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Siemens Ltd.
BSE Code 500550
ISIN Demat INE003A01024
Book Value(Rs.) 239.62
Dividend Yield % 0.71
Market Cap(Rs. in millions) 350974.32
P/E 37.69
EPS 26.15
Face Value(Rs.) 2  
Year End: September 2015


General Performance Review

Since assuming power in 2014, the Government has announced various measures aimed at providing an impetus to domestic manufacturing, generation of power, urban infrastructure development and mobility such as increasing budgetary allocation in infrastructure, enhancing FDI limits across sectors and enhancing transparency in procurement and 'ease of doing business'.

During the financial year 2014-15, India's macro-economic scenario remained stagnant with demand for capital goods waiting to recover.  India's GDP growth improved to 7.3 percent in 2014-15 compared to 6.9 percent in 2013-14. With inflation on a downward trend, the Reserve Bank of India finally initiated a cycle of interest rate cuts. Investments in industry however continue to be impacted by interest rates, which continue to remain relatively high, and slow pace of project implementation. While the IIP has shown improvements with a year on year growth of 6.4 percent, manufacturing growth remained low with capacity utilization in the industry at around 60-70 percent. The Government's pro-reform agenda was refected in a range of investor friendly measures on land acquisition, job creation and workforce reforms, coal block allocations, and amendments to the Electricity Act. Rationalization in diesel prices, reforms in tax administration and structure, redefining investment limits across defence, railways, realty and insurance, have all paved the way for renewed investor confidence. However, the industrial economy continues to witness sub-par growth with the capex cycle clearly awaiting more policy actions from the Government before taking forward its investment decisions.

Siemens Ltd.'s results during financial year 2014-15 were also affected by these factors. New Orders were down by 2 percent at Rs. 101,322 million in financial year 2014-15, compared with Rs. 103,238 million in financial year 2013-14. Sales (excluding Other Operating Revenues) were down by 2 percent to Rs. 102,831 million, compared with Rs. 104,483 million in financial year 2013-14, while Profit after Tax (PAT) was up by 96 percent at Rs. 11,833 million compared with Rs. 6,032 million in financial year2013-14. During financial year 2014-15 the exceptional items stood at Rs. 7,828, compared with Rs. 3,827 in financial year 2013-14.

Operational Performance

As of 1st October, 2014, the Company aligned its businesses into seven Divisions: Power and Gas, Energy Management, Mobility, Building Technologies, Digital Factory, Process Industries & Drives and Healthcare.


Power and Gas Division offers a broad spectrum of products and solutions for reliable, efficient and clean power for generation of electricity from fossil fuels and for the reliable generation of power for oil and gas applications. Customers  are Utilities, Independent Power producers and Engineering, Procurement and Construction (EPC) companies as well as businesses in industries such as oil and gas, sugar, cement,  etc.

The Division operated in difficult market conditions amid postponement of new projects, stiff competitive pricing environment and commoditization of products. No gas-based projects were awarded through open market bidding during the financial year due to reduced gas availability for existing plants.

Among the key highlights in the financial year 2014-15, the Division won an order from NTPC-Dadri for modernization of Controls and Instrumentation while the Company's Vadodara factory also delivered its first locally-manufactured 120 MW SST 600 Steam Turbine.

For financial year 2014-15, the New Orders were down by 25% percent to Rs. 11,466 million, Sales down by 1 percent to Rs. 15,317 million, while Profit from Operations was Rs. 1,915 million compared to a loss of Rs. 250 million in the brvious year.


Customers are increasing their focus on energy-efficient operations, which is an opportunity for new energy-efficient Steam Turbines and modernizing of existing Steam Turbines. Overall, the market for Power and Gas is expected to improve driven by the Government's initiatives to kick-start the economy, including facilitating coal/gas allocation and environment clearances for various projects.


Energy Management Division is a supplier of products, systems, solutions and services for transmission and distribution of electrical energy. Its portfolio ranges from systems for low-voltage grids and distribution grids to solutions for smart grids and energy automation systems to power supply systems for industrial plants and high-voltage transmission systems. Its customers are Central Utilities, State Utilities, Private Transmission and Distribution System Operators and Industries.

