perquisites, Performance Linked Incentive and Compensation under Stock Option Plan(s) of Siemens AG as well as SMP Scheme, as Minimum Remuneration to them. No Sitting Fee shall be paid to them for attending the Meetings of the Board of Directors or any Committee thereof. This explanation, together with the accompanying Notice, is to be regarded as an Abstract of the Terms pursuant to the provisions of Section 302 of the Companies Act, 1956. The said payment requires the approval of the Members pursuant to Sections 198, 309 and 310 read with Schedule XIII to the Companies Act, 1956 and hence the Board commends Resolution Nos. 8, 9 and 10 for your approval. None of the Directors of the Company other than Dr. Bruck, Mr. Mathur and Mr. Paranjape are interested in the Resolution. 3. Item No. 11 Mr. Vilas B. Parulekar was appointed as a Director and Whole-time Director of the Company with effect from1st February, 2007. Mr. Parulekar, on completion of his term, ceased to be a Whole-time Director and Director of the Company with effect from1st October, 2009. In appreciation of the services rendered by Mr. Parulekar, during his 38 years of employment with the Company, including over two years as a Whole-time Director, it is proposed to make a one-time special payment of Rs.5,000,000 (Rupees Five Million only) to him. This explanation, together with the accompanying Notice, is to be regarded as an Abstract of the Terms pursuant to the provisions of Section 302 of the Companies Act, 1956. The said payment requires the approval of the Members pursuant to Section 310 read with Schedule XIII to the Companies Act, 1956 and hence the Board commends Resolution No. 11 for your approval. None of the Directors of the Company are interested in the Resolution. 4. Item Nos. 12 and 13 Siemens has a long tradition of enabling employees to participate in its success by encouraging its employees worldwide the possibility to invest in Siemens shares. Building on this culture, the Management of Siemens Ltd., (“Company”) proposes to extend the participation of its employees in the success of the Company. The goal is to lay the cornerstone for Siemens equity culture in which as many employees as possible can – as shareholders – participate in the Company, assume responsibility and identify themselves with the Company. The purpose of the Siemens Limited - Share Meeting Plan (“SMP Scheme”) is to offer to Eligible Of?cers of the Company and its Indian subsidiary companies, who are willing to invest a certain amount of their annual gross performance pay in shares of the Company (“Investment Shares”) the possibility to receive matching cash incentive. Investment Shares will be matched by cash incentive in a 1 for 3 ratio, (i.e. cash equivalent to one free share (“Matching Cash Incentive”) will be paid for each three Investment Shares purchased by a participating employee. The ?rst tranche of this new “3 plus 1” program, under our “SMP Scheme” is proposed to be implemented in 2010. Precondition for the receipt of Matching Cash Incentive is that the Investment Shares are purchased via one time funding from the amounts resulting from annual gross performance pay and held during the vesting period of 3 years in terms of the SMP Scheme.
41
14
Annual Report 2009
The salient features of the SMP Scheme are as follows: Particulars Total number of shares to be issued under the Scheme SMP Scheme No fresh equity shares of the Company would be issued by the Company for the SMP Scheme. Under SMP Scheme shares would be procured either through an employee bene?t trust (to be constituted by the Board) or any other entity or service provider (“Third Party”) which may be appointed by the Board in a permissible manner, by means of purchase from the secondary market. Such shares would be allocated to the participating employees/directors of the Company in accordance with the SMP Scheme. The total number of shares that can be granted to the participating employees shall not exceed the issued share capital of the Company. Purpose of Scheme SMP Scheme aims at rewarding and motivating the employees of the Company and its subsidiaries. The main objective of the SMP Scheme are as follows: • To offer employees the possibility to invest in the Company’s shares and bene?t from long term participation in the Company’s success; and • To foster employees’ identi?cation with the Company. Eligible Of?cers and Whole-time Directors of the Company and its Indian subsidiaries (other than expatriates) who are on the payroll of the Company or its Indian subsidiaries as on 30th September, 2009 and as of the ?rst day of the offering period (“Eligible Of?cers”). The maximum investment threshold differs between senior managers and other of?cers. Senior Managers (i.e. of?cers within Global Position Level 1 to 4) can invest up to 50% of their annual gross performance pay; whereas, other Of?cers (i.e. of?cers below Global Position Level 4) can invest in the range of minimum 3% to maximum 5% of their annual cash compensation (i.e. Total Fixed Pay minus Retirals). Eligible Of?cers will pay the purchase price of the Investment Shares exclusively by one-time payroll deduction of the total amount to be invested. The month of this salary deduction will be concurrent with the month of payment of the annual gross performance pay in order to enable them to apply those funds for the purchase of Investment Shares. The Third party will procure the Company’s shares from the secondary market (on behalf of the participating employees) based on the prevailing market price on the designated dates. The Third party will endeavor to procure the necessary quantum of shares at the same market price but would be guided by market conditions as on the date of such purchase. Shares may be allocated by Third party to the participating employees at an average price of procurement, if permitted under law. Subject to applicability, if any, of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (“SEBI ESOP Guidelines”), shares allocated to the participating employees shall be locked-in for a minimum period of one year from the date of such allocation. In case of non-applicability of the SEBI ESOP Guidelines, there will be no lock-in period. Investment Shares purchased under the SMP Scheme will entitle the participating employee to Matching Cash Incentive on the basis of a 1 for 3 ratio. Cash incentive will be granted subject to compliance with the following conditions throughout the period starting on the acquisition date and ending on January 31 (inclusive), of the third calendar year following the calendar year of the acquisition date: (i) continued employment of participating employee with the relevant participating Company (ii) continued holding of the relevant number of Investment Shares by the participating employee in the custody account (iii) compliance with all terms and conditions of the SMP Scheme For Investment Shares held during the aforesaid period, cash incentive will be granted in the ratio 1:3 (i.e. cash incentive equivalent to value of 1 Share for every 3 full Investment Shares.) (“Matching Cash Incentive”).
15
Eligible Of?cers entitled to participate in the SMP Scheme Investment Limits
Payment Method
Price or pricing formula
Lock-in
Matching Cash Incentive
Siemens Ltd.
15
Particulars Appraisal process for determining the eligibility of employees to participate in the SMP Scheme Accounting policies
SMP Scheme The appraisal process for determining the eligibility of the participating employees will be speci?ed by the Board/Compensation Committee and will be based on criteria such as grade, seniority, length of service, performance record, merit of the employee, future potential contribution by the employee and or such other criteria as may be determined. The Company will comply with the disclosures and accounting policies as applicable to it under law, including those prescribed by SEBI and other concerned Authorities in this regard.
The Company is of the opinion that the SEBI ESOP Guidelines are not applicable to the SMP Scheme, however as abundant caution and with a view to comply with the relevant requirements, as applicable, of the SEBI ESOP Guidelines and/or the Companies Act 1956, the approval of the Members to the SMP Scheme is being sought by way of a Special Resolution. With a view to comply with the relevant requirements, as applicable, of the SEBI ESOP Guidelines, a separate resolution is being passed to enable the bene?ts of the SMP Scheme to be extended to employees of the Indian subsidiaries of the Company. Accordingly, the resolution set out at Item No. 13 is being placed for approval of the Members. Shares to be allocated under the SMP Scheme shall not be treated as an offer or invitation made to public for the subscription in the shares of the Company. The SMP Scheme is not to be construed as buy back of shares. The Board commends the Resolution Nos. 12 and 13 for your approval, as a Special Resolution. None of the Directors of the Company is in any way concerned or interested in the resolutions except the Whole-time Directors to the extent of their participation in the SMP Scheme. By Order of the Board of Directors For Siemens Ltd.
Ajai Jain Vice President (Legal) & Company Secretary Registered Of?ce: 130, Pandurang Budhkar Marg Worli, Mumbai – 400018 Mumbai Monday, 30th November, 2009
61
16
Annual Report 2009
Pro?le of the Directors being re-appointed as required under Clause 49 of the Listing Agreement entered into with the Stock Exchanges
Particulars Date of Birth Date of Appointment Quali?cation Mr. Joe Kaeser 23 June, 1957 1st October, 2006 Studied Business Administration Dipl.-Betriebswirt
rd
Mr. Vijay V. Paranjape 25 July, 1948 1st February, 2007 B. E. Elect.
th
Mr. Narendra J. Jhaveri 9th August, 1935 9th November, 2000 Masters Degree in Economics from Gujarat University M.Sc in Economics from The London School of Economics
Expertise in speci?c functional areas
Has held various senior level positions during his 29 years of tenure in the House of Siemens. He is presently the Member of the Managing Board and the Head of Corporate Finance and Controlling of Siemens AG.
After a brief stint with NCAER, he joined Reserve Bank of India. He then joined ICICI as Chief Economist in 1974 and rose to He is currently the CEO of the position of Joint Managing the Industry Sector of the Director. In 1993, he moved to I-Sec, a joint venture investment Company. bank between ICICI and JP Morgan, as Executive Chairman. Thereafter, he was associated with the Kotak Mahindra Group. Has held various senior level positions during his 37 years of tenure with the Company. 1. 2. Siemens Rolling Stock Pvt. Ltd. Flender Ltd., Chairman 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Afcons Infrastructure Ltd. Pidilite Industries Ltd. Usha Martin Ltd. Voltas Ltd. Juniper Hotels Pvt. Ltd. SKF India Ltd. Ultra Tech Cement Ltd. Hindalco Industries Ltd. Siemens Healthcare Diagnostics Ltd., Chairman Phoenix ARC Pvt. Ltd. Edelweiss Capital Ltd. Gujarat Venture Finance Ltd. Edelweiss Securities Ltd.
Directorships held
Director 1. Siemens Corporation (USA) 2. Siemens Ltd. (China) 3. Allianz Deutschland AG (Germany) 4. BSH Bosch und Siemens Hausgerate GmbH (Germany) 5. Siemens Aktiengesellschaft Oesterreich (Austria) Member of Managing Board 6. Siemens Aktiengesellschaft (Germany) Member of Supervisory Board 7. Bayerische Boerse AG (Germany) 8. Nokia Siemens Networks B. V. (Netherlands) Member of Advisory Board 9. Muenchner Handlsverein Holding GmbH & Co. KG (Germany) Member of Foundation Board 10. Carl Friedrich von Siemens Stiftung (Germany)
Membership of Committees
_
_
Audit Committee 1. Afcons Infrastructure Ltd.* 2. Pidilite Industries Ltd. 3. Usha Martin Ltd.* 4. Voltas Ltd.* 5. SKF India Ltd. 6. Hindalco Industries Ltd. 7. Siemens Healthcare Diagnostics Ltd. 8. Edelweiss Capital Ltd.* *Chairman 5,000
No. of shares held in the Company Siemens Ltd.
Nil
4,200
17
17
Directors’ Report
Dear Members, The Directors have pleasure in presenting the 52nd Annual Report of your Company and the Audited Accounts for the year ended on 30th September, 2009. 1. Financial Performance Rs. in Million 2008-09 Gross Pro?t before Interest, Depreciation and Exceptional Income Less: Interest Depreciation Pro?t before Tax and Exceptional Income Add: Exceptional Income Pro?t on sale of Investments in Subsidiaries Pro?t on sale of SBT Division Pro?t on sale of SVDO Division Pro?t before Tax Less: Tax Deferred Tax Fringe Bene?t Tax Net Pro?t after Tax Amount available for appropriation Appropriations: General Reserve Net de?cit on account of amalgamation of erstwhile Siemens Industrial Turbomachinery Services Private Ltd. Proposed Dividend Dividend Distribution Tax 2. Operations The Turnover of the Company increased marginally and stood at Rs.83,888 million as compared to Rs.82,955 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 new orders booked during the year were also on a healthy note despite tough market conditions. The Pro?t after Tax was Rs.10,449 million, compared to Rs.5,933 million during 2007–08. This increase was primarily on account of a substantial one time increase in Financing & Investment Income resulting from the Company’s sale of Siemens Information Systems Ltd. (SISL) and Siemens Information Processing Services Pvt. Ltd. (SIPS). 3. Dividend The Board of Directors recommends a Dividend of Rs.5 per Equity Share of Rs.2 each. This Dividend is subject to the approval of the Members at the forthcoming 52nd Annual General Meeting to be held on 29th January, 2010. In the previous year, the Company paid a Dividend of Rs.3 per Equity Share of Rs.2 each. 4. Management’s Discussion and Analysis A detailed review of the operations, performance and future outlook of the Company and its businesses is given in the Management’s Discussion and Analysis, which forms part of this Report as Annexure II.
81
2007-08 8,349.78 40.54 637.34 7,671.90 10.64 1,235.15 8,917.69 3,493.16 (629.04) 120.30 5,933.27 5,933.27 4,577.24 172.64 1,011.48 171.90
Growth % 56.84
13,095.69 58.77 777.79 12,259.13 2,059.46 14,318.59 4,007.46 (208.88) 71.50 10,448.51 10,448.51 8,476.21 1,685.80 286.50
59.79
60.56
76.10
18
Annual Report 2009
Siemens Green Facts
The new Siemens CCP plant in Irsching, Germany will have 60 % ef?ciency and produce 40,000 fewer tons of CO2 emissions. This is equivalent to the emissions of 9,500 cars driven 20,000 kilometers, a year.
5.
Amalgamations, Divestments and Acquisitions
a. Amalgamation of Siemens Healthcare Diagnostics Ltd., Baroda (SHDL) At the meeting held on 30th November, 2009, the Board of Directors approved the proposal for the amalgamation of SHDL with the Company. The “Appointed Date” has been ?xed as 1st October, 2009. The Board has recommended a share exchange ratio of 2:1 i.e. (Two) Equity Shares of Rs.2 each fully paid-up of the Company for every 1 (One) Equity Share of Rs.10 each fully paid-up of SHDL. The amalgamation is subject to all the necessary statutory / regulatory approvals, including approvals of the Members of the respective companies and the relevant High Courts. SHDL is based at Baroda and is engaged in manufacturing, marketing and Customer Support of Medical Diagnostic Reagents and Instrument etc. SHDL is listed on the Bombay Stock Exchange Ltd.
b.
Acquisition of balance 50% stake in Flender Ltd., Kolkata The Company, on 31st July, 2009 acquired 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) for a consideration of Rs.910 million. With this acquisition, Flender Ltd., has become a 100% subsidiary of the Company. The process for amalgamation of Flender Ltd. with the Company has already been initiated.
c.
Acquisition of balance stake in Siemens Building Technologies Pvt. Ltd., Chennai (SBTPL) The Company, on 7th January, 2009 acquired second tranche of 6.83% stake in SBTPL comprising of 254,843 Equity Shares of Rs.10/- each from the Promoters of SBTPL for a consideration of Rs.791.06 million. Subsequent to this acquisition, the Company’s shareholding in SBTPL increased to 86.15%. At the meeting held on 26th November, 2009, the Board of Directors has approved the acquisition of the remaining 13.85% stake in SBTPL comprising of 517,209 Equity Shares of Rs.10/- each from the Promoters of SBTPL for a consideration of Rs.702 million. With this acquisition, SBTPL will become a 100% subsidiary of the Company. Further, it is proposed to amalgamate SBTPL with the Company, subject to all statutory and regulatory approvals in this regard.
d.
Divestment of 100% stake in Siemens Information Systems Ltd., Mumbai (SISL) On 25th June, 2009, the Company sold its 100% equity stake comprising of 6,815,000 Equity Shares of Rs.10/- each in SISL to Siemens Corporate Finance Pvt. Ltd., Mumbai (SCFPL) for a consideration of Rs.2,794 million. SISL has thus, ceased to be a subsidiary of the Company with effect from the said date.
e.
Divestment of 51% stake in Siemens Information Processing Services Pvt. Ltd., Bangalore (SIPS) On 25th June, 2009, the Company sold its 51% equity stake comprising of 2,123,800 Equity Shares of Rs.10/- each in SIPS to SCFPL for a consideration of Rs.228 million. SIPS has thus, ceased to be a subsidiary of the Company with effect from the said date.
f.
Divestment of 100% stake in Siemens Nixdorf Information Systems Pvt. Ltd., Mumbai (SNISL) SNISL was 100% subsidiary of SISL and being a subsidiary of a subsidiary, SNISL was considered as a subsidiary of the Company. On 2nd June, 2009, SISL sold its 100% equity stake in SNISL to SCFPL. SNISL has thus, ceased to be a subsidiary of the Company with effect from the said date.
6.
Subsidiary companies a. Flender Ltd., Kolkata - a 100% subsidiary Flender Ltd., is engaged in the business of manufacturing gear boxes, couplings and spares. For the year ended on 30th September, 2009, Flender Ltd. reported a total income of Rs.398 million and a Net Pro?t of Rs.45 million. b. Siemens Rolling Stock Pvt. Ltd., Mumbai (SRSPL) – a 100% subsidiary SRSPL was incorporated on 4th July, 2008 and is engaged in the manufacture of Railway Rolling Stock. For the year ended on 30th September, 2009, SRSPL reported a total income of Rs.16.35 million and a Net Loss of Rs.135.04 million.
19
Siemens Ltd.
19
Directors’ Report (continued)
c.
Siemens Building Technologies Pvt. Ltd., Chennai (SBTPL) - a 86.15% subsidiary SBTPL is engaged in the Building Technologies business providing a range of products and services comprising of building automation systems, ?re safety solutions, security solutions, etc. For the year ended on 30th September, 2009, SBTPL recorded a total income of Rs.2,051 million and a Net Loss of Rs.146.81 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.2,597 million and a Net Loss of Rs.234.8 million.
All the above subsidiary companies are non-material, non-listed subsidiary companies as de?ned 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 on 30th September, 2009. 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 Of?ce 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 52nd 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 prescribed Accounting Standards. 7. 8. Foreign Exchange Earnings and Expenditure Details concerning Foreign Exchange Earnings and Expenditure have been given under the Notes to the Accounts. 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. 9. 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 Company’s growth. Our industrial relations continue to be cordial. The Company is introducing an Equity Based Compensation Program “Siemens Limited – Share Matching Plan” for the Eligible Of?cers of the Company and its subsidiaries. This Plan provides an opportunity to reap sustainable, long-term bene?ts from the Company’s success. The necessary resolutions with respect to implementation of the said Plan forms part of the Notice of the 52nd Annual General Meeting and the same are recommended for your approval. The total number of permanent employees of the Company as on 30th September, 2009, was 6,683 (as on 30th September, 2008: 6,502). 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 Of?ce of the Company. 10. 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’ Certi?cate on compliance with Corporate Governance requirements by the Company is attached to the Corporate Governance Report. 11. General Shareholder Information General Shareholder Information forms part of the this Report as Annexure IV.
20 02
20 20
Annual Report 2009
Siemens Green Facts
With HVDC transmission technology from Siemens, electricity can be transmitted over distances of up to 2,000 kilometers with minimum loss.
12.
Directors’ Responsibility Statement Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors con?rm that, to the best of their knowledge and belief: 1. 2. in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures; 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, 2009 and of the pro?t of the Company for the year ended on that date; proper and suf?cient 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 the annual accounts have been prepared on a going concern basis.
3.
4.
13.
Directors Mr. V. B. Parulekar, on completion of his term, ceased to be a Whole-time Director and Director of the Company with effect from 1st October, 2009. The Board places on record its appreciation for the services rendered by Mr. Parulekar during his tenure with the Company. At the 52nd Annual General Meeting, Mr. Joe Kaeser, Mr. V. V. Paranjape and Mr. N. J. Jhaveri retire by rotation and being eligible, offer themselves for re-appointment. The above re-appointments form part of the Notice of the forthcoming 52nd Annual General Meeting and the respective resolutions are recommended for your approval. Pro?les of these Directors as required under Clause 49 of the Listing Agreement are given in the Notice of the 52nd Annual General Meeting.
14.
Auditors Messrs S. R. Batliboi & Associates, Chartered Accountants, retire as the Statutory Auditors of the Company at the ensuing Annual General Meeting and offer themselves for re-appointment. A certi?cate from them has been received to the effect that their re-appointment as Statutory Auditors of the Company, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.
15.
Cost Auditors In accordance with the requirements of Central Government and pursuant to Section 233B of the Companies Act, 1956, the Company carries out an audit of cost accounts for the product “Electric Motors” every year. M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai, have been conducting this audit since 1972.
16.
Acknowledgements 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 Monday, 30th November, 2009
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Annexure I to the Directors’ Report
Directors’ ReportEnergy, etc. u/s 217(1)(e) Conservation of
Additional Information in terms of Section 217(1)(e) of the Companies Act, 1956, dealing with Conservation of Energy, Research & Development and Technology Absorption & Innovation. A. Conservation of Energy a. Measures taken • Regrouping of the lights in the Traction bay. • • • • Replacement of lower wattage bulbs / Lamps instead of higher wattage in all the factories. Upgrading 80kW impregnation curing oven on `Thyristor Drive’ principle. Implementation of Delta Re?ex system and Real Time clock. Intermediate arrangements between Phase 1 and 2 for utilization of solar hot water for canteen cooking and washing. Use of natural light at production area during day time. Use of Heavy Duty Corrugated Box for the packing of panels. High density I/O modules conceived. I/O modules without requirement of FIM conceived. Use of low power consumption controller as well as low voltage electronics component.
• • • •
WDG4 Converter for Indian Railways. New series of contactors type 3TS and overload relays type 3US. New series of Pushbuttons and actuators type 3SB5. In house Type Testing facilities expanded as per plan to support timely introduction of Roadmap projects. Development of products - Multix Focus and Multiphos 450 (High Frequency Generator). Test on silicon bellow for use in outdoor VCB. Design & type test on 12 kV panels for withstanding 40 kA,1s internal arc fault. Design & type tests on enclosure for outdoor R.M.U. to withstand 20 kA, 0.1s internal arc fault. Cost effective circuit breakers of 145 kV & 245 kV range were designed developed and tested. 50 KA design of 400 KV HCB, DBR disconnector and earth switch. 40 KA 3 sec. 400 KV HCB Isolator and earth switch copper design. Indigenisation of low cost PG400/245/145 localisation and manufacture and assembly process. Design developed centre break 3150 Amp at low cost upto 245 KV. Development of User friendly Historian package. Development of FIM-less I/O system architecture. Development of Speed measurement module. Development of project speci?c features. Increase in market share. Energy ef?cient products. Overall cost reduction. Opportunity to tap new market. Recognition of SGR-R&D as Global R&D, by Siemens AG Introduction of cost competitive R.M.U. in domestic market. Reduced time to market the product. Improved segment speci?c business potential, especially service & captive power plant projects. Improved system acceptance. Improved quality. Lower lifetime costs for customers. Development and Testing of induction motors as per IE2 complying to IEC 60034-30. Localisation of 70 mm MCBs with higher breaking capacities and features. Annual Report 2009
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• • • • •
b. Additional investments and proposals, if any being implemented for reduction of consumption of energy • PLC based lighting control for manufacturing and administration building. • Customisation and use of power plant optimisation packages for Indian power plant projects.
2. Bene?ts derived as a result of the above R&D:
c. Impact of Measures undertaken • Optimisation of energy consumption. • • Savings in energy and fuel cost. Environment Protection.
B. Research and Development (R&D) 1. Speci?c areas in which R&D was carried out: • Prototype development of Windmill Generator of 1.875 MW rating. Prototype made ready and is under evaluation. • • Developed 1.35 MW induction motor. Received accreditation for BEE ‘Star’ rating label for the energy ef?cient motors from the Bureau of Energy Ef?ciency (Ministry of Power, Government of India). Localisation of new range of fuses and RCCBs. New range of DBs. 10 KA MCB Housing and cover in Urea. Development of MV Drives.
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3. Further Plan of action:
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Siemens Green Facts
Variable-speed drives with frequency converters reduce the electricity consumption of pumps and fans by up to 60%.
• • • • • • • • • • • • • •
Development for series production. Development of New products with primary focus on State of Art Contactors & Relays. Build R&D capacity and capability for further research oriented activities/projects. Solar Power for Generator, Smart Camera for C Arms. Implementation of improved designs & cost effective designs for 420 kV circuit breakers. Low cost design of disconnector for local low end market. 63 KA rating 400 KV disconnector. 765 KA localization. Customization of optimization package. Customization of simulator. Development of PSS for excitation system. Further developments in IO modules. Enhancing SW testing by use for standard services & tools. Development of MOR package
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•
Localisation of ST Technology for SST 300 C Blading and SST 600 Turbine.
2. Bene?ts derived from the above: • Reduction in imports of the motors. • • • • • Meeting the demand of Indian Railways for increased local content in manufacturing. Environment friendly hazardous waste. Overall cost reduction. Increased market coverage.
Year of Import Has the technology has been fully absorbed Yes If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action. Not Applicable
process,
reduction
in
Reduction in consumption of paint.
3. Imported Technology:
Technology Imported
4. Expenditure on R&D: a. Capital Expenditure: Rs.21.40 million b. Revenue Expenditure: Rs.57.50 million c. Total Expenditure: Rs.78.90 million C. Technology Absorption & Innovation 1. Efforts undertaken: • Full depth manufacturing of Traction Motors for Diesel Electric Locomotive application. This included necessary indigenisation of components and parts. Indigenisation of c-parts for all the traction motors. Introduction of Medium Voltage Motors manufacturing. This included necessary indigenisation of components and parts, introduction of additional technology in shaft insertion in rotors, assembly and testing processes. Introduction of ENSIS Oiling process for Magnets. 800 kV Circuit Breaker Development work in process. Indigenisation of low cost PG400/245/145 manufacture and assembly process. Design & development centre break 3150 Amp at low cost upto 245 KV. Technological Assistance for Instrument Transformer Manufacturing of 245kV & 420kV Current Transformers. Technological Assistance for Transformer Manufacturing for 400 kV rating of Power Transformers including HVDC transformers. Introduction of 4th Generation DCS SPPA T3000.
Coil manufacture and winding process. - Process of machining of components for traction motor. - Assembly and testing process. Ensis Oil Spraying Automat Technology for manufacture of 800 kV GCB
2007-08
2008-09 2008-09
Yes No
Not Applicable Development work in progress and manufacturing would commence after successful type testing Not Applicable
• •
Technology for manufacture of 245 kV & 400 kV Current Transformers Technology for manufacture of 400 kV Power Transformers Distributed control System SPPA T3000 Steam Turbine & Condenser engineering and production
2007-08
Yes
2007-08
No
2007-08 2008-09
Yes No
Process of absorption of HVDC technology is is expected to be fully absorbed by FY 2009-10. Not Applicable C Blading manufacturing under localisation, SST 600 localisation started from September, 2009.
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On behalf of the Board of Directors For Siemens Ltd.
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Deepak S. Parekh Chairman Mumbai Monday, 30th November, 2009
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Siemens Ltd.
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Annexure II to the Directors’ Report
Directors’ Report Management’s Discussions and Analysis
General Performance Review The ?scal year 2008-09 began amidst ?nancial slowdown, which decelerated the economic growth of India to 6.7%. This depicted a decline of 2.1% from the average growth rate of 8.8% recorded in the previous ?ve years. While the GDP growth in the ?rst two quarters was above 7.5%, it fell sharply in the third and fourth quarter to 5.8% as compared to GDP growth rate of 9.3% and 8.6% recorded in Q3 and Q4 of 2007-08. The moderation in growth for 2008-09 is mainly attributed to steep slowdown in growth in industry to 3.9 per cent from 8.1 per cent in 2007-08. Within industry, the manufacturing, electricity, gas and water supply and construction activities declined sharply, while growth in mining and quarrying sector showed a marginal growth. Growth in agriculture, forestry and ?sheries declined from 4.9% in 2007-08 to 1.6% in 2008-09. The growth slowdown in services sector was moderate. It was estimated at 9.7% in 2008-09 as compared to 10.9% in 2007-08. While the market witnessed slowdown in new investments, the rise in in?ation, high interest rates and liquidity crunch also led to cancellation, renegotiation and delay of many planned projects in India. To counter this negative fallout of the global economic slowdown, the Indian Government implemented ?scal stimulus packages to boost demand and increased expenditure on public projects. The RBI took a number of monetary easing and liquidity enhancing measures to facilitate ?ow of funds to meet the needs of infrastructure sectors. As a result, in the second quarter (July-September 2009), the economic indicators were looking up. After growing by 6.1% in the ?rst quarter, the GDP is estimated to have grown by 6.8% in the second quarter. The growth was led by an estimated 7% growth in the industrial sector, as compared to 5% in the ?rst quarter. While, the industry as well as services sector were on recovery track, the performance of the agriculture sector remained a cause of concern. Considering the overall market conditions during the last ?scal of the company (October – September 2009), Siemens continued to achieve stable performance. Further reviews on each of Siemens’ sector businesses are given separately in the following paragraphs:
led to severe price pressures in the market with companies anxious to ?ll up idle capacities. The heartening fact was that the Railway sector had a marginal impact of the economic crisis. The freight and passenger loading did not decline in absolute terms and registered a growth over previous years. Considering the overall market pressures, Siemens Industry Sector, which is a mix of short and long cycle businesses performed on expected lines during the last ?scal. It secured a good order intake and increased its revenue by 12% with strong order backlog. Its pro?t margin remained good at 5%. A major contributor to the Industry Sector performance was the Mobility division, which grew by 48% over the previous ?scal. Siemens Mobility division is a key player in Rail based transport solutions. With the addition of Infrastructure Logistics and Traf?c Solutions business, the division grew to a full spectrum of Mobility solutions provider. It continued to gain market share due to its state-of-the-art technology and in-depth local infrastructure including manufacture of propulsion equipment at Nashik and Kalwa Works, progressive localization of baggage handling solutions, a vast network of service infrastructure and dedicated personnel. The order intake of Industry Solutions (IS) division, which handles project business, was affected due to postponement of investment decisions in the respective market segments. With some large order back log, the turnover of IS division remained steady. Industry Automation and Drive Technologies (IA&DT), the product and solution division was also moderately affected and its order intake was a re?ection of prevailing market trends. With its edge in providing innovative and customized products & solutions, Siemens IA&DT division won several noteworthy orders amidst stiff competition and price pressures. The division also signed important alliances with Steel Authority of India Ltd., Indian Machine Tools Manufacturers Association (IMTMA) and with the Indo Danish Tools Room (IDTR) Jamshedpur to impart technical training to their employees and end customers. IA&DT further expanded their training
Industry Sector
The Industry sector was impacted the most as a result of the global economic slowdown, with growth rates declining from 8.1% in FY08 to 3.9% in FY09. With an acute liquidity crunch, most investments were deferred and projects were scaled down or deferred in sectors such as Automotive, Textiles, Paper, FMCG, F&B, Cement, Metal Technologies and other infrastructure projects. This decline in demand
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Annual Report 2009
Siemens Green Facts
Siemens’ Corex technology reduces CO2 and Sulfur Dioxide emissions resulting from iron production by 30% and 97% respectively.
network by setting three new authorized training centers catering to the northern, southern and eastern regions of the country. The highlight of IS division was the success achieved in its new business ventures such as water technologies, infrastructure projects and service businesses. The division also retained its leadership position in the metal and mining sector by winning a number of key orders and executing them successfully. It won a breakthrough order for the country’s biggest capacity electro-chlorination plant along with some large orders from the Metal Sector to supply electricals, power distribution equipment and automation solutions. The Mobility division won its ?rst order in India for the Metro electri?cation from Delhi Airport Metro Express Link (DAMEL), in addition to modern signaling and state-of-theart baggage handling systems with city check-in facility. The division also won major orders to supply IGBT (Insulated Gate Bipolar Transistors technology) based propulsion and control equipment for diesel electric locomotives. The modern stateof-the-art IGBT based electrics are highly reliable, require low maintenance and provide better lifecycle cost position. The strategic success was that the Mobility division was also able to establish its footprint in the traf?c solutions segment in the country. During the year 2008-09, the Industry Sector launched several innovative products across its businesses. For instance, G120 drive series, Medium Voltage motors, localized version of new design traction motors for Diesel Locomotives and Conveyor belts ‘Vario Belt V2,’ etc. The Sector was also accredited with the ‘BEE Star’ rating by the Bureau of Energy Ef?ciency (Ministry of Power, Govt. of India) for the energy ef?cient motors manufactured at Kalwa, near Mumbai. The Mobility division was successful in the development of the 500KVA Hotel Load converter that is energy ef?cient and will be used in the Rajdhani and Shatabdi express trains. The division has also completed the important development of the SIBAS based locomotive controller for 4500 HP IGBT based Diesel Electric Locomotives, which is a microprocessor based control system that controls complete locomotive functioning and enable its ef?cient operations. On the R&D front the Sector made numerous noteworthy investments. The Nasik Works developed and installed Water-cooled Converter & Controls (including software) for Shovels used in the export mining market. The Switchgear Kalwa Works has indigenously developed a new range of 3 TS contactors & 3 US overload relays and 3 SB5 Pushbutton stations & actuators. The factory is also considering registration of four patents in switchgear R&D. Outlook: The Government rolled out signi?cant economic policy reforms and ?scal stimulus packages to boost demand and increase expenditure on public projects. Also a number of monetary easing and liquidity enhancing measures were
undertaken to facilitate ?ow of funds from the ?nancial systems to meet the needs of infrastructure sectors. These developments will revive the projects undertaken by industries and thereby support the Industry Sector growth plans. There are various indicators, which show that global economic slowdown has started bottoming out. Going further, the sector will focus on energy ef?cient products / solutions and enhance its GREEN portfolio, which will create sustainable value for customers. This will give an added dimension to the sector’s strategy in the coming years and also offer a substantial business potential.
Energy Sector
As a consequence of the global economic crisis, the energy market witnessed a clear downward trend in the last ?scal. The power generation market fell by about 15% while the distribution segment declined by about 30%. The heartening sign was that the transmission segment continued to grow, with the Power Grid Corporation of India spearheading the progress in the transmission sector. The last ?scal saw a signi?cant shift towards supercritical technology with the Central Electricity Authority (CEA) mandating stricter ef?ciency guidelines for supercritical equipment to ensure reliability and good performance of power plants. While low cost suppliers continued to lead the market, more new players entered the competitive space, which led to heightened price pressures. In such a market environment, Siemens Energy Sector performed well and retained its market position in the industry. During 2008-09, the order value rose by 21%, while its sales increased marginally by 2%. Pro?ts rose by 91% on account of the substantial completion of certain large projects, which has resulted in signi?cant savings in estimated costs and consequential recognition of additional
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Annexure II to the Directors’ Report (continued)
Management’s Discussions and Analysis
revenue and pro?ts. During the year, the Sector continued to invest for expanding its manufacturing capabilities. It commenced operations at its Gas Insulated Switchgear (GIS) factory at Aurangabad, which was the ?rst GIS factory to be fully operational in India. The Sector also expanded its Steam Turbine factory at Vadodara. Amongst the many orders won by the Energy Sector, the most prominent contract was from Adani Power Ltd. to construct India’s ?rst private sector High-voltage-directcurrent (HVDC) transmission system. This environment friendly system will help reduce millions of tons of CO2 emissions and provide energy ef?cient transmission of power over a distance of 1,000 km from Mundra power plant in Gujarat to Mohindergarh in Haryana. Apart from orders, the Energy Sector also rolled out new products and solutions. It introduced many innovative products such as power plant control system SPPA-T3000, 400kV Power Transformer, Traction Transformer, localized Grading Capacitors, 420kV, 50kV Disconnectors, etc. Siemens was awarded the Enertia Award 2008 for technology innovation for the Talcher-Kolar HVDC link capacity enhancement. Outlook: The early signs of an economic recovery is expected to lead to a revival of deferred projects. The substantial capacity addition will generate a market for our products down to the distribution level. The growth in the Transmission sector is expected to continue, while the recent resurgence in the industrial sector is expected to help the Distribution segment. The power and industry sectors will continue to be key drivers for our growth. The increased demand for supercritical technology with CEA mandating stricter ef?ciency guidelines will bene?t the Energy Sector with its technology edge in providing supercritical technology. While the Government has initiated bulk tendering of fossil supercritical units, the Power Grid has moved towards implementation of 800kV HVDC transmission lines and the next focus is to adopt 1200kV AC lines. As innovation leaders, the Sector will continue to leverage growth opportunities by widening the spectrum of it’s high-tech products and solutions and expanding manufacturing capacities.
position by gaining market share, especially in segments of CT scanners, MRI, Molecular Imaging & Special Products and grew faster than the market. With healthy Order intake and improved pro?tability, the overall performance of the Sector was very good. On a comparable basis, for the total business, orders grew by 20%, sales grew by 5%, while pro?ts rose by 24%. For only the direct business, Sales declined by 10%, Orders declined by 6%, while Pro?ts rose by 24%. In line with its business philosophy, the Healthcare Sector introduced several ?rst-of-its-kind products in the country. For instance, it launched SOMATOM De?nition Flash CT scanner, which is the fastest CT scanner in the world with a low radiation dose. The world’s ?rst molecular CT scanner called Biograph mCT was installed for the ?rst time in India. The Sector also introduced country’s ?rst robotic cathlab, Artis Zeego. One of the most outstanding technologies introduced by Siemens was Liver Elastography using ACUSON S2000 ultrasound system. With this ultrasound system, for the ?rst time in India it is now possible to non-invasively diagnose liver disorders. Another ultrasound system launched was ACUSON SC2000 which provides exclusive cardiac and vascular diagnosis. With this ultrasound system, Siemens also introduced a technology called Echo in a Heartbeat that allows volume scanning of a heart in one second. Siemens Healthcare won noteworthy multi-modality orders, which included two large private sector orders for providing a range of imaging equipments. The sector also received the single largest bulk order from one of the government entities. A signi?cant export order was won from China for 20 units of Multimobil 5C C-arm systems and 40 units of Multimobil 2.5 X-rays. The Healthcare Sector enhanced its post sale support and service and at present has over 700 systems connected to Siemens Remote Service for remote monitoring and servicing. It continued to conduct advance training workshops for customers as well as for the application teams, which signi?cantly helped the sector to perform better. In FY2008-09, Healthcare was credited with Frost & Sullivan’s
Healthcare
In the beginning of FY2009, the industry witnessed hardening of credit and spiraling of interest rates, with weakening of the Indian Rupee against the US Dollar. This led to slowdown in the private sector investment in the Healthcare sector however the investments by the public sector compensated for the slowdown in the private sector. During the fourth quarter of the last ?scal, there were signs of recovery in the private sector investments. Thus, the overall healthcare equipment market grew by 10% - 12% in the last ?nancial year. Despite the intense competition in the market, Siemens Healthcare Sector further consolidated its leadership
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Annual Report 2009
Siemens Green Facts
Planon, a mercury free lamp from Osram, has a service life of 100,000 hrs., & lasts 6 times more than conventional ?uorescent lamp.
Best CT Scan Equipment Company of the Year award. Outlook: The trend of the Indian Rupee appreciating against the US Dollar and recovery of the private sector investment is expected to augur well for the industry. The Oncology and Cardiology segment will be the major growth drivers. Some of the Corporate groups are looking for ‘Pay per Use models’ and the Government hospitals are looking for public private partnerships. The Tier II and Tier III cities will continue to see big growth. Siemens will leverage these business opportunities by focusing on high potential areas and emerging markets. It will also focus on ‘Imaging inside Operation room’ market and the replacement market. The Sector will continue to launch world-class innovative technologies in India and also invest in R&D at its Goa factory.
Center (GECC) in Chennai for Building Automation Systems. The GECC will provide engineering design services for the Indian market and for the Asia Paci?c region. Outlook: Though there are signs of revival in the industry, the related market for building technologies such as commercial real estate and retail are not expected to see a speedy recovery. SBTPL expects to improve its business performance by focusing on key verticals like Government, Pharma and Data Centers. The company will establish greater competence in Energy Ef?ciency Services to optimize energy consumption in existing building infrastructure. SBPTL will also focus on increasing it’s services portfolio to provide value added offerings to the existing installed base, especially in the area of knowledge services to create greater value from existing investment. Flender Ltd. Flender Ltd., a 100% subsidiary company of Siemens Ltd, manufactures mechanical and electrical components for power transmission equipment. Their pro?le covers a diversi?ed product range from individual components to complete drive systems. Despite the market pressures during the last ?nancial year, Flender continued to do well. Orders increased by 9%. A slowdown in the cement sector, which contributed to more than half of the company’s order intake in the past was compensated by increased demand in the Power sector. Its sales increased by 13%, while pro?ts rose by 15%. The merger process of Flender with Siemens Ltd. is currently underway and an application has been ?led in the High Court of Calcutta. The appointed date for the merger is October 1, 2009.
Group companies of Siemens Ltd. Industry
Siemens Building Technologies Pvt. Ltd. (SBTPL) As a consequence of the global economic slowdown and acute liquidity crunch, the demand in the building technologies market fell sharply by about 20%. The business potential in segments such as Commercial Real Estate, Retail, IT and BPOs reduced considerably in turn affecting the performance of Siemens Building Technologies. The ?scal 2008-09 was one of the most dif?cult years for Siemens Building Technologies Pvt. Ltd. (SBTPL), which is an 86% subsidiary of Siemens Ltd. The revenues fell by 21% while the pro?tability was impacted severely. In addition, the subsidiaries of SBTPL in UK and Ireland also witnessed tough market conditions. In spite of the adverse market conditions resulting in severe price pressures, the company secured some noteworthy orders for Integrated Buildings Management Systems (IBMS), ?re suppression equipment and annual maintenance contracts. One of their major achievements was the establishment of the Graphics & Engineering Competence
Corporate Functions Review
Internal Control Systems The mandate of internal audit in Siemens Ltd. is to add value and improve the operations and processes of the Company. This is done by independently and objectively evaluating and reporting on Siemens’ ?nancial reporting integrity, the effectiveness of risk management and internal control systems and the adherence to Siemens’ compliance policies in a systematic and disciplined manner. Siemens has outsourced the internal audit function to Corporate Finance Audit, the Global Audit Department of Siemens AG, majority shareholder of Siemens Ltd. To deliver on its mandate, the Internal Audit department develops a ?exible audit plan for Siemens and its subsidiary companies using an appropriate risk-based methodology and considering the work performed by Siemens’ other control and monitoring functions and external auditors, to provide optimal audit coverage at a reasonable overall cost. The audit plan is submitted to the Audit Committee of Siemens
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Siemens Ltd.
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Annexure II to the Directors’ Report (continued)
Management’s Discussions and Analysis
for review and concurrence at least annually. The results from the audit are reported to the Audit Committee on a quarterly basis. Compliance Siemens Ltd. also strengthened its Compliance function during the Internal Control Remediation implementation phase and thereafter in October 2008, restructured this function based on focus areas and sector requirements. Each sector of the company has a dedicated Sector Compliance team that helps to ensure on one hand, the effectiveness of the de?ned controls in the business environment and on the other hand supports in reducing the response time to help the business in day to day operations, without escalating queries to the Regional Compliance Of?ce (RCO). During the year 2008-2009, the RCO team helped to ’Build Trust’ and inculcated a strong ’Conviction for Compliance’. It continued its conviction even outside the realms of Siemens to other organizations through Collective Action Plan and with the support from NGOs, Transparency International, India (TI I) and Government bodies. The RCO supervises Compliance program of all Group Companies to achieve synergies within Siemens in India. Safety & Environment Siemens has always considered safety and environment one of its key focus areas and has always strived to make continues improvements in these two aspects. The highlight of the FY 2008-2009, was the standardization of Safety & Environmental Management System as per International Standards for Certi?cation. During this year, the Transformer, Switchboard and Aurangabad Circuit Breaker Factories have implemented Safety Management System as per International Standard OHSAS 18001. Our factories are now certi?ed by OHSAS 18001 through external auditors. At Siemens, environment concerns have always taken precedence; hence all our factories at Kalwa, Aurangabad
and Nashik have re-certi?ed for international standard ISO 14001 for Environment Management System. To address the concerns of Environment Protection, concrete efforts were made towards natural resource conservation. For example, a Sewage Treatment Plant was commissioned at Kalwa Works and the Kalwa Switchgear factory started a pilot Rain Water Harvesting project. The treated and collected water is currently used for ?ushing and gardening. The Kalwa Switchgear Factory has reduced waste material by reusing process scrap, thermoplastic, so far the total quantity of 10 tons/year has been recycled. For creating a safe work environment, this year total 2,760 employees including contractors have been trained on various Safety & Environment topics. This is a three fold growth in terms of numbers as compared to previous year. The determination of our line managers towards Safety & Environment supported by strong Management Commitment has led to a signi?cant reduction in accidents in all our manufacturing Units. There have been no accidents reported at Kalwa Switchgear Factory, Goa Works, Nashik Works and Baroda Works. The number of Total Accidents at all our production units of has reduced by 29%. In order to tackle any ?re emergency, Nashik Works has installed a new state-of-the-art ?re hydrant system. The new system has a pumping mechanism to supply minimum of 4,500 liters/per minute at a pressure of 7kg/cm2 along with a jockey pump and a diesel backup pump. Siemens has also included Safety & Environment clauses in all its Purchase Orders. This reinforces our communication towards compliant behavior by all our vendors in our premises and of their own. An exhaustive Safety & Environment Protocol Manual for Siemens Project sites was prepared to speci?c safety legal and technical safety requirements. This Protocol Manual has been distributed among our project sites across the country. As a part of preventive crisis management, emergency drills were conducted at all our factories and of?ces. Human Resource Initiatives Employees are the back bone of a good organisation and to motivate them to achieve greater heights HR undertook several initiatives towards their development, enhancement and retention. Despite the dif?cult market conditions, the Company hired around 130 fresh Graduate Trainee Engineers (GTE) who joined the Siemens family. The program titled ‘Welcoming the Young Giants’ was planned to welcome and integrate the young engineers in the house of Siemens. Keeping in line with the business growth and constantly changing market demands, the company invested signi?cantly in various training and development activities to better equip our employees by enhancing their competencies in order to
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Siemens Green Facts
SOMATOM De?nition Computed Tomography saves energy up to 30%. The material components are 97% recyclable compared to the previous model.
successfully meet future challenges. Nearly 290 programs were conducted during the year covering 3,500 participants. In the area of leadership development, the existing Program for Business Managers (PBM), meant for our talent at the mid-management level, was re-designed with greater focus on Business Strategy. This year, 35 Managers across the Companies went through the program and their projects will be closely tracked for implementation. Additionally, a specialized program was designed for the Senior Management team known as Strategic Leadership Development Programme (SLDP) in collaboration with Indian Institute of Management, Ahmedabad (IIM-A). It is a two weeks intensive training on Business Skills and Leadership development. Another new initiative that has been undertaken by HR is Executive Coaching for select Top Management to hone their business and leadership skills by bringing in an external perspective. The Company has put a lot of emphasis towards developing the young talent and as an example; recently ?ve of our employees were selected to present new ideas to the Board Members in Germany. The company worldwide, as well as in India, is also focusing on building greater diversity in its efforts towards making the organization truly global. Last year, under the new shared service concept, HR services were bundled and several processes were re-designed to bring in higher ef?ciency at signi?cantly lower costs primarily with the effective use of IT enabled tools, as also by outsourcing of transactional work to our in-house Shared Services out?t, SIPS. Amidst all the pressures and demands of the growing business, Industrial Relations continued to be cordial with our Unions.
the Industry sector to gain stability, which got impacted the most in the economic slowdown. Overall the business sentiment is now positive. Investments in the infrastructure sector are also likely to help boost the economy. With expected investments of about US$500 billion, a number of infrastructure projects have been announced by the Railways, Urban authorities and Power especially on a public-privatepartnership (PPP) model. The challenges that confronted the Indian economy in 2008-09 will remain in 2009-10 as well. The ?rst area of challenge will be of monetary and ?scal policy and the other will be of returning to the high growth path. However, compared to other emerging economies, India has several strengths that can help an early mitigation of the adverse effects of the global economic crisis — high share of services in GDP, high domestic saving rate, growing infrastructure investment and most preferred destination for investments among others. Siemens Ltd. will focus on providing solutions to the infrastructure challenges faced by the country and will maintain its market position by driving pro?table growth. While focusing on sustainability, Siemens will strengthen its solutions for environment protection and energy ef?ciency. Note: This report contains forward-looking statements based on beliefs of Siemens’ management. The words ‘anticipate,’ ‘believe,’ ‘estimate,’ ‘forecast,’ ‘expect,’ ‘ intend,’ ‘plan,’ ‘should,’ and ‘project’ are used to identify forward-looking statements, Such statements re?ect the company’s current views with respect to the future events and are subject to risks and uncertainties. Many factors could cause the actual result to be materially different, including amongst others changes in the general economic and business conditions, changes in the currency exchange rates and interest rates, introduction of competing products, lack of acceptance of new products or services, and changes in business strategy. Actual results may vary materially from those projected here. Siemens does not intend to assume any obligation to update these forward-looking statements. On behalf of the Board of Directors For Siemens Ltd.
Outlook for Siemens Ltd.
India has established itself as one of the world’s fastest growing economies — this fact has been attracting many investors across the world to leverage opportunities in this growing market. However, the ?nancial meltdown and consequent economic slowdown that impacted the world last year, had its effect on the Indian economy as well. But despite the slowdown, investment remained relatively buoyant, growing at a rate higher than the GDP (32.2% from 31.6% in 2007-08). Towards the end of the ?scal 200809, the economy saw a silver lining when the government stepped in with its ?scal stimulus initiatives. India is now on track to improve its economy and the Reserve Bank of India (RBI) recently projected the country’s economic growth at 6% in ?scal 2009-10. As the markets are currently under a phase of correction, the competition to win orders is getting intense. Projects that were delayed last year are expected to resume, primarily helping
Deepak S. Parekh Chairman Mumbai Monday, 30th November, 2009
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Annexure III to the Directors’ Report
Corporate Governance Report
(As per Clause 49 of the Listing Agreement entered into with the Stock Exchanges)
I.
Company’s Philosophy on Corporate Governance The Company’s philosophy on Corporate Governance is to observe the highest level of ethics in all its dealings, to ensure the ef?cient conduct of the affairs of the Company to achieve its goal of maximising value for all its stakeholders.
II.
Board of Directors (Board) • Composition During the year under consideration, the Board comprises of`12 experts (excluding Alternate Directors) drawn from diverse ?elds / professions. The Board has an optimum combination of Executive and Non-executive Directors, which is in conformity with the requirement of Clause 49 of the Listing Agreement with the Stock Exchanges (Listing Agreement) in this regard. The Chairman of the Board is a Non-executive and Independent Director. All Directors, except the Managing Director and Special Director, are liable to retire by rotation. Composition of the Board Minimum Requirement as per Clause 49 No. of Directors % of Total Directors Non-executive Directors 8 66.67 50% (therein Independent Directors) (6) (54.54) (33.33%) Whole-time Directors 4 33.33 Total 12 100 The necessary disclosures regarding Committee positions have been made by all the Directors. None of the Directors on the Board is a Member of more than 10 Committees and Chairman of more than 5 Committees across all companies in which they are Directors. There is no relationship between the Directors inter-se. The Composition of the Board, Directorship / Committee positions in other companies as on 30th September, 2009, the changes during the year under review, number of Meetings held and attended during the year are as follows: Name Category(1) Board Meetings during the FY 2008-09 Held(5) Attended 6 6 6 6 5 6 5 6 6 2 Attend- Other Other Committee ance at Director- positions in India(3) last AGM ships in held on India(2) Member Chairman 30.01.09 Yes Yes Yes Yes No 17 2 13 9 Nil 1 1 4 2 N.A. 5 Nil 2 3 N.A. Particulars
Mr. Deepak S. Parekh (Chairman) 2 Dr. Armin Bruck 3 Mr. Darius C. Shroff 4 Mr. Yezdi H. Malegam 5 Mr. Wolfgang Dehen(4) (Nominee of Parent Company, Siemens AG) (from 19.12.2008) 6 Prof. Dr. Hermann Requardt(4) (Nominee of Parent Company, Siemens AG) (upto 19.12.2008) 7 Mr. Stephan Schneider(4)(6) (Alternate for Mr. Wolfgang Dehen from 19.12.2008) 8 Mr. Narendra J. Jhaveri 9 Mr. Keki Dadiseth 10 Mr. Pradip V. Nayak 11 Mr. Joe Kaeser(4) 12 Dr. Otmar Schmitt(4) (Alternate for Mr. Joe Kaeser)
03
1
NED (I) WTD NED (I) NED (I) NED
NED
1
Nil
N.A.
Nil
N.A.
N.A.
NED
5
2
Yes
Nil
N.A.
N.A.
NED (I) NED (I) NED (I) NED NED
6 6 6 6 6
4 5 6 4 2
Yes Yes Yes Yes Yes
13 9 4 Nil Nil
4 1 2 N.A. N.A.
4 2 1 N.A. N.A.
30
Annual Report 2009
Siemens Green Facts
MAGNETOM Essenza, the new Magnetic Resonance Tomography has very low operating cost and can reduce your energy bill by up to 50%.
Name
Category(1)
Board Meetings during the FY 2008-09 Held(5) Attended 2 1
Attend- Other Other Committee ance at Director- positions in India(3) last AGM ships in held on India(2) Member Chairman 30.01.09 N.A. Nil N.A. N.A.
13 Mr. Patrick de Royer (Executive Director) (upto 31.12.2008) 14 Mr. Vijay V. Paranjape 15 Mr. Vilas B. Parulekar (upto 30.09.09) 16 Mr. Sunil Mathur Notes: (1)
WTD
WTD WTD WTD
6 6 6
4 6 6
Yes Yes Yes
2 Nil 2
Nil Nil 1
Nil Nil 1
•
Category: WTD - Whole-time Director, NED – Non-executive Director , NED (I) – Non-executive Director and Independent. (2) Includes Alternate Directorships and Directorships in private companies. (3) Includes only Audit Committee and Investors Grievance Committee of Public Limited Companies. (4) In the whole-time employment of parent company, Siemens AG, Germany. (5) Details provided for the period for which the individuals held Directorship of the Company. (6) Ceased to be an Alternate Director for Prof. Dr. Hermann Requardt w.e.f. 19th December, 2008. From 1st October, 2008 to 19th December, 2008, he attended one Board Meeting as an Alternate Director for Prof. Dr. Hermann Requardt. Board Meetings During the Financial Year 2008-09, 6 Meetings were held on 25th November, 2008, 19th December, 2008, 9th January, 2009, 30th January, 2009, 30th April, 2009 and 23rd July, 2009. The gap between any two Meetings did not exceed four months. Agenda papers containing all necessary information / documents are made available to the Board in advance to enable the Board to discharge its responsibilities effectively and take informed decisions. Where it is not practicable to attach or send the relevant information as a part of Agenda Papers, the same are tabled at the meeting or / and the presentations are made by the concerned managers to the Board. Considerable time is spent by the Directors on discussions and deliberations at the Board Meetings. The information as speci?ed in Annexure IA to Clause 49 of the Listing Agreement is regularly made available to the Board, whenever applicable, for discussion and consideration.
III.
Committees of Directors A Mandatory Committees i. Audit Committee of Directors (Audit Committee) Composition The Audit Committee comprises of experts specialising in accounting / ?nancial management. The Chairman of the Audit Committee is a Non-executive and Independent Director. The present composition of the Audit Committee is as follows: Name From No. of meetings during FY 2008-09 Held Attended 6 6 6 5* 6 6 4 5
31
Mr. Yezdi H. Malegam, Chairman 15.12.2000 Mr. Joe Kaeser / Dr. Otmar Schmitt 01.10.2006 (Alternate Director for Mr. Joe Kaeser) Mr. Deepak S. Parekh 22.11.2004 Mr. Keki Dadiseth 01.02.2006 * Mr. Kaeser attended 4 meetings and Dr. Schmitt attended 1 Meeting. Siemens Ltd.
31
Annexure III to the Directors’ Report (continued)
Corporate Governance Report
Mr. Ajai Jain, Vice President (Legal) & Company Secretary, is appointed as Secretary to the Committee w.e.f. 1st August, 2008. During the Financial Year 2008-09, 6 Meetings were held on 7th November, 2008, 24th November, 2008, 19th December, 2008, 30th January, 2009, 30th April, 2009 and 23rd July, 2009. The Executive Director and the Heads of Accounts, Finance, Internal Audit and Taxation Departments, Regional Compliance Of?cer and the Statutory Auditors are permanent invitees to the Meetings. Terms of reference The powers and terms of reference of the Audit Committee are as mentioned in the Clause 49 II (C), (D) & (E) of the Listing Agreement and Section 292A of the Companies Act, 1956. The terms of reference are brie?y described below: a. b. c. d. e. f. g. h. i. j. k. Oversight of the Company’s ?nancial reporting process and disclosure of ?nancial information. Recommend the appointment, re-appointment and, if required, replacement or removal of Statutory Auditors, ?xation of audit fees and approving payments for any other services. Review with management the annual and quarterly ?nancial statements before submission to the Board. Review with management, performance of Statutory and Internal Auditors and adequacy of internal control systems. Review the adequacy of internal audit function. Discussions with Internal Auditors of any signi?cant ?ndings and follow-ups thereon. Review the ?ndings of any internal investigations by the Internal Auditors. Discussions with Statutory Auditors before the audit commences, of the nature and scope of audit as well as have post-audit discussion to ascertain any areas of concern. Look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors. Review the functioning of the Whistle Blower mechanism. Review the following information: • • • • • • Management discussion and analysis of ?nancial condition and results of operations; Statement of signi?cant related party transactions; Management letters / letters of internal control weaknesses issued by the Statutory Auditors; Internal audit reports relating to internal control weaknesses; The appointment, removal and remuneration of the Chief Internal Auditor; and The ?nancial statements, in particular, the investments made by unlisted subsidiary companies. In addition to the above, the following disclosures are made to the Audit Committee, as and when applicable: • • • Basis of related party transactions; Disclosure of Accounting Treatment; and Utilisation / application of proceeds from public issues, rights issues, preferential issues, etc., if any.
The Audit Committee is vested with the necessary powers, as de?ned in its Charter, to achieve its objectives. The Chairman of the Audit Committee was present at the 51st Annual General Meeting held on 30th January, 2009.
23
32
Annual Report 2009
Siemens Green Facts
Globally, the Siemens environment portfolio accounts for about 25% of our revenue. By 2011, we plan to achieve a revenue of 25 billion euros with this portfolio.
ii.
Investors Grievance Committee of Directors (Investors Grievance Committee) Composition The Investors Grievance Committee has been constituted to attend to and redress the investors’ grievances. Name Mr. Darius C. Shroff, Chairman Mr. Pradip V. Nayak Dr. Armin Bruck From 15.12.2000 01.02.2006 01.01.2008
th
No. of meetings during FY 2008-09 Held 2 2 2
nd
Attended 2 2 1
During the Financial Year 2008-09, the Committee met on 29 January, 2009 and 22 September, 2009. Mr. Ajai Jain, Vice President (Legal) & Company Secretary, is the “Compliance Of?cer” pursuant to the requirement of the Securities and Exchange Board of India (SEBI) Regulations and Listing Agreement. Details of Investor Complaints The Company and TSR Darashaw Ltd., Registrar & Share Transfer Agent (RTA), attend to all grievances of the investors received directly or through SEBI, Stock Exchanges, Ministry of Corporate Affairs, Registrar of Companies, etc. Barring certain cases pending in Courts / Consumer Forums, relating to disputes over the title to Shares, in which either the Company has been made a party or necessary intimation thereof has been received by the Company, all the investor grievances / correspondences have been promptly attended to from the date of their receipt. Continuous efforts are made to ensure that grievances are more expeditiously redressed to the complete satisfaction of the investors. The details of Complaints received, cleared / pending during the Financial Year 2008-09 is given below: Nature of Complaints Non-receipt of Share Certi?cates duly transferred Non-receipt of dividend warrants Letters from SEBI Letters from Stock Exchanges Total Received 7 19 7 8 41 Cleared 7 19 6 8 40 Pending 0 0 1 0 1
Number of complaints received during the year as a percentage of total number of Members as on 30th September, 2009, is 0.02%. B. Non-Mandatory Committees Remuneration Committee of Directors (Remuneration Committee) Composition Name Mr. Narendra J. Jhaveri, Chairman Mr. Darius C. Shroff Mr. Deepak S. Parekh Mr. Pradip. V. Nayak
th
From 15.12.2000 15.12.2000 01.10.2004 23.07.2007
th
During the Financial Year 2008-09, the Committee met on 25 November, 2008 and 30 April, 2009.
33
Siemens Ltd.
33
Annexure III to the Directors’ Report (continued)
Corporate Governance Report
Terms of reference a. b. c. Determine the Company’s policy on speci?c remuneration packages for Whole-time Directors / Executive Directors including pension rights and any compensation payment. Decide the actual Salary, Salary Grades, Overseas Allowance, Perquisites, Retirals and Increment of Wholetime Directors. De?ne and implement the Performance Linked Incentive Scheme (including ESOP of the Company and / or Siemens AG) and evaluate the performance and determine the amount of incentive of the Whole-time Directors for that purpose. Decide the amount of Commission payable to the Whole-time Directors. Periodically review and suggest revision of the total remuneration package of the Whole-time Directors keeping in view the performance of the Company, standards prevailing in the industry, statutory guidelines, etc.
d. e.
Remuneration Policy The remuneration policy of the Company is performance driven and is structured to motivate employees, recognize their merits & achievements and promote excellence in their performance. 1. For Whole-time Directors The Board of Directors / the Remuneration Committee of Directors is authorised to decide the remuneration of the Whole-time Directors, subject to the approval of the Members and Central Government, if required. The remuneration structure comprises of Salary, Perquisites, Retirement Bene?ts, Performance Linked Incentive (PLI), Commission and Compensation under Stock Option Plan(s) of Siemens AG, Germany, parent company/ Siemens Limited- Share Matching Plan (SMP Scheme), India. The Whole-time Directors shall be entitled to payment of cash equivalent of the fair market value of the Options/ Awards as on exercise Date, to which they may be entitled under the Stock Option Plan(s), as may be applicable from time to time of the parent company, Siemens AG, Germany. They shall be entitled to Cash Incentive under SMP Scheme, as applicable from time to time. Annual increments are decided by the Remuneration Committee within the salary grade approved by the Members. In addition to the above remuneration, Expatriate Directors are paid Overseas Allowance and certain other Perquisites as per the Rules of the Company. They are also entitled to the Company’s Retirement Bene?ts as per the law applicable from time to time. PLI, Compensation under Stock Option Plan(s) of Siemens AG/ SMP Scheme and Commission constitute the variable component of remuneration. PLI is computed on the basis of speci?c targets set for each Whole-time Directors every year. The targets are also linked to the Company’s targets. PLI is paid to the Whole-time Directors on achievement of the said targets. Commission is determined on the basis of the Net Pro?ts of the Company in a particular Financial Year, subject to the overall ceiling as stipulated in Sections 198 and 309 of the Companies Act, 1956. Remuneration paid / payable to the Whole-time Directors for the Financial Year 2008-09 (Amount in Rs.) Dr. Bruck Salary Perquisites(1) Performance Linked Incentive Compensation under Stock Option Plan(s) of Siemens AG
43
Mr. Mathur 5,830,500 15,039,321
Mr. Paranjape 4,254,600 3,992,288
Mr. Parulekar(2) 3,936,000 5,929,689
Mr. de Royer(3) 1,606,500 6,453,013
9,517,200 21,352,798
32,465,741
21,841,594
12,377,216
8,693,837
Nil
Nil
Nil
Nil
Nil
5,631,043 Annual Report 2009
34
Siemens Green Facts
Energy saving motors from Siemens ?t into virtually every drive concept and are characterized by 40% lower power loss compared to standard motors.
Dr. Bruck Commission Total Tenure From To Shares of Rs.2 each held as on 30.09.2009 Notes: (1) 01.10.2007 30.09.2012 Nil 63,335,739
Mr. Mathur Nil 42,711,415
Mr. Paranjape Nil 20,624,104
Mr. Parulekar(2) Nil 18,559,526
Mr. de Royer(3) Nil 13,690,556
22.07.2008 21.07.2013
01.02.2007 30.09.2010
01.02.2007 30.09.2009
01.10.2006 31.12.2008
Nil
Nil
4,200
5,000
N.A.
Perquisites include Company’s contribution to Provident and Superannuation Funds for Directors and Overseas Allowance for Expatriate Directors viz. Mr. de Royer and Dr. Bruck. Perquisites paid to Mr. Mathur include Special Allowance. The Board sanctioned a lump sum gratuitous payment of Rs. 5,000,000/- on account of his long association with the Company. This payment is subject to the approval of the members of the Company at the forthcoming 52nd Annual General Meeting to be held on 29th January, 2010. Pro-rata payment from 1st October, 2008 to 31st December, 2008. Mr. Upili, a former Whole-time Director of the Company was paid a total remuneration of Rs. 2,53,446/towards the arrears for the Financial Year 2007-08.
(2)
(3) (4)
No severance fees are payable to the Directors on termination of employment. The Company did not have its scheme of stock options for the Financial Year 2008-09. However, the Compensation under Stock Option Plan(s) of Siemens AG, Germany and the SMP Scheme, India, the Whole-time Directors and certain other Senior Managers of the Company are entitled to cash equivalent of the fair market value of Options / Awards, as stated above. 2. For Non-executive Directors The Non-executive Directors are paid remuneration by way of Sitting Fees and Commission. Sitting Fees The Non-executive Directors are entitled to sitting fees for attending Board / Committee Meetings, as per the details given below: Meetings Board Audit Committee Investors Grievance Committee, Remuneration Committee, Corporate Governance Committee, Investment Committee and Special Committee. Commission In terms of the Members’ approval given at the 47th Annual General Meeting held on 27th January, 2005, Commission is payable at a rate not exceeding 1% per annum of the Net Pro?ts of the Company computed in the manner referred to in Section 309 of the Companies Act, 1956. The actual amount of Commission payable to each Non-executive Director is decided by the Board on the following criteria: • • • • • Siemens Ltd. Number of Board Meetings attended Number of various Committee Meetings attended Role and responsibility as Chairman / Member of the Board Role and responsibility as Chairman / Member of the Committee Overall contribution and role outside the Meetings
35
Sitting fees per Meeting (Rs.) 20,000 20,000 10,000
35
Annexure III to the Directors’ Report (continued)
Corporate Governance Report
Remuneration paid / payable to the Non-executive Directors for the Financial Year 2008-09 Name Sitting Fees for Board / Committee Meetings attended (Rs.) 260,000 290,000 170,000 100,000 200,000 200,000 N.A. N.A. 80,000 N.A.
(2)
Commission(1)
Total
(Rs.) 3,150,000 2,100,000 1,650,000 1,200,000 1,350,000 1,700,000 N.A. N.A. 450,000 N.A. N.A.
(Rs.) 3,410,000 2,390,000 1,820,000 1,300,000 1,550,000 1,900,000 N.A. N.A. 530,000 N.A. N.A.
Number of Equity Shares of Rs.2 each held as on 30.09.09 9,000 6,250 9,000 5,000 Nil Nil Nil Nil Nil Nil Nil
Mr. Deepak S. Parekh Mr. Yezdi H. Malegam Mr. Darius C. Shroff Mr. Narendra J. Jhaveri Mr. Keki Dadiseth Mr. Pradip V. Nayak Mr. Joe Kaeser
(2)
Mr. Wolfgang Dehen(2) Dr. Otmar Schmitt Mr. Stephan Schneider(2) Prof. Dr. Hermann Requardt Notes: (1) (2)
N.A.
Subject to the approval of Annual Accounts for the Financial Year 2008-09 by the Members at the 52nd Annual General Meeting to be held on 29th January, 2010. Opted not to accept any Sitting Fees or Commission.
Mr. Darius C. Shroff is a Senior Partner of M/s. Crawford Bayley & Co., Solicitors & Advocates, who has a professional relationship with the Company. The professional fees of Rs. 514,000/- paid to M/s. Crawford Bayley & Co., during the Financial Year under review, is not considered material enough to impinge on the independence of Mr. Shroff. None of the other Non-executive Directors has any other pecuniary interest in the Company, as disclosed to us. C. Other Committees of Directors i. Corporate Governance Committee of Directors (Corporate Governance Committee) The Committee has been constituted inter-alia to consider, review and decide the matters relating to Corporate Governance as per the Listing Agreement and applicable Laws & Regulations and recommending best practices in the areas of Board Governance, Corporate Governance & disclosure policies considering the interest of the stakeholders. Composition Name Mr. Keki Dadiseth, Chairman Mr. Deepak S. Parekh Mr. Yezdi H. Malegam Mr. Darius C. Shroff Mr. Joe Kaeser / Dr. Otmar Schmitt (Alternate Director for Mr. Joe Kaeser) Dr. Armin Bruck From 1.06.2007 1.06.2007 1.06.2007 23.07.2007 1.06.2007 1.01.2008
During the Financial Year 2008-09, the Corporate Governance Committee Meeting was held on 30th April, 2009. All the members except Mr. K. Dadiseth attended the said Meeting.
63
36
Annual Report 2009
Siemens Green Facts
Siemens LEDs uses 80% less electricity than light bulbs and have a service life that is 50 times longer.
ii.
Investment Committee of Directors (Investment Committee) Composition Name From Mr. Deepak S. Parekh Mr. Yezdi H. Malegam Mr. Pradip V. Nayak Mr. Joe Kaeser / Dr. Otmar Schmitt (Alternate Director for Mr. Joe Kaeser) Mr. Patrick de Royer Mr. Sunil Mathur 23.07.2007 23.07.2007 23.07.2007 23.07.2007 23.07.2007 01.10.2008 Tenure To 31.12.2008 Chairman Member Member Member Member Member Position
The Investment Committee Meetings are held as and when required. During the Financial Year 2008-09, 4 Meetings were held on 24th November, 2008, 19th December, 2008, 9th January, 2009 and 23rd July, 2009. The role of the Committee includes reviewing guidelines for investing surplus funds of the Company, reviewing proposals of mergers and acquisitions, valuations, investment proposals and periodical monitoring of investments, authorizing negotiation of the terms and conditions of the various credit/?nancial facilities and carrying out such other function as may be delegated by the Board from time to time. IV. Committees of Management (Constituted by the Board of Directors) i. Share Transfer Committee (STC) Composition Name From Dr. Armin Bruck Mr. Sunil Mathur Mr. Patrick de Royer Mr. Ajai Jain 01.01.2008 01.10.2008 01.02.2006 01.08.2008 Tenure To 31.12.2008 Chairman Member Member Member and Secretary Position
The STC notes and takes on record the transfer / transmission / transposition of shares and consolidation / splitting of folios, issue of share certi?cates in exchange for sub-divided, consolidated, defaced, etc., as approved by the authorised of?cers of the Company. The STC also notes the dealings in the Shares by the designated employees under the Company’s Code of Conduct for Prevention of Insider Trading. The STC Meetings are held as and when required, usually fortnightly. 24 Meetings of the STC were held during the Financial Year 2008-09. ii. Finance Committee (FC) Composition Name From Mr. Sunil Mathur Dr. Armin Bruck Mr. Patrick de Royer Mr. Ajai Jain 01.10.2008 01.01.2008 01.02.2006 01.08.2008 Tenure To 31.12.2008 Chairman Member Member Member and Secretary Position
The FC authorises opening / closing of bank accounts, availing of credit facilities, giving of loans, intercorporate deposits, guarantees, investment in mutual funds, commodity hedging etc. The FC Meetings are held as and when required. 13 Meetings of the FC were held during the Financial Year 2008-09.
37
Siemens Ltd.
37
Annexure III to the Directors’ Report (continued)
Corporate Governance Report
iii.
Delegation of Powers Committee (DPC) Composition Name From Dr. Armin Bruck Mr. Patrick de Royer Mr. Sunil Mathur Mr. Ajai Jain 01.01.2008 01.02.2006 22.07.2008 01.08.2008 Tenure To 31.12.2008 Chairman Member Member Member and Secretary Position
The DPC issues / revokes Powers of Attorney, ?xes the procedures for signing authority, grants authority for various purposes to the employees, etc. The DPC Meetings are held as and when required. 10 Meetings of the DPC were held during the Financial Year 2008-09. V. Subsidiary companies The Company does not have any material non-listed Indian subsidiary whose turnover or net worth (i.e. Paid-up Capital and Free Reserves) exceeds 20% of the consolidated turnover or net worth respectively, of the Company and its subsidiaries in the immediately preceding accounting year ended on 30th September, 2009. The Company monitors the performance of its subsidiaries, inter alia, by the following means: • • • VI. The Financial Statements, in particular the investments made by the unlisted subsidiary companies, are reviewed by the Company’s Audit Committee as well as by the Board. The Minutes of Board Meetings of the subsidiaries are noted at the Board Meetings of the Company. Details of signi?cant transactions and arrangements entered into by the unlisted subsidiary companies are placed before the Company’s Board, as and when applicable.
Chief Executive Of?cer (CEO) and Chief Financial Of?cer (CFO) certi?cation As required by Clause 49 V of the Listing Agreement, the CEO and CFO certi?cation of the Financial Statements, the Cash Flow Statement and the Internal Control Systems for ?nancial reporting has been obtained from Dr. Armin Bruck (Managing Director / CEO) and Mr. Sunil Mathur (Executive Director / CFO).
VII.
Risk Management Framework The Company has in place a mechanism to inform the Board about the risk assessment and minimisation procedures and periodical review to ensure that management controls risk through means of a properly de?ned framework.
VIII.
Business Conduct Guidelines (BCGs) The Company has adopted BCGs as the Code of Conduct for Directors, including Non-executive Directors and Senior Management of the Company, as per the requirement of Clause 49 I D of the Listing Agreement. The Company has received con?rmations from all the Directors and Senior Management of the Company regarding compliance with the BCGs for the year ended on 30th September, 2009. A certi?cate from Dr. Armin Bruck, Managing Director, to this effect, is attached to this Report. The BCGs can be viewed on the website of the Company www.siemens.co.in.
IX.
Policy for Prevention, Detection and Investigation of Frauds and Protection of Whistleblowers (the Whistleblower Policy) The Company is committed to provide an open, honest and transparent working environment and seeks to eliminate fraudulent activities in its operations. To maintain high level of legal, ethical and moral standards and to provide a gateway for employees to report unethical behaviour and actual or suspected frauds, the Company has adopted the Whistleblower Policy with effect from 1st February, 2005, in line with Clause 7 of Annexure I D to Clause 49 of the Listing Agreement. No personnel have been denied access to the Audit Committee. The Whistleblower Policy broadly covers a detailed process for reporting, handling and investigation of fraudulent activities and providing necessary protection to the employees who report such fraudulent activities / unethical behaviour.
