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The Directors have pleasure in presenting the 57th Annual Report of your Company and the Audited Financial Statements for the year ended 30th September, 2014.
The Ministry of Corporate Affairs vide Circular No. 08/2014 dated 4th April, 2014 clarified that the financial statements and the documents required to be attached thereto, the auditor's and directors' report in respect of the financial year under reference shall continue to be governed by the relevant provisions of the Companies Act, 1956, schedules and rules made there under.
The Turnover of the Company decreased by approximately 6% and stood at Rs. 106,626 million as compared to Rs. 113,526 million in the previous year. The Company's Profit from Operations for the year ended 30th September, 2014 was Rs. 3,652 million as compared to Rs. 1,705 million in the corresponding period of the previous year.
The Profit after Tax was Rs. 6,032 million, compared to Rs. 1,940 million during 2012–13. In line with Siemens Global strategic re–alignment, the Company's businesses have with effect from 1st October, 2014 been classified into eight new 'Divisions' namely Power and Gas, Power Generation Services, Energy Management, Building Technologies, Mobility, Process Industries & Drives, Digital Factory and Healthcare.
The Board of Directors recommends a dividend of Rs. 6 per Equity Share of Rs. 2 each. This dividend is subject to the approval of the Members at the forthcoming Annual General Meeting. In the previous year, the Company paid a dividend of Rs. 5 per Equity Share of Rs. 2 each.
Sale and transfer of Metals Technologies business of the Company
The Company's parent company, Siemens Aktiengesellschaft, Germany ("SAG") has: (a) entered into an agreement with Mitsubishi–Hitachi Metals Machinery, Inc. ("MHMM") and Mitsubishi Heavy Industries ("MHI") for setting up a Joint Venture ("JV Co.") to operate in the business of metallurgical industry as a complete provider of plant, products and services for the iron, steel and aluminum industry ("MT Business"); and (b) pursuant to the aforementioned agreement the parties to such Agreement have agreed to transfer their existing MT Businesses including the MT Business of the Siemens group worldwide (including the MT Business of Siemens Limited) to the JV Co. According to the agreement, MHMM will hold a 51% and SAG a 49% stake in the JV Co.
The Board of Directors of the Company at its meeting held on 3rd June, 2014 approved in principle the sale and transfer of the Metals Technologies business of the Company to a designated entity subject to such terms and conditions as may be decided later on.
The Company accordingly vide its notice dated 8th November, 2014 has proposed the sale and transfer of its Metals Technologies business to a subsidiary (which is being incorporated) of Siemens VAI Metals Technologies GmbH, Germany, with effect from the close of business hours on 31st December, 2014 for a consideration of Rs. 10,232.7 million. The voting upon the said resolution is currently underway and shall end on 12th December, 2014 and thereafter the results would be announced.
5. Subsidiary company
The Board of Directors at its meeting held on 30th January, 2014 approved, subject to the necessary approvals, the acquisition of 100% equity shares of Siemens Rail Automation Pvt. Ltd. (SRAPL) from Siemens International Holding BV, Netherlands (99.99%) and Siemens AG (0.01%) for a consideration of Rs. 550 million. SRAPL is engaged in the business of manufacture, supply, design, installation and commissioning of Railway Signaling equipments consisting of trackside and on board equipment. Post acquisition, SRAPL became a wholly owned subsidiary of the Company with effect from 1st October, 2014.
6. Foreign Exchange Earnings and Expenditure
Details of foreign exchange earnings and expenditure have been given under the Notes to the Accounts.
7. Conservation of Energy and Technology Absorption
Information in terms of Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given as Annexure I to this Report.
8. Corporate Governance
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.
Your Company observes high standards of corporate governance in all areas of its functioning with strong emphasis on transparency, integrity and accountability. As required by Clause 49 VI of the Listing Agreement, a detailed report on Corporate Governance alongwith the Auditor's Certificate thereon forms part of this Report as Annexure III.
General Shareholder Information forms part of this Report as Annexure IV.
9. Business Responsibility Report
Pursuant to Clause 55 of the Listing agreement entered into with the Stock Exchanges, your Company is required to include as part of the Annual Report, Business Responsibility Report (BRR) which provides a suggested framework of a BRR, describing initiatives taken by the company from an environmental, social and governance perspective.