During the financial year 2014-15, the market for Energy Management solutions remained competitive. Industrial and Independent Power Production Capital Expenditure is yet to pick up. Among the key highlights in financial year 2014-15, the Division received large orders for supply of GIS substations from Bihar Grid Company Ltd. and Power Grid Company of Bangladesh. The Division also received orders for modernizing the electricity distribution networks of Amritsar, Jallandhar, Ludhiana, Dehradun and Faridabad through SCADA/DMS functionality. The Energy Management Division also delivered the 1200kV Capacitor Voltage Transformer for the ultra-high voltage National test station at Power Grid Corporation of India Ltd., Bina (Madhya Pradesh).

For financial year 2014-15, the New Orders were down by

13 percent to Rs. 31,248 million, Sales grew by 7 percent to Rs. 29,664 million, while Profit from Operations was Rs. 2,218 million compared to Rs. 1,746 million in the brvious year.


The Company has a strong network of local factories and is engaged in localization and product upgrades for the local market. Thus, the Government's initiatives to encourage local manufacturers as part of its Make in India program would provide opportunities for the Company. Other factors that are expected to aid growth are the Government planning to invest in technology for Transmission & Distribution such as Smart Grids in order to achieve its objective of 24x7 Power  for all by 2019.


Building Technologies Division provides solutions for safe, secure, energy-efficient and eco-friendly buildings and infrastructures. It has solutions for applications such as fire safety, security, building automation, heating, ventilation, air conditioning and energy management.

The growth in demand for Building Technologies during financial year 2014-15 was effected by the low number of development projects, and insignificant capacity expansion by industry. Another important factor was the lack of mandatory regulations on energy efficiency and safety for buildings in India. Among the highlights of the financial year 2014-15, the Division won a project to implement security automation for a Coal-bed Methane Plant in Madhya Pradesh and another order for Integrated Building Management System for an airport in Kerala.

For financial year 2014-15, the New Orders were up by 15 percent to Rs. 3,068 million, Sales grew by 9 percent to Rs. 2,742 million, while Profit from Operations was Rs. 229 million compared to Rs.190 million in the brvious year.


The demand for Building Technologies solutions is expected to pick up driven by infrastructure development projects in major cities in India, particularly construction in the IT, ITES, hotels, hospitals and BFSI verticals. The Government's mission to develop 100 Smart Cities brsents yet another opportunity for Building Technologies.


The Mobility Division supplies solutions for passenger and freight transportation, including rail vehicles, rail automation and rail electrification systems. The financial year 2014­15 witnessed government initiatives such as transparent, decentralized procurement and a five-year Action Plan announced as part of the Railway Budget 2015, which were positives for the Mobility Division.

During the year, the Division won separate orders worth Rs. 4,500 million from Diesel Locomotive Works for three-phase Propulsion Systems and another order worth Rs. 810 million  for Alternating Current traction systems (better technology compared to the earlier Direct Current systems ensuring improved reliability and lower maintenance) for Diesel Electric Locomotives.

For financial year 2014-15, New Orders were up by 118 percent to Rs. 9,468 million, Sales grew by 12 percent to Rs. 9,656 million, while Profit from Operations was Rs. 475 million compared to Rs. 328 million in the brvious year.


The Indian Railways has announced plans for major enhancements in conventional rail infrastructure of gauge conversion, electrification and doubling, tripling or quadrupling of railway lines, high-speed corridors and dedicated freight corridors. To facilitate commute for increasing urban population, the Government has plans to expand Metro rail network to all cities with more than one million population. The Indian Railways also plans to partner with the private sector to improve last mile connectivity, expand rolling stock fleet and modernize station infrastructure. To facilitate such partnership, the government has allowed 100 percent FDI in railway infrastructure. These are opportunities for Siemens Ltd.'s Mobility Division, which has the required competencies and technologies.