83
38
Annual Report 2009
Siemens Green Facts
Till date, Siemens has modernized 6,500 buildings worldwide. Their intelligent and integrated BMS systems have reduced CO2 emissions by 2.4 million metric tons, resulting in savings of more than 1 billion euros.
X.
Code of Conduct for Prevention of Insider Trading Pursuant to the requirements of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, as amended, the Company has adopted a Code of Conduct for Prevention of Insider Trading with effect from 1st August, 2002. Mr. Ajai Jain, Vice President (Legal) & Company Secretary, is the Compliance Of?cer. This Code of Conduct is applicable to all Directors and such identi?ed employees of the Company as well as of the group companies who are expected to have access to unpublished price sensitive information relating to the Company.
XI.
General Body Meetings a. Details of venue, date and time of the last three Annual General Meetings (AGM) held: Financial Year 2007-08 2006-07 2005-06 b. AGM No. 51st 50th 49th Venue Yashwantrao Pratishthan Auditorium Y. B. Chavan Centre General Jagannathrao Bhonsle Marg Nariman Point, Mumbai - 400 021 Day and Date Friday, 30th January, 2009 Thursday, 31st January, 2008 Thursday, 18th January, 2007 Time 3.00 p.m. 3.00 p.m. 3.30 p.m.
Special Resolutions passed at the last three AGM: i. At 51st AGM held on 30th January, 2009 – Approving Amendment to the Articles of Association of the Company pertaining to addition of new clause with respect to implementation of Siemens Internal Regulations. At 50th AGM held on 31st January, 2008 – (a) (b) iii. Approving Amendment to the Articles of Association of the Company pertaining to the Authorised Share Capital of the Company. Appointment of Ms. Mukta Paranjape, d/o Mr. Vijay V. Paranjape, Whole-time Director, to an of?ce or place of pro?t.
ii.
At 49th AGM held on 18th January, 2007 – Approving change in place of keeping Register and Index of Members, etc.
c. XII.
During the last Financial Year, no resolution was passed through Postal Ballot in accordance with Section 192A of the Companies Act, 1956. Transactions with related parties, as per requirements of Accounting Standard 18, are disclosed elsewhere in this Annual Report. The Company has not entered into any other transaction of a material nature with the Promoters, Directors or the Management, their subsidiaries or relatives, etc. that may have a potential con?ict with the interests of the Company at large. With regard to matters related to capital markets, the Company has complied with all requirements of the Listing Agreement as well as SEBI regulations and guidelines. No penalties were imposed or strictures passed against the Company by the Stock Exchanges, SEBI or any other statutory authority during the last three years in this regard. Disclosures have also been received from the senior managerial personnel relating to the ?nancial and commercial transactions in which they or their relatives may have a personal interest. However, none of these transactions have potential con?ict with the interests of the Company at large. The Quarterly / Annual Financial Results of the Company are published in the Business Standard and Navshakti. The following are also promptly displayed on the Company’s website www.siemens.co.in: Financial Results, Shareholding Pattern, Annual Report and the Presentations, as and when made, to the media and analysts in the ‘Investor Relations’ Section.
39
Disclosures a. b.
c.
d.
XIII. Means of Communication a. b.
Siemens Ltd.
39
Annexure III to the Directors’ Report (continued)
Corporate Governance Report
c.
Of?cial press releases in the ‘Press’ Section. Letters / intimation to Stock Exchanges in the ‘Notices for Corporate Development’ Section under the ‘Investor Relations’ Section.
Information about the Financial Results, Shareholding Pattern, and other speci?ed details are now electronically ?led through the Corporate Filing and Dissemination System (CFDS) as required under the Listing Agreement. Investors can view this information by visiting the website www.corp?ling.co.in. The Management’s Discussion and Analysis forms part of the Directors’ Report as Annexure II.
d.
XIV. General Shareholder Information ‘General Shareholder Information’ forms part of the Directors’ Report as Annexure IV. XV. Status of compliance with non-mandatory requirements 1. 2. 3. The Company has constituted a Remuneration Committee of Directors comprising of Non-executive and Independent Directors. As mentioned earlier, the Company has adopted Whistleblower Policy. The Company is in the regime of unquali?ed ?nancial statements.
On behalf of the Board of Directors For Siemens Ltd.
Deepak S. Parekh Chairman Mumbai Monday, 30th November, 2009 Declaration by the Managing Director under Clause 49 of the Listing Agreement regarding compliance with Business Conduct Guidelines (Code of Conduct) In accordance with Clause 49 I D of the Listing Agreement with the Stock Exchanges, I hereby con?rm that all the Directors and the Senior Management personnel of the Company have af?rmed compliance with the Business Conduct Guidelines (Code of Conduct), as applicable to them, for the Financial Year ended on 30th September, 2009. For Siemens Ltd.
Dr. Armin Bruck Managing Director Mumbai Thursday, 26th November, 2009
04
40
Annual Report 2009
Siemens Green Facts
Siemens Power Management Systems optimizes the use of energy. These systems can reduce energy costs by upto 20% and the associated improvements in ef?ciency reduce CO2 emissions by about 10%.
Certi?cation by the Chief Executive Of?cer (CEO) and Chief Financial Of?cer (CFO) under Clause 49 of the Listing Agreement To the Board of Directors of Siemens Ltd., Dear Sirs, a) We have reviewed the ?nancial statements and the cash ?ow of Siemens Ltd. (‘the Company’) for the year ended 30 September, 2009 and to the best of our knowledge and belief: i.) ii.) b) c) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
There are, to the best of our knowledge and belief, no transactions entered into between the Company during the year which are fraudulent, illegal or violative of the Company’s code of conduct. We accept responsibility for establishing and maintaining internal controls for ?nancial reporting. We have evaluated the effectiveness of internal control systems of the Company and have disclosed to the Auditors and the Audit Committee, de?ciencies in the design or operation of internal controls, if any and steps taken or proposed to be taken for rectifying these de?ciencies. We have indicated to the Auditors and the Audit Committee: i.) ii.) iii.) Signi?cant changes in the internal control over ?nancial reporting during the year; Signi?cant changes in accounting policies during the year and that the same have been disclosed suitably in the notes to the ?nancial statements; Instances of signi?cant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a signi?cant role in the Company’s internal control systems over ?nancial reporting.
d)
Yours truly
Sunil Mathur Executive Director / CFO Mumbai Thursday, 26th November, 2009
Dr. Armin Bruck Managing Director / CEO
41
Siemens Ltd.
41
Certi?cate of Compliance To The Members of Siemens Limited We have examined the compliance of conditions of corporate governance by Siemens Limited (‘the Company’), for the year ended on September 30, 2009, as stipulated in clause 49 of the Listing Agreement of the said Company with stock exchanges. The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the ?nancial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the Company nor the ef?ciency or effectiveness with which the management has conducted the affairs of the Company. For S. R. Batliboi & Associates Chartered Accountants
per Sudhir Soni Partner Membership No.:41870 Mumbai November 30 2009
24
42
Annual Report 2009
Annexure IV to the Directors’ Report
General Shareholder Information
(As required by Clause 49 of the Listing Agreement entered into with the Stock Exchanges)
1.
52nd Annual General Meeting Day, date and time Venue Friday, 29th January, 2010 at 3.00 P.M. Nehru Centre Auditorium, Dr. Annie Besant Road, Worli, Mumbai - 400 018.
2.
Financial Calendar The Company follows the period of 1st October to 30th September, as the Financial Year. For the Financial Year 2009-10, Financial Results will be announced as per the following tentative schedule: 1st quarter ending 31st December, 2009 2 quarter ending 31 March, 2010 3rd quarter ending 30th June, 2010 Year ending 30 September, 2010
th nd st
Last week of January, 2010 Last week of April, 2010 Last week of July, 2010 Last week of November, 2010
3.
Book Closure The Company’s Register of Members and Share Transfer Books will remain closed from Thursday, 21st January, 2010 to Friday, 29th January, 2010 (both days inclusive).
4. 5.
Dividend Dividend will be paid on or before Wednesday, 24th February, 2010. Listing on Stock Exchanges The Equity Shares of the Company are listed on the following premier Stock Exchanges of India having nation-wide trading terminals: Bombay Stock Exchange Ltd. (BSE) Phiroze Jeejeebhoy Towers Dalal Street, Mumbai - 400 001 National Stock Exchange of India Ltd. (NSE) Exchange Plaza, Plot No. C/1 G Block, Bandra - Kurla Complex Bandra (E), Mumbai - 400 051
The Company has paid the listing fees for the Financial Year 2009-10 to the aforesaid Stock Exchanges. With effect from 27th June, 2006, the Company forms part of “S&P CNX Nifty Index” of NSE. S&P CNX Nifty represents the shares of 50 elite companies in the Country from across 21 sectors of the Economy. BSE has permitted trading of the Company’s Shares in the ‘A Group’. The Company’s Shares are also available for trading in the Futures & Options segment. The market lot for trading in the Company’s Shares in this segment is 752. 6. Stock Code / Symbol BSE NSE Reuters Bloomberg International Securities Identi?cation Number (ISIN) Corporate Identity Number (CIN) - allotted by the Ministry of Corporate Affairs 7. Custodial Fees to Depositories The annual custodial fees for the Financial Year 2009-10 has been paid to National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL).
43
500550 SIEMENS EQ SIEM.BO / SIEM.NS SIEM:IN INE003A01024 L28920MH1957PLC010839
Siemens Ltd.
43
Annexure IV to the Directors’ Report (continued)
General Shareholder Information
8.
Market Price Data (1) The market price and volume of the Company’s Shares traded on BSE and NSE during each month of the last Financial Year from 1st October, 2008 to 30th September, 2009 are as follows: Face Value of Share of Rs. 2 each BSE High Rs. October 2008 November 2008 December 2008 January 2009 February 2009 March 2009 April 2009 May 2009 June 2009 July 2009 August 2009 September 2009 (2) 418.40 339.00 294.00 322.00 236.20 274.80 329.75 502.40 527.80 541.20 521.60 574.40 Low Rs. 210.00 215.10 214.00 186.20 195.00 190.35 255.30 296.00 409.45 375.50 426.00 485.10 Volume Nos. 3,984,510 5,918,178 5,136,035 6,313,041 5,178,005 5,172,145 5,291,695 4,790,651 3,276,157 3,238,710 2,525,996 2,065,767 High Rs. 418.00 337.30 294.05 321.50 236.40 274.80 330.50 502.80 538.20 557.40 522.00 579.00 NSE Low Rs. 206.10 212.70 212.80 186.35 193.50 191.20 255.10 314.10 447.50 376.00 420.05 485.00 Volume Nos. 13,133,604 17,656,113 14,316,370 17,975,599 16,685,881 15,281,711 17,164,052 17,640,683 12,887,178 13,888,132 12,088,192 8,597,887
Company’s closing share price movement during the Financial Year 2008-09 on BSE and NSE vis-à-vis respective indices:
44
44
Annual Report 2009
Siemens Green Facts
Till date, around 6400 Siemens Wind Turbines with a peak capacity of 5700 MW save over 8 million metric tones of CO2 a year.
9.
Distribution of Shareholding as on 30th September, 2009 Number of Shares held (Face Value of Rs.2 each) 1-500 501-1000 1001-2000 2001-3000 3001-4000 4001-5000 5001-10000 10001 & above Total Shareholders Number 175,690 7,253 4,677 2,117 1,266 600 978 761 193,342 % of total 90.87 3.75 2.42 1.10 0.65 0.31 0.51 0.39 100.00 Number 10,747,156 5,577,256 7,047,203 5,361,173 4,497,151 2,777,186 6,845,127 294,307,948 337,160,200 Shares % of total 3.19 1.66 2.09 1.59 1.33 0.82 2.03 87.29 100.00
10.
Shareholders’ Pro?le as on 30th September, 2009
No. of shareholders as on 30th September
2009 193,342
2008 200,389
45
Siemens Ltd.
45
Annexure IV to the Directors’ Report (continued)
General Shareholder Information
11.
Top Ten Shareholders of the Company as on 30th September, 2009 Sr. No. 1 2 3 4 5 Name of the Shareholder Category Number of Shares of Rs.2 each 186,041,090 46,215,233 4,813,981 2,825,160 3,999,638 % of total Capital * 55.18 13.71 1.43 0.84 1.19
Siemens Aktiengesellschaft, Germany Life Insurance Corporation of India HDFC Standard Life Insurance Company Ltd. Bharat Bijlee Ltd. Reliance Capital Trustee Co. Ltd. A/C Reliance Diversi?ed Power Sector Fund General Insurance Corporation of India Azim Hasham Premji Bajaj Allianz Life Insurance Company Ltd. National Insurance Company Ltd. The New India Assurance Company Ltd. Total
Promoter Financial Institution Body Corporate Body Corporate Mutual Fund
6 7 8 9 10
Financial Institution Resident Individual Body Corporate Financial Institution Financial Institution
2,369,890 2,273,018 1,768,170 1,450,530 1,314,530 253,071,240
0.70 0.67 0.52 0.43 0.39 74.06
* Total Paid-up Share Capital is Rs. 674,320,400 comprising of 337,160,200 Equity Shares of Rs.2 each. 12. Dematerialisation of Shares & Liquidity The details of Equity Shares dematerialised and those held in physical form as on 30th September, 2009 are given hereunder: Particulars of Equity Shares Equity Shares of Rs.2 each Number Dematerialised form NSDL CDSL Sub-total Physical Form Total 322,839,069 7,025,438 329,864,507 7,295,693 337,160,200 95.75* 2.09 97.84* 2.16 100 138,527 44,888 183,415 9,927 193,342 71.65* 23.22 94.87* 5.13 100 % of total Shareholders Number % of total
* Including 55.18% holding of Siemens AG, Germany. Considering the advantages of dealing in securities in electronic / dematerialised form, Shareholders still holding Shares in physical form are requested to dematerialise their Shares at the earliest. For further information / clari?cation / assistance in this regard, please contact TSR Darashaw Ltd., (TSRDL) Registrar and Share Transfer Agent. As per the directions of SEBI, Equity Shares of the Company can be traded by all the investors only in dematerialised form. The Company’s Shares are actively traded on BSE and NSE.
64
46
Annual Report 2009
Siemens Green Facts
The Siemens lightweight metro vehicles, with their efficient automation and intelligent management systems, are environment friendly and consume 30% less energy than vehicles used previously.
13.
Registrar and Share Transfer Agent Share transfers, dividend payment and all other investor related matters are attended to and processed by TSRDL. TSR Darashaw Ltd. 6-10, Haji Moosa Patrawala Industrial Estate 20, Dr. E. Moses Road Mahalaxmi, Mumbai – 400 011 Time: 10 a.m. to 3.30 p.m. (Monday to Friday) Phone: +91 (22) 6656 8484 Fax: +91 (22) 6656 8494 Email: [email protected] Website: www.tsrdarashaw.com For the convenience of shareholders based in the following cities, transfer documents and letters will also be accepted at the following Branch Of?ces of TSRDL: • TSR Darashaw Ltd. 503 Barton Centre, 5th Floor 84, M G Road Bangalore - 560 001 Phone:+91 (80) 2532 0321 Fax:+ 91 (80) 2558 0019 Email: [email protected] • TSR Darashaw Ltd. Plot No 2/42, Sant Vihar, Ansari Road, Daryaganj New Delhi - 110 002 Phone:+ 91 (11) 2327 1805 Fax:+91 (11) 2327 1802 Email: [email protected] • Shah Consultancy Services Pvt. Ltd Agents : TSR DARASHAW LIMITED 3, Sumatinath Complex, Pritam Nagar, Akhada Road Ellisbridge Ahmedabad - 380 006 Telefax:+ 91 (79) 2657 6038 Email:[email protected] • TSR Darashaw Ltd. Tata Centre 1st Floor, 43, Jawaharlal Nehru Road Kolkata - 700 071 Phone:+91 (33) 2288 3087 Fax:+91 (33) 2288 3062 Email: [email protected] • TSR Darashaw Ltd. Bungalow No. 1, 'E' Road Northern Town, Bistupur Jamshedpur - 831 001 Phone:+ 91 (657) 2426 616 Fax:+91 (657) 2426 937 Email: [email protected]
14.
Share Transfer System Documents for transfer of shares in physical form can be lodged with TSRDL at its registered address or at any of the above mentioned branch of?ces. The transfers are normally processed within 20-23 days from the date of receipt, if the documents are complete in all respects.
47
Siemens Ltd.
47
Annexure IV to the Directors’ Report (continued)
General Shareholder Information
15.
Plant Locations Location Maharashtra Aurangabad Works Nashik Works Kalwa Works Transformer Works Kalwa E-76, Waluj, MIDC Area, Aurangabad – 431 136 Plot No. C-1, Additional Industrial Area, MIDC, Ambad, Nashik - 422 010 Post Box No.85, Thane - Belapur Road, Thane - 400 601 Post Box No.8, Airoli Post Of?ce, Thane-Belapur Road, Airoli, Navi Mumbai – 400 708 Address
Goa Goa Works Gujarat Vadodara Works Andhra Pradesh Hyderabad Works Karnataka Bangalore Works 16. Address for correspondence Registered and Corporate Of?ce: Siemens Ltd. 130, Pandurang Budhkar Marg Worli, Mumbai - 400 018, India Phone: +91 (22) 2498 7000 Fax: +91 (22) 2498 7500 Website: www.siemens.co.in Investor Relations Team: Contact Person: Ms. Sheetal Vyas Email: [email protected] Phone: +91 (22) 2498 7173 Fax: +91 (22) 2498 7043 Time: 10 a.m. to 12 noon and 2 p.m. to 4 p.m. on all working days of the Company. (Saturday and Sunday closed). The Investor Relations Team of the Legal Department is located at the Registered Of?ce. For the convenience of our investors, transfer requests, etc. are accepted at the Registered Of?ce also.
84
L-6, Verna Industrial Area, Panjim-Margao Highway, Verna – 403 722
Maneja Village, Opp. Makarpura Railway Station, Vadodara – 390 013
Plot No. 89 & 90, IDA, Gandhinagar, Post Balanagar, Hyderabad – 500 037
Devanahalli Road, Off Old Madras Road, Virgonagar Post, Bangalore - 560 049
48
Annual Report 2009
Siemens Green Facts
The prestigious ‘BEE’ certi?ed Siemens Motors help minimise energy consumption, increase productivity and reduce cost of ownership.
17.
Other Corporate Information Bankers Citibank N. A. Deutsche Bank AG HDFC Bank Ltd. The Hongkong and Shanghai Banking Corporation Ltd. Standard Chartered Bank State Bank of India Auditors S. R. Batliboi & Associates Cost Auditors R. Nanabhoy & Co.
On behalf of the Board of Directors For Siemens Ltd.
Deepak S. Parekh Chairman Mumbai Monday, 30th November, 2009 Note: The information given hereinabove is as of date unless otherwise stated.
49
Siemens Ltd.
49
Corporate Social Directors’ Report Responsibility
Corporate Social Responsibility forms an integral part of the Company’s corporate principles and business philosophy. As a company with a strong sense of values and commitment, Siemens believes that pro?tability must go hand in hand with a sense of responsibility towards employees, stakeholders and the society. The basic aim is to play a positive role towards the advancement of the society. During the last ?scal, Siemens supported various social causes with active participation from employees. St. Catherine’s Home, Mumbai Siemens has been associated with St. Catherine’s Home, a primary school and orphanage for street children, at Bandra, Mumbai for over seven years. The objective is to provide a normal childhood to the 210 vulnerable children resident at St. Catherine’s. So far Siemens has adopted three batches of 115 children and contributes towards their boarding and educational expenses on a yearly basis. As part of these efforts, the company has undertaken refurbishment work and upgradation of infrastructure. This year, enthusiastic employee volunteers also celebrated the Republic day along with the children. An Adventure cum Arts camp was organized for the children to encourage their athletic and artistic skills. Like every year, to take care of the children’s recreational and emotional needs, the company organized a picnic to Water Kingdom wherein the employees actively participated. A special ‘Teachers day’ workshop for care givers and teachers of the children was also arranged. Another important initiative supported by Siemens is ‘Happy Feet’, wherein dance is combined with counseling and life skills education. Happy Feet provides children with opportunities to channelize their troubled energies into constructive and aesthetic expressions and addresses their psychosocial concerns in an interactive and interpretive manner. Tsunami Rehabilitation
Community joined hands with Srinivasan Services Trust, a reputed NGO and adopted 4 villages in the worst affected regions of Nagapattinam and Kanyakumari districts. The rehabilitation plan covers ?ve areas, namely Healthcare, Housing, Education, providing livelihood opportunities and Rural Development. After four years of initiating this program, all the activities are well under way. Each of the four medical and social centers in the villages has one fulltime doctor, a nurse and an attendant with around 4050 patients visiting every day. The medical centers conduct anemia camps and women are made aware about issues like nutrition, child-care, etc. through regular training sessions conducted at the social center. Camps monitoring nutrition and health of the children are also conducted regularly. The Infant Mortality Rate & Maternal Mortality Rate in all 4 villages is 0%. So far, around 122,000 patients have been treated. The housing project has been completed and all the 139 houses have been handed over to the bene?ciaries. These houses have been specially designed to suit coastal climactic conditions and are located at a safe distance from the coastline. The refurbishment of schools, construction of toilets and additional classrooms has been completed in all the villages and programs like adult literacy, computer training and coaching for weak learners are in progress. About 1030 adults can now read and write. With a view to provide livelihood opportunities, the women are trained for making various decorative and utility items like candles, soap, etc and unemployed youth members are trained for computer operations, of?ce administration and automobile repairs. Over 1480 women and the youngsters have already started earning income in the range of Rs.800/- to Rs.3,000/every month. The Rural development program focuses on maintaining cleanliness in the villages and activities like setting up kitchen gardens, soak pits and compost yards. So far, 4700 kitchen yards, 186 soak pits and 1540 individual compost pits have been set up. 3 out of 4 adopted villages were selected for the ‘Nirmal Gram Puraskar Award-2008’ by the Government of India for their outstanding performance on total sanitation. The long-term goal of the project is to lift 80 % of the people in the adopted villages above the poverty line. Seva Chakkara Ashrama, Chennai Siemens has partnered with Seva Chakkara Orphanage, a registered NGO in Chennai, which houses 84 boys and girls from different backgrounds such as street children, children of single parent, etc. Led by the Siemens Information Processing Services Ltd. (SIPS), the objective of this initiative is to provide a normal childhood to the children. Associated with the project since two years, Siemens has adopted 15 children by taking over their education and boarding expenses. As part of these efforts, the company has also undertaken refurbishment work and up gradation of infrastructure such Annual Report 2009
Realizing the need for long-term rehabilitation for the Tsunami victims, Siemens along with the German Business
05
50
Siemens Green Facts
Siemens IGBT equipment help save more than 30% energy for the Mumbai Suburban railways.
as painting of the building, refurbishment of the classrooms, washrooms, Kitchen renovations, setting a medical unit, etc. The enthusiastic and involved employee volunteers of Siemens Chennai visit the Ashrama frequently and spend quality time with the children celebrating various festivals and picnics/outings with the children. Equal employment opportunity for the Differently Abled Siemens, on a proactive basis, has undertaken an initiative of providing equal opportunities for the differently abled persons. Siemens Information Processing Services (SIPS), a division of Siemens, in co-ordination with Ability Foundation, an NGO, invites candidates who are physically challenged. The applicants go through an online assessment test that helps evaluate the Candidate’s Aptitude and skills. The selected candidates are employed on basis of merit and treated on par with other employees at the work place. The company ensures that the employees are provided with a suitable physical infrastructure and conducive working environment. SIPS presently employs 35 personnel who are differently abled and have graduated from different streams like commerce, science and engineering. They have been hired for processes like Transaction, Finance and Accounting. Akshar Trust, Vadodara As a leading company engaged in the business of hearing instruments, Siemens understands and empathizes with the needs of the hearing impaired. Siemens has been associated with Akshar Trust, a school for Hearing Impaired children based in Vadodara since two years. Siemens Ltd. and Siemens Hearing Instruments Ltd. made a joint donation of specially molded hearing instruments to 20 underprivileged students of the Akshar Trust last year. Since Akshar trust had shifted to a new location, as an expression of involvement, Siemens
decided to support the paint work of the school building. On January 22, 2009, enthusiastic Siemens Vadodara employees painted the school building into a livelier place. Tree Planting Initiative, Chennai As Siemens is deeply committed to sound environmental practices, it has adopted the issue of protecting the environment as one of the CSR objectives. An employee driven initiative was designed by Siemens for creating awareness amongst employees and the society about preservation of trees and the hazardous consequences of stationary, water and energy wastage. This initiative is being implemented with the NGO partner, Nizhal that spreads awareness about issues related to environment and trees in urban areas. As part of the project, employee volunteers have undertaken 4 tree walks in Chennai, conducted Tree surveys in the Gandhi Nagar area in Chennai and sensitized 5 schools in the area on conservation of trees.
51
Siemens Ltd.
51
Siemens Limited Fiftysecond Annual Report for the year ended 30 September 2009
65
56
Annual Report 2009
Auditors’ Report to the Members of Siemens Limited
1.
We have audited the attached balance sheet of Siemens Limited (‘the Company’) as at September 30, 2009 and also the pro?t and loss account and the cash ?ow statement for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters speci?ed in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; The balance sheet, pro?t and loss account and cash ?ow statement dealt with by this report are in agreement with the books of account;
iv.
In our opinion, the balance sheet, pro?t and loss account and cash ?ow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. On the basis of the written representations received from the directors, as on September 30, 2009 and taken on record by the Board of Directors, we report that none of the directors is disquali?ed as on September 30, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; a) in the case of the balance sheet, of the state of affairs of the Company as at September 30, 2009; in the case of the pro?t and loss account, of the pro?t for the year ended on that date; and in the case of cash ?ow statement, of the cash ?ows for the year ended on that date.
v.
2.
vi.
3.
b)
4.
c)
ii.
For S.R. BATLIBOI & ASSOCIATES Chartered Accountants per Sudhir Soni Partner Membership No.:41870 Place: Mumbai Date: November 26, 2009
iii.
57
Siemens Ltd.
57
Annexure to the Auditors’ Report
(i)
(a)
The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets. The Company has a regular programme of physical veri?cation of its ?xed assets by which all ?xed assets are veri?ed in a phased manner over a period of three years. In our opinion, this periodicity of physical veri?cation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such veri?cation. There was no substantial disposal of ?xed assets during the year. (vii) The management has conducted physical veri?cation of inventory at reasonable intervals during the year. The procedures of physical veri?cation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical veri?cation.
(b)
business, for the purchase of inventory and ?xed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. (v) According to the information and explanations provided by the management, there are no particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained under Section 301 of the Act. The Company has not accepted any deposits from the public. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
(vi) (c)
(ii)
(a)
(b)
(c)
(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956, in respect of electrical motors and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. (ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, or employees’ state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees’ state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows: Annual Report 2009
(iii)
As informed, the Company has not granted any loans, secured or unsecured to companies, ?rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, sub-clause (b), (c) and (d) are not applicable. As informed, the Company has not taken any loans, secured or unsecured from companies, ?rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, sub-clause (f) and (g) are not applicable. (b)
(iv)
In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and ?xed assets are for the Company’s specialised requirements and similarly certain goods sold are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its
85
(c)
58
Name of the Statute Central Excise Act, 1944 and Service Tax
Nature of dues Duty and Penalty
Amount (Rs.'000) 670 65,609 324
Period to which the amount relates 1993-96, 1998-99, 2000-02, 2007-08 1980-81, 1988-90, 1991-93, 1994-98, 2001-06, 2006-08 1991-1995 1967-69, 1970-71, 1972-74, 1979-90, 1991-94, 1998-09 1974-78, 1987-88, 1992-93, 1995-97, 1999-02, 2002-07 1986-87, 1989-91, 1992-04 1984-85, 1993-97, 2000-01, 2003-04, 2005-07 1998-99
Forum where the dispute is pending Commissioner (Appeals) Customs, Excise, Service tax Appellate Tribunal High Court Assistant Commissioner
State & Central Sales Tax Acts, Works Contract Tax Acts, Entry Tax
Tax, Interest and Penalty
71,956
145,776 33,510 50,426 Customs Act, 1962 (x) Duty 120,000
Deputy Commissioner Sales Tax Tribunal High Court High Court
The Company has no accumulated losses at the end of the ?nancial year and it has not incurred cash losses in the current and immediately preceding ?nancial year. The company did not have any borrowings from ?nancial institutions, bank or by way of debentures during the year. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
on short-term basis have been used for long-term investment. (xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956. (xix) The Company did not have any outstanding debentures during the year. (xx) The company has not raised any money by way of public issues during the year.
(xi)
(xii)
(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual bene?t fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company. (xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company. (xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or ?nancial institutions.
(xxi) According to the information and explanations given to us, the Company has noticed and reported certain instances of frauds relating to theft by third party and employees amounting to Rs 14,019 thousand. The investigations relating to these cases are either closed or in progress and the amounts have been recovered or the Company is covered by insurance. According to the information and explanations given to us, no fraud by the Company has been noticed or reported during the year. For S.R. BATLIBOI & ASSOCIATES Chartered Accountants per Sudhir Soni Partner Membership No.: 41870 Place: Mumbai Date: November 26, 2009
(xvi) The Company did not have any term loans outstanding during the year. (xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised
59
Siemens Ltd.
59
Balance sheet as at 30 September 2009 (Currency : Indian rupees thousands)
Schedule SOURCES OF FUNDS Shareholders' funds Share capital Reserves and surplus 5 6 674,320 28,491,887 29,166,207 674,320 20,016,524 20,690,844 2009 2008
Loan funds Unsecured loans
7
5,906 29,172,113
10,614 20,701,458
APPLICATION OF FUNDS Fixed assets Gross block Accumulated depreciation/ amortisation Net block Capital work-in-progress including capital advances 8 11,347,774 (5,052,761) 6,295,013 1,057,018 7,352,031 9 10 11 12 13 14 4,769,723 1,119,126 9,721,971 34,583,115 14,449,022 10,457,640 69,211,748 9,910,985 (4,339,333) 5,571,652 870,136 6,441,788 5,236,464 910,247 7,621,143 34,327,991 9,130,895 6,312,513 57,392,542
Investments Deferred tax asset, net Current assets, loans and advances Inventories Sundry debtors Cash and bank balances Loans and advances Current liabilities and provisions Current liabilities Provisions Net current assets
15 16
(40,585,370) (12,695,145) (53,280,515) 15,931,233 29,172,113
(42,663,570) (6,616,013) (49,279,583) 8,112,959 20,701,458
Signi?cant accounting policies Schedules to the ?nancial statements
1 2 - 36
The schedules referred to above form an integral part of the balance sheet. As per our report of even date.
For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors of Siemens Limited Deepak S. Parekh Dr. Armin Bruck Sunil Mathur Yezdi H. Malegam per Sudhir Soni Partner Membership No: 41870 Mumbai 26 November 2009
06
Ajai Jain Mumbai 26 November 2009
Chairman Managing Director Executive Director Director & Chairman of Audit Committee Vice President (Legal) & Company Secretary
60
Annual Report 2009
Pro?t and loss account for the year ended 30 September 2009 (Currency : Indian rupees thousands)
Schedule INCOME Sales and services (gross) Excise duty Sales and services (net) Commission income Interest income Other operating income, net Other income 17 18 19 85,554,114 (2,186,779) 83,367,335 520,410 83,887,745 523,002 697,219 2,341,188 87,449,154 85,588,746 (3,085,118) 82,503,628 451,826 82,955,454 471,937 621,790 67,214 84,116,395 2009 2008
EXPENDITURE Cost of sales and services Personnel costs Depreciation/amortisation Interest Expense Other costs, net Pro?t before tax before exceptional income Exceptional income: - Pro?t on sale of investments in subsidiaries - Pro?t on sale of Building Technologies division - Pro?t on sale of Automotive division Pro?t before tax Consists of: - Discontinued operations - Continuing operations Provision for tax Current tax Deferred tax credit/(charge) Fringe bene?t tax Pro?t after tax Consists of: - Discontinued operations - Continuing operations Pro?t available for appropriation Appropriations: Proposed dividend Tax on proposed dividend Net de?cit on account of amalgamation of erstwhile Siemens Industrial Turbomachinery Services Private Ltd. Transfer to general reserve Earnings per share ('EPS') (Equity share of face value Rs 2 each) - Basic and diluted Signi?cant accounting policies Schedules to the ?nancial statements The schedules referred to above form an integral part of the pro?t and loss account. As per our report of even date. For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors of Siemens Limited Deepak S. Parekh Chairman Dr. Armin Bruck Managing Director Sunil Mathur Executive Director Yezdi H. Malegam Director & Chairman of Audit Committee Ajai Jain Vice President (Legal) & Company Secretary Mumbai 26 November 2009
61
20 21 8 22
63,976,912 5,498,989 777,794 58,772 4,877,553 75,190,020 12,259,134
67,730,513 4,475,751 637,344 40,535 3,560,352 76,444,495 7,671,900 10,635 1,235,151 8,917,686 8,232 8,909,454 8,917,686 (3,493,161) 629,037 (120,296) 5,933,266 5,434 5,927,832 5,933,266 1,011,481 171,901 172,640 4,577,244 5,933,266
3
2,059,459 14,318,593
4
14,318,593 14,318,593 (4,007,464) 208,879 (71,500) 10,448,508
4
10,448,508 10,448,508 1,685,801 286,502 8,476,205 10,448,508
2
34 1 2 - 36
30.99
17.60
per Sudhir Soni Partner Membership No: 41870 Mumbai 26 November 2009
Siemens Ltd.
61
Cash ?ow statement for the year ended 30 September 2009 (Currency : Indian rupees thousands)
Cash ?ow from operating activities Pro?t before tax Adjustments for: Interest expense Bad debts Provision for doubtful debts/advances, net Depreciation and amortisation Pro?t on sale of ?xed assets, net Pro?t on sale of long term investment (equity shares in Siemens Information Systems Ltd.) Pro?t on sale of long term investment (equity shares in Siemens Information Processing Systems Ltd.) Pro?t on sale of Building Technologies division Pro?t on sale of Automotive division Sale of lease rights Pro?t on sale of Electronics Assembly Division Unrealised exchange gain, net Interest income Dividend income Operating pro?t before working capital changes Increase in inventories Increase in sundry debtors and other receivables Increase in sundry creditors and other current liabilities Increase in provisions Net change in working capital Cash generated from operations Direct taxes paid, net Net cash provided by operating activities of which discontinued operations of which continuing operations Cash ?ow from investing activities Purchase of ?xed assets Proceeds from sale of ?xed assets Purchase of investments - In subsidiary companies (total consideration is in cash or cash equivalent) - In mutual funds Sale of investments - In subsidiary company (total consideration is in cash or cash equivalent) - In mutual funds Dividend received - From subsidiary company - From mutual funds Interest received Inter corporate deposits placed Inter corporate deposits received back Sale of Automotive division (total consideration is in cash or cash equivalent) Sale of lease rights (total consideration is in cash or cash equivalent) Sale of EA business (total consideration is in cash or cash equivalent) Cash generated from investing activities of which discontinued operations of which continuing operations Cash ?ow from ?nancing activities Interest paid Dividend paid (including tax thereon) Repayment of long term borrowings Net cash used in ?nancing activities of which discontinued operations of which continuing operations Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents acquired on merger of SITS Cash and cash equivalents on demerger of the Automotive division Effect of exchange gain/(loss) on cash and cash equivalents Cash and cash equivalents at the end of the year
Schedule
2009
14,318,593
2008
8,917,686 40,535 34,943 311,643 637,344 (259,256) (10,635) (1,235,151) (232,046) (471,937) (67,214) 7,665,912 (396,396) (10,521,707) 11,000,201 1,138,892 1,220,990 8,886,902 (3,969,992) 4,916,910 (104,951) 5,021,861 (1,946,909) 290,309 (250,000) (962,215) 744,889 67,214 482,513 (750,000) 325,000 1,700,000 (299,199) (42,358) (256,841) (20,535) (945,555) (4,709) (970,799) (970,799) 3,646,912 4,636,219 114,609 76,492 656,663 9,130,895
22 22 8 18
58,772 246,216 (121,563) 777,794 (238,276) (1,942,882) (116,577)
4 4
17 19
4
(78,000) (30,307) (1,027,379) (523,002) (2,232,881) 9,090,508 (2,100,828) (1,261,079) (1,862,579) 5,233,690 9,204 9,099,712 (5,631,333) 3,468,379 3,468,379 (1,708,871) 258,268 (1,700,999) 3,021,459 1,205,740
19 19
4
4
2,229,459 3,422 520,377 (10,845,000) 9,050,000 78,000 28,150 2,140,005 2,140,005 (2,251) (1,180,526) (4,708) (1,187,485) (1,187,485) 4,420,899 9,130,895 897,228 14,449,022
4
2 4 13
Note: Cash and cash equivalents at the end of the period include current account balances with banks of Rs 13,863 (2008: Rs 11,007) which are restricted in use.
As per our report of even date.
For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors of Siemens Limited Deepak S. Parekh Chairman Dr. Armin Bruck Managing Director Sunil Mathur Executive Director Yezdi H. Malegam Director & Chairman of Audit Committee Ajai Jain Vice President (Legal) & Company Secretary Mumbai 26 November, 2009
per Sudhir Soni Partner Membership No: 41870 Mumbai 26 November, 2009
26
62
Annual Report 2009
Schedules to the ?nancial statements for the year ended 30 September 2009 (Currency : Indian rupees thousands)
1. 1.1 Signi?cant accounting policies Basis of preparation of ?nancial statements The ?nancial statements are prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the accounting standards speci?ed in the Companies (Accounting Standards) Rules 2006, issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards (‘NACAS’) and relevant provisions of Companies Act, 1956 (‘the Act’), to the extent applicable. 1.2 Use of estimates The preparation of ?nancial statements in conformity with generally accepted accounting principles (‘GAAP’) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the ?nancial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods. 1.3 Fixed assets and depreciation Fixed assets are stated at acquisition or revalued amounts less accumulated depreciation. The cost of ?xed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Depreciation is provided on the straight-line method (‘SLM’). The depreciation rates prescribed in Schedule XIV to the Act are considered as the minimum rates. If the management’s estimate of the useful life of a ?xed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is shorter than that envisaged in the aforesaid Schedule, depreciation is provided at a higher rate based on the management’s estimate of useful life/ remaining life. The key ?xed asset blocks and related annual depreciation rates, which in management’s opinion re?ect the estimated useful economic lives of the ?xed assets, are: Asset Rate Land - Freehold land - Lease hold Over the lease period Buildings - Factory buildings 3.34% - Other buildings 2-2.5% Plant and machinery - Assets at project sites Over the life of the project - Special machine tools 10% - Other plant and machinery 10-25% Furniture, ?ttings and of?ce equipment 20%-33.33% Vehicles 25% Where depreciable assets are revalued, depreciation is provided on the revalued amount and the additional depreciation on accretion to assets on revaluation is transferred from revaluation reserve to the pro?t and loss account. Assets costing less than Rs 5,000 are fully charged to the pro?t and loss account in the year of acquisition. Items of ?xed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and estimated net realizable value and are disclosed separately in the ?nancial statements. Any expected loss is recognised in the pro?t and loss account through an accelerated depreciation charge. Capital work-in-progress includes the cost of ?xed assets that are not ready to use at the balance sheet date and advances paid to acquire capital assets before the balance sheet date. 1.4 Intangible assets Intangible assets comprise goodwill and technical know-how. These intangible assets are amortised on straight-line basis based on the following useful lives, which in management’s estimate represents the period during which economic bene?ts will be derived from their use: Asset Useful life Goodwill 60 months Technical know-how 60 – 84 months
63
Siemens Ltd.
63
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
1.5 Impairment of assets The Company assesses at each balance sheet date whether there is any indication that an asset or a group of assets (cash generating unit) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or cash generating unit. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash ?ows are discounted to the present value at the weighted average cost of capital. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the pro?t and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is re?ected at the recoverable amount subject to a maximum of depreciable historical cost had no impairment been recognised. 1.6 Investments Investments that are readily realizable and intended to be held but not more than a year are classi?ed as current investments. All other investments are classi?ed as long term investments. Long-term investments are carried at cost. Provision for diminution is made to recognize a decline, other than temporary in value of long-term investments and is determined separately for each individual investment. Current investments are carried at lower of cost and fair value, computed separately in respect of each category of investment. 1.7 Inventories Inventories comprise all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. Raw materials are valued at the lower of cost and net realisable value. Cost is determined on the basis of the weighted average method. Work-in-progress and ?nished goods are valued at the lower of cost and net realisable value. Excise duty is included in the value of ?nished goods inventory. Cost is determined on a weighted average basis. Custom duty on goods where title has passed to the Company is included in the value of inventory. The net realisable value of work-in-progress is determined with reference to the selling price of related ?nished goods. Raw materials held for the production of ?nished goods are not written down below cost except in case where material prices have declined and it is estimated that the cost of the ?nished product will exceed its net realisable value. 1.8 Revenue recognition Revenue from sale of products is recognised on transfer of all signi?cant risk and rewards of ownership of the products on to the customers, which is generally on dispatch of goods. Sales are stated exclusive of sales tax and net of trade and quantity discount. Revenue from services is recognised as per the terms of the contract with the customer using the proportionate completion method. Income from ?xed price construction contracts is recognised by reference to the estimated overall pro?tability of the contract under the percentage of completion method. Percentage of completion is determined as a proportion of the costs incurred upto the reporting date to the total estimated contract costs. Provision for expected loss is recognized immediately when it is probable that the total estimated contract costs will exceed total contract revenue. Commission income is recognised when proof of shipment is received from the supplier. Dividend income is recognised when the right to receive the dividend is established. Interest income is recognised on the time proportion basis. Export incentives receivable are accrued for when the right to receive the credit is established and there is no signi?cant uncertainty regarding the ultimate collection of export proceeds. 1.9 Leases Where the Company is the lessee: Leases where the lessor effectively retains substantially all the risk and bene?ts of ownership of the leased items are classi?ed as operating leases. Lease payments under an operating lease, are recognised as an expense in the statement of pro?t and loss on a straight line basis over the lease term.
46
64
Annual Report 2009
1.9
Leases (Continued) Where the Company is the lessor: Assets subject to operating leases are included in ?xed assets. Lease income is recognised in the Pro?t and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in the Pro?t and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Pro?t and Loss Account.
1.10 Employee bene?ts (a) Short term employee bene?ts All employee bene?ts payable wholly within twelve months of rendering the service are classi?ed as short-term employee bene?ts. Bene?ts such as salaries, wages and short term compensated absences, etc. and the expected cost of ex-gratia is recognised in the period in which the employee renders the related service. Post-employment bene?ts (i) De?ned Contribution Plans: The Company’s approved superannuation scheme and employee state insurance scheme are de?ned contribution plans. The Company’s contribution paid/ payable under the schemes is recognised as expense in the pro?t and loss account during the period in which the employee renders the related service. De?ned Bene?t Plans: The Company’s provident fund, gratuity, pension and medical bene?ts schemes are de?ned bene?t plans. The present value of the obligation under such de?ned bene?t plans is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee bene?t entitlement and measures each unit separately to build up the ?nal obligation. The obligation is measured at the present value of the estimated future cash ?ows. The discount rates used for determining the present value of the obligation under de?ned bene?t plans, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognised immediately in the pro?t and loss account. 1.11 Foreign currency transactions The Company is exposed to currency ?uctuations on foreign currency transactions. Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the pro?t and loss account of the year. Translation Monetary assets and liabilities in foreign currency, which are outstanding as at the year-end, are translated at the year-end at the closing exchange rate and the resultant exchange differences are recognized in the pro?t and loss account. Non monetary items are stated in the balance sheet using the exchange rate at the date of the transaction. Derivative instruments The Company’s exposure to foreign currency ?uctuations relates to foreign currency assets, liabilities and forecasted cash ?ows. The Company limits the effects of foreign exchange rate ?uctuations by following established risk management policies including the use of derivatives. The Company enters into forward exchange contracts, where the counterparty is a bank. As per Accounting Standard (‘AS’) 11 – ‘The Effects of Changes in Foreign Exchange Rates’, the premium or the discount on forward exchange contracts not relating to ?rm commitments or highly probable forecast transactions and not intended for trading or speculation purpose is amortized as expense or income over the life of the contract. All other derivatives, which are not covered by AS 11, are measured using the mark-to-market principle with the resulting gains/ losses thereon being recorded in the pro?t and loss account. 1.12 Taxation Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the incometax law), deferred tax charge or credit (re?ecting the tax effect of timing differences between accounting income and
65
(b)
(ii)
Siemens Ltd.
65
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
1.12 Taxation (Continued) taxable income for the year) and fringe bene?t tax computed in accordance with the relevant provisions of the Income Tax Act, 1961. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty supported by convincing evidence of realisation of the assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to re?ect the amount that is reasonable/virtually certain (as the case may be) to be realised. Provision for fringe bene?t tax (FBT) is made on the basis of applicable FBT on the taxable value of speci?ed expenses of the Company as prescribed under the Income Tax Act, 1961. 1.13 Earnings per share Basic and diluted earnings per share is computed by dividing the net pro?t attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year. 1.14 Provision Provisions comprise liabilities of uncertain timing or amount. Provisions are recognized when the Company recognizes it has a present obligation as a result of past events, it is probable that an out?ow of resources embodying economic bene?ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Disclosures for contingent liability are made when there is a possible or present obligation for which it is not probable that there will be an out?ow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of out?ow of resources is remote, no disclosure is made. Loss contingencies arising from claims, litigation, assessment, ?nes, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Contingent assets are neither recognized nor disclosed in the ?nancial statements. 1.15 Cash and cash equivalents Cash and cash equivalents include cash, cheques in hand, cash at bank and short-term deposits with banks having maturity of three months or less. 2. Amalgamation of Siemens Industrial Turbomachinery Services Private Limited (‘SITS’) Pursuant to the scheme of amalgamation (‘the scheme’) of the erstwhile SITS with the Company as approved in the Board Meeting held on 22 November 2007 and subsequently sanctioned by the Honorable High Court of Karnataka on 26 September 2008, the assets and liabilities of the erstwhile SITS were transferred to and vested in the Company with effect from 1 April 2008. Consequently, the ?gures for the current year are not strictly comparable to those of the prior year. 3. Investments During the year the company sold its holdings in Siemens Information Systems Limited & Siemens Information Processing Services Private Limited for a sale consideration of Rs 3,021,459 resulting in a pro?t of Rs 2,059,459 which is disclosed under Exceptional income. 4. Discontinued operations Automotive and Building Technologies segment The Board of Directors of the Company at its meeting held on 23 April 2007 approved a detailed formal plan for the discontinuance of its business activities pertaining to “Automotive” (‘SVDO’) and “Building Technologies” (‘SBT’) segment of the Company. After obtaining necessary approvals the SVDO segment was sold with effect from 1 December 2007 and SBT was sold with effect from 1 October 2007. Consequently, the ?gures for the current year are not strictly comparable to those of the prior year.
66
66
Annual Report 2009
2009 5. Share capital Authorised 1,000,000,000 Equity shares of Rs 2 each (2008: 1,000,000,000 Equity shares of Rs 2 each)
2008
2,000,000 2,000,000
2,000,000 2,000,000
Issued 338,024,465 Equity shares of Rs 2 each (2008: 338,024,465 Equity shares of Rs 2 each) Subscribed and fully paid-up 337,160,200 Equity shares of Rs 2 each fully paid-up (2008: 337,160,200 Equity shares of Rs 2 each fully paid-up)
676,049
676,049
674,320 674,320
674,320 674,320
Of the above: 186,041,090 (2008: 186,041,090) Equity shares of Rs 2 each, fully paid-up, are held by the Holding company, Siemens AG, Germany; 55,500,000 (2008: 55,500,000) Equity shares of Rs 2 each, fully paid-up, were allotted as fully paid-up bonus shares by capitalisation of the General reserve; 168,580,100 (2008: 168,580,100) Equity shares of Rs 2 each, fully paid-up, were allotted as fully paid up bonus shares by capitalisation of Securities Premium account; 3,638,085 (2008: 3,638,085) Equity shares of Rs 2 each, were allotted as fully paid-up for consideration received other than in cash. 6. Reserves and surplus Capital reserve Balance brought forward Amalgamation reserve Balance brought forward Securities premium account Balance brought forward Issue of bonus shares Revaluation reserve Balance brought forward revaluation transferred from pro?t and loss account General reserve Balance brought forward Addition on amalgamation of erstwhile SITS (Refer Schedule 2) Transfer from pro?t and loss account 18,425,670 8,476,205 26,901,875 28,491,887 7. Unsecured loans Interest free loans under sales tax deferral scheme The loan under the sales tax deferral scheme is payable upto 2011 - Amounts payable within one year Siemens Ltd. 13,642,776 205,650 4,577,244 18,425,670 20,016,524 14,036 (842) 13,194 14,882 (846) 14,036 688 55,635 1,520,495 1,520,495 688 55,635 1,857,655 (337,160) 1,520,495
5,906 5,906 3,495
10,614 10,614 4,708
67
67
Schedules to the ?nancial statements (continued) as at 30 September 2009 (Currency : Indian rupees thousands)
8. Fixed assets
Intangible assets Goodwill Technical knowhow Tangible assets Land Buildings Plant and (Refer (Refer note i machinery note i ) and iii ) Furniture, ?ttings and of?ce equipment Vehicles Total Previous year
Gross block At 1 October 2008 Additions on amalgamation of erstwhile SITS (Refer Schedule 2) Additions Deductions/ adjustments At 30 September 2009 Accumulated depreciation At 1 October 2008 Additions on amalgamation of erstwhile SITS (Refer Schedule 2) Charge for the year (Refer note ii) Deductions/ adjustments At 30 September 2009 Net block At 30 September 2009 At 30 September 2008 44,032 75,509 54,346 72,603 539,461 546,369 2,826,949 2,525,446 2,481,325 2,065,616 347,393 282,495 1,507 3,614 6,295,013 5,571,652 5,571,652 164,049 75,136 37,924 530,068 2,498,203 1,018,289 15,664 4,339,333 4,063,785 239,558 147,739 584,293 3,055,514 4,563,819 1,300,784 19,278 9,910,985 8,701,239
239,558
147,739
584,293
402,420 (22,904) 3,435,030
916,307 (41,756) 5,438,370
203,262 (19,757) 1,484,289
(783)
1,521,989 (85,200)
57,769 1,912,520 (760,543) 9,910,985
18,495 11,347,774
31,477 195,526
18,257 93,393
6,908 44,832
83,413 (5,400) 608,081
495,059 (36,217) 2,957,045
141,813 (23,206) 1,136,896
1,709 (385) 16,988
778,636 (65,208) 5,052,761
31,671 638,190 (394,313) 4,339,333
Notes:i Included in the gross block of land at 30 September 2009 is freehold land of Rs 16,447 (2008: Rs 16,447) and buildings includes Rs 175,722 (2008: Rs 201,543 ) representing 560 shares of Rs 50 each and 10 shares of Rs 100 each (2008: 595 shares of Rs 50 each and 10 shares of Rs 100 each) in various co-operative housing societies. Depreciation provided has been disclosed as under: Charge for the year Transfer to Revaluation reserve As per pro?t and loss account iii Buildings include assets held for sale: Acquisition Value Accumulated depreciation Written Down Value iv Assets includes assets given on operating lease Particulars Buildings 2009 Furniture and Fixture and of?ce equipment 137,540 46,866 12,508 Land Plant and Machinery 286,218 131,287 22,005 Buildings 2008 Furniture and Fixture and of?ce equipment 180,016 49,871 15,812 Land Plant and Machinery 336,258 125,449 25,435 2009 10,018 (3,683) 6,335 2008 2009 778,636 (842) 777,794 2008 638,190 (846) 637,344
ii
Gross Block Written Down Value Depreciation charge for the year
86
547,886 440,245 11,523
28,783 18,671 -
731,006 577,324 16,434
79,858 66,279 -
68
Annual Report 2009
2009 9. Investments Non-Trade, long term (at cost) In government securities (unquoted) National Savings Certi?cates Investment in subsidiary companies (unquoted) Nil (2008: 6,815,000) Equity Shares of Rs 10 each fully paid-up in Siemens Information Systems Ltd. (Nil holding; 2008: 100% holding) Nil (2008: 2,123,800) Equity Shares of Rs 10 each fully paid-up in Siemens Information Processing Services Private Ltd. (Nil holding; 2008: 51% holding) 3,216,870 (2008: 2,962,027) Equity Shares of Rs 10 each fully paid-up in Siemens Building Technologies Private Ltd. (86.15% holding; 2008: 79.32%) (Refer note i) 25,000,000 (2008: 25,000,000) Equity Shares of Rs 10 each fully paid-up in Siemens Rolling Stock Private Ltd. (100% holding; 2008: 100% holding) 4,320,000 (2008: 2,160,000) Equity Shares of Rs 10 each fully paid-up in Flender Ltd. (formerly an associate company ) (100% holding; 2008: 50%holding) Note: i) The company is committed to acquire balance 13.85% shares by 2012 Investment in other companies (Quoted) 10,485 (2008: 10,485) Equity Shares of Re 1 each fully paid up in PRICOL Ltd. 10,000 (2008: 10,000) Equity Shares of Rs 10 each fully paid up in Scooters India Ltd. (Unquoted) 1 (2008:1) equity share of Rs 10 each fully paid up in International Shock Absorbers Ltd. Current Investments, at lower of cost or fair value In Mutual Funds (unquoted) Nil ( 2008: 30,611,083) Sundaram BNP Paribas Money Fund - Super Institutional - Daily Dividend Reinvestment Nil ( 2008: 28,970,500) Birla Cash Plus -Institutional Premium- Daily Dividend Reinvestment Nil (2008: 30,885,544 ) units of ING Liquid Fund Super Institutional -Daily Dividend Option Nil (2008: 24,261,211 ) units of HDFC Liquid Fund Premium Plan-Daily Dividend Reinvestment Option
2008
5 5
5 5
-
851,000 111,000
2,932,095 250,000
2,141,031 250,000
1,587,515 4,769,610
677,580 4,030,611
8 100 108
8 100 108
0.01 0.01
0.01 0.01
4,769,723
309,028 290,270 309,004 297,438 1,205,740 5,236,464 5,236,356 108 400
69
- Aggregate book value of unquoted investments - Aggregate book value of quoted investments - Aggregate market value of quoted investments Siemens Ltd.
4,769,615 108 355
69
Schedules to the ?nancial statements (continued) as at 30 September 2009 (Currency : Indian rupees thousands)
9 Investments (Continued) The following investments were acquired and sold during the year
A) Name of the mutual fund Birla Cash Plus -Institutional Premium - Daily Dividend Reinvestment Sundaram BNP Paribas Money Fund - Super Institutional - Daily Dividend Reinvestment ING Liquid Fund Super Institutional - Daily Dividend Option HDFC Liquid Fund Premium Plan - Daily Dividend Reinvestment Option Purchased during the year Quantity Value 83,369 835 Sold during the year Quantity Value 83,369 835
94,466 81,648 66,574 326,057
954 817 816 3,422
94,466 81,648 66,574 326,057 2009
954 817 816 3,422 2008
10
Deferred tax assets Deferred tax assets Arising on account of timing differences in: Provision for doubtful debts and advances Expenditure debited to pro?t & loss account but allowed for tax purposes in following years Other provisions Deferred tax liability Arising on account of timing differences in : Excess of depreciation allowable under income tax law over depreciation provided in accounts Deferred tax assets (net)
309,642 732,587 414,514 1,456,743
333,805 458,953 413,454 1,206,212
337,617 1,119,126
295,965 910,247
11
Inventories Raw materials [includes Goods in Transit Rs 965,031 (2008 : Rs 321,750)] Work-in-progress - factory related - project related Finished goods
2,531,516 329,855 5,749,589 1,111,011 9,721,971
1,526,726 554,148 4,051,773 1,488,496 7,621,143
12
Sundry debtors Debts outstanding - over six months - other debts Of which - considered good - considered doubtful Provision for doubtful debts
15,998,492 19,353,824 35,352,316 34,583,115 769,201 35,352,316 (769,201) 34,583,115
12,098,840 23,105,063 35,203,903 34,327,991 875,912 35,203,903 (875,912) 34,327,991
07
70
Annual Report 2009
2009 12 Sundry debtors (Continued) Sundry debtors are unsecured and include: Project related retention money - over six months - other Included in debtors are debts due from companies under the same management: - Osram India Private Ltd. - Siemens Information Systems Ltd. - Siemens Information Processing Services Private Ltd. - Siemens Power Engineering Private. Ltd. - Powerplant Performance Improvement Ltd. - Siemens Hearing Instruments Private Ltd. - Flender Ltd. - Siemens Rolling Stock Private Ltd. - Morgan Construction Company India Private Ltd. - Siemens Building Technology Private Ltd. - Winergy Drive Systems India Private Ltd. - Siemens Corporate Finance Private Ltd. - Bangalore International Airport Ltd. - Siemens VAI Metals Technologies Private Ltd. - Siemens Healthcare Diagnostics Ltd. (formerly known as Siemens Medical Solutions Diagnostics Ltd.) 13 Cash and bank balances Cash in hand Cheques in hand Balances with scheduled banks - on current account - on deposit account Balances with other banks
2008
13,753,293 3,122,451 16,875,744 16 44,799 11,158 2,953 10,336 4,310 13,515 6,307 6,357 3,884 95 17,592 552,586 3,689
11,741,312 4,968,932 16,710,244 2,000 103,115 6,157 8,883 1,895 5,143 4,703 72,577 26,830 663 7,781 94,443 1,709 843
5,691 792,587 1,486,035 10,473,300 1,691,409 14,449,022
8,707 1,348,131 1,560,670 4,580,700 1,632,687 9,130,895
Bank balances with other banks in current account includes : - Citibank, Colombo - Deutsche Bank, Colombo - Standard Chartered Bank, Nepal - Standard Chartered Bank, Doha - Standard Chartered Bank, Qatar - The Hongkong & Shanghai Banking Corporation Ltd.,Khulna - The Hongkong & Shanghai Banking Corporation Ltd.,Dhaka - The Hongkong and Shanghai Banking Corporation, Doha
10,286 1,048 36 65,797 180,265 6,658 11,796 1,415,523 1,691,409
16,270 32 543,859 24,585 1,047,941 1,632,687
Maximum amount outstanding at any time during the year : - Citibank, Colombo - Citibank, Dhaka - Deutsche Bank, Colombo Siemens Ltd.
124,005 1,182
16,629 38 1,020
71
71
Schedules to the ?nancial statements (continued) as at 30 September 2009 (Currency : Indian rupees thousands)
13 Cash and bank balances (Continued) - Standard Chartered Bank, Qatar - Standard Chartered Bank, Nepal - Standard Chartered Bank, Doha - The Hongkong & Shanghai Banking Corporation Ltd., Colombo - The Hongkong & Shanghai Banking Corporation Ltd., Dhaka - The Hongkong and Shanghai Banking Corporation, Doha - The Hongkong & Shanghai Banking Corporation Ltd., Khulna Loans and advances (Unsecured) Loans and advances recoverable in cash or kind or for value to be received - considered good - considered doubtful Provision for doubtful advances Advance payments of income tax [net of provision for tax Rs 14,184,946 (2008: Rs 10,177,482)] Balances with customs, port trusts etc. Inter corporate deposits - Subsidiaries - Others Interest accrued on inter corporate deposits 4,265,843 141,779 4,407,622 (141,779) 4,265,843 2,069,722 799,425 1,450,000 1,860,000 12,650 10,457,640 Amount receivable from Customs authorities towards excess payment of Customs duty Loans and advances includes : (a) Inter-corporate deposits given to companies under the same management: Osram India Private Ltd. Siemens Building Technologies Private Ltd. Winergy Drive Systems India Private Ltd. Siemens Rolling Stock Private Ltd. Siemens Healthcare Diagnostics Ltd. Morgan Construction Company India Private Ltd. 3,548,303 156,631 3,704,934 (156,631) 3,548,303 517,353 721,832 800,000 715,000 10,025 6,312,513 2009 192,410 142 598,217 35,376 5,913,155 9,279 2008 605,935 32 67 3,990 2,276,531 -
14
2,225
2,225
800,000 850,000 660,000 600,000 400,000 3,310,000
250,000 800,000 380,000 85,000 1,515,000 50,000 270,000 800,000 380,000 85,000 Annual Report 2009
Maximum amount outstanding at any time during the year: 27
Flender Ltd. Osram India Private Ltd. Siemens Building Technologies Private Ltd. Siemens Healthcare Diagnostics Ltd. Siemens Rolling Stock Private Ltd. Winergy Drive Systems India Private Ltd. Morgan Construction Company India Private Ltd.
800,000 1,100,000 400,000 600,000 660,000 175,000
72
2009 15 Current liabilities Sundry creditors Micro and Small Enterprises ( Refer Schedule 35 ) Subsidiaries Others Advances from customers (Refer note 2) Unclaimed dividend (Refer note 1) 653,274 33,142 23,769,726 16,115,365 13,863 40,585,370
2008 331,311 93,090 21,234,804 20,993,358 11,007 42,663,570
Notes (1) Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. (2) Advance from customers include progress payments billed and advances received from project related work 14,975,178 20,053,468 16 Provisions Pension Leave wages Medical bene?ts Silver jubilee Warranty Loss order Liquidated damages Contingencies Proposed dividend Tax on proposed dividend
174,983 240,841 70,754 74,418 1,980,532 891,614 5,651,320 1,638,380 1,685,801 286,502 12,695,145
160,326 233,379 45,169 68,925 1,248,631 1,099,514 1,574,211 1,002,476 1,011,481 171,901 6,616,013
17
Interest income Interest income - others [includes tax deducted at source Rs 119,717, (2008 : Rs 95,380)]
523,002 523,002
471,937 471,937
18
Other operating income, net Export incentives Pro?t on sale of ?xed assets, net Recoveries from subsidiary companies, associates and third parties Miscellaneous income
97,375 238,276 337,627 23,941 697,219
60,174 259,256 283,592 18,768 621,790
19
Other income Dividend from subsidiary companies Dividend from mutual fund investments Miscellaneous other Income
2,229,459 3,422 108,307 2,341,188
67,214 67,214
20
Cost of sales and services Raw materials and components consumed Traded goods purchased Spares and stores consumed Project bought outs Change in inventories Other costs Included in other costs, change in excise duty on closing stock of ?nished goods
18,929,334 11,335,326 266,601 28,430,906 (1,096,038) 6,110,783 63,976,912 19,788
16,214,299 12,229,124 393,325 36,330,363 11,074 2,552,328 67,730,513 82,313
73
Siemens Ltd.
73
Schedules to the ?nancial statements (continued) as at 30 September 2009 (Currency : Indian rupees thousands)
2009 21 Personnel costs Salaries, wages and bonus, net Contribution to provident and other funds Workmen and staff welfare 4,629,505 525,841 343,643 5,498,989 22 Other costs, net Exchange loss/ (gains), net Travel and conveyance External software services and data processing Rates and taxes Communications Packing and forwarding Power and fuel Insurance Rent Repairs - on building - on machinery - others Legal and professional Advertising and publicity Of?ce supplies, printing and stationery Research and development expenditure Bank guarantee commission/ bank charges Lease rentals Donation Commission to directors Directors' fees Bad debts Provision for doubtful debts and advances, net Miscellaneous expenses 2008 3,931,583 298,010 246,158 4,475,751
82,520 862,588 558,457 543,057 364,919 349,372 267,554 264,184 196,513 89,782 68,354 118,830 173,914 5,185 76,079 171,022 97,697 36,044 1,580 11,600 1,300 246,216 (121,563) 412,349 4,877,553
(2,016,693) 968,445 658,367 582,487 358,188 342,288 278,681 237,697 211,148 84,739 64,134 113,923 143,878 127,889 86,251 85,619 67,861 44,307 2,091 14,000 1,440 34,943 311,643 757,026 3,560,352
23
Commitments and contingent liabilities (a) Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) (b) Contingent liabilities Taxation matters (excluding interest) In respect of certain completed assessments where matters are under appeal by the Company 432,706 309,422 120,000 47,055 295,807 409,373 120,000 43,812 Annual Report 2009 712,829 552,034
Excise/ sales tax liabilities, under dispute Customs liabilities, under dispute Claims against the Company not acknowledge as debts
47
74
2009 24 (i) Supplementary statutory information Managerial remuneration Personnel and other costs include remuneration paid to Directors' as set out below: Salaries Perquisites Commission Performance linked incentive Payment of stock appreciation rights Directors sitting fees Contribution to provident fund Contribution to superannuation fund
2008
25,145 53,183 11,600 75,378 5,631 1,300 2,734 2,103 177,074
29,814 62,680 14,000 64,896 40,745 1,440 1,483 1,854 216,912
Managerial remuneration includes Rs 5000 (2008: 8,184 ) towards consideration in connection with retirement from of?ce. Certain wholetime Directors are covered under the Company's gratuity, leave, medical and silver/ golden jubilee schemes along with the other employees of the Company. These liabilities are determined for all employees by an independent actuarial valuation. The speci?c amount for such bene?ts can't be ascertained separately and accordingly the same has not been included above. Computation of Managerial Remuneration: Pro?t before tax Add: Managing and other director’s remuneration and commission Depreciation charged in the accounts (Refer Schedule 8) Pro?t on sale of ?xed assets, net (as per Section 349 of the Act) Provision for doubtful debts and advances, net Provision for wealth tax Pro?t on sale of tenancy rights Pro?t on sale of EA business Less: Pro?t on sale of investment Pro?t on sale of ?xed assets, net (as per pro?t and loss account) - 'SBT' division - 'SVDO' division Depreciation as computed under Section 350 of the Act (see note below) Net pro?t as per Section 349 of the Act Performance linked incentive to Managing and wholetime directors at 0.61% of the (2008: 0.81%) net pro?ts as calculated above Commission to other directors at 0.09% of the (2008: 0.18%) net pro?ts as calculated above 14,318,593 177,074 777,794 239,974 (121,563) (17,381) 78,000 30,307 (2,059,459) (238,276) (777,794) 12,407,269 8,917,686 216,912 637,344 4,419 311,643 2,447 (259,256) (10,635) (1,235,151) (637,344) 7,948,065
75,378 11,600 86,978
64,896 14,000 78,896
The Company depreciates its ?xed assets based on estimated useful lives which are lower or equal to the implicit estimated useful lives prescribed by Schedule XIV of the Act. Thus, the depreciation charged in the books is higher than that prescribed as the minimum by the Act. Hence, this higher value has been considered as a deduction for the computation of managerial remuneration above.
75
Siemens Ltd.
75
Schedules to the ?nancial statements (continued) as at 30 September 2009 (Currency : Indian rupees thousands)
2009 24 Supplementary statutory information (Continued) (ii) Auditors' remuneration (for Audit services exclusive of service tax) Audit fees Tax audit fees Other services Reimbursement of expenses 12,500 4,000 11,680 915 29,095 (iii) Earnings and expenditure in foreign exchange (on accrual basis) (a) Earnings in foreign currency - Exports of goods - Direct on FOB basis - Under IDA/IBRD/ADB credits - Project business - Commission - Service charges and others (b) Expenditure in foreign currency (on accrual basis) - Travelling - Installation charges - Expenditure on contracts at foreign sites - Commission - Service charges - Others (c) Value of imports calculated on CIF basis - Raw material - Components, spare parts and traded goods - Capital goods (iv) Net dividend remitted in foreign exchange Final: Period to which the dividend relates Number of non-resident shareholders Number of equity shares held on which dividend was due Amount remitted 25 Disclosure as per Clause 32 of the listing Agreement Loans and advances in the nature of loans 1.04.2007 to 31.03.2008 One 186,041,090 558,123 1.04.2006 to 31.03.2007 One 93,020,545 446,499 7,020 3,000 3,100 737 13,857 2008
2,569,481 2,829,935 5,486,774 520,410 9,130,899
2,839,181 1,194,038 26,377,412 451,826 94,324
79,158 40,723 2,741,317 175,630 1,652,704 622,355
92,691 3,871 10,122,364 2,719 1,257,464 417,371
5,015,591 21,382,256 528,565
4,432,304 19,949,757 174,506
Amount at 30 September 2009
Maximum amount outstanding at any time during the year 1,100,000 600,000 Annual Report 2009
Subsidiary company - Siemens Building Technologies Private Ltd. - Siemens Rolling Stock Private Ltd.
67
850,000 600,000
76
26
Additional information pursuant to the provisions of paragraphs 3, 4C, and 4D of Part II of Schedule VI to the Companies Act, 1956: (i) Sales and Services Class of goods Refer Note (a) and (d) below Switchgear items Electric motors/ generators Switchboards, control boards and miscellaneous accessories X-ray equipment Railway equipment Variable speed AC/DC drive systems, motor control modules and programmable control systems Protection systems Data acquisition, logging and control systems Medical electronic diagnostic equipment Other engineering project goods Maintenance, repairs and other services Industrial turbines Rental Income Automotive - Traded goods Transformer Commission income 2009 Quantity 87,452 Nos. Value 8,738,746 2,388,714 4,111,312 230,307 9,647,280 2008 Quantity 110,136 Nos. Value 9,194,551 3,336,349 5,052,256 347,495 6,708,855
5,041,047 926,084 981,629 4,202,445 33,754,477 8,510,311 3,571,504 463,291 800,188 83,367,335 520,410 83,887,745
4,941,696 420,286 5,533,864 40,261,709 1,303,147 4,068,391 464,333 231,596 639,100 82,503,628 451,826 82,955,454
(ii) Imported and indigenous raw materials and components consumed 2009 Value % of total consumption Imported 6,947,605 37 Indigenous 11,981,729 63 18,929,334 100 (iii) Inventories Finished goods Refer Note (a) below Class of goods Switchgear items Electric motors/generators Switchboards, control boards, etc. X-ray equipment Medical electronic diagnostic equipment Railway equipment Variable speed AC/DC drive systems, motor control modules and programmable control systems Protection systems/ uninterrupted power Data acquisition, logging and control systems Others Work-in-progress - factory related - project related 2009 Quantity 2,672 Nos. . Value 308,637 123,143 25,232 4,743 72,200 228,313
2008 Value % of total consumption 5,550,153 34 10,664,146 66 16,214,299 100
2008 Quantity 3,871 Nos.
Value 411,257 164,618 54,244 11,649 116,724 303,391
284,378 1,324 13,806 49,235 1,111,011 329,855 5,749,589 7,190,455
391,579 14,824 20,210 1,488,496 554,148 4,051,773 6,094,417
77
Siemens Ltd.
77
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
26 Additional information pursuant to the provisions of paragraphs 3, 4C, and 4D of Part II of Schedule VI to the Companies Act, 1956 (Continued): (iv) Purchases Refer Note (a) below Class of goods 2009 2008 Value Value Medical electronic diagnostic equipment 3,274,879 3,707,141 Others 8,060,447 8,521,983 Towards projects execution 28,430,906 36,330,363 39,766,232 48,559,487 (v) Raw materials, bought out components consumed during the year Unit MT MT MT MT MT MT MT Kms Kgs Nos Nos Nos Nos Nos Nos Nos Nos Pcs 2009 Quantity 1,659 13,692 214,397 188 5,599 3,091 21,455 11,030 6,440 189,585 128,907 30 1,023,967 17,966 38,003 146,094 13,860 2,300,235 Value 550,923 198,300 17,320 46,620 585,771 289,006 652,845 104,412 212,485 237,836 580,264 6,337 37,149 252,140 10,853 63,282 25,264 2,096,391 12,962,136 18,929,334 2008 Quantity 1,078 690 77 453 8,994 4,910 1,434 2,303 8,036 433,963 132,040 31 687,024 35,660 33,966 156,972 14,783 688,216 Value 394,707 274,698 28,956 71,944 594,886 379,459 243,465 80,852 300,199 177,794 448,205 1,083 26,686 369,808 4,748 54,367 33,189 725,246 12,004,007 16,214,299
Copper ?ats, strips and pro?les Enamelled copper wire Brass sheets and strips Aluminium ingots, pro?les and castings Iron and steel castings and shafts Dynamo steel sheets, strips and laminations Hot rolled and cold rolled steel sheets, strips, housings, etc. Cables and wires Silver components Ball and roller bearings Thyristors, diodes and transistors X-ray tubes Amphenol terminals Vacuum tubes Integrated circuits Capacitors and condensers Printed circuit boards Turbine components Others
(vi) Capacities and Production Refer Note (b) below Unit Class of goods manufactured 2009 Annual Actual installed production capacity (refer Note (c) below) 16,263,493 20,023 8,000 (Boards) 1,283 209 12,216,614 16,008 2,279 (Boards) 958 23 2008 Annual Actual installed production capacity (refer Note (c) below) 16,263,493 20,023 8,000 (Boards) 1,283 209 15,033,076 18,769 2,672 (Boards) 1,070 36
Switchgear items Electric motors/ generators Switch boards, control boards and miscellaneous accessories X-ray equipment Electromedical equipment Variable speed AC/DC drive systems, motor control modules and programmable control system
87
Nos Nos Nos Nos Nos
Nos
6,248
1,924
6,248
1,774
78
Annual Report 2009
26
Additional information pursuant to the provisions of paragraphs 3, 4C, and 4D of Part II of Schedule VI to the Companies Act, 1956 (Continued) Instrument Transformers Static Converter for railways Audio frequency track circuit Interlocking relays Auxiliary inverter for AR locomotive Traction converter for diesel locomotive Electrical control cabinet Circuit breakers above 1000 volts Power Transformers Single stage/ multi stage turbines Traction Converters for EMU Auxiliary Converters for EMU High Frequency Power Supply Nos Nos Nos Nos Nos Nos Nos Nos MVA MW Nos Nos Nos 1,133 610 900 250,000 150 72 288 2,250 15,000 69 180 180 600 421 129 336 130,130 131 72 138 1,270 2,140 33 140 142 5,000 610 900 250,000 120 72 288 1,000 15,000 69 180 180 600 3 139 348 160,160 120 84 191 1,170 1,306 45 129 141 135
Licensed Capacity is not applicable in terms of the Government of India's noti?cation No. S.O. 477(E) dated 25 July, 1991. (a) For paragraph 3(ii) of Part II of Schedule VI to the Companies Act, 1956, the classes of goods dealt with by the Company are grouped under suitable product heads. In terms of Note 3 to paragraph 3 of Part II of Schedule VI, disclosures by quantity are restricted to those items/articles which individually account for 10% or more of the total sales and services, purchases or closing stocks as applicable. (b) For paragraph 4C, of Part II to Schedule VI to the Companies Act, 1956, the goods manufactured by the Company are grouped as per the classi?cation of Industrial Licenses without giving the individual articles covered by each license. (c) Installed capacities are as certi?ed by the Managing Director and have not been veri?ed by the Auditors, as this is a technical matter.
