The Directors have pleasure in presenting the 59th Annual Report of your Company and the Audited Financial Statements for the year ended 30th September, 2016.
1. Financial Performance
Profit from operations before other income and finance costs
Add: Other income
Less: Finance costs
Profit before exceptional items and tax
Add: Exceptional items
Profit before Tax
Profit for the year
Balance in the Statement of Profit and Loss brought forward
Amount available for appropriation
Interim Dividend paid
Tax on Interim Dividend
Proposed Final Dividend
Dividend Distribution Tax
Balance in the Statement of Profit and Loss carried forward
The Turnover of the Company increased by 3% and stood at Rs.108,089 million as compared to Rs.105,124 million in the previous year. The Company''''s Profit from Operations for the year ended 30th September, 2016 was Rs.7,468 million as compared to Rs.7,581 million in the previous year.
The Profit after Tax for the year ended 30th September, 2016 was Rs.28,880 million as compared to Rs.11,833 million during FY 2014-15.
During the Financial Year 2015-16, the Board of Directors declared a Special Dividend (Interim Dividend) of Rs.27.50 (Rupees Twenty Seven and Fifty Paise only) per equity share of Rs.2 each aggregating Rs.11,787 million including Dividend Distribution Tax. The Special Dividend (Interim Dividend) was paid in the month of August 2016.
The Board of Directors has recommended a final dividend of Rs.6 per equity share having face value of Rs.2 each, subject to the approval of the Members at the 59th Annual General Meeting. In the previous year, the Company paid a Dividend of Rs.10 (including Special Dividend of Rs.4 on account of large exceptional income during FY 2014-15) per equity share of ''''2 each.
The total dividend for the financial year 2015-16, including the proposed final dividend, will be Rs.33.50 (Previous year: Rs.10 per equity share (including Special Dividend of Rs.4 per equity share).
As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR"), the top 500 listed entities based on market capitalization are required to formulate Dividend Distribution Policy. The Company has formulated its Dividend Distribution Policy and the details of which are available on the Company''''s website at http://www.siemens.co.in/en/index/investor.html.
Sale and transfer of the Healthcare Undertaking of the Company ("SLHC")
Pursuant to the approval of the Members by way of Postal Ballot on 27th April, 2016, SLHC was sold and transferred as a going concern on a Slump Sale basis to Siemens Healthcare Private Limited, a subsidiary of Siemens AG, Germany, with effect from 1st July, 2016, for a consideration of Rs.30,500 million and recorded a profit of Rs.30,278 million, which forms part of exceptional items.
5. Subsidiary company
Siemens Rail Automation Private Limited (SRAPL) is a non-material and non-listed subsidiary of the Company pursuant to LODR. SRAPL is engaged in the business of manufacture, supply, design, installation and commissioning of Railway Signaling equipment consisting of trackside and on board equipment.
The Company has not made any further equity investment in SRAPL during the year. Your Company has obtained a certificate from the Statutory Auditors certifying that the Company is in compliance with the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000 with respect to the downstream investments.
A summary of performance of SRAPL is provided below.
The Turnover of SRAPL for FY 2015-16 stood at Rs.340 million (0.31% of consolidated turnover of the Company) as compared to Rs.577 million in the previous year and its Loss from Operations for the year ended 30th September, 2016 was Rs.44 million as compared to Loss from Operations of Rs.15 million in the previous year.
The Company does not have any joint venture or associate companies during the year.
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 ("the Act"), a statement containing salient features of financial statements of SRAPL in the prescribed Form AOC-1 is provided in Annexure I forming part of this Report. The audited financial Statements of SRAPL for FY 2015-16 are available on the Company''''s website at http://www.siemens.co.in/ en/index/investor/financials-of-our-subsidiaries.htm and the same are also available for inspection at the Registered Office of the Company as per the details mentioned in notice of the 59th Annual General Meeting. Your Company will also make available these documents upon request by any Member of the Company interested in obtaining the same.
Consolidated Financial Statements
The Annual Audited Consolidated Financial Statements together with the Report of Auditors'''' thereon forms part of this Annual Report.
6. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Information as required to be given under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 (as amended) is provided in Annexure II forming part of this Report.
7. Business Responsibility Report
Regulation 34(2) of LODR, inter alia, provides that the annual report of the top 500 listed entities based on market capitalization (calculated as on March 31 of every financial year), shall include a Business Responsibility Report ("BRR").
Your Company, being one of such 500 listed entities, has included BRR, as part of the Annual Report, describing initiatives taken by the Company from an environmental, social and governance perspective.
As a Green Initiative, the BRR for the year FY 2015-16 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 http://www.siemens.co.in/about-us/sustainability.htm
Any Member interested in obtaining a copy of BRR may write to the Company Secretary.
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 III.
Pursuant to the requirements of LODR, a detailed report on Corporate Governance along with the Auditor''''s Certificate confirming thereon forms part of this Report as Annexure IV.
General Shareholder Information forms part of this Report as Annexure V.
9. Audit Committee
The Company has an Audit Committee pursuant to the requirements of the Act read with the rules framed there under and LODR. The details relating to the same are given in the Report on Corporate Governance forming part of this Report. During the Financial year 2015-16, the recommendations of Audit Committee were duly approved and accepted by the Board of Directors.
10. Directors and Key Managerial Personnel
During the FY 2015-16, Mr. Pradip Nayak (DIN: 00032403) resigned from the Board of Directors of the Company with effect from 1st January, 2016. The Board places its appreciation for the valuable guidance and services rendered by him during his association with the Company as Director of the Company.
At the forthcoming 59th Annual General Meeting, Ms. Mariel von Schumann (DIN: 06625674) retires by rotation and being eligible, offers herself for re-appointment.