As a Green Initiative, the full BRR for the year 2014 has been hosted on the Company's website, which can be accessed at <http://www.siemens.co.in/en/index/investor/annual_report.htm> and Any Member interested in obtaining a copy of BRR may write to the Company Secretary of the Company.
Your Directors place on record their deep appreciation of the contribution made by the employees of the Company at all levels.
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 Financial Statement are being sent to all the Members of the Company, excluding the Statement of Particulars of Employees. Any Member interested in obtaining a copy of the said Statement may write to the Company Secretary of the Company.
11. Directors' Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors confirm that, to the best of their knowledge and belief:
a. in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures;
b. 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, 2014 and of the profit of the Company for the year ended on that date;
c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and
d. the annual accounts have been prepared on a going concern basis.
Mr. Christian Rummel has been appointed as an Additional Director as well as Executive Director and Chief Financial Officer of the Company with effect from 1st February, 2014. The terms and conditions of his appointment, including his remuneration, are subject to the approval of Members and Central Government. As per provisions of Section 161 of the Companies Act, 2013 and Article 104(b) of the Articles of Association of the Company, Mr. Rummel holds office upto the date of the forthcoming 57th Annual General Meeting and is eligible for appointment. Notice under Section 160 of the Companies Act, 2013 has been received from a member signifying her intention to propose the appointment of Mr. Rummel as Director of the Company.
At the ensuing Annual General Meeting, Mr. Joe Kaeser, Mr. Yezdi Malegam and Mr. Darius Shroff retire by rotation and being eligible, offer themselves for re–appointment.
Pursuant to Companies Act, 2013 and Clause 49 of the Listing Agreement, Mr. Deepak S. Parekh, Mr. Yezdi Malegam, Mr. Darius Shroff, Mr. Narendra Jhaveri, Mr. Keki Dadiseth and Mr. Pradip Nayak are proposed to be appointed as Independent Directors for a period of 5 years from the date of the Annual General Meeting i.e. 30th January, 2015 and shall not be liable to retire by rotation.
The above appointments and re–appointments form part of the Notice of the 57th Annual General Meeting and the respective Resolutions are recommended for your approval.
Profiles of these Directors, as required under Clause 49 of the Listing Agreement, are given in the Notice of the 57th Annual General Meeting.
The present Auditors of the Company, Messrs S.R. Batliboi & Associates LLP, Chartered Accountants, have expressed their unwillingness to be re–appointed as Auditors of the Company upon their retirement at the forthcoming Annual General Meeting. The Board of Directors, on recommendation of the Audit Committee, recommends the appointment of Messrs S R B C & Co. LLP, Chartered Accountants (Firm Registration No. 324982E), as the Statutory Auditors of the Company from the conclusion of 57th Annual General Meeting (subject to ratification by the Members every year in the Annual General Meeting) until the conclusion of 61st Annual General Meeting of the Company. A certificate from them has been received to the effect that their appointment as Statutory Auditors of the Company, if made, would be according to the terms and conditions prescribed under Sections 139 and 141 of the Companies Act, 2013 and rules framed thereunder. Messrs S R B C & Co. LLP and Messrs S. R. Batliboi & Associates LLP belong to the same netwaork of audit firms.
14. Fixed deposits
Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.
15. Cost Auditors
The Board of Directors, on recommendation of the Audit Committee, has appointed Messrs R. Nanabhoy & Co., Cost Accountants, as Cost Auditors of the Company, for the Financial Year 2014–15, for conducting the audit of the cost records maintained by the Company for the various products as mandated by the Central Government, pursuant to its order dated 30th June, 2014 and any amendments thereof, subject to the approval of the Members on the remuneration to be paid to the Cost Auditor. A certificate from them has been received to the effect that their appointment as Cost Auditors of the Company, if made, would be in accordance with the limits specified under of Section 141 of the Companies Act, 2013 and rules framed thereunder. The Company had filed the Cost Audit Report for FY 2012–13 on 6th March, 2014, which is within the time limit prescribed under the Companies (Cost Audit Report) Rules, 2011.
The Board of Directors take this opportunity to thank Siemens AG – the parent company, customers, members, suppliers, bankers, business partners / associates and Central and State Governments for their consistent support and co–operation to the Company.
On behalf of the Board of Directors For
Deepak S. Parekh
Date :Tuesday, 25th November, 2014