(d) Sales and services are inclusive of equipment supplied for project orders. Purchases, production and closing stock ?gures include equipment processed or to be supplied for project orders. 27. Disclosure relating to Provisions Provision for warranty Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period. Provision for liquidated damages Liquidated damages are provided based on contractual terms when the delivery/ commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms upto closure of the contract (including warranty period). Provision for loss orders A provision for expected loss on construction contracts is recognised when it is probable that the contract costs will exceed total contract revenue. For all other contracts loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic bene?ts. Contingencies The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the out?ow of which would depend on the cessation of the respective events.
79
Siemens Ltd.
79
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
The movements in the above provisions are summarised below: Warranties Balance as at 1 October 2008 Provisions: Created Utilised Reversed Balance as at 30 September 2009 28 1,248,631 1,096,676 (103,141) (261,634) 1,980,532 Liquidated damages 1,574,211 4,575,933 (182,918) (315,906) 5,651,320 Loss orders 1,099,514 692,148 (838,809) (61,239) 891,614 Contingencies 1,002,476 841,697 (47,877) (157,916) 1,638,380
Disclosure pursuant to Accounting Standard - 7 'Construction Contracts': (i) Contract Revenue recognised for the year ended 30 September 2009
2009 55,167,095
2008 50,884,780
(ii) Aggregate amount of contract costs incurred and recognised pro?ts (less recognised losses ) for all contracts in progress as at 30 September 2009 (iii) Amount of advances received (iv) Amounts due from customers (v) Amounts due to customers 29. Disclosure pursuant to Accounting Standard - 19 'Leases':
154,693,242 6,648,354 5,854,199 8,684,323
119,307,554 5,644,363 2,846,638 15,137,749
Lease payments on non cancellable lease arrangement debited to the pro?t and loss account and the future lease payments in respect of non cancellable operating lease are summarised below: 2009 2008 (i) Amount due not later than one year from the balance sheet date (ii) Amount due later than one year and not later than ?ve years (iii) Amount due later than ?ve years 30,988 80,332 60,682 172,002 27,258 91,909 80,093 199,260
Lease rent debited to pro?t and loss account Rs 232,557 (2008: Rs 255,455 ) Sub-lease payments recognised in the pro?t and loss account Rs 28,559 (2008: Rs 23,930) There is no contingent rent recognised in the P&L account General description of the leasing arrangement: (i) The Company has entered into operating lease arrangements for its of?ce premises and storage locations and residential premises for its employees.
(ii) The future lease rental payments are determined on the basis of the monthly lease payment terms as per the agreements (iii) At the expiry of the non cancellable lease period the option of renewal rests with the Company. (iv) Some of the lease agreements have escalation clause. There are no exceptional/ restrictive covenants in the lease agreements. 30. Related party transactions Siemens AG Siemens Information Systems Ltd. (SISL) Siemens Information Processing Services Private Ltd. ('SIPS') Holding company Wholly owned subsidiary company (upto 24 June 2009) Subsidiary company (51% of whose Equity Share capital is held by Siemens Ltd. and the balance 49% is held by SISL) (upto 24 June 2009) Siemens Industrial Turbomachinery Services Private Ltd. Wholly owned subsidiary company (upto 31 March 2008) Siemens Rolling Stock Private Ltd. Wholly owned subsidiary company (w.e.f. 4 July 2008 )
08
30.1 Parties where control exists
80
Annual Report 2009
30.1 Parties where control exists (Continued) Flender Ltd. Siemens Building Technologies Private Ltd. Siemens Nixdorf Information Systems Private Ltd. Vista Security Technics Private Ltd. iMetrex Technologies Pte. Ltd. (Singapore) Avenues Honkong Ltd. (Hongkong) iMetrex Technologies Ltd. (Ireland) Europlex Technologies Ltd. (United Kingdom) Europlex Technologies (Ireland) Ltd. formerly known as Europlex Manufacturing Ltd. (Ireland) Europlex Research Ltd. (Ireland) Clonshaugh Security Ltd. formerly known as Europlex Technologies Ltd. (Ireland) Wholly owned subsidiary company (w.e.f. 1 August 2009 ) Subsidiary company Wholly owned subsidiary of SISL. Wholly owned subsidiary of Siemens Building Technologies Private Ltd. Wholly owned subsidiary of Siemens Building Technologies Private Ltd. Wholly owned subsidiary of Siemens Building Technologies Private Ltd. Subsidiary of Siemens Building Technologies Private Ltd. Wholly owned subsidiary of iMetrex Technologies Ltd. (Ireland) Wholly owned subsidiary of iMetrex Technologies Ltd. (Ireland) Wholly owned subsidiary of iMetrex Technologies Ltd. (Ireland) Wholly owned subsidiary of iMetrex Technologies Ltd. (Ireland)
30.2 Other related parties where transactions have taken place during the year Fellow Subsidiaries Siemens S.A. Siemens Ltd. Siemens Healthcare Diagnostics Ltd. Siemens Aktiengesellschaft Österreich ETM professional control GmbH Siemens VAI Metals Technologies GmbH & Co Siemens Transportation Systems GmbH & Co KG VA TECH Transmission & Distribution GmbH Siemens Bangladesh Ltd. Siemens S.A./N.V. ADB S.A./N.V. Siemens Ltda. Siemens Eletroeletronica Limitada Iriel Ind. Com. Sist. Eletr. Ltda. Siemens Milltronics Process Instruments, Inc. Trench Ltd. Siemens Canada Ltd. Siemens Medium Voltage Switching Technologies (Wuxi) Ltd. Siemens International Trading Ltd., Shanghai Siemens Circuit Protection Systems Ltd. Siemens Electrical Apparatus Ltd. Siemens Power Plant Automation Ltd. Siemens Ltd., China Siemens Electrical Drives Ltd. Siemens Manufacturing and Engineering Centre Ltd. Siemens Factory Automation Engineering Ltd. Siemens Shanghai Medical Equipment Ltd. MWB (Shanghai) Co Ltd. Siemens Wiring Accessories Shandong Ltd. Siemens Switchgear Co. Ltd. Siemens Industrial Automation Ltd. Siemens Numerical Control Ltd. Siemens Electrical Drives (Shanghai) Ltd. Siemens Mindit Magnetic Resonance Ltd. Zhenjiang Siemens Busbar Trunking Systems Co. Ltd. Siemens S.A. Siemens S.A. Koncar Power Transformers Ltd. Argentina Australia Australia Austria Austria Austria Austria Austria Bangladesh Belgium Belgium Brazil Brazil Brazil Canada Canada Canada China China China China China China China China China China China China China China China China China China Columbia Costa Rica Croatia
81
Siemens Ltd.
81
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
30.2 Other related parties where transactions have taken place during the year (Continued) Fellow Subsidiaries Siemens Elektromotory s.r.o. Siemens Industrial Turbomachinery s.r.o. OEZ s.r.o. Siemens Wind Power A/S Siemens S.A. Siemens Technologies S.A.E. Siemens Osakeyhtiö Siemens S.A.S. Siemens Production Automatisation S.A.S. Trench France S.A.S. Siemens Transmission & Distribution SAS Siemens VAI Metals Technologies SAS Siemens Transportation Systems S.A.S. Flender-Graffenstaden SAS Siemens Building Technologies Fire & Security Products GmbH & Co. oHG SYKATEC Systeme, Komponenten, Anwendungstechnologie GmbH & Co. KG Weiss Spindeltechnologie GmbH Siemens Financial Services GmbH Mechanik Center Erlangen GmbH LINCAS Export Services GmbH Siemens Turbomachinery Equipment GmbH Siemens Busbar Trunking Systems GmbH & Co. KG Trench Germany GmbH Wallace & Tiernan GmbH mdexx Magnetronic Devices GmbH & Co. KG (upto 31 December 2008) Alpha Verteilertechnik GmbH Lincas Electro Vertriebsgesellschaft mbH Loher GmbH Siemens Geared Motors Gesellschaft mit beschränkter Haftung Siemens Finance & Leasing GmbH Ruhrtal Hochspannungsgeräte GmbH & Co. OHG (Upto 30 June 2009) HSP Hochspannungsgeräte GmbH Flender Industriegetriebe GmbH Ruhrtal Hochspannungsgeräte GmbH evosoft GmbH FEAG Fertigungscenter für Elektrische Anlagen GmbH Siemens Building Technologies GmbH & Co. oHG Siemens Financial Services GmbH/WCF Siemens Real Estate GmbH & Co. OHG Siemens Product Lifecycle Management Software (DE) GmbH A Friedr. Flender AG Siemens plc Siemens Industrial Turbomachinery Ltd. Siemens Protection Devices Ltd. Chemfeed Ltd. Electrocatalytic Ltd. Electrium Sales Ltd. Siemens Magnet Technology Ltd. Siemens Busbar Trunking Systems Ltd., in Liquidation Siemens A.E., Elektrotechnische Projekte und Erzeugnisse Eviop-Tempo A.E. Electrical Equipment Manufacturers Siemens Ltd. Siemens Erömütechnika Kft. Siemens Hearing Instruments Private Ltd. Siemens Power Engineering Private Ltd. OSRAM India Private Ltd. Siemens VAI Metals Technologies Private Ltd. Siemens Healthcare Diagnostics Ltd. Siemens Corporate Finance Private Ltd. Winergy Drive Systems India Private Ltd. Czech Republic Czech Republic Czech Republic Denmark Ecuador Egypt Finland France France France France France France France Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Great Britain Great Britain Great Britain Great Britain Great Britain Great Britain Great Britain Great Britain Greece Greece Hongkong Hungary India India India India India India India
28
82
Annual Report 2009
30.2 Other related parties where transactions have taken place during the year (Continued) Fellow Subsidiaries Morgan Construction Company India Private Ltd. Siemens Enterprise Communications Private Ltd. (Upto 31 March 2009) Powerplant Performance Improvement Ltd. Siemens Information Systems Ltd. (w.e.f. 25 June 2009) Siemens Information Processing Services Private Ltd. (w.e.f. 25 June 2009) Siemens Product Lifecycle Management Software (India) Private Ltd. P.T. Siemens Indonesia Siemens Sherkate Sahami (Khass) Siemens Israel Ltd. Siemens S.p.A. Trench Italia S.r.l. Siemens K.K. Siemens TOO Siemens Kenya Ltd. Siemens Ltd. Siemens Electrical & Electronic Services K.S.C. Osram Opto Semiconductors (Malaysia) Sdn Bhd Siemens Malaysia Sdn. Bhd. Siemens Industrial Workshop Sdn. Bhd. Siemens, S.A. de C.V. Siemens S.A. Siemens Nederland N.V. Siemens Industrial Turbomachinery B.V. Siemens (N.Z.) Ltd. Siemens Ltd. Siemens Oil and Gas Offshore AS (upto 30 June 2009) Siemens L.L.C. Siemens Pakistan Engineering Co. Ltd. Siemens, Inc. Siemens Power Operations, Inc. Siemens Sp. z o.o. Siemens W.L.L. Siemens S.R.L. OOO Siemens ISCOSA Industries and Maintenance Ltd. Siemens Ltd. Arabia Electric Ltd. (Equipment) Siemens Pte. Ltd. Power Automation Pte. Ltd. Siemens Electronics Assembly Systems Pte. Ltd Siemens Energy Management and Information Systems Pte. Ltd. Siemens d.o.o. Siemens Ltd. Siemens S.A. Siemens Industrial Turbomachinery AB Siemens AB Siemens Schweiz AG, Building Technologies Division, International Headquarters Siemens Schweiz AG Siemens Ltd. Siemens Ltd. Siemens Ltd. Siemens Sanayi ve Ticaret A.S. Siemens LLC Siemens Ukraine Siemens Energy, Inc. Siemens Building Technologies, Inc. Siemens Demag Delaval Turbomachinery, Inc. Siemens Energy & Automation, Inc. Siemens Water Technologies Corp. India India India India India India Indonesia Iran Israel Italy Italy Japan Kazakhstan Kenya Korea Kuwait Malaysia Malaysia Malaysia Mexico Morocco Netherlands Netherlands New Zealand Nigeria Norway Oman Pakistan Philippines Philippines Poland Qatar Romania Russia Saudi Arabia Saudi Arabia Saudi Arabia Singapore Singapore Singapore Singapore Slovania South Africa Spain Sweden Sweden Switzerland Switzerland Taiwan Tanzania Thailand Turkey UAE Ukraine USA USA USA USA USA
83
Siemens Ltd.
83
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
30.2 Other related parties where transactions have taken place during the year (Continued) Fellow Subsidiaries Siemens Medical Solutions USA, Inc. Siemens Shared Services, LLC Morgan Construction Company Siemens Transportation Systems, Inc. Siemens Power Transmission & Distribution, Inc. PETNET Solutions, Inc. SMS Inc. - Customer Solutions Group Siemens S.A. Siemens Automation Systems Ltd. Siemens Ltd. Flender Ltd. (upto 31 July 2009) USA USA USA USA USA USA USA Venezuela Vietnam Vietnam India
Associates
30.3 Directors of the Company Wholetime Directors Dr. Armin Bruck (w.e.f. 1 October 2007) Mr. Sunil Mathur (w.e.f. 22 July 2008) Mr. Patrick de Royer (Retired on 31 December 2008 ) Mr. K. R. Upilli (Retired on 27 July 2008 ) Mr. Vijay V. Paranjape Mr. J. Schubert (Retired on 1 January 2008) Mr. Vilas Parulekar (Retired on 25 September 2009 )
30.4
2009 Key Holding Fellow managerial Company Subsidiaries Subsidiaries Associate personnel 2008 Key Holding Fellow Associate managerial Company Subsidiaries Subsidiaries personnel
Description Sales - Siemens AG - Siemens Information Systems Ltd. - Siemens Energy & Automation, Inc - Siemens VAI Metals Technologies Private Ltd. - Siemens VAI Metals Technologies SAS - Flender Ltd. - Others Commission income - Siemens AG - Siemens Industrial Turbomachinery AB - Siemens Industrial Turbomachinery Ltd. - Siemens Pte. Ltd. - Siemens Building Technologies, Inc. - Others Other recoveries - Siemens AG - Siemens Information Systems Ltd. - Siemens Information Processing Services Private Ltd. - Siemens Corporate Finance Private Ltd. - Siemens Enterprise Communications Private Ltd. - Siemens Transportation Systems S.A.S. - Siemens Pte. Ltd. - Flender Ltd. - Others Reimbursement of expenses - Siemens AG - Siemens Information Systems Ltd. - Siemens Rolling Stock Private Ltd. - Siemens Enterprise Communications Private Ltd. - Siemens Pte. Ltd. - Siemens Wind Power A/S - Siemens Electronics Assembly Systems Pte. Ltd. - Flender Ltd. - Others
2,024,042 481,223 153,633 352,973 -
280,376 592 51,007 78,636 11,881 3,528 17,681 6,830 1,059
519,617 784,264 154,578 1,156,885 17,576 16,047 2,586 2,978 17,457 7,688 13,259 25,727 30,307 10,115 2,357 569 13,044 11,231 1,210
3,006 6,178 018 -
-
1,246,622 441,661 145,641 106,979 -
390,972 6,851 102,245 15,739 6,900 33,630 5,180 4,992
366,026 104,360 266,413 743,905 3,764 1,496 075 2,798 60,589 15,950 16,686 17,476 21,556 5,588 4,605
3,395 750 342 -
-
48
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Annual Report 2009
30.4
2009 Key Holding Fellow managerial Company Subsidiaries Subsidiaries Associate personnel 2008 Key Holding Fellow Associate managerial Company Subsidiaries Subsidiaries personnel
Description Purchase/Other services -
Siemens AG 15,502,378 Siemens Information Systems Ltd. Siemens Building Technologies Private Ltd. Siemens Information Processing Services Private Ltd. Koncar Power Transformers Ltd. Siemens Electrical Apparatus Ltd. Siemens Medical Solutions USA, Inc. Flender Ltd. Others -
99,365 14,350 28,468 -
58,397 43,327 602,950 566,228 2,407,778
19,439 -
- 14,799,173 -
217,762 20,519 290 100
3,554,963 3,276,771
22,339 -
-
Interest Income - Siemens Building Technologies Private Ltd. - Osram India Private Ltd. - Winergy Drive Systems India Private Ltd. - Morgan Construction Company India Private Ltd. - Siemens Rolling Stock Private Ltd. - Flender Ltd. - Others Sale of division/ investments Siemens Electronics Assembly Systems Pte. Ltd. Siemens VDO Automotive Components Private Ltd.
-
72,726 14,975 -
29,877 42,392 8,783 8,796
-
-
-
67,305 -
23,442 18,331 1,650 -
1,498 -
-
-
-
30,307 -
-
-
-
-
1,700,000
-
-
Purchase of Investments/ Equity Contribution - Siemens Building Technologies Private Ltd. - Siemens Rolling Stock Private Ltd. - A Friedr.-Flender AG Sale of investments in subsidiaries - Siemens Corporate Finance Private Ltd. Dividend paid Dividend received - Siemens Information Systems Ltd. - Siemens Information Processing Services Private Ltd. Purchase of Fixed assets/ Capital work in progress - Siemens AG - Siemens Building Technologies Private Ltd. - Trench Germany GmbH - Others Purchase of Intangible assets (Technical knowhow) - Siemens AG Bonus shares issued - Siemens AG Managerial Remuneration Mr. J. Schubert Dr. Armin Bruck Mr. Sunil Mathur Mr. Vijay V. Paranjape Mr. Vilas Parulekar Mr. Patrick de Royer Mr. K. R. Upilli Siemens Building Technologies Private Ltd. Siemens Rolling Stock Private Ltd. Osram India Private Ltd. Winergy Drive Systems India Private Ltd. Morgan Construction Company India Private Ltd. Siemens Healthcare Diagnostics Ltd. Flender Ltd.
558,123 -
2,112,650 116,809
909,935 3,021,459 -
-
-
446,499 -
275,000 250,000 -
-
-
-
30,371 -
12,478 -
042 1,550
-
-
23,076 -
-
6,488 2,330
-
-
-
3,700,000 1,300,000 -
1,950,000 2,360,000 735,000 800,000 -
-
63,336 42,771 20,624 23,560 13,691 253 -
29,223 186,011 -
300,000 -
50,000 240,000 85,000 -
75,000
52,704 52,137 7,552 15,373 14,333 33,664 25,708 -
Inter Corporate Deposits given
85
Siemens Ltd.
85
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
30.4
2009 Key Holding Fellow managerial Company Subsidiaries Subsidiaries Associate personnel 3,650,000 700,000 1,400,000 2,080,000 820,000 400,000 2008 Key Holding Fellow Associate managerial Company Subsidiaries Subsidiaries personnel 70,000 180,000 75,000 -
Description Inter Corporate Deposits repaid Siemens Building Technologies Private Ltd. Siemens Rolling Stock Private Ltd. Osram India Private Ltd. Winergy Drive Systems India Private Ltd. Morgan Construction Company India Private Ltd. Siemens Healthcare Diagnostics Ltd. Flender Ltd.
Outstanding Balances Debtors Siemens AG Siemens Building Technologies Private Ltd. Siemens Rolling Stock Private Ltd. Siemens VAI Metals Technologies Private Ltd. Siemens Information Systems Ltd. Siemens Enterprise Communications Private Ltd. Morgan Construction Company India Private Ltd. Flender Ltd. Others 880,283 3,884 6,307 13,515 552,601 33,684 6,105 156,348 175,814 8,860 4,703 103,115 24,128 56,547 72,577 22,774 5,143 -
Creditors Siemens AG Siemens Building Technologies Private Ltd. Flender Ltd. Siemens Information Systems Ltd. Siemens VAI Metals Technologies Private Ltd. Siemens Information Processing Services Private Ltd. Siemens Power Engineering Private Ltd. Siemens industrial turbomachinery Others 4,100,111 26,785 6,357 45,729 37,948 35,756 32,645 135,153 1,098,914 3,700,397 12,515 72,187 3,553 4,834 2,218 25,896 92,163 8,576 -
Inter Corporate Deposits Siemens Building Technologies Private Ltd. Siemens Rolling Stock Private Ltd. Osram India Private Ltd. Winergy Drive Systems India Private Ltd. Morgan Construction Company India Private Ltd. Siemens Healthcare Diagnostics Ltd. 850,000 600,000 800,000 660,000 400,000 800,000 250,000 380,000 85,000 -
Interest receivable on Inter Corporate Deposits Siemens Building Technologies Private Ltd. Osram India Private Ltd. Morgan Construction Company India Private Ltd. Winergy Drive Systems India Private Ltd. Siemens Rolling Stock Private Ltd. Siemens Healthcare Diagnostics Ltd. 2,358 2,985 3,995 976 2,336 6,596 1,532 1,650 247 -
Managerial Remuneration payable 68
Dr. Armin Bruck Mr. Sunil Mathur Mr. Vijay V. Paranjape Mr. Vilas Parulekar Mr. Patrick de Royer Mr. K. R. Upilli
-
-
-
-
32,466 21,842 12,377 13,694 -
-
-
-
-
22,400 2,950 7,680 6,144 18,578 7,144
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Annual Report 2009
31
(i)
Information about business segments
Revenue External sales 2009 2008 Inter segmental sales 2009 2008 983,424 6,205,892 32,955 119,377 7,681 481,737 1,696,864 (9,527,930) 759,552 4,139,996 58,841 234,009 338 14,717 169,757 650,652 (6,027,862) Total 2009 9,622,182 11,682,246 850,402 11,496,810 10,260,282 4,227,556 5,631,183 24,718,938 8,841,966 5,431,079 653,031 (9,527,930) 83,887,745 2008 9,904,062 10,108,180 924,859 11,439,244 6,952,028 1,299,752 5,114,719 28,414,625 7,896,261 6,053,460 644,530 231,596 (6,027,862) 82,955,454 Results 2009 628,823 736,630 32,141 1,071,628 (76,905) 441,639 811,993 4,004,832 652,076 413,083 844,186 9,560,126 (58,772) 523,002 2,059,459 2,234,778 14,318,593 (4,007,464) 208,879 (71,500) 10,448,508 83,887,745 82,955,454 83,887,745 82,955,454 10,448,508 2008 916,358 826,544 55,711 1,503,794 (184,426) (1,858,132) 570,592 3,412,775 972,429 335,303 614,104 8,232 7,173,284 (40,535) 471,937 1,245,786 67,214 8,917,686 (3,493,161) 629,037 (120,296) 5,933,266 5,933,266
Industry Automation Drive Technologies Building Technologies Industry Solutions Mobility Fossil Power Generation Oil & Gas Power Transmission Power Distribution Healthcare Real Estate Discontinued Operations* Eliminations Total Interest expenses Interest income Exceptional income Unallocable corporate items Pro?t before tax Income tax Deferred tax Fringe bene?t tax Pro?t after tax Consolidated total
8,638,758 5,476,354 817,447 11,377,433 10,260,282 4,219,875 5,631,183 24,237,201 7,145,102 5,431,079 653,031 83,887,745
9,144,510 5,968,184 866,018 11,205,235 6,952,028 1,299,414 5,100,002 28,244,868 7,245,609 6,053,460 644,530 231,596 82,955,454
* Discontinued operations (refer schedule 4)
Non cash expenditure Assets 2009 Industry Automation Drive Technologies Building Technologies Industry Solutions Mobility Fossil Power Generation Oil & Gas Power Transmission Power Distribution Healthcare Real Estate Discontinued Operations* Total Unallocable corporate items Consolidated total 3,893,282 3,488,451 495,993 5,662,121 3,154,534 751,998 2,495,405 2008 3,632,063 3,533,372 569,536 4,431,915 2,506,146 1,926,790 2,726,040 Liabilities 2009 2,465,910 3,005,161 1,940,723 6,045,058 3,399,790 2,534,254 3,225,582 2008 2,189,927 2,449,817 151,652 5,770,733 2,947,982 3,020,798 2,920,384 Capital Expenditure 2009 210,146 173,105 49,649 12,736 1,355 1,543 368,713 479,164 37,157 43,871 276,282 1,653,721 55,150 1,708,871 2008 146,268 139,788 52,530 15,789 2,323 2,464 197,936 379,436 40,731 13,327 903,036 25,663 1,919,291 27,663 1,946,954 Depreciation 2009 93,083 102,907 24,766 10,448 4,996 3,941 54,570 237,800 25,873 17,331 175,187 750,902 26,892 777,794 2008 75,269 77,903 18,953 7,848 5,982 4,921 63,618 Others 2009 2008 221,742 (151,508) (34,245) (147,679) (4,345) 51,600 46,764 47,086 25,090 (34,564) 34,992 (49,734) (46,506) 29,180
25,675,227 24,882,449 18,022,565 18,102,867 4,676,538 1,587,538 2,144,171 4,211,815 1,631,308 1,827,767 3,063,500 2,106,517 338,813 3,108,613 1,854,429 352,977 -
193,252 (1,277,509) (249,016) 19,358 18,657 124,387 5,492 615,640 21,704 637,344 (28,807) (25,893) (4,652) 180,063 (79,663) 9,953 (632)
54,025,258 51,879,201 46,147,873 42,870,179 28,427,370 18,101,840 7,138,548 6,420,017
(983,169) (505,114) 80,443 (902,726) 619,654 114,540
82,452,628 69,981,041 53,286,421 49,290,196
87
Siemens Ltd.
87
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
31 (ii) Secondary segment information Revenue based on location of customers 2009 Within India Outside India Total 2008 Carrying amount of segment assets by location 2009 2008 Additions to ?xed assets and intangible assets 2009 1,708,871 1,708,871 2008 1,946,954 1,946,954
66,618,911 53,644,537 50,326,018 36,897,384 17,268,834 29,310,917 32,126,610 33,083,657 83,887,745 82,955,454 82,452,628 69,981,041
31
(iii) -
Other disclosures: Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks. Pro?ts/ losses on inter segment transfers are eliminated at the Company level. Balances with group companies and related parties have been included in unallocable corporate items. During the year there has been reorganisation of Business Segments. Figures for the year ended 30 September 2009 and year ended 30 September 2008 has been regrouped to make them comparable. Segment information:
31
(iv)
The primary and secondary reportable segments are business segments and geographical segments respectively. Business Segments: The business of the Company is divided into eleven segments. These segments are the basis for management control and hence, form the basis for reporting. The business of each segment comprises of : Industry Automation:- Provides complete range of automation products & systems, industrial automation systems & low-voltage Switchgears. Drive Technologies:- Provides complete range of large and standard drives and motors, special purpose motors, process and motion control systems. Building Technologies :- Electrical Installation Technologies, i.e. Products for Building, e.g. miniature circuit breakers, distribution boards, residual current circuit breakers, etc. Industry Solutions:- Undertakes turnkey projects in the industrial and infrastructure sectors over the entire life cycle including concept, engineering, procurement, supplies, installation, commissioning and after sales services. Mobility:- Provides solutions for rail automation, railway electri?cation, light and heavy rail, locomotives, trains, turnkey projects and integrated services. Fossil Power Generation:- The Fossil Power Generation Division offers highly ef?cient products and solutions for power generation based on fossil fuels. They range from individual gas and steam turbines and generators, to turnkey power plants. The Division also develops instrumentation and control systems for every type of power plant. Oil & Gas:- The Oil & Gas Division offers customers products and solutions that are used for the extraction, conversion and transport of oil and gas. The Division portfolio also includes solutions for power generation and distribution, compressors with electrical and mechanical drives, process and automation technologies, and integrated IT solutions for pipeline and storage applications. Power Transmission:- The Power Transmission Division offers products and solutions in the high-voltage ?eld – such as High Voltage Direct Current (HVDC) transmission systems, substations, switchgear and transformers. Power Distribution:- The specialties of the Power Distribution Division range from solutions for the automation of power grids, to products like medium-voltage switchgear and components. Healthcare:- Provides diagnostic, therapeutic and life-saving products in computer tomography (CT), magnetic resonance imaging (MRI), ultrasonography, nuclear medicine, digital angiography, patient monitoring systems, digital radiography systems, radiology networking systems, lithotripsy and linear accelerators. Real Estate:- Provides comprehensive real estate management. Geographical Segments: The business is organised in two geographic segments i.e. within India and outside India. * Discontinued operations (refer Schedule 4)
88
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Annual Report 2009
32
Disclosure pursuant to Accounting Standard - 15 'Employee Bene?ts' : (i) De?ned Contribution plans Amount of Rs 98,881 (2008: Rs 81,959 ) is recognised as an expense and included in "Personnel costs" (Refer schedule 21) in the Pro?t and loss account. (ii) De?ned bene?t plans a Amounts for the current period are as follows:
Gratuity 2009 I Change in bene?t obligation Liability at the beginning of the year Interest cost Current service cost Liability transfer in Liability transfer out Bene?t paid Actuarial (gain)/ loss on obligations Liability at the end of the year II Fair value of plan assets Fair value of plan assets at the beginning of the year Expected return on plan assets Contributions Transfer from other company Transfer to other company Bene?t paid Actuarial gain/(loss) on plan assets Fair value of plan assets at the end of the year III Actual return on plan assets Expected return on plan assets Actuarial gain/(loss) on plan assets Actual return on plan assets IV Amount recognised in the balance sheet Liability at the end of the year Fair value of plan assets at the end of the year Amount recognised in the balance sheet V 604,602 647,749 (43,147) 466,489 476,575 (10,086) 174,983 174,983 160,326 160,326 70,754 70,754 45,169 45,169 50,027 (14,616) 35,411 37,187 1,669 38,856 476,575 50,027 171,495 9,528 (1,222) (44,038) (14,616) 647,749 471,412 37,187 8,979 905 (11,412) (32,165) 1,669 476,575 466,489 37,249 22,783 9,528 (1,222) (44,038) 113,813 604,602 442,128 35,959 22,415 1,928 (11,412) (32,165) 7,636 466,489 160,326 12,826 (28,305) 30,136 174,983 166,549 13,324 (25,421) 5,874 160,326 45,169 3,555 2,980 (7,410) 26,460 70,754 42,699 2,989 3,205 (25,421) 21,697 45,169 2008 Pension 2009 2008 Medical 2009 2008
Expenses recognised in the income statement Interest cost 37,249 Current service cost 22,783 Expected return on plan assets (50,027) Actuarial (gain)/ loss 128,429 Expense recognised in personnel costs (Schedule 21) 138,434
35,959 22,415 (37,187) 5,967 27,154
12,826 30,136 42,962
13,324 5,874 19,198
3,555 2,980 26,460 32,995
2,989 3,205 21,697 27,891
89
Siemens Ltd.
89
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
32 Disclosure pursuant to Accounting Standard - 15 ‘Employee Bene?ts’ : (continued)
Gratuity 2009 VI Balance sheet reconciliation Opening net liability Expense as above Transfer from other company Employers contribution Amount recognised in balance sheet Actuarial Assumptions: For the Year Discount Rate Current Rate of Return on Plan Assets Current Medical Cost increase rate Attrition rate (10,086) 138,434 (171,495) (43,147) 2008 (29,284) 27,154 1,023 (8,979) (10,086) Pension 2009 160,326 42,962 (28,305) 174,983 2008 166,549 19,198 (25,421) 160,326 Medical 2009 45,169 32,995 (7,410) 70,754 2008 42,699 27,891 (25,421) 45,169
VI
8.0% 8.0% 5.0%
8.0% 8.0% 2.0%
8.0% -
8.0% -
8.0% 7.0% 1% increase (6,071) 7,939 (76) 444
8.0% 5.0% 1% decrease 7,373 (6,757) 171 (444)
VIII Sensitivity Change Change Change Change IX in in in in Liability - Discount rate Liability - In?ation rate Service Cost - Discount rate Interest Cost - Discount rate -
Amount for the Current and Previous Periods as per AS15 Para 120
are as follows: 2009 604,602 647,749 (43,147) 9,883 (13,897) Gratuity 2008 466,489 476,575 (10,086) 7,862 1,669 2007 442,128 471,412 (29,284) 15,831 7,071
Liability at the end of the year Fair value of plan assets at the end of the year Difference Experience Adjustment on Plan Liabilities (gain)/ loss Experience Adjustment on Plan Assets (loss)/ gain
b
The fund formed by the Company manages the investments of the Gratuity Fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark government securities of similar maturities. The Company expects to contribute Rs 29,246 to gratuity fund in 2009-10. The estimates of future salary increases, considered in actuarial valuation, take into account in?ation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The guidance issued by the Accounting Standard Board (ASB) on implementing AS 15, Employee Bene?ts (revised 2005) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as de?ned bene?t plan. The fund does not have any existing de?cit or interest shortfall. In regard to any future obligation arising due to interest shortfall (i.e. government interest to be paid on provident funds scheme exceeds rate of interest earned on investment), pending the issuance of guidance note from the Actuarial Society of India, the Company's actuary has expressed his inability to reliably measure the same. Gratuity Plan Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company’s Scheme whichever is more bene?cial.
c d
(iii)
General Descriptions of signi?cant de?ned plans I
09
90
Annual Report 2009
32
Disclosure pursuant to Accounting Standard - 15 ‘Employee Bene?ts’ : (continued) II Medical Post-Retirement Medical Bene?t is paid to eligible employees in case of survival upto the retirement age and after death, bene?ts are available to the employee's spouse. The Company reimburses the employees for expenses incurred over and above the claim accepted by the insurance company. The Company pays 80% of difference between liability incurred by employee and claim received from insurance company subject to ceiling based on the grade of employees. (iv) Broad category of plan assets as a percentage of total plan assets of the Gratuity Plan Particulars Government of India securities State government securities Public sector unit bonds Special discount scheme Total Plan Assets 2009 13% 22% 32% 33% 100% 2008 17% 10% 28% 45% 100%
33.
Derivative Instruments a Forward Contracts The company uses forward contracts to mitigate its risks associated with foreign currency ?uctuations having underlying transaction and relating to ?rm commitments or highly probable forecast transactions. The Company does not enter into any forward contract which is intended for trading or speculative purposes. The details of forward contracts outstanding at the year end is as follows:Currency Number of contracts Buy amount Indian rupees equivalent 4,627,004 5,788,859 11,558,916 12,054,393 21,144 16,128 26,195 19,563 296,258 179,422 64,463 10,396 33,769 Number of contracts Sell amount Indian rupees equivalent 18,941,503 13,712,408 3,635,600 2,336,299 17,224,543 13,045,708 9,624 -
US Dollar 2009 2008 Euro 2009 2008 Qatari Riyal 2009 2008 Japanese Yen 2009 2008 Pound Sterling 2009 2008 Swiss Franc 2009 2008 CAD 2009 2008 SEK 2009 2008
163 127 143 118 2 2 3 3 13 15 3 1 4 -
96,186 123,259 165,104 178,830 1,600 1,250 49,000 44,243 3,855 2,147 1,517 235 729 -
103 112 53 51 13 16 1 -
393,753 291,971 51,930 34,659 1,303,408 1,011,099 114 -
All currency exposures having underlying transactions as at 30 September 2009 are covered by foreign currency forward contracts. The forward contracts have been converted in Indian rupees, at the spot rates, as at 30 September 2009 to facilitate reading purposes only.
91
Siemens Ltd.
91
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
b Commodity Contracts The Company uses Commodity Future Contracts to hedge against ?uctuations in commodity prices. The following are outstanding copper future contracts entered into by the Company as on 30 September 2009 Year Number of Contracts 749 Nil Contractual Quantity 749 MT Nil Buy/Sell
2009 2008 Note: Each contract of copper is of 1,000 kg. 34. Earnings per share:
Buy NA
2009 Pro?t after tax (net pro?t attributable to equity shareholders) Shares:Weighted average number of equity shares outstanding during the year Earnings per share (basic and diluted) 35 Micro and Small Enterprises Development Act, 2006 ('MSMED') 337,160,200 30.99 10,448,508
2008 5,933,266
337,160,200 17.60
The Company has amounts due to suppliers under MSMED as at 30 September 2009. The disclosure pursuant to the said Act is as under: 2009 Principal amount due to suppliers under MSMED Interest accrued and due to suppliers under MSMED on the above amount, unpaid Payment made to suppliers (other than interest) beyond the appointed day during the year Interest paid to suppliers under the MSMED Interest due and payable towards suppliers under MSMED Act towards payments already made Interest accrued & remaining unpaid at the end of the accounting Year 653,274 2008 331,311
5,670
1,622
2,059,172 -
700,857 -
64,676
15,891
70,346
17,513
The information has been given in respect of such vendors to the extent they could be identi?ed as 'micro and small enterprises' on the basis of information available with the Company.
29
92
Annual Report 2009
36
Prior years comparatives Pursuant to the purchase of SITS (Refer Schedule 2) and discontinuation of the 'SBT' and 'SVDO' segments (Refer Schedule 4), the ?gures of the current year are not strictly comparable to those of the previous year. Previous year's ?gures have been regrouped/ reclassi?ed wherever necessary, to conform to current year's classi?cation. The ?gures of previous year were audited by a ?rm of Chartered Accountants other than S.R.Batliboi & Associates. As per our report of even date. For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors of Siemens Limited Deepak S. Parekh Dr. Armin Bruck Sunil Mathur Yezdi H. Malegam per Sudhir Soni Partner Membership No: 41870 Mumbai 26 November 2009 Ajai Jain Mumbai 26 November 2009 Chairman Managing Director Executive Director Director & Chairman of Audit Committee Vice President (Legal) & Company Secretary
93
Siemens Ltd.
93
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
Balance Sheet Abstract and Company's General Business Pro?le I. Registration Details Registration No. Balance Sheet Date 30 Date 10839 09 Month 2009 Year State Code 11
II.
Capital raised during the year (Amount in Rs thousands) Public Issue NIL Bonus Issue 0 Rights Issue NIL Private Placement NIL
III.
Position of mobilisation and deployment of funds (Amount in Rs thousands) Total Liabilities 82,452,628 Sources of Funds Paid-up Capital 674,320 Secured Loans NIL Application of Funds Net Fixed Assets 7,352,031 Net Current Assets 15,931,233 Accumulated Loss NIL Investments 4,769,723 Miscellaneous Expenditure NIL Deferred Tax Asset 1,119,126 Reserves & Surplus 28,491,887 Unsecured Loans 5,906 Total Assets 82,452,628
49
94
Annual Report 2009
Balance Sheet Abstract and Company's General Business Pro?le (Continued) IV. Performance of the Company (Amount in Rs thousands) Turnover (including other income) 87,449,154 +/+ Pro?t/Loss Before Tax 14,318,593 (Please tick appropriate box + for Pro?t, - for Loss) Earning per share in Rs 30.99 Dividend Rate % 250% +/+ Total Expenditure 75,190,020 Pro?t/Loss After Tax 10,448,508
V.
Generic Names of Three Principal Products/Services of the Company (As per monetary terms) Item No. (ITC Code) Product description Item No. (ITC Code) Product description Item No. (ITC Code) Product description 854800 Electrical part of machinery or apparatus 903289 Electronic automatic regulators 902210 X-ray apparatus
The Earning per share disclosed above has been computed in accordance with the Accounting Standard - 20, Earning per share, issued by the Institute of Chartered Accountants of India (“ICAI”). For and on behalf of the Board of Directors Deepak S. Parekh Dr. Armin Bruck Sunil Mathur Yezdi H. Malegam Ajai Jain Mumbai 26 November 2009 Chairman Managing Director Executive Director Director & Chairman of Audit Committee Vice President (Legal) & Company Secretary
95
Siemens Ltd.
95
Statement Regarding Subsidiary Companies Pursuant to Section 212 ( 1 ) and ( 3 ) of The Companies Act, 1956 : (Currency: Indian rupees in thousands) Name of the Subsidiary The net Aggregate of pro?ts (losses) of the subsidiary company for it’s ?nancial year so far as they concern the members of Siemens Ltd. a) Dealt within the account of Siemens Limited for the year ended b) Not dealt within the account of Siemens Limited for the year ended The net Aggregate of pro?ts (losses) of the subsidiary company for it’s ?nancial year so far as they concern the members of Siemens Ltd. a) Dealt within the account of Siemens Limited for the year ended b) Not dealt within the account of Siemens Limited for the year ended
30 September 2009 Siemens Information Systems Ltd. [6,815,000 (2008: 6,815,000) Equity shares of Rs 10 each, fully paid-up i.e.100% holding (up to 24 June 2009) (2008: 100% holding)] Flender Ltd. [4,320,000 (2008: Nil) Equity shares of Rs 10 each, fully paid-up i.e.100% holding (incorporated on 1 August 2009) (2008: 50% holding)] Siemens Information Processing Services Private Ltd. [ 2,123,800 (2008: 2,123,800) Equity shares of Rs 10 each, fully paid-up i.e. 51% holding (up to 24 June 2009) (2008: 51% holding)] Siemens Industrial Turbomachinery Services Private Ltd. [Nil (2008:Nil) Equity shares of Rs 100 each, fully paid-up i.e. Nil (2008: 100% holding)](up to 31 March 2008) Siemens Rolling Stock Private Ltd. [25,000,000 (2008:25,000,000) Equity shares of Rs 10 each, fully paid-up, i.e.100% holding (2008: 100%)] Siemens Building Technologies Private Ltd. [3,216,870 (2008: 2,962,027) Equity shares of Rs 10 each, fully paid-up i.e. 86.15% holding (2008: 79.32% holding)] (Additional 6.83% acquired on 7 January 2009) 187,406
30 September 2008 338,997
-
44,979
-
-
-
107,193
-
117,250
-
-
-
21,049
-
(135,042)
-
(11,276)
-
(146,808)
-
90,754
69
96
Annual Report 2009
Siemens Group Consolidated Financial Statements for the year ended 30 September 2009 together with Auditors’ Report
97
Siemens Group
97
Disclosure pursuant to Central Government approval no. 47/681/2009-CL-III dated 30 October, 2009 under Section 212 (8) of the Companies Act, 1956 (Currency: Indian rupees in thousands)
Siemens Information Systems Ltd. Siemens Nixdorf Information Systems Private Ltd. Flender Ltd. Siemens Industrial Turbomachinery Services Private Ltd. Siemens Information Processing Services Private Ltd. Upto 24 June 2009 2009 2008 41,643 350,441 125 392,209 392,209 2009 250,000 600,000 850,000 850,000 Siemens Rolling Stock Private Ltd.
Upto 24 June 2009 Particulars Capital Reserves Loans Total Assets Total liabilities Details of investments: 2040514 equity shares of Rs 10 each fully paid-up in Siemens Information Processing services Private ltd. Investments funds Turnover Pro?t / (Loss) before Tax Provision For Tax Deferred Tax MAT credit entitlement Fringe Bene?t Tax Pro?t / (Loss) After Tax Interim dividend Dividend Distribution Tax in mutual 629,014 (20) (20) 2009 2008 68,150 2009 2008
From 1 August 2009 2009 43,200 850,418 900,893 900,893 2008 2009 -
Upto 31 March 2008 2008 -
From 4 July 2008 2008 250,000 250,000 250,000
- 161,210 - 328,536 -
- 3,499,690 -
- 3,567,840 - 3,567,840
- 489,746 - 489,746
29,996
29,996
-
-
-
-
-
-
-
-
-
-
389,332 67,336 23,928 (1,570) 44,979 -
-
-
268,843 34,073 15,401 (2,811) 434 21,049 -
-
-
29,351
-
5,733,631 9,942,678 245,718 42,577 (1,900) 17,634 187,406 732,674 409,656 (55,073) 39,094 338,997 -
764,896 1,071,703 109,433 (2,851) 5,091 107,193 -
132,498 (134,524) (11,154) 22,761 (105) (11,242) 3,834 518 122
117,250 (135,042) (11,276) -
89
98
Annual Report 2009
Disclosure pursuant to Central Government approval no. 47/681/2009-CL-III dated 30 October, 2009 under Section 212 (8) of the Companies Act, 1956 (Currency: Indian rupees in thousands)
Siemens Building Technologies Private Ltd. Particulars Capital Reserves Loans Total Assets Total liabilities Details of investments Investments in mutual funds Turnover Pro?t / (Loss) before Tax Provision For Tax Deferred Tax Fringe Bene?t Tax Pro?t / (Loss) After Tax Interim dividend Dividend Distribution Tax 2009 37,341 571,881 852,873 1,462,095 1,462,095 331,780 1,772,635 (142,256) 26,758 (41,295) 2,929 (146,808) 2008 37,341 642,623 906,718 1,586,683 1,586,683 437,081 2,085,520 124,751 43,250 (19,435) 7,605 93,331 Vista Security Technics Private Ltd. 2009 669 81,586 82,256 82,256 251,001 1,875 4,074 (3,574) 188 1,187 2008 669 80,399 81,069 81,069 320,480 19,584 7,617 (867) 271 12,564 iMetrex Technologies Pte.Ltd (Singapore) 2009 339 260,264 260,603 260,603 554,486 138,284 17,452 120,831 2008 325 138,574 138,899 138,899 742,736 149,934 (25,339) 124,594 Avenues Hongkong Ltd. (Hong kong) 2009 (4,897) (4,897) 228,463 2008 299 226,129 226,428 226,428 258,919 (75,596) (75,596) 106,000 -
99
Siemens Group
99
Disclosure pursuant to Central Government approval no. 47/681/2009-CL-III dated 30 October, 2009 under Section 212 (8) of the Companies Act, 1956 (Currency: Indian rupees in thousands)
iMetrex Technologies Ltd. (Ireland) Europlex Technologies U.K Ltd. (UK) Europlex Technologies (Ireland) Ltd. formerly known as Europlex Manufacturing Ltd. (Ireland) 2009 52,634 (416,386) (418,691) (418,691) 174,653 (44,178) 8,067 (52,245) 2008 49,944 (342,936) (292,992) (292,992) 152,816 (71,546) (12,121) (83,667) Europlex Research Ltd. (Ireland) Clonshaugh Security Ltd. formerly known as Europlex Technologies Ltd. (Ireland)
Particulars Capital Reserves Loans Total Assets Total liabilities Details of investments Investments in mutual funds Turnover Pro?t / (Loss) before Tax Provision For Tax Deferred Tax Fringe Bene?t Tax Pro?t / (Loss) After Tax Interim dividend Dividend Distribution Tax
2009 113,917 354,169 415,468 415,468 (1,230) (1,230) -
2008 108,142 337,448 445,590 445,590 87,826 87,826 -
2009 224,566 (238,417) (48,265) (48,265) 69,428 (23,991) (23,991) -
2008 8 (233,725) (233,717) (233,717) 95,873 (19,669) (358) (20,026) -
2009 -
2008 114 (114) (5,294) (5,294) -
2009 -
2008 8 (8) 87,805 25,252 25,252 -
The Currency & exchange rate used by the following companies Company Currency Exchange Rate closing rate for balance sheet items 33.89 6.17 70.00 76.98 70.00 70.00 70.00 Exchange Rate average rate for revenue items 33.30 6.33 66.35 75.60 66.35 66.35 66.35
iMetrex Technologies Pte Ltd-Singapore Avenues Hongkong Ltd iMetrex Technologies Pvt Ltd-Ireland Europlex Technologies U.K Ltd Europlex manufacturing Ltd. Europlex Research ltd. Europlex Technologies Ltd
SGD HK$ Euro GBP Euro Euro Euro
001
100
Annual Report 2009
Auditors’ Report To the Board of Directors of Siemens Limited
We have audited the attached consolidated balance sheet of Siemens Limited, its subsidiaries and associate (collectively referred to as the ‘Siemens group’), as at September 30, 2009, and also the consolidated pro?t and loss account and the consolidated cash ?ow statement for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Siemens Limited’s management. Our responsibility is to express an opinion on these ?nancial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report that the consolidated ?nancial statements have been prepared by the Siemens Limited’s management in accordance with the requirements of Accounting Standards (AS) 21, Consolidated Financial Statements, Accounting Standards (AS) 23, Accounting for Investments in Associates in Consolidated Financial Statements noti?ed pursuant to the Companies (Accounting Standards) Rules, 2006, (as amended).
In our opinion and to the best of our information and according to the explanations given to us, the consolidated ?nancial statements give a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the consolidated balance sheet, of the state of affairs of the Siemens Group as at September 30, 2009; in the case of the consolidated pro?t and loss account, of the pro?t for the year ended on that date; and in the case of the consolidated cash ?ow statement, of the cash ?ows for the year ended on that date.
(b)
(c)
For S.R. BATLIBOI & ASSOCIATES Chartered Accountants
per Sudhir Soni Partner Membership No.:41870 Place: Mumbai Date: November 26, 2009
101
Siemens Group
101
Consolidated Balance Sheet as at 30 September 2009 (Currency: Indian rupees thousands)
Schedule SOURCES OF FUNDS Shareholders’ funds Share capital Reserves and surplus Minority interest Equity Non-equity Loan funds Secured loans Unsecured loans 2009 2008
3 4
674,320 27,138,616 27,812,936
674,320 22,099,755 22,774,075 7,721 139,665 147,386 101,751 10,614 112,365 23,033,826
5 6
5,173 51,144 56,317 515 5,906 6,421 27,875,674
7 8
APPLICATION OF FUNDS Fixed assets Gross block Accumulated depreciation Net block Capital work-in-progress including capital advances Investments Deferred tax asset, net Current assets, loans and advances Inventories Sundry debtors Cash and bank balances Loans and advances Current liabilities and provisions Current liabilities Provisions Net current assets
9 16,761,573 (7,493,264) 9,268,309 1,616,343 10,884,652 113 1,196,377 10,554,838 36,134,193 14,745,833 9,198,885 70,633,749 (42,048,548) (12,790,669) (54,839,217) 15,794,532 27,875,674 15,551,439 (7,603,701) 7,947,738 1,068,470 9,016,208 2,450,339 1,461,899 8,257,439 37,563,888 13,221,817 6,450,042 65,493,186 (47,854,139) (7,533,667) (55,387,806) 10,105,380 23,033,826
10 11 12 13 14 15
16 17
Signi?cant accounting policies 1 Schedules to the consolidated ?nancial statements 2 - 33 The schedules referred to above form an integral part of the consolidated balance sheet. As per our report of even date.
For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors Deepak S. Parekh Chairman Dr. Armin Bruck Managing Director Sunil Mathur Executive Director Yezdi H. Malegam Director & Chairman of Audit Committee Ajai Jain Vice President (Legal) & Company Secretary Mumbai 26 November 2009
per Sudhir Soni Partner Membership No.: 41870 Mumbai 26 November 2009
201
102
Annual Report 2009
Consolidated Pro?t and Loss Account for the year ended 30 September 2009 (Currency: Indian rupees thousands)
INCOME Sales and services (gross) Excise duty Sales and services (net) Commission income Interest income Other operating income, net Other income EXPENDITURE Cost of sales and services Personnel costs Depreciation/ amortisatio Interest Expense Other costs, net Pro?t before tax before exceptional income Exceptional income: – Pro?t on sale of subsidiaries – Pro?t on sale of Automotive division Pro?t before tax Consists of: – Discontinued operations – Continuing operations Provision for tax Current tax (includes 2009: Rs 42,577; 2008: Rs 432,416 of discontinued operations) Deferred tax credit ((includes 2009: Rs 4,751; 2008: Rs 55,178 of discontinued operations) Fringe bene?t tax (includes 2009 : Rs 22,726 2008; : Rs 42,928 of discontinued operations) Minimum Alternate Tax credit entitlement (of discontinued operations) Pro?t after tax Share of pro?t of associate Minority interest Net pro?t after tax Consists of: – Discontinued operations – Continuing operations Net pro?t after tax Balance in pro?t & loss account brought forward Amount available for appropriation Appropriations: Proposed dividend Tax on Proposed dividend Transfer to general reserve Balance carried forward Earnings per share (‘EPS’) (Equity share of face value Rs 2 each) – Basic and diluted Signi?cant accounting policies Schedules to the consolidated ?nancial statements The schedules referred to above form an integral part of the consolidated pro?t & loss account. As per our report of even date. For S.R.Batliboi & Associates Chartered Accountants Schedule 2009 94,581,979 (2,245,714) 92,336,265 528,263 92,864,528 558,449 626,641 114,910 94,164,528 65,679,226 9,443,848 1,732,689 73,944 7,852,671 84,782,378 9,382,150 1,501,019 10,883,169 447,941 10,435,228 10,883,169 (4,121,560) 255,805 (94,098) 6,923,316 81,670 41,052 7,046,038 2 387,389 6,658,649 7,046,038 1,929,045 8,975,083 1,685,801 286,502 8,476,205 (1,473,425) 8,975,083 32 20.90 1 2 - 33 17.78 2008 99,486,310 (3,149,908) 96,336,402 461,809 96,798,211 647,730 497,781 99,052 98,042,774 69,643,284 9,203,423 1,616,860 65,548 9,326,357 89,855,472 8,187,302 1,235,151 9,422,453 1,237,026 8,185,427 9,422,453 (4,029,668) 707,328 (171,654) 11,242 5,939,701 74,556 (18,768) 5,995,489 825,304 5,170,185 5,995,489 2,092,152 8,087,641 1,011,481 569,871 4,577,244 1,929,045 8,087,641
18 19 20 21 22 9 23
2 2 2
per Sudhir Soni Partner Membership No.: 41870 Mumbai 26 November 2009
For and on behalf of the Board of Directors Deepak S. Parekh Chairman Dr. Armin Bruck Managing Director Sunil Mathur Executive Director Yezdi H. Malegam Director & Chairman of Audit Committee Ajai Jain Vice President (Legal) & Company Secretary Mumbai 26 November 2009
103
Siemens Group
103
Consolidated cash ?ow statement for the year ended 30 September 2009 (Currency: Indian rupees thousands)
Cash ?ow from operating activities Pro?t before tax Adjustments for: Interest expense Depreciation and amortisation Pro?t on sale of ?xed assets, net Pro?t on sale of long term investment (equity shares in Siemens Information Systems Ltd.) Loss on sale of long term investment (equity shares in Siemens Information Processing Systems Ltd.) Pro?t on sale of Automotive division Sale of lease rights Pro?t on sale of Electronics Assembly Division Bad debts Provision for doubtful debts/ advances, net Unrealised exchange gain, net Interest income Dividend income Operating pro?t before working capital changes Increase in inventories Increase in sundry debtors and other receivables Increase in sundry creditors and other current liabilities Increase in provisions Net change in working capital Cash generated from operations Direct taxes paid, net Net cash provided by operating activities of which discontinued operations – Information Technology Services – Business Process Outsourcing – Automotive Cash ?ow from investing activities Purchase of ?xed assets Proceeds from sale of ?xed assets Purchase of investments – In subsidiary companies (total consideration is in cash or cash equivalent) – In mutual funds Sale of investments – In mutual funds – In subsidiary company (total consideration is in cash or cash equivalent) Dividend income received from mutual funds Interest received Sale of lease rights (total consideration is in cash or cash equivalent) Sale of EA business (total consideration is in cash or cash equivalent) Sale of Automotive division (total consideration is in cash or cash equivalent) Inter corporate deposits placed Inter corporate deposits received back Cash generated from investing activities of – – – which discontinued operations Information Technology Services Business Process Outsourcing Automotive
401
Schedule
2009 10,883,169 73,944 1,732,689 (240,740) (1,513,879) 12,860 (78,000) (30,307) 311,921 112,425 (1,027,379) (558,449) (6,603) 9,671,651 (2,095,654) (1,187,497) (1,176,736) 5,048,707 588,820 10,260,471 (5,928,487) 4,331,984
2008 9,422,453 65,548 1,616,860 (260,461) (1,235,151) 57,964 408,001 (454,670) (647,730) (99,052) 8,873,762 (337,194) (11,771,198) 11,403,528 1,842,823 1,137,959 10,011,721 (4,714,746) 5,296,975 158,308 282,049 (104,951) (2,368,730) 417,758 (1,499,053) 958,699 99,052 652,547 1,700,000 (450,000) 325,000 (164,727) (348,161) (21,120) (42,358) Annual Report 2009
9 19
23 23 18 20
2 2 2 9
665,706 (227,977) (2,825,701) 306,024 (1,700,999) 1,834,754 3,021,459
20
6,603 556,076 78,000 28,150 (5,845,000) 4,700,000 159,366
2 2
693,798 (3,722) -
104
Schedule Cash ?ow from ?nancing activities Interest paid Repayment of short term borrowings Dividend paid (including tax thereon) Repayment of long term borrowings Net cash used in ?nancing activities of which discontinued operations – Information Technology Services – Business Process Outsourcing – Automotive Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents acquired on acquisition of subsidiary (Flender Ltd.) Cash and cash equivalents on sale of subsidiary (Siemens Information Systems Ltd.) Cash and cash equivalents on sale of subsidiary (Siemens Information Processing Systems Ltd.) Cash and cash equivalents (Automotive division) Effect of exchange gain/(loss) on cash and cash equivalents Cash and cash equivalents at the end of the year 2 2
2009 (17,423) (101,175) (1,578,496) (4,708) (1,701,802) (359,045) (64) 2,789,548 13,221,817 125,991 (2,068,293) (220,459) 897,229
2008 (45,548) (200,006) (945,555) (4,709) (1,195,818) (48) 3,936,430 8,569,723 76,492 639,172 13,221,817
14
14,745,833
Note: Cash and cash equivalents at the end of the period include current account balances with banks of Rs 13,863 (2008: Rs 11,007) which are restricted in use. As per our report of even date.
For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors Deepak S. Parekh Chairman Dr. Armin Bruck Managing Director Sunil Mathur Executive Director Yezdi H. Malegam Director & Chairman of Audit Committee Ajai Jain Vice President (Legal) & Company Secretary Mumbai 26 November 2009
per Sudhir Soni Partner Membership No.: 41870 Mumbai 26 November 2009
105
Siemens Group
105
Schedules to the Consolidated Financial Statements for the year ended 30 September 2009 (Currency: Indian rupees thousands)
1 1.1 Signi?cant accounting policies Basis of preparation of ?nancial statements The ?nancial statements are prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the accounting standards speci?ed in the Companies (Accounting Standards) Rules 2006, (as amended) issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards (‘NACAS’) and relevant provisions of Companies Act, 1956 (‘the Act’) to the extent applicable. The accounting policies have been consistently applied by the Group and are consistent with those used in the previous year. 1.2 Principles of consolidation The consolidated ?nancial statements include the ?nancial statements of Siemens Limited (‘the Company’) or (‘the parent company’), its subsidiaries and associate. The Company, its subsidiaries and associate constitute the Siemens Group. The list of subsidiaries, step-down subsidiaries and associate are set out below: Entity Subsidiaries Siemens Information Systems Ltd. (‘SISL’) (100% upto 24 June 2009) (Refer note a) Siemens Information Processing Systems Private Ltd. (‘SIPS’) (100% upto 24 June 2009) (the balance 49% is held by SISL) (Refer note a) Siemens Building Technologies Private Ltd. (‘SBTPL’) Siemens Rolling Stock Private Ltd. (incorporated on 4 July 2008) Flender Ltd. (subsidiary from 1 August 2009) (Refer note b) Step-down subsidiaries Siemens Nixdorf Information Systems Private Ltd. (‘SNISL’) (100% share capital held by SISL) (100% upto 1 June 2009) (Refer note a) Vista Security Technics Private Ltd. (‘VSTPL’) (100% share capital held by SBTPL) iMetrex Technologies Pte Ltd. (‘iTPL’) (100% share capital held by SBTPL) Avenues (Hong Kong) Ltd. (‘AHKL’) (100% share capital held by SBTPL) iMetrex Technologies Ltd. (‘iTL’) (100% share capital held by SBTPL) Europlex Technologies Ltd. (100% share capital held by iTL) Europlex Manufacturing Ltd. (100% share capital held by iTL) Europlex Research Ltd. (100% share capital held by iTL) Europlex Technologies UK Ltd. (100% share capital held by iTL) Associate Flender Ltd. (50% Upto 31 July 2009) (Refer Note b) Note: a. Country of incorporation % holding 2009 % holding 2008
India India India India India
86.15% 100% 100%
100% 51% 79.32% 100% 50%
India India Singapore Hong Kong Ireland Ireland Ireland Ireland UK India
100% 100% 100% 100% 100% 100% 100% 100% -
100% 100% 100% 100% 99.76% 100% 100% 100% 100% 50%
During the year, the Group’s entire stake in Siemens Information Systems Ltd. Siemens Information Processing Services Private Ltd. and Siemens Nixdorf Information Systems Private Ltd. has been sold to Siemens Corporate Finance Private Ltd. During the year, the Group increased its investment in Flender Ltd. with effect from 1 August 2009 (formerly an associate, now a subsidiary company) from 50% to 100% by purchasing an additional 50% stake for a consideration of Rs. 909,935. Annual Report 2009
b.
601
106
Subsidiaries The excess/ de?cit of cost to the parent company of its investment in the subsidiaries over its portion of equity in the subsidiaries at the respective dates on which investment in such subsidiaries was made is recognised in the ?nancial statements as goodwill/capital reserve. The parent company’s portion of equity in such subsidiaries is determined on the basis of book values of assets and liabilities as per the ?nancial statements of the subsidiaries as on the date of investment and if not available, the ?nancial statements for the immediately preceding period adjusted for the effects of signi?cant transactions. Goodwill is amortised over a period of 5 years from date of acquisition/investment. The ?nancial statements of the parent company and its subsidiaries have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances/transactions and resulting unrealized pro?ts in full. Unrealized losses resulting from intra-group transactions are also eliminated except to the extent that recoverable value of related assets is lower than their cost to the group. The amounts shown in respect of reserves comprise the amount of the relevant reserves as per the balance sheet of the parent company and its share in the post-acquisition increase in the relevant reserves of the subsidiaries. Subsidiaries are consolidated from the date on which effective control is transferred to the Group and are no longer consolidated from the date of disposal. Minority interest’s share of net pro?t is adjusted against the income to arrive at the net income attributable to shareholders. Minority interest’s share of net assets is presented separately in the balance sheet. Consolidated ?nancial statements are prepared using uniform accounting policies for transactions and other events in similar circumstances. Investment in Associates Investments in entities in which the parent company has signi?cant in?uence but not a controlling interest, are reported according to the equity method i.e. the investment is initially recorded at cost, identifying any goodwill / capital reserve arising at the time of acquisition. Goodwill is amortised over a period of 5 years from date of acquisition/investment. The carrying amount of the investment is adjusted thereafter for the post acquisition change in the investor’s share of net assets of the investee. The consolidated pro?t and loss account includes the investor’s share of the results of the operations of the investee. Effect of Acquisition/Disposals The effect of acquisition/disposal of stake in subsidiaries during the year on the consolidated ?nancial statements is as under: Name of Company Effect on Group Pro?t before Tax for the year Rs 35,148 Net Assets as at
Acquisitions: Flender Ltd. Disposals: Siemens Information Systems Ltd. (Previous Year Rs 1,061,824 and Rs 3,564,560) Siemens Information Processing Services Pvt. Ltd. (Previous Year Rs 166,990 and Rs 415,511) 1.3 Use of estimates Rs 326,327 Rs 121,634
1 August 2009 Rs 848,639 24 June 2009 Rs 1,251,253 Rs 240,436
The preparation of ?nancial statements in conformity with generally accepted accounting principles (‘GAAP’) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the ?nancial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.
107
Siemens Group
107
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
1.4 Fixed assets and depreciation Fixed assets are stated at acquisition or revalued amounts less accumulated depreciation. The cost of ?xed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Depreciation is provided on the straight-line method (‘SLM’). The depreciation rates prescribed in Schedule XIV to the Act are considered as the minimum rates. If the management’s estimate of the useful life of a ?xed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is shorter than that envisaged in the aforesaid Schedule, depreciation is provided at a higher rate based on the management’s estimate of useful life/ remaining life. The key ?xed asset blocks and related annual depreciation rates, which in management’s opinion re?ect the estimated useful economic lives of the ?xed assets, are: Asset Land - Freehold land - Lease hold Buildings - Factory buildings - Other buildings Plant and machinery - Assets at project sites - Special machine tools - Other plant and machinery Furniture, ?ttings and of?ce equipment Vehicles Rate Over the lease period 3.34% 2% - 5% Over the life of the project 10% 10% - 25% 20% - 33 1/3% 25%
Where depreciable assets are revalued, depreciation is provided on the revalued amount and the additional depreciation on accretion to assets on revaluation is transferred from revaluation reserve to pro?t and loss account. Assets costing less than Rs 5,000 are fully charged to the pro?t and loss account in the year of acquisition. Items of ?xed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and estimated net realizable value and are disclosed separately in the ?nancial statements. Any expected loss is recognised in the pro?t and loss account through an accelerated depreciation charge. Capital work-in-progress includes the cost of ?xed assets that are not ready to use at the balance sheet date and advances paid to acquire capital assets before the balance sheet date. 1.5 Intangible assets Intangible assets comprise goodwill and technical know-how. These intangible assets are amortised on straight-line basis based on the following useful lives, which in management’s estimate represents the period during which economic bene?ts will be derived from their use: Asset Goodwill Technical know-how Useful life 60 months 60 - 84 months
Non-compete fee is amortised over the period of the agreement of 3 years. 1.6 Impairment of assets The Group assesses at each balance sheet date whether there is any indication that an asset or a group of assets (cash generating unit) may be impaired. If any such indication exists, the Group estimates the recoverable amount of the asset or cash generating unit. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash ?ows are discounted to the present value at the weighted average cost of capital. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the pro?t and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is re?ected at the recoverable amount subject to a maximum of depreciable historical cost had no impairment been recognised.
801
108
Annual Report 2009
1.7
Investments Investments that are readily realizable and intended to be held but not more than a year are classi?ed as current investments. All other investments are classi?ed as long term investments. Long-term investments are carried at cost. Provision for diminution is made to recognize a decline, other than temporary in value of long-term investments and is determined separately for each individual investment. Current investments are carried at lower of cost and fair value, computed separately in respect of each category of investment.
1.8
Inventories Inventories comprise all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. Raw materials are valued at the lower of cost and net realisable value. Cost is determined on the basis of the weighted average method. Work-in-progress and ?nished goods are valued at the lower of cost and net realisable value. Excise duty is included in the value of ?nished goods inventory. Custom duty on goods where title has passed to the Group is included in the value of inventory. The net realizable value of work-in-progress is determined with reference to the selling price of related ?nished goods. Raw materials held for production of ?nished goods are not written down below cost except in case where material price have declined and it is estimated that the cost of ?nished product will exceed their net realisable value.
1.9
Revenue recognition Revenue from sale of products is recognised on transfer of all signi?cant risk and rewards of ownership of the products to the customers, which is generally on despatch of goods. Sales are stated exclusive of sales tax and net of trade and quantity discount. Revenue from services is recognised as per the terms of the contract with the customer using the proportionate completion method. Income from ?xed price construction contracts is recognised by reference to the estimated overall pro?tability of the contract under the percentage of completion method. Percentage of completion is determined as a proportion of the costs incurred upto the reporting date to the total estimated contract costs. Revenue from ?xed price software contracts is recognised using the percentage of completion method of accounting, under which the sales value of performance, including earnings thereon is determined by relating the actual man hours of work performed to date to the estimated total man hours for each contract. Provision for expected loss is recognized immediately when it is probable that the total estimated contract costs will exceed total contract revenue. Revenues under cost plus contracts are recognised as services are rendered on the basis of an agreed mark-up on costs incurred in accordance with arrangement entered. Revenue recognition is postponed in circumstances when signi?cant uncertainty with respect to collectibility exists. Maintenance revenue is considered on acceptance of the contract and is accrued over the period of the contract. Revenue from training is recognised as the related service is performed. Commission income is recognised when proof of shipment is received from the supplier. Commission from sale of software license is recognised when the right to use the license is conferred. Dividend income is recognised when the right to receive the dividend is established. Interest income is recognised on the time proportion basis. Export incentives receivable are accrued for when the right to receive the credit is established and there is no signi?cant uncertainty regarding the ultimate collection of export proceeds.
109
Siemens Group
109
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
1.10 Leases Where the Group is the lessee: Leases where the lessor effectively retains substantially all the risk and bene?ts of ownership of the leased items are classi?ed as operating leases. Lease payments under an operating lease, are recognised as an expense in the statement of pro?t and loss on a straight-line basis over the lease term. Leases under which the Group assumes subsequently all the risks and rewards of ownership are classi?ed as ?nance leases. Such assets are capitalised at fair value of the asset or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments are apportioned between the ?nance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Where the Group is the lessor: Assets subject to operating leases are included in ?xed assets. Lease income is recognised in the Pro?t and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in the Pro?t and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Pro?t and Loss Account. 1.11 Employee bene?ts (a) Short term employee bene?ts All employee bene?ts payable wholly within twelve months of rendering the service are classi?ed as shortterm employee bene?ts. Bene?ts such as salaries, wages, and short term compensated absences, etc. and the expected cost of ex-gratia is recognised in the period in which the employee renders the related service. (b) Post-employment bene?ts (i) De?ned Contribution Plans: The Group’s approved superannuation scheme, employee state insurance scheme and labour welfare fund are de?ned contribution plans. The Group’s contribution paid/payable under the schemes is recognised as expense in the pro?t and loss account during the period in which the employee renders the related service. De?ned Bene?t Plans: The Group’s provident fund, gratuity, pension and medical bene?ts schemes are de?ned bene?t plans. In case of one of the subsidiary ‘Flender Ltd.’ superannuation is a de?ned bene?t scheme. The present value of the obligation under such de?ned bene?t plans is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee bene?t entitlement and measures each unit separately to build up the ?nal obligation. The obligation is measured at the present value of the estimated future cash ?ows. The discount rates used for determining the present value of the obligation under de?ned bene?t plans, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognised immediately in the pro?t and loss account. 1.12 Foreign currency transactions The Group is exposed to currency ?uctuations on foreign currency transactions. Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the pro?t and loss account of the year. Translation Monetary assets and liabilities in foreign currency, which are outstanding as at the year-end, are translated at the yearend at the closing exchange rate and the resultant exchange differences are recognized in the pro?t and loss account. Non monetary items are stated in the balance sheet using the exchange rate at the date of the transaction.
011
(ii)
110
Annual Report 2009
In respect of Non-integral foreign operations, the assets and liabilities, both monetary and non-monetary are translated at the closing rates and income and expenses are translated at average exchange rates and all the resulting exchange differences are accumulated in foreign currency translation reserve. Derivative instruments The Group’s exposure to foreign currency ?uctuations relates to foreign currency assets, liabilities and forecasted cash ?ows. The Group limits the effects of foreign exchange rate ?uctuations by following established risk management policies including the use of derivatives. The Group enters into forward exchange contracts, where the counterparty is a bank. As per Accounting Standard (‘AS’) 11 – ‘The Effects of Changes in Foreign Exchange Rates’, the premium or the discount on forward exchange contracts not relating to ?rm commitments or highly probable forecast transactions and not intended for trading or speculation purpose is amortized as expense or income over the life of the contract. All other derivatives, which are not covered by AS 11, are measured using the mark-to-market principle with the resulting gains/ losses thereon being recorded in the pro?t and loss account. 1.13 Taxation Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the incometax law), deferred tax charge or credit (re?ecting the tax effect of timing differences between accounting income and taxable income for the year) and fringe bene?t tax computed in accordance with the relevant provisions of the Income Tax Act, 1961. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of the assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to re?ect the amount that is reasonable/ virtually certain (as the case may be) to be realised. Provision for fringe bene?t tax (FBT) has been recognized on the basis of harmonious contextual interpretation of the provisions of Income Tax Act, 1961. 1.14 Earnings per share Basic and diluted earnings per share is computed by dividing the net pro?t attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year. 1.15 Provisions Provisions comprise liabilities of uncertain timing or amount. Provisions are recognized when the Company recognizes it has a present obligation as a result of past events, it is probable that an out?ow of resources embodying economic bene?ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Disclosures for contingent liability are made when there is a possible or present obligation for which it is not probable that there will be an out?ow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of out?ow of resources is remote, no disclosure is made. Loss contingencies arising from claims, litigation, assessment, ?nes, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Contingent assets are neither recognized nor disclosed in the ?nancial statements. 1.16 Cash and Cash equivalents Cash and cash equivalents include cash, cheques in hand, cash at bank and short-term deposits with banks having maturity of three months or less.
111
Siemens Group
111
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
2 Discontinued operations a. Information Technology Services segment The Board of Directors of the Group at its meeting held on 09 January 2009 approved the sale of the Group’s holding in Siemens Information Systems Ltd. (SISL) (pertaining to “Information Technology Services” (‘ITS’) segment of the Group) to Siemens Corporate Finance Private Ltd. (SCFPL). The shareholders, pursuant to the provisions of section 293(1)(a) and section 192A of the Act approved the sale and transfer of the investments in the ITS segment for a total consideration of Rs 2,793,882 after an adjustment of Rs 1,697,118 towards change in Net Assets from the valuation date upto the date of closing which was agreed to be 31 March 2009. The Group recognised a pre-tax pro?t of Rs 1,513,879 on account of sale of the ITS segment. The income tax expense on sale is Rs 368,475. The investments were transferred to SCFPL as at 24 June 2009 and revenue and expenses for the period ended up to 24 June 2009 recorded in the pro?t and loss account contains the following amounts relating to discontinued operations of ‘SISL’: For the period ended 24 June 2009 Revenue (including interest, commission, dividend and other income) Expenditure Pro?t before tax Pro?t after tax Total assets Total liabilities b. 5,774,912 (5,448,585) 326,327 268,015 For the year ended 30 September 2008 9,976,833 (8,915,009) 1,061,824 668,147
As at 24 June 2009 As at 30 September 2008 6,126,914 8,093,863 (4,875,661) (4,529,303)
Business Process Outsourcing segment The Board of Directors of the Group at its meeting held on 25 November 2008 approved the sale of the Group’s holding in Siemens Information Processing Services Pvt. Ltd. (SIPS) (pertaining to “Business Process Outsourcing” (‘BPO’) segment of the Group) to Siemens Corporate Finance Pvt. Ltd. (SCFPL). The shareholders, pursuant to the provisions of section 293(1)(a) and section 192A of the Act approved the sale and transfer of the investments in the BPO segment for a total consideration of Rs 227,577 after an adjustment of Rs 414,423 towards change in Net Assets from the valuation date upto the date of closing which was agreed to be 31 March 2009. The Group recognised a pre-tax loss of Rs 12,860 on account of sale of the ITS segment. The income tax expense on sale is Rs 21,523. The investments were transferred to SCFPL as at 24 June 2009 and revenue and expenses for the period ended up to 24 June 2009 recorded in the pro?t and loss account contains the following amounts relating to discontinued operations of ‘SIPS’: For the period ended 24 June 2009 739,339 (617,705) 121,634 119,394 For the year ended 30 September 2008 1,098,167 (931,177) 166,990 151,743
Revenue (including interest and other income) Expenditure Pro?t before tax Pro?t after tax Total assets Total liabilities c. Automotive
As at 24 June 2009 As at 30 September 2008 525,308 708,043 (284,872) (292,532)
The Board of Directors of the Group at its meeting held on 23 April 2007 approved a detailed formal plan for the discontinuance of its business activities pertaining to “Automotive” (‘SVDO’) segment of the Group. After obtaining necessary approvals the SVDO segment was sold with effect from 1 December 2007 and SBT was sold with effect from 1 October 2007. Consequently, the ?gures for the current year are not strictly comparable to those of the prior year.