Digital Factory Division offers a combrhensive portfolio of software products and automation technologies for industrial applications covering the entire life cycle, from product design and production execution to after-sales services. Siemens helps its customers in the manufacturing sector enhance the flexibility and efficiency of their production processes, thereby boosting their competitiveness. These solutions are supplied to customers in Automotive, Food & Beverage, Pharmaceuticals, Textile, Tyre, General Engineering segments and Original Equipment Manufacturers (OEMs) engaged in machine tools, printing, packaging and electrical panel manufacturing.

During the financial year 2014-15, lower capital expenditure and (insufficient) investments by customers impacted the Division's performance. Demand improved from OEMs and smaller infrastructure-related projects, while the short-cycle business was on track driven by consumption segments such as Automotive and Food and Beverage. Customers in general are becoming more receptive to new products conforming to superior quality, safety, efficiency standards and offerings which enhance equipment lifecycle.

The business of the Digital Factory Division is characterized by numerous relatively small orders. Key highlights of the financial year were customers choosing the Company's International Electrotechnical Commission (IEC) 61439-compliant switchboards and multi-packaging Original Equipment Manufacturers (OEM) opting for Automation solutions (IEC 61439 is the new international standard that governs the production of Power Switchgear and Control Gear assemblies). The Division launched various state-of-the-art products such as Protection Devices, Controllers and Integrated Register Controls for OEMs in the printing industry.

For financial year 2014-15, the New Orders were up by

10 percent to Rs. 15,701 million, Sales grew by 6 percent to Rs. 15,480 million, while Profit from Operations was Rs. 1,267 million compared to Rs. 853 million in the brvious year.


The Digital Factory Division foresees demand to pick up driven by increasing customer brferences for the latest IEC standard for low-voltage Switchboards, Intelligent Motor Management, Energy Management Systems and Data Services. Demand from defence manufacturers, providers of Skill Enhancement services and Packaging OEMs is also expected to grow. The Division will continue to focus on delivering the 'right features' and competitive solutions for greater flexibility and efficiency in the customers' manufacturing processes.


Process Industries and Drives Division offers a combrhensive portfolio for Industrial application and solutions in the field of Automation and Drives for process industries such as Chemical, Pharmaceuticals, Food and Beverages, Water and Waste Water, Cement, Mining, Oil & Gas, Paper and Marines.

The business environment in which Process Industries and Drives Division operates is primarily driven by core sector industries. During financial year 2014-15, the improvement in these sectors was insignificant compared to financial year 2013-14. Among the highlights of the financial year, the Division won an order from Suzlon Energy Ltd for supply of Winergy brand Gear Boxes of 2.1MW capacity for wind turbines.

During the financial year, the energy-efficient industrial motors produced at the Division's factory in Kalwa surpassed the 100,000 milestone. The Advanced Motor Test Centre (AMTC), Kalwa, is the first among Industrial Motor Manufacturers in India to receive NABL (National Accreditation Board for Testing and Calibration Laboratories) accreditation for testing Industrial Motors. AMTC is equipped with 8 fully-automated test benches capable of testing Motors in the wide range of 120 W to 3000 kW. Among key new products, the Division launched the Simatic PCS 7 Smart DCS for industries including process, production and hybrid sectors and a Wireless Router for Wireless Broadband Communication, Smart Cities, Oil and Gas facilities, substations of Power Distribution systems, Switch Cabinets for Traffic and Rail Transport Control as well as applications in any harsh industrial environment.

For financial year 2014-15, the New Orders were up by

11 percent to Rs. 14,234 million, Sales grew by 5 percent to Rs. 14,483 million, while Profit from Operations was Rs. 729 million compared to Rs. 643 million in the brvious year.


The Company expects an increase in expenditure by the Government in Infrastructure and Defense to drive demand for focused verticals such as Cement, Mining and Marine. New investment from private industries is expected to remain slow till the capacity utilization of industries increase. Demand is expected from customers who are increasingly seeking higher efficiency products and looking for improving plant productivity. The Process Industries and Drives Division will continue its focus on increasing market share by introducing new products, extending reach, exploring new applications and enhancing focus on customer Intimacy.


The Healthcare Division supplies technology for the healthcare industry and is a leader in medical imaging, laboratory diagnostics and solutions for the healthcare IT. Its customers are providers of Imaging Diagnostics, Laboratory diagnostics and Point of Care.