The resolution for the above re-appointment along with the brief profile forms part of the Notice of the 59th Annual General Meeting and the resolution for her re-appointment is recommended for your approval.
The Independent Directors of the Company viz. Mr. Deepak Parekh (DIN: 00009078), Mr. Yezdi Malegam (DIN: 00092017), Mr. Darius Shroff (DIN: 00170680) and Mr. Keki Dadiseth (DIN: 00052165) have furnished declarations to the Company under Section 149(7) of the Act, confirming that they meet the criteria prescribed for Independent Directors under Section 149(6) of the Act as well as under LODR.
Mr. Sunil Mathur, Managing Director and Chief Executive Officer (DIN: 02261944), Mr. Christian Rummel, Executive Director and Chief Financial Officer (DIN: 01992982) and Mr. Ketan Thaker, Company Secretary (ACS No.: 16,250) are the Key Managerial Personnel of the Company as on the date of this Report.
11. Board Meetings
During FY 2015-16, six meetings of the Board of Directors were held. The details of the attendance of Directors at the Board Meetings are mentioned in the Corporate Governance Report annexed hereto.
12. Annual evaluation of Board, its Committees and individual Directors
The details of the Annual evaluation of Board, its Committees and individual Directors are mentioned in the Corporate Governance Report.
13. Corporate Social Responsibility
At Siemens we wish to sustainably improve living conditions for as many people as possible, worldwide. The Company works towards that goal with business activities that address the challenges of our time such as Demographic change, Urbanization, Climate Change, Globalization and Digitalization. Our mission is to make real what matters in the way we electrify, automate and digitalize the world around us. Ingenuity drives us and what we create is for society. Our company-wide Corporate Citizenship framework forms a part of the Sustainability & Citizenship priority area. The Company considers it as its economic, environmental and social responsibility to foster sustainable local development as well as add value to the local economy in which it operates.
Further in accordance with the provisions of Section 135 of the Act and Rules framed there under, the Company has a Corporate Social Responsibility ("CSR") Committee of Directors comprising of Mr. Deepak Parekh (Chairman), Ms. Mariel von Schumann, Mr. Sunil Mathur and Mr. Christian Rummel. The Committee reviews and monitors the CSR projects and expenditure undertaken by the Company on a regular basis.
The Company implements the CSR projects directly as well as through implementing partners. The Company''''s initiatives towards sustainable communities have been addressed under the areas of integrated rural development using technology, skill development, promotion of science and technical education, conservation of water and other natural resources, provision of healthcare and sanitation and providing relief during disaster. The details of such initiatives, CSR spend, CSR Policy, etc., have been provided as Annexure VI to this Report, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014.
14. Remuneration Policy
The details of the Remuneration policy are mentioned in the Corporate Governance Report.
A Statement of Disclosure of Remuneration pursuant to Section 197 of the Act read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), is provided as Annexure VII forming part of this Report.
15. Extracts of Annual Return
The extracts of Annual Return in Form MGT 9 as required under Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 (as amended), forms part of this Report as Annexure VIII.
16. Particulars of contracts or arrangements with Related Parties
The particulars of contracts or arrangements with Related Parties referred to in Section 188(1) of the Act, in the prescribed Form AOC - 2, is provided as Annexure IX forming part of this Report.
17. Particulars of Loans, Guarantees or Investments
A statement providing particulars of loans, guarantees or investments under Section 186 of the Act is provided as Annexure X forming part of this Report.
18. Vigil Mechanism
As per the provisions of Section 177(9) of the Act, the Company is required to establish an effective Vigil Mechanism for Directors and employees to report genuine concerns. The Company has a Policy for Prevention, Detection and Investigation of Frauds and Protection of Whistleblowers ("the Whistleblower Policy") in place and the details of the Whistleblower Policy are provided in the Report on Corporate Governance forming part of this Report. The Company has disclosed information about the establishment of the Whistleblower Policy on its website http://www.siemens.co.in/en/index/investor/business-ethics.htm.
19. Risk Management Policy
Siemens Enterprise Risk Management (ERM) is a company-wide framework of methods and processes used to identify, assess, monitor and mitigate risks and seize opportunities related to achievement of Siemens business objectives. The Siemens ERM approach is based on the globally accepted "The Committee of Sponsoring Organizations of the Treadway Commission" ("COSO") framework i.e. "ERM - Integrated Framework". The COSO framework provides a generic concept which has been customized to reflect Company''''s requirements.
Major risks identified by the Business Divisions and Corporate Departments are systematically addressed through mitigating actions on a continuing basis. The Company has a Risk Management Committee in accordance with the requirements of LODR to, inter alia, monitor the risks and their mitigating actions. The Board of Directors of the Company also reviews the Risk Assessment and Mitigation Report annually.
Details in respect of adequacy of internal financial controls with reference to the Financial Statements are given in the Management''''s Discussion and Analysis, which forms part of this Report.
20. Directors'''' Responsibility Statement
Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Act, the Directors confirm that, to the best of their knowledge and belief:
a) that in the preparation of the Annual Financial Statements for the year ended 30th September, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) that such accounting policies have been selected and applied consistently and judgment 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, 2016 and of the profit of the Company for the year ended on that date;
c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) that the annual Financial Statements have been prepared on a going concern basis;
e) that proper internal financial controls are in place and that such internal financial controls were adequate and were operating effectively;
f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and are adequate and operating effectively.
21. Reporting of fraud
There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Act and Rules framed there under either to the Company or to the Central Government.
22. 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.
23. Amount, if any, proposed to transfer to reserves
The Company has made no transfers to reserves during the Financial Year 2015-16.
Your Directors place on record their deep appreciation for the contribution made by the employees of the Company at all levels.
The information on employees particulars as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), is provided in the Annexure