211
112
Annual Report 2009
2009 3 Share capital Authorised 1,000,000,000 Equity Shares of Rs 2 each (2008: 1,000,000,000 Equity Shares of Rs 2 each) Issued 338,024,465 Equity Shares of Rs. 2 each (2008: 338,024,465 Equity Shares of Rs 2 each) Subscribed and paid-up 337,160,200 Equity Shares of Rs 2 each fully paid-up (2008: 337,160,200 Equity Shares of Rs 2 each fully paid-up) 674,320 674,320 Of the above:
2008
2,000,000 2,000,000
2,000,000 2,000,000
676,049
676,049
674,320 674,320
186,041,090 (2008: 186,041,090) Equity Shares of Rs 2 each, fully paid-up, are held by the Holding company, Siemens AG, Germany; 55,500,000 (2008: 55,500,000) Equity Shares of Rs 2 each, fully paid-up, were allotted as fully paid-up bonus shares by capitalisation of the General Reserve; 168,580,100 (2008 : 168,580,100) Equity Shares of Rs 2 each, fully paid up, were allotted as fully paid-up bonus shares by capitalisation of Securities Premium account; 3,638,085 (2008: 3,638,085) Equity Shares of Rs 2 each, were allotted as fully paid-up for consideration received other than in cash. 2009 4 Reserves and surplus Capital reserve – Balance brought forward – Addition on acquisition of Flender Ltd. Capital redemption reserve Amalgamation reserve Securities premium account – Balance brought forward – Issue of bonus shares Capital reserve on consolidation – Adjustment on amalgamation of erstwhile SITS Foreign currency translation reserve* – Balance brought forward – Created during the year – Share allocated to Minority (4,398) (51,998) 7,811 (48,585) Siemens Group (40,759) 36,361 (4,398)
113
2008
688 10,164 10,852 55,635 1,520,495 1,520,495 -
688 688 9 55,635 1,857,655 (337,160) 1,520,495 16,862 (16,862) -
113
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
4 Reserves and surplus (Continued) Revaluation reserve – Balance brought forward – Additional depreciation on building due to revaluation transferred from pro?t and loss account 14,036 (842) 13,194 2009 General reserve – Balance brought forward – Transfer from pro?t and loss account – Addition on account of employee bene?ts Pro?t and loss account 18,584,245 8,476,205 27,060,450 (1,473,425) 27,138,616 * Foreign Currency translation reserve arising from consolidation of non-integral subsidiaries. 5 Minority interest in equity Siemens Building Technologies Private Ltd. 517,209 (2008: 772,052) equity shares held by minority interest (13.85% holding; 2008: 20.68% holding) Adjustment on purchase of additional interest 7,721 (2,548) 5,173 6 Minority interest in non-equity Siemens Building Technologies Private Ltd. Balance brought forward Increase during the year on account of sale of SBT business segment Adjustment on purchase of additional stake Share of pro?t/(loss) for the year Share of foreign currency translation reserve 139,665 (39,658) (41,052) (7,811) 51,144 7 Secured loans From Banks – Term loans – Cash credit and working capital loan Finance lease obligation ( Refer schedule 25B) 515 515 8 Unsecured loans Interest free loans under – sales tax deferral scheme 5,906 5,906
411
2009
2008 14,882 (846) 14,036 2008 13,966,735 4,577,244 40,266 18,584,245 1,929,045 22,099,755
7,721 7,721
72,145 48,752 18,768 139,665
37,196 63,498 1,057 101,751
10,614 10,614 Annual Report 2009
114
9
Fixed assets
Intangible assets Goodwill Technical Knowhow Non compete fees Land Buildings Tangible assets Plant and Machinery Furniture, Fittings & Of?ce Equipment 2,781,946 49,446 467,579 Vehicles Vehicles taken on lease Total Previous year
Gross block At 1 October 2008 Acquisition on purchase of Flender Ltd. Additions (others) Deductions/ adjustments (Refer note 6) At 30 September 2009 Accumulated depreciation At 1 October 2008 Additions on purchase of Flender Ltd. Charge for the year Deductions/adjustments (Refer note 6) At 30 September 2009 Net block At 30 September 2009 At 30 September 2008 Notes: 1 2,248,926 1,376,340 54,346 72,603 591,751 559,123 3,021,418 2,837,115 3,238,881 2,362,245 110,387 714,182 2,600 26,062 68 9,268,309 7,947,738 7,947,738 1,196,408 343,034 537,327 (569,581) 1,507,188 75,136 18,257 93,393 56,465 56,465 38,115 188 7,436 45,739 624,905 28,629 103,280 (117,624) 639,190 3,508,873 333,258 513,335 (30,813) 4,324,653 2,067,764 21,255 455,480 1,738,557) 805,942 91,483 1,518 10,389 (82,696) 20,694 1,019 70 7,603,703 784,347 1,645,574 6,557,867 1,529,018 (483,184) 7,603,701 2,572,748 527,743 1,234,244 (578,621) 3,756,114 147,739 147,739 56,465 56,465 597,236 652 44,020 (4,418) 637,490 3,462,020 86,577 650,459 (538,448) 3,660,608 5,871,118 622,150 1,124,209 117,545 1,518 551 (96,320) 23,294 1,087 15,551,439 14,106,023 1,344,551 3,521,062 2,363,650 (918,234)
(53,943) (2,382,642) 7,563,534 916,329
(1,087) (3,655,479)
- 16,761,573 15,551,439
(1,089) (2,540,360)
-
7,493,264
2 3
Included in the gross block of land at 30 September 2009 is freehold land of Rs 19,078 (2008: Rs 23,496 ) and buildings includes Rs. 179,111 (2008: Rs 204,910) representing 560 shares of Rs 50 each and 10 shares of Rs 100 each (2008: 595 shares of Rs 50 each and 20 shares of Rs 100 each and 10 shares of Rs 2250 each) in various co-operative housing societies. Land with a value of Rs 2,136 (2008: Rs 2,136) and building with a value of Rs 6,335 (2008 : Nil) are held for sale at 30 September 2009 Depreciation provided has been disclosed as under: 2009 Charge for the year Goodwill on investment in associate amortised (refer Schedule 10) Adjustment of capital reserve on consolidation with goodwill Transfer from Revaluation reserve As per pro?t and loss account 1,645,574 87,957 (842) 1,732,689 2008 1,529,018 105,550 (16,862) (846) 1,616,860
4
Assets includes assets given on operating lease 2009 Particulars Buildings Furniture and Fixture and of?ce equipment 137,540 46,866 12,508 Land Plant and Machinery Buildings 2008 Furniture and Fixture and of?ce equipment 180,016 49,871 15,812 Land Plant and Machinery
Gross Block Written Down Value Depreciation charge for the year 5 6 7 8
547,886 440,245 11,523
28,783 18,671 -
286,218 131,287 22,005
731,006 577,324 16,434
79,858 66,279 -
336,258 125,449 25,435
Furniture, Fittings & Of?ce Equipment includes Rs 24,962 (previous year Rs 24,427) cost incurred by the company on certain assets, ownership of which vests with the West Bengal State Electricity Board. Deductions/ adjustments to ?xed asset includes transfer of assets on account of discontinued operations. (Refer Schedule 2) Above additions to gross block and deletions in accumulated depreciation include exchange ?uctuation adjustments amounting to Rs 21,168 (2008: Rs 57,867) and Rs 20,571 (2008: Rs 54,416) respectively on consolidation of non-integral foreign operations. Goodwill includes goodwill on consolidations - Gross Block Rs 3,349,372 (2008: Rs 2,166,367) Net Block Rs 2,116,840 (2008: Rs 1,180,074)
115
Siemens Group
115
Schedules to the Consolidated Financial Statements (Continued) as at 30 September 2009 (Currency: Indian rupees thousands)
2009 10 Investments Non-Trade, long term (at cost) In government securities (unquoted) National Savings Certi?cates (Unquoted) Shares in associate company 2,160,000 (2008: 2,160,000) Equity Shares of Rs 10 each fully paid-up in Flender Ltd. (50% holding; 2008: 50% holding) Cumulative goodwill on purchase of shares in associate Cumulative amortisation of goodwill Cumulative share of pro?t in associate company Conversion to subsidiary pursuant to purchase of balance shares by the Group (Quoted) Investment in other companies 10,485 (2008: 10,485) Equity Shares of Re 1 each fully paid-up in PRICOL Ltd. 10,000 (2008: 10,000) Equity Shares of Rs 10 each fully paid-up in Scooters India Ltd. (Unquoted) 1 (2008: 1) Equity Share of Rs 10 each fully paid-up in International Shock Absorbers Ltd. Current Investments, at lower of cost or fair value In Mutual Funds (unquoted) Nil (2008: 55,024,962) Birla Cash Plus- Institutional Premium - Daily Dividend Reinvestment Nil (2008: 52,078,676) Sundaram BNP Paribas Money Fund - Super Institutional - Daily Dividend Reinvestment Nil (2008: 30,885,544) units of ING Liquid Fund Super Institutional - Daily Dividend Option Nil (2008: 36,597,419) units of HDFC Liquid Fund Premium Plan - Daily Dividend Reinvestment Option 5 5 2008
149,837 527,743 677,580 (343,034) 334,546 274,638 609,184 (609,184) -
149,837 527,743 677,580 (255,077) 422,503 192,968 615,471 615,471
8 100 108
8 100 108
0.01
0.01
113
551,323 525,750 309,004 448,677 1,834,754 2,450,339 2,450,231 108 400 Annual Report 2009
– Aggregate book value of unquoted investment – Aggregate book value of quoted investments – Aggregate market value of quoted investments
611
5 108 355
116
2009 11 Deferred tax asset Arising on account of timing differences in: – Depreciation – Provision for doubtful debts and advances – Expenditure debited to pro?t & loss account but allowed for tax purposes in following years – Other provisions Deferred tax liability Arising on account of timing differences in: – Differences in Depreciation and other differences in block of ?xed assets as per tax books and ?nancial books Deferred tax asset (net) 12 Inventories Raw materials including spares Work-in-progress – factory related – project related Finished goods Sundry debtors Debts outstanding – Over six months – Other debts Of which – Considered good – Considered doubtful Provision for doubtful debts Sundry debtors are unsecured and include: Project related retention money – over six months – other 14 Cash and bank balances Cash in hand Cheques in hand Balances with scheduled banks – on current account – on deposit account Balances with other banks
2008
7,637 378,407 732,688 452,082 1,570,814
13,734 421,254 458,953 878,310 1,772,251
374,437 1,196,377
310,352 1,461,899
2,976,504 451,404 5,749,589 1,377,341 10,554,838
1,716,105 558,785 4,202,043 1,780,506 8,257,439
13
16,826,807 20,281,709 37,108,516 36,134,193 980,484 37,114,677 (980,484) 36,134,193
13,147,548 25,625,333 38,772,881 37,563,888 1,208,993 38,772,881 (1,208,993) 37,563,888
13,753,293 3,112,451 16,875,744
11,741,312 4,968,932 16,710,244
8,869 792,752 1,616,326 10,636,477 1,691,409 14,745,833
8,734 1,348,131 2,292,348 7,936,235 1,636,369 13,221,817
117
Siemens Group
117
Schedules to the Consolidated Financial Statements (Continued) as at 30 September 2009 (Currency: Indian rupees thousands)
2009 15 Loans and advances (Unsecured, considered good unless stated) Advances recoverable in cash or in kind or for value to be received – considered good – considered doubtful 4,415,822 143,967 4,559,789 Provision for doubtful advances (143,967) 4,415,822 Advance payments of income tax (net of provision for taxation) Minimum Alternate Tax credit entitlement Balances with customs, port trusts, etc. Inter corporate deposits - Others Interest accrued on inter corporate deposits 2,085,388 830,369 1,860,000 7,306 9,198,885 16 Current liabilities Sundry creditors Advances from customers (Refer note 1) Unclaimed dividend (Refer note 2) Notes (1) (2) Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. Advance from customers include progress payments billed and advances received from project related work 14,975,178 20,053,468 25,730,724 16,303,961 13,863 42,048,548 26,665,830 21,177,302 11,007 47,854,139 4,074,305 176,398 4,250,703 (176,398) 4,074,305 890,158 11,242 754,404 715,000 4,933 6,450,042 2008
17
Provisions Pension Provision for Taxation (net of advance tax payment) Leave wages Medical bene?ts Silver Jubilee Gratuity Warranty Loss order Liquidated damages Contingencies Proposed dividend Tax on proposed dividend 174,983 23,975 259,204 70,754 74,418 7,759 1,996,892 907,939 5,658,161 1,644,281 1,685,801 286,502 12,790,669
811
160,326 39,081 359,568 45,169 68,925 82,020 1,282,290 1,099,514 1,804,557 1,010,865 1,011,481 569,871 7,533,667 Annual Report 2009
118
2009 18 Interest income Interest income (Others) 558,449 558,449
2008
647,730 647,730
19
Other operating income, net Export incentives Pro?t on sale of ?xed assets, net Recoveries from associates and third parties Miscellaneous income 97,375 240,740 223,385 65,141 626,641 60,174 260,461 112,812 64,334 497,781
20
Other income Dividend on mutual fund investment Miscellaneous other Income 6,603 108,307 114,910 99,052 99,052
21
Cost of sales and services Raw materials consumed Traded goods purchased Spares and stores consumed Project bought outs Change in inventories Other costs 19,406,329 12,322,120 279,690 28,426,152 (1,064,879) 6,309,814 65,679,226 16,724,813 13,810,998 393,325 36,330,363 (219,086) 2,602,871 69,643,284
22
Personnel costs Salaries, wages and bonus, net Contribution to provident and other funds Staff welfare 8,210,639 768,214 464,995 9,443,848 8,251,420 575,366 376,637 9,203,423
119
Siemens Group
119
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
2009 23 Other costs, net Exchange losses/(gains), net Travel and conveyance Legal and professional External software services and data processing Communications Rent (Refer Schedule 25) Project related other costs Project related hardware cost Repairs – – – on building on machinery others 205,914 74,267 228,265 112,425 597,327 361,637 367,178 14,645 287,365 157,287 6,817 181,183 114,032 311,921 36,044 1,580 11,600 1,300 538,494 7,852,671 24 Commitments and contingent liabilities (a) Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Contingent liabilities Taxation matters (excluding interest) – In respect of certain completed assessments where matters are under appeal by the Company Excise/ sales tax liabilities, under dispute Customs liabilities, under dispute Claims against the company not acknowledge as debts
021
2008 (1,593,205) 2,043,063 1,046,735 925,010 749,669 654,201 627,409 469,243 229,969 66,167 162,281 408,001 612,902 384,260 384,060 317,425 271,419 167,253 161,378 90,731 86,424 57,964 40,616 2,867 14,000 1,440 945,075 9,326,357
61,657 1,338,866 529,430 766,511 678,952 715,037 135,898 17,039
Provision for doubtful debts and advances, net Rates and taxes Power and fuel Packing and forwarding Project related software cost Insurance Of?ce supplies, printing and stationery Advertising and publicity Research and development expenditure Bank guarantee commission/bank charges Bad debts Lease rentals (Refer Schedule 25) Donation Commission to directors Directors’ fees Miscellaneous expenses
1,025,014
959,762
(b)
432,706 312,609 120,000 117,617
302,789 442,524 120,000 43,812 Annual Report 2009
120
25
Disclosure pursuant to Accounting Standard - 19 ‘Leases’ : Lease payments on non cancellable lease arrangement debited to the pro?t and loss account and the future lease payments in respect of non cancellable operating lease are summarised below: 2009 A Operating Lease (i) (ii) (iii) Amount due not later than one year from the balance sheet date Amount due later than one year and not later than ?ve years Amount due later than ?ve years 170,417 90,074 349,104 609,595 Lease rent debited to pro?t and loss account 751,081 201,221 145,496 218,862 565,579 859,406 2008
Sub-lease payments recognised in the pro?t and loss account Rs 28,559 ( 2008: Rs. 23,930) There is no contingent rent recognised in the P&L account General description of the leasing arrangement: (i) (ii) (iii) (iv) The Company has entered into operating lease arrangements for its of?ce premises, vehicles, storage locations, motor car, equipments and residential premises for its employees. The future lease rental payments are determined on the basis of the monthly lease payment terms as per the agreements. At the expiry of the non cancellable lease period the option of renewal rests with the Company. Some of the lease agreements have escalation clause. There are no exceptional/ restrictive covenants in the lease agreements.
B
Future lease commitments in respect of Financial leases (i) Within one year Minimum lease payments Present value of Minimum lease payments Later than one year and not later than ?ve years Minimum lease payments Present value of Minimum lease payments (iii) (iv) Later than ?ve years Total minimum lease payments at the year end Less : amount representing ?nance charges Present value of minimum lease payments 386 353 129 126 515 36 479 577 468 515 479 1,092 145 947
(ii)
(v)
The Company has entered into ?nance lease arrangements for vehicles for a period of 5 years. There is no escalation clause and there are no exceptional/ restrictive covenants. The lease rental payments are determined on the basis of the monthly lease payment terms as per the agreements.
26
Related party names Holding company (holds 55.18% of the Equity Share capital as at 30 September 2009)
121
26.1 Siemens AG
Siemens Group
121
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
26.2 Other related parties where transactions have taken place during the year Fellow Subsidiaries Siemens S.A. Siemens IT Solutions and Services S. A. Siemens Ltd. Siemens Healthcare Diagnostics Ltd. Siemens Aktiengesellschaft Österreich ETM professional control GmbH Siemens VAI Metals Technologies GmbH & Co Siemens Transportation Systems GmbH & Co KG VA Tech Transmission & Distribution GmbH Siemens Ltd. Siemens Bangladesh Ltd. Siemens S.A./N.V. ADB S.A./N.V. Siemens IT Solutions and Services S. A. Siemens Ltda. Siemens Eletroeletronica Limitada Iriel Ind. Com. Sist. Eletr. Ltda. Siemens Milltronics Process Instruments, Inc. Trench Ltd. Siemens Canada Ltd. Siemens Medium Voltage Switching Technologies (Wuxi) Ltd. Siemens International Trading Ltd., Shanghai Siemens Circuit Protection Systems Ltd. Siemens Electrical Apparatus Ltd. Siemens Power Plant Automation Ltd. Siemens Ltd. Siemens Electrical Drives Ltd. Siemens Manufacturing and Engineering Centre Ltd. Siemens Factory Automation Engineering Ltd. Siemens Shanghai Medical Equipment Ltd. MWB (Shanghai) Co Ltd. Siemens Wiring Accessories Shandong Ltd. Siemens Switchgear Co. Ltd. Siemens Industrial Automation Ltd. Siemens Numerical Control Ltd. Siemens Electrical Drives (Shanghai) Ltd. Siemens Mindit Magnetic Resonance Ltd. Zhenjiang Siemens Busbar Trunking Systems Co. Ltd. Siemens Mechanical Drive Systems (Tianjin) Co., Ltd. Winergy Drive Systems (Tianjin) Co. Ltd Siemens Program & System Engineer Nanjing Co Ltd. Siemens S.A. Siemens S.A. Koncar Power Transformers Ltd. Siemens Elektromotory s.r.o. Siemens Industrial Turbomachinery s.r.o. OEZ s.r.o. Siemens Wind Power A/S Siemens S.A. Siemens Technologies S.A.E. Siemens Osakeyhtiö Siemens S.A.S. Siemens Production Automatisation S.A.S. Trench France S.A.S. Siemens Transmission & Distribution SAS Argentina Argentina Australia Australia Austria Austria Austria Austria Austria Bangkok Bangladesh Belgium Belgium Belgium Brazil Brazil Brazil Canada Canada Canada China China China China China China China China China China China China China China China China China China China China China Columbia Costa Rica Croatia Czech Republic Czech Republic Czech Republic Denmark Ecuador Egypt Finland France France France France Annual Report 2009
221
122
26.2 Other related parties where transactions have taken place during the year (Continued) Fellow Subsidiaries Siemens VAI Metals Technologies SAS France Siemens Transportation Systems S.A.S. France Flender-Graffenstaden SAS France SBT HVAC Product GMBH Germany Siemens Building Technologies Fire & Security Products Germany GmbH & Co. oHG SYKATEC Systeme, Komponenten, Anwendungstechnologie GmbH Germany & Co. KG Weiss Spindeltechnologie GmbH Germany Siemens Financial Services GmbH Germany Mechanik Center Erlangen GmbH Germany LINCAS Export Services GmbH Germany Siemens Turbomachinery Equipment GmbH Germany Siemens Busbar Trunking Systems GmbH & Co. KG Germany Trench Germany GmbH Germany Wallace & Tiernan GmbH Germany mdexx Magnetronic Devices GmbH & Co. KG Germany (upto 31 December 2008) Alpha Verteilertechnik GmbH Germany Lincas Electro Vertriebsgesellschaft mbH Germany Loher GmbH Germany Siemens Geared Motors Gesellschaft mit beschränkter Germany Haftung Siemens Finance & Leasing GmbH Germany Ruhrtal Hochspannungsgeräte GmbH & Co. OHG Germany (Upto 30 June 2009) HSP Hochspannungsgeräte GmbH Germany Flender Industriegetriebe GmbH Germany Evosoft GmbH Germany FEAG Fertigungscenter für Elektrische Anlagen GmbH Germany Siemens Building Technologies GmbH & Co. oHG Germany Siemens Financial Services GmbH/WCF Germany Siemens Real Estate GmbH & Co. OHG Germany Siemens Product Lifecycle Management Software (DE) GmbH Germany A Friedr. Flender AG Germany SBT Fire & Security Products GMBH & Co, Germany Germany Siemens Geared Motors Gesellschaft mit beschränkter Haftung Germany Siemens IT Solutions and Services Management GmbH Germany Siemens Enterprise Communications GmbH & Co KG Germany Siemens Enterprise Communications GmbH & Co KG/STS Germany R&S Restaurant Services GmbH Germany Siemens SIA Germany SBT GmbH & Co Germany Germany Siemens plc Great Britain Siemens Industrial Turbomachinery Ltd. Great Britain Siemens Protection Devices Ltd. Great Britain Chemfeed Ltd. Great Britain Electrocatalytic Ltd. Great Britain Electrium Sales Ltd. Great Britain Siemens Magnet Technology Ltd. Great Britain Siemens Busbar Trunking Systems Ltd., in Liquidation Great Britain SBT Security Products Ltd. Great Britain Siemens IT Solutions and Services Ltd. Great Britain Siemens A.E., Elektrotechnische Projekte und Erzeugnisse Greece Eviop-Tempo A.E. Electrical Equipment Manufacturers Greece
123
Siemens Group
123
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
26.2 Other related parties where transactions have taken place during the year (Continued) Fellow Subsidiaries Siemens Ltd. Siemens Erömütechnika Kft. Siemens Hearing Instruments Private Ltd. Siemens Power Engineering Private Ltd. OSRAM India Private Ltd. Siemens VAI Metals Technologies Private Ltd. Siemens Healthcare Diagnostics Ltd. Siemens Corporate Finance Private Ltd. Winergy Drive Systems India Private Ltd. Morgan Construction Company India Private Ltd. Siemens Enterprise Communications Private Ltd. (Upto 31 March 2009) Powerplant Performance Improvement Ltd. Siemens Information Systems Ltd. (w.e.f. 25 June 2009) Siemens Information Processing Services Private Ltd. (w.e.f. 25 June 2009) Siemens Product Lifecycle Management Software (India) Private Ltd. P.T. Siemens Indonesia Siemens Sherkate Sahami (Khass) Siemens Ltd. Siemens Israel Ltd. Siemens S.p.A. Trench Italia S.r.l. Siemens IT Solutions and Services SPA Siemens K.K. Siemens TOO Siemens Kenya Ltd. Siemens Ltd. Siemens Electrical & Electronic Services K.S.C. Osram Opto Semiconductors (Malaysia) Sdn. Bhd. Siemens Malaysia Sdn. Bhd. Siemens Industrial Workshop Sdn. Bhd. Siemens, S.A. de C.V. Siemens S.A. Siemens Nederland N.V. Siemens Industrial Turbomachinery B.V. Siemens (N.Z.) Ltd. Siemens Ltd. Siemens Oil and Gas Offshore AS (upto 30 June 2009) Siemens L.L.C. Siemens Pakistan Engineering Co. Ltd. Siemens, Inc. Siemens Power Operations, Inc. Siemens Sp. z o.o. Siemens W.L.L. Siemens S.R.L. OOO Siemens ISCOSA Industries and Maintenance Ltd. Siemens Ltd. Arabia Electric Ltd. (Equipment) Siemens d.o.o.Beograd Siemens Pte. Ltd. Power Automation Pte. Ltd. Hongkong Hungary India India India India India India India India India India India India India Indonesia Iran Ireland Israel Italy Italy Italy Japan Kazakhstan Kenya Korea Kuwait Malaysia Malaysia Malaysia Mexico Morocco Netherlands Netherlands New Zealand Nigeria Norway Oman Pakistan Philippines Philippines Poland Qatar Romania Russia Saudi Arabia Saudi Arabia Saudi Arabia Serbia Singapore Singapore Annual Report 2009
421
124
26.2 Other related parties where transactions have taken place during the year (Continued) Fellow Subsidiaries Siemens Electronics Assembly Systems Pte. Ltd Singapore Siemens Energy Management and Information Systems Pte. Ltd. Singapore Siemens IT Solutions and Services Singapore Siemens d.o.o. Slovania Siemens Ltd. South Africa Siemens S.A. Spain Siemens Holding S.L. Spain Siemens Industrial Turbomachinery AB Sweden Siemens AB Sweden Siemens Schweiz AG, Building Technologies Division, International Switzerland Headquarters Siemens Schweiz AG Switzerland Siemens Ltd. Taiwan Siemens Ltd. Tanzania Siemens Ltd. Thailand Siemens Sanayi ve Ticaret A.S. Turkey Siemens LLC UAE SD (Middle East) LLC UAE Siemens Ukraine Ukraine Siemens Energy, Inc. USA Siemens Building Technologies, Inc. USA Siemens Demag Delaval Turbomachinery, Inc. USA Siemens Energy & Automation, Inc. USA Siemens Water Technologies Corp. USA Siemens Medical Solutions USA, Inc. USA Siemens Shared Services, LLC USA Morgan Construction Company USA Siemens Transportation Systems, Inc. USA Siemens Power Transmission & Distribution, Inc. USA PETNET Solutions, Inc. USA SMS Inc. - Customer Solutions Group USA SBT Inc., USA USA Siemens Building Technologies LLC USA Siemens Corporation USA Siemens Medical Solutions Health Services Corporation USA Siemens IT Solutions and Services Inc USA Siemens Communications Inc USA Siemens Corporate Research Inc USA Siemens Healthcare Diagnostics inc USA Siemens Molecular Imaging Inc USA Siemens Product Lifecycle Management Software Inc USA Siemens S.A. Venezuela Siemens Automation Systems Ltd. Vietnam Siemens Ltd. Vietnam Flender Ltd. (upto 31 July 2009) Dr. Armin Bruck (w.e.f. 1 October 2007) Mr. Sunil Mathur (w.e.f. 22 July 2008) Mr. Patrick de Royer (Retired on 31 December 2008) Mr. K. R. Upili (Retired on 27 July 2008) Mr. Vijay V. Paranjape Mr. J. Schubert (Retired on 1 January 2008) Mr. Vilas Parulekar (Retired on 25 September 2009)
125
Associate 26.3 Key Managerial Personnel
India
Siemens Group
125
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
26.4 Related party transactions
Description 2009 Holding Fellow Associate Key Company Subsidiaries Managerial Personnel Sales – Siemens AG – Siemens Energy & Automation, Inc – Siemens VAI Metals Technologies Private Ltd. – Siemens VAI Metals Technologies SAS – Siemens Medical Solutions Health Services Corp., US – Siemens IT Solutions & Services Ltd, UK – Flender Ltd. – Others Goods in transit – Siemens SAS France – Others Commission income – Siemens AG – Siemens Industrial Turbomachinery AB – Siemens Industrial Turbomachinery Ltd. – Siemens Pte. Ltd. – Others Other recoveries – Siemens AG – Siemens Information Systems Ltd. – Siemens Information Processing Services Private Ltd. – Siemens Corporate Finance Private Ltd. – Siemens Enterprise Communications Private Ltd. – Siemens Transportation Systems S.A.S. – Siemens Pte. Ltd. – Flender Ltd – Others Reimbursement of expenses – Siemens AG – Siemens Information Systems Ltd. – Siemens Enterprise Communications Private Ltd. – Siemens Pte. Ltd. – Siemens Wind Power A/S – Siemens Electronics Assembly Systems Pte. Ltd. – Flender Ltd. – Others Purchase / Other services – Siemens AG – Siemens Information Systems Ltd. – Koncar Power Transformers Ltd. – Siemens Electrical Apparatus Ltd. – Siemens Medical Solutions USA, Inc. – Flender Ltd. – Others Interest Income – Osram India Private Ltd. – Winergy Drive Systems India Private Ltd. – Morgan Construction Company India Private Ltd. – Flender Ltd. – Others Sale of division/ investments – Siemens Electronics Assembly Systems Pte. Ltd. – Siemens VDO Automotive Components Private Ltd. Purchase of Investments/ Equity Contribution – A Friedr.-Flender AG Sale of Subsidiaries – Siemens Corporate Finance Private Ltd. Dividend paid Sale of ?xed Assets/Capital WIP – Siemens Shared services
621
2008 Holding Fellow Company Subsidiaries 4,508,917 - 366,781 - 104,927 - 266,413 - 668,676 - 652,835 - 3,388,751 441,661 145,641 106,979 3,764 75 2,798 60,589 15,950 16,686 17,476 21,556 5,588 4,605 Associate Key Managerial Personnel -
4,345,279 543,157 821,417 154,578 634,940 679,817 - 2,244,717 481,223 153,633 352,973 17,945 8,301 17,576 16,047 2,586 10,773 17,457 7,688 13,259 25,727 53,027 10,115 2,357 569 13,044 11,231 1,210
3,006 6,178 18 19,439 -
-
3,395 750 342 22,339 1,498 -
15,796,470 59,633 43,327 602,950 566,228 - 3,185,830 29,877 42,392 8,783 8,796 30,307 909,935
15,123,623 - 3,554,963 - 383,784 - 446,384 - 3,292,609 23,442 18,331 1,650 -
- 1,700,000 446,499 8,597
- 3,021,459 558,123 -
126
Annual Report 2009
26.4 Related party transactions (Continued)
Description 2009 Holding Fellow Associate Key Company Subsidiaries Managerial Personnel Purchase of Fixed assets/ Capital WIP – Siemens AG – Trench Germany GmbH – Siemens Enterprise Communications Private Ltd. – Others Purchase of Intangible assets (Technical knowhow) – Siemens AG Bonus shares issued – Siemens AG Managerial Remuneration Mr. J. Schubert Dr. Armin Bruck Mr. Sunil Mathur Mr. Vijay V. Paranjape Mr. Vilas Parulekar Mr. Patrick de Royer Mr. K. R. Upilli Inter Corporate Deposits given – Osram India Private Ltd. – Winergy Drive Systems India Private Ltd. – Morgan Construction Company India Private Ltd. – Siemens Healthcare Diagnostics Ltd. – Flender Ltd. Inter Corporate Deposits repaid – Osram India Private Ltd. – Winergy Drive Systems India Private Ltd. – Morgan Construction Company India Private Ltd. – Siemens Healthcare Diagnostics Ltd. – Flender Ltd. Outstanding Balances Debtors – Siemens AG – Siemens VAI Metals Technologies Private Ltd. – Siemens Information Systems Ltd. – Morgan Construction Company India Private Ltd. – Flender Ltd. – Others Creditors – Siemens AG – Siemens Information Systems Ltd. – Siemens VAI Metals Technologies Private Ltd. – Siemens Information Processing Services Private Ltd. – Siemens Power Engineering Private Ltd. – Siemens industrial turbomachinery Ltd. – Flender Ltd. – Others Inter Corporate Deposits – Osram India Private Ltd. – Winergy Drive Systems India Private Ltd. – Morgan Construction Company India Private Ltd. – Siemens Healthcare Diagnostics Ltd. Interest receivable on Inter Corporate Deposits – Osram India Private Ltd. – Winergy Drive Systems India Private Ltd. – Morgan Construction Company India Private Ltd. – Siemens Healthcare Diagnostics Ltd. Managerial Remuneration payable Dr. Armin Bruck Mr. Sunil Mathur Mr. Vijay V. Paranjape Mr. Vilas Parulekar Mr. Patrick de Royer Mr. K. R. Upili 32,504 42 4,107 1,804 63,336 42,711 20,624 23,560 13,691 253 2008 Holding Fellow Company Subsidiaries Associate Key Managerial Personnel 52,704 52,137 7,552 15,373 14,333 33,664 25,708 -
27,777 29,223 186,011 -
6,488 436 10,481 50,000 240,000 85,000 70,000 180,000 -
75,000 75,000
- 1,950,000 - 2,360,000 735,000 800,000 - 1,400,000 - 2,080,000 820,000 400,000 -
880,283 -
588,584 38,635 6,105 198,342
-
32,466 21,842 12,377 13,694 -
655,537 3,773,010 -
381 72,460 232,402 2,218 25,896 526,175 250,000 380,000 85,000 1,532 247 1,650 -
5,143 8,576 -
22,400 2,950 7,680 6,144 18,578 7,144
127
4,103,023 45,729 37,948 35,756 32,645 135,153 - 1,366,820 800,000 660,000 400,000 3,995 976 2,336 -
Siemens Group
127
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
27 Disclosure relating to Provisions Provision for warranty Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period. Provision for liquidated damages Liquidated damages are provided based on contractual terms when the delivery/ commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms upto closure of the contract (including warranty period). Provision for loss orders A provision for expected loss on construction contracts is recognised when it is probable that the contract costs will exceed total contract revenue. For all other contracts loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic bene?ts. Contingencies The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the out?ow of which would depend on the cessation of the respective events. The movements in the above provisions are summarised below: Warranties Balance as at 1 October 2008 - Created - Additions on purchase of Flender Ltd. - Utilised - Reversed - Disposal of Subsidiaries Balance as at 30 September 2009 28 1,282,290 1,116,457 10,758 (128,440) (267,853) (16,320) 1,996,892 Liquidated damages 1,804,557 4,594,724 8,143 (226,041) (316,674) (206,548) 5,658,161 Loss orders Contingencies 1,099,514 692,646 15,826 (838,808) (61,239) 907,939 1,010,865 847,598 (56,266) (157,916) 1,644,281
Disclosure pursuant to Accounting Standard - 7 ‘Construction Contracts’ : 2009 (i) (ii) Contract Revenue recognised for the year ended 30 September 2009 Aggregate amount of contract costs incurred and recognised pro?ts (less recognised losses) for all contracts in progress as at 30 September 2009 Amount of advances received Amounts due from customers Amounts due to customers 55,187,367 154,713,514 2008 50,884,780 119,307,554
(iii) (iv) (v)
821
6,648,354 5,867,401 8,684,323
5,644,363 2,846,638 15,137,749 Annual Report 2009
128
29
(i)
Information about business segments
Revenue External Revenue Inter segmental Revenue Total Revenue 2009 2008 2009 2008 2009 2008 8,624,926 9,144,478 997,253 759,581 9,622,179 9,904,059 5,870,143 5,968,153 6,207,589 4,251,279 12,077,732 10,219,432 3,311,811 4,040,966 86,514 96,785 3,398,325 4,137,751 11,376,532 11,204,593 120,278 234,651 11,496,810 11,439,244 10,288,045 6,952,028 445 - 10,288,490 6,952,028 4,219,692 1,298,570 7,865 1,182 4,227,557 1,299,752 5,630,939 5,368,631 244 14,932 5,631,183 5,383,563 24,236,130 28,244,868 482,809 169,757 24,718,939 28,414,625 7,143,864 7,245,609 1,698,103 650,652 8,841,967 7,896,261 5,430,843 6,053,460 235 - 5,431,078 6,053,460 339,780 238,989 313,251 405,540 653,031 644,529 5,654,851 9,736,966 78,780 205,712 5,733,631 9,942,678 736,972 1,069,304 27,923 2,400 764,895 1,071,704 231,596 231,596 - (10,021,289) (6,792,471) (10,021,289) (6,792,471) 92,864,528 96,798,211 - 92,864,528 96,798,211 Results 2009 2008 620,247 898,951 798,759 809,356 (147,729) 309,558 1,060,712 1,487,936 (184,327) (195,332) 438,346 (1,861,253) 807,591 589,574 3,990,678 3,394,381 646,939 967,318 320,366 407,079 689,446 334,805 209,759 824,340 117,251 141,155 8,232 9,454,751 (73,944) 8,029,388 (65,548)
Industry Automation Drive Technologies Building Technologies Industry Solutions Mobility Fossil Power Generation Oil & Gas Power Transmission Power Distribution Healthcare Real Estate Information Technology Services * Business Process Outsourcing * Automotive * Eliminations Total Interest expenses Interest income (includes 2009: Rs 117,749; 2008: Rs 231,462 of discontinued operations) Exceptional income Unallocable corporate items (includes 2009: Rs 3,182; 2008 : Rs 31,837 of discontinued operations) Pro?t before tax Share of pro?t from associate Minority interest Current tax Deferred tax Fringe bene?t tax Minimum Alternative Tax credit entitlement Consolidated total
558,449 1,501,019
647,730 1,235,151
(557,106) (424,268) 10,883,169 9,422,453 81,670 74,556 41,052 (18,768) (4,121,560) (4,029,668) 255,805 707,328 (94,098) (171,654) 92,864,528 96,798,211 - 92,864,528 96,798,211 7,046,038 11,242 5,995,489
* Discontinued operations (refer schedule 2)
Assets 2009 Industry Automation Drive Technologies Building Technologies Industry Solutions Mobility Fossil Power Generation Oil & Gas Power Transmission Power Distribution Healthcare Real Estate Information Technology Services Business Process Outsourcing Automotive * Total Unallocable corporate items Consolidated total 3,890,750 4,747,623 2,317,030 5,658,032 4,033,589 750,758 2,493,753 25,669,938 4,674,646 1,585,272 2,096,462 Net Capital Employed Liabilities 2008 2009 2008 Capital Expenditure 2009 2008 210,146 790,606 834,612 12,736 741,853 1,543 368,713 479,164 37,157 43,871 276,282 144,810 59,560 55,148 146,268 139,788 167,127 15,789 48,365 2,464 197,936 379,436 40,731 13,327 903,036 264,591 54,557 25,663 27,564 Non cash expenditure Depreciation Others 2009 2008 2009 2008 93,923 235,313 523,686 10,448 9,803 3,941 54,570 237,800 25,873 17,331 175,187 269,429 48,491 26,894 75,270 221,740 (151,508) 77,903 (30,071) (147,679) 403,428 152,480 (34,564) 7,848 51,600 34,992 5,982 46,764 (49,734) 4,921 47,086 (46,506) 73,539 25,090 29,180 193,146 (1,277,509) (249,016) 19,358 (28,807) 180,063 18,657 (25,893) (79,663) 124,359 (4,652) 9,953 406,442 138,694 (103,244) 73,258 5,492 (632) (683,478) (608,358) 80,445 (603,033) 619,653 11,295 127,257
3,610,022 2,462,367 2,175,347 3,510,629 3,506,557 2,434,773 2,759,022 2,829,664 1,199,485 4,411,746 6,039,341 5,757,273 2,551,311 3,569,206 2,964,223 1,922,843 2,532,521 3,018,164 2,710,506 3,223,272 2,910,016 24,856,474 18,015,171 18,087,126 4,204,597 3,060,855 3,104,239 1,612,155 2,103,350 1,841,647 1,821,513 338,570 352,219 4,082,114 - 4,654,018 236,998 323,098 7,221,081 6,825,929
57,917,853 58,289,930 47,680,874 48,821,628 24,797,038 20,131,702 82,714,891 78,421,632 54,901,955 55,647,557
4,001,053 2,399,078 4,056,201 2,426,642
1,705,795 1,489,603 1,732,689 1,616,860
* Discontinued operations (refer schedule 2)
129
Siemens Group
129
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
29 (ii) Secondary segment information Revenue-based on location of customers 2009 2008 Within India Outside India Consolidated total 29 (iii) Other disclosures: – – – – (iv) Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks. Pro?ts/ losses on inter segment transfers are eliminated at the Company level. Balances with group companies and related parties have been included in unallocable corporate items. During the year there has been reorganisation of Business Segments. Figures for the year ended 30 September 2009 and year ended 30 September 2008 has been regrouped to make them comparable. 69,404,858 23,459,670 92,864,528 56,443,689 40,354,522 96,798,211 Carrying amount of Additions to segment assets ?xed assets and intangible by location assets 2009 2008 2009 2008 50,569,740 32,145,151 82,714,891 43,333,387 35,088,245 78,421,632 4,034,107 22,094 4,056,201 2,426,642 2,426,642
Segment information: The primary and secondary reportable segments are business segments and geographical segments respectively. Business Segments: The business of the Company is divided into eleven segments. These segments are the basis for management control and hence, form the basis for reporting. The business of each segment comprises of : – Industry Automation:- Provides complete range of automation products & systems, industrial automation systems & low-voltage Switchgears. – Drive Technologies:- Provides complete range of large and standard drives and motors, special purpose motors, process and motion control systems. – Building Technologies:- Electrical Installation Technologies, i.e. Products for Building, e.g. Miniature Circuit breakers, Distribution boards, Residual Current Circuit Breakers, etc. – Industry Solutions:- Undertakes turnkey projects in the industrial and infrastructure sectors over the entire life cycle including concept, engineering, procurement, supplies, installation, commissioning and after sales services. – Mobility:- Provides solutions for rail automation, railway electri?cation, light and heavy rail, locomotives, trains, turnkey projects and integrated services. – Fossil Power Generation:- The Fossil Power Generation Division offers highly ef?cient products and solutions for power generation based on fossil fuels. They range from individual gas and steam turbines and generators, to turnkey power plants. The Division also develops instrumentation and control systems for every type of power plant. – Oil & Gas:- The Oil & Gas Division offers customers products and solutions that are used for the extraction, conversion and transport of oil and gas. The Division portfolio also includes solutions for power generation and distribution, compressors with electrical and mechanical drives, process and automation technologies, and integrated IT solutions for pipeline and storage applications. – Power Transmission:- The Power Transmission Division offers products and solutions in the high-voltage ?eld – such as High Voltage Direct Current (HVDC) transmission systems, substations, switchgear and transformers. – Power Distribution:- The specialties of the Power Distribution Division range from solutions for the automation of power grids, to products like medium-voltage switchgear and components. – Healthcare:- Provides diagnostic, therapeutic and life-saving products in computer tomography (CT), magnetic resonance imaging (MRI), ultrasonography, nuclear medicine, digital angiography, patient monitoring systems, digital radiography systems, radiology networking systems, lithotripsy and linear accelerators. – Real Estate:- Provides comprehensive real estate management.
031
130
Annual Report 2009
–
Information technology services :- Provide comprehensive range of technology services, including software development, packaged software integration and systems maintenance to its worldwide customers operating in different industries. Business process outsourcing :- Provides back of?ce support services to group companies and other external customers.
–
Geographical Segments: The business is organised in two geographic segments i.e. within India and outside India. 30 Disclosure pursuant to Accounting Standard - 15 ‘Employee Bene?ts’ : (i) De?ned Contribution Plans Amount of Rs 211,649 (2008: Rs 183,409) is recognised as an expense and included in “Personnel costs” (Refer Schedule 22) in the Pro?t and loss account. (ii) De?ned bene?t plans a Amounts for the current period are as follows:
Gratuity 2009 I Change in bene?t obligation Liability at the beginning of the year Interest cost Current service cost Liability transfer in Liability transfer out Bene?t paid Actuarial (gain)/ loss on obligations Transfer in on Purchase of Flender Ltd. Transfer out on Sale of SISL and SIPS Liability at the end of the year II Fair value of plan assets Fair value of plan assets at the beginning of the year Expected return on plan assets Contributions Transfer from other company Transfer to other company Bene?t paid Actuarial gain/ (loss) on plan assets Transfer in on Purchase of Flender Ltd. Transfer out on Sale of SISL and SIPS Fair value of plan assets at the end of the year Total Actuarial Gain/(Loss) to be recognised III Actual return on plan assets Expected return on plan assets Actuarial gain/ (loss) on plan assets Actual return on plan assets IV Amount recognised in the balance sheet Liability at the end of the year Fair value of plan assets at the end of the year Amount recognised in the balance sheet V Expenses recognised in the income statement Interest cost Current service cost Expected return on plan assets Actuarial (gain)/ loss Expense recognised in personnel costs (Schedule 22) 602,966 46,490 41,788 9,528 (1,222) (65,653) 135,612 29,379 (148,224) 650,664 2008 559,474 45,455 49,909 3,766 (11,412) (57,053) 12,827 602,966 Pension 2009 160,326 12,826 (28,305) 30,136 174,983 2008 166,549 13,324 (25,421) 5,874 160,326 Medical 2009 45,169 3,555 2,979 (7,410) 26,460 70,753 2008 42,699 2,989 3,205 (25,421) 21,697 45,169 Super Annuation 2009 77,854 1,262 1,459 (215) (779) (198) 79,383 2008 -
520,944 53,409 183,640 9,528 (1,222) (65,653) (14,069) 24,514 (25,038) 686,053 (149,681) 53,409 (14,069) 39,340 650,664 686,053 (35,389)
523,000 41,584 22,092 905 (11,412) (57,053) 1,828 520,944 (10,999) 41,586 1,828 43,414 602,966 520,946 82,020
(30,136) 174,983 174,983
(5,874) 160,326 160,326
(26,460) 70,753 70,753
(21,697) 45,169 45,169
74,923 1,784 4,102 (215) (779) (432) 79,383 (234) 1,784 (432) 1,352 79,383 79,383 -
-
46,490 41,788 (53,409) 149,681 184,550
45,455 49,909 (41,584) 10,999 64,779
12,826 30,136 42,962
13,324 5,874 19,198
3,555 2,979 26,460 32,994
2,989 3,205 21,697 27,891
1,262 1,459 (1,784) 233 1,170
131
-
Siemens Group
131
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
30. (ii) a Amounts for the current period are as follows (Continued)
Gratuity 2009 VI Balance sheet reconciliation Opening net liability Expense as above Transfer from other company Employers contribution/ paid Transfer in on Purchase of Flender Ltd Transfer out on Sale of SISL and SIPS Amount recognised in balance sheet VII Acturial Assumptions : For the Year Discount Rate Current Rate of Return on Plan Assets Current Medical Cost increase rate Attretion rate VIII Sensitivity Change in Liability - Discount rate Change in Liability - In?ation rate Change in Service Cost - Discount rate Change in Interest Cost - Discount rate IX 82,022 184,550 (183,640) 4,865 (123,186) (35,389) 2008 36,474 64,779 2,861 (22,092) 82,022 Pension 2009 160,326 42,962 (28,305) 174,983 2008 166,549 19,198 (25,421) 160,326 Medical 2009 45,169 32,994 (7,410) 70,753 2008 42,699 27,891 (25,421) 45,169 Super Annuation 2009 2,932 1,170 (4,102) 2008 -
8.0% 8.0% 5.0% -
8.0% 8.0% 2.0% -
8.0% -
8.0% -
8.0% 7.0% 1% increase (6,071) 7,939 (76) 444
8.0% 5.0% 1% decrease 7,373 (6,757) 171 (373)
Amount for the Current and Previous periods as per AS15 Para 120 are as follows : Liability at the end of the year Fair value of plan assets at the end of the year Difference Experience Adjustment on Plan Liabilities (gain)/ loss Experience Adjustment on Plan Assets (loss)/ gain 650,664 686,053 (35,389) (5,845) (12,938) 602,966 520,946 82,020 13,131 1,986 -
b
The fund formed by the Company manages the investments of the Gratuity Fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similiar maturities. The Company expects to contribute Rs 33,183 to gratuity fund in 2009-10. The estimates of future salary increases, considered in actuarial valuation, take in to account in?ation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The guidance issued by the Accounting Standard Board (ASB) on implementing AS 15, Employee Bene?ts (revised 2005) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as de?ned bene?t plan. The fund does not have any existing de?cit or interest shortfall. In regard to any future obligation arising due to interest shortfall (i.e. government interest to be paid on provident funds scheme exceeds rate of interest earned on investment), pending the issuance of guidance note from the Actuarial Society of India, the Company’s actuary has expressed his inability to reliably measure the same. * Figures not available hence not reported
c
d
e (iii)
General Descriptions of signi?cant de?ned plans I Gratuity plan Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company’s Scheme whichever is more bene?cial.
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Annual Report 2009
II
Medical Post-Retirement Medical Bene?t is paid to eligible employees in case of survival upto the retirement age and after death, bene?ts are available to the employee’s spouse. The Company reimburses the employees for expenses incurred over and above the claim accepted by the insurance company. The Company pays 80% of difference between liability incurred by employee and claim received from insurance company subject to ceiling based on the grade of employees.
(iv)
Broad category of plan assets as a percentage of total plan assets of the Gratuity plan Particulars Government of India securities State Government securities Public sector unit bonds Special Discount scheme Total Plan Assets 2009 13% 22% 32% 33% 100% 2008 17% 10% 28% 45% 100%
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Derivative Instruments a Forward Contracts The Company uses forward contracts to mitigate its risks associated with foreign currency ?uctuations having underlying transaction and relating to ?rm commitments or highly probable forecast transactions. The Company does not enter into any forward contract which is intended for trading or speculative purposes. The details of forward contracts outstanding at the year end is as follows:Currency Number of contracts Buy Amount Indian rupees equivalent 4,627,004 5,788,859 11,843,567 12,054,393 21,144 16,128 26,195 19,563 296,258 179,422 64,463 10,396 33,769 Number of contracts Sell Amount Indian rupees equivalent 18,941,503 13,712,408 3,635,715 2,336,299 17,224,543 13,045,708 9,624 133
US Dollar 2009 2008 Euro 2009 2008 Qatari Riyal 2009 2008 Japanese Yen 2009 2008 Pound Sterling 2009 2008 Swiss Franc 2009 2008 CAD 2009 2008 SEK 2009 2008 GBP 2009 2008 Siemens Group
163 127 160 118 2 2 3 3 13 15 3 1 4 -
96,186 123,259 169,170 178,830 1,600 1,250 49,000 44,243 3,855 2,147 1,517 235 729 -
103 112 57 51 13 16 1 -
393,753 291,971 51,932 34,659 1,303,408 1,011,099 114 -
133
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
All currency exposures having underlying transactions as at 30 September 2009 are covered by foreign currency forward contracts. The forward contracts have been converted in Indian rupees, at the spot rates, as at 30 September 2009 to facilitate reading purposes only. b Commodity Contracts The Company uses Commodity Future Contracts to hedge against ?uctuations in commodity prices. The following are outstanding copper future contracts entered into by the Company as on 30 September 2009. Year 2009 2008 Note: Each contract of copper is of 1,000 kg. c Unhedged foreign currency exposure derivatives
2009 Receivable Payable Amount Indian Amount Indian rupees rupees equivalent equivalent 392 18,732 1,508 72,298 7,490 253,837 547 18,507 1,598 111,914 5,605 392,372 43 3,361 0.44 20 0.06 3 2008 Receivable Amount Indian rupees equivalent 7,991 259,803 4,267 283,573 Payable Amount
Number of Contracts 749 Nil
Contractual Quantity 749 MT Nil
Buy /Sell Buy NA
USD SGD EURO GBP CHF AUD
2,993 5,969 7,183 31 8 -
Indian rupees equivalent 137,762 194,046 477,292 2,633 319 -
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Earnings per share: Pro?t after tax Pro?t after tax (Net pro?t attributable to Equity shareholders) Shares:Weighted average number of Equity shares outstanding during the year Earnings per share 2009 7,046,038 7,046,038 337,160,200 20.90 2008 5,995,489 5,995,489 337,160,200 17.78
33
Prior years comparatives Pursuant to the disposal of ‘SISL’ and ‘SIPS’ and acquisition of Flender Ltd. in the current year and discontinuation of the ‘SVDO’ segment in the previous year, the ?gures of the current year are not strictly comparable to those of the previous year. Previous year’s ?gures have been regrouped/reclassi?ed wherever necessary, to conform to current year’s classi?cation. The ?gures of previous year were audited by a ?rm of Chartered Accountants other than S.R.Batliboi & Associates.
As per our report of even date.
For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors Deepak S. Parekh Chairman Dr. Armin Bruck Managing Director Sunil Mathur Executive Director Yezdi H. Malegam Director & Chairman of Audit Committee Ajai Jain Vice President (Legal) & Company Secretary Mumbai 26 November 2009
per Sudhir Soni Partner Membership No: 41870 Mumbai 26 November 2009
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Annual Report 2009
Siemens Ltd.
Registered Of?ce: 130, Pandurang Budhkar Marg, Worli, Mumbai - 400 018
ATTENDANCE SLIP PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE AUDITORIUM
DP. Id Client Id/ Folio No. No. of Shares I hereby record my presence at the 52nd Annual General Meeting of the Company at Nehru Centre Auditorium, Dr. Annie Besant Road, Worli, Mumbai - 400 018 on Friday, 29th January, 2010, at 3.00 p.m.
Full name of the Proxy, if attending the Meeting:
NAME & ADDRESS OF THE REGISTERED SHAREHOLDER
Signature of the Member / Joint Member / Proxy attending the Meeting : Friday, 29th January, 2010
Note: Persons attending the Meeting are requested to bring this Attendance Slip and Annual Report with them. Duplicate Attendance Slip and Annual Reports will not be issued at the Annual General Meeting.
Siemens Ltd.
Registered Of?ce: 130, Pandurang Budhkar Marg, Worli, Mumbai - 400 018 PROXY FORM I/We, of hereby appoint or failing him / her being a member/members of Siemens Ltd. of .of
as my / our proxy to vote for me / us on my / our behalf at the 52nd Annual General Meeting of the Company to be held at Nehru Centre Auditorium, Dr. Annie Besant Road, Worli, Mumbai - 400 018 on Friday, 29th January, 2010, at 3.00 p.m. and at any adjournment thereof. Registered Folio / DP. ID. & Client ID.: No. of Shares held:
Af?x a 15 paise Revenue Stamp
Signed this Notes:
day of
2010
Signature(s) of Member(s)
(a) Proxies, in order to be effective, must be received at the Registered Of?ce of the Company not less than 48 hours before the time of the Meeting. (b) A Member entitled to attend and vote at this Meeting is entitled to appoint a proxy and the Proxy need not be a Member.
doc_207572323.pdf
The report for the financial year 2009 - 2010 of siemens.
Contents
Financial Highlights Chairman’s Statement Board of Directors 3 4 6
Siemens Ltd. Notice Directors’ Report Annexure I - Conservation of energy, etc. Annexure II - Management’s Discussions and Analysis Annexure III - Corporate Governance Report Annexure IV - General Shareholder Information Corporate Social Responsibility Auditors’ Report Financial Statements 8 18 22 24 30 43 50 57 60
Siemens Group Auditors’ Report Financial Statements Proxy & Attendence Slip 101 102 135
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Financial Highlights - Siemens Limited
2008-09 *Orders received *Sales *Pro?t before tax As % of sales *Pro?t after tax As % of sales ** Net worth per share^ ** Earning per share *Dividend Dividend % Debt/equity ratio *Investment in ?xed assets No. of employees No. of shareholders 87964 83888 14319 17% 10449 12% 86.51 30.99 1686 250% 1522 6683 193342 2007-08 87722 82955 8918 11% 5933 7% 61.37 17.60 1011 150% 1913 6502 200389 2006-07 95720 77268 8742 11% 5965 8% 94.37 17.69 809 240% 2574 6505 100135 2005-06 82025 45103 5055 11% 3601 8% 64.48 21.36 641 190% 843 5971 79118 2004-05 41233 27485 3631 13% 2548 9% 47.12 15.72 481 145% 277 4777 31315
* Rs In millions ** Rupees ^ From 2005 - 06 the face value is Rs.2 per share (upto 2003-04 the face value was Rs.10 per share) ^ Bonus shares issued in the year 2007-08.
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Chairman’s Statement
Performance Highlights On our part, Siemens Ltd. has managed to turn in a satisfactory performance in a fairly challenging environment and sustained a steady momentum of pro?tability and growth. For the ?nancial year ended September 30, 2009, Pro?t from Operations increased by 32% to Rs.945 crore as compared to the corresponding period of the previous year. Sales rose marginally to Rs.8,389 crore for the year ended September 30, 2009 as compared to Rs.8,296 crore in the corresponding period of the previous year. Siemens Ltd. received New Orders valued at Rs.8,796 crore despite tough market conditions in the 12 months ended September 30, 2009 as compared to Rs.8,718 crore in the corresponding period of the previous year. For the year ended September 30, 2009, the Company’s Pro?t Before Tax stood at Rs.1,432 crore as compared to Rs.892 crore in the previous year, registering an increase of 61%. This increase was primarily on account of a substantial one-time increase in Financing & Investment Income resulting from the Company’s sale of Siemens Information Systems Ltd. (SISL) and Siemens Information Processing Services Pvt. Ltd. (SIPS). The Pro?t After Tax rose by 76% and stood at Rs.1,045 crore as compared to Rs.593 crore in the previous year. The Unexecuted Order Value as of September 30, 2009 stood at Rs.10,292 crore - a rise of 5% (September 30, 2008: Rs.9,834 crore). The Board of Directors has recommended a dividend of Rs.5 for an equity share of Rs.2 each for the ?nancial year ended September 2009. During the previous ?nancial year, the Company had paid a dividend of Rs.3 for an equity share of Rs.2 each. Performance Analysis Despite a challenging market environment with signi?cant pricing pressures, our company maintained a steady focus on growth areas and secured a stable order intake. Our revenues increased marginally with a strong order backlog. Our operating pro?ts rose and the pro?t margin improved signi?cantly with an increased focus on Project and Asset Management. A true measure of how effective our Asset Management initiatives were can be gauged from the fact that our cash generated from operations is at the same level as the Pro?t from Operations (PFO), despite the liquidity crisis that we went through. Some new technologies that we introduced during the year in India included the Somatom De?nition Flash - 2nd Generation Dual source CT by our Healthcare sector and the Power Plant Control system ‘SPPA-T3000’ by our Energy sector. We also increased our local footprint. We set up a gas insulated switchgear factory at Aurangabad, expanded our steam turbine factory at Vadodara and we also enhanced our operations at the HVDC transformer factory at Kalwa. Annual Report 2009
Dear Shareholders, If there has been one de?nitive theme that has been occupying our minds constantly over the last twelve months, it has been the unfolding of a totally unanticipated change in the economic paradigm. After enjoying successive terms of year-on-year growth, the world’s leading economies slipped into a recession and are now reconciled to a signi?cant decline in economic growth. Looking back on the year that was, India Inc. had started the last ?scal under the general impression that the domestic market was insulated from the scenarios impacting the world economy. Although India has a domestic-driven economy, the drastic change in the global macro economic environment took a toll on the Indian economy, resulting in an overall slowdown in business volumes in the initial quarters of FY’08-09. The stimulus package unveiled by the government, comprising of a series of monetary and ?scal measures, has helped ease the scenario to a considerable extent. If at all there was an encouraging sign in this gloom, it was the resilience shown by certain emerging economies, including India that recorded positive growth rates. At present, as we stand in the midst of a new business year, the market outlook for India is more optimistic and con?dent and it does appear that the worst is behind us. I would now like to present a brief overview of Siemens Ltd.’s business performance during the previous ?nancial year.
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On the cost side, we critically looked at all areas however small, maintained a strict ?nancial discipline and eliminated all inef?ciencies. Our clear focus on operational excellence has helped us to keep our performance on track. At this juncture, I would like to share some developments that have unfolded in our subsidiary companies. As you may be aware, Siemens Ltd. currently holds an 86% stake in Siemens Building Technologies Pvt. Ltd (SBTPL). Our board has now approved a proposal to acquire the remaining 14% stake for a consideration of Rs. 70 crore. This company will then become a wholly owned subsidiary of Siemens Ltd. The Board has also approved the proposal to integrate SBTPL into Siemens Ltd. This strategic decision to buy the remaining stake in SBTPL was undertaken with a long-term perspective, taking into consideration the revenue potential of this segment. To cite an instance, SBTPL was recently selected by one of India’s leading IT companies to implement a multi-million Euro contract for delivering an enterprise-wide converged security solution. Moreover, to raise further synergies by fully integrating the company into Siemens Ltd., it is vital that we buy the balance stake and gain complete management control. In yet another signi?cant development, the Board of Directors has approved the merger of Siemens Healthcare Diagnostics Ltd. (SHDL) with our company. With this merger, we will be able to strengthen our healthcare portfolio and make Siemens one of the leading integrated healthcare companies to provide in-vitro and in-vivo diagnostic solutions in the Indian market. The complimentary portfolios of the two companies will raise synergies in leveraging a combined customer base and thus expand the installed base in India. People Excellence Our employees continue to be the most vital pillar of success in all our endeavours. During the year, we continued with our focus on developing the capabilities of our workforce even further through several HR initiatives. In the area of leadership development, the existing Programme for Business Managers (PBM), meant for our talent at the midmanagement level, was re-designed with greater focus on business strategy. Additionally, a specialised programme was designed for the Senior Management team, known as Strategic Leadership Development Programme (SLDP) in collaboration with the Indian Institute of Management, Ahmedabad (IIM-A). Moreover, for the ?rst time in the history of Siemens India, one of our employees has been certi?ed as a Project Director by Siemens AG. This not only endorses our strong project management skills, but also con?rms the recognition of talent from India. As ever, we shall continue with our consistent focus on the development of our people.
The Road ahead - Outlook for Siemens The Indian economy, with its strong fundamentals, has managed to tide over the global downturn with greater resilience than many other countries, as indicated by its GDP growth. Going forward, many economists believe that the economic recovery will be driven by a new phenomenon growing consumer spending in emerging markets, with India at the forefront. Initiatives undertaken by the Government to develop infrastructure will play a crucial role in establishing the pace of recovery. In what is a positive sign in these tough times, the manufacturing sector has bene?ted from the government’s stimulus packages and also leaner operating costs and has shown some encouraging numbers for the September’09 quarter. Sectors such as metals, cement, paper and real estate, which have been largely impacted, will be in a phase of consolidation in the coming months. The buoyancy in the automobile industry continues, with carmakers and twowheeler companies bettering their sales. Conclusion At present, the market sentiment continues to be on a cautious outlook and FY 2009-10 will be a year of stabilisation and a steady recovery of the growth momentum. On our part, Siemens Ltd. will continue to keep a close watch on potential growth markets in the business environment and strive to achieve pro?table growth by catering to the specialised requirements of our valued customers. For instance, our green portfolio presents a huge business opportunity for us. Customers are more discerning now and are demanding environment friendly technologies. We are already one of the global leaders in the ?eld of climatefriendly technologies. In conclusion, I would like to heartily thank the Board, the management and especially our vibrant team of employees for their consistent support and commitment to Siemens Ltd. India is an important market in the global strategy of Siemens and our company remains as committed as ever to leverage opportunities and continue its efforts to achieve pro?table growth in this vibrant market.
Mumbai December, 2009
Deepak Parekh Chairman
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Siemens Ltd.
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Board of Directors
Non-executive Directors
Deepak S. Parekh Chairman
D. C. Shroff Director
Y. H. Malegam Director
N. J. Jhaveri Director
K. Dadiseth Director
Pradip V. Nayak Director
Joe Kaeser Director
Committees and Organisation Structure
Committees of Directors
Audit Committee
Y. H. Malegam (Chairman) Deepak S. Parekh K. Dadiseth J. Kaeser / Dr. O. Schmitt Ajai Jain (Secretary)
Investors Grievance Committee
D. C. Shroff (Chairman) Pradip V. Nayak Dr. Armin Bruck Ajai Jain (Secretary)
Remuneration Committee
N. J. Jhaveri (Chairman) D. C. Shroff Deepak S. Parekh Pradip V. Nayak Ajai Jain (Secretary)
Corporate Governance Committee
K. Dadiseth (Chairman) Deepak S. Parekh Y. H. Malegam D. C. Shroff J. Kaeser / Dr. O. Schmitt Dr. Armin Bruck Ajai Jain (Secretary)
Sectors
Industry
V. V. Paranjape 1
Cross Sector Services
Energy
A. K. Dixit 1
Healthcare
D. Ragavan 1
Siemens Real Estate
A. S. Shikarwar 1*
Key Management & Support Functions
Reporting to CEO
Chief Financial Of?cer Sunil D. Mathur Legal Dr. K. Stadelmann ^ Human Resources K. Ghatge Communication S. Joshi Compliance A. Chopra Strategy & Business Excellence R. Dalvi @ Supply Chain Management - Indirect Material & Logicstics V. D. Kale Siemens One & Key Account Management NN Siemens Ltd. Representative Of?ce, Sri Lanka V. Saxena
Location In-charge
Ahmedabad A. Mehta Sri Lanka V. Saxena
Notes: 1 @
Jaipur A. Sinha Coimbatore K. A. Prakash
Pune R. Likhitkar Kalwa G. D’Silva
New Delhi, Ring Road Worli M. Vasudeva A. Singh Gurgaon M. Vasudeva
# ^ *
Baroda N. Dewaji Kharghar M. K. Vig
Kolkata B. B. Tanna
indicate reporting to CEO Includes top+, Manufacturing Strategy, Quality and PM@Siemens
Mr. Sant is also Export Control Of?cer Including Company Secretary Including Corporate Security
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Annual Report 2009
Whole-time Directors and Corporate Management
Wolfgang Dehen Director
Dr. O. Schmitt Alternate Director for Mr. J. Kaeser
S. Schnieder Alternate Director for Mr. W. Dehen
Dr. Armin Bruck 1 Managing Director and Chief Executive Of?cer
Sunil D. Mathur Executive Director and Chief Financial Of?cer
V. V. Paranjape Whole-time Director
Committees of Management
Investment Committee
Deepak S. Parekh (Chairman) Y. H. Malegam Pradip V. Nayak J. Kaeser / Dr. O. Schmitt Sunil D. Mathur Ajai Jain (Secretary)
Company Secretary
Delegation of Powers Committee
Ajai Jain Vice President (Legal) & Company Secretary
Share Transfer Committee
Finance Committee
Dr. Armin Bruck (Chairman) Sunil D. Mathur (Chairman) Dr. Armin Bruck (Chairman) Sunil D. Mathur Dr. Armin Bruck Sunil D. Mathur Ajai Jain Ajai Jain Ajai Jain
Key Management & Support Functions
Reporting to CFO
Accounting & Controlling K. Alleraun Information Technology N. Sharan Finance P. Bhambani Taxation N. D. Rao Import/Export Admin & Travel P. Sant #
Key Management & Support Functions
Reporting to Head HR
Compensation & Bene?ts P. Choudhury Recruitment J. Prabhudesai Learning & Development Dr. M. Vyas Industrial Relations G. D’Silva Environment Protection & Safety J. Rao Healthcare Management Dr. G. K. Kulkarni International Delegation Centre, India S. S. Jaswal
Nashik S. Pate Goa H. Usgaonkar
Hyderabad P. Rama Murthy Hyderabdad - Saifabad T. Srikant
Aurangabad M. Wani Bangalore R. Lala
Bangalore K. Nadkarni Nagpur S. Deosthali
Kalwa G. D’Silva Chandigarh N. Gandhi
Chennai G. V. R. Rao
Lucknow A. K. Chaudhary Cochin NN
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Siemens Ltd.
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Siemens Ltd. Notice
NOTICE is hereby given that the 52nd Annual General Meeting of the Members of the Company will be held at Nehru Centre Auditorium, Dr. Annie Besant Road, Worli, Mumbai – 400 018 on Friday, 29th January, 2010, at 3.00 p.m. to transact the following business: ORDINARY BUSINESS: 1. 2. 3. 4. 5. 6. To receive, consider and adopt the audited Pro?t and Loss Account for the year ended 30th September, 2009, Balance Sheet as at that date together with the Reports of the Directors and Auditors thereon. To declare a Dividend on Equity Shares. To appoint a Director in place of Mr. Joe Kaeser, who retires by rotation and being eligible, offers himself for re-appointment. To appoint a Director in place of Mr. Vijay V. Paranjape, who retires by rotation and being eligible, offers himself for re-appointment. To appoint a Director in place of Mr. Narendra J. Jhaveri, who retires by rotation and being eligible, offers himself for re-appointment. To re-appoint Messrs S. R. Batliboi & Associates, Chartered Accountants, as Statutory Auditors of the Company to hold of?ce from the conclusion of the 52nd Annual General Meeting upto the conclusion of the next i.e. 53rd Annual General Meeting of the Company and to authorise the Board of Directors of the Company to ?x their remuneration.
SPECIAL BUSINESS: To consider and if thought ?t, to pass with or without modi?cations, the following Resolutions: 7. Payment of commission to Non- Executive Directors As a Special Resolution: “RESOLVED THAT pursuant to the provisions of Sections 198, 309 and other applicable provisions if any, of the Companies Act, 1956 and Article 113 of the Articles of Association of the Company such sum by way of commission not exceeding in the aggregate 1%(one percent) per annum or such other percentage as may be speci?ed by the Companies Act, 1956 from time to time in this regard of the Net Pro?ts of the Company computed in the manner referred to in Section 309(5) of the Companies Act, 1956 be paid for each of the ?ve ?nancial years of the Company commencing from 1st October, 2009 to those Directors of the Company other than the Managing Director, Executive Director and the Whole-time Directors as may be determined by the Board of Directors of the Company from time-to-time.” 8. Revision in remuneration of Dr. Armin Bruck, Managing Director As an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309, 310 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, and subject to the approval of the Central Government, if required, the Company hereby accords its approval to the revision in remuneration payable to Dr. Armin Bruck, Managing Director with effect from 1st January, 2010 as set out under Serial No. 2 of the Explanatory Statement annexed to this Notice.” 9. Revision in remuneration of Mr. Sunil Mathur, Executive Director As an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309, 310 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, and subject to the approval of the Central Government, if required, the Company hereby accords its approval to the revision in remuneration payable to Mr. Sunil Mathur, Executive Director with effect from 1st January, 2010 as set out under Serial No. 2 of the Explanatory Statement annexed to this Notice.” 10. Revision in remuneration of Mr. Vijay V. Paranjape, Whole-time Director As an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309, 310 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, and subject to the approval of the Central Government, if required, the Company hereby accords its approval to the revision in remuneration payable to Mr. Vijay V. Paranjape, Whole-time Director with effect from 1st January, 2010 as set out under Serial No. 2 of the Explanatory Statement annexed to this Notice.” 11. One-time special payment to Mr. Vilas B. Parulekar (former Whole-time Director) As an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 198, 309, 310 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, the Company hereby accords its approval for the one-time special payment of Rs. 5,000,000 (Rupees Five Million only) to Mr. Vilas B. Parulekar, who ceased to be the Whole-time Director and as Director of the Company with effect from 1st October, 2009.
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Annual Report 2009
12.