The Healthcare sector witnessed moderate growth largely by corporate hospitals / laboratory chains and customers in Tier II/III cities and a one-time large procurement order from the government for the 6 new AIIMS hospitals. Shifting of the Budget allocation for Healthcare from the Centre to the States, is a matter of concern and will put more brssure on the already limited public health infrastructure in the country, as States will prioritise their Central allocations. This could impact the Government spending on Healthcare. Policy decisions like 100% FDI in healthcare sector has attracted private equity investors leading to a consolidation of existing facilities and could lead to a change in the business models from product sale to PPP, leasing, pay-per-use, pay-as-you-save, etc. High volatility in foreign exchange rates will adversely impact the cost of imports. The Company will need to evaluate the impact of these developments on its business.

During the financial year. Healthcare Division introduced new products in Ultrasound, X-Ray equipment, Mammography, CT, MR, Angiography and laboratory diagnostics to cater to entry-level as well as high-end technology requirements. Among the new products is MULTIMOBIL10, a locally-manufactured mobile X-ray system to cater to the potential demand in the entry level mobile X-ray systems. Its 'plug and perform' feature allows easy X-ray imaging near the patient's bedside, in the intensive care units, neo-natal care units and operating rooms without moving the patient. In addition, it also introduced three scalable hematology systems that offer state-of-the-art hematology testing capabilities for small to mid-sized laboratories and can also be used as back-up systems for larger diagnostic setups.

For financial year 2014-15, the New Orders were up by 7 percent to Rs. 15,551 million, Sales was down by 2 percent to Rs. 14,005 million, while Profit from Operations was Rs. 673 million compared to Rs. 389 million in the brvious year.


The Healthcare sector in India is expected to continue to grow, driven by various government initiatives under the "Health for all" program. Regulations on imports on refurbished systems can be a hurdle to provide affordable low-cost diagnostic services. While the Private Sector will continue to see consolidation by the corporate chains, resulting in increased opportunities as well as increased price brssures, the shift of allocations for Healthcare from the Centre to the States could create a challenge with regard to the rate of growth of this business, as States will take decisions based on their own priorities.


During the financial year 2014-15, Siemens Ltd. operated with a compliance system that is exemplary in the industry, focusing on compliance in areas of its business by rationalizing and strengthening controls to ensure adherence to compliance procedures.

As part of the Integrity Dialogue 2015 rolled out across the Company, over 3,500 employees were trained on various aspects of compliance.

To ensure that Compliance played a role of 'business enabler' without relinquishing and safeguarding controls, various processes were streamlined to facilitate governance as well as supporting business to early identify risks and implement remedial actions for a stronger and compliant company.

The Company has a 24/7 whistleblower hotline 'Tell Us' through which any compliance violations including potential cases can be notified. This is available for employees, directors as well as third parties. It is operated by a provider that is independent of Siemens to enable receipt of anonymous as well as protected information to be passed on without any bias. The Company continues to exhibit zero tolerance towards any non-compliant behavior.

The Company sustained its Collective Action programme in financial year 2014-15, focusing on creating awareness of the importance of a 'corruption-free' business environment through partnerships with like-minded Indian corporates. The Company also regularly participated in major anti-corruption forums where rebrsentatives of the Company's Compliance team made brsentations on topics such as compliance processes, transparency and accountability in corporate reporting, trends in enforcement and working in a conducive business environment at various conferences. As part of Siemens Integrity Initiative, Siemens Ltd. sponsored the anti-corruption awareness campaigns by partnering CII and Global Compact Network India.

(Details on compliance activities are included in the Business Responsibility Report available on www.siemens.co.in).


The Management of Siemens Ltd. is responsible for establishing and maintaining adequate internal control over financial reporting. The internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the brparation of financial statements for external purposes in accordance with applicable accounting principles and includes those policies and procedures that:

- Pertain to the maintenance of records that in reasonable detail, reflect accurately and fairly reflect the transactions and dispositions of the assets of the Company;

- Provide reasonable assurance that transactions are recorded as necessary to permit brparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

- Provide reasonable assurance regarding brvention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Siemens Ltd's Management assessed the effectiveness of the Company's internal control over financial reporting as of September 30, 2015. As a result of the evaluation, the Management has concluded that the Company's internal control over financial reporting was effective as of September 30, 2015 with no significant deficiency.