Siemens Limited – Share Matching Plan As a Special Resolution: “RESOLVED THAT in accordance with the provisions contained in the Memorandum and Articles of Association of the Company and the applicable provisions of the Companies Act, 1956 (hereinafter referred to as the “Act”) and subject to compliance, if required, of the provisions contained in the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, (if applicable)(hereinafter referred to as the “SEBI ESOP Guidelines”) (including any statutory modi?cation(s) or re-enactment of the Act or SEBI ESOP Guidelines, for the time being in force), and all other regulations / guidelines prescribed by any other relevant authority, from time to time to the extent applicable, and subject to such other approvals, permissions or sanctions as may be necessary, and subject to such conditions and modi?cations as may be prescribed or imposed while granting such approvals, permissions and sanctions which may be agreed to by the Board of Directors of the Company (hereinafter referred to as ‘the Board’ which term shall be deemed to include any committee(s) which the Board may constitute to exercise its powers, including the powers conferred by this resolution), consent of the Members be and is hereby accorded to the Board for the introduction and implementation of the “Siemens Limited – Share Matching Plan (“SMP Scheme”), the salient features of which are furnished in the Explanatory Statement to this Notice, and to offer shares, which will be acquired either throughan employee bene?t trust (to be constituted by the Board) or any other entity or service provider (“Third Party”) which may be appointed by the Board in a permissible manner, by means of purchase from the secondary market, to such employees and Whole-time Directors (excluding expatriates) who are in the permanent employment of the Company, and to such other person(s) as may from time to time be allowed to enjoy the bene?ts of the SMP Scheme under applicable laws and regulations made by the Company from time to time (hereinafter collectively referred to as “Company Employees”), except those who are promoters or belong to the promoter group, under the SMP Scheme, at such price or prices, in one or more tranches and on such terms and conditions, as may be ?xed or determined by the Board and/or Third Party in accordance with the SMP Scheme.” “RESOLVED FURTHER THAT for the purpose of giving effect to the above, such acquisition of equity shares by the trust, other entity or service provider (as the case may be) and implementation and administration of the SMP Scheme, the Board be and is hereby authorised on behalf of the Company to evolve, decide upon and bring into effect the SMP Scheme, and to make such modi?cations, changes, variations, alterations or revisions in the SMP Scheme from time to time or to suspend, withdraw or revive the SMP Scheme as may be speci?ed by any statutory authority and to do all such acts, deeds, matters and things as may in its absolute discretion deem ?t, necessary or desirable for such purpose and with authority on behalf of the Company to settle any issues, questions, dif?culties or doubts that may arise in this regard without being required to seek any further consent or approval of the Members and further to execute all documents and writings as may be necessary, proper, desirable or expedient and to give such directions and or instructions as it may from time to time decide and to accept and give effect to such modi?cations, changes, variations, alterations, deletions, additions as regards the terms and conditions and all things incidental and ancilliary thereto.” “RESOLVED FURTHER THAT all actions taken by the Board in connection with the above resolutions and all incidental and ancilliary things done are hereby speci?cally approved and rati?ed.” “RESOLVED FURTHER THAT the Company shall conform to the accounting policies prescribed from time to time under the SEBI ESOP Guidelines, to the extent relevant and applicable to the SMP Scheme.” “RESOLVED FURTHER THAT the Board, be and is hereby authorised to do all such acts, deeds, matters and things, as may, in its absolute discretion, deem necessary, expedient, useful or proper including the appointment of Merchant Bankers, Brokers, Solicitors, Registrars, Advertisement Agency, Compliance Of?cer, Investors Service Centre and other Advisors, Consultants or Representative, incidental to the implementation of the SMP Scheme as also to prefer all applications to the appropriate authorities, parties and the institutions for their requisite approvals as also to initiate all necessary actions for preparation and issue of public announcement and ?ling of public announcement, if required, with SEBI/Stock Exchange(s), and all other documents required to be ?led in the above connection and to settle all such questions or dif?culties whatsoever which may arise and take all such steps and decisions in this regard.”
13.
Siemens Limited - Share Matching Plan to the Employees of Indian subsidiaries of the Company As a Special Resolution: “RESOLVED THAT in accordance with the provisions contained in the Memorandum and Articles of Association and the applicable provisions of the Companies Act, 1956 (hereinafter referred to as the “Act”) and subject to compliance, if required, of the provisions contained in the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, (if applicable)(hereinafter referred to as the “SEBI ESOP Guidelines”) (including any statutory modi?cations or re-enactments of the Act or the SEBI ESOP Guidelines, for the time being in force) and all other regulations/guidelines prescribed by any other relevant authority, from time to time, to the extent applicable, and subject to such other approvals, permissions and sanctions as may be necessary, and subject to such conditions and modi?cations as may be prescribed or imposed while granting such approvals, permissions and sanctions which may be agreed to by the Board of Directors of the Company (hereinafter referred to as ‘the Board’ which term shall be deemed to include any committee(s) which the Board may constitute to exercise its powers, including the
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Siemens Ltd.
9
powers conferred by this resolution), consent of the members be and is hereby accorded to the Board to extend the bene?ts of the Siemens Limited – Share Matching Plan (“SMP Scheme”), the salient features of which are furnished in the Explanatory Statement to this Notice, and to offer shares, which will be acquired by either through an employee bene?t trust (to be constituted by the Board), or any other entity or service provider (“Third Party”) which may be appointed by the Board in a permissible manner, by means of purchase from the secondary market, to such employees and Whole-time Directors (excluding expatriates) who are in the permanent employment of the Indian subsidiaries of the Company and to such other person(s) as may from time to time be allowed to enjoy the bene?ts of the SMP Scheme under applicable laws and regulations made by the Company from time to time (hereinafter referred to as “Subsidiaries Employees”), except those who are promoters or belong to the promoter group, under the SMP Scheme, at such price or prices, in one or more tranches and on such terms and conditions, as may be ?xed or determined by the Board and/ or Third Party in accordance with the SMP Scheme.” “RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby authorised on behalf of the Company to evolve, decide upon and bring into effect the SMP Scheme, and to make such modi?cations, changes, variations, alterations or revisions in the SMP Scheme from time to time or to suspend, withdraw or revive the SMP Scheme as may be speci?ed by any statutory authority and to do all such acts, deeds, matters and things as may in its absolute discretion deem ?t, necessary or desirable for such purpose and with authority on behalf of the Company to settle any issues, questions, dif?culties or doubts that may arise in this regard without being required to seek any further consent or approval of the Members and further to execute all documents and writings as may be necessary, proper, desirable or expedient and to give such directions and or instructions as it may from time to time decide and to accept and give effect to such modi?cations, changes, variations, alterations, deletions, additions as regards the terms and conditions and all things incidental and ancilliary thereto.” “RESOLVED FURTHER THAT all actions taken by the Board in connection with the above and all incidental and ancilliary things done are hereby speci?cally approved and rati?ed.” “RESOLVED FURTHER THAT the Board, be and is hereby authorised to do all such acts, deeds, matters and things, as may, in its absolute discretion, deem necessary, expedient, useful or proper including the appointment of Merchant Bankers, Brokers, Solicitors, Registrars, Advertisement Agency, Compliance Of?cer, Investors Service Centre and other Advisors, Consultants or Representative, incidental to the implementation of the SMP Scheme as also to prefer all applications to the appropriate authorities, parties and the institutions for their requisite approvals as also to initiate all necessary actions for preparation and issue of public announcement and ?ling of public announcement, if required, with SEBI/Stock Exchange(s), and all other documents required to be ?led in the above connection and to settle all such questions or dif?culties whatsoever which may arise and take all such steps and decisions in this regard.” By Order of the Board of Directors For Siemens Ltd.
Ajai Jain Vice President (Legal) & Company Secretary Registered Of?ce: 130, Pandurang Budhkar Marg Worli, Mumbai - 400 018 Mumbai Monday, 30th November, 2009 Notes: a. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. Proxies, in order to be effective, must be received by the Company, duly ?lled, stamped and signed, at its Registered Of?ce not less than 48 hours before the Meeting. b.
01
The relevant Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956, in respect of the Special Businesses in the Notice is annexed hereto. Annual Report 2009
10
c.
Corporate Members intending to send their authorised representatives to attend the Annual General Meeting are requested to send a duly certi?ed copy of their Board Resolution authorising their representatives to attend and vote at the forthcoming 52nd Annual General Meeting. Members/Proxies/Representatives should bring the enclosed Attendance Slip, duly ?lled in, for attending the Meeting. Copies of the Annual Report or Attendance Slips will not be distributed at the Meeting. Pro?le of the Directors seeking re-appointment, as required in terms of Clause 49 of the Listing Agreement entered into with the Stock Exchanges, are annexed to this Notice. The Register of Members and Share Transfer Books of the Company will remain closed from Thursday, 21st January, 2010 to Friday, 29th January, 2010, both days inclusive, for the purpose of payment of Dividend, if declared. The Dividend, as recommended by the Board of Directors, if declared at the 52nd Annual General Meeting, will be paid on or before Wednesday, 24th February, 2010, to those Members who hold Shares in physical form and whose name appears on the Company’s Register of Members as holders of Equity Shares on Friday, 29th January, 2010. In respect of Shares held in electronic form, to the Bene?cial Owners of the Shares as at the close of business hours on Wednesday, 20th January, 2010, as per details to be furnished by National Securities Depository Limited and Central Depository Services (India) Limited.
d. e. f. g.
h.
Members holding Shares in electronic form may please note that their bank details, as furnished by their respective Depository Participants to the Registrar and Share Transfer Agent – TSR Darashaw Ltd., will be mandatorily printed on their dividend warrants as advised by the Securities and Exchange Board of India. Further, instructions if any, given by them in respect of Shares held in physical form will not be automatically applicable to the dividend payable on Shares held in electronic form. Such Members are therefore requested to give instructions regarding bank accounts in which they wish to receive dividend, to their respective Depository Participants directly. The Company or its Registrar and Share Transfer Agent will not act on any direct request from such Members for change / deletion of such bank details. Unclaimed / Unpaid Dividend: Pursuant to the provisions of Section 205A and 205C of the Companies Act, 1956, the dividend which remains unclaimed / unpaid for a period of seven years from the date of transfer to the unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) of the Central Government. The status of Dividend remaining unclaimed / unpaid is given hereunder: Dividend for the Financial Year Up to and including the Financial Year 1994-95 Contact The Registrar of Companies Central Government Of?ce Building, “A” Wing, 2nd Floor, CBD Belapur, Navi Mumbai, Maharashtra- 400 614. Non-recoverable since the unpaid amount has been transferred to IEPF of the Central Government. Action by Shareholder Application to be made in Form II prescribed by the Companies Unpaid Dividend (Transfer to the General Revenue Account of the Central Government) Rules, 1978.
i.
For the Financial Year 1995 - 96, 1999 - 2000 and 2001-02 (Interim Dividend) No Dividend was declared by the Company for the Financial Years 1996 - 97, 1997 - 98 and 1998 - 99 Financial Years 2001 – 02 (Final Dividend) and thereafter
_
TSR Darashaw Ltd., Registrar and Share Transfer Agent.
Request letter on plain paper.
The tentative dates for transfer to IEPF of the dividend remaining unclaimed / unpaid since 2001 - 02 are provided hereunder: Financial Year 2001 - 02 Final Dividend 2002 - 03 Interim Dividend Final Dividend Siemens Ltd. 35 40 21st July, 2003 21st January, 2004 26th August, 2010 26th February, 2011
11
Rate (%)
Date of declaration of dividend
Tentative date for transfer to IEPF
25
21st January, 2003
26th February, 2010
11
Financial Year 2003 - 04 Interim Dividend Final Dividend 2004 - 05 Interim Dividend Final Dividend 2005 - 06 Interim Dividend# Final Dividend 2006 - 07 Dividend 2007 – 08 Dividend
#
Rate (%)
Date of declaration of dividend
Tentative date for transfer to IEPF
40 50
22nd April, 2004 27th January, 2005
28th May, 2011 3rd March, 2012
45 100
25th April, 2005 27th January, 2006
31st May, 2012 3rd March, 2013
10 190
23rd December, 2005 18th January, 2007
28th January, 2013 22nd February, 2014
240
31st January, 2008
24th February, 2015
150
30th January, 2009
5th March, 2016
Declared by the erstwhile Siemens VDO Automotive Ltd. (since merged with the Company).
Members are requested to contact TSR Darashaw Ltd. / Investor Relations Team of the Company for encashing the unclaimed dividend standing to the credit of their account. After transfer of the said amounts to IEPF, no claims in this respect shall lie against IEPF or the Company nor shall any payment be made in respect of such claims. j. k. l. Members holding Shares in more than one folio in the same name(s) are requested to send the details of their folios alongwith the Share Certi?cates so as to enable the Company to consolidate their holdings into one folio. The Annual Report 2009 of the Company circulated to the Members of the Company, will be made available on the Company’s website at www.siemens.co.in and also on SEBI’s EDIFAR website at www.sebiedifar.nic.in. Members desirous of getting any information about the Accounts of the Company are requested to write to the Company atleast seven days in advance of the Meeting, so that the information required can be made readily available at the Meeting. All documents referred to in the accompanying Notice and Explanatory Statement are open for inspection at the Registered Of?ce of the Company on all working days between 10.00 a.m. and 12 noon upto the date of the 52nd Annual General Meeting.
m.
Explanatory Statement
As required by Section 173(2) of the Companies Act, 1956, in respect of the items of Special Business mentioned in the Notice. 1. Item No. 7 At the 47th Annual General Meeting held on 27th January, 2005, the Members had given their approval pursuant to Section 309(7) of the Companies Act, 1956, for payment of Commission to Directors (other than the Managing Director, Executive Director and Whole-time Directors) for a period of ?ve ?nancial years commencing from 1st October, 2004 upto 30th September, 2009. The Company is continuously improving its performance and pro?tability. In appreciation of their contribution and for the services they have rendered / will be rendering to the Company, it is proposed that the Non-Executive Directors be paid remuneration by way of Commission not exceeding in aggregate 1% (one percent) per annum or such other percentage as may be speci?ed by the Companies Act, 1956 from time-to-time in this regard, of the Net Pro?ts for that year computed in the manner referred to in Sections 198, 349 and 350 of the Companies Act, 1956 for each of the ?ve ?nancial years of the Company commencing from 1st October, 2009. This remuneration will be distributed amongst such of the Non-Executive Directors and in such proportion as the Board of Directors may decide, from time-to-time.
21
12
Annual Report 2009
Approval of the Members under Section 309(4) of the Companies Act, 1956 is required for payment of Commission, if any, to the Directors. Hence, the Board of Directors commends the Resolution No. 7 for your approval as a Special Resolution. None of the Directors of the Company, other than Mr. Deepak S. Parekh, Mr. D. C. Shroff, Mr. Y. H. Malegam, Mr. Keki Dadiseth, Mr. Pradip V. Nayak, Mr. N. J. Jhaveri, Mr. Joe Kaeser, Dr. O. Schmitt (being Alternate Director to Mr. Kaeser), Mr. Wolfgang Dehen and Mr. S. Schneider (being Alternate Director to Mr. Dehen) being Non-Executive Directors, are interested in the resolution. 2. Item No. 8, 9 and 10 In appreciation of the dedicated efforts which contributed in achieving an excellent performance by the Company and having regard to the increased responsibilities for further improving the performance of the Company in this competitive market, the Remuneration Committee of Directors at its Meeting held on 26th November, 2009 approved a revision in the remuneration of the Managing Director and all Whole-time Directors of the Company. The terms and conditions with respect to the revision in remuneration of the Directors are given below: I. Remuneration: Name of the Director Designation Salary per month (Rs.) 857,100 (w.e.f. 1st January, 2010) 524,400 (w.e.f. 1st January, 2010) Salary Grade Overseas / Special Allowance per month (Rs.)
Dr. Armin Bruck
Managing Director
250,000 – 1,000,000 857,100 * (w.e.f. 1st January, 2010) 200,000 – 750,000 524,400 (w.e.f. 1st January, 2010) Not Applicable
Mr. Sunil Mathur
Executive Director
Mr. Vijay V. Paranjape
Whole-time Director 389,600 (w.e.f. 1st January, 2010)
200,000 – 600,000
*Overseas Allowance; Annual Increments as may be decided by the Remuneration Committee of Directors / Board of Directors. II. Perquisites: i. In addition to the above, they shall also be entitled to Perquisites and Allowances like Rent-free furnished / semi-furnished accommodation / House Rent Allowance / Stay in a hotel; expenditure incurred by the Company on gas, electricity, water and furnishings to be valued as per the Income Tax Rules; Medical Reimbursement; Hospitalisation Expenses; Leave; Leave Travel Concession; Home Leave; Retirement bene?ts as per the laws applicable from time-to-time; Club Fees; Long Service Award; Company maintained car with driver / maintenance cost of the car and reimbursement of fuel expenses at actuals; Communication facility (Personal long distance calls will be borne by them), as per the Rules of the Company, as applicable. The perquisites and allowances shall be valued as per the Income Tax Rules, wherever applicable. In the absence of any such Rules, they shall be evaluated at actual cost. ii. Children’s Education Expenses (only for Dr. Bruck and Mr. Mathur): For Children studying in or outside India, the Education Expenses shall be paid by the Company directly to the school. Income Tax on Children’s Education Expenses to be borne by the Company. iii. Holiday passage for children studying outside India / family staying abroad (only for Dr. Bruck and Mr. Mathur): Return holiday passage is admissible once in a year by economy class or once in two years by ?rst class to children from their place of study abroad to India and to the members of the family from the place of their stay abroad to India if they are not residing in India with him. iv. Reimbursement of expenses incurred on returning to home country after completion of tenure (only for Dr. Bruck and Mr. Mathur): Actual expenses incurred on travel and on packing, forwarding, loading or unloading as well as freight, insurance, customs duty, clearing expenses, local transportation and installation expenses in connection with the moving of personal effects for self and family for joining duty in India (only for Dr. Bruck and Mr. Mathur) may be allowed in case these have not been claimed from the previous employer. After completion of the tenure, such expenses in connection with the moving of personal effects for self and family may be allowed
13
Siemens Ltd.
13
if they are ?nally leaving the employment of the Company. In case they are joining another Siemens Group / Associate Company, the Company to which they are transferred should bear these expenses. “Family” means the spouse and dependent children. III. Performance Linked Incentive They shall also be entitled to remuneration by way of Performance Linked Incentive based on the speci?c goals mutually set and approved by the Board of Directors / Remuneration Committee of Directors, from time-to-time. IV. Compensation under Stock Option Plan(s) of Siemens AG / Siemens Limited - Share Matching Plan (SMP Scheme) They shall also be entitled to payment of the cash equivalent of the fair market value of the Options / Awards as on Exercise Date, to which they may be entitled under the Stock Option Plan(s), as may be applicable from timeto-time of the parent company, Siemens AG, Germany as well as the Cash Incentive under the SMP Scheme, as applicable from time to time. V. Commission They shall also be entitled to remuneration by way of Commission as may be decided by the Board of Directors / Remuneration Committee of Directors from time-to-time. The amount of it based on the net pro?ts of the Company in a particular year shall be subject to the overall ceiling laid down in Sections 198 and 309 of the Companies Act, 1956. VI. Minimum Remuneration Notwithstanding anything hereinabove, where, in any ?nancial year during the currency of their tenure as Managing Director / Executive Director / Whole-time Director the Company has no pro?ts or its pro?ts are inadequate, the Company will pay the aforesaid remuneration by way of Salary, Special Allowance / Overseas Allowance, Perquisites, Performance Linked Incentive and Compensation under Stock Option Plan(s) of Siemens AG as well as SMP Scheme, as Minimum Remuneration to them. No Sitting Fee shall be paid to them for attending the Meetings of the Board of Directors or any Committee thereof. This explanation, together with the accompanying Notice, is to be regarded as an Abstract of the Terms pursuant to the provisions of Section 302 of the Companies Act, 1956. The said payment requires the approval of the Members pursuant to Sections 198, 309 and 310 read with Schedule XIII to the Companies Act, 1956 and hence the Board commends Resolution Nos. 8, 9 and 10 for your approval. None of the Directors of the Company other than Dr. Bruck, Mr. Mathur and Mr. Paranjape are interested in the Resolution. 3. Item No. 11 Mr. Vilas B. Parulekar was appointed as a Director and Whole-time Director of the Company with effect from1st February, 2007. Mr. Parulekar, on completion of his term, ceased to be a Whole-time Director and Director of the Company with effect from1st October, 2009. In appreciation of the services rendered by Mr. Parulekar, during his 38 years of employment with the Company, including over two years as a Whole-time Director, it is proposed to make a one-time special payment of Rs.5,000,000 (Rupees Five Million only) to him. This explanation, together with the accompanying Notice, is to be regarded as an Abstract of the Terms pursuant to the provisions of Section 302 of the Companies Act, 1956. The said payment requires the approval of the Members pursuant to Section 310 read with Schedule XIII to the Companies Act, 1956 and hence the Board commends Resolution No. 11 for your approval. None of the Directors of the Company are interested in the Resolution. 4. Item Nos. 12 and 13 Siemens has a long tradition of enabling employees to participate in its success by encouraging its employees worldwide the possibility to invest in Siemens shares. Building on this culture, the Management of Siemens Ltd., (“Company”) proposes to extend the participation of its employees in the success of the Company. The goal is to lay the cornerstone for Siemens equity culture in which as many employees as possible can – as shareholders – participate in the Company, assume responsibility and identify themselves with the Company. The purpose of the Siemens Limited - Share Meeting Plan (“SMP Scheme”) is to offer to Eligible Of?cers of the Company and its Indian subsidiary companies, who are willing to invest a certain amount of their annual gross performance pay in shares of the Company (“Investment Shares”) the possibility to receive matching cash incentive. Investment Shares will be matched by cash incentive in a 1 for 3 ratio, (i.e. cash equivalent to one free share (“Matching Cash Incentive”) will be paid for each three Investment Shares purchased by a participating employee. The ?rst tranche of this new “3 plus 1” program, under our “SMP Scheme” is proposed to be implemented in 2010. Precondition for the receipt of Matching Cash Incentive is that the Investment Shares are purchased via one time funding from the amounts resulting from annual gross performance pay and held during the vesting period of 3 years in terms of the SMP Scheme.
41
14
Annual Report 2009
The salient features of the SMP Scheme are as follows: Particulars Total number of shares to be issued under the Scheme SMP Scheme No fresh equity shares of the Company would be issued by the Company for the SMP Scheme. Under SMP Scheme shares would be procured either through an employee bene?t trust (to be constituted by the Board) or any other entity or service provider (“Third Party”) which may be appointed by the Board in a permissible manner, by means of purchase from the secondary market. Such shares would be allocated to the participating employees/directors of the Company in accordance with the SMP Scheme. The total number of shares that can be granted to the participating employees shall not exceed the issued share capital of the Company. Purpose of Scheme SMP Scheme aims at rewarding and motivating the employees of the Company and its subsidiaries. The main objective of the SMP Scheme are as follows: • To offer employees the possibility to invest in the Company’s shares and bene?t from long term participation in the Company’s success; and • To foster employees’ identi?cation with the Company. Eligible Of?cers and Whole-time Directors of the Company and its Indian subsidiaries (other than expatriates) who are on the payroll of the Company or its Indian subsidiaries as on 30th September, 2009 and as of the ?rst day of the offering period (“Eligible Of?cers”). The maximum investment threshold differs between senior managers and other of?cers. Senior Managers (i.e. of?cers within Global Position Level 1 to 4) can invest up to 50% of their annual gross performance pay; whereas, other Of?cers (i.e. of?cers below Global Position Level 4) can invest in the range of minimum 3% to maximum 5% of their annual cash compensation (i.e. Total Fixed Pay minus Retirals). Eligible Of?cers will pay the purchase price of the Investment Shares exclusively by one-time payroll deduction of the total amount to be invested. The month of this salary deduction will be concurrent with the month of payment of the annual gross performance pay in order to enable them to apply those funds for the purchase of Investment Shares. The Third party will procure the Company’s shares from the secondary market (on behalf of the participating employees) based on the prevailing market price on the designated dates. The Third party will endeavor to procure the necessary quantum of shares at the same market price but would be guided by market conditions as on the date of such purchase. Shares may be allocated by Third party to the participating employees at an average price of procurement, if permitted under law. Subject to applicability, if any, of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (“SEBI ESOP Guidelines”), shares allocated to the participating employees shall be locked-in for a minimum period of one year from the date of such allocation. In case of non-applicability of the SEBI ESOP Guidelines, there will be no lock-in period. Investment Shares purchased under the SMP Scheme will entitle the participating employee to Matching Cash Incentive on the basis of a 1 for 3 ratio. Cash incentive will be granted subject to compliance with the following conditions throughout the period starting on the acquisition date and ending on January 31 (inclusive), of the third calendar year following the calendar year of the acquisition date: (i) continued employment of participating employee with the relevant participating Company (ii) continued holding of the relevant number of Investment Shares by the participating employee in the custody account (iii) compliance with all terms and conditions of the SMP Scheme For Investment Shares held during the aforesaid period, cash incentive will be granted in the ratio 1:3 (i.e. cash incentive equivalent to value of 1 Share for every 3 full Investment Shares.) (“Matching Cash Incentive”).
15
Eligible Of?cers entitled to participate in the SMP Scheme Investment Limits
Payment Method
Price or pricing formula
Lock-in
Matching Cash Incentive
Siemens Ltd.
15
Particulars Appraisal process for determining the eligibility of employees to participate in the SMP Scheme Accounting policies
SMP Scheme The appraisal process for determining the eligibility of the participating employees will be speci?ed by the Board/Compensation Committee and will be based on criteria such as grade, seniority, length of service, performance record, merit of the employee, future potential contribution by the employee and or such other criteria as may be determined. The Company will comply with the disclosures and accounting policies as applicable to it under law, including those prescribed by SEBI and other concerned Authorities in this regard.
The Company is of the opinion that the SEBI ESOP Guidelines are not applicable to the SMP Scheme, however as abundant caution and with a view to comply with the relevant requirements, as applicable, of the SEBI ESOP Guidelines and/or the Companies Act 1956, the approval of the Members to the SMP Scheme is being sought by way of a Special Resolution. With a view to comply with the relevant requirements, as applicable, of the SEBI ESOP Guidelines, a separate resolution is being passed to enable the bene?ts of the SMP Scheme to be extended to employees of the Indian subsidiaries of the Company. Accordingly, the resolution set out at Item No. 13 is being placed for approval of the Members. Shares to be allocated under the SMP Scheme shall not be treated as an offer or invitation made to public for the subscription in the shares of the Company. The SMP Scheme is not to be construed as buy back of shares. The Board commends the Resolution Nos. 12 and 13 for your approval, as a Special Resolution. None of the Directors of the Company is in any way concerned or interested in the resolutions except the Whole-time Directors to the extent of their participation in the SMP Scheme. By Order of the Board of Directors For Siemens Ltd.
Ajai Jain Vice President (Legal) & Company Secretary Registered Of?ce: 130, Pandurang Budhkar Marg Worli, Mumbai – 400018 Mumbai Monday, 30th November, 2009
61
16
Annual Report 2009
Pro?le of the Directors being re-appointed as required under Clause 49 of the Listing Agreement entered into with the Stock Exchanges
Particulars Date of Birth Date of Appointment Quali?cation Mr. Joe Kaeser 23 June, 1957 1st October, 2006 Studied Business Administration Dipl.-Betriebswirt
rd
Mr. Vijay V. Paranjape 25 July, 1948 1st February, 2007 B. E. Elect.
th
Mr. Narendra J. Jhaveri 9th August, 1935 9th November, 2000 Masters Degree in Economics from Gujarat University M.Sc in Economics from The London School of Economics
Expertise in speci?c functional areas
Has held various senior level positions during his 29 years of tenure in the House of Siemens. He is presently the Member of the Managing Board and the Head of Corporate Finance and Controlling of Siemens AG.
After a brief stint with NCAER, he joined Reserve Bank of India. He then joined ICICI as Chief Economist in 1974 and rose to He is currently the CEO of the position of Joint Managing the Industry Sector of the Director. In 1993, he moved to I-Sec, a joint venture investment Company. bank between ICICI and JP Morgan, as Executive Chairman. Thereafter, he was associated with the Kotak Mahindra Group. Has held various senior level positions during his 37 years of tenure with the Company. 1. 2. Siemens Rolling Stock Pvt. Ltd. Flender Ltd., Chairman 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Afcons Infrastructure Ltd. Pidilite Industries Ltd. Usha Martin Ltd. Voltas Ltd. Juniper Hotels Pvt. Ltd. SKF India Ltd. Ultra Tech Cement Ltd. Hindalco Industries Ltd. Siemens Healthcare Diagnostics Ltd., Chairman Phoenix ARC Pvt. Ltd. Edelweiss Capital Ltd. Gujarat Venture Finance Ltd. Edelweiss Securities Ltd.
Directorships held
Director 1. Siemens Corporation (USA) 2. Siemens Ltd. (China) 3. Allianz Deutschland AG (Germany) 4. BSH Bosch und Siemens Hausgerate GmbH (Germany) 5. Siemens Aktiengesellschaft Oesterreich (Austria) Member of Managing Board 6. Siemens Aktiengesellschaft (Germany) Member of Supervisory Board 7. Bayerische Boerse AG (Germany) 8. Nokia Siemens Networks B. V. (Netherlands) Member of Advisory Board 9. Muenchner Handlsverein Holding GmbH & Co. KG (Germany) Member of Foundation Board 10. Carl Friedrich von Siemens Stiftung (Germany)
Membership of Committees
_
_
Audit Committee 1. Afcons Infrastructure Ltd.* 2. Pidilite Industries Ltd. 3. Usha Martin Ltd.* 4. Voltas Ltd.* 5. SKF India Ltd. 6. Hindalco Industries Ltd. 7. Siemens Healthcare Diagnostics Ltd. 8. Edelweiss Capital Ltd.* *Chairman 5,000
No. of shares held in the Company Siemens Ltd.
Nil
4,200
17
17
Directors’ Report
Dear Members, The Directors have pleasure in presenting the 52nd Annual Report of your Company and the Audited Accounts for the year ended on 30th September, 2009. 1. Financial Performance Rs. in Million 2008-09 Gross Pro?t before Interest, Depreciation and Exceptional Income Less: Interest Depreciation Pro?t before Tax and Exceptional Income Add: Exceptional Income Pro?t on sale of Investments in Subsidiaries Pro?t on sale of SBT Division Pro?t on sale of SVDO Division Pro?t before Tax Less: Tax Deferred Tax Fringe Bene?t Tax Net Pro?t after Tax Amount available for appropriation Appropriations: General Reserve Net de?cit on account of amalgamation of erstwhile Siemens Industrial Turbomachinery Services Private Ltd. Proposed Dividend Dividend Distribution Tax 2. Operations The Turnover of the Company increased marginally and stood at Rs.83,888 million as compared to Rs.82,955 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 new orders booked during the year were also on a healthy note despite tough market conditions. The Pro?t after Tax was Rs.10,449 million, compared to Rs.5,933 million during 2007–08. This increase was primarily on account of a substantial one time increase in Financing & Investment Income resulting from the Company’s sale of Siemens Information Systems Ltd. (SISL) and Siemens Information Processing Services Pvt. Ltd. (SIPS). 3. Dividend The Board of Directors recommends a Dividend of Rs.5 per Equity Share of Rs.2 each. This Dividend is subject to the approval of the Members at the forthcoming 52nd Annual General Meeting to be held on 29th January, 2010. In the previous year, the Company paid a Dividend of Rs.3 per Equity Share of Rs.2 each. 4. Management’s Discussion and Analysis A detailed review of the operations, performance and future outlook of the Company and its businesses is given in the Management’s Discussion and Analysis, which forms part of this Report as Annexure II.
81
2007-08 8,349.78 40.54 637.34 7,671.90 10.64 1,235.15 8,917.69 3,493.16 (629.04) 120.30 5,933.27 5,933.27 4,577.24 172.64 1,011.48 171.90
Growth % 56.84
13,095.69 58.77 777.79 12,259.13 2,059.46 14,318.59 4,007.46 (208.88) 71.50 10,448.51 10,448.51 8,476.21 1,685.80 286.50
59.79
60.56
76.10
18
Annual Report 2009
Siemens Green Facts
The new Siemens CCP plant in Irsching, Germany will have 60 % ef?ciency and produce 40,000 fewer tons of CO2 emissions. This is equivalent to the emissions of 9,500 cars driven 20,000 kilometers, a year.
5.
Amalgamations, Divestments and Acquisitions
a. Amalgamation of Siemens Healthcare Diagnostics Ltd., Baroda (SHDL) At the meeting held on 30th November, 2009, the Board of Directors approved the proposal for the amalgamation of SHDL with the Company. The “Appointed Date” has been ?xed as 1st October, 2009. The Board has recommended a share exchange ratio of 2:1 i.e. (Two) Equity Shares of Rs.2 each fully paid-up of the Company for every 1 (One) Equity Share of Rs.10 each fully paid-up of SHDL. The amalgamation is subject to all the necessary statutory / regulatory approvals, including approvals of the Members of the respective companies and the relevant High Courts. SHDL is based at Baroda and is engaged in manufacturing, marketing and Customer Support of Medical Diagnostic Reagents and Instrument etc. SHDL is listed on the Bombay Stock Exchange Ltd.
b.
Acquisition of balance 50% stake in Flender Ltd., Kolkata The Company, on 31st July, 2009 acquired 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) for a consideration of Rs.910 million. With this acquisition, Flender Ltd., has become a 100% subsidiary of the Company. The process for amalgamation of Flender Ltd. with the Company has already been initiated.
c.
Acquisition of balance stake in Siemens Building Technologies Pvt. Ltd., Chennai (SBTPL) The Company, on 7th January, 2009 acquired second tranche of 6.83% stake in SBTPL comprising of 254,843 Equity Shares of Rs.10/- each from the Promoters of SBTPL for a consideration of Rs.791.06 million. Subsequent to this acquisition, the Company’s shareholding in SBTPL increased to 86.15%. At the meeting held on 26th November, 2009, the Board of Directors has approved the acquisition of the remaining 13.85% stake in SBTPL comprising of 517,209 Equity Shares of Rs.10/- each from the Promoters of SBTPL for a consideration of Rs.702 million. With this acquisition, SBTPL will become a 100% subsidiary of the Company. Further, it is proposed to amalgamate SBTPL with the Company, subject to all statutory and regulatory approvals in this regard.
d.
Divestment of 100% stake in Siemens Information Systems Ltd., Mumbai (SISL) On 25th June, 2009, the Company sold its 100% equity stake comprising of 6,815,000 Equity Shares of Rs.10/- each in SISL to Siemens Corporate Finance Pvt. Ltd., Mumbai (SCFPL) for a consideration of Rs.2,794 million. SISL has thus, ceased to be a subsidiary of the Company with effect from the said date.
e.
Divestment of 51% stake in Siemens Information Processing Services Pvt. Ltd., Bangalore (SIPS) On 25th June, 2009, the Company sold its 51% equity stake comprising of 2,123,800 Equity Shares of Rs.10/- each in SIPS to SCFPL for a consideration of Rs.228 million. SIPS has thus, ceased to be a subsidiary of the Company with effect from the said date.
f.
Divestment of 100% stake in Siemens Nixdorf Information Systems Pvt. Ltd., Mumbai (SNISL) SNISL was 100% subsidiary of SISL and being a subsidiary of a subsidiary, SNISL was considered as a subsidiary of the Company. On 2nd June, 2009, SISL sold its 100% equity stake in SNISL to SCFPL. SNISL has thus, ceased to be a subsidiary of the Company with effect from the said date.
6.
Subsidiary companies a. Flender Ltd., Kolkata - a 100% subsidiary Flender Ltd., is engaged in the business of manufacturing gear boxes, couplings and spares. For the year ended on 30th September, 2009, Flender Ltd. reported a total income of Rs.398 million and a Net Pro?t of Rs.45 million. b. Siemens Rolling Stock Pvt. Ltd., Mumbai (SRSPL) – a 100% subsidiary SRSPL was incorporated on 4th July, 2008 and is engaged in the manufacture of Railway Rolling Stock. For the year ended on 30th September, 2009, SRSPL reported a total income of Rs.16.35 million and a Net Loss of Rs.135.04 million.
19
Siemens Ltd.
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Directors’ Report (continued)
c.
Siemens Building Technologies Pvt. Ltd., Chennai (SBTPL) - a 86.15% subsidiary SBTPL is engaged in the Building Technologies business providing a range of products and services comprising of building automation systems, ?re safety solutions, security solutions, etc. For the year ended on 30th September, 2009, SBTPL recorded a total income of Rs.2,051 million and a Net Loss of Rs.146.81 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.2,597 million and a Net Loss of Rs.234.8 million.
All the above subsidiary companies are non-material, non-listed subsidiary companies as de?ned 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 on 30th September, 2009. 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 Of?ce 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 52nd 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 prescribed Accounting Standards. 7. 8. Foreign Exchange Earnings and Expenditure Details concerning Foreign Exchange Earnings and Expenditure have been given under the Notes to the Accounts. 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. 9. 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 Company’s growth. Our industrial relations continue to be cordial. The Company is introducing an Equity Based Compensation Program “Siemens Limited – Share Matching Plan” for the Eligible Of?cers of the Company and its subsidiaries. This Plan provides an opportunity to reap sustainable, long-term bene?ts from the Company’s success. The necessary resolutions with respect to implementation of the said Plan forms part of the Notice of the 52nd Annual General Meeting and the same are recommended for your approval. The total number of permanent employees of the Company as on 30th September, 2009, was 6,683 (as on 30th September, 2008: 6,502). 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 Of?ce of the Company. 10. 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’ Certi?cate on compliance with Corporate Governance requirements by the Company is attached to the Corporate Governance Report. 11. General Shareholder Information General Shareholder Information forms part of the this Report as Annexure IV.
20 02
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Annual Report 2009
Siemens Green Facts
With HVDC transmission technology from Siemens, electricity can be transmitted over distances of up to 2,000 kilometers with minimum loss.
12.
Directors’ Responsibility Statement Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors con?rm that, to the best of their knowledge and belief: 1. 2. in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures; 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, 2009 and of the pro?t of the Company for the year ended on that date; proper and suf?cient 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 the annual accounts have been prepared on a going concern basis.
3.
4.
13.
Directors Mr. V. B. Parulekar, on completion of his term, ceased to be a Whole-time Director and Director of the Company with effect from 1st October, 2009. The Board places on record its appreciation for the services rendered by Mr. Parulekar during his tenure with the Company. At the 52nd Annual General Meeting, Mr. Joe Kaeser, Mr. V. V. Paranjape and Mr. N. J. Jhaveri retire by rotation and being eligible, offer themselves for re-appointment. The above re-appointments form part of the Notice of the forthcoming 52nd Annual General Meeting and the respective resolutions are recommended for your approval. Pro?les of these Directors as required under Clause 49 of the Listing Agreement are given in the Notice of the 52nd Annual General Meeting.
14.
Auditors Messrs S. R. Batliboi & Associates, Chartered Accountants, retire as the Statutory Auditors of the Company at the ensuing Annual General Meeting and offer themselves for re-appointment. A certi?cate from them has been received to the effect that their re-appointment as Statutory Auditors of the Company, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.
15.
Cost Auditors In accordance with the requirements of Central Government and pursuant to Section 233B of the Companies Act, 1956, the Company carries out an audit of cost accounts for the product “Electric Motors” every year. M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai, have been conducting this audit since 1972.
16.
Acknowledgements 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 Monday, 30th November, 2009
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Siemens Ltd.
21
Annexure I to the Directors’ Report
Directors’ ReportEnergy, etc. u/s 217(1)(e) Conservation of
Additional Information in terms of Section 217(1)(e) of the Companies Act, 1956, dealing with Conservation of Energy, Research & Development and Technology Absorption & Innovation. A. Conservation of Energy a. Measures taken • Regrouping of the lights in the Traction bay. • • • • Replacement of lower wattage bulbs / Lamps instead of higher wattage in all the factories. Upgrading 80kW impregnation curing oven on `Thyristor Drive’ principle. Implementation of Delta Re?ex system and Real Time clock. Intermediate arrangements between Phase 1 and 2 for utilization of solar hot water for canteen cooking and washing. Use of natural light at production area during day time. Use of Heavy Duty Corrugated Box for the packing of panels. High density I/O modules conceived. I/O modules without requirement of FIM conceived. Use of low power consumption controller as well as low voltage electronics component.
• • • •
WDG4 Converter for Indian Railways. New series of contactors type 3TS and overload relays type 3US. New series of Pushbuttons and actuators type 3SB5. In house Type Testing facilities expanded as per plan to support timely introduction of Roadmap projects. Development of products - Multix Focus and Multiphos 450 (High Frequency Generator). Test on silicon bellow for use in outdoor VCB. Design & type test on 12 kV panels for withstanding 40 kA,1s internal arc fault. Design & type tests on enclosure for outdoor R.M.U. to withstand 20 kA, 0.1s internal arc fault. Cost effective circuit breakers of 145 kV & 245 kV range were designed developed and tested. 50 KA design of 400 KV HCB, DBR disconnector and earth switch. 40 KA 3 sec. 400 KV HCB Isolator and earth switch copper design. Indigenisation of low cost PG400/245/145 localisation and manufacture and assembly process. Design developed centre break 3150 Amp at low cost upto 245 KV. Development of User friendly Historian package. Development of FIM-less I/O system architecture. Development of Speed measurement module. Development of project speci?c features. Increase in market share. Energy ef?cient products. Overall cost reduction. Opportunity to tap new market. Recognition of SGR-R&D as Global R&D, by Siemens AG Introduction of cost competitive R.M.U. in domestic market. Reduced time to market the product. Improved segment speci?c business potential, especially service & captive power plant projects. Improved system acceptance. Improved quality. Lower lifetime costs for customers. Development and Testing of induction motors as per IE2 complying to IEC 60034-30. Localisation of 70 mm MCBs with higher breaking capacities and features. Annual Report 2009
• • • • • • • • • • • • • • • • • • • • • • • • • •
• • • • •
b. Additional investments and proposals, if any being implemented for reduction of consumption of energy • PLC based lighting control for manufacturing and administration building. • Customisation and use of power plant optimisation packages for Indian power plant projects.
2. Bene?ts derived as a result of the above R&D:
c. Impact of Measures undertaken • Optimisation of energy consumption. • • Savings in energy and fuel cost. Environment Protection.
B. Research and Development (R&D) 1. Speci?c areas in which R&D was carried out: • Prototype development of Windmill Generator of 1.875 MW rating. Prototype made ready and is under evaluation. • • Developed 1.35 MW induction motor. Received accreditation for BEE ‘Star’ rating label for the energy ef?cient motors from the Bureau of Energy Ef?ciency (Ministry of Power, Government of India). Localisation of new range of fuses and RCCBs. New range of DBs. 10 KA MCB Housing and cover in Urea. Development of MV Drives.
• • • •
22
3. Further Plan of action:
22
Siemens Green Facts
Variable-speed drives with frequency converters reduce the electricity consumption of pumps and fans by up to 60%.
• • • • • • • • • • • • • •
Development for series production. Development of New products with primary focus on State of Art Contactors & Relays. Build R&D capacity and capability for further research oriented activities/projects. Solar Power for Generator, Smart Camera for C Arms. Implementation of improved designs & cost effective designs for 420 kV circuit breakers. Low cost design of disconnector for local low end market. 63 KA rating 400 KV disconnector. 765 KA localization. Customization of optimization package. Customization of simulator. Development of PSS for excitation system. Further developments in IO modules. Enhancing SW testing by use for standard services & tools. Development of MOR package
-
•
Localisation of ST Technology for SST 300 C Blading and SST 600 Turbine.
2. Bene?ts derived from the above: • Reduction in imports of the motors. • • • • • Meeting the demand of Indian Railways for increased local content in manufacturing. Environment friendly hazardous waste. Overall cost reduction. Increased market coverage.
Year of Import Has the technology has been fully absorbed Yes If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action. Not Applicable
process,
reduction
in
Reduction in consumption of paint.
3. Imported Technology:
Technology Imported
4. Expenditure on R&D: a. Capital Expenditure: Rs.21.40 million b. Revenue Expenditure: Rs.57.50 million c. Total Expenditure: Rs.78.90 million C. Technology Absorption & Innovation 1. Efforts undertaken: • Full depth manufacturing of Traction Motors for Diesel Electric Locomotive application. This included necessary indigenisation of components and parts. Indigenisation of c-parts for all the traction motors. Introduction of Medium Voltage Motors manufacturing. This included necessary indigenisation of components and parts, introduction of additional technology in shaft insertion in rotors, assembly and testing processes. Introduction of ENSIS Oiling process for Magnets. 800 kV Circuit Breaker Development work in process. Indigenisation of low cost PG400/245/145 manufacture and assembly process. Design & development centre break 3150 Amp at low cost upto 245 KV. Technological Assistance for Instrument Transformer Manufacturing of 245kV & 420kV Current Transformers. Technological Assistance for Transformer Manufacturing for 400 kV rating of Power Transformers including HVDC transformers. Introduction of 4th Generation DCS SPPA T3000.
Coil manufacture and winding process. - Process of machining of components for traction motor. - Assembly and testing process. Ensis Oil Spraying Automat Technology for manufacture of 800 kV GCB
2007-08
2008-09 2008-09
Yes No
Not Applicable Development work in progress and manufacturing would commence after successful type testing Not Applicable
• •
Technology for manufacture of 245 kV & 400 kV Current Transformers Technology for manufacture of 400 kV Power Transformers Distributed control System SPPA T3000 Steam Turbine & Condenser engineering and production
2007-08
Yes
2007-08
No
2007-08 2008-09
Yes No
Process of absorption of HVDC technology is is expected to be fully absorbed by FY 2009-10. Not Applicable C Blading manufacturing under localisation, SST 600 localisation started from September, 2009.
• • • • •
On behalf of the Board of Directors For Siemens Ltd.
•
Deepak S. Parekh Chairman Mumbai Monday, 30th November, 2009
23
•
Siemens Ltd.
23
Annexure II to the Directors’ Report
Directors’ Report Management’s Discussions and Analysis
General Performance Review The ?scal year 2008-09 began amidst ?nancial slowdown, which decelerated the economic growth of India to 6.7%. This depicted a decline of 2.1% from the average growth rate of 8.8% recorded in the previous ?ve years. While the GDP growth in the ?rst two quarters was above 7.5%, it fell sharply in the third and fourth quarter to 5.8% as compared to GDP growth rate of 9.3% and 8.6% recorded in Q3 and Q4 of 2007-08. The moderation in growth for 2008-09 is mainly attributed to steep slowdown in growth in industry to 3.9 per cent from 8.1 per cent in 2007-08. Within industry, the manufacturing, electricity, gas and water supply and construction activities declined sharply, while growth in mining and quarrying sector showed a marginal growth. Growth in agriculture, forestry and ?sheries declined from 4.9% in 2007-08 to 1.6% in 2008-09. The growth slowdown in services sector was moderate. It was estimated at 9.7% in 2008-09 as compared to 10.9% in 2007-08. While the market witnessed slowdown in new investments, the rise in in?ation, high interest rates and liquidity crunch also led to cancellation, renegotiation and delay of many planned projects in India. To counter this negative fallout of the global economic slowdown, the Indian Government implemented ?scal stimulus packages to boost demand and increased expenditure on public projects. The RBI took a number of monetary easing and liquidity enhancing measures to facilitate ?ow of funds to meet the needs of infrastructure sectors. As a result, in the second quarter (July-September 2009), the economic indicators were looking up. After growing by 6.1% in the ?rst quarter, the GDP is estimated to have grown by 6.8% in the second quarter. The growth was led by an estimated 7% growth in the industrial sector, as compared to 5% in the ?rst quarter. While, the industry as well as services sector were on recovery track, the performance of the agriculture sector remained a cause of concern. Considering the overall market conditions during the last ?scal of the company (October – September 2009), Siemens continued to achieve stable performance. Further reviews on each of Siemens’ sector businesses are given separately in the following paragraphs:
led to severe price pressures in the market with companies anxious to ?ll up idle capacities. The heartening fact was that the Railway sector had a marginal impact of the economic crisis. The freight and passenger loading did not decline in absolute terms and registered a growth over previous years. Considering the overall market pressures, Siemens Industry Sector, which is a mix of short and long cycle businesses performed on expected lines during the last ?scal. It secured a good order intake and increased its revenue by 12% with strong order backlog. Its pro?t margin remained good at 5%. A major contributor to the Industry Sector performance was the Mobility division, which grew by 48% over the previous ?scal. Siemens Mobility division is a key player in Rail based transport solutions. With the addition of Infrastructure Logistics and Traf?c Solutions business, the division grew to a full spectrum of Mobility solutions provider. It continued to gain market share due to its state-of-the-art technology and in-depth local infrastructure including manufacture of propulsion equipment at Nashik and Kalwa Works, progressive localization of baggage handling solutions, a vast network of service infrastructure and dedicated personnel. The order intake of Industry Solutions (IS) division, which handles project business, was affected due to postponement of investment decisions in the respective market segments. With some large order back log, the turnover of IS division remained steady. Industry Automation and Drive Technologies (IA&DT), the product and solution division was also moderately affected and its order intake was a re?ection of prevailing market trends. With its edge in providing innovative and customized products & solutions, Siemens IA&DT division won several noteworthy orders amidst stiff competition and price pressures. The division also signed important alliances with Steel Authority of India Ltd., Indian Machine Tools Manufacturers Association (IMTMA) and with the Indo Danish Tools Room (IDTR) Jamshedpur to impart technical training to their employees and end customers. IA&DT further expanded their training
Industry Sector
The Industry sector was impacted the most as a result of the global economic slowdown, with growth rates declining from 8.1% in FY08 to 3.9% in FY09. With an acute liquidity crunch, most investments were deferred and projects were scaled down or deferred in sectors such as Automotive, Textiles, Paper, FMCG, F&B, Cement, Metal Technologies and other infrastructure projects. This decline in demand
42
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Annual Report 2009
Siemens Green Facts
Siemens’ Corex technology reduces CO2 and Sulfur Dioxide emissions resulting from iron production by 30% and 97% respectively.
network by setting three new authorized training centers catering to the northern, southern and eastern regions of the country. The highlight of IS division was the success achieved in its new business ventures such as water technologies, infrastructure projects and service businesses. The division also retained its leadership position in the metal and mining sector by winning a number of key orders and executing them successfully. It won a breakthrough order for the country’s biggest capacity electro-chlorination plant along with some large orders from the Metal Sector to supply electricals, power distribution equipment and automation solutions. The Mobility division won its ?rst order in India for the Metro electri?cation from Delhi Airport Metro Express Link (DAMEL), in addition to modern signaling and state-of-theart baggage handling systems with city check-in facility. The division also won major orders to supply IGBT (Insulated Gate Bipolar Transistors technology) based propulsion and control equipment for diesel electric locomotives. The modern stateof-the-art IGBT based electrics are highly reliable, require low maintenance and provide better lifecycle cost position. The strategic success was that the Mobility division was also able to establish its footprint in the traf?c solutions segment in the country. During the year 2008-09, the Industry Sector launched several innovative products across its businesses. For instance, G120 drive series, Medium Voltage motors, localized version of new design traction motors for Diesel Locomotives and Conveyor belts ‘Vario Belt V2,’ etc. The Sector was also accredited with the ‘BEE Star’ rating by the Bureau of Energy Ef?ciency (Ministry of Power, Govt. of India) for the energy ef?cient motors manufactured at Kalwa, near Mumbai. The Mobility division was successful in the development of the 500KVA Hotel Load converter that is energy ef?cient and will be used in the Rajdhani and Shatabdi express trains. The division has also completed the important development of the SIBAS based locomotive controller for 4500 HP IGBT based Diesel Electric Locomotives, which is a microprocessor based control system that controls complete locomotive functioning and enable its ef?cient operations. On the R&D front the Sector made numerous noteworthy investments. The Nasik Works developed and installed Water-cooled Converter & Controls (including software) for Shovels used in the export mining market. The Switchgear Kalwa Works has indigenously developed a new range of 3 TS contactors & 3 US overload relays and 3 SB5 Pushbutton stations & actuators. The factory is also considering registration of four patents in switchgear R&D. Outlook: The Government rolled out signi?cant economic policy reforms and ?scal stimulus packages to boost demand and increase expenditure on public projects. Also a number of monetary easing and liquidity enhancing measures were
undertaken to facilitate ?ow of funds from the ?nancial systems to meet the needs of infrastructure sectors. These developments will revive the projects undertaken by industries and thereby support the Industry Sector growth plans. There are various indicators, which show that global economic slowdown has started bottoming out. Going further, the sector will focus on energy ef?cient products / solutions and enhance its GREEN portfolio, which will create sustainable value for customers. This will give an added dimension to the sector’s strategy in the coming years and also offer a substantial business potential.
Energy Sector
As a consequence of the global economic crisis, the energy market witnessed a clear downward trend in the last ?scal. The power generation market fell by about 15% while the distribution segment declined by about 30%. The heartening sign was that the transmission segment continued to grow, with the Power Grid Corporation of India spearheading the progress in the transmission sector. The last ?scal saw a signi?cant shift towards supercritical technology with the Central Electricity Authority (CEA) mandating stricter ef?ciency guidelines for supercritical equipment to ensure reliability and good performance of power plants. While low cost suppliers continued to lead the market, more new players entered the competitive space, which led to heightened price pressures. In such a market environment, Siemens Energy Sector performed well and retained its market position in the industry. During 2008-09, the order value rose by 21%, while its sales increased marginally by 2%. Pro?ts rose by 91% on account of the substantial completion of certain large projects, which has resulted in signi?cant savings in estimated costs and consequential recognition of additional
25
Siemens Ltd.
25
Annexure II to the Directors’ Report (continued)
Management’s Discussions and Analysis
revenue and pro?ts. During the year, the Sector continued to invest for expanding its manufacturing capabilities. It commenced operations at its Gas Insulated Switchgear (GIS) factory at Aurangabad, which was the ?rst GIS factory to be fully operational in India. The Sector also expanded its Steam Turbine factory at Vadodara. Amongst the many orders won by the Energy Sector, the most prominent contract was from Adani Power Ltd. to construct India’s ?rst private sector High-voltage-directcurrent (HVDC) transmission system. This environment friendly system will help reduce millions of tons of CO2 emissions and provide energy ef?cient transmission of power over a distance of 1,000 km from Mundra power plant in Gujarat to Mohindergarh in Haryana. Apart from orders, the Energy Sector also rolled out new products and solutions. It introduced many innovative products such as power plant control system SPPA-T3000, 400kV Power Transformer, Traction Transformer, localized Grading Capacitors, 420kV, 50kV Disconnectors, etc. Siemens was awarded the Enertia Award 2008 for technology innovation for the Talcher-Kolar HVDC link capacity enhancement. Outlook: The early signs of an economic recovery is expected to lead to a revival of deferred projects. The substantial capacity addition will generate a market for our products down to the distribution level. The growth in the Transmission sector is expected to continue, while the recent resurgence in the industrial sector is expected to help the Distribution segment. The power and industry sectors will continue to be key drivers for our growth. The increased demand for supercritical technology with CEA mandating stricter ef?ciency guidelines will bene?t the Energy Sector with its technology edge in providing supercritical technology. While the Government has initiated bulk tendering of fossil supercritical units, the Power Grid has moved towards implementation of 800kV HVDC transmission lines and the next focus is to adopt 1200kV AC lines. As innovation leaders, the Sector will continue to leverage growth opportunities by widening the spectrum of it’s high-tech products and solutions and expanding manufacturing capacities.
position by gaining market share, especially in segments of CT scanners, MRI, Molecular Imaging & Special Products and grew faster than the market. With healthy Order intake and improved pro?tability, the overall performance of the Sector was very good. On a comparable basis, for the total business, orders grew by 20%, sales grew by 5%, while pro?ts rose by 24%. For only the direct business, Sales declined by 10%, Orders declined by 6%, while Pro?ts rose by 24%. In line with its business philosophy, the Healthcare Sector introduced several ?rst-of-its-kind products in the country. For instance, it launched SOMATOM De?nition Flash CT scanner, which is the fastest CT scanner in the world with a low radiation dose. The world’s ?rst molecular CT scanner called Biograph mCT was installed for the ?rst time in India. The Sector also introduced country’s ?rst robotic cathlab, Artis Zeego. One of the most outstanding technologies introduced by Siemens was Liver Elastography using ACUSON S2000 ultrasound system. With this ultrasound system, for the ?rst time in India it is now possible to non-invasively diagnose liver disorders. Another ultrasound system launched was ACUSON SC2000 which provides exclusive cardiac and vascular diagnosis. With this ultrasound system, Siemens also introduced a technology called Echo in a Heartbeat that allows volume scanning of a heart in one second. Siemens Healthcare won noteworthy multi-modality orders, which included two large private sector orders for providing a range of imaging equipments. The sector also received the single largest bulk order from one of the government entities. A signi?cant export order was won from China for 20 units of Multimobil 5C C-arm systems and 40 units of Multimobil 2.5 X-rays. The Healthcare Sector enhanced its post sale support and service and at present has over 700 systems connected to Siemens Remote Service for remote monitoring and servicing. It continued to conduct advance training workshops for customers as well as for the application teams, which signi?cantly helped the sector to perform better. In FY2008-09, Healthcare was credited with Frost & Sullivan’s
Healthcare
In the beginning of FY2009, the industry witnessed hardening of credit and spiraling of interest rates, with weakening of the Indian Rupee against the US Dollar. This led to slowdown in the private sector investment in the Healthcare sector however the investments by the public sector compensated for the slowdown in the private sector. During the fourth quarter of the last ?scal, there were signs of recovery in the private sector investments. Thus, the overall healthcare equipment market grew by 10% - 12% in the last ?nancial year. Despite the intense competition in the market, Siemens Healthcare Sector further consolidated its leadership
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Annual Report 2009
Siemens Green Facts
Planon, a mercury free lamp from Osram, has a service life of 100,000 hrs., & lasts 6 times more than conventional ?uorescent lamp.
Best CT Scan Equipment Company of the Year award. Outlook: The trend of the Indian Rupee appreciating against the US Dollar and recovery of the private sector investment is expected to augur well for the industry. The Oncology and Cardiology segment will be the major growth drivers. Some of the Corporate groups are looking for ‘Pay per Use models’ and the Government hospitals are looking for public private partnerships. The Tier II and Tier III cities will continue to see big growth. Siemens will leverage these business opportunities by focusing on high potential areas and emerging markets. It will also focus on ‘Imaging inside Operation room’ market and the replacement market. The Sector will continue to launch world-class innovative technologies in India and also invest in R&D at its Goa factory.
Center (GECC) in Chennai for Building Automation Systems. The GECC will provide engineering design services for the Indian market and for the Asia Paci?c region. Outlook: Though there are signs of revival in the industry, the related market for building technologies such as commercial real estate and retail are not expected to see a speedy recovery. SBTPL expects to improve its business performance by focusing on key verticals like Government, Pharma and Data Centers. The company will establish greater competence in Energy Ef?ciency Services to optimize energy consumption in existing building infrastructure. SBPTL will also focus on increasing it’s services portfolio to provide value added offerings to the existing installed base, especially in the area of knowledge services to create greater value from existing investment. Flender Ltd. Flender Ltd., a 100% subsidiary company of Siemens Ltd, manufactures mechanical and electrical components for power transmission equipment. Their pro?le covers a diversi?ed product range from individual components to complete drive systems. Despite the market pressures during the last ?nancial year, Flender continued to do well. Orders increased by 9%. A slowdown in the cement sector, which contributed to more than half of the company’s order intake in the past was compensated by increased demand in the Power sector. Its sales increased by 13%, while pro?ts rose by 15%. The merger process of Flender with Siemens Ltd. is currently underway and an application has been ?led in the High Court of Calcutta. The appointed date for the merger is October 1, 2009.
Group companies of Siemens Ltd. Industry
Siemens Building Technologies Pvt. Ltd. (SBTPL) As a consequence of the global economic slowdown and acute liquidity crunch, the demand in the building technologies market fell sharply by about 20%. The business potential in segments such as Commercial Real Estate, Retail, IT and BPOs reduced considerably in turn affecting the performance of Siemens Building Technologies. The ?scal 2008-09 was one of the most dif?cult years for Siemens Building Technologies Pvt. Ltd. (SBTPL), which is an 86% subsidiary of Siemens Ltd. The revenues fell by 21% while the pro?tability was impacted severely. In addition, the subsidiaries of SBTPL in UK and Ireland also witnessed tough market conditions. In spite of the adverse market conditions resulting in severe price pressures, the company secured some noteworthy orders for Integrated Buildings Management Systems (IBMS), ?re suppression equipment and annual maintenance contracts. One of their major achievements was the establishment of the Graphics & Engineering Competence
Corporate Functions Review
Internal Control Systems The mandate of internal audit in Siemens Ltd. is to add value and improve the operations and processes of the Company. This is done by independently and objectively evaluating and reporting on Siemens’ ?nancial reporting integrity, the effectiveness of risk management and internal control systems and the adherence to Siemens’ compliance policies in a systematic and disciplined manner. Siemens has outsourced the internal audit function to Corporate Finance Audit, the Global Audit Department of Siemens AG, majority shareholder of Siemens Ltd. To deliver on its mandate, the Internal Audit department develops a ?exible audit plan for Siemens and its subsidiary companies using an appropriate risk-based methodology and considering the work performed by Siemens’ other control and monitoring functions and external auditors, to provide optimal audit coverage at a reasonable overall cost. The audit plan is submitted to the Audit Committee of Siemens
27
Siemens Ltd.
27
Annexure II to the Directors’ Report (continued)
Management’s Discussions and Analysis
for review and concurrence at least annually. The results from the audit are reported to the Audit Committee on a quarterly basis. Compliance Siemens Ltd. also strengthened its Compliance function during the Internal Control Remediation implementation phase and thereafter in October 2008, restructured this function based on focus areas and sector requirements. Each sector of the company has a dedicated Sector Compliance team that helps to ensure on one hand, the effectiveness of the de?ned controls in the business environment and on the other hand supports in reducing the response time to help the business in day to day operations, without escalating queries to the Regional Compliance Of?ce (RCO). During the year 2008-2009, the RCO team helped to ’Build Trust’ and inculcated a strong ’Conviction for Compliance’. It continued its conviction even outside the realms of Siemens to other organizations through Collective Action Plan and with the support from NGOs, Transparency International, India (TI I) and Government bodies. The RCO supervises Compliance program of all Group Companies to achieve synergies within Siemens in India. Safety & Environment Siemens has always considered safety and environment one of its key focus areas and has always strived to make continues improvements in these two aspects. The highlight of the FY 2008-2009, was the standardization of Safety & Environmental Management System as per International Standards for Certi?cation. During this year, the Transformer, Switchboard and Aurangabad Circuit Breaker Factories have implemented Safety Management System as per International Standard OHSAS 18001. Our factories are now certi?ed by OHSAS 18001 through external auditors. At Siemens, environment concerns have always taken precedence; hence all our factories at Kalwa, Aurangabad
and Nashik have re-certi?ed for international standard ISO 14001 for Environment Management System. To address the concerns of Environment Protection, concrete efforts were made towards natural resource conservation. For example, a Sewage Treatment Plant was commissioned at Kalwa Works and the Kalwa Switchgear factory started a pilot Rain Water Harvesting project. The treated and collected water is currently used for ?ushing and gardening. The Kalwa Switchgear Factory has reduced waste material by reusing process scrap, thermoplastic, so far the total quantity of 10 tons/year has been recycled. For creating a safe work environment, this year total 2,760 employees including contractors have been trained on various Safety & Environment topics. This is a three fold growth in terms of numbers as compared to previous year. The determination of our line managers towards Safety & Environment supported by strong Management Commitment has led to a signi?cant reduction in accidents in all our manufacturing Units. There have been no accidents reported at Kalwa Switchgear Factory, Goa Works, Nashik Works and Baroda Works. The number of Total Accidents at all our production units of has reduced by 29%. In order to tackle any ?re emergency, Nashik Works has installed a new state-of-the-art ?re hydrant system. The new system has a pumping mechanism to supply minimum of 4,500 liters/per minute at a pressure of 7kg/cm2 along with a jockey pump and a diesel backup pump. Siemens has also included Safety & Environment clauses in all its Purchase Orders. This reinforces our communication towards compliant behavior by all our vendors in our premises and of their own. An exhaustive Safety & Environment Protocol Manual for Siemens Project sites was prepared to speci?c safety legal and technical safety requirements. This Protocol Manual has been distributed among our project sites across the country. As a part of preventive crisis management, emergency drills were conducted at all our factories and of?ces. Human Resource Initiatives Employees are the back bone of a good organisation and to motivate them to achieve greater heights HR undertook several initiatives towards their development, enhancement and retention. Despite the dif?cult market conditions, the Company hired around 130 fresh Graduate Trainee Engineers (GTE) who joined the Siemens family. The program titled ‘Welcoming the Young Giants’ was planned to welcome and integrate the young engineers in the house of Siemens. Keeping in line with the business growth and constantly changing market demands, the company invested signi?cantly in various training and development activities to better equip our employees by enhancing their competencies in order to
82
28
Annual Report 2009
Siemens Green Facts
SOMATOM De?nition Computed Tomography saves energy up to 30%. The material components are 97% recyclable compared to the previous model.
successfully meet future challenges. Nearly 290 programs were conducted during the year covering 3,500 participants. In the area of leadership development, the existing Program for Business Managers (PBM), meant for our talent at the mid-management level, was re-designed with greater focus on Business Strategy. This year, 35 Managers across the Companies went through the program and their projects will be closely tracked for implementation. Additionally, a specialized program was designed for the Senior Management team known as Strategic Leadership Development Programme (SLDP) in collaboration with Indian Institute of Management, Ahmedabad (IIM-A). It is a two weeks intensive training on Business Skills and Leadership development. Another new initiative that has been undertaken by HR is Executive Coaching for select Top Management to hone their business and leadership skills by bringing in an external perspective. The Company has put a lot of emphasis towards developing the young talent and as an example; recently ?ve of our employees were selected to present new ideas to the Board Members in Germany. The company worldwide, as well as in India, is also focusing on building greater diversity in its efforts towards making the organization truly global. Last year, under the new shared service concept, HR services were bundled and several processes were re-designed to bring in higher ef?ciency at signi?cantly lower costs primarily with the effective use of IT enabled tools, as also by outsourcing of transactional work to our in-house Shared Services out?t, SIPS. Amidst all the pressures and demands of the growing business, Industrial Relations continued to be cordial with our Unions.
the Industry sector to gain stability, which got impacted the most in the economic slowdown. Overall the business sentiment is now positive. Investments in the infrastructure sector are also likely to help boost the economy. With expected investments of about US$500 billion, a number of infrastructure projects have been announced by the Railways, Urban authorities and Power especially on a public-privatepartnership (PPP) model. The challenges that confronted the Indian economy in 2008-09 will remain in 2009-10 as well. The ?rst area of challenge will be of monetary and ?scal policy and the other will be of returning to the high growth path. However, compared to other emerging economies, India has several strengths that can help an early mitigation of the adverse effects of the global economic crisis — high share of services in GDP, high domestic saving rate, growing infrastructure investment and most preferred destination for investments among others. Siemens Ltd. will focus on providing solutions to the infrastructure challenges faced by the country and will maintain its market position by driving pro?table growth. While focusing on sustainability, Siemens will strengthen its solutions for environment protection and energy ef?ciency. Note: This report contains forward-looking statements based on beliefs of Siemens’ management. The words ‘anticipate,’ ‘believe,’ ‘estimate,’ ‘forecast,’ ‘expect,’ ‘ intend,’ ‘plan,’ ‘should,’ and ‘project’ are used to identify forward-looking statements, Such statements re?ect the company’s current views with respect to the future events and are subject to risks and uncertainties. Many factors could cause the actual result to be materially different, including amongst others changes in the general economic and business conditions, changes in the currency exchange rates and interest rates, introduction of competing products, lack of acceptance of new products or services, and changes in business strategy. Actual results may vary materially from those projected here. Siemens does not intend to assume any obligation to update these forward-looking statements. On behalf of the Board of Directors For Siemens Ltd.
Outlook for Siemens Ltd.
India has established itself as one of the world’s fastest growing economies — this fact has been attracting many investors across the world to leverage opportunities in this growing market. However, the ?nancial meltdown and consequent economic slowdown that impacted the world last year, had its effect on the Indian economy as well. But despite the slowdown, investment remained relatively buoyant, growing at a rate higher than the GDP (32.2% from 31.6% in 2007-08). Towards the end of the ?scal 200809, the economy saw a silver lining when the government stepped in with its ?scal stimulus initiatives. India is now on track to improve its economy and the Reserve Bank of India (RBI) recently projected the country’s economic growth at 6% in ?scal 2009-10. As the markets are currently under a phase of correction, the competition to win orders is getting intense. Projects that were delayed last year are expected to resume, primarily helping
Deepak S. Parekh Chairman Mumbai Monday, 30th November, 2009
29
Siemens Ltd.
29
Annexure III to the Directors’ Report
Corporate Governance Report
(As per Clause 49 of the Listing Agreement entered into with the Stock Exchanges)
I.
Company’s Philosophy on Corporate Governance The Company’s philosophy on Corporate Governance is to observe the highest level of ethics in all its dealings, to ensure the ef?cient conduct of the affairs of the Company to achieve its goal of maximising value for all its stakeholders.
II.
Board of Directors (Board) • Composition During the year under consideration, the Board comprises of`12 experts (excluding Alternate Directors) drawn from diverse ?elds / professions. The Board has an optimum combination of Executive and Non-executive Directors, which is in conformity with the requirement of Clause 49 of the Listing Agreement with the Stock Exchanges (Listing Agreement) in this regard. The Chairman of the Board is a Non-executive and Independent Director. All Directors, except the Managing Director and Special Director, are liable to retire by rotation. Composition of the Board Minimum Requirement as per Clause 49 No. of Directors % of Total Directors Non-executive Directors 8 66.67 50% (therein Independent Directors) (6) (54.54) (33.33%) Whole-time Directors 4 33.33 Total 12 100 The necessary disclosures regarding Committee positions have been made by all the Directors. None of the Directors on the Board is a Member of more than 10 Committees and Chairman of more than 5 Committees across all companies in which they are Directors. There is no relationship between the Directors inter-se. The Composition of the Board, Directorship / Committee positions in other companies as on 30th September, 2009, the changes during the year under review, number of Meetings held and attended during the year are as follows: Name Category(1) Board Meetings during the FY 2008-09 Held(5) Attended 6 6 6 6 5 6 5 6 6 2 Attend- Other Other Committee ance at Director- positions in India(3) last AGM ships in held on India(2) Member Chairman 30.01.09 Yes Yes Yes Yes No 17 2 13 9 Nil 1 1 4 2 N.A. 5 Nil 2 3 N.A. Particulars
Mr. Deepak S. Parekh (Chairman) 2 Dr. Armin Bruck 3 Mr. Darius C. Shroff 4 Mr. Yezdi H. Malegam 5 Mr. Wolfgang Dehen(4) (Nominee of Parent Company, Siemens AG) (from 19.12.2008) 6 Prof. Dr. Hermann Requardt(4) (Nominee of Parent Company, Siemens AG) (upto 19.12.2008) 7 Mr. Stephan Schneider(4)(6) (Alternate for Mr. Wolfgang Dehen from 19.12.2008) 8 Mr. Narendra J. Jhaveri 9 Mr. Keki Dadiseth 10 Mr. Pradip V. Nayak 11 Mr. Joe Kaeser(4) 12 Dr. Otmar Schmitt(4) (Alternate for Mr. Joe Kaeser)
03
1
NED (I) WTD NED (I) NED (I) NED
NED
1
Nil
N.A.
Nil
N.A.
N.A.
NED
5
2
Yes
Nil
N.A.
N.A.
NED (I) NED (I) NED (I) NED NED
6 6 6 6 6
4 5 6 4 2
Yes Yes Yes Yes Yes
13 9 4 Nil Nil
4 1 2 N.A. N.A.
4 2 1 N.A. N.A.
30
Annual Report 2009
Siemens Green Facts
MAGNETOM Essenza, the new Magnetic Resonance Tomography has very low operating cost and can reduce your energy bill by up to 50%.
Name
Category(1)
Board Meetings during the FY 2008-09 Held(5) Attended 2 1
Attend- Other Other Committee ance at Director- positions in India(3) last AGM ships in held on India(2) Member Chairman 30.01.09 N.A. Nil N.A. N.A.
13 Mr. Patrick de Royer (Executive Director) (upto 31.12.2008) 14 Mr. Vijay V. Paranjape 15 Mr. Vilas B. Parulekar (upto 30.09.09) 16 Mr. Sunil Mathur Notes: (1)
WTD
WTD WTD WTD
6 6 6
4 6 6
Yes Yes Yes
2 Nil 2
Nil Nil 1
Nil Nil 1
•
Category: WTD - Whole-time Director, NED – Non-executive Director , NED (I) – Non-executive Director and Independent. (2) Includes Alternate Directorships and Directorships in private companies. (3) Includes only Audit Committee and Investors Grievance Committee of Public Limited Companies. (4) In the whole-time employment of parent company, Siemens AG, Germany. (5) Details provided for the period for which the individuals held Directorship of the Company. (6) Ceased to be an Alternate Director for Prof. Dr. Hermann Requardt w.e.f. 19th December, 2008. From 1st October, 2008 to 19th December, 2008, he attended one Board Meeting as an Alternate Director for Prof. Dr. Hermann Requardt. Board Meetings During the Financial Year 2008-09, 6 Meetings were held on 25th November, 2008, 19th December, 2008, 9th January, 2009, 30th January, 2009, 30th April, 2009 and 23rd July, 2009. The gap between any two Meetings did not exceed four months. Agenda papers containing all necessary information / documents are made available to the Board in advance to enable the Board to discharge its responsibilities effectively and take informed decisions. Where it is not practicable to attach or send the relevant information as a part of Agenda Papers, the same are tabled at the meeting or / and the presentations are made by the concerned managers to the Board. Considerable time is spent by the Directors on discussions and deliberations at the Board Meetings. The information as speci?ed in Annexure IA to Clause 49 of the Listing Agreement is regularly made available to the Board, whenever applicable, for discussion and consideration.
III.
Committees of Directors A Mandatory Committees i. Audit Committee of Directors (Audit Committee) Composition The Audit Committee comprises of experts specialising in accounting / ?nancial management. The Chairman of the Audit Committee is a Non-executive and Independent Director. The present composition of the Audit Committee is as follows: Name From No. of meetings during FY 2008-09 Held Attended 6 6 6 5* 6 6 4 5
31
Mr. Yezdi H. Malegam, Chairman 15.12.2000 Mr. Joe Kaeser / Dr. Otmar Schmitt 01.10.2006 (Alternate Director for Mr. Joe Kaeser) Mr. Deepak S. Parekh 22.11.2004 Mr. Keki Dadiseth 01.02.2006 * Mr. Kaeser attended 4 meetings and Dr. Schmitt attended 1 Meeting. Siemens Ltd.
31
Annexure III to the Directors’ Report (continued)
Corporate Governance Report
Mr. Ajai Jain, Vice President (Legal) & Company Secretary, is appointed as Secretary to the Committee w.e.f. 1st August, 2008. During the Financial Year 2008-09, 6 Meetings were held on 7th November, 2008, 24th November, 2008, 19th December, 2008, 30th January, 2009, 30th April, 2009 and 23rd July, 2009. The Executive Director and the Heads of Accounts, Finance, Internal Audit and Taxation Departments, Regional Compliance Of?cer and the Statutory Auditors are permanent invitees to the Meetings. Terms of reference The powers and terms of reference of the Audit Committee are as mentioned in the Clause 49 II (C), (D) & (E) of the Listing Agreement and Section 292A of the Companies Act, 1956. The terms of reference are brie?y described below: a. b. c. d. e. f. g. h. i. j. k. Oversight of the Company’s ?nancial reporting process and disclosure of ?nancial information. Recommend the appointment, re-appointment and, if required, replacement or removal of Statutory Auditors, ?xation of audit fees and approving payments for any other services. Review with management the annual and quarterly ?nancial statements before submission to the Board. Review with management, performance of Statutory and Internal Auditors and adequacy of internal control systems. Review the adequacy of internal audit function. Discussions with Internal Auditors of any signi?cant ?ndings and follow-ups thereon. Review the ?ndings of any internal investigations by the Internal Auditors. Discussions with Statutory Auditors before the audit commences, of the nature and scope of audit as well as have post-audit discussion to ascertain any areas of concern. Look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors. Review the functioning of the Whistle Blower mechanism. Review the following information: • • • • • • Management discussion and analysis of ?nancial condition and results of operations; Statement of signi?cant related party transactions; Management letters / letters of internal control weaknesses issued by the Statutory Auditors; Internal audit reports relating to internal control weaknesses; The appointment, removal and remuneration of the Chief Internal Auditor; and The ?nancial statements, in particular, the investments made by unlisted subsidiary companies. In addition to the above, the following disclosures are made to the Audit Committee, as and when applicable: • • • Basis of related party transactions; Disclosure of Accounting Treatment; and Utilisation / application of proceeds from public issues, rights issues, preferential issues, etc., if any.
The Audit Committee is vested with the necessary powers, as de?ned in its Charter, to achieve its objectives. The Chairman of the Audit Committee was present at the 51st Annual General Meeting held on 30th January, 2009.
23
32
Annual Report 2009
Siemens Green Facts
Globally, the Siemens environment portfolio accounts for about 25% of our revenue. By 2011, we plan to achieve a revenue of 25 billion euros with this portfolio.
ii.
Investors Grievance Committee of Directors (Investors Grievance Committee) Composition The Investors Grievance Committee has been constituted to attend to and redress the investors’ grievances. Name Mr. Darius C. Shroff, Chairman Mr. Pradip V. Nayak Dr. Armin Bruck From 15.12.2000 01.02.2006 01.01.2008
th
No. of meetings during FY 2008-09 Held 2 2 2
nd
Attended 2 2 1
During the Financial Year 2008-09, the Committee met on 29 January, 2009 and 22 September, 2009. Mr. Ajai Jain, Vice President (Legal) & Company Secretary, is the “Compliance Of?cer” pursuant to the requirement of the Securities and Exchange Board of India (SEBI) Regulations and Listing Agreement. Details of Investor Complaints The Company and TSR Darashaw Ltd., Registrar & Share Transfer Agent (RTA), attend to all grievances of the investors received directly or through SEBI, Stock Exchanges, Ministry of Corporate Affairs, Registrar of Companies, etc. Barring certain cases pending in Courts / Consumer Forums, relating to disputes over the title to Shares, in which either the Company has been made a party or necessary intimation thereof has been received by the Company, all the investor grievances / correspondences have been promptly attended to from the date of their receipt. Continuous efforts are made to ensure that grievances are more expeditiously redressed to the complete satisfaction of the investors. The details of Complaints received, cleared / pending during the Financial Year 2008-09 is given below: Nature of Complaints Non-receipt of Share Certi?cates duly transferred Non-receipt of dividend warrants Letters from SEBI Letters from Stock Exchanges Total Received 7 19 7 8 41 Cleared 7 19 6 8 40 Pending 0 0 1 0 1
Number of complaints received during the year as a percentage of total number of Members as on 30th September, 2009, is 0.02%. B. Non-Mandatory Committees Remuneration Committee of Directors (Remuneration Committee) Composition Name Mr. Narendra J. Jhaveri, Chairman Mr. Darius C. Shroff Mr. Deepak S. Parekh Mr. Pradip. V. Nayak
th
From 15.12.2000 15.12.2000 01.10.2004 23.07.2007
th
During the Financial Year 2008-09, the Committee met on 25 November, 2008 and 30 April, 2009.
33
Siemens Ltd.
33
Annexure III to the Directors’ Report (continued)
Corporate Governance Report
Terms of reference a. b. c. Determine the Company’s policy on speci?c remuneration packages for Whole-time Directors / Executive Directors including pension rights and any compensation payment. Decide the actual Salary, Salary Grades, Overseas Allowance, Perquisites, Retirals and Increment of Wholetime Directors. De?ne and implement the Performance Linked Incentive Scheme (including ESOP of the Company and / or Siemens AG) and evaluate the performance and determine the amount of incentive of the Whole-time Directors for that purpose. Decide the amount of Commission payable to the Whole-time Directors. Periodically review and suggest revision of the total remuneration package of the Whole-time Directors keeping in view the performance of the Company, standards prevailing in the industry, statutory guidelines, etc.
d. e.
Remuneration Policy The remuneration policy of the Company is performance driven and is structured to motivate employees, recognize their merits & achievements and promote excellence in their performance. 1. For Whole-time Directors The Board of Directors / the Remuneration Committee of Directors is authorised to decide the remuneration of the Whole-time Directors, subject to the approval of the Members and Central Government, if required. The remuneration structure comprises of Salary, Perquisites, Retirement Bene?ts, Performance Linked Incentive (PLI), Commission and Compensation under Stock Option Plan(s) of Siemens AG, Germany, parent company/ Siemens Limited- Share Matching Plan (SMP Scheme), India. The Whole-time Directors shall be entitled to payment of cash equivalent of the fair market value of the Options/ Awards as on exercise Date, to which they may be entitled under the Stock Option Plan(s), as may be applicable from time to time of the parent company, Siemens AG, Germany. They shall be entitled to Cash Incentive under SMP Scheme, as applicable from time to time. Annual increments are decided by the Remuneration Committee within the salary grade approved by the Members. In addition to the above remuneration, Expatriate Directors are paid Overseas Allowance and certain other Perquisites as per the Rules of the Company. They are also entitled to the Company’s Retirement Bene?ts as per the law applicable from time to time. PLI, Compensation under Stock Option Plan(s) of Siemens AG/ SMP Scheme and Commission constitute the variable component of remuneration. PLI is computed on the basis of speci?c targets set for each Whole-time Directors every year. The targets are also linked to the Company’s targets. PLI is paid to the Whole-time Directors on achievement of the said targets. Commission is determined on the basis of the Net Pro?ts of the Company in a particular Financial Year, subject to the overall ceiling as stipulated in Sections 198 and 309 of the Companies Act, 1956. Remuneration paid / payable to the Whole-time Directors for the Financial Year 2008-09 (Amount in Rs.) Dr. Bruck Salary Perquisites(1) Performance Linked Incentive Compensation under Stock Option Plan(s) of Siemens AG
43
Mr. Mathur 5,830,500 15,039,321
Mr. Paranjape 4,254,600 3,992,288
Mr. Parulekar(2) 3,936,000 5,929,689
Mr. de Royer(3) 1,606,500 6,453,013
9,517,200 21,352,798
32,465,741
21,841,594
12,377,216
8,693,837
Nil
Nil
Nil
Nil
Nil
5,631,043 Annual Report 2009
34
Siemens Green Facts
Energy saving motors from Siemens ?t into virtually every drive concept and are characterized by 40% lower power loss compared to standard motors.
Dr. Bruck Commission Total Tenure From To Shares of Rs.2 each held as on 30.09.2009 Notes: (1) 01.10.2007 30.09.2012 Nil 63,335,739
Mr. Mathur Nil 42,711,415
Mr. Paranjape Nil 20,624,104
Mr. Parulekar(2) Nil 18,559,526
Mr. de Royer(3) Nil 13,690,556
22.07.2008 21.07.2013
01.02.2007 30.09.2010
01.02.2007 30.09.2009
01.10.2006 31.12.2008
Nil
Nil
4,200
5,000
N.A.
Perquisites include Company’s contribution to Provident and Superannuation Funds for Directors and Overseas Allowance for Expatriate Directors viz. Mr. de Royer and Dr. Bruck. Perquisites paid to Mr. Mathur include Special Allowance. The Board sanctioned a lump sum gratuitous payment of Rs. 5,000,000/- on account of his long association with the Company. This payment is subject to the approval of the members of the Company at the forthcoming 52nd Annual General Meeting to be held on 29th January, 2010. Pro-rata payment from 1st October, 2008 to 31st December, 2008. Mr. Upili, a former Whole-time Director of the Company was paid a total remuneration of Rs. 2,53,446/towards the arrears for the Financial Year 2007-08.
(2)
(3) (4)
No severance fees are payable to the Directors on termination of employment. The Company did not have its scheme of stock options for the Financial Year 2008-09. However, the Compensation under Stock Option Plan(s) of Siemens AG, Germany and the SMP Scheme, India, the Whole-time Directors and certain other Senior Managers of the Company are entitled to cash equivalent of the fair market value of Options / Awards, as stated above. 2. For Non-executive Directors The Non-executive Directors are paid remuneration by way of Sitting Fees and Commission. Sitting Fees The Non-executive Directors are entitled to sitting fees for attending Board / Committee Meetings, as per the details given below: Meetings Board Audit Committee Investors Grievance Committee, Remuneration Committee, Corporate Governance Committee, Investment Committee and Special Committee. Commission In terms of the Members’ approval given at the 47th Annual General Meeting held on 27th January, 2005, Commission is payable at a rate not exceeding 1% per annum of the Net Pro?ts of the Company computed in the manner referred to in Section 309 of the Companies Act, 1956. The actual amount of Commission payable to each Non-executive Director is decided by the Board on the following criteria: • • • • • Siemens Ltd. Number of Board Meetings attended Number of various Committee Meetings attended Role and responsibility as Chairman / Member of the Board Role and responsibility as Chairman / Member of the Committee Overall contribution and role outside the Meetings
35
Sitting fees per Meeting (Rs.) 20,000 20,000 10,000
35
Annexure III to the Directors’ Report (continued)
Corporate Governance Report
Remuneration paid / payable to the Non-executive Directors for the Financial Year 2008-09 Name Sitting Fees for Board / Committee Meetings attended (Rs.) 260,000 290,000 170,000 100,000 200,000 200,000 N.A. N.A. 80,000 N.A.
(2)
Commission(1)
Total
(Rs.) 3,150,000 2,100,000 1,650,000 1,200,000 1,350,000 1,700,000 N.A. N.A. 450,000 N.A. N.A.
(Rs.) 3,410,000 2,390,000 1,820,000 1,300,000 1,550,000 1,900,000 N.A. N.A. 530,000 N.A. N.A.
Number of Equity Shares of Rs.2 each held as on 30.09.09 9,000 6,250 9,000 5,000 Nil Nil Nil Nil Nil Nil Nil
Mr. Deepak S. Parekh Mr. Yezdi H. Malegam Mr. Darius C. Shroff Mr. Narendra J. Jhaveri Mr. Keki Dadiseth Mr. Pradip V. Nayak Mr. Joe Kaeser
(2)
Mr. Wolfgang Dehen(2) Dr. Otmar Schmitt Mr. Stephan Schneider(2) Prof. Dr. Hermann Requardt Notes: (1) (2)
N.A.
Subject to the approval of Annual Accounts for the Financial Year 2008-09 by the Members at the 52nd Annual General Meeting to be held on 29th January, 2010. Opted not to accept any Sitting Fees or Commission.
Mr. Darius C. Shroff is a Senior Partner of M/s. Crawford Bayley & Co., Solicitors & Advocates, who has a professional relationship with the Company. The professional fees of Rs. 514,000/- paid to M/s. Crawford Bayley & Co., during the Financial Year under review, is not considered material enough to impinge on the independence of Mr. Shroff. None of the other Non-executive Directors has any other pecuniary interest in the Company, as disclosed to us. C. Other Committees of Directors i. Corporate Governance Committee of Directors (Corporate Governance Committee) The Committee has been constituted inter-alia to consider, review and decide the matters relating to Corporate Governance as per the Listing Agreement and applicable Laws & Regulations and recommending best practices in the areas of Board Governance, Corporate Governance & disclosure policies considering the interest of the stakeholders. Composition Name Mr. Keki Dadiseth, Chairman Mr. Deepak S. Parekh Mr. Yezdi H. Malegam Mr. Darius C. Shroff Mr. Joe Kaeser / Dr. Otmar Schmitt (Alternate Director for Mr. Joe Kaeser) Dr. Armin Bruck From 1.06.2007 1.06.2007 1.06.2007 23.07.2007 1.06.2007 1.01.2008
During the Financial Year 2008-09, the Corporate Governance Committee Meeting was held on 30th April, 2009. All the members except Mr. K. Dadiseth attended the said Meeting.
63
36
Annual Report 2009
Siemens Green Facts
Siemens LEDs uses 80% less electricity than light bulbs and have a service life that is 50 times longer.
ii.
Investment Committee of Directors (Investment Committee) Composition Name From Mr. Deepak S. Parekh Mr. Yezdi H. Malegam Mr. Pradip V. Nayak Mr. Joe Kaeser / Dr. Otmar Schmitt (Alternate Director for Mr. Joe Kaeser) Mr. Patrick de Royer Mr. Sunil Mathur 23.07.2007 23.07.2007 23.07.2007 23.07.2007 23.07.2007 01.10.2008 Tenure To 31.12.2008 Chairman Member Member Member Member Member Position
The Investment Committee Meetings are held as and when required. During the Financial Year 2008-09, 4 Meetings were held on 24th November, 2008, 19th December, 2008, 9th January, 2009 and 23rd July, 2009. The role of the Committee includes reviewing guidelines for investing surplus funds of the Company, reviewing proposals of mergers and acquisitions, valuations, investment proposals and periodical monitoring of investments, authorizing negotiation of the terms and conditions of the various credit/?nancial facilities and carrying out such other function as may be delegated by the Board from time to time. IV. Committees of Management (Constituted by the Board of Directors) i. Share Transfer Committee (STC) Composition Name From Dr. Armin Bruck Mr. Sunil Mathur Mr. Patrick de Royer Mr. Ajai Jain 01.01.2008 01.10.2008 01.02.2006 01.08.2008 Tenure To 31.12.2008 Chairman Member Member Member and Secretary Position
The STC notes and takes on record the transfer / transmission / transposition of shares and consolidation / splitting of folios, issue of share certi?cates in exchange for sub-divided, consolidated, defaced, etc., as approved by the authorised of?cers of the Company. The STC also notes the dealings in the Shares by the designated employees under the Company’s Code of Conduct for Prevention of Insider Trading. The STC Meetings are held as and when required, usually fortnightly. 24 Meetings of the STC were held during the Financial Year 2008-09. ii. Finance Committee (FC) Composition Name From Mr. Sunil Mathur Dr. Armin Bruck Mr. Patrick de Royer Mr. Ajai Jain 01.10.2008 01.01.2008 01.02.2006 01.08.2008 Tenure To 31.12.2008 Chairman Member Member Member and Secretary Position
The FC authorises opening / closing of bank accounts, availing of credit facilities, giving of loans, intercorporate deposits, guarantees, investment in mutual funds, commodity hedging etc. The FC Meetings are held as and when required. 13 Meetings of the FC were held during the Financial Year 2008-09.
37
Siemens Ltd.
37
Annexure III to the Directors’ Report (continued)
Corporate Governance Report
iii.
Delegation of Powers Committee (DPC) Composition Name From Dr. Armin Bruck Mr. Patrick de Royer Mr. Sunil Mathur Mr. Ajai Jain 01.01.2008 01.02.2006 22.07.2008 01.08.2008 Tenure To 31.12.2008 Chairman Member Member Member and Secretary Position
The DPC issues / revokes Powers of Attorney, ?xes the procedures for signing authority, grants authority for various purposes to the employees, etc. The DPC Meetings are held as and when required. 10 Meetings of the DPC were held during the Financial Year 2008-09. V. Subsidiary companies The Company does not have any material non-listed Indian subsidiary whose turnover or net worth (i.e. Paid-up Capital and Free Reserves) exceeds 20% of the consolidated turnover or net worth respectively, of the Company and its subsidiaries in the immediately preceding accounting year ended on 30th September, 2009. The Company monitors the performance of its subsidiaries, inter alia, by the following means: • • • VI. The Financial Statements, in particular the investments made by the unlisted subsidiary companies, are reviewed by the Company’s Audit Committee as well as by the Board. The Minutes of Board Meetings of the subsidiaries are noted at the Board Meetings of the Company. Details of signi?cant transactions and arrangements entered into by the unlisted subsidiary companies are placed before the Company’s Board, as and when applicable.
Chief Executive Of?cer (CEO) and Chief Financial Of?cer (CFO) certi?cation As required by Clause 49 V of the Listing Agreement, the CEO and CFO certi?cation of the Financial Statements, the Cash Flow Statement and the Internal Control Systems for ?nancial reporting has been obtained from Dr. Armin Bruck (Managing Director / CEO) and Mr. Sunil Mathur (Executive Director / CFO).
VII.
Risk Management Framework The Company has in place a mechanism to inform the Board about the risk assessment and minimisation procedures and periodical review to ensure that management controls risk through means of a properly de?ned framework.
VIII.
Business Conduct Guidelines (BCGs) The Company has adopted BCGs as the Code of Conduct for Directors, including Non-executive Directors and Senior Management of the Company, as per the requirement of Clause 49 I D of the Listing Agreement. The Company has received con?rmations from all the Directors and Senior Management of the Company regarding compliance with the BCGs for the year ended on 30th September, 2009. A certi?cate from Dr. Armin Bruck, Managing Director, to this effect, is attached to this Report. The BCGs can be viewed on the website of the Company www.siemens.co.in.
IX.
Policy for Prevention, Detection and Investigation of Frauds and Protection of Whistleblowers (the Whistleblower Policy) The Company is committed to provide an open, honest and transparent working environment and seeks to eliminate fraudulent activities in its operations. To maintain high level of legal, ethical and moral standards and to provide a gateway for employees to report unethical behaviour and actual or suspected frauds, the Company has adopted the Whistleblower Policy with effect from 1st February, 2005, in line with Clause 7 of Annexure I D to Clause 49 of the Listing Agreement. No personnel have been denied access to the Audit Committee. The Whistleblower Policy broadly covers a detailed process for reporting, handling and investigation of fraudulent activities and providing necessary protection to the employees who report such fraudulent activities / unethical behaviour.
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Annual Report 2009
Siemens Green Facts
Till date, Siemens has modernized 6,500 buildings worldwide. Their intelligent and integrated BMS systems have reduced CO2 emissions by 2.4 million metric tons, resulting in savings of more than 1 billion euros.
X.
Code of Conduct for Prevention of Insider Trading Pursuant to the requirements of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, as amended, the Company has adopted a Code of Conduct for Prevention of Insider Trading with effect from 1st August, 2002. Mr. Ajai Jain, Vice President (Legal) & Company Secretary, is the Compliance Of?cer. This Code of Conduct is applicable to all Directors and such identi?ed employees of the Company as well as of the group companies who are expected to have access to unpublished price sensitive information relating to the Company.
XI.
General Body Meetings a. Details of venue, date and time of the last three Annual General Meetings (AGM) held: Financial Year 2007-08 2006-07 2005-06 b. AGM No. 51st 50th 49th Venue Yashwantrao Pratishthan Auditorium Y. B. Chavan Centre General Jagannathrao Bhonsle Marg Nariman Point, Mumbai - 400 021 Day and Date Friday, 30th January, 2009 Thursday, 31st January, 2008 Thursday, 18th January, 2007 Time 3.00 p.m. 3.00 p.m. 3.30 p.m.
Special Resolutions passed at the last three AGM: i. At 51st AGM held on 30th January, 2009 – Approving Amendment to the Articles of Association of the Company pertaining to addition of new clause with respect to implementation of Siemens Internal Regulations. At 50th AGM held on 31st January, 2008 – (a) (b) iii. Approving Amendment to the Articles of Association of the Company pertaining to the Authorised Share Capital of the Company. Appointment of Ms. Mukta Paranjape, d/o Mr. Vijay V. Paranjape, Whole-time Director, to an of?ce or place of pro?t.
ii.
At 49th AGM held on 18th January, 2007 – Approving change in place of keeping Register and Index of Members, etc.
c. XII.
During the last Financial Year, no resolution was passed through Postal Ballot in accordance with Section 192A of the Companies Act, 1956. Transactions with related parties, as per requirements of Accounting Standard 18, are disclosed elsewhere in this Annual Report. The Company has not entered into any other transaction of a material nature with the Promoters, Directors or the Management, their subsidiaries or relatives, etc. that may have a potential con?ict with the interests of the Company at large. With regard to matters related to capital markets, the Company has complied with all requirements of the Listing Agreement as well as SEBI regulations and guidelines. No penalties were imposed or strictures passed against the Company by the Stock Exchanges, SEBI or any other statutory authority during the last three years in this regard. Disclosures have also been received from the senior managerial personnel relating to the ?nancial and commercial transactions in which they or their relatives may have a personal interest. However, none of these transactions have potential con?ict with the interests of the Company at large. The Quarterly / Annual Financial Results of the Company are published in the Business Standard and Navshakti. The following are also promptly displayed on the Company’s website www.siemens.co.in: Financial Results, Shareholding Pattern, Annual Report and the Presentations, as and when made, to the media and analysts in the ‘Investor Relations’ Section.
39
Disclosures a. b.
c.
d.
XIII. Means of Communication a. b.
Siemens Ltd.
39
Annexure III to the Directors’ Report (continued)
Corporate Governance Report
c.
Of?cial press releases in the ‘Press’ Section. Letters / intimation to Stock Exchanges in the ‘Notices for Corporate Development’ Section under the ‘Investor Relations’ Section.
Information about the Financial Results, Shareholding Pattern, and other speci?ed details are now electronically ?led through the Corporate Filing and Dissemination System (CFDS) as required under the Listing Agreement. Investors can view this information by visiting the website www.corp?ling.co.in. The Management’s Discussion and Analysis forms part of the Directors’ Report as Annexure II.
d.
XIV. General Shareholder Information ‘General Shareholder Information’ forms part of the Directors’ Report as Annexure IV. XV. Status of compliance with non-mandatory requirements 1. 2. 3. The Company has constituted a Remuneration Committee of Directors comprising of Non-executive and Independent Directors. As mentioned earlier, the Company has adopted Whistleblower Policy. The Company is in the regime of unquali?ed ?nancial statements.
On behalf of the Board of Directors For Siemens Ltd.
Deepak S. Parekh Chairman Mumbai Monday, 30th November, 2009 Declaration by the Managing Director under Clause 49 of the Listing Agreement regarding compliance with Business Conduct Guidelines (Code of Conduct) In accordance with Clause 49 I D of the Listing Agreement with the Stock Exchanges, I hereby con?rm that all the Directors and the Senior Management personnel of the Company have af?rmed compliance with the Business Conduct Guidelines (Code of Conduct), as applicable to them, for the Financial Year ended on 30th September, 2009. For Siemens Ltd.
Dr. Armin Bruck Managing Director Mumbai Thursday, 26th November, 2009
04
40
Annual Report 2009
Siemens Green Facts
Siemens Power Management Systems optimizes the use of energy. These systems can reduce energy costs by upto 20% and the associated improvements in ef?ciency reduce CO2 emissions by about 10%.
Certi?cation by the Chief Executive Of?cer (CEO) and Chief Financial Of?cer (CFO) under Clause 49 of the Listing Agreement To the Board of Directors of Siemens Ltd., Dear Sirs, a) We have reviewed the ?nancial statements and the cash ?ow of Siemens Ltd. (‘the Company’) for the year ended 30 September, 2009 and to the best of our knowledge and belief: i.) ii.) b) c) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
There are, to the best of our knowledge and belief, no transactions entered into between the Company during the year which are fraudulent, illegal or violative of the Company’s code of conduct. We accept responsibility for establishing and maintaining internal controls for ?nancial reporting. We have evaluated the effectiveness of internal control systems of the Company and have disclosed to the Auditors and the Audit Committee, de?ciencies in the design or operation of internal controls, if any and steps taken or proposed to be taken for rectifying these de?ciencies. We have indicated to the Auditors and the Audit Committee: i.) ii.) iii.) Signi?cant changes in the internal control over ?nancial reporting during the year; Signi?cant changes in accounting policies during the year and that the same have been disclosed suitably in the notes to the ?nancial statements; Instances of signi?cant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a signi?cant role in the Company’s internal control systems over ?nancial reporting.
d)
Yours truly
Sunil Mathur Executive Director / CFO Mumbai Thursday, 26th November, 2009
Dr. Armin Bruck Managing Director / CEO
41
Siemens Ltd.
41
Certi?cate of Compliance To The Members of Siemens Limited We have examined the compliance of conditions of corporate governance by Siemens Limited (‘the Company’), for the year ended on September 30, 2009, as stipulated in clause 49 of the Listing Agreement of the said Company with stock exchanges. The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the ?nancial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the Company nor the ef?ciency or effectiveness with which the management has conducted the affairs of the Company. For S. R. Batliboi & Associates Chartered Accountants
per Sudhir Soni Partner Membership No.:41870 Mumbai November 30 2009
24
42
Annual Report 2009
Annexure IV to the Directors’ Report
General Shareholder Information
(As required by Clause 49 of the Listing Agreement entered into with the Stock Exchanges)
1.
52nd Annual General Meeting Day, date and time Venue Friday, 29th January, 2010 at 3.00 P.M. Nehru Centre Auditorium, Dr. Annie Besant Road, Worli, Mumbai - 400 018.
2.
Financial Calendar The Company follows the period of 1st October to 30th September, as the Financial Year. For the Financial Year 2009-10, Financial Results will be announced as per the following tentative schedule: 1st quarter ending 31st December, 2009 2 quarter ending 31 March, 2010 3rd quarter ending 30th June, 2010 Year ending 30 September, 2010
th nd st
Last week of January, 2010 Last week of April, 2010 Last week of July, 2010 Last week of November, 2010
3.
Book Closure The Company’s Register of Members and Share Transfer Books will remain closed from Thursday, 21st January, 2010 to Friday, 29th January, 2010 (both days inclusive).
4. 5.
Dividend Dividend will be paid on or before Wednesday, 24th February, 2010. Listing on Stock Exchanges The Equity Shares of the Company are listed on the following premier Stock Exchanges of India having nation-wide trading terminals: Bombay Stock Exchange Ltd. (BSE) Phiroze Jeejeebhoy Towers Dalal Street, Mumbai - 400 001 National Stock Exchange of India Ltd. (NSE) Exchange Plaza, Plot No. C/1 G Block, Bandra - Kurla Complex Bandra (E), Mumbai - 400 051
The Company has paid the listing fees for the Financial Year 2009-10 to the aforesaid Stock Exchanges. With effect from 27th June, 2006, the Company forms part of “S&P CNX Nifty Index” of NSE. S&P CNX Nifty represents the shares of 50 elite companies in the Country from across 21 sectors of the Economy. BSE has permitted trading of the Company’s Shares in the ‘A Group’. The Company’s Shares are also available for trading in the Futures & Options segment. The market lot for trading in the Company’s Shares in this segment is 752. 6. Stock Code / Symbol BSE NSE Reuters Bloomberg International Securities Identi?cation Number (ISIN) Corporate Identity Number (CIN) - allotted by the Ministry of Corporate Affairs 7. Custodial Fees to Depositories The annual custodial fees for the Financial Year 2009-10 has been paid to National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL).
43
500550 SIEMENS EQ SIEM.BO / SIEM.NS SIEM:IN INE003A01024 L28920MH1957PLC010839
Siemens Ltd.
43
Annexure IV to the Directors’ Report (continued)
General Shareholder Information
8.
Market Price Data (1) The market price and volume of the Company’s Shares traded on BSE and NSE during each month of the last Financial Year from 1st October, 2008 to 30th September, 2009 are as follows: Face Value of Share of Rs. 2 each BSE High Rs. October 2008 November 2008 December 2008 January 2009 February 2009 March 2009 April 2009 May 2009 June 2009 July 2009 August 2009 September 2009 (2) 418.40 339.00 294.00 322.00 236.20 274.80 329.75 502.40 527.80 541.20 521.60 574.40 Low Rs. 210.00 215.10 214.00 186.20 195.00 190.35 255.30 296.00 409.45 375.50 426.00 485.10 Volume Nos. 3,984,510 5,918,178 5,136,035 6,313,041 5,178,005 5,172,145 5,291,695 4,790,651 3,276,157 3,238,710 2,525,996 2,065,767 High Rs. 418.00 337.30 294.05 321.50 236.40 274.80 330.50 502.80 538.20 557.40 522.00 579.00 NSE Low Rs. 206.10 212.70 212.80 186.35 193.50 191.20 255.10 314.10 447.50 376.00 420.05 485.00 Volume Nos. 13,133,604 17,656,113 14,316,370 17,975,599 16,685,881 15,281,711 17,164,052 17,640,683 12,887,178 13,888,132 12,088,192 8,597,887
Company’s closing share price movement during the Financial Year 2008-09 on BSE and NSE vis-à-vis respective indices:
44
44
Annual Report 2009
Siemens Green Facts
Till date, around 6400 Siemens Wind Turbines with a peak capacity of 5700 MW save over 8 million metric tones of CO2 a year.
9.
Distribution of Shareholding as on 30th September, 2009 Number of Shares held (Face Value of Rs.2 each) 1-500 501-1000 1001-2000 2001-3000 3001-4000 4001-5000 5001-10000 10001 & above Total Shareholders Number 175,690 7,253 4,677 2,117 1,266 600 978 761 193,342 % of total 90.87 3.75 2.42 1.10 0.65 0.31 0.51 0.39 100.00 Number 10,747,156 5,577,256 7,047,203 5,361,173 4,497,151 2,777,186 6,845,127 294,307,948 337,160,200 Shares % of total 3.19 1.66 2.09 1.59 1.33 0.82 2.03 87.29 100.00
10.
Shareholders’ Pro?le as on 30th September, 2009
No. of shareholders as on 30th September
2009 193,342
2008 200,389
45
Siemens Ltd.
45
Annexure IV to the Directors’ Report (continued)
General Shareholder Information
11.
Top Ten Shareholders of the Company as on 30th September, 2009 Sr. No. 1 2 3 4 5 Name of the Shareholder Category Number of Shares of Rs.2 each 186,041,090 46,215,233 4,813,981 2,825,160 3,999,638 % of total Capital * 55.18 13.71 1.43 0.84 1.19
Siemens Aktiengesellschaft, Germany Life Insurance Corporation of India HDFC Standard Life Insurance Company Ltd. Bharat Bijlee Ltd. Reliance Capital Trustee Co. Ltd. A/C Reliance Diversi?ed Power Sector Fund General Insurance Corporation of India Azim Hasham Premji Bajaj Allianz Life Insurance Company Ltd. National Insurance Company Ltd. The New India Assurance Company Ltd. Total
Promoter Financial Institution Body Corporate Body Corporate Mutual Fund
6 7 8 9 10
Financial Institution Resident Individual Body Corporate Financial Institution Financial Institution
2,369,890 2,273,018 1,768,170 1,450,530 1,314,530 253,071,240
0.70 0.67 0.52 0.43 0.39 74.06
* Total Paid-up Share Capital is Rs. 674,320,400 comprising of 337,160,200 Equity Shares of Rs.2 each. 12. Dematerialisation of Shares & Liquidity The details of Equity Shares dematerialised and those held in physical form as on 30th September, 2009 are given hereunder: Particulars of Equity Shares Equity Shares of Rs.2 each Number Dematerialised form NSDL CDSL Sub-total Physical Form Total 322,839,069 7,025,438 329,864,507 7,295,693 337,160,200 95.75* 2.09 97.84* 2.16 100 138,527 44,888 183,415 9,927 193,342 71.65* 23.22 94.87* 5.13 100 % of total Shareholders Number % of total
* Including 55.18% holding of Siemens AG, Germany. Considering the advantages of dealing in securities in electronic / dematerialised form, Shareholders still holding Shares in physical form are requested to dematerialise their Shares at the earliest. For further information / clari?cation / assistance in this regard, please contact TSR Darashaw Ltd., (TSRDL) Registrar and Share Transfer Agent. As per the directions of SEBI, Equity Shares of the Company can be traded by all the investors only in dematerialised form. The Company’s Shares are actively traded on BSE and NSE.
64
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Annual Report 2009
Siemens Green Facts
The Siemens lightweight metro vehicles, with their efficient automation and intelligent management systems, are environment friendly and consume 30% less energy than vehicles used previously.
13.
Registrar and Share Transfer Agent Share transfers, dividend payment and all other investor related matters are attended to and processed by TSRDL. TSR Darashaw Ltd. 6-10, Haji Moosa Patrawala Industrial Estate 20, Dr. E. Moses Road Mahalaxmi, Mumbai – 400 011 Time: 10 a.m. to 3.30 p.m. (Monday to Friday) Phone: +91 (22) 6656 8484 Fax: +91 (22) 6656 8494 Email: [email protected] Website: www.tsrdarashaw.com For the convenience of shareholders based in the following cities, transfer documents and letters will also be accepted at the following Branch Of?ces of TSRDL: • TSR Darashaw Ltd. 503 Barton Centre, 5th Floor 84, M G Road Bangalore - 560 001 Phone:+91 (80) 2532 0321 Fax:+ 91 (80) 2558 0019 Email: [email protected] • TSR Darashaw Ltd. Plot No 2/42, Sant Vihar, Ansari Road, Daryaganj New Delhi - 110 002 Phone:+ 91 (11) 2327 1805 Fax:+91 (11) 2327 1802 Email: [email protected] • Shah Consultancy Services Pvt. Ltd Agents : TSR DARASHAW LIMITED 3, Sumatinath Complex, Pritam Nagar, Akhada Road Ellisbridge Ahmedabad - 380 006 Telefax:+ 91 (79) 2657 6038 Email:[email protected] • TSR Darashaw Ltd. Tata Centre 1st Floor, 43, Jawaharlal Nehru Road Kolkata - 700 071 Phone:+91 (33) 2288 3087 Fax:+91 (33) 2288 3062 Email: [email protected] • TSR Darashaw Ltd. Bungalow No. 1, 'E' Road Northern Town, Bistupur Jamshedpur - 831 001 Phone:+ 91 (657) 2426 616 Fax:+91 (657) 2426 937 Email: [email protected]
14.
Share Transfer System Documents for transfer of shares in physical form can be lodged with TSRDL at its registered address or at any of the above mentioned branch of?ces. The transfers are normally processed within 20-23 days from the date of receipt, if the documents are complete in all respects.
47
Siemens Ltd.
47
Annexure IV to the Directors’ Report (continued)
General Shareholder Information
15.
Plant Locations Location Maharashtra Aurangabad Works Nashik Works Kalwa Works Transformer Works Kalwa E-76, Waluj, MIDC Area, Aurangabad – 431 136 Plot No. C-1, Additional Industrial Area, MIDC, Ambad, Nashik - 422 010 Post Box No.85, Thane - Belapur Road, Thane - 400 601 Post Box No.8, Airoli Post Of?ce, Thane-Belapur Road, Airoli, Navi Mumbai – 400 708 Address
Goa Goa Works Gujarat Vadodara Works Andhra Pradesh Hyderabad Works Karnataka Bangalore Works 16. Address for correspondence Registered and Corporate Of?ce: Siemens Ltd. 130, Pandurang Budhkar Marg Worli, Mumbai - 400 018, India Phone: +91 (22) 2498 7000 Fax: +91 (22) 2498 7500 Website: www.siemens.co.in Investor Relations Team: Contact Person: Ms. Sheetal Vyas Email: [email protected] Phone: +91 (22) 2498 7173 Fax: +91 (22) 2498 7043 Time: 10 a.m. to 12 noon and 2 p.m. to 4 p.m. on all working days of the Company. (Saturday and Sunday closed). The Investor Relations Team of the Legal Department is located at the Registered Of?ce. For the convenience of our investors, transfer requests, etc. are accepted at the Registered Of?ce also.
84
L-6, Verna Industrial Area, Panjim-Margao Highway, Verna – 403 722
Maneja Village, Opp. Makarpura Railway Station, Vadodara – 390 013
Plot No. 89 & 90, IDA, Gandhinagar, Post Balanagar, Hyderabad – 500 037
Devanahalli Road, Off Old Madras Road, Virgonagar Post, Bangalore - 560 049
48
Annual Report 2009
Siemens Green Facts
The prestigious ‘BEE’ certi?ed Siemens Motors help minimise energy consumption, increase productivity and reduce cost of ownership.
17.
Other Corporate Information Bankers Citibank N. A. Deutsche Bank AG HDFC Bank Ltd. The Hongkong and Shanghai Banking Corporation Ltd. Standard Chartered Bank State Bank of India Auditors S. R. Batliboi & Associates Cost Auditors R. Nanabhoy & Co.
On behalf of the Board of Directors For Siemens Ltd.
Deepak S. Parekh Chairman Mumbai Monday, 30th November, 2009 Note: The information given hereinabove is as of date unless otherwise stated.
49
Siemens Ltd.
49
Corporate Social Directors’ Report Responsibility
Corporate Social Responsibility forms an integral part of the Company’s corporate principles and business philosophy. As a company with a strong sense of values and commitment, Siemens believes that pro?tability must go hand in hand with a sense of responsibility towards employees, stakeholders and the society. The basic aim is to play a positive role towards the advancement of the society. During the last ?scal, Siemens supported various social causes with active participation from employees. St. Catherine’s Home, Mumbai Siemens has been associated with St. Catherine’s Home, a primary school and orphanage for street children, at Bandra, Mumbai for over seven years. The objective is to provide a normal childhood to the 210 vulnerable children resident at St. Catherine’s. So far Siemens has adopted three batches of 115 children and contributes towards their boarding and educational expenses on a yearly basis. As part of these efforts, the company has undertaken refurbishment work and upgradation of infrastructure. This year, enthusiastic employee volunteers also celebrated the Republic day along with the children. An Adventure cum Arts camp was organized for the children to encourage their athletic and artistic skills. Like every year, to take care of the children’s recreational and emotional needs, the company organized a picnic to Water Kingdom wherein the employees actively participated. A special ‘Teachers day’ workshop for care givers and teachers of the children was also arranged. Another important initiative supported by Siemens is ‘Happy Feet’, wherein dance is combined with counseling and life skills education. Happy Feet provides children with opportunities to channelize their troubled energies into constructive and aesthetic expressions and addresses their psychosocial concerns in an interactive and interpretive manner. Tsunami Rehabilitation
Community joined hands with Srinivasan Services Trust, a reputed NGO and adopted 4 villages in the worst affected regions of Nagapattinam and Kanyakumari districts. The rehabilitation plan covers ?ve areas, namely Healthcare, Housing, Education, providing livelihood opportunities and Rural Development. After four years of initiating this program, all the activities are well under way. Each of the four medical and social centers in the villages has one fulltime doctor, a nurse and an attendant with around 4050 patients visiting every day. The medical centers conduct anemia camps and women are made aware about issues like nutrition, child-care, etc. through regular training sessions conducted at the social center. Camps monitoring nutrition and health of the children are also conducted regularly. The Infant Mortality Rate & Maternal Mortality Rate in all 4 villages is 0%. So far, around 122,000 patients have been treated. The housing project has been completed and all the 139 houses have been handed over to the bene?ciaries. These houses have been specially designed to suit coastal climactic conditions and are located at a safe distance from the coastline. The refurbishment of schools, construction of toilets and additional classrooms has been completed in all the villages and programs like adult literacy, computer training and coaching for weak learners are in progress. About 1030 adults can now read and write. With a view to provide livelihood opportunities, the women are trained for making various decorative and utility items like candles, soap, etc and unemployed youth members are trained for computer operations, of?ce administration and automobile repairs. Over 1480 women and the youngsters have already started earning income in the range of Rs.800/- to Rs.3,000/every month. The Rural development program focuses on maintaining cleanliness in the villages and activities like setting up kitchen gardens, soak pits and compost yards. So far, 4700 kitchen yards, 186 soak pits and 1540 individual compost pits have been set up. 3 out of 4 adopted villages were selected for the ‘Nirmal Gram Puraskar Award-2008’ by the Government of India for their outstanding performance on total sanitation. The long-term goal of the project is to lift 80 % of the people in the adopted villages above the poverty line. Seva Chakkara Ashrama, Chennai Siemens has partnered with Seva Chakkara Orphanage, a registered NGO in Chennai, which houses 84 boys and girls from different backgrounds such as street children, children of single parent, etc. Led by the Siemens Information Processing Services Ltd. (SIPS), the objective of this initiative is to provide a normal childhood to the children. Associated with the project since two years, Siemens has adopted 15 children by taking over their education and boarding expenses. As part of these efforts, the company has also undertaken refurbishment work and up gradation of infrastructure such Annual Report 2009
Realizing the need for long-term rehabilitation for the Tsunami victims, Siemens along with the German Business
05
50
Siemens Green Facts
Siemens IGBT equipment help save more than 30% energy for the Mumbai Suburban railways.
as painting of the building, refurbishment of the classrooms, washrooms, Kitchen renovations, setting a medical unit, etc. The enthusiastic and involved employee volunteers of Siemens Chennai visit the Ashrama frequently and spend quality time with the children celebrating various festivals and picnics/outings with the children. Equal employment opportunity for the Differently Abled Siemens, on a proactive basis, has undertaken an initiative of providing equal opportunities for the differently abled persons. Siemens Information Processing Services (SIPS), a division of Siemens, in co-ordination with Ability Foundation, an NGO, invites candidates who are physically challenged. The applicants go through an online assessment test that helps evaluate the Candidate’s Aptitude and skills. The selected candidates are employed on basis of merit and treated on par with other employees at the work place. The company ensures that the employees are provided with a suitable physical infrastructure and conducive working environment. SIPS presently employs 35 personnel who are differently abled and have graduated from different streams like commerce, science and engineering. They have been hired for processes like Transaction, Finance and Accounting. Akshar Trust, Vadodara As a leading company engaged in the business of hearing instruments, Siemens understands and empathizes with the needs of the hearing impaired. Siemens has been associated with Akshar Trust, a school for Hearing Impaired children based in Vadodara since two years. Siemens Ltd. and Siemens Hearing Instruments Ltd. made a joint donation of specially molded hearing instruments to 20 underprivileged students of the Akshar Trust last year. Since Akshar trust had shifted to a new location, as an expression of involvement, Siemens
decided to support the paint work of the school building. On January 22, 2009, enthusiastic Siemens Vadodara employees painted the school building into a livelier place. Tree Planting Initiative, Chennai As Siemens is deeply committed to sound environmental practices, it has adopted the issue of protecting the environment as one of the CSR objectives. An employee driven initiative was designed by Siemens for creating awareness amongst employees and the society about preservation of trees and the hazardous consequences of stationary, water and energy wastage. This initiative is being implemented with the NGO partner, Nizhal that spreads awareness about issues related to environment and trees in urban areas. As part of the project, employee volunteers have undertaken 4 tree walks in Chennai, conducted Tree surveys in the Gandhi Nagar area in Chennai and sensitized 5 schools in the area on conservation of trees.
51
Siemens Ltd.
51
Siemens Limited Fiftysecond Annual Report for the year ended 30 September 2009
65
56
Annual Report 2009
Auditors’ Report to the Members of Siemens Limited
1.
We have audited the attached balance sheet of Siemens Limited (‘the Company’) as at September 30, 2009 and also the pro?t and loss account and the cash ?ow statement for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ?nancial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters speci?ed in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; The balance sheet, pro?t and loss account and cash ?ow statement dealt with by this report are in agreement with the books of account;
iv.
In our opinion, the balance sheet, pro?t and loss account and cash ?ow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. On the basis of the written representations received from the directors, as on September 30, 2009 and taken on record by the Board of Directors, we report that none of the directors is disquali?ed as on September 30, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; a) in the case of the balance sheet, of the state of affairs of the Company as at September 30, 2009; in the case of the pro?t and loss account, of the pro?t for the year ended on that date; and in the case of cash ?ow statement, of the cash ?ows for the year ended on that date.
v.
2.
vi.
3.
b)
4.
c)
ii.
For S.R. BATLIBOI & ASSOCIATES Chartered Accountants per Sudhir Soni Partner Membership No.:41870 Place: Mumbai Date: November 26, 2009
iii.
57
Siemens Ltd.
57
Annexure to the Auditors’ Report
(i)
(a)
The Company has maintained proper records showing full particulars, including quantitative details and situation of ?xed assets. The Company has a regular programme of physical veri?cation of its ?xed assets by which all ?xed assets are veri?ed in a phased manner over a period of three years. In our opinion, this periodicity of physical veri?cation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such veri?cation. There was no substantial disposal of ?xed assets during the year. (vii) The management has conducted physical veri?cation of inventory at reasonable intervals during the year. The procedures of physical veri?cation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical veri?cation.
(b)
business, for the purchase of inventory and ?xed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. (v) According to the information and explanations provided by the management, there are no particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained under Section 301 of the Act. The Company has not accepted any deposits from the public. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
(vi) (c)
(ii)
(a)
(b)
(c)
(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956, in respect of electrical motors and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. (ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, or employees’ state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees’ state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows: Annual Report 2009
(iii)
As informed, the Company has not granted any loans, secured or unsecured to companies, ?rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, sub-clause (b), (c) and (d) are not applicable. As informed, the Company has not taken any loans, secured or unsecured from companies, ?rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, sub-clause (f) and (g) are not applicable. (b)
(iv)
In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and ?xed assets are for the Company’s specialised requirements and similarly certain goods sold are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its
85
(c)
58
Name of the Statute Central Excise Act, 1944 and Service Tax
Nature of dues Duty and Penalty
Amount (Rs.'000) 670 65,609 324
Period to which the amount relates 1993-96, 1998-99, 2000-02, 2007-08 1980-81, 1988-90, 1991-93, 1994-98, 2001-06, 2006-08 1991-1995 1967-69, 1970-71, 1972-74, 1979-90, 1991-94, 1998-09 1974-78, 1987-88, 1992-93, 1995-97, 1999-02, 2002-07 1986-87, 1989-91, 1992-04 1984-85, 1993-97, 2000-01, 2003-04, 2005-07 1998-99
Forum where the dispute is pending Commissioner (Appeals) Customs, Excise, Service tax Appellate Tribunal High Court Assistant Commissioner
State & Central Sales Tax Acts, Works Contract Tax Acts, Entry Tax
Tax, Interest and Penalty
71,956
145,776 33,510 50,426 Customs Act, 1962 (x) Duty 120,000
Deputy Commissioner Sales Tax Tribunal High Court High Court
The Company has no accumulated losses at the end of the ?nancial year and it has not incurred cash losses in the current and immediately preceding ?nancial year. The company did not have any borrowings from ?nancial institutions, bank or by way of debentures during the year. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
on short-term basis have been used for long-term investment. (xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956. (xix) The Company did not have any outstanding debentures during the year. (xx) The company has not raised any money by way of public issues during the year.
(xi)
(xii)
(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual bene?t fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company. (xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company. (xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or ?nancial institutions.
(xxi) According to the information and explanations given to us, the Company has noticed and reported certain instances of frauds relating to theft by third party and employees amounting to Rs 14,019 thousand. The investigations relating to these cases are either closed or in progress and the amounts have been recovered or the Company is covered by insurance. According to the information and explanations given to us, no fraud by the Company has been noticed or reported during the year. For S.R. BATLIBOI & ASSOCIATES Chartered Accountants per Sudhir Soni Partner Membership No.: 41870 Place: Mumbai Date: November 26, 2009
(xvi) The Company did not have any term loans outstanding during the year. (xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised
59
Siemens Ltd.
59
Balance sheet as at 30 September 2009 (Currency : Indian rupees thousands)
Schedule SOURCES OF FUNDS Shareholders' funds Share capital Reserves and surplus 5 6 674,320 28,491,887 29,166,207 674,320 20,016,524 20,690,844 2009 2008
Loan funds Unsecured loans
7
5,906 29,172,113
10,614 20,701,458
APPLICATION OF FUNDS Fixed assets Gross block Accumulated depreciation/ amortisation Net block Capital work-in-progress including capital advances 8 11,347,774 (5,052,761) 6,295,013 1,057,018 7,352,031 9 10 11 12 13 14 4,769,723 1,119,126 9,721,971 34,583,115 14,449,022 10,457,640 69,211,748 9,910,985 (4,339,333) 5,571,652 870,136 6,441,788 5,236,464 910,247 7,621,143 34,327,991 9,130,895 6,312,513 57,392,542
Investments Deferred tax asset, net Current assets, loans and advances Inventories Sundry debtors Cash and bank balances Loans and advances Current liabilities and provisions Current liabilities Provisions Net current assets
15 16
(40,585,370) (12,695,145) (53,280,515) 15,931,233 29,172,113
(42,663,570) (6,616,013) (49,279,583) 8,112,959 20,701,458
Signi?cant accounting policies Schedules to the ?nancial statements
1 2 - 36
The schedules referred to above form an integral part of the balance sheet. As per our report of even date.
For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors of Siemens Limited Deepak S. Parekh Dr. Armin Bruck Sunil Mathur Yezdi H. Malegam per Sudhir Soni Partner Membership No: 41870 Mumbai 26 November 2009
06
Ajai Jain Mumbai 26 November 2009
Chairman Managing Director Executive Director Director & Chairman of Audit Committee Vice President (Legal) & Company Secretary
60
Annual Report 2009
Pro?t and loss account for the year ended 30 September 2009 (Currency : Indian rupees thousands)
Schedule INCOME Sales and services (gross) Excise duty Sales and services (net) Commission income Interest income Other operating income, net Other income 17 18 19 85,554,114 (2,186,779) 83,367,335 520,410 83,887,745 523,002 697,219 2,341,188 87,449,154 85,588,746 (3,085,118) 82,503,628 451,826 82,955,454 471,937 621,790 67,214 84,116,395 2009 2008
EXPENDITURE Cost of sales and services Personnel costs Depreciation/amortisation Interest Expense Other costs, net Pro?t before tax before exceptional income Exceptional income: - Pro?t on sale of investments in subsidiaries - Pro?t on sale of Building Technologies division - Pro?t on sale of Automotive division Pro?t before tax Consists of: - Discontinued operations - Continuing operations Provision for tax Current tax Deferred tax credit/(charge) Fringe bene?t tax Pro?t after tax Consists of: - Discontinued operations - Continuing operations Pro?t available for appropriation Appropriations: Proposed dividend Tax on proposed dividend Net de?cit on account of amalgamation of erstwhile Siemens Industrial Turbomachinery Services Private Ltd. Transfer to general reserve Earnings per share ('EPS') (Equity share of face value Rs 2 each) - Basic and diluted Signi?cant accounting policies Schedules to the ?nancial statements The schedules referred to above form an integral part of the pro?t and loss account. As per our report of even date. For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors of Siemens Limited Deepak S. Parekh Chairman Dr. Armin Bruck Managing Director Sunil Mathur Executive Director Yezdi H. Malegam Director & Chairman of Audit Committee Ajai Jain Vice President (Legal) & Company Secretary Mumbai 26 November 2009
61
20 21 8 22
63,976,912 5,498,989 777,794 58,772 4,877,553 75,190,020 12,259,134
67,730,513 4,475,751 637,344 40,535 3,560,352 76,444,495 7,671,900 10,635 1,235,151 8,917,686 8,232 8,909,454 8,917,686 (3,493,161) 629,037 (120,296) 5,933,266 5,434 5,927,832 5,933,266 1,011,481 171,901 172,640 4,577,244 5,933,266
3
2,059,459 14,318,593
4
14,318,593 14,318,593 (4,007,464) 208,879 (71,500) 10,448,508
4
10,448,508 10,448,508 1,685,801 286,502 8,476,205 10,448,508
2
34 1 2 - 36
30.99
17.60
per Sudhir Soni Partner Membership No: 41870 Mumbai 26 November 2009
Siemens Ltd.
61
Cash ?ow statement for the year ended 30 September 2009 (Currency : Indian rupees thousands)
Cash ?ow from operating activities Pro?t before tax Adjustments for: Interest expense Bad debts Provision for doubtful debts/advances, net Depreciation and amortisation Pro?t on sale of ?xed assets, net Pro?t on sale of long term investment (equity shares in Siemens Information Systems Ltd.) Pro?t on sale of long term investment (equity shares in Siemens Information Processing Systems Ltd.) Pro?t on sale of Building Technologies division Pro?t on sale of Automotive division Sale of lease rights Pro?t on sale of Electronics Assembly Division Unrealised exchange gain, net Interest income Dividend income Operating pro?t before working capital changes Increase in inventories Increase in sundry debtors and other receivables Increase in sundry creditors and other current liabilities Increase in provisions Net change in working capital Cash generated from operations Direct taxes paid, net Net cash provided by operating activities of which discontinued operations of which continuing operations Cash ?ow from investing activities Purchase of ?xed assets Proceeds from sale of ?xed assets Purchase of investments - In subsidiary companies (total consideration is in cash or cash equivalent) - In mutual funds Sale of investments - In subsidiary company (total consideration is in cash or cash equivalent) - In mutual funds Dividend received - From subsidiary company - From mutual funds Interest received Inter corporate deposits placed Inter corporate deposits received back Sale of Automotive division (total consideration is in cash or cash equivalent) Sale of lease rights (total consideration is in cash or cash equivalent) Sale of EA business (total consideration is in cash or cash equivalent) Cash generated from investing activities of which discontinued operations of which continuing operations Cash ?ow from ?nancing activities Interest paid Dividend paid (including tax thereon) Repayment of long term borrowings Net cash used in ?nancing activities of which discontinued operations of which continuing operations Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents acquired on merger of SITS Cash and cash equivalents on demerger of the Automotive division Effect of exchange gain/(loss) on cash and cash equivalents Cash and cash equivalents at the end of the year
Schedule
2009
14,318,593
2008
8,917,686 40,535 34,943 311,643 637,344 (259,256) (10,635) (1,235,151) (232,046) (471,937) (67,214) 7,665,912 (396,396) (10,521,707) 11,000,201 1,138,892 1,220,990 8,886,902 (3,969,992) 4,916,910 (104,951) 5,021,861 (1,946,909) 290,309 (250,000) (962,215) 744,889 67,214 482,513 (750,000) 325,000 1,700,000 (299,199) (42,358) (256,841) (20,535) (945,555) (4,709) (970,799) (970,799) 3,646,912 4,636,219 114,609 76,492 656,663 9,130,895
22 22 8 18
58,772 246,216 (121,563) 777,794 (238,276) (1,942,882) (116,577)
4 4
17 19
4
(78,000) (30,307) (1,027,379) (523,002) (2,232,881) 9,090,508 (2,100,828) (1,261,079) (1,862,579) 5,233,690 9,204 9,099,712 (5,631,333) 3,468,379 3,468,379 (1,708,871) 258,268 (1,700,999) 3,021,459 1,205,740
19 19
4
4
2,229,459 3,422 520,377 (10,845,000) 9,050,000 78,000 28,150 2,140,005 2,140,005 (2,251) (1,180,526) (4,708) (1,187,485) (1,187,485) 4,420,899 9,130,895 897,228 14,449,022
4
2 4 13
Note: Cash and cash equivalents at the end of the period include current account balances with banks of Rs 13,863 (2008: Rs 11,007) which are restricted in use.
As per our report of even date.
For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors of Siemens Limited Deepak S. Parekh Chairman Dr. Armin Bruck Managing Director Sunil Mathur Executive Director Yezdi H. Malegam Director & Chairman of Audit Committee Ajai Jain Vice President (Legal) & Company Secretary Mumbai 26 November, 2009
per Sudhir Soni Partner Membership No: 41870 Mumbai 26 November, 2009
26
62
Annual Report 2009
Schedules to the ?nancial statements for the year ended 30 September 2009 (Currency : Indian rupees thousands)
1. 1.1 Signi?cant accounting policies Basis of preparation of ?nancial statements The ?nancial statements are prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the accounting standards speci?ed in the Companies (Accounting Standards) Rules 2006, issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards (‘NACAS’) and relevant provisions of Companies Act, 1956 (‘the Act’), to the extent applicable. 1.2 Use of estimates The preparation of ?nancial statements in conformity with generally accepted accounting principles (‘GAAP’) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the ?nancial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods. 1.3 Fixed assets and depreciation Fixed assets are stated at acquisition or revalued amounts less accumulated depreciation. The cost of ?xed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Depreciation is provided on the straight-line method (‘SLM’). The depreciation rates prescribed in Schedule XIV to the Act are considered as the minimum rates. If the management’s estimate of the useful life of a ?xed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is shorter than that envisaged in the aforesaid Schedule, depreciation is provided at a higher rate based on the management’s estimate of useful life/ remaining life. The key ?xed asset blocks and related annual depreciation rates, which in management’s opinion re?ect the estimated useful economic lives of the ?xed assets, are: Asset Rate Land - Freehold land - Lease hold Over the lease period Buildings - Factory buildings 3.34% - Other buildings 2-2.5% Plant and machinery - Assets at project sites Over the life of the project - Special machine tools 10% - Other plant and machinery 10-25% Furniture, ?ttings and of?ce equipment 20%-33.33% Vehicles 25% Where depreciable assets are revalued, depreciation is provided on the revalued amount and the additional depreciation on accretion to assets on revaluation is transferred from revaluation reserve to the pro?t and loss account. Assets costing less than Rs 5,000 are fully charged to the pro?t and loss account in the year of acquisition. Items of ?xed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and estimated net realizable value and are disclosed separately in the ?nancial statements. Any expected loss is recognised in the pro?t and loss account through an accelerated depreciation charge. Capital work-in-progress includes the cost of ?xed assets that are not ready to use at the balance sheet date and advances paid to acquire capital assets before the balance sheet date. 1.4 Intangible assets Intangible assets comprise goodwill and technical know-how. These intangible assets are amortised on straight-line basis based on the following useful lives, which in management’s estimate represents the period during which economic bene?ts will be derived from their use: Asset Useful life Goodwill 60 months Technical know-how 60 – 84 months
63
Siemens Ltd.
63
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
1.5 Impairment of assets The Company assesses at each balance sheet date whether there is any indication that an asset or a group of assets (cash generating unit) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or cash generating unit. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash ?ows are discounted to the present value at the weighted average cost of capital. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the pro?t and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is re?ected at the recoverable amount subject to a maximum of depreciable historical cost had no impairment been recognised. 1.6 Investments Investments that are readily realizable and intended to be held but not more than a year are classi?ed as current investments. All other investments are classi?ed as long term investments. Long-term investments are carried at cost. Provision for diminution is made to recognize a decline, other than temporary in value of long-term investments and is determined separately for each individual investment. Current investments are carried at lower of cost and fair value, computed separately in respect of each category of investment. 1.7 Inventories Inventories comprise all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. Raw materials are valued at the lower of cost and net realisable value. Cost is determined on the basis of the weighted average method. Work-in-progress and ?nished goods are valued at the lower of cost and net realisable value. Excise duty is included in the value of ?nished goods inventory. Cost is determined on a weighted average basis. Custom duty on goods where title has passed to the Company is included in the value of inventory. The net realisable value of work-in-progress is determined with reference to the selling price of related ?nished goods. Raw materials held for the production of ?nished goods are not written down below cost except in case where material prices have declined and it is estimated that the cost of the ?nished product will exceed its net realisable value. 1.8 Revenue recognition Revenue from sale of products is recognised on transfer of all signi?cant risk and rewards of ownership of the products on to the customers, which is generally on dispatch of goods. Sales are stated exclusive of sales tax and net of trade and quantity discount. Revenue from services is recognised as per the terms of the contract with the customer using the proportionate completion method. Income from ?xed price construction contracts is recognised by reference to the estimated overall pro?tability of the contract under the percentage of completion method. Percentage of completion is determined as a proportion of the costs incurred upto the reporting date to the total estimated contract costs. Provision for expected loss is recognized immediately when it is probable that the total estimated contract costs will exceed total contract revenue. Commission income is recognised when proof of shipment is received from the supplier. Dividend income is recognised when the right to receive the dividend is established. Interest income is recognised on the time proportion basis. Export incentives receivable are accrued for when the right to receive the credit is established and there is no signi?cant uncertainty regarding the ultimate collection of export proceeds. 1.9 Leases Where the Company is the lessee: Leases where the lessor effectively retains substantially all the risk and bene?ts of ownership of the leased items are classi?ed as operating leases. Lease payments under an operating lease, are recognised as an expense in the statement of pro?t and loss on a straight line basis over the lease term.
46
64
Annual Report 2009
1.9
Leases (Continued) Where the Company is the lessor: Assets subject to operating leases are included in ?xed assets. Lease income is recognised in the Pro?t and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in the Pro?t and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Pro?t and Loss Account.
1.10 Employee bene?ts (a) Short term employee bene?ts All employee bene?ts payable wholly within twelve months of rendering the service are classi?ed as short-term employee bene?ts. Bene?ts such as salaries, wages and short term compensated absences, etc. and the expected cost of ex-gratia is recognised in the period in which the employee renders the related service. Post-employment bene?ts (i) De?ned Contribution Plans: The Company’s approved superannuation scheme and employee state insurance scheme are de?ned contribution plans. The Company’s contribution paid/ payable under the schemes is recognised as expense in the pro?t and loss account during the period in which the employee renders the related service. De?ned Bene?t Plans: The Company’s provident fund, gratuity, pension and medical bene?ts schemes are de?ned bene?t plans. The present value of the obligation under such de?ned bene?t plans is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee bene?t entitlement and measures each unit separately to build up the ?nal obligation. The obligation is measured at the present value of the estimated future cash ?ows. The discount rates used for determining the present value of the obligation under de?ned bene?t plans, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognised immediately in the pro?t and loss account. 1.11 Foreign currency transactions The Company is exposed to currency ?uctuations on foreign currency transactions. Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the pro?t and loss account of the year. Translation Monetary assets and liabilities in foreign currency, which are outstanding as at the year-end, are translated at the year-end at the closing exchange rate and the resultant exchange differences are recognized in the pro?t and loss account. Non monetary items are stated in the balance sheet using the exchange rate at the date of the transaction. Derivative instruments The Company’s exposure to foreign currency ?uctuations relates to foreign currency assets, liabilities and forecasted cash ?ows. The Company limits the effects of foreign exchange rate ?uctuations by following established risk management policies including the use of derivatives. The Company enters into forward exchange contracts, where the counterparty is a bank. As per Accounting Standard (‘AS’) 11 – ‘The Effects of Changes in Foreign Exchange Rates’, the premium or the discount on forward exchange contracts not relating to ?rm commitments or highly probable forecast transactions and not intended for trading or speculation purpose is amortized as expense or income over the life of the contract. All other derivatives, which are not covered by AS 11, are measured using the mark-to-market principle with the resulting gains/ losses thereon being recorded in the pro?t and loss account. 1.12 Taxation Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the incometax law), deferred tax charge or credit (re?ecting the tax effect of timing differences between accounting income and
65
(b)
(ii)
Siemens Ltd.
65
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
1.12 Taxation (Continued) taxable income for the year) and fringe bene?t tax computed in accordance with the relevant provisions of the Income Tax Act, 1961. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty supported by convincing evidence of realisation of the assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to re?ect the amount that is reasonable/virtually certain (as the case may be) to be realised. Provision for fringe bene?t tax (FBT) is made on the basis of applicable FBT on the taxable value of speci?ed expenses of the Company as prescribed under the Income Tax Act, 1961. 1.13 Earnings per share Basic and diluted earnings per share is computed by dividing the net pro?t attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year. 1.14 Provision Provisions comprise liabilities of uncertain timing or amount. Provisions are recognized when the Company recognizes it has a present obligation as a result of past events, it is probable that an out?ow of resources embodying economic bene?ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Disclosures for contingent liability are made when there is a possible or present obligation for which it is not probable that there will be an out?ow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of out?ow of resources is remote, no disclosure is made. Loss contingencies arising from claims, litigation, assessment, ?nes, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Contingent assets are neither recognized nor disclosed in the ?nancial statements. 1.15 Cash and cash equivalents Cash and cash equivalents include cash, cheques in hand, cash at bank and short-term deposits with banks having maturity of three months or less. 2. Amalgamation of Siemens Industrial Turbomachinery Services Private Limited (‘SITS’) Pursuant to the scheme of amalgamation (‘the scheme’) of the erstwhile SITS with the Company as approved in the Board Meeting held on 22 November 2007 and subsequently sanctioned by the Honorable High Court of Karnataka on 26 September 2008, the assets and liabilities of the erstwhile SITS were transferred to and vested in the Company with effect from 1 April 2008. Consequently, the ?gures for the current year are not strictly comparable to those of the prior year. 3. Investments During the year the company sold its holdings in Siemens Information Systems Limited & Siemens Information Processing Services Private Limited for a sale consideration of Rs 3,021,459 resulting in a pro?t of Rs 2,059,459 which is disclosed under Exceptional income. 4. Discontinued operations Automotive and Building Technologies segment The Board of Directors of the Company at its meeting held on 23 April 2007 approved a detailed formal plan for the discontinuance of its business activities pertaining to “Automotive” (‘SVDO’) and “Building Technologies” (‘SBT’) segment of the Company. After obtaining necessary approvals the SVDO segment was sold with effect from 1 December 2007 and SBT was sold with effect from 1 October 2007. Consequently, the ?gures for the current year are not strictly comparable to those of the prior year.
66
66
Annual Report 2009
2009 5. Share capital Authorised 1,000,000,000 Equity shares of Rs 2 each (2008: 1,000,000,000 Equity shares of Rs 2 each)
2008
2,000,000 2,000,000
2,000,000 2,000,000
Issued 338,024,465 Equity shares of Rs 2 each (2008: 338,024,465 Equity shares of Rs 2 each) Subscribed and fully paid-up 337,160,200 Equity shares of Rs 2 each fully paid-up (2008: 337,160,200 Equity shares of Rs 2 each fully paid-up)
676,049
676,049
674,320 674,320
674,320 674,320
Of the above: 186,041,090 (2008: 186,041,090) Equity shares of Rs 2 each, fully paid-up, are held by the Holding company, Siemens AG, Germany; 55,500,000 (2008: 55,500,000) Equity shares of Rs 2 each, fully paid-up, were allotted as fully paid-up bonus shares by capitalisation of the General reserve; 168,580,100 (2008: 168,580,100) Equity shares of Rs 2 each, fully paid-up, were allotted as fully paid up bonus shares by capitalisation of Securities Premium account; 3,638,085 (2008: 3,638,085) Equity shares of Rs 2 each, were allotted as fully paid-up for consideration received other than in cash. 6. Reserves and surplus Capital reserve Balance brought forward Amalgamation reserve Balance brought forward Securities premium account Balance brought forward Issue of bonus shares Revaluation reserve Balance brought forward revaluation transferred from pro?t and loss account General reserve Balance brought forward Addition on amalgamation of erstwhile SITS (Refer Schedule 2) Transfer from pro?t and loss account 18,425,670 8,476,205 26,901,875 28,491,887 7. Unsecured loans Interest free loans under sales tax deferral scheme The loan under the sales tax deferral scheme is payable upto 2011 - Amounts payable within one year Siemens Ltd. 13,642,776 205,650 4,577,244 18,425,670 20,016,524 14,036 (842) 13,194 14,882 (846) 14,036 688 55,635 1,520,495 1,520,495 688 55,635 1,857,655 (337,160) 1,520,495
5,906 5,906 3,495
10,614 10,614 4,708
67
67
Schedules to the ?nancial statements (continued) as at 30 September 2009 (Currency : Indian rupees thousands)
8. Fixed assets
Intangible assets Goodwill Technical knowhow Tangible assets Land Buildings Plant and (Refer (Refer note i machinery note i ) and iii ) Furniture, ?ttings and of?ce equipment Vehicles Total Previous year
Gross block At 1 October 2008 Additions on amalgamation of erstwhile SITS (Refer Schedule 2) Additions Deductions/ adjustments At 30 September 2009 Accumulated depreciation At 1 October 2008 Additions on amalgamation of erstwhile SITS (Refer Schedule 2) Charge for the year (Refer note ii) Deductions/ adjustments At 30 September 2009 Net block At 30 September 2009 At 30 September 2008 44,032 75,509 54,346 72,603 539,461 546,369 2,826,949 2,525,446 2,481,325 2,065,616 347,393 282,495 1,507 3,614 6,295,013 5,571,652 5,571,652 164,049 75,136 37,924 530,068 2,498,203 1,018,289 15,664 4,339,333 4,063,785 239,558 147,739 584,293 3,055,514 4,563,819 1,300,784 19,278 9,910,985 8,701,239
239,558
147,739
584,293
402,420 (22,904) 3,435,030
916,307 (41,756) 5,438,370
203,262 (19,757) 1,484,289
(783)
1,521,989 (85,200)
57,769 1,912,520 (760,543) 9,910,985
18,495 11,347,774
31,477 195,526
18,257 93,393
6,908 44,832
83,413 (5,400) 608,081
495,059 (36,217) 2,957,045
141,813 (23,206) 1,136,896
1,709 (385) 16,988
778,636 (65,208) 5,052,761
31,671 638,190 (394,313) 4,339,333
Notes:i Included in the gross block of land at 30 September 2009 is freehold land of Rs 16,447 (2008: Rs 16,447) and buildings includes Rs 175,722 (2008: Rs 201,543 ) representing 560 shares of Rs 50 each and 10 shares of Rs 100 each (2008: 595 shares of Rs 50 each and 10 shares of Rs 100 each) in various co-operative housing societies. Depreciation provided has been disclosed as under: Charge for the year Transfer to Revaluation reserve As per pro?t and loss account iii Buildings include assets held for sale: Acquisition Value Accumulated depreciation Written Down Value iv Assets includes assets given on operating lease Particulars Buildings 2009 Furniture and Fixture and of?ce equipment 137,540 46,866 12,508 Land Plant and Machinery 286,218 131,287 22,005 Buildings 2008 Furniture and Fixture and of?ce equipment 180,016 49,871 15,812 Land Plant and Machinery 336,258 125,449 25,435 2009 10,018 (3,683) 6,335 2008 2009 778,636 (842) 777,794 2008 638,190 (846) 637,344
ii
Gross Block Written Down Value Depreciation charge for the year
86
547,886 440,245 11,523
28,783 18,671 -
731,006 577,324 16,434
79,858 66,279 -
68
Annual Report 2009
2009 9. Investments Non-Trade, long term (at cost) In government securities (unquoted) National Savings Certi?cates Investment in subsidiary companies (unquoted) Nil (2008: 6,815,000) Equity Shares of Rs 10 each fully paid-up in Siemens Information Systems Ltd. (Nil holding; 2008: 100% holding) Nil (2008: 2,123,800) Equity Shares of Rs 10 each fully paid-up in Siemens Information Processing Services Private Ltd. (Nil holding; 2008: 51% holding) 3,216,870 (2008: 2,962,027) Equity Shares of Rs 10 each fully paid-up in Siemens Building Technologies Private Ltd. (86.15% holding; 2008: 79.32%) (Refer note i) 25,000,000 (2008: 25,000,000) Equity Shares of Rs 10 each fully paid-up in Siemens Rolling Stock Private Ltd. (100% holding; 2008: 100% holding) 4,320,000 (2008: 2,160,000) Equity Shares of Rs 10 each fully paid-up in Flender Ltd. (formerly an associate company ) (100% holding; 2008: 50%holding) Note: i) The company is committed to acquire balance 13.85% shares by 2012 Investment in other companies (Quoted) 10,485 (2008: 10,485) Equity Shares of Re 1 each fully paid up in PRICOL Ltd. 10,000 (2008: 10,000) Equity Shares of Rs 10 each fully paid up in Scooters India Ltd. (Unquoted) 1 (2008:1) equity share of Rs 10 each fully paid up in International Shock Absorbers Ltd. Current Investments, at lower of cost or fair value In Mutual Funds (unquoted) Nil ( 2008: 30,611,083) Sundaram BNP Paribas Money Fund - Super Institutional - Daily Dividend Reinvestment Nil ( 2008: 28,970,500) Birla Cash Plus -Institutional Premium- Daily Dividend Reinvestment Nil (2008: 30,885,544 ) units of ING Liquid Fund Super Institutional -Daily Dividend Option Nil (2008: 24,261,211 ) units of HDFC Liquid Fund Premium Plan-Daily Dividend Reinvestment Option
2008
5 5
5 5
-
851,000 111,000
2,932,095 250,000
2,141,031 250,000
1,587,515 4,769,610
677,580 4,030,611
8 100 108
8 100 108
0.01 0.01
0.01 0.01
4,769,723
309,028 290,270 309,004 297,438 1,205,740 5,236,464 5,236,356 108 400
69
- Aggregate book value of unquoted investments - Aggregate book value of quoted investments - Aggregate market value of quoted investments Siemens Ltd.