Siemens Ltd. is committed to a Zero Harm Culture (ZHC). During financial year 2014-15, the Company took various measures aimed at constantly improving Environmental Protection, Health Management and Safety (EHS) performance, including workshops for vendors & franchisee, Knowledge Exchange sessions for factory and project teams and several communications activities across locations and project sites.

In its effort to ensure ZHC is practiced within the Company, the Board of Directors reviews the progress of the safety measures being undertaken at Siemens Ltd. In addition, the Company's Senior Management continuously monitored the EHS status to check whether the project sites, factories and offices are operating under safe conditions. Rebrsentatives of the Management made a number of project site visits. During these visits, observations for improvement, application of best practices along with corrective actions were communicated to the respective project teams. The Company strengthened its risk mitigation measures.

The Company organizes regular training on environment, health and safety to permanent employees, temporary staff and contractual labour. During the year, the Company conducted 17,422 hours of safety training for permanent employees and 26,214 hours of training for contract workforce.

Recognizing the need to provide high-quality training on safety, Siemens Ltd. has set up the Siemens TUV Rheinland Global Skill Centre for Occupational Safety at Mumbai in collaboration with TUV Rheinland - a leader in Testing, Certification, Inspection, Consulting and Training. The hands-on training modules, under the Sitrust brand, are targeted mainly at Occupational Safety Practitioners, Project Managers, Construction Managers, Construction Site Supervisors, Safety Marshals and Site Engineers.

During the financial year 2014-15, 370 participants were imparted training on various aspects of Hazard Identification and implementation of Safety Controls.

(Details on EHS activities are included in the Business Responsibility Report available on www.siemens.co.in).


Through its sustained focus on professional development, employee-friendly policies and continuous engagement, Siemens Ltd. aims to be the Employer of Choice for engineering and management professionals.

The Company's Human Resources Department initiated various measures during financial year 2014-15. The Knowledge Pay and Hardship Allowance Schemes were introduced for attracting and retaining specific categories of employees engaged in project sites as well as in the service function. The 'My Pay, My Way!' program aimed at empowering employees with the choice to design their own salary structure as per individual brferences and improved Performance Pay schemes were introduced for four distinct focus groups - Sales, Service, Project Management & Manufacturing. It also enhanced Gratuity-related benefits as a tool to retain employees. The Company launched the Potential Development Program designed to identify and groom potential leaders for addressing Siemens current and future business challenges.

In the area of talent acquisition, the Company launched the Siemens Student Program - a focused initiative across 10 target brmier engineering institutes to promote Siemens Ltd. as an Employer of Choice and identify students for placement through structured internship offerings.

For employee welfare, the Company introduced an improved Healthy@Siemens wellness program, which includes regular training sessions on various health aspects. A sustained  360degreeWellness@Siemens program for lifestyle disorders was also rolled out.

The Company continues to have a cordial relationship with its Unions. In order to further improve Industrial Relations during the financial year 2014-15, the Company enhanced the productivity incentive scheme, made grades and skills on the shopfloor more flexible and extended medical insurance to direct contract employees.

As of September 30, 2015, the Company had 10,168 employees compared to 10,933 as of September 30, 2014.


The Management of Siemens Ltd. believes the year 2015-16 is expected to be a year of fiat or moderate growth depending on the speed of implementation of the reforms process.

With its 22 state-of-the-art factories and strong capabilities in the various verticals, Siemens Ltd. is brpared to address the demand for technologies to support this expected growth.

In 2015-16 Siemens with its portfolio strengths in electrification, automation and digitalization will continue to pursue all opportunities for profitable and sustainable growth.

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 reflect the Company's current views with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual result to be materially different, including, among other things, changes in general economic and business conditions, changes in 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 Limited

Deepak S. Parekh


DIN: 00009078

Place : Mumbai

Date : Friday, 27th November, 2015

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