4,769,615 108 355
69
Schedules to the ?nancial statements (continued) as at 30 September 2009 (Currency : Indian rupees thousands)
9 Investments (Continued) The following investments were acquired and sold during the year
A) Name of the mutual fund Birla Cash Plus -Institutional Premium - Daily Dividend Reinvestment Sundaram BNP Paribas Money Fund - Super Institutional - Daily Dividend Reinvestment ING Liquid Fund Super Institutional - Daily Dividend Option HDFC Liquid Fund Premium Plan - Daily Dividend Reinvestment Option Purchased during the year Quantity Value 83,369 835 Sold during the year Quantity Value 83,369 83594,466 81,648 66,574 326,057
954 817 816 3,422
94,466 81,648 66,574 326,057 2009
954 817 816 3,422 2008
10
Deferred tax assets Deferred tax assets Arising on account of timing differences in: Provision for doubtful debts and advances Expenditure debited to pro?t & loss account but allowed for tax purposes in following years Other provisions Deferred tax liability Arising on account of timing differences in : Excess of depreciation allowable under income tax law over depreciation provided in accounts Deferred tax assets (net)
309,642 732,587 414,514 1,456,743
333,805 458,953 413,454 1,206,212
337,617 1,119,126
295,965 910,247
11
Inventories Raw materials [includes Goods in Transit Rs 965,031 (2008 : Rs 321,750)] Work-in-progress - factory related - project related Finished goods
2,531,516 329,855 5,749,589 1,111,011 9,721,971
1,526,726 554,148 4,051,773 1,488,496 7,621,143
12
Sundry debtors Debts outstanding - over six months - other debts Of which - considered good - considered doubtful Provision for doubtful debts
15,998,492 19,353,824 35,352,316 34,583,115 769,201 35,352,316 (769,201) 34,583,115
12,098,840 23,105,063 35,203,903 34,327,991 875,912 35,203,903 (875,912) 34,327,991
07
70
Annual Report 2009
2009 12 Sundry debtors (Continued) Sundry debtors are unsecured and include: Project related retention money - over six months - other Included in debtors are debts due from companies under the same management: - Osram India Private Ltd. - Siemens Information Systems Ltd. - Siemens Information Processing Services Private Ltd. - Siemens Power Engineering Private. Ltd. - Powerplant Performance Improvement Ltd. - Siemens Hearing Instruments Private Ltd. - Flender Ltd. - Siemens Rolling Stock Private Ltd. - Morgan Construction Company India Private Ltd. - Siemens Building Technology Private Ltd. - Winergy Drive Systems India Private Ltd. - Siemens Corporate Finance Private Ltd. - Bangalore International Airport Ltd. - Siemens VAI Metals Technologies Private Ltd. - Siemens Healthcare Diagnostics Ltd. (formerly known as Siemens Medical Solutions Diagnostics Ltd.) 13 Cash and bank balances Cash in hand Cheques in hand Balances with scheduled banks - on current account - on deposit account Balances with other banks
2008
13,753,293 3,122,451 16,875,744 16 44,799 11,158 2,953 10,336 4,310 13,515 6,307 6,357 3,884 95 17,592 552,586 3,689
11,741,312 4,968,932 16,710,244 2,000 103,115 6,157 8,883 1,895 5,143 4,703 72,577 26,830 663 7,781 94,443 1,709 843
5,691 792,587 1,486,035 10,473,300 1,691,409 14,449,022
8,707 1,348,131 1,560,670 4,580,700 1,632,687 9,130,895
Bank balances with other banks in current account includes : - Citibank, Colombo - Deutsche Bank, Colombo - Standard Chartered Bank, Nepal - Standard Chartered Bank, Doha - Standard Chartered Bank, Qatar - The Hongkong & Shanghai Banking Corporation Ltd.,Khulna - The Hongkong & Shanghai Banking Corporation Ltd.,Dhaka - The Hongkong and Shanghai Banking Corporation, Doha
10,286 1,048 36 65,797 180,265 6,658 11,796 1,415,523 1,691,409
16,270 32 543,859 24,585 1,047,941 1,632,687
Maximum amount outstanding at any time during the year : - Citibank, Colombo - Citibank, Dhaka - Deutsche Bank, Colombo Siemens Ltd.
124,005 1,182
16,629 38 1,020
71
71
Schedules to the ?nancial statements (continued) as at 30 September 2009 (Currency : Indian rupees thousands)
13 Cash and bank balances (Continued) - Standard Chartered Bank, Qatar - Standard Chartered Bank, Nepal - Standard Chartered Bank, Doha - The Hongkong & Shanghai Banking Corporation Ltd., Colombo - The Hongkong & Shanghai Banking Corporation Ltd., Dhaka - The Hongkong and Shanghai Banking Corporation, Doha - The Hongkong & Shanghai Banking Corporation Ltd., Khulna Loans and advances (Unsecured) Loans and advances recoverable in cash or kind or for value to be received - considered good - considered doubtful Provision for doubtful advances Advance payments of income tax [net of provision for tax Rs 14,184,946 (2008: Rs 10,177,482)] Balances with customs, port trusts etc. Inter corporate deposits - Subsidiaries - Others Interest accrued on inter corporate deposits 4,265,843 141,779 4,407,622 (141,779) 4,265,843 2,069,722 799,425 1,450,000 1,860,000 12,650 10,457,640 Amount receivable from Customs authorities towards excess payment of Customs duty Loans and advances includes : (a) Inter-corporate deposits given to companies under the same management: Osram India Private Ltd. Siemens Building Technologies Private Ltd. Winergy Drive Systems India Private Ltd. Siemens Rolling Stock Private Ltd. Siemens Healthcare Diagnostics Ltd. Morgan Construction Company India Private Ltd. 3,548,303 156,631 3,704,934 (156,631) 3,548,303 517,353 721,832 800,000 715,000 10,025 6,312,513 2009 192,410 142 598,217 35,376 5,913,155 9,279 2008 605,935 32 67 3,990 2,276,531 -
14
2,225
2,225
800,000 850,000 660,000 600,000 400,000 3,310,000
250,000 800,000 380,000 85,000 1,515,000 50,000 270,000 800,000 380,000 85,000 Annual Report 2009
Maximum amount outstanding at any time during the year: 27
Flender Ltd. Osram India Private Ltd. Siemens Building Technologies Private Ltd. Siemens Healthcare Diagnostics Ltd. Siemens Rolling Stock Private Ltd. Winergy Drive Systems India Private Ltd. Morgan Construction Company India Private Ltd.
800,000 1,100,000 400,000 600,000 660,000 175,000
72
2009 15 Current liabilities Sundry creditors Micro and Small Enterprises ( Refer Schedule 35 ) Subsidiaries Others Advances from customers (Refer note 2) Unclaimed dividend (Refer note 1) 653,274 33,142 23,769,726 16,115,365 13,863 40,585,370
2008 331,311 93,090 21,234,804 20,993,358 11,007 42,663,570
Notes (1) Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. (2) Advance from customers include progress payments billed and advances received from project related work 14,975,178 20,053,468 16 Provisions Pension Leave wages Medical bene?ts Silver jubilee Warranty Loss order Liquidated damages Contingencies Proposed dividend Tax on proposed dividend
174,983 240,841 70,754 74,418 1,980,532 891,614 5,651,320 1,638,380 1,685,801 286,502 12,695,145
160,326 233,379 45,169 68,925 1,248,631 1,099,514 1,574,211 1,002,476 1,011,481 171,901 6,616,013
17
Interest income Interest income - others [includes tax deducted at source Rs 119,717, (2008 : Rs 95,380)]
523,002 523,002
471,937 471,937
18
Other operating income, net Export incentives Pro?t on sale of ?xed assets, net Recoveries from subsidiary companies, associates and third parties Miscellaneous income
97,375 238,276 337,627 23,941 697,219
60,174 259,256 283,592 18,768 621,790
19
Other income Dividend from subsidiary companies Dividend from mutual fund investments Miscellaneous other Income
2,229,459 3,422 108,307 2,341,188
67,214 67,214
20
Cost of sales and services Raw materials and components consumed Traded goods purchased Spares and stores consumed Project bought outs Change in inventories Other costs Included in other costs, change in excise duty on closing stock of ?nished goods
18,929,334 11,335,326 266,601 28,430,906 (1,096,038) 6,110,783 63,976,912 19,788
16,214,299 12,229,124 393,325 36,330,363 11,074 2,552,328 67,730,513 82,313
73
Siemens Ltd.
73
Schedules to the ?nancial statements (continued) as at 30 September 2009 (Currency : Indian rupees thousands)
2009 21 Personnel costs Salaries, wages and bonus, net Contribution to provident and other funds Workmen and staff welfare 4,629,505 525,841 343,643 5,498,989 22 Other costs, net Exchange loss/ (gains), net Travel and conveyance External software services and data processing Rates and taxes Communications Packing and forwarding Power and fuel Insurance Rent Repairs - on building - on machinery - others Legal and professional Advertising and publicity Of?ce supplies, printing and stationery Research and development expenditure Bank guarantee commission/ bank charges Lease rentals Donation Commission to directors Directors' fees Bad debts Provision for doubtful debts and advances, net Miscellaneous expenses 2008 3,931,583 298,010 246,158 4,475,751
82,520 862,588 558,457 543,057 364,919 349,372 267,554 264,184 196,513 89,782 68,354 118,830 173,914 5,185 76,079 171,022 97,697 36,044 1,580 11,600 1,300 246,216 (121,563) 412,349 4,877,553
(2,016,693) 968,445 658,367 582,487 358,188 342,288 278,681 237,697 211,148 84,739 64,134 113,923 143,878 127,889 86,251 85,619 67,861 44,307 2,091 14,000 1,440 34,943 311,643 757,026 3,560,352
23
Commitments and contingent liabilities (a) Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) (b) Contingent liabilities Taxation matters (excluding interest) In respect of certain completed assessments where matters are under appeal by the Company 432,706 309,422 120,000 47,055 295,807 409,373 120,000 43,812 Annual Report 2009 712,829 552,034
Excise/ sales tax liabilities, under dispute Customs liabilities, under dispute Claims against the Company not acknowledge as debts
47
74
2009 24 (i) Supplementary statutory information Managerial remuneration Personnel and other costs include remuneration paid to Directors' as set out below: Salaries Perquisites Commission Performance linked incentive Payment of stock appreciation rights Directors sitting fees Contribution to provident fund Contribution to superannuation fund
2008
25,145 53,183 11,600 75,378 5,631 1,300 2,734 2,103 177,074
29,814 62,680 14,000 64,896 40,745 1,440 1,483 1,854 216,912
Managerial remuneration includes Rs 5000 (2008: 8,184 ) towards consideration in connection with retirement from of?ce. Certain wholetime Directors are covered under the Company's gratuity, leave, medical and silver/ golden jubilee schemes along with the other employees of the Company. These liabilities are determined for all employees by an independent actuarial valuation. The speci?c amount for such bene?ts can't be ascertained separately and accordingly the same has not been included above. Computation of Managerial Remuneration: Pro?t before tax Add: Managing and other director’s remuneration and commission Depreciation charged in the accounts (Refer Schedule 8) Pro?t on sale of ?xed assets, net (as per Section 349 of the Act) Provision for doubtful debts and advances, net Provision for wealth tax Pro?t on sale of tenancy rights Pro?t on sale of EA business Less: Pro?t on sale of investment Pro?t on sale of ?xed assets, net (as per pro?t and loss account) - 'SBT' division - 'SVDO' division Depreciation as computed under Section 350 of the Act (see note below) Net pro?t as per Section 349 of the Act Performance linked incentive to Managing and wholetime directors at 0.61% of the (2008: 0.81%) net pro?ts as calculated above Commission to other directors at 0.09% of the (2008: 0.18%) net pro?ts as calculated above 14,318,593 177,074 777,794 239,974 (121,563) (17,381) 78,000 30,307 (2,059,459) (238,276) (777,794) 12,407,269 8,917,686 216,912 637,344 4,419 311,643 2,447 (259,256) (10,635) (1,235,151) (637,344) 7,948,065
75,378 11,600 86,978
64,896 14,000 78,896
The Company depreciates its ?xed assets based on estimated useful lives which are lower or equal to the implicit estimated useful lives prescribed by Schedule XIV of the Act. Thus, the depreciation charged in the books is higher than that prescribed as the minimum by the Act. Hence, this higher value has been considered as a deduction for the computation of managerial remuneration above.
75
Siemens Ltd.
75
Schedules to the ?nancial statements (continued) as at 30 September 2009 (Currency : Indian rupees thousands)
2009 24 Supplementary statutory information (Continued) (ii) Auditors' remuneration (for Audit services exclusive of service tax) Audit fees Tax audit fees Other services Reimbursement of expenses 12,500 4,000 11,680 915 29,095 (iii) Earnings and expenditure in foreign exchange (on accrual basis) (a) Earnings in foreign currency - Exports of goods - Direct on FOB basis - Under IDA/IBRD/ADB credits - Project business - Commission - Service charges and others (b) Expenditure in foreign currency (on accrual basis) - Travelling - Installation charges - Expenditure on contracts at foreign sites - Commission - Service charges - Others (c) Value of imports calculated on CIF basis - Raw material - Components, spare parts and traded goods - Capital goods (iv) Net dividend remitted in foreign exchange Final: Period to which the dividend relates Number of non-resident shareholders Number of equity shares held on which dividend was due Amount remitted 25 Disclosure as per Clause 32 of the listing Agreement Loans and advances in the nature of loans 1.04.2007 to 31.03.2008 One 186,041,090 558,123 1.04.2006 to 31.03.2007 One 93,020,545 446,499 7,020 3,000 3,100 737 13,857 2008
2,569,481 2,829,935 5,486,774 520,410 9,130,899
2,839,181 1,194,038 26,377,412 451,826 94,324
79,158 40,723 2,741,317 175,630 1,652,704 622,355
92,691 3,871 10,122,364 2,719 1,257,464 417,371
5,015,591 21,382,256 528,565
4,432,304 19,949,757 174,506
Amount at 30 September 2009
Maximum amount outstanding at any time during the year 1,100,000 600,000 Annual Report 2009
Subsidiary company - Siemens Building Technologies Private Ltd. - Siemens Rolling Stock Private Ltd.
67
850,000 600,000
76
26
Additional information pursuant to the provisions of paragraphs 3, 4C, and 4D of Part II of Schedule VI to the Companies Act, 1956: (i) Sales and Services Class of goods Refer Note (a) and (d) below Switchgear items Electric motors/ generators Switchboards, control boards and miscellaneous accessories X-ray equipment Railway equipment Variable speed AC/DC drive systems, motor control modules and programmable control systems Protection systems Data acquisition, logging and control systems Medical electronic diagnostic equipment Other engineering project goods Maintenance, repairs and other services Industrial turbines Rental Income Automotive - Traded goods Transformer Commission income 2009 Quantity 87,452 Nos. Value 8,738,746 2,388,714 4,111,312 230,307 9,647,280 2008 Quantity 110,136 Nos. Value 9,194,551 3,336,349 5,052,256 347,495 6,708,855
5,041,047 926,084 981,629 4,202,445 33,754,477 8,510,311 3,571,504 463,291 800,188 83,367,335 520,410 83,887,745
4,941,696 420,286 5,533,864 40,261,709 1,303,147 4,068,391 464,333 231,596 639,100 82,503,628 451,826 82,955,454
(ii) Imported and indigenous raw materials and components consumed 2009 Value % of total consumption Imported 6,947,605 37 Indigenous 11,981,729 63 18,929,334 100 (iii) Inventories Finished goods Refer Note (a) below Class of goods Switchgear items Electric motors/generators Switchboards, control boards, etc. X-ray equipment Medical electronic diagnostic equipment Railway equipment Variable speed AC/DC drive systems, motor control modules and programmable control systems Protection systems/ uninterrupted power Data acquisition, logging and control systems Others Work-in-progress - factory related - project related 2009 Quantity 2,672 Nos. . Value 308,637 123,143 25,232 4,743 72,200 228,313
2008 Value % of total consumption 5,550,153 34 10,664,146 66 16,214,299 100
2008 Quantity 3,871 Nos.
Value 411,257 164,618 54,244 11,649 116,724 303,391
284,378 1,324 13,806 49,235 1,111,011 329,855 5,749,589 7,190,455
391,579 14,824 20,210 1,488,496 554,148 4,051,773 6,094,417
77
Siemens Ltd.
77
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
26 Additional information pursuant to the provisions of paragraphs 3, 4C, and 4D of Part II of Schedule VI to the Companies Act, 1956 (Continued): (iv) Purchases Refer Note (a) below Class of goods 2009 2008 Value Value Medical electronic diagnostic equipment 3,274,879 3,707,141 Others 8,060,447 8,521,983 Towards projects execution 28,430,906 36,330,363 39,766,232 48,559,487 (v) Raw materials, bought out components consumed during the year Unit MT MT MT MT MT MT MT Kms Kgs Nos Nos Nos Nos Nos Nos Nos Nos Pcs 2009 Quantity 1,659 13,692 214,397 188 5,599 3,091 21,455 11,030 6,440 189,585 128,907 30 1,023,967 17,966 38,003 146,094 13,860 2,300,235 Value 550,923 198,300 17,320 46,620 585,771 289,006 652,845 104,412 212,485 237,836 580,264 6,337 37,149 252,140 10,853 63,282 25,264 2,096,391 12,962,136 18,929,334 2008 Quantity 1,078 690 77 453 8,994 4,910 1,434 2,303 8,036 433,963 132,040 31 687,024 35,660 33,966 156,972 14,783 688,216 Value 394,707 274,698 28,956 71,944 594,886 379,459 243,465 80,852 300,199 177,794 448,205 1,083 26,686 369,808 4,748 54,367 33,189 725,246 12,004,007 16,214,299
Copper ?ats, strips and pro?les Enamelled copper wire Brass sheets and strips Aluminium ingots, pro?les and castings Iron and steel castings and shafts Dynamo steel sheets, strips and laminations Hot rolled and cold rolled steel sheets, strips, housings, etc. Cables and wires Silver components Ball and roller bearings Thyristors, diodes and transistors X-ray tubes Amphenol terminals Vacuum tubes Integrated circuits Capacitors and condensers Printed circuit boards Turbine components Others
(vi) Capacities and Production Refer Note (b) below Unit Class of goods manufactured 2009 Annual Actual installed production capacity (refer Note (c) below) 16,263,493 20,023 8,000 (Boards) 1,283 209 12,216,614 16,008 2,279 (Boards) 958 23 2008 Annual Actual installed production capacity (refer Note (c) below) 16,263,493 20,023 8,000 (Boards) 1,283 209 15,033,076 18,769 2,672 (Boards) 1,070 36
Switchgear items Electric motors/ generators Switch boards, control boards and miscellaneous accessories X-ray equipment Electromedical equipment Variable speed AC/DC drive systems, motor control modules and programmable control system
87
Nos Nos Nos Nos Nos
Nos
6,248
1,924
6,248
1,774
78
Annual Report 2009
26
Additional information pursuant to the provisions of paragraphs 3, 4C, and 4D of Part II of Schedule VI to the Companies Act, 1956 (Continued) Instrument Transformers Static Converter for railways Audio frequency track circuit Interlocking relays Auxiliary inverter for AR locomotive Traction converter for diesel locomotive Electrical control cabinet Circuit breakers above 1000 volts Power Transformers Single stage/ multi stage turbines Traction Converters for EMU Auxiliary Converters for EMU High Frequency Power Supply Nos Nos Nos Nos Nos Nos Nos Nos MVA MW Nos Nos Nos 1,133 610 900 250,000 150 72 288 2,250 15,000 69 180 180 600 421 129 336 130,130 131 72 138 1,270 2,140 33 140 142 5,000 610 900 250,000 120 72 288 1,000 15,000 69 180 180 600 3 139 348 160,160 120 84 191 1,170 1,306 45 129 141 135
Licensed Capacity is not applicable in terms of the Government of India's noti?cation No. S.O. 477(E) dated 25 July, 1991. (a) For paragraph 3(ii) of Part II of Schedule VI to the Companies Act, 1956, the classes of goods dealt with by the Company are grouped under suitable product heads. In terms of Note 3 to paragraph 3 of Part II of Schedule VI, disclosures by quantity are restricted to those items/articles which individually account for 10% or more of the total sales and services, purchases or closing stocks as applicable. (b) For paragraph 4C, of Part II to Schedule VI to the Companies Act, 1956, the goods manufactured by the Company are grouped as per the classi?cation of Industrial Licenses without giving the individual articles covered by each license. (c) Installed capacities are as certi?ed by the Managing Director and have not been veri?ed by the Auditors, as this is a technical matter.
(d) Sales and services are inclusive of equipment supplied for project orders. Purchases, production and closing stock ?gures include equipment processed or to be supplied for project orders. 27. Disclosure relating to Provisions Provision for warranty Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period. Provision for liquidated damages Liquidated damages are provided based on contractual terms when the delivery/ commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms upto closure of the contract (including warranty period). Provision for loss orders A provision for expected loss on construction contracts is recognised when it is probable that the contract costs will exceed total contract revenue. For all other contracts loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic bene?ts. Contingencies The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the out?ow of which would depend on the cessation of the respective events.
79
Siemens Ltd.
79
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
The movements in the above provisions are summarised below: Warranties Balance as at 1 October 2008 Provisions: Created Utilised Reversed Balance as at 30 September 2009 28 1,248,631 1,096,676 (103,141) (261,634) 1,980,532 Liquidated damages 1,574,211 4,575,933 (182,918) (315,906) 5,651,320 Loss orders 1,099,514 692,148 (838,809) (61,239) 891,614 Contingencies 1,002,476 841,697 (47,877) (157,916) 1,638,380
Disclosure pursuant to Accounting Standard - 7 'Construction Contracts': (i) Contract Revenue recognised for the year ended 30 September 2009
2009 55,167,095
2008 50,884,780
(ii) Aggregate amount of contract costs incurred and recognised pro?ts (less recognised losses ) for all contracts in progress as at 30 September 2009 (iii) Amount of advances received (iv) Amounts due from customers (v) Amounts due to customers 29. Disclosure pursuant to Accounting Standard - 19 'Leases':
154,693,242 6,648,354 5,854,199 8,684,323
119,307,554 5,644,363 2,846,638 15,137,749
Lease payments on non cancellable lease arrangement debited to the pro?t and loss account and the future lease payments in respect of non cancellable operating lease are summarised below: 2009 2008 (i) Amount due not later than one year from the balance sheet date (ii) Amount due later than one year and not later than ?ve years (iii) Amount due later than ?ve years 30,988 80,332 60,682 172,002 27,258 91,909 80,093 199,260
Lease rent debited to pro?t and loss account Rs 232,557 (2008: Rs 255,455 ) Sub-lease payments recognised in the pro?t and loss account Rs 28,559 (2008: Rs 23,930) There is no contingent rent recognised in the P&L account General description of the leasing arrangement: (i) The Company has entered into operating lease arrangements for its of?ce premises and storage locations and residential premises for its employees.
(ii) The future lease rental payments are determined on the basis of the monthly lease payment terms as per the agreements (iii) At the expiry of the non cancellable lease period the option of renewal rests with the Company. (iv) Some of the lease agreements have escalation clause. There are no exceptional/ restrictive covenants in the lease agreements. 30. Related party transactions Siemens AG Siemens Information Systems Ltd. (SISL) Siemens Information Processing Services Private Ltd. ('SIPS') Holding company Wholly owned subsidiary company (upto 24 June 2009) Subsidiary company (51% of whose Equity Share capital is held by Siemens Ltd. and the balance 49% is held by SISL) (upto 24 June 2009) Siemens Industrial Turbomachinery Services Private Ltd. Wholly owned subsidiary company (upto 31 March 2008) Siemens Rolling Stock Private Ltd. Wholly owned subsidiary company (w.e.f. 4 July 2008 )
08
30.1 Parties where control exists
80
Annual Report 2009
30.1 Parties where control exists (Continued) Flender Ltd. Siemens Building Technologies Private Ltd. Siemens Nixdorf Information Systems Private Ltd. Vista Security Technics Private Ltd. iMetrex Technologies Pte. Ltd. (Singapore) Avenues Honkong Ltd. (Hongkong) iMetrex Technologies Ltd. (Ireland) Europlex Technologies Ltd. (United Kingdom) Europlex Technologies (Ireland) Ltd. formerly known as Europlex Manufacturing Ltd. (Ireland) Europlex Research Ltd. (Ireland) Clonshaugh Security Ltd. formerly known as Europlex Technologies Ltd. (Ireland) Wholly owned subsidiary company (w.e.f. 1 August 2009 ) Subsidiary company Wholly owned subsidiary of SISL. Wholly owned subsidiary of Siemens Building Technologies Private Ltd. Wholly owned subsidiary of Siemens Building Technologies Private Ltd. Wholly owned subsidiary of Siemens Building Technologies Private Ltd. Subsidiary of Siemens Building Technologies Private Ltd. Wholly owned subsidiary of iMetrex Technologies Ltd. (Ireland) Wholly owned subsidiary of iMetrex Technologies Ltd. (Ireland) Wholly owned subsidiary of iMetrex Technologies Ltd. (Ireland) Wholly owned subsidiary of iMetrex Technologies Ltd. (Ireland)
30.2 Other related parties where transactions have taken place during the year Fellow Subsidiaries Siemens S.A. Siemens Ltd. Siemens Healthcare Diagnostics Ltd. Siemens Aktiengesellschaft Österreich ETM professional control GmbH Siemens VAI Metals Technologies GmbH & Co Siemens Transportation Systems GmbH & Co KG VA TECH Transmission & Distribution GmbH Siemens Bangladesh Ltd. Siemens S.A./N.V. ADB S.A./N.V. Siemens Ltda. Siemens Eletroeletronica Limitada Iriel Ind. Com. Sist. Eletr. Ltda. Siemens Milltronics Process Instruments, Inc. Trench Ltd. Siemens Canada Ltd. Siemens Medium Voltage Switching Technologies (Wuxi) Ltd. Siemens International Trading Ltd., Shanghai Siemens Circuit Protection Systems Ltd. Siemens Electrical Apparatus Ltd. Siemens Power Plant Automation Ltd. Siemens Ltd., China Siemens Electrical Drives Ltd. Siemens Manufacturing and Engineering Centre Ltd. Siemens Factory Automation Engineering Ltd. Siemens Shanghai Medical Equipment Ltd. MWB (Shanghai) Co Ltd. Siemens Wiring Accessories Shandong Ltd. Siemens Switchgear Co. Ltd. Siemens Industrial Automation Ltd. Siemens Numerical Control Ltd. Siemens Electrical Drives (Shanghai) Ltd. Siemens Mindit Magnetic Resonance Ltd. Zhenjiang Siemens Busbar Trunking Systems Co. Ltd. Siemens S.A. Siemens S.A. Koncar Power Transformers Ltd. Argentina Australia Australia Austria Austria Austria Austria Austria Bangladesh Belgium Belgium Brazil Brazil Brazil Canada Canada Canada China China China China China China China China China China China China China China China China China China Columbia Costa Rica Croatia
81
Siemens Ltd.
81
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
30.2 Other related parties where transactions have taken place during the year (Continued) Fellow Subsidiaries Siemens Elektromotory s.r.o. Siemens Industrial Turbomachinery s.r.o. OEZ s.r.o. Siemens Wind Power A/S Siemens S.A. Siemens Technologies S.A.E. Siemens Osakeyhtiö Siemens S.A.S. Siemens Production Automatisation S.A.S. Trench France S.A.S. Siemens Transmission & Distribution SAS Siemens VAI Metals Technologies SAS Siemens Transportation Systems S.A.S. Flender-Graffenstaden SAS Siemens Building Technologies Fire & Security Products GmbH & Co. oHG SYKATEC Systeme, Komponenten, Anwendungstechnologie GmbH & Co. KG Weiss Spindeltechnologie GmbH Siemens Financial Services GmbH Mechanik Center Erlangen GmbH LINCAS Export Services GmbH Siemens Turbomachinery Equipment GmbH Siemens Busbar Trunking Systems GmbH & Co. KG Trench Germany GmbH Wallace & Tiernan GmbH mdexx Magnetronic Devices GmbH & Co. KG (upto 31 December 2008) Alpha Verteilertechnik GmbH Lincas Electro Vertriebsgesellschaft mbH Loher GmbH Siemens Geared Motors Gesellschaft mit beschränkter Haftung Siemens Finance & Leasing GmbH Ruhrtal Hochspannungsgeräte GmbH & Co. OHG (Upto 30 June 2009) HSP Hochspannungsgeräte GmbH Flender Industriegetriebe GmbH Ruhrtal Hochspannungsgeräte GmbH evosoft GmbH FEAG Fertigungscenter für Elektrische Anlagen GmbH Siemens Building Technologies GmbH & Co. oHG Siemens Financial Services GmbH/WCF Siemens Real Estate GmbH & Co. OHG Siemens Product Lifecycle Management Software (DE) GmbH A Friedr. Flender AG Siemens plc Siemens Industrial Turbomachinery Ltd. Siemens Protection Devices Ltd. Chemfeed Ltd. Electrocatalytic Ltd. Electrium Sales Ltd. Siemens Magnet Technology Ltd. Siemens Busbar Trunking Systems Ltd., in Liquidation Siemens A.E., Elektrotechnische Projekte und Erzeugnisse Eviop-Tempo A.E. Electrical Equipment Manufacturers Siemens Ltd. Siemens Erömütechnika Kft. Siemens Hearing Instruments Private Ltd. Siemens Power Engineering Private Ltd. OSRAM India Private Ltd. Siemens VAI Metals Technologies Private Ltd. Siemens Healthcare Diagnostics Ltd. Siemens Corporate Finance Private Ltd. Winergy Drive Systems India Private Ltd. Czech Republic Czech Republic Czech Republic Denmark Ecuador Egypt Finland France France France France France France France Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Great Britain Great Britain Great Britain Great Britain Great Britain Great Britain Great Britain Great Britain Greece Greece Hongkong Hungary India India India India India India India
28
82
Annual Report 2009
30.2 Other related parties where transactions have taken place during the year (Continued) Fellow Subsidiaries Morgan Construction Company India Private Ltd. Siemens Enterprise Communications Private Ltd. (Upto 31 March 2009) Powerplant Performance Improvement Ltd. Siemens Information Systems Ltd. (w.e.f. 25 June 2009) Siemens Information Processing Services Private Ltd. (w.e.f. 25 June 2009) Siemens Product Lifecycle Management Software (India) Private Ltd. P.T. Siemens Indonesia Siemens Sherkate Sahami (Khass) Siemens Israel Ltd. Siemens S.p.A. Trench Italia S.r.l. Siemens K.K. Siemens TOO Siemens Kenya Ltd. Siemens Ltd. Siemens Electrical & Electronic Services K.S.C. Osram Opto Semiconductors (Malaysia) Sdn Bhd Siemens Malaysia Sdn. Bhd. Siemens Industrial Workshop Sdn. Bhd. Siemens, S.A. de C.V. Siemens S.A. Siemens Nederland N.V. Siemens Industrial Turbomachinery B.V. Siemens (N.Z.) Ltd. Siemens Ltd. Siemens Oil and Gas Offshore AS (upto 30 June 2009) Siemens L.L.C. Siemens Pakistan Engineering Co. Ltd. Siemens, Inc. Siemens Power Operations, Inc. Siemens Sp. z o.o. Siemens W.L.L. Siemens S.R.L. OOO Siemens ISCOSA Industries and Maintenance Ltd. Siemens Ltd. Arabia Electric Ltd. (Equipment) Siemens Pte. Ltd. Power Automation Pte. Ltd. Siemens Electronics Assembly Systems Pte. Ltd Siemens Energy Management and Information Systems Pte. Ltd. Siemens d.o.o. Siemens Ltd. Siemens S.A. Siemens Industrial Turbomachinery AB Siemens AB Siemens Schweiz AG, Building Technologies Division, International Headquarters Siemens Schweiz AG Siemens Ltd. Siemens Ltd. Siemens Ltd. Siemens Sanayi ve Ticaret A.S. Siemens LLC Siemens Ukraine Siemens Energy, Inc. Siemens Building Technologies, Inc. Siemens Demag Delaval Turbomachinery, Inc. Siemens Energy & Automation, Inc. Siemens Water Technologies Corp. India India India India India India Indonesia Iran Israel Italy Italy Japan Kazakhstan Kenya Korea Kuwait Malaysia Malaysia Malaysia Mexico Morocco Netherlands Netherlands New Zealand Nigeria Norway Oman Pakistan Philippines Philippines Poland Qatar Romania Russia Saudi Arabia Saudi Arabia Saudi Arabia Singapore Singapore Singapore Singapore Slovania South Africa Spain Sweden Sweden Switzerland Switzerland Taiwan Tanzania Thailand Turkey UAE Ukraine USA USA USA USA USA
83
Siemens Ltd.
83
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
30.2 Other related parties where transactions have taken place during the year (Continued) Fellow Subsidiaries Siemens Medical Solutions USA, Inc. Siemens Shared Services, LLC Morgan Construction Company Siemens Transportation Systems, Inc. Siemens Power Transmission & Distribution, Inc. PETNET Solutions, Inc. SMS Inc. - Customer Solutions Group Siemens S.A. Siemens Automation Systems Ltd. Siemens Ltd. Flender Ltd. (upto 31 July 2009) USA USA USA USA USA USA USA Venezuela Vietnam Vietnam India
Associates
30.3 Directors of the Company Wholetime Directors Dr. Armin Bruck (w.e.f. 1 October 2007) Mr. Sunil Mathur (w.e.f. 22 July 2008) Mr. Patrick de Royer (Retired on 31 December 2008 ) Mr. K. R. Upilli (Retired on 27 July 2008 ) Mr. Vijay V. Paranjape Mr. J. Schubert (Retired on 1 January 2008) Mr. Vilas Parulekar (Retired on 25 September 2009 )
30.4
2009 Key Holding Fellow managerial Company Subsidiaries Subsidiaries Associate personnel 2008 Key Holding Fellow Associate managerial Company Subsidiaries Subsidiaries personnel
Description Sales - Siemens AG - Siemens Information Systems Ltd. - Siemens Energy & Automation, Inc - Siemens VAI Metals Technologies Private Ltd. - Siemens VAI Metals Technologies SAS - Flender Ltd. - Others Commission income - Siemens AG - Siemens Industrial Turbomachinery AB - Siemens Industrial Turbomachinery Ltd. - Siemens Pte. Ltd. - Siemens Building Technologies, Inc. - Others Other recoveries - Siemens AG - Siemens Information Systems Ltd. - Siemens Information Processing Services Private Ltd. - Siemens Corporate Finance Private Ltd. - Siemens Enterprise Communications Private Ltd. - Siemens Transportation Systems S.A.S. - Siemens Pte. Ltd. - Flender Ltd. - Others Reimbursement of expenses - Siemens AG - Siemens Information Systems Ltd. - Siemens Rolling Stock Private Ltd. - Siemens Enterprise Communications Private Ltd. - Siemens Pte. Ltd. - Siemens Wind Power A/S - Siemens Electronics Assembly Systems Pte. Ltd. - Flender Ltd. - Others
2,024,042 481,223 153,633 352,973 -
280,376 592 51,007 78,636 11,881 3,528 17,681 6,830 1,059
519,617 784,264 154,578 1,156,885 17,576 16,047 2,586 2,978 17,457 7,688 13,259 25,727 30,307 10,115 2,357 569 13,044 11,231 1,210
3,006 6,178 018 -
-
1,246,622 441,661 145,641 106,979 -
390,972 6,851 102,245 15,739 6,900 33,630 5,180 4,992
366,026 104,360 266,413 743,905 3,764 1,496 075 2,798 60,589 15,950 16,686 17,476 21,556 5,588 4,605
3,395 750 342 -
-
48
84
Annual Report 2009
30.4
2009 Key Holding Fellow managerial Company Subsidiaries Subsidiaries Associate personnel 2008 Key Holding Fellow Associate managerial Company Subsidiaries Subsidiaries personnel
Description Purchase/Other services -
Siemens AG 15,502,378 Siemens Information Systems Ltd. Siemens Building Technologies Private Ltd. Siemens Information Processing Services Private Ltd. Koncar Power Transformers Ltd. Siemens Electrical Apparatus Ltd. Siemens Medical Solutions USA, Inc. Flender Ltd. Others -
99,365 14,350 28,468 -
58,397 43,327 602,950 566,228 2,407,778
19,439 -
- 14,799,173 -
217,762 20,519 290 100
3,554,963 3,276,771
22,339 -
-
Interest Income - Siemens Building Technologies Private Ltd. - Osram India Private Ltd. - Winergy Drive Systems India Private Ltd. - Morgan Construction Company India Private Ltd. - Siemens Rolling Stock Private Ltd. - Flender Ltd. - Others Sale of division/ investments Siemens Electronics Assembly Systems Pte. Ltd. Siemens VDO Automotive Components Private Ltd.
-
72,726 14,975 -
29,877 42,392 8,783 8,796
-
-
-
67,305 -
23,442 18,331 1,650 -
1,498 -
-
-
-
30,307 -
-
-
-
-
1,700,000
-
-
Purchase of Investments/ Equity Contribution - Siemens Building Technologies Private Ltd. - Siemens Rolling Stock Private Ltd. - A Friedr.-Flender AG Sale of investments in subsidiaries - Siemens Corporate Finance Private Ltd. Dividend paid Dividend received - Siemens Information Systems Ltd. - Siemens Information Processing Services Private Ltd. Purchase of Fixed assets/ Capital work in progress - Siemens AG - Siemens Building Technologies Private Ltd. - Trench Germany GmbH - Others Purchase of Intangible assets (Technical knowhow) - Siemens AG Bonus shares issued - Siemens AG Managerial Remuneration Mr. J. Schubert Dr. Armin Bruck Mr. Sunil Mathur Mr. Vijay V. Paranjape Mr. Vilas Parulekar Mr. Patrick de Royer Mr. K. R. Upilli Siemens Building Technologies Private Ltd. Siemens Rolling Stock Private Ltd. Osram India Private Ltd. Winergy Drive Systems India Private Ltd. Morgan Construction Company India Private Ltd. Siemens Healthcare Diagnostics Ltd. Flender Ltd.
558,123 -
2,112,650 116,809
909,935 3,021,459 -
-
-
446,499 -
275,000 250,000 -
-
-
-
30,371 -
12,478 -
042 1,550
-
-
23,076 -
-
6,488 2,330
-
-
-
3,700,000 1,300,000 -
1,950,000 2,360,000 735,000 800,000 -
-
63,336 42,771 20,624 23,560 13,691 253 -
29,223 186,011 -
300,000 -
50,000 240,000 85,000 -
75,000
52,704 52,137 7,552 15,373 14,333 33,664 25,708 -
Inter Corporate Deposits given
85
Siemens Ltd.
85
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
30.4
2009 Key Holding Fellow managerial Company Subsidiaries Subsidiaries Associate personnel 3,650,000 700,000 1,400,000 2,080,000 820,000 400,000 2008 Key Holding Fellow Associate managerial Company Subsidiaries Subsidiaries personnel 70,000 180,000 75,000 -
Description Inter Corporate Deposits repaid Siemens Building Technologies Private Ltd. Siemens Rolling Stock Private Ltd. Osram India Private Ltd. Winergy Drive Systems India Private Ltd. Morgan Construction Company India Private Ltd. Siemens Healthcare Diagnostics Ltd. Flender Ltd.
Outstanding Balances Debtors Siemens AG Siemens Building Technologies Private Ltd. Siemens Rolling Stock Private Ltd. Siemens VAI Metals Technologies Private Ltd. Siemens Information Systems Ltd. Siemens Enterprise Communications Private Ltd. Morgan Construction Company India Private Ltd. Flender Ltd. Others 880,283 3,884 6,307 13,515 552,601 33,684 6,105 156,348 175,814 8,860 4,703 103,115 24,128 56,547 72,577 22,774 5,143 -
Creditors Siemens AG Siemens Building Technologies Private Ltd. Flender Ltd. Siemens Information Systems Ltd. Siemens VAI Metals Technologies Private Ltd. Siemens Information Processing Services Private Ltd. Siemens Power Engineering Private Ltd. Siemens industrial turbomachinery Others 4,100,111 26,785 6,357 45,729 37,948 35,756 32,645 135,153 1,098,914 3,700,397 12,515 72,187 3,553 4,834 2,218 25,896 92,163 8,576 -
Inter Corporate Deposits Siemens Building Technologies Private Ltd. Siemens Rolling Stock Private Ltd. Osram India Private Ltd. Winergy Drive Systems India Private Ltd. Morgan Construction Company India Private Ltd. Siemens Healthcare Diagnostics Ltd. 850,000 600,000 800,000 660,000 400,000 800,000 250,000 380,000 85,000 -
Interest receivable on Inter Corporate Deposits Siemens Building Technologies Private Ltd. Osram India Private Ltd. Morgan Construction Company India Private Ltd. Winergy Drive Systems India Private Ltd. Siemens Rolling Stock Private Ltd. Siemens Healthcare Diagnostics Ltd. 2,358 2,985 3,995 976 2,336 6,596 1,532 1,650 247 -
Managerial Remuneration payable 68
Dr. Armin Bruck Mr. Sunil Mathur Mr. Vijay V. Paranjape Mr. Vilas Parulekar Mr. Patrick de Royer Mr. K. R. Upilli
-
-
-
-
32,466 21,842 12,377 13,694 -
-
-
-
-
22,400 2,950 7,680 6,144 18,578 7,144
86
Annual Report 2009
31
(i)
Information about business segments
Revenue External sales 2009 2008 Inter segmental sales 2009 2008 983,424 6,205,892 32,955 119,377 7,681 481,737 1,696,864 (9,527,930) 759,552 4,139,996 58,841 234,009 338 14,717 169,757 650,652 (6,027,862) Total 2009 9,622,182 11,682,246 850,402 11,496,810 10,260,282 4,227,556 5,631,183 24,718,938 8,841,966 5,431,079 653,031 (9,527,930) 83,887,745 2008 9,904,062 10,108,180 924,859 11,439,244 6,952,028 1,299,752 5,114,719 28,414,625 7,896,261 6,053,460 644,530 231,596 (6,027,862) 82,955,454 Results 2009 628,823 736,630 32,141 1,071,628 (76,905) 441,639 811,993 4,004,832 652,076 413,083 844,186 9,560,126 (58,772) 523,002 2,059,459 2,234,778 14,318,593 (4,007,464) 208,879 (71,500) 10,448,508 83,887,745 82,955,454 83,887,745 82,955,454 10,448,508 2008 916,358 826,544 55,711 1,503,794 (184,426) (1,858,132) 570,592 3,412,775 972,429 335,303 614,104 8,232 7,173,284 (40,535) 471,937 1,245,786 67,214 8,917,686 (3,493,161) 629,037 (120,296) 5,933,266 5,933,266
Industry Automation Drive Technologies Building Technologies Industry Solutions Mobility Fossil Power Generation Oil & Gas Power Transmission Power Distribution Healthcare Real Estate Discontinued Operations* Eliminations Total Interest expenses Interest income Exceptional income Unallocable corporate items Pro?t before tax Income tax Deferred tax Fringe bene?t tax Pro?t after tax Consolidated total
8,638,758 5,476,354 817,447 11,377,433 10,260,282 4,219,875 5,631,183 24,237,201 7,145,102 5,431,079 653,031 83,887,745
9,144,510 5,968,184 866,018 11,205,235 6,952,028 1,299,414 5,100,002 28,244,868 7,245,609 6,053,460 644,530 231,596 82,955,454
* Discontinued operations (refer schedule 4)
Non cash expenditure Assets 2009 Industry Automation Drive Technologies Building Technologies Industry Solutions Mobility Fossil Power Generation Oil & Gas Power Transmission Power Distribution Healthcare Real Estate Discontinued Operations* Total Unallocable corporate items Consolidated total 3,893,282 3,488,451 495,993 5,662,121 3,154,534 751,998 2,495,405 2008 3,632,063 3,533,372 569,536 4,431,915 2,506,146 1,926,790 2,726,040 Liabilities 2009 2,465,910 3,005,161 1,940,723 6,045,058 3,399,790 2,534,254 3,225,582 2008 2,189,927 2,449,817 151,652 5,770,733 2,947,982 3,020,798 2,920,384 Capital Expenditure 2009 210,146 173,105 49,649 12,736 1,355 1,543 368,713 479,164 37,157 43,871 276,282 1,653,721 55,150 1,708,871 2008 146,268 139,788 52,530 15,789 2,323 2,464 197,936 379,436 40,731 13,327 903,036 25,663 1,919,291 27,663 1,946,954 Depreciation 2009 93,083 102,907 24,766 10,448 4,996 3,941 54,570 237,800 25,873 17,331 175,187 750,902 26,892 777,794 2008 75,269 77,903 18,953 7,848 5,982 4,921 63,618 Others 2009 2008 221,742 (151,508) (34,245) (147,679) (4,345) 51,600 46,764 47,086 25,090 (34,564) 34,992 (49,734) (46,506) 29,180
25,675,227 24,882,449 18,022,565 18,102,867 4,676,538 1,587,538 2,144,171 4,211,815 1,631,308 1,827,767 3,063,500 2,106,517 338,813 3,108,613 1,854,429 352,977 -
193,252 (1,277,509) (249,016) 19,358 18,657 124,387 5,492 615,640 21,704 637,344 (28,807) (25,893) (4,652) 180,063 (79,663) 9,953 (632)
54,025,258 51,879,201 46,147,873 42,870,179 28,427,370 18,101,840 7,138,548 6,420,017
(983,169) (505,114) 80,443 (902,726) 619,654 114,540
82,452,628 69,981,041 53,286,421 49,290,196
87
Siemens Ltd.
87
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
31 (ii) Secondary segment information Revenue based on location of customers 2009 Within India Outside India Total 2008 Carrying amount of segment assets by location 2009 2008 Additions to ?xed assets and intangible assets 2009 1,708,871 1,708,871 2008 1,946,954 1,946,954
66,618,911 53,644,537 50,326,018 36,897,384 17,268,834 29,310,917 32,126,610 33,083,657 83,887,745 82,955,454 82,452,628 69,981,041
31
(iii) -
Other disclosures: Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks. Pro?ts/ losses on inter segment transfers are eliminated at the Company level. Balances with group companies and related parties have been included in unallocable corporate items. During the year there has been reorganisation of Business Segments. Figures for the year ended 30 September 2009 and year ended 30 September 2008 has been regrouped to make them comparable. Segment information:
31
(iv)
The primary and secondary reportable segments are business segments and geographical segments respectively. Business Segments: The business of the Company is divided into eleven segments. These segments are the basis for management control and hence, form the basis for reporting. The business of each segment comprises of : Industry Automation:- Provides complete range of automation products & systems, industrial automation systems & low-voltage Switchgears. Drive Technologies:- Provides complete range of large and standard drives and motors, special purpose motors, process and motion control systems. Building Technologies :- Electrical Installation Technologies, i.e. Products for Building, e.g. miniature circuit breakers, distribution boards, residual current circuit breakers, etc. Industry Solutions:- Undertakes turnkey projects in the industrial and infrastructure sectors over the entire life cycle including concept, engineering, procurement, supplies, installation, commissioning and after sales services. Mobility:- Provides solutions for rail automation, railway electri?cation, light and heavy rail, locomotives, trains, turnkey projects and integrated services. Fossil Power Generation:- The Fossil Power Generation Division offers highly ef?cient products and solutions for power generation based on fossil fuels. They range from individual gas and steam turbines and generators, to turnkey power plants. The Division also develops instrumentation and control systems for every type of power plant. Oil & Gas:- The Oil & Gas Division offers customers products and solutions that are used for the extraction, conversion and transport of oil and gas. The Division portfolio also includes solutions for power generation and distribution, compressors with electrical and mechanical drives, process and automation technologies, and integrated IT solutions for pipeline and storage applications. Power Transmission:- The Power Transmission Division offers products and solutions in the high-voltage ?eld – such as High Voltage Direct Current (HVDC) transmission systems, substations, switchgear and transformers. Power Distribution:- The specialties of the Power Distribution Division range from solutions for the automation of power grids, to products like medium-voltage switchgear and components. Healthcare:- Provides diagnostic, therapeutic and life-saving products in computer tomography (CT), magnetic resonance imaging (MRI), ultrasonography, nuclear medicine, digital angiography, patient monitoring systems, digital radiography systems, radiology networking systems, lithotripsy and linear accelerators. Real Estate:- Provides comprehensive real estate management. Geographical Segments: The business is organised in two geographic segments i.e. within India and outside India. * Discontinued operations (refer Schedule 4)
88
88
Annual Report 2009
32
Disclosure pursuant to Accounting Standard - 15 'Employee Bene?ts' : (i) De?ned Contribution plans Amount of Rs 98,881 (2008: Rs 81,959 ) is recognised as an expense and included in "Personnel costs" (Refer schedule 21) in the Pro?t and loss account. (ii) De?ned bene?t plans a Amounts for the current period are as follows:
Gratuity 2009 I Change in bene?t obligation Liability at the beginning of the year Interest cost Current service cost Liability transfer in Liability transfer out Bene?t paid Actuarial (gain)/ loss on obligations Liability at the end of the year II Fair value of plan assets Fair value of plan assets at the beginning of the year Expected return on plan assets Contributions Transfer from other company Transfer to other company Bene?t paid Actuarial gain/(loss) on plan assets Fair value of plan assets at the end of the year III Actual return on plan assets Expected return on plan assets Actuarial gain/(loss) on plan assets Actual return on plan assets IV Amount recognised in the balance sheet Liability at the end of the year Fair value of plan assets at the end of the year Amount recognised in the balance sheet V 604,602 647,749 (43,147) 466,489 476,575 (10,086) 174,983 174,983 160,326 160,326 70,754 70,754 45,169 45,169 50,027 (14,616) 35,411 37,187 1,669 38,856 476,575 50,027 171,495 9,528 (1,222) (44,038) (14,616) 647,749 471,412 37,187 8,979 905 (11,412) (32,165) 1,669 476,575 466,489 37,249 22,783 9,528 (1,222) (44,038) 113,813 604,602 442,128 35,959 22,415 1,928 (11,412) (32,165) 7,636 466,489 160,326 12,826 (28,305) 30,136 174,983 166,549 13,324 (25,421) 5,874 160,326 45,169 3,555 2,980 (7,410) 26,460 70,754 42,699 2,989 3,205 (25,421) 21,697 45,169 2008 Pension 2009 2008 Medical 2009 2008
Expenses recognised in the income statement Interest cost 37,249 Current service cost 22,783 Expected return on plan assets (50,027) Actuarial (gain)/ loss 128,429 Expense recognised in personnel costs (Schedule 21) 138,434
35,959 22,415 (37,187) 5,967 27,154
12,826 30,136 42,962
13,324 5,874 19,198
3,555 2,980 26,460 32,995
2,989 3,205 21,697 27,891
89
Siemens Ltd.
89
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
32 Disclosure pursuant to Accounting Standard - 15 ‘Employee Bene?ts’ : (continued)
Gratuity 2009 VI Balance sheet reconciliation Opening net liability Expense as above Transfer from other company Employers contribution Amount recognised in balance sheet Actuarial Assumptions: For the Year Discount Rate Current Rate of Return on Plan Assets Current Medical Cost increase rate Attrition rate (10,086) 138,434 (171,495) (43,147) 2008 (29,284) 27,154 1,023 (8,979) (10,086) Pension 2009 160,326 42,962 (28,305) 174,983 2008 166,549 19,198 (25,421) 160,326 Medical 2009 45,169 32,995 (7,410) 70,754 2008 42,699 27,891 (25,421) 45,169
VI
8.0% 8.0% 5.0%
8.0% 8.0% 2.0%
8.0% -
8.0% -
8.0% 7.0% 1% increase (6,071) 7,939 (76) 444
8.0% 5.0% 1% decrease 7,373 (6,757) 171 (444)
VIII Sensitivity Change Change Change Change IX in in in in Liability - Discount rate Liability - In?ation rate Service Cost - Discount rate Interest Cost - Discount rate -
Amount for the Current and Previous Periods as per AS15 Para 120
are as follows: 2009 604,602 647,749 (43,147) 9,883 (13,897) Gratuity 2008 466,489 476,575 (10,086) 7,862 1,669 2007 442,128 471,412 (29,284) 15,831 7,071Liability at the end of the year Fair value of plan assets at the end of the year Difference Experience Adjustment on Plan Liabilities (gain)/ loss Experience Adjustment on Plan Assets (loss)/ gain
b
The fund formed by the Company manages the investments of the Gratuity Fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark government securities of similar maturities. The Company expects to contribute Rs 29,246 to gratuity fund in 2009-10. The estimates of future salary increases, considered in actuarial valuation, take into account in?ation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The guidance issued by the Accounting Standard Board (ASB) on implementing AS 15, Employee Bene?ts (revised 2005) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as de?ned bene?t plan. The fund does not have any existing de?cit or interest shortfall. In regard to any future obligation arising due to interest shortfall (i.e. government interest to be paid on provident funds scheme exceeds rate of interest earned on investment), pending the issuance of guidance note from the Actuarial Society of India, the Company's actuary has expressed his inability to reliably measure the same. Gratuity Plan Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company’s Scheme whichever is more bene?cial.
c d
(iii)
General Descriptions of signi?cant de?ned plans I
09
90
Annual Report 2009
32
Disclosure pursuant to Accounting Standard - 15 ‘Employee Bene?ts’ : (continued) II Medical Post-Retirement Medical Bene?t is paid to eligible employees in case of survival upto the retirement age and after death, bene?ts are available to the employee's spouse. The Company reimburses the employees for expenses incurred over and above the claim accepted by the insurance company. The Company pays 80% of difference between liability incurred by employee and claim received from insurance company subject to ceiling based on the grade of employees. (iv) Broad category of plan assets as a percentage of total plan assets of the Gratuity Plan Particulars Government of India securities State government securities Public sector unit bonds Special discount scheme Total Plan Assets 2009 13% 22% 32% 33% 100% 2008 17% 10% 28% 45% 100%
33.
Derivative Instruments a Forward Contracts The company uses forward contracts to mitigate its risks associated with foreign currency ?uctuations having underlying transaction and relating to ?rm commitments or highly probable forecast transactions. The Company does not enter into any forward contract which is intended for trading or speculative purposes. The details of forward contracts outstanding at the year end is as follows:Currency Number of contracts Buy amount Indian rupees equivalent 4,627,004 5,788,859 11,558,916 12,054,393 21,144 16,128 26,195 19,563 296,258 179,422 64,463 10,396 33,769 Number of contracts Sell amount Indian rupees equivalent 18,941,503 13,712,408 3,635,600 2,336,299 17,224,543 13,045,708 9,624 -
US Dollar 2009 2008 Euro 2009 2008 Qatari Riyal 2009 2008 Japanese Yen 2009 2008 Pound Sterling 2009 2008 Swiss Franc 2009 2008 CAD 2009 2008 SEK 2009 2008
163 127 143 118 2 2 3 3 13 15 3 1 4 -
96,186 123,259 165,104 178,830 1,600 1,250 49,000 44,243 3,855 2,147 1,517 235 729 -
103 112 53 51 13 16 1 -
393,753 291,971 51,930 34,659 1,303,408 1,011,099 114 -
All currency exposures having underlying transactions as at 30 September 2009 are covered by foreign currency forward contracts. The forward contracts have been converted in Indian rupees, at the spot rates, as at 30 September 2009 to facilitate reading purposes only.
91
Siemens Ltd.
91
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
b Commodity Contracts The Company uses Commodity Future Contracts to hedge against ?uctuations in commodity prices. The following are outstanding copper future contracts entered into by the Company as on 30 September 2009 Year Number of Contracts 749 Nil Contractual Quantity 749 MT Nil Buy/Sell
2009 2008 Note: Each contract of copper is of 1,000 kg. 34. Earnings per share:
Buy NA
2009 Pro?t after tax (net pro?t attributable to equity shareholders) Shares:Weighted average number of equity shares outstanding during the year Earnings per share (basic and diluted) 35 Micro and Small Enterprises Development Act, 2006 ('MSMED') 337,160,200 30.99 10,448,508
2008 5,933,266
337,160,200 17.60
The Company has amounts due to suppliers under MSMED as at 30 September 2009. The disclosure pursuant to the said Act is as under: 2009 Principal amount due to suppliers under MSMED Interest accrued and due to suppliers under MSMED on the above amount, unpaid Payment made to suppliers (other than interest) beyond the appointed day during the year Interest paid to suppliers under the MSMED Interest due and payable towards suppliers under MSMED Act towards payments already made Interest accrued & remaining unpaid at the end of the accounting Year 653,274 2008 331,311
5,670
1,622
2,059,172 -
700,857 -
64,676
15,891
70,346
17,513
The information has been given in respect of such vendors to the extent they could be identi?ed as 'micro and small enterprises' on the basis of information available with the Company.
29
92
Annual Report 2009
36
Prior years comparatives Pursuant to the purchase of SITS (Refer Schedule 2) and discontinuation of the 'SBT' and 'SVDO' segments (Refer Schedule 4), the ?gures of the current year are not strictly comparable to those of the previous year. Previous year's ?gures have been regrouped/ reclassi?ed wherever necessary, to conform to current year's classi?cation. The ?gures of previous year were audited by a ?rm of Chartered Accountants other than S.R.Batliboi & Associates. As per our report of even date. For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors of Siemens Limited Deepak S. Parekh Dr. Armin Bruck Sunil Mathur Yezdi H. Malegam per Sudhir Soni Partner Membership No: 41870 Mumbai 26 November 2009 Ajai Jain Mumbai 26 November 2009 Chairman Managing Director Executive Director Director & Chairman of Audit Committee Vice President (Legal) & Company Secretary
93
Siemens Ltd.
93
Schedules to the ?nancial statements (continued) for the year ended 30 September 2009 (Currency : Indian rupees thousands)
Balance Sheet Abstract and Company's General Business Pro?le I. Registration Details Registration No. Balance Sheet Date 30 Date 10839 09 Month 2009 Year State Code 11
II.
Capital raised during the year (Amount in Rs thousands) Public Issue NIL Bonus Issue 0 Rights Issue NIL Private Placement NIL
III.
Position of mobilisation and deployment of funds (Amount in Rs thousands) Total Liabilities 82,452,628 Sources of Funds Paid-up Capital 674,320 Secured Loans NIL Application of Funds Net Fixed Assets 7,352,031 Net Current Assets 15,931,233 Accumulated Loss NIL Investments 4,769,723 Miscellaneous Expenditure NIL Deferred Tax Asset 1,119,126 Reserves & Surplus 28,491,887 Unsecured Loans 5,906 Total Assets 82,452,628
49
94
Annual Report 2009
Balance Sheet Abstract and Company's General Business Pro?le (Continued) IV. Performance of the Company (Amount in Rs thousands) Turnover (including other income) 87,449,154 +/+ Pro?t/Loss Before Tax 14,318,593 (Please tick appropriate box + for Pro?t, - for Loss) Earning per share in Rs 30.99 Dividend Rate % 250% +/+ Total Expenditure 75,190,020 Pro?t/Loss After Tax 10,448,508
V.
Generic Names of Three Principal Products/Services of the Company (As per monetary terms) Item No. (ITC Code) Product description Item No. (ITC Code) Product description Item No. (ITC Code) Product description 854800 Electrical part of machinery or apparatus 903289 Electronic automatic regulators 902210 X-ray apparatus
The Earning per share disclosed above has been computed in accordance with the Accounting Standard - 20, Earning per share, issued by the Institute of Chartered Accountants of India (“ICAI”). For and on behalf of the Board of Directors Deepak S. Parekh Dr. Armin Bruck Sunil Mathur Yezdi H. Malegam Ajai Jain Mumbai 26 November 2009 Chairman Managing Director Executive Director Director & Chairman of Audit Committee Vice President (Legal) & Company Secretary
95
Siemens Ltd.
95
Statement Regarding Subsidiary Companies Pursuant to Section 212 ( 1 ) and ( 3 ) of The Companies Act, 1956 : (Currency: Indian rupees in thousands) Name of the Subsidiary The net Aggregate of pro?ts (losses) of the subsidiary company for it’s ?nancial year so far as they concern the members of Siemens Ltd. a) Dealt within the account of Siemens Limited for the year ended b) Not dealt within the account of Siemens Limited for the year ended The net Aggregate of pro?ts (losses) of the subsidiary company for it’s ?nancial year so far as they concern the members of Siemens Ltd. a) Dealt within the account of Siemens Limited for the year ended b) Not dealt within the account of Siemens Limited for the year ended
30 September 2009 Siemens Information Systems Ltd. [6,815,000 (2008: 6,815,000) Equity shares of Rs 10 each, fully paid-up i.e.100% holding (up to 24 June 2009) (2008: 100% holding)] Flender Ltd. [4,320,000 (2008: Nil) Equity shares of Rs 10 each, fully paid-up i.e.100% holding (incorporated on 1 August 2009) (2008: 50% holding)] Siemens Information Processing Services Private Ltd. [ 2,123,800 (2008: 2,123,800) Equity shares of Rs 10 each, fully paid-up i.e. 51% holding (up to 24 June 2009) (2008: 51% holding)] Siemens Industrial Turbomachinery Services Private Ltd. [Nil (2008:Nil) Equity shares of Rs 100 each, fully paid-up i.e. Nil (2008: 100% holding)](up to 31 March 2008) Siemens Rolling Stock Private Ltd. [25,000,000 (2008:25,000,000) Equity shares of Rs 10 each, fully paid-up, i.e.100% holding (2008: 100%)] Siemens Building Technologies Private Ltd. [3,216,870 (2008: 2,962,027) Equity shares of Rs 10 each, fully paid-up i.e. 86.15% holding (2008: 79.32% holding)] (Additional 6.83% acquired on 7 January 2009) 187,406
30 September 2008 338,997
-
44,979
-
-
-
107,193
-
117,250
-
-
-
21,049
-
(135,042)
-
(11,276)
-
(146,808)
-
90,754
69
96
Annual Report 2009
Siemens Group Consolidated Financial Statements for the year ended 30 September 2009 together with Auditors’ Report
97
Siemens Group
97
Disclosure pursuant to Central Government approval no. 47/681/2009-CL-III dated 30 October, 2009 under Section 212 (8) of the Companies Act, 1956 (Currency: Indian rupees in thousands)
Siemens Information Systems Ltd. Siemens Nixdorf Information Systems Private Ltd. Flender Ltd. Siemens Industrial Turbomachinery Services Private Ltd. Siemens Information Processing Services Private Ltd. Upto 24 June 2009 2009 2008 41,643 350,441 125 392,209 392,209 2009 250,000 600,000 850,000 850,000 Siemens Rolling Stock Private Ltd.
Upto 24 June 2009 Particulars Capital Reserves Loans Total Assets Total liabilities Details of investments: 2040514 equity shares of Rs 10 each fully paid-up in Siemens Information Processing services Private ltd. Investments funds Turnover Pro?t / (Loss) before Tax Provision For Tax Deferred Tax MAT credit entitlement Fringe Bene?t Tax Pro?t / (Loss) After Tax Interim dividend Dividend Distribution Tax in mutual 629,014 (20) (20) 2009 2008 68,150 2009 2008
From 1 August 2009 2009 43,200 850,418 900,893 900,893 2008 2009 -
Upto 31 March 2008 2008 -
From 4 July 2008 2008 250,000 250,000 250,000
- 161,210 - 328,536 -
- 3,499,690 -
- 3,567,840 - 3,567,840
- 489,746 - 489,746
29,996
29,996
-
-
-
-
-
-
-
-
-
-
389,332 67,336 23,928 (1,570) 44,979 -
-
-
268,843 34,073 15,401 (2,811) 434 21,049 -
-
-
29,351
-
5,733,631 9,942,678 245,718 42,577 (1,900) 17,634 187,406 732,674 409,656 (55,073) 39,094 338,997 -
764,896 1,071,703 109,433 (2,851) 5,091 107,193 -
132,498 (134,524) (11,154) 22,761 (105) (11,242) 3,834 518 122
117,250 (135,042) (11,276) -
89
98
Annual Report 2009
Disclosure pursuant to Central Government approval no. 47/681/2009-CL-III dated 30 October, 2009 under Section 212 (8) of the Companies Act, 1956 (Currency: Indian rupees in thousands)
Siemens Building Technologies Private Ltd. Particulars Capital Reserves Loans Total Assets Total liabilities Details of investments Investments in mutual funds Turnover Pro?t / (Loss) before Tax Provision For Tax Deferred Tax Fringe Bene?t Tax Pro?t / (Loss) After Tax Interim dividend Dividend Distribution Tax 2009 37,341 571,881 852,873 1,462,095 1,462,095 331,780 1,772,635 (142,256) 26,758 (41,295) 2,929 (146,808) 2008 37,341 642,623 906,718 1,586,683 1,586,683 437,081 2,085,520 124,751 43,250 (19,435) 7,605 93,331 Vista Security Technics Private Ltd. 2009 669 81,586 82,256 82,256 251,001 1,875 4,074 (3,574) 188 1,187 2008 669 80,399 81,069 81,069 320,480 19,584 7,617 (867) 271 12,564 iMetrex Technologies Pte.Ltd (Singapore) 2009 339 260,264 260,603 260,603 554,486 138,284 17,452 120,831 2008 325 138,574 138,899 138,899 742,736 149,934 (25,339) 124,594 Avenues Hongkong Ltd. (Hong kong) 2009 (4,897) (4,897) 228,463 2008 299 226,129 226,428 226,428 258,919 (75,596) (75,596) 106,000 -
99
Siemens Group
99
Disclosure pursuant to Central Government approval no. 47/681/2009-CL-III dated 30 October, 2009 under Section 212 (8) of the Companies Act, 1956 (Currency: Indian rupees in thousands)
iMetrex Technologies Ltd. (Ireland) Europlex Technologies U.K Ltd. (UK) Europlex Technologies (Ireland) Ltd. formerly known as Europlex Manufacturing Ltd. (Ireland) 2009 52,634 (416,386) (418,691) (418,691) 174,653 (44,178) 8,067 (52,245) 2008 49,944 (342,936) (292,992) (292,992) 152,816 (71,546) (12,121) (83,667) Europlex Research Ltd. (Ireland) Clonshaugh Security Ltd. formerly known as Europlex Technologies Ltd. (Ireland)
Particulars Capital Reserves Loans Total Assets Total liabilities Details of investments Investments in mutual funds Turnover Pro?t / (Loss) before Tax Provision For Tax Deferred Tax Fringe Bene?t Tax Pro?t / (Loss) After Tax Interim dividend Dividend Distribution Tax
2009 113,917 354,169 415,468 415,468 (1,230) (1,230) -
2008 108,142 337,448 445,590 445,590 87,826 87,826 -
2009 224,566 (238,417) (48,265) (48,265) 69,428 (23,991) (23,991) -
2008 8 (233,725) (233,717) (233,717) 95,873 (19,669) (358) (20,026) -
2009 -
2008 114 (114) (5,294) (5,294) -
2009 -
2008 8 (8) 87,805 25,252 25,252 -
The Currency & exchange rate used by the following companies Company Currency Exchange Rate closing rate for balance sheet items 33.89 6.17 70.00 76.98 70.00 70.00 70.00 Exchange Rate average rate for revenue items 33.30 6.33 66.35 75.60 66.35 66.35 66.35
iMetrex Technologies Pte Ltd-Singapore Avenues Hongkong Ltd iMetrex Technologies Pvt Ltd-Ireland Europlex Technologies U.K Ltd Europlex manufacturing Ltd. Europlex Research ltd. Europlex Technologies Ltd
SGD HK$ Euro GBP Euro Euro Euro
001
100
Annual Report 2009
Auditors’ Report To the Board of Directors of Siemens Limited
We have audited the attached consolidated balance sheet of Siemens Limited, its subsidiaries and associate (collectively referred to as the ‘Siemens group’), as at September 30, 2009, and also the consolidated pro?t and loss account and the consolidated cash ?ow statement for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Siemens Limited’s management. Our responsibility is to express an opinion on these ?nancial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the ?nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by management, as well as evaluating the overall ?nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report that the consolidated ?nancial statements have been prepared by the Siemens Limited’s management in accordance with the requirements of Accounting Standards (AS) 21, Consolidated Financial Statements, Accounting Standards (AS) 23, Accounting for Investments in Associates in Consolidated Financial Statements noti?ed pursuant to the Companies (Accounting Standards) Rules, 2006, (as amended).
In our opinion and to the best of our information and according to the explanations given to us, the consolidated ?nancial statements give a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the consolidated balance sheet, of the state of affairs of the Siemens Group as at September 30, 2009; in the case of the consolidated pro?t and loss account, of the pro?t for the year ended on that date; and in the case of the consolidated cash ?ow statement, of the cash ?ows for the year ended on that date.
(b)
(c)
For S.R. BATLIBOI & ASSOCIATES Chartered Accountants
per Sudhir Soni Partner Membership No.:41870 Place: Mumbai Date: November 26, 2009
101
Siemens Group
101
Consolidated Balance Sheet as at 30 September 2009 (Currency: Indian rupees thousands)
Schedule SOURCES OF FUNDS Shareholders’ funds Share capital Reserves and surplus Minority interest Equity Non-equity Loan funds Secured loans Unsecured loans 2009 2008
3 4
674,320 27,138,616 27,812,936
674,320 22,099,755 22,774,075 7,721 139,665 147,386 101,751 10,614 112,365 23,033,826
5 6
5,173 51,144 56,317 515 5,906 6,421 27,875,674
7 8
APPLICATION OF FUNDS Fixed assets Gross block Accumulated depreciation Net block Capital work-in-progress including capital advances Investments Deferred tax asset, net Current assets, loans and advances Inventories Sundry debtors Cash and bank balances Loans and advances Current liabilities and provisions Current liabilities Provisions Net current assets
9 16,761,573 (7,493,264) 9,268,309 1,616,343 10,884,652 113 1,196,377 10,554,838 36,134,193 14,745,833 9,198,885 70,633,749 (42,048,548) (12,790,669) (54,839,217) 15,794,532 27,875,674 15,551,439 (7,603,701) 7,947,738 1,068,470 9,016,208 2,450,339 1,461,899 8,257,439 37,563,888 13,221,817 6,450,042 65,493,186 (47,854,139) (7,533,667) (55,387,806) 10,105,380 23,033,826
10 11 12 13 14 15
16 17
Signi?cant accounting policies 1 Schedules to the consolidated ?nancial statements 2 - 33 The schedules referred to above form an integral part of the consolidated balance sheet. As per our report of even date.
For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors Deepak S. Parekh Chairman Dr. Armin Bruck Managing Director Sunil Mathur Executive Director Yezdi H. Malegam Director & Chairman of Audit Committee Ajai Jain Vice President (Legal) & Company Secretary Mumbai 26 November 2009
per Sudhir Soni Partner Membership No.: 41870 Mumbai 26 November 2009
201
102
Annual Report 2009
Consolidated Pro?t and Loss Account for the year ended 30 September 2009 (Currency: Indian rupees thousands)
INCOME Sales and services (gross) Excise duty Sales and services (net) Commission income Interest income Other operating income, net Other income EXPENDITURE Cost of sales and services Personnel costs Depreciation/ amortisatio Interest Expense Other costs, net Pro?t before tax before exceptional income Exceptional income: – Pro?t on sale of subsidiaries – Pro?t on sale of Automotive division Pro?t before tax Consists of: – Discontinued operations – Continuing operations Provision for tax Current tax (includes 2009: Rs 42,577; 2008: Rs 432,416 of discontinued operations) Deferred tax credit ((includes 2009: Rs 4,751; 2008: Rs 55,178 of discontinued operations) Fringe bene?t tax (includes 2009 : Rs 22,726 2008; : Rs 42,928 of discontinued operations) Minimum Alternate Tax credit entitlement (of discontinued operations) Pro?t after tax Share of pro?t of associate Minority interest Net pro?t after tax Consists of: – Discontinued operations – Continuing operations Net pro?t after tax Balance in pro?t & loss account brought forward Amount available for appropriation Appropriations: Proposed dividend Tax on Proposed dividend Transfer to general reserve Balance carried forward Earnings per share (‘EPS’) (Equity share of face value Rs 2 each) – Basic and diluted Signi?cant accounting policies Schedules to the consolidated ?nancial statements The schedules referred to above form an integral part of the consolidated pro?t & loss account. As per our report of even date. For S.R.Batliboi & Associates Chartered Accountants Schedule 2009 94,581,979 (2,245,714) 92,336,265 528,263 92,864,528 558,449 626,641 114,910 94,164,528 65,679,226 9,443,848 1,732,689 73,944 7,852,671 84,782,378 9,382,150 1,501,019 10,883,169 447,941 10,435,228 10,883,169 (4,121,560) 255,805 (94,098) 6,923,316 81,670 41,052 7,046,038 2 387,389 6,658,649 7,046,038 1,929,045 8,975,083 1,685,801 286,502 8,476,205 (1,473,425) 8,975,083 32 20.90 1 2 - 33 17.78 2008 99,486,310 (3,149,908) 96,336,402 461,809 96,798,211 647,730 497,781 99,052 98,042,774 69,643,284 9,203,423 1,616,860 65,548 9,326,357 89,855,472 8,187,302 1,235,151 9,422,453 1,237,026 8,185,427 9,422,453 (4,029,668) 707,328 (171,654) 11,242 5,939,701 74,556 (18,768) 5,995,489 825,304 5,170,185 5,995,489 2,092,152 8,087,641 1,011,481 569,871 4,577,244 1,929,045 8,087,641
18 19 20 21 22 9 23
2 2 2
per Sudhir Soni Partner Membership No.: 41870 Mumbai 26 November 2009
For and on behalf of the Board of Directors Deepak S. Parekh Chairman Dr. Armin Bruck Managing Director Sunil Mathur Executive Director Yezdi H. Malegam Director & Chairman of Audit Committee Ajai Jain Vice President (Legal) & Company Secretary Mumbai 26 November 2009
103
Siemens Group
103
Consolidated cash ?ow statement for the year ended 30 September 2009 (Currency: Indian rupees thousands)
Cash ?ow from operating activities Pro?t before tax Adjustments for: Interest expense Depreciation and amortisation Pro?t on sale of ?xed assets, net Pro?t on sale of long term investment (equity shares in Siemens Information Systems Ltd.) Loss on sale of long term investment (equity shares in Siemens Information Processing Systems Ltd.) Pro?t on sale of Automotive division Sale of lease rights Pro?t on sale of Electronics Assembly Division Bad debts Provision for doubtful debts/ advances, net Unrealised exchange gain, net Interest income Dividend income Operating pro?t before working capital changes Increase in inventories Increase in sundry debtors and other receivables Increase in sundry creditors and other current liabilities Increase in provisions Net change in working capital Cash generated from operations Direct taxes paid, net Net cash provided by operating activities of which discontinued operations – Information Technology Services – Business Process Outsourcing – Automotive Cash ?ow from investing activities Purchase of ?xed assets Proceeds from sale of ?xed assets Purchase of investments – In subsidiary companies (total consideration is in cash or cash equivalent) – In mutual funds Sale of investments – In mutual funds – In subsidiary company (total consideration is in cash or cash equivalent) Dividend income received from mutual funds Interest received Sale of lease rights (total consideration is in cash or cash equivalent) Sale of EA business (total consideration is in cash or cash equivalent) Sale of Automotive division (total consideration is in cash or cash equivalent) Inter corporate deposits placed Inter corporate deposits received back Cash generated from investing activities of – – – which discontinued operations Information Technology Services Business Process Outsourcing Automotive
401
Schedule
2009 10,883,169 73,944 1,732,689 (240,740) (1,513,879) 12,860 (78,000) (30,307) 311,921 112,425 (1,027,379) (558,449) (6,603) 9,671,651 (2,095,654) (1,187,497) (1,176,736) 5,048,707 588,820 10,260,471 (5,928,487) 4,331,984
2008 9,422,453 65,548 1,616,860 (260,461) (1,235,151) 57,964 408,001 (454,670) (647,730) (99,052) 8,873,762 (337,194) (11,771,198) 11,403,528 1,842,823 1,137,959 10,011,721 (4,714,746) 5,296,975 158,308 282,049 (104,951) (2,368,730) 417,758 (1,499,053) 958,699 99,052 652,547 1,700,000 (450,000) 325,000 (164,727) (348,161) (21,120) (42,358) Annual Report 2009
9 19
23 23 18 20
2 2 2 9
665,706 (227,977) (2,825,701) 306,024 (1,700,999) 1,834,754 3,021,459
20
6,603 556,076 78,000 28,150 (5,845,000) 4,700,000 159,366
2 2
693,798 (3,722) -
104
Schedule Cash ?ow from ?nancing activities Interest paid Repayment of short term borrowings Dividend paid (including tax thereon) Repayment of long term borrowings Net cash used in ?nancing activities of which discontinued operations – Information Technology Services – Business Process Outsourcing – Automotive Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents acquired on acquisition of subsidiary (Flender Ltd.) Cash and cash equivalents on sale of subsidiary (Siemens Information Systems Ltd.) Cash and cash equivalents on sale of subsidiary (Siemens Information Processing Systems Ltd.) Cash and cash equivalents (Automotive division) Effect of exchange gain/(loss) on cash and cash equivalents Cash and cash equivalents at the end of the year 2 2
2009 (17,423) (101,175) (1,578,496) (4,708) (1,701,802) (359,045) (64) 2,789,548 13,221,817 125,991 (2,068,293) (220,459) 897,229
2008 (45,548) (200,006) (945,555) (4,709) (1,195,818) (48) 3,936,430 8,569,723 76,492 639,172 13,221,817
14
14,745,833
Note: Cash and cash equivalents at the end of the period include current account balances with banks of Rs 13,863 (2008: Rs 11,007) which are restricted in use. As per our report of even date.
For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors Deepak S. Parekh Chairman Dr. Armin Bruck Managing Director Sunil Mathur Executive Director Yezdi H. Malegam Director & Chairman of Audit Committee Ajai Jain Vice President (Legal) & Company Secretary Mumbai 26 November 2009
per Sudhir Soni Partner Membership No.: 41870 Mumbai 26 November 2009
105
Siemens Group
105
Schedules to the Consolidated Financial Statements for the year ended 30 September 2009 (Currency: Indian rupees thousands)
1 1.1 Signi?cant accounting policies Basis of preparation of ?nancial statements The ?nancial statements are prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the accounting standards speci?ed in the Companies (Accounting Standards) Rules 2006, (as amended) issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards (‘NACAS’) and relevant provisions of Companies Act, 1956 (‘the Act’) to the extent applicable. The accounting policies have been consistently applied by the Group and are consistent with those used in the previous year. 1.2 Principles of consolidation The consolidated ?nancial statements include the ?nancial statements of Siemens Limited (‘the Company’) or (‘the parent company’), its subsidiaries and associate. The Company, its subsidiaries and associate constitute the Siemens Group. The list of subsidiaries, step-down subsidiaries and associate are set out below: Entity Subsidiaries Siemens Information Systems Ltd. (‘SISL’) (100% upto 24 June 2009) (Refer note a) Siemens Information Processing Systems Private Ltd. (‘SIPS’) (100% upto 24 June 2009) (the balance 49% is held by SISL) (Refer note a) Siemens Building Technologies Private Ltd. (‘SBTPL’) Siemens Rolling Stock Private Ltd. (incorporated on 4 July 2008) Flender Ltd. (subsidiary from 1 August 2009) (Refer note b) Step-down subsidiaries Siemens Nixdorf Information Systems Private Ltd. (‘SNISL’) (100% share capital held by SISL) (100% upto 1 June 2009) (Refer note a) Vista Security Technics Private Ltd. (‘VSTPL’) (100% share capital held by SBTPL) iMetrex Technologies Pte Ltd. (‘iTPL’) (100% share capital held by SBTPL) Avenues (Hong Kong) Ltd. (‘AHKL’) (100% share capital held by SBTPL) iMetrex Technologies Ltd. (‘iTL’) (100% share capital held by SBTPL) Europlex Technologies Ltd. (100% share capital held by iTL) Europlex Manufacturing Ltd. (100% share capital held by iTL) Europlex Research Ltd. (100% share capital held by iTL) Europlex Technologies UK Ltd. (100% share capital held by iTL) Associate Flender Ltd. (50% Upto 31 July 2009) (Refer Note b) Note: a. Country of incorporation % holding 2009 % holding 2008
India India India India India
86.15% 100% 100%
100% 51% 79.32% 100% 50%
India India Singapore Hong Kong Ireland Ireland Ireland Ireland UK India
100% 100% 100% 100% 100% 100% 100% 100% -
100% 100% 100% 100% 99.76% 100% 100% 100% 100% 50%
During the year, the Group’s entire stake in Siemens Information Systems Ltd. Siemens Information Processing Services Private Ltd. and Siemens Nixdorf Information Systems Private Ltd. has been sold to Siemens Corporate Finance Private Ltd. During the year, the Group increased its investment in Flender Ltd. with effect from 1 August 2009 (formerly an associate, now a subsidiary company) from 50% to 100% by purchasing an additional 50% stake for a consideration of Rs. 909,935. Annual Report 2009
b.
601
106
Subsidiaries The excess/ de?cit of cost to the parent company of its investment in the subsidiaries over its portion of equity in the subsidiaries at the respective dates on which investment in such subsidiaries was made is recognised in the ?nancial statements as goodwill/capital reserve. The parent company’s portion of equity in such subsidiaries is determined on the basis of book values of assets and liabilities as per the ?nancial statements of the subsidiaries as on the date of investment and if not available, the ?nancial statements for the immediately preceding period adjusted for the effects of signi?cant transactions. Goodwill is amortised over a period of 5 years from date of acquisition/investment. The ?nancial statements of the parent company and its subsidiaries have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances/transactions and resulting unrealized pro?ts in full. Unrealized losses resulting from intra-group transactions are also eliminated except to the extent that recoverable value of related assets is lower than their cost to the group. The amounts shown in respect of reserves comprise the amount of the relevant reserves as per the balance sheet of the parent company and its share in the post-acquisition increase in the relevant reserves of the subsidiaries. Subsidiaries are consolidated from the date on which effective control is transferred to the Group and are no longer consolidated from the date of disposal. Minority interest’s share of net pro?t is adjusted against the income to arrive at the net income attributable to shareholders. Minority interest’s share of net assets is presented separately in the balance sheet. Consolidated ?nancial statements are prepared using uniform accounting policies for transactions and other events in similar circumstances. Investment in Associates Investments in entities in which the parent company has signi?cant in?uence but not a controlling interest, are reported according to the equity method i.e. the investment is initially recorded at cost, identifying any goodwill / capital reserve arising at the time of acquisition. Goodwill is amortised over a period of 5 years from date of acquisition/investment. The carrying amount of the investment is adjusted thereafter for the post acquisition change in the investor’s share of net assets of the investee. The consolidated pro?t and loss account includes the investor’s share of the results of the operations of the investee. Effect of Acquisition/Disposals The effect of acquisition/disposal of stake in subsidiaries during the year on the consolidated ?nancial statements is as under: Name of Company Effect on Group Pro?t before Tax for the year Rs 35,148 Net Assets as at
Acquisitions: Flender Ltd. Disposals: Siemens Information Systems Ltd. (Previous Year Rs 1,061,824 and Rs 3,564,560) Siemens Information Processing Services Pvt. Ltd. (Previous Year Rs 166,990 and Rs 415,511) 1.3 Use of estimates Rs 326,327 Rs 121,634
1 August 2009 Rs 848,639 24 June 2009 Rs 1,251,253 Rs 240,436
The preparation of ?nancial statements in conformity with generally accepted accounting principles (‘GAAP’) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the ?nancial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.
107
Siemens Group
107
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
1.4 Fixed assets and depreciation Fixed assets are stated at acquisition or revalued amounts less accumulated depreciation. The cost of ?xed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Depreciation is provided on the straight-line method (‘SLM’). The depreciation rates prescribed in Schedule XIV to the Act are considered as the minimum rates. If the management’s estimate of the useful life of a ?xed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is shorter than that envisaged in the aforesaid Schedule, depreciation is provided at a higher rate based on the management’s estimate of useful life/ remaining life. The key ?xed asset blocks and related annual depreciation rates, which in management’s opinion re?ect the estimated useful economic lives of the ?xed assets, are: Asset Land - Freehold land - Lease hold Buildings - Factory buildings - Other buildings Plant and machinery - Assets at project sites - Special machine tools - Other plant and machinery Furniture, ?ttings and of?ce equipment Vehicles Rate Over the lease period 3.34% 2% - 5% Over the life of the project 10% 10% - 25% 20% - 33 1/3% 25%
Where depreciable assets are revalued, depreciation is provided on the revalued amount and the additional depreciation on accretion to assets on revaluation is transferred from revaluation reserve to pro?t and loss account. Assets costing less than Rs 5,000 are fully charged to the pro?t and loss account in the year of acquisition. Items of ?xed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and estimated net realizable value and are disclosed separately in the ?nancial statements. Any expected loss is recognised in the pro?t and loss account through an accelerated depreciation charge. Capital work-in-progress includes the cost of ?xed assets that are not ready to use at the balance sheet date and advances paid to acquire capital assets before the balance sheet date. 1.5 Intangible assets Intangible assets comprise goodwill and technical know-how. These intangible assets are amortised on straight-line basis based on the following useful lives, which in management’s estimate represents the period during which economic bene?ts will be derived from their use: Asset Goodwill Technical know-how Useful life 60 months 60 - 84 months
Non-compete fee is amortised over the period of the agreement of 3 years. 1.6 Impairment of assets The Group assesses at each balance sheet date whether there is any indication that an asset or a group of assets (cash generating unit) may be impaired. If any such indication exists, the Group estimates the recoverable amount of the asset or cash generating unit. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash ?ows are discounted to the present value at the weighted average cost of capital. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the pro?t and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is re?ected at the recoverable amount subject to a maximum of depreciable historical cost had no impairment been recognised.
801
108
Annual Report 2009
1.7
Investments Investments that are readily realizable and intended to be held but not more than a year are classi?ed as current investments. All other investments are classi?ed as long term investments. Long-term investments are carried at cost. Provision for diminution is made to recognize a decline, other than temporary in value of long-term investments and is determined separately for each individual investment. Current investments are carried at lower of cost and fair value, computed separately in respect of each category of investment.
1.8
Inventories Inventories comprise all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. Raw materials are valued at the lower of cost and net realisable value. Cost is determined on the basis of the weighted average method. Work-in-progress and ?nished goods are valued at the lower of cost and net realisable value. Excise duty is included in the value of ?nished goods inventory. Custom duty on goods where title has passed to the Group is included in the value of inventory. The net realizable value of work-in-progress is determined with reference to the selling price of related ?nished goods. Raw materials held for production of ?nished goods are not written down below cost except in case where material price have declined and it is estimated that the cost of ?nished product will exceed their net realisable value.
1.9
Revenue recognition Revenue from sale of products is recognised on transfer of all signi?cant risk and rewards of ownership of the products to the customers, which is generally on despatch of goods. Sales are stated exclusive of sales tax and net of trade and quantity discount. Revenue from services is recognised as per the terms of the contract with the customer using the proportionate completion method. Income from ?xed price construction contracts is recognised by reference to the estimated overall pro?tability of the contract under the percentage of completion method. Percentage of completion is determined as a proportion of the costs incurred upto the reporting date to the total estimated contract costs. Revenue from ?xed price software contracts is recognised using the percentage of completion method of accounting, under which the sales value of performance, including earnings thereon is determined by relating the actual man hours of work performed to date to the estimated total man hours for each contract. Provision for expected loss is recognized immediately when it is probable that the total estimated contract costs will exceed total contract revenue. Revenues under cost plus contracts are recognised as services are rendered on the basis of an agreed mark-up on costs incurred in accordance with arrangement entered. Revenue recognition is postponed in circumstances when signi?cant uncertainty with respect to collectibility exists. Maintenance revenue is considered on acceptance of the contract and is accrued over the period of the contract. Revenue from training is recognised as the related service is performed. Commission income is recognised when proof of shipment is received from the supplier. Commission from sale of software license is recognised when the right to use the license is conferred. Dividend income is recognised when the right to receive the dividend is established. Interest income is recognised on the time proportion basis. Export incentives receivable are accrued for when the right to receive the credit is established and there is no signi?cant uncertainty regarding the ultimate collection of export proceeds.
109
Siemens Group
109
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
1.10 Leases Where the Group is the lessee: Leases where the lessor effectively retains substantially all the risk and bene?ts of ownership of the leased items are classi?ed as operating leases. Lease payments under an operating lease, are recognised as an expense in the statement of pro?t and loss on a straight-line basis over the lease term. Leases under which the Group assumes subsequently all the risks and rewards of ownership are classi?ed as ?nance leases. Such assets are capitalised at fair value of the asset or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments are apportioned between the ?nance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Where the Group is the lessor: Assets subject to operating leases are included in ?xed assets. Lease income is recognised in the Pro?t and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in the Pro?t and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Pro?t and Loss Account. 1.11 Employee bene?ts (a) Short term employee bene?ts All employee bene?ts payable wholly within twelve months of rendering the service are classi?ed as shortterm employee bene?ts. Bene?ts such as salaries, wages, and short term compensated absences, etc. and the expected cost of ex-gratia is recognised in the period in which the employee renders the related service. (b) Post-employment bene?ts (i) De?ned Contribution Plans: The Group’s approved superannuation scheme, employee state insurance scheme and labour welfare fund are de?ned contribution plans. The Group’s contribution paid/payable under the schemes is recognised as expense in the pro?t and loss account during the period in which the employee renders the related service. De?ned Bene?t Plans: The Group’s provident fund, gratuity, pension and medical bene?ts schemes are de?ned bene?t plans. In case of one of the subsidiary ‘Flender Ltd.’ superannuation is a de?ned bene?t scheme. The present value of the obligation under such de?ned bene?t plans is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee bene?t entitlement and measures each unit separately to build up the ?nal obligation. The obligation is measured at the present value of the estimated future cash ?ows. The discount rates used for determining the present value of the obligation under de?ned bene?t plans, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognised immediately in the pro?t and loss account. 1.12 Foreign currency transactions The Group is exposed to currency ?uctuations on foreign currency transactions. Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the pro?t and loss account of the year. Translation Monetary assets and liabilities in foreign currency, which are outstanding as at the year-end, are translated at the yearend at the closing exchange rate and the resultant exchange differences are recognized in the pro?t and loss account. Non monetary items are stated in the balance sheet using the exchange rate at the date of the transaction.
011
(ii)
110
Annual Report 2009
In respect of Non-integral foreign operations, the assets and liabilities, both monetary and non-monetary are translated at the closing rates and income and expenses are translated at average exchange rates and all the resulting exchange differences are accumulated in foreign currency translation reserve. Derivative instruments The Group’s exposure to foreign currency ?uctuations relates to foreign currency assets, liabilities and forecasted cash ?ows. The Group limits the effects of foreign exchange rate ?uctuations by following established risk management policies including the use of derivatives. The Group enters into forward exchange contracts, where the counterparty is a bank. As per Accounting Standard (‘AS’) 11 – ‘The Effects of Changes in Foreign Exchange Rates’, the premium or the discount on forward exchange contracts not relating to ?rm commitments or highly probable forecast transactions and not intended for trading or speculation purpose is amortized as expense or income over the life of the contract. All other derivatives, which are not covered by AS 11, are measured using the mark-to-market principle with the resulting gains/ losses thereon being recorded in the pro?t and loss account. 1.13 Taxation Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the incometax law), deferred tax charge or credit (re?ecting the tax effect of timing differences between accounting income and taxable income for the year) and fringe bene?t tax computed in accordance with the relevant provisions of the Income Tax Act, 1961. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of the assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to re?ect the amount that is reasonable/ virtually certain (as the case may be) to be realised. Provision for fringe bene?t tax (FBT) has been recognized on the basis of harmonious contextual interpretation of the provisions of Income Tax Act, 1961. 1.14 Earnings per share Basic and diluted earnings per share is computed by dividing the net pro?t attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year. 1.15 Provisions Provisions comprise liabilities of uncertain timing or amount. Provisions are recognized when the Company recognizes it has a present obligation as a result of past events, it is probable that an out?ow of resources embodying economic bene?ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Disclosures for contingent liability are made when there is a possible or present obligation for which it is not probable that there will be an out?ow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of out?ow of resources is remote, no disclosure is made. Loss contingencies arising from claims, litigation, assessment, ?nes, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Contingent assets are neither recognized nor disclosed in the ?nancial statements. 1.16 Cash and Cash equivalents Cash and cash equivalents include cash, cheques in hand, cash at bank and short-term deposits with banks having maturity of three months or less.
111
Siemens Group
111
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
2 Discontinued operations a. Information Technology Services segment The Board of Directors of the Group at its meeting held on 09 January 2009 approved the sale of the Group’s holding in Siemens Information Systems Ltd. (SISL) (pertaining to “Information Technology Services” (‘ITS’) segment of the Group) to Siemens Corporate Finance Private Ltd. (SCFPL). The shareholders, pursuant to the provisions of section 293(1)(a) and section 192A of the Act approved the sale and transfer of the investments in the ITS segment for a total consideration of Rs 2,793,882 after an adjustment of Rs 1,697,118 towards change in Net Assets from the valuation date upto the date of closing which was agreed to be 31 March 2009. The Group recognised a pre-tax pro?t of Rs 1,513,879 on account of sale of the ITS segment. The income tax expense on sale is Rs 368,475. The investments were transferred to SCFPL as at 24 June 2009 and revenue and expenses for the period ended up to 24 June 2009 recorded in the pro?t and loss account contains the following amounts relating to discontinued operations of ‘SISL’: For the period ended 24 June 2009 Revenue (including interest, commission, dividend and other income) Expenditure Pro?t before tax Pro?t after tax Total assets Total liabilities b. 5,774,912 (5,448,585) 326,327 268,015 For the year ended 30 September 2008 9,976,833 (8,915,009) 1,061,824 668,147
As at 24 June 2009 As at 30 September 2008 6,126,914 8,093,863 (4,875,661) (4,529,303)
Business Process Outsourcing segment The Board of Directors of the Group at its meeting held on 25 November 2008 approved the sale of the Group’s holding in Siemens Information Processing Services Pvt. Ltd. (SIPS) (pertaining to “Business Process Outsourcing” (‘BPO’) segment of the Group) to Siemens Corporate Finance Pvt. Ltd. (SCFPL). The shareholders, pursuant to the provisions of section 293(1)(a) and section 192A of the Act approved the sale and transfer of the investments in the BPO segment for a total consideration of Rs 227,577 after an adjustment of Rs 414,423 towards change in Net Assets from the valuation date upto the date of closing which was agreed to be 31 March 2009. The Group recognised a pre-tax loss of Rs 12,860 on account of sale of the ITS segment. The income tax expense on sale is Rs 21,523. The investments were transferred to SCFPL as at 24 June 2009 and revenue and expenses for the period ended up to 24 June 2009 recorded in the pro?t and loss account contains the following amounts relating to discontinued operations of ‘SIPS’: For the period ended 24 June 2009 739,339 (617,705) 121,634 119,394 For the year ended 30 September 2008 1,098,167 (931,177) 166,990 151,743
Revenue (including interest and other income) Expenditure Pro?t before tax Pro?t after tax Total assets Total liabilities c. Automotive
As at 24 June 2009 As at 30 September 2008 525,308 708,043 (284,872) (292,532)
The Board of Directors of the Group at its meeting held on 23 April 2007 approved a detailed formal plan for the discontinuance of its business activities pertaining to “Automotive” (‘SVDO’) segment of the Group. After obtaining necessary approvals the SVDO segment was sold with effect from 1 December 2007 and SBT was sold with effect from 1 October 2007. Consequently, the ?gures for the current year are not strictly comparable to those of the prior year.
211
112
Annual Report 2009
2009 3 Share capital Authorised 1,000,000,000 Equity Shares of Rs 2 each (2008: 1,000,000,000 Equity Shares of Rs 2 each) Issued 338,024,465 Equity Shares of Rs. 2 each (2008: 338,024,465 Equity Shares of Rs 2 each) Subscribed and paid-up 337,160,200 Equity Shares of Rs 2 each fully paid-up (2008: 337,160,200 Equity Shares of Rs 2 each fully paid-up) 674,320 674,320 Of the above:
2008
2,000,000 2,000,000
2,000,000 2,000,000
676,049
676,049
674,320 674,320
186,041,090 (2008: 186,041,090) Equity Shares of Rs 2 each, fully paid-up, are held by the Holding company, Siemens AG, Germany; 55,500,000 (2008: 55,500,000) Equity Shares of Rs 2 each, fully paid-up, were allotted as fully paid-up bonus shares by capitalisation of the General Reserve; 168,580,100 (2008 : 168,580,100) Equity Shares of Rs 2 each, fully paid up, were allotted as fully paid-up bonus shares by capitalisation of Securities Premium account; 3,638,085 (2008: 3,638,085) Equity Shares of Rs 2 each, were allotted as fully paid-up for consideration received other than in cash. 2009 4 Reserves and surplus Capital reserve – Balance brought forward – Addition on acquisition of Flender Ltd. Capital redemption reserve Amalgamation reserve Securities premium account – Balance brought forward – Issue of bonus shares Capital reserve on consolidation – Adjustment on amalgamation of erstwhile SITS Foreign currency translation reserve* – Balance brought forward – Created during the year – Share allocated to Minority (4,398) (51,998) 7,811 (48,585) Siemens Group (40,759) 36,361 (4,398)
113
2008
688 10,164 10,852 55,635 1,520,495 1,520,495 -
688 688 9 55,635 1,857,655 (337,160) 1,520,495 16,862 (16,862) -
113
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
4 Reserves and surplus (Continued) Revaluation reserve – Balance brought forward – Additional depreciation on building due to revaluation transferred from pro?t and loss account 14,036 (842) 13,194 2009 General reserve – Balance brought forward – Transfer from pro?t and loss account – Addition on account of employee bene?ts Pro?t and loss account 18,584,245 8,476,205 27,060,450 (1,473,425) 27,138,616 * Foreign Currency translation reserve arising from consolidation of non-integral subsidiaries. 5 Minority interest in equity Siemens Building Technologies Private Ltd. 517,209 (2008: 772,052) equity shares held by minority interest (13.85% holding; 2008: 20.68% holding) Adjustment on purchase of additional interest 7,721 (2,548) 5,173 6 Minority interest in non-equity Siemens Building Technologies Private Ltd. Balance brought forward Increase during the year on account of sale of SBT business segment Adjustment on purchase of additional stake Share of pro?t/(loss) for the year Share of foreign currency translation reserve 139,665 (39,658) (41,052) (7,811) 51,144 7 Secured loans From Banks – Term loans – Cash credit and working capital loan Finance lease obligation ( Refer schedule 25B) 515 515 8 Unsecured loans Interest free loans under – sales tax deferral scheme 5,906 5,906
411
2009
2008 14,882 (846) 14,036 2008 13,966,735 4,577,244 40,266 18,584,245 1,929,045 22,099,755
7,721 7,721
72,145 48,752 18,768 139,665
37,196 63,498 1,057 101,751
10,614 10,614 Annual Report 2009
114
9
Fixed assets
Intangible assets Goodwill Technical Knowhow Non compete fees Land Buildings Tangible assets Plant and Machinery Furniture, Fittings & Of?ce Equipment 2,781,946 49,446 467,579 Vehicles Vehicles taken on lease Total Previous year
Gross block At 1 October 2008 Acquisition on purchase of Flender Ltd. Additions (others) Deductions/ adjustments (Refer note 6) At 30 September 2009 Accumulated depreciation At 1 October 2008 Additions on purchase of Flender Ltd. Charge for the year Deductions/adjustments (Refer note 6) At 30 September 2009 Net block At 30 September 2009 At 30 September 2008 Notes: 1 2,248,926 1,376,340 54,346 72,603 591,751 559,123 3,021,418 2,837,115 3,238,881 2,362,245 110,387 714,182 2,600 26,062 68 9,268,309 7,947,738 7,947,738 1,196,408 343,034 537,327 (569,581) 1,507,188 75,136 18,257 93,393 56,465 56,465 38,115 188 7,436 45,739 624,905 28,629 103,280 (117,624) 639,190 3,508,873 333,258 513,335 (30,813) 4,324,653 2,067,764 21,255 455,480 1,738,557) 805,942 91,483 1,518 10,389 (82,696) 20,694 1,019 70 7,603,703 784,347 1,645,574 6,557,867 1,529,018 (483,184) 7,603,701 2,572,748 527,743 1,234,244 (578,621) 3,756,114 147,739 147,739 56,465 56,465 597,236 652 44,020 (4,418) 637,490 3,462,020 86,577 650,459 (538,448) 3,660,608 5,871,118 622,150 1,124,209 117,545 1,518 551 (96,320) 23,294 1,087 15,551,439 14,106,023 1,344,551 3,521,062 2,363,650 (918,234)
(53,943) (2,382,642) 7,563,534 916,329
(1,087) (3,655,479)
- 16,761,573 15,551,439
(1,089) (2,540,360)
-
7,493,264
2 3
Included in the gross block of land at 30 September 2009 is freehold land of Rs 19,078 (2008: Rs 23,496 ) and buildings includes Rs. 179,111 (2008: Rs 204,910) representing 560 shares of Rs 50 each and 10 shares of Rs 100 each (2008: 595 shares of Rs 50 each and 20 shares of Rs 100 each and 10 shares of Rs 2250 each) in various co-operative housing societies. Land with a value of Rs 2,136 (2008: Rs 2,136) and building with a value of Rs 6,335 (2008 : Nil) are held for sale at 30 September 2009 Depreciation provided has been disclosed as under: 2009 Charge for the year Goodwill on investment in associate amortised (refer Schedule 10) Adjustment of capital reserve on consolidation with goodwill Transfer from Revaluation reserve As per pro?t and loss account 1,645,574 87,957 (842) 1,732,689 2008 1,529,018 105,550 (16,862) (846) 1,616,860
4
Assets includes assets given on operating lease 2009 Particulars Buildings Furniture and Fixture and of?ce equipment 137,540 46,866 12,508 Land Plant and Machinery Buildings 2008 Furniture and Fixture and of?ce equipment 180,016 49,871 15,812 Land Plant and Machinery
Gross Block Written Down Value Depreciation charge for the year 5 6 7 8
547,886 440,245 11,523
28,783 18,671 -
286,218 131,287 22,005
731,006 577,324 16,434
79,858 66,279 -
336,258 125,449 25,435
Furniture, Fittings & Of?ce Equipment includes Rs 24,962 (previous year Rs 24,427) cost incurred by the company on certain assets, ownership of which vests with the West Bengal State Electricity Board. Deductions/ adjustments to ?xed asset includes transfer of assets on account of discontinued operations. (Refer Schedule 2) Above additions to gross block and deletions in accumulated depreciation include exchange ?uctuation adjustments amounting to Rs 21,168 (2008: Rs 57,867) and Rs 20,571 (2008: Rs 54,416) respectively on consolidation of non-integral foreign operations. Goodwill includes goodwill on consolidations - Gross Block Rs 3,349,372 (2008: Rs 2,166,367) Net Block Rs 2,116,840 (2008: Rs 1,180,074)
115
Siemens Group
115
Schedules to the Consolidated Financial Statements (Continued) as at 30 September 2009 (Currency: Indian rupees thousands)
2009 10 Investments Non-Trade, long term (at cost) In government securities (unquoted) National Savings Certi?cates (Unquoted) Shares in associate company 2,160,000 (2008: 2,160,000) Equity Shares of Rs 10 each fully paid-up in Flender Ltd. (50% holding; 2008: 50% holding) Cumulative goodwill on purchase of shares in associate Cumulative amortisation of goodwill Cumulative share of pro?t in associate company Conversion to subsidiary pursuant to purchase of balance shares by the Group (Quoted) Investment in other companies 10,485 (2008: 10,485) Equity Shares of Re 1 each fully paid-up in PRICOL Ltd. 10,000 (2008: 10,000) Equity Shares of Rs 10 each fully paid-up in Scooters India Ltd. (Unquoted) 1 (2008: 1) Equity Share of Rs 10 each fully paid-up in International Shock Absorbers Ltd. Current Investments, at lower of cost or fair value In Mutual Funds (unquoted) Nil (2008: 55,024,962) Birla Cash Plus- Institutional Premium - Daily Dividend Reinvestment Nil (2008: 52,078,676) Sundaram BNP Paribas Money Fund - Super Institutional - Daily Dividend Reinvestment Nil (2008: 30,885,544) units of ING Liquid Fund Super Institutional - Daily Dividend Option Nil (2008: 36,597,419) units of HDFC Liquid Fund Premium Plan - Daily Dividend Reinvestment Option 5 5 2008
149,837 527,743 677,580 (343,034) 334,546 274,638 609,184 (609,184) -
149,837 527,743 677,580 (255,077) 422,503 192,968 615,471 615,471
8 100 108
8 100 108
0.01
0.01
113
551,323 525,750 309,004 448,677 1,834,754 2,450,339 2,450,231 108 400 Annual Report 2009
– Aggregate book value of unquoted investment – Aggregate book value of quoted investments – Aggregate market value of quoted investments
611
5 108 355
116
2009 11 Deferred tax asset Arising on account of timing differences in: – Depreciation – Provision for doubtful debts and advances – Expenditure debited to pro?t & loss account but allowed for tax purposes in following years – Other provisions Deferred tax liability Arising on account of timing differences in: – Differences in Depreciation and other differences in block of ?xed assets as per tax books and ?nancial books Deferred tax asset (net) 12 Inventories Raw materials including spares Work-in-progress – factory related – project related Finished goods Sundry debtors Debts outstanding – Over six months – Other debts Of which – Considered good – Considered doubtful Provision for doubtful debts Sundry debtors are unsecured and include: Project related retention money – over six months – other 14 Cash and bank balances Cash in hand Cheques in hand Balances with scheduled banks – on current account – on deposit account Balances with other banks
2008
7,637 378,407 732,688 452,082 1,570,814
13,734 421,254 458,953 878,310 1,772,251
374,437 1,196,377
310,352 1,461,899
2,976,504 451,404 5,749,589 1,377,341 10,554,838
1,716,105 558,785 4,202,043 1,780,506 8,257,439
13
16,826,807 20,281,709 37,108,516 36,134,193 980,484 37,114,677 (980,484) 36,134,193
13,147,548 25,625,333 38,772,881 37,563,888 1,208,993 38,772,881 (1,208,993) 37,563,888
13,753,293 3,112,451 16,875,744
11,741,312 4,968,932 16,710,244
8,869 792,752 1,616,326 10,636,477 1,691,409 14,745,833
8,734 1,348,131 2,292,348 7,936,235 1,636,369 13,221,817
117
Siemens Group
117
Schedules to the Consolidated Financial Statements (Continued) as at 30 September 2009 (Currency: Indian rupees thousands)
2009 15 Loans and advances (Unsecured, considered good unless stated) Advances recoverable in cash or in kind or for value to be received – considered good – considered doubtful 4,415,822 143,967 4,559,789 Provision for doubtful advances (143,967) 4,415,822 Advance payments of income tax (net of provision for taxation) Minimum Alternate Tax credit entitlement Balances with customs, port trusts, etc. Inter corporate deposits - Others Interest accrued on inter corporate deposits 2,085,388 830,369 1,860,000 7,306 9,198,885 16 Current liabilities Sundry creditors Advances from customers (Refer note 1) Unclaimed dividend (Refer note 2) Notes (1) (2) Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. Advance from customers include progress payments billed and advances received from project related work 14,975,178 20,053,468 25,730,724 16,303,961 13,863 42,048,548 26,665,830 21,177,302 11,007 47,854,139 4,074,305 176,398 4,250,703 (176,398) 4,074,305 890,158 11,242 754,404 715,000 4,933 6,450,042 2008
17
Provisions Pension Provision for Taxation (net of advance tax payment) Leave wages Medical bene?ts Silver Jubilee Gratuity Warranty Loss order Liquidated damages Contingencies Proposed dividend Tax on proposed dividend 174,983 23,975 259,204 70,754 74,418 7,759 1,996,892 907,939 5,658,161 1,644,281 1,685,801 286,502 12,790,669
811
160,326 39,081 359,568 45,169 68,925 82,020 1,282,290 1,099,514 1,804,557 1,010,865 1,011,481 569,871 7,533,667 Annual Report 2009
118
2009 18 Interest income Interest income (Others) 558,449 558,449
2008
647,730 647,730
19
Other operating income, net Export incentives Pro?t on sale of ?xed assets, net Recoveries from associates and third parties Miscellaneous income 97,375 240,740 223,385 65,141 626,641 60,174 260,461 112,812 64,334 497,781
20
Other income Dividend on mutual fund investment Miscellaneous other Income 6,603 108,307 114,910 99,052 99,052
21
Cost of sales and services Raw materials consumed Traded goods purchased Spares and stores consumed Project bought outs Change in inventories Other costs 19,406,329 12,322,120 279,690 28,426,152 (1,064,879) 6,309,814 65,679,226 16,724,813 13,810,998 393,325 36,330,363 (219,086) 2,602,871 69,643,284
22
Personnel costs Salaries, wages and bonus, net Contribution to provident and other funds Staff welfare 8,210,639 768,214 464,995 9,443,848 8,251,420 575,366 376,637 9,203,423
119
Siemens Group
119
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
2009 23 Other costs, net Exchange losses/(gains), net Travel and conveyance Legal and professional External software services and data processing Communications Rent (Refer Schedule 25) Project related other costs Project related hardware cost Repairs – – – on building on machinery others 205,914 74,267 228,265 112,425 597,327 361,637 367,178 14,645 287,365 157,287 6,817 181,183 114,032 311,921 36,044 1,580 11,600 1,300 538,494 7,852,671 24 Commitments and contingent liabilities (a) Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Contingent liabilities Taxation matters (excluding interest) – In respect of certain completed assessments where matters are under appeal by the Company Excise/ sales tax liabilities, under dispute Customs liabilities, under dispute Claims against the company not acknowledge as debts
021
2008 (1,593,205) 2,043,063 1,046,735 925,010 749,669 654,201 627,409 469,243 229,969 66,167 162,281 408,001 612,902 384,260 384,060 317,425 271,419 167,253 161,378 90,731 86,424 57,964 40,616 2,867 14,000 1,440 945,075 9,326,357
61,657 1,338,866 529,430 766,511 678,952 715,037 135,898 17,039
Provision for doubtful debts and advances, net Rates and taxes Power and fuel Packing and forwarding Project related software cost Insurance Of?ce supplies, printing and stationery Advertising and publicity Research and development expenditure Bank guarantee commission/bank charges Bad debts Lease rentals (Refer Schedule 25) Donation Commission to directors Directors’ fees Miscellaneous expenses
1,025,014
959,762
(b)
432,706 312,609 120,000 117,617
302,789 442,524 120,000 43,812 Annual Report 2009
120
25
Disclosure pursuant to Accounting Standard - 19 ‘Leases’ : Lease payments on non cancellable lease arrangement debited to the pro?t and loss account and the future lease payments in respect of non cancellable operating lease are summarised below: 2009 A Operating Lease (i) (ii) (iii) Amount due not later than one year from the balance sheet date Amount due later than one year and not later than ?ve years Amount due later than ?ve years 170,417 90,074 349,104 609,595 Lease rent debited to pro?t and loss account 751,081 201,221 145,496 218,862 565,579 859,406 2008
Sub-lease payments recognised in the pro?t and loss account Rs 28,559 ( 2008: Rs. 23,930) There is no contingent rent recognised in the P&L account General description of the leasing arrangement: (i) (ii) (iii) (iv) The Company has entered into operating lease arrangements for its of?ce premises, vehicles, storage locations, motor car, equipments and residential premises for its employees. The future lease rental payments are determined on the basis of the monthly lease payment terms as per the agreements. At the expiry of the non cancellable lease period the option of renewal rests with the Company. Some of the lease agreements have escalation clause. There are no exceptional/ restrictive covenants in the lease agreements.
B
Future lease commitments in respect of Financial leases (i) Within one year Minimum lease payments Present value of Minimum lease payments Later than one year and not later than ?ve years Minimum lease payments Present value of Minimum lease payments (iii) (iv) Later than ?ve years Total minimum lease payments at the year end Less : amount representing ?nance charges Present value of minimum lease payments 386 353 129 126 515 36 479 577 468 515 479 1,092 145 947
(ii)
(v)
The Company has entered into ?nance lease arrangements for vehicles for a period of 5 years. There is no escalation clause and there are no exceptional/ restrictive covenants. The lease rental payments are determined on the basis of the monthly lease payment terms as per the agreements.
26
Related party names Holding company (holds 55.18% of the Equity Share capital as at 30 September 2009)
121
26.1 Siemens AG
Siemens Group
121
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
26.2 Other related parties where transactions have taken place during the year Fellow Subsidiaries Siemens S.A. Siemens IT Solutions and Services S. A. Siemens Ltd. Siemens Healthcare Diagnostics Ltd. Siemens Aktiengesellschaft Österreich ETM professional control GmbH Siemens VAI Metals Technologies GmbH & Co Siemens Transportation Systems GmbH & Co KG VA Tech Transmission & Distribution GmbH Siemens Ltd. Siemens Bangladesh Ltd. Siemens S.A./N.V. ADB S.A./N.V. Siemens IT Solutions and Services S. A. Siemens Ltda. Siemens Eletroeletronica Limitada Iriel Ind. Com. Sist. Eletr. Ltda. Siemens Milltronics Process Instruments, Inc. Trench Ltd. Siemens Canada Ltd. Siemens Medium Voltage Switching Technologies (Wuxi) Ltd. Siemens International Trading Ltd., Shanghai Siemens Circuit Protection Systems Ltd. Siemens Electrical Apparatus Ltd. Siemens Power Plant Automation Ltd. Siemens Ltd. Siemens Electrical Drives Ltd. Siemens Manufacturing and Engineering Centre Ltd. Siemens Factory Automation Engineering Ltd. Siemens Shanghai Medical Equipment Ltd. MWB (Shanghai) Co Ltd. Siemens Wiring Accessories Shandong Ltd. Siemens Switchgear Co. Ltd. Siemens Industrial Automation Ltd. Siemens Numerical Control Ltd. Siemens Electrical Drives (Shanghai) Ltd. Siemens Mindit Magnetic Resonance Ltd. Zhenjiang Siemens Busbar Trunking Systems Co. Ltd. Siemens Mechanical Drive Systems (Tianjin) Co., Ltd. Winergy Drive Systems (Tianjin) Co. Ltd Siemens Program & System Engineer Nanjing Co Ltd. Siemens S.A. Siemens S.A. Koncar Power Transformers Ltd. Siemens Elektromotory s.r.o. Siemens Industrial Turbomachinery s.r.o. OEZ s.r.o. Siemens Wind Power A/S Siemens S.A. Siemens Technologies S.A.E. Siemens Osakeyhtiö Siemens S.A.S. Siemens Production Automatisation S.A.S. Trench France S.A.S. Siemens Transmission & Distribution SAS Argentina Argentina Australia Australia Austria Austria Austria Austria Austria Bangkok Bangladesh Belgium Belgium Belgium Brazil Brazil Brazil Canada Canada Canada China China China China China China China China China China China China China China China China China China China China China Columbia Costa Rica Croatia Czech Republic Czech Republic Czech Republic Denmark Ecuador Egypt Finland France France France France Annual Report 2009
221
122
26.2 Other related parties where transactions have taken place during the year (Continued) Fellow Subsidiaries Siemens VAI Metals Technologies SAS France Siemens Transportation Systems S.A.S. France Flender-Graffenstaden SAS France SBT HVAC Product GMBH Germany Siemens Building Technologies Fire & Security Products Germany GmbH & Co. oHG SYKATEC Systeme, Komponenten, Anwendungstechnologie GmbH Germany & Co. KG Weiss Spindeltechnologie GmbH Germany Siemens Financial Services GmbH Germany Mechanik Center Erlangen GmbH Germany LINCAS Export Services GmbH Germany Siemens Turbomachinery Equipment GmbH Germany Siemens Busbar Trunking Systems GmbH & Co. KG Germany Trench Germany GmbH Germany Wallace & Tiernan GmbH Germany mdexx Magnetronic Devices GmbH & Co. KG Germany (upto 31 December 2008) Alpha Verteilertechnik GmbH Germany Lincas Electro Vertriebsgesellschaft mbH Germany Loher GmbH Germany Siemens Geared Motors Gesellschaft mit beschränkter Germany Haftung Siemens Finance & Leasing GmbH Germany Ruhrtal Hochspannungsgeräte GmbH & Co. OHG Germany (Upto 30 June 2009) HSP Hochspannungsgeräte GmbH Germany Flender Industriegetriebe GmbH Germany Evosoft GmbH Germany FEAG Fertigungscenter für Elektrische Anlagen GmbH Germany Siemens Building Technologies GmbH & Co. oHG Germany Siemens Financial Services GmbH/WCF Germany Siemens Real Estate GmbH & Co. OHG Germany Siemens Product Lifecycle Management Software (DE) GmbH Germany A Friedr. Flender AG Germany SBT Fire & Security Products GMBH & Co, Germany Germany Siemens Geared Motors Gesellschaft mit beschränkter Haftung Germany Siemens IT Solutions and Services Management GmbH Germany Siemens Enterprise Communications GmbH & Co KG Germany Siemens Enterprise Communications GmbH & Co KG/STS Germany R&S Restaurant Services GmbH Germany Siemens SIA Germany SBT GmbH & Co Germany Germany Siemens plc Great Britain Siemens Industrial Turbomachinery Ltd. Great Britain Siemens Protection Devices Ltd. Great Britain Chemfeed Ltd. Great Britain Electrocatalytic Ltd. Great Britain Electrium Sales Ltd. Great Britain Siemens Magnet Technology Ltd. Great Britain Siemens Busbar Trunking Systems Ltd., in Liquidation Great Britain SBT Security Products Ltd. Great Britain Siemens IT Solutions and Services Ltd. Great Britain Siemens A.E., Elektrotechnische Projekte und Erzeugnisse Greece Eviop-Tempo A.E. Electrical Equipment Manufacturers Greece
123
Siemens Group
123
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
26.2 Other related parties where transactions have taken place during the year (Continued) Fellow Subsidiaries Siemens Ltd. Siemens Erömütechnika Kft. Siemens Hearing Instruments Private Ltd. Siemens Power Engineering Private Ltd. OSRAM India Private Ltd. Siemens VAI Metals Technologies Private Ltd. Siemens Healthcare Diagnostics Ltd. Siemens Corporate Finance Private Ltd. Winergy Drive Systems India Private Ltd. Morgan Construction Company India Private Ltd. Siemens Enterprise Communications Private Ltd. (Upto 31 March 2009) Powerplant Performance Improvement Ltd. Siemens Information Systems Ltd. (w.e.f. 25 June 2009) Siemens Information Processing Services Private Ltd. (w.e.f. 25 June 2009) Siemens Product Lifecycle Management Software (India) Private Ltd. P.T. Siemens Indonesia Siemens Sherkate Sahami (Khass) Siemens Ltd. Siemens Israel Ltd. Siemens S.p.A. Trench Italia S.r.l. Siemens IT Solutions and Services SPA Siemens K.K. Siemens TOO Siemens Kenya Ltd. Siemens Ltd. Siemens Electrical & Electronic Services K.S.C. Osram Opto Semiconductors (Malaysia) Sdn. Bhd. Siemens Malaysia Sdn. Bhd. Siemens Industrial Workshop Sdn. Bhd. Siemens, S.A. de C.V. Siemens S.A. Siemens Nederland N.V. Siemens Industrial Turbomachinery B.V. Siemens (N.Z.) Ltd. Siemens Ltd. Siemens Oil and Gas Offshore AS (upto 30 June 2009) Siemens L.L.C. Siemens Pakistan Engineering Co. Ltd. Siemens, Inc. Siemens Power Operations, Inc. Siemens Sp. z o.o. Siemens W.L.L. Siemens S.R.L. OOO Siemens ISCOSA Industries and Maintenance Ltd. Siemens Ltd. Arabia Electric Ltd. (Equipment) Siemens d.o.o.Beograd Siemens Pte. Ltd. Power Automation Pte. Ltd. Hongkong Hungary India India India India India India India India India India India India India Indonesia Iran Ireland Israel Italy Italy Italy Japan Kazakhstan Kenya Korea Kuwait Malaysia Malaysia Malaysia Mexico Morocco Netherlands Netherlands New Zealand Nigeria Norway Oman Pakistan Philippines Philippines Poland Qatar Romania Russia Saudi Arabia Saudi Arabia Saudi Arabia Serbia Singapore Singapore Annual Report 2009
421
124
26.2 Other related parties where transactions have taken place during the year (Continued) Fellow Subsidiaries Siemens Electronics Assembly Systems Pte. Ltd Singapore Siemens Energy Management and Information Systems Pte. Ltd. Singapore Siemens IT Solutions and Services Singapore Siemens d.o.o. Slovania Siemens Ltd. South Africa Siemens S.A. Spain Siemens Holding S.L. Spain Siemens Industrial Turbomachinery AB Sweden Siemens AB Sweden Siemens Schweiz AG, Building Technologies Division, International Switzerland Headquarters Siemens Schweiz AG Switzerland Siemens Ltd. Taiwan Siemens Ltd. Tanzania Siemens Ltd. Thailand Siemens Sanayi ve Ticaret A.S. Turkey Siemens LLC UAE SD (Middle East) LLC UAE Siemens Ukraine Ukraine Siemens Energy, Inc. USA Siemens Building Technologies, Inc. USA Siemens Demag Delaval Turbomachinery, Inc. USA Siemens Energy & Automation, Inc. USA Siemens Water Technologies Corp. USA Siemens Medical Solutions USA, Inc. USA Siemens Shared Services, LLC USA Morgan Construction Company USA Siemens Transportation Systems, Inc. USA Siemens Power Transmission & Distribution, Inc. USA PETNET Solutions, Inc. USA SMS Inc. - Customer Solutions Group USA SBT Inc., USA USA Siemens Building Technologies LLC USA Siemens Corporation USA Siemens Medical Solutions Health Services Corporation USA Siemens IT Solutions and Services Inc USA Siemens Communications Inc USA Siemens Corporate Research Inc USA Siemens Healthcare Diagnostics inc USA Siemens Molecular Imaging Inc USA Siemens Product Lifecycle Management Software Inc USA Siemens S.A. Venezuela Siemens Automation Systems Ltd. Vietnam Siemens Ltd. Vietnam Flender Ltd. (upto 31 July 2009) Dr. Armin Bruck (w.e.f. 1 October 2007) Mr. Sunil Mathur (w.e.f. 22 July 2008) Mr. Patrick de Royer (Retired on 31 December 2008) Mr. K. R. Upili (Retired on 27 July 2008) Mr. Vijay V. Paranjape Mr. J. Schubert (Retired on 1 January 2008) Mr. Vilas Parulekar (Retired on 25 September 2009)
125
Associate 26.3 Key Managerial Personnel
India
Siemens Group
125
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
26.4 Related party transactions
Description 2009 Holding Fellow Associate Key Company Subsidiaries Managerial Personnel Sales – Siemens AG – Siemens Energy & Automation, Inc – Siemens VAI Metals Technologies Private Ltd. – Siemens VAI Metals Technologies SAS – Siemens Medical Solutions Health Services Corp., US – Siemens IT Solutions & Services Ltd, UK – Flender Ltd. – Others Goods in transit – Siemens SAS France – Others Commission income – Siemens AG – Siemens Industrial Turbomachinery AB – Siemens Industrial Turbomachinery Ltd. – Siemens Pte. Ltd. – Others Other recoveries – Siemens AG – Siemens Information Systems Ltd. – Siemens Information Processing Services Private Ltd. – Siemens Corporate Finance Private Ltd. – Siemens Enterprise Communications Private Ltd. – Siemens Transportation Systems S.A.S. – Siemens Pte. Ltd. – Flender Ltd – Others Reimbursement of expenses – Siemens AG – Siemens Information Systems Ltd. – Siemens Enterprise Communications Private Ltd. – Siemens Pte. Ltd. – Siemens Wind Power A/S – Siemens Electronics Assembly Systems Pte. Ltd. – Flender Ltd. – Others Purchase / Other services – Siemens AG – Siemens Information Systems Ltd. – Koncar Power Transformers Ltd. – Siemens Electrical Apparatus Ltd. – Siemens Medical Solutions USA, Inc. – Flender Ltd. – Others Interest Income – Osram India Private Ltd. – Winergy Drive Systems India Private Ltd. – Morgan Construction Company India Private Ltd. – Flender Ltd. – Others Sale of division/ investments – Siemens Electronics Assembly Systems Pte. Ltd. – Siemens VDO Automotive Components Private Ltd. Purchase of Investments/ Equity Contribution – A Friedr.-Flender AG Sale of Subsidiaries – Siemens Corporate Finance Private Ltd. Dividend paid Sale of ?xed Assets/Capital WIP – Siemens Shared services
621
2008 Holding Fellow Company Subsidiaries 4,508,917 - 366,781 - 104,927 - 266,413 - 668,676 - 652,835 - 3,388,751 441,661 145,641 106,979 3,764 75 2,798 60,589 15,950 16,686 17,476 21,556 5,588 4,605 Associate Key Managerial Personnel -
4,345,279 543,157 821,417 154,578 634,940 679,817 - 2,244,717 481,223 153,633 352,973 17,945 8,301 17,576 16,047 2,586 10,773 17,457 7,688 13,259 25,727 53,027 10,115 2,357 569 13,044 11,231 1,210
3,006 6,178 18 19,439 -
-
3,395 750 342 22,339 1,498 -
15,796,470 59,633 43,327 602,950 566,228 - 3,185,830 29,877 42,392 8,783 8,796 30,307 909,935
15,123,623 - 3,554,963 - 383,784 - 446,384 - 3,292,609 23,442 18,331 1,650 -
- 1,700,000 446,499 8,597
- 3,021,459 558,123 -
126
Annual Report 2009
26.4 Related party transactions (Continued)
Description 2009 Holding Fellow Associate Key Company Subsidiaries Managerial Personnel Purchase of Fixed assets/ Capital WIP – Siemens AG – Trench Germany GmbH – Siemens Enterprise Communications Private Ltd. – Others Purchase of Intangible assets (Technical knowhow) – Siemens AG Bonus shares issued – Siemens AG Managerial Remuneration Mr. J. Schubert Dr. Armin Bruck Mr. Sunil Mathur Mr. Vijay V. Paranjape Mr. Vilas Parulekar Mr. Patrick de Royer Mr. K. R. Upilli Inter Corporate Deposits given – Osram India Private Ltd. – Winergy Drive Systems India Private Ltd. – Morgan Construction Company India Private Ltd. – Siemens Healthcare Diagnostics Ltd. – Flender Ltd. Inter Corporate Deposits repaid – Osram India Private Ltd. – Winergy Drive Systems India Private Ltd. – Morgan Construction Company India Private Ltd. – Siemens Healthcare Diagnostics Ltd. – Flender Ltd. Outstanding Balances Debtors – Siemens AG – Siemens VAI Metals Technologies Private Ltd. – Siemens Information Systems Ltd. – Morgan Construction Company India Private Ltd. – Flender Ltd. – Others Creditors – Siemens AG – Siemens Information Systems Ltd. – Siemens VAI Metals Technologies Private Ltd. – Siemens Information Processing Services Private Ltd. – Siemens Power Engineering Private Ltd. – Siemens industrial turbomachinery Ltd. – Flender Ltd. – Others Inter Corporate Deposits – Osram India Private Ltd. – Winergy Drive Systems India Private Ltd. – Morgan Construction Company India Private Ltd. – Siemens Healthcare Diagnostics Ltd. Interest receivable on Inter Corporate Deposits – Osram India Private Ltd. – Winergy Drive Systems India Private Ltd. – Morgan Construction Company India Private Ltd. – Siemens Healthcare Diagnostics Ltd. Managerial Remuneration payable Dr. Armin Bruck Mr. Sunil Mathur Mr. Vijay V. Paranjape Mr. Vilas Parulekar Mr. Patrick de Royer Mr. K. R. Upili 32,504 42 4,107 1,804 63,336 42,711 20,624 23,560 13,691 253 2008 Holding Fellow Company Subsidiaries Associate Key Managerial Personnel 52,704 52,137 7,552 15,373 14,333 33,664 25,708 -
27,777 29,223 186,011 -
6,488 436 10,481 50,000 240,000 85,000 70,000 180,000 -
75,000 75,000
- 1,950,000 - 2,360,000 735,000 800,000 - 1,400,000 - 2,080,000 820,000 400,000 -
880,283 -
588,584 38,635 6,105 198,342
-
32,466 21,842 12,377 13,694 -
655,537 3,773,010 -
381 72,460 232,402 2,218 25,896 526,175 250,000 380,000 85,000 1,532 247 1,650 -
5,143 8,576 -
22,400 2,950 7,680 6,144 18,578 7,144
127
4,103,023 45,729 37,948 35,756 32,645 135,153 - 1,366,820 800,000 660,000 400,000 3,995 976 2,336 -
Siemens Group
127
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
27 Disclosure relating to Provisions Provision for warranty Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period. Provision for liquidated damages Liquidated damages are provided based on contractual terms when the delivery/ commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms upto closure of the contract (including warranty period). Provision for loss orders A provision for expected loss on construction contracts is recognised when it is probable that the contract costs will exceed total contract revenue. For all other contracts loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic bene?ts. Contingencies The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the out?ow of which would depend on the cessation of the respective events. The movements in the above provisions are summarised below: Warranties Balance as at 1 October 2008 - Created - Additions on purchase of Flender Ltd. - Utilised - Reversed - Disposal of Subsidiaries Balance as at 30 September 2009 28 1,282,290 1,116,457 10,758 (128,440) (267,853) (16,320) 1,996,892 Liquidated damages 1,804,557 4,594,724 8,143 (226,041) (316,674) (206,548) 5,658,161 Loss orders Contingencies 1,099,514 692,646 15,826 (838,808) (61,239) 907,939 1,010,865 847,598 (56,266) (157,916) 1,644,281
Disclosure pursuant to Accounting Standard - 7 ‘Construction Contracts’ : 2009 (i) (ii) Contract Revenue recognised for the year ended 30 September 2009 Aggregate amount of contract costs incurred and recognised pro?ts (less recognised losses) for all contracts in progress as at 30 September 2009 Amount of advances received Amounts due from customers Amounts due to customers 55,187,367 154,713,514 2008 50,884,780 119,307,554
(iii) (iv) (v)
821
6,648,354 5,867,401 8,684,323
5,644,363 2,846,638 15,137,749 Annual Report 2009
128
29
(i)
Information about business segments
Revenue External Revenue Inter segmental Revenue Total Revenue 2009 2008 2009 2008 2009 2008 8,624,926 9,144,478 997,253 759,581 9,622,179 9,904,059 5,870,143 5,968,153 6,207,589 4,251,279 12,077,732 10,219,432 3,311,811 4,040,966 86,514 96,785 3,398,325 4,137,751 11,376,532 11,204,593 120,278 234,651 11,496,810 11,439,244 10,288,045 6,952,028 445 - 10,288,490 6,952,028 4,219,692 1,298,570 7,865 1,182 4,227,557 1,299,752 5,630,939 5,368,631 244 14,932 5,631,183 5,383,563 24,236,130 28,244,868 482,809 169,757 24,718,939 28,414,625 7,143,864 7,245,609 1,698,103 650,652 8,841,967 7,896,261 5,430,843 6,053,460 235 - 5,431,078 6,053,460 339,780 238,989 313,251 405,540 653,031 644,529 5,654,851 9,736,966 78,780 205,712 5,733,631 9,942,678 736,972 1,069,304 27,923 2,400 764,895 1,071,704 231,596 231,596 - (10,021,289) (6,792,471) (10,021,289) (6,792,471) 92,864,528 96,798,211 - 92,864,528 96,798,211 Results 2009 2008 620,247 898,951 798,759 809,356 (147,729) 309,558 1,060,712 1,487,936 (184,327) (195,332) 438,346 (1,861,253) 807,591 589,574 3,990,678 3,394,381 646,939 967,318 320,366 407,079 689,446 334,805 209,759 824,340 117,251 141,155 8,232 9,454,751 (73,944) 8,029,388 (65,548)
Industry Automation Drive Technologies Building Technologies Industry Solutions Mobility Fossil Power Generation Oil & Gas Power Transmission Power Distribution Healthcare Real Estate Information Technology Services * Business Process Outsourcing * Automotive * Eliminations Total Interest expenses Interest income (includes 2009: Rs 117,749; 2008: Rs 231,462 of discontinued operations) Exceptional income Unallocable corporate items (includes 2009: Rs 3,182; 2008 : Rs 31,837 of discontinued operations) Pro?t before tax Share of pro?t from associate Minority interest Current tax Deferred tax Fringe bene?t tax Minimum Alternative Tax credit entitlement Consolidated total
558,449 1,501,019
647,730 1,235,151
(557,106) (424,268) 10,883,169 9,422,453 81,670 74,556 41,052 (18,768) (4,121,560) (4,029,668) 255,805 707,328 (94,098) (171,654) 92,864,528 96,798,211 - 92,864,528 96,798,211 7,046,038 11,242 5,995,489
* Discontinued operations (refer schedule 2)
Assets 2009 Industry Automation Drive Technologies Building Technologies Industry Solutions Mobility Fossil Power Generation Oil & Gas Power Transmission Power Distribution Healthcare Real Estate Information Technology Services Business Process Outsourcing Automotive * Total Unallocable corporate items Consolidated total 3,890,750 4,747,623 2,317,030 5,658,032 4,033,589 750,758 2,493,753 25,669,938 4,674,646 1,585,272 2,096,462 Net Capital Employed Liabilities 2008 2009 2008 Capital Expenditure 2009 2008 210,146 790,606 834,612 12,736 741,853 1,543 368,713 479,164 37,157 43,871 276,282 144,810 59,560 55,148 146,268 139,788 167,127 15,789 48,365 2,464 197,936 379,436 40,731 13,327 903,036 264,591 54,557 25,663 27,564 Non cash expenditure Depreciation Others 2009 2008 2009 2008 93,923 235,313 523,686 10,448 9,803 3,941 54,570 237,800 25,873 17,331 175,187 269,429 48,491 26,894 75,270 221,740 (151,508) 77,903 (30,071) (147,679) 403,428 152,480 (34,564) 7,848 51,600 34,992 5,982 46,764 (49,734) 4,921 47,086 (46,506) 73,539 25,090 29,180 193,146 (1,277,509) (249,016) 19,358 (28,807) 180,063 18,657 (25,893) (79,663) 124,359 (4,652) 9,953 406,442 138,694 (103,244) 73,258 5,492 (632) (683,478) (608,358) 80,445 (603,033) 619,653 11,295 127,257
3,610,022 2,462,367 2,175,347 3,510,629 3,506,557 2,434,773 2,759,022 2,829,664 1,199,485 4,411,746 6,039,341 5,757,273 2,551,311 3,569,206 2,964,223 1,922,843 2,532,521 3,018,164 2,710,506 3,223,272 2,910,016 24,856,474 18,015,171 18,087,126 4,204,597 3,060,855 3,104,239 1,612,155 2,103,350 1,841,647 1,821,513 338,570 352,219 4,082,114 - 4,654,018 236,998 323,098 7,221,081 6,825,929
57,917,853 58,289,930 47,680,874 48,821,628 24,797,038 20,131,702 82,714,891 78,421,632 54,901,955 55,647,557
4,001,053 2,399,078 4,056,201 2,426,642
1,705,795 1,489,603 1,732,689 1,616,860
* Discontinued operations (refer schedule 2)
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Siemens Group
129
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
29 (ii) Secondary segment information Revenue-based on location of customers 2009 2008 Within India Outside India Consolidated total 29 (iii) Other disclosures: – – – – (iv) Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks. Pro?ts/ losses on inter segment transfers are eliminated at the Company level. Balances with group companies and related parties have been included in unallocable corporate items. During the year there has been reorganisation of Business Segments. Figures for the year ended 30 September 2009 and year ended 30 September 2008 has been regrouped to make them comparable. 69,404,858 23,459,670 92,864,528 56,443,689 40,354,522 96,798,211 Carrying amount of Additions to segment assets ?xed assets and intangible by location assets 2009 2008 2009 2008 50,569,740 32,145,151 82,714,891 43,333,387 35,088,245 78,421,632 4,034,107 22,094 4,056,201 2,426,642 2,426,642
Segment information: The primary and secondary reportable segments are business segments and geographical segments respectively. Business Segments: The business of the Company is divided into eleven segments. These segments are the basis for management control and hence, form the basis for reporting. The business of each segment comprises of : – Industry Automation:- Provides complete range of automation products & systems, industrial automation systems & low-voltage Switchgears. – Drive Technologies:- Provides complete range of large and standard drives and motors, special purpose motors, process and motion control systems. – Building Technologies:- Electrical Installation Technologies, i.e. Products for Building, e.g. Miniature Circuit breakers, Distribution boards, Residual Current Circuit Breakers, etc. – Industry Solutions:- Undertakes turnkey projects in the industrial and infrastructure sectors over the entire life cycle including concept, engineering, procurement, supplies, installation, commissioning and after sales services. – Mobility:- Provides solutions for rail automation, railway electri?cation, light and heavy rail, locomotives, trains, turnkey projects and integrated services. – Fossil Power Generation:- The Fossil Power Generation Division offers highly ef?cient products and solutions for power generation based on fossil fuels. They range from individual gas and steam turbines and generators, to turnkey power plants. The Division also develops instrumentation and control systems for every type of power plant. – Oil & Gas:- The Oil & Gas Division offers customers products and solutions that are used for the extraction, conversion and transport of oil and gas. The Division portfolio also includes solutions for power generation and distribution, compressors with electrical and mechanical drives, process and automation technologies, and integrated IT solutions for pipeline and storage applications. – Power Transmission:- The Power Transmission Division offers products and solutions in the high-voltage ?eld – such as High Voltage Direct Current (HVDC) transmission systems, substations, switchgear and transformers. – Power Distribution:- The specialties of the Power Distribution Division range from solutions for the automation of power grids, to products like medium-voltage switchgear and components. – Healthcare:- Provides diagnostic, therapeutic and life-saving products in computer tomography (CT), magnetic resonance imaging (MRI), ultrasonography, nuclear medicine, digital angiography, patient monitoring systems, digital radiography systems, radiology networking systems, lithotripsy and linear accelerators. – Real Estate:- Provides comprehensive real estate management.
031
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Annual Report 2009
–
Information technology services :- Provide comprehensive range of technology services, including software development, packaged software integration and systems maintenance to its worldwide customers operating in different industries. Business process outsourcing :- Provides back of?ce support services to group companies and other external customers.
–
Geographical Segments: The business is organised in two geographic segments i.e. within India and outside India. 30 Disclosure pursuant to Accounting Standard - 15 ‘Employee Bene?ts’ : (i) De?ned Contribution Plans Amount of Rs 211,649 (2008: Rs 183,409) is recognised as an expense and included in “Personnel costs” (Refer Schedule 22) in the Pro?t and loss account. (ii) De?ned bene?t plans a Amounts for the current period are as follows:
Gratuity 2009 I Change in bene?t obligation Liability at the beginning of the year Interest cost Current service cost Liability transfer in Liability transfer out Bene?t paid Actuarial (gain)/ loss on obligations Transfer in on Purchase of Flender Ltd. Transfer out on Sale of SISL and SIPS Liability at the end of the year II Fair value of plan assets Fair value of plan assets at the beginning of the year Expected return on plan assets Contributions Transfer from other company Transfer to other company Bene?t paid Actuarial gain/ (loss) on plan assets Transfer in on Purchase of Flender Ltd. Transfer out on Sale of SISL and SIPS Fair value of plan assets at the end of the year Total Actuarial Gain/(Loss) to be recognised III Actual return on plan assets Expected return on plan assets Actuarial gain/ (loss) on plan assets Actual return on plan assets IV Amount recognised in the balance sheet Liability at the end of the year Fair value of plan assets at the end of the year Amount recognised in the balance sheet V Expenses recognised in the income statement Interest cost Current service cost Expected return on plan assets Actuarial (gain)/ loss Expense recognised in personnel costs (Schedule 22) 602,966 46,490 41,788 9,528 (1,222) (65,653) 135,612 29,379 (148,224) 650,664 2008 559,474 45,455 49,909 3,766 (11,412) (57,053) 12,827 602,966 Pension 2009 160,326 12,826 (28,305) 30,136 174,983 2008 166,549 13,324 (25,421) 5,874 160,326 Medical 2009 45,169 3,555 2,979 (7,410) 26,460 70,753 2008 42,699 2,989 3,205 (25,421) 21,697 45,169 Super Annuation 2009 77,854 1,262 1,459 (215) (779) (198) 79,383 2008 -
520,944 53,409 183,640 9,528 (1,222) (65,653) (14,069) 24,514 (25,038) 686,053 (149,681) 53,409 (14,069) 39,340 650,664 686,053 (35,389)
523,000 41,584 22,092 905 (11,412) (57,053) 1,828 520,944 (10,999) 41,586 1,828 43,414 602,966 520,946 82,020
(30,136) 174,983 174,983
(5,874) 160,326 160,326
(26,460) 70,753 70,753
(21,697) 45,169 45,169
74,923 1,784 4,102 (215) (779) (432) 79,383 (234) 1,784 (432) 1,352 79,383 79,383 -
-
46,490 41,788 (53,409) 149,681 184,550
45,455 49,909 (41,584) 10,999 64,779
12,826 30,136 42,962
13,324 5,874 19,198
3,555 2,979 26,460 32,994
2,989 3,205 21,697 27,891
1,262 1,459 (1,784) 233 1,170
131
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Siemens Group
131
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
30. (ii) a Amounts for the current period are as follows (Continued)
Gratuity 2009 VI Balance sheet reconciliation Opening net liability Expense as above Transfer from other company Employers contribution/ paid Transfer in on Purchase of Flender Ltd Transfer out on Sale of SISL and SIPS Amount recognised in balance sheet VII Acturial Assumptions : For the Year Discount Rate Current Rate of Return on Plan Assets Current Medical Cost increase rate Attretion rate VIII Sensitivity Change in Liability - Discount rate Change in Liability - In?ation rate Change in Service Cost - Discount rate Change in Interest Cost - Discount rate IX 82,022 184,550 (183,640) 4,865 (123,186) (35,389) 2008 36,474 64,779 2,861 (22,092) 82,022 Pension 2009 160,326 42,962 (28,305) 174,983 2008 166,549 19,198 (25,421) 160,326 Medical 2009 45,169 32,994 (7,410) 70,753 2008 42,699 27,891 (25,421) 45,169 Super Annuation 2009 2,932 1,170 (4,102) 2008 -
8.0% 8.0% 5.0% -
8.0% 8.0% 2.0% -
8.0% -
8.0% -
8.0% 7.0% 1% increase (6,071) 7,939 (76) 444
8.0% 5.0% 1% decrease 7,373 (6,757) 171 (373)
Amount for the Current and Previous periods as per AS15 Para 120
are as follows : Liability at the end of the year Fair value of plan assets at the end of the year Difference Experience Adjustment on Plan Liabilities (gain)/ loss Experience Adjustment on Plan Assets (loss)/ gain 650,664 686,053 (35,389) (5,845) (12,938) 602,966 520,946 82,020 13,131 1,986 -b
The fund formed by the Company manages the investments of the Gratuity Fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similiar maturities. The Company expects to contribute Rs 33,183 to gratuity fund in 2009-10. The estimates of future salary increases, considered in actuarial valuation, take in to account in?ation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The guidance issued by the Accounting Standard Board (ASB) on implementing AS 15, Employee Bene?ts (revised 2005) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as de?ned bene?t plan. The fund does not have any existing de?cit or interest shortfall. In regard to any future obligation arising due to interest shortfall (i.e. government interest to be paid on provident funds scheme exceeds rate of interest earned on investment), pending the issuance of guidance note from the Actuarial Society of India, the Company’s actuary has expressed his inability to reliably measure the same. * Figures not available hence not reported
c
d
e (iii)
General Descriptions of signi?cant de?ned plans I Gratuity plan Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company’s Scheme whichever is more bene?cial.
231
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Annual Report 2009
II
Medical Post-Retirement Medical Bene?t is paid to eligible employees in case of survival upto the retirement age and after death, bene?ts are available to the employee’s spouse. The Company reimburses the employees for expenses incurred over and above the claim accepted by the insurance company. The Company pays 80% of difference between liability incurred by employee and claim received from insurance company subject to ceiling based on the grade of employees.
(iv)
Broad category of plan assets as a percentage of total plan assets of the Gratuity plan Particulars Government of India securities State Government securities Public sector unit bonds Special Discount scheme Total Plan Assets 2009 13% 22% 32% 33% 100% 2008 17% 10% 28% 45% 100%
31
Derivative Instruments a Forward Contracts The Company uses forward contracts to mitigate its risks associated with foreign currency ?uctuations having underlying transaction and relating to ?rm commitments or highly probable forecast transactions. The Company does not enter into any forward contract which is intended for trading or speculative purposes. The details of forward contracts outstanding at the year end is as follows:Currency Number of contracts Buy Amount Indian rupees equivalent 4,627,004 5,788,859 11,843,567 12,054,393 21,144 16,128 26,195 19,563 296,258 179,422 64,463 10,396 33,769 Number of contracts Sell Amount Indian rupees equivalent 18,941,503 13,712,408 3,635,715 2,336,299 17,224,543 13,045,708 9,624 133
US Dollar 2009 2008 Euro 2009 2008 Qatari Riyal 2009 2008 Japanese Yen 2009 2008 Pound Sterling 2009 2008 Swiss Franc 2009 2008 CAD 2009 2008 SEK 2009 2008 GBP 2009 2008 Siemens Group
163 127 160 118 2 2 3 3 13 15 3 1 4 -
96,186 123,259 169,170 178,830 1,600 1,250 49,000 44,243 3,855 2,147 1,517 235 729 -
103 112 57 51 13 16 1 -
393,753 291,971 51,932 34,659 1,303,408 1,011,099 114 -
133
Schedules to the Consolidated Financial Statements (Continued) for the year ended 30 September 2009 (Currency: Indian rupees thousands)
All currency exposures having underlying transactions as at 30 September 2009 are covered by foreign currency forward contracts. The forward contracts have been converted in Indian rupees, at the spot rates, as at 30 September 2009 to facilitate reading purposes only. b Commodity Contracts The Company uses Commodity Future Contracts to hedge against ?uctuations in commodity prices. The following are outstanding copper future contracts entered into by the Company as on 30 September 2009. Year 2009 2008 Note: Each contract of copper is of 1,000 kg. c Unhedged foreign currency exposure derivatives
2009 Receivable Payable Amount Indian Amount Indian rupees rupees equivalent equivalent 392 18,732 1,508 72,298 7,490 253,837 547 18,507 1,598 111,914 5,605 392,372 43 3,361 0.44 20 0.06 3 2008 Receivable Amount Indian rupees equivalent 7,991 259,803 4,267 283,573 Payable Amount
Number of Contracts 749 Nil
Contractual Quantity 749 MT Nil
Buy /Sell Buy NA
USD SGD EURO GBP CHF AUD
2,993 5,969 7,183 31 8 -
Indian rupees equivalent 137,762 194,046 477,292 2,633 319 -
32
Earnings per share: Pro?t after tax Pro?t after tax (Net pro?t attributable to Equity shareholders) Shares:Weighted average number of Equity shares outstanding during the year Earnings per share 2009 7,046,038 7,046,038 337,160,200 20.90 2008 5,995,489 5,995,489 337,160,200 17.78
33
Prior years comparatives Pursuant to the disposal of ‘SISL’ and ‘SIPS’ and acquisition of Flender Ltd. in the current year and discontinuation of the ‘SVDO’ segment in the previous year, the ?gures of the current year are not strictly comparable to those of the previous year. Previous year’s ?gures have been regrouped/reclassi?ed wherever necessary, to conform to current year’s classi?cation. The ?gures of previous year were audited by a ?rm of Chartered Accountants other than S.R.Batliboi & Associates.
As per our report of even date.
For S.R.Batliboi & Associates Chartered Accountants For and on behalf of the Board of Directors Deepak S. Parekh Chairman Dr. Armin Bruck Managing Director Sunil Mathur Executive Director Yezdi H. Malegam Director & Chairman of Audit Committee Ajai Jain Vice President (Legal) & Company Secretary Mumbai 26 November 2009
per Sudhir Soni Partner Membership No: 41870 Mumbai 26 November 2009
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Annual Report 2009
Siemens Ltd.
Registered Of?ce: 130, Pandurang Budhkar Marg, Worli, Mumbai - 400 018
ATTENDANCE SLIP PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE AUDITORIUM
DP. Id Client Id/ Folio No. No. of Shares I hereby record my presence at the 52nd Annual General Meeting of the Company at Nehru Centre Auditorium, Dr. Annie Besant Road, Worli, Mumbai - 400 018 on Friday, 29th January, 2010, at 3.00 p.m.
Full name of the Proxy, if attending the Meeting:
NAME & ADDRESS OF THE REGISTERED SHAREHOLDER
Signature of the Member / Joint Member / Proxy attending the Meeting : Friday, 29th January, 2010
Note: Persons attending the Meeting are requested to bring this Attendance Slip and Annual Report with them. Duplicate Attendance Slip and Annual Reports will not be issued at the Annual General Meeting.
Siemens Ltd.
Registered Of?ce: 130, Pandurang Budhkar Marg, Worli, Mumbai - 400 018 PROXY FORM I/We, of hereby appoint or failing him / her being a member/members of Siemens Ltd. of .of
as my / our proxy to vote for me / us on my / our behalf at the 52nd Annual General Meeting of the Company to be held at Nehru Centre Auditorium, Dr. Annie Besant Road, Worli, Mumbai - 400 018 on Friday, 29th January, 2010, at 3.00 p.m. and at any adjournment thereof. Registered Folio / DP. ID. & Client ID.: No. of Shares held:
Af?x a 15 paise Revenue Stamp
Signed this Notes:
day of
2010
Signature(s) of Member(s)
(a) Proxies, in order to be effective, must be received at the Registered Of?ce of the Company not less than 48 hours before the time of the Meeting. (b) A Member entitled to attend and vote at this Meeting is entitled to appoint a proxy and the Proxy need not be a Member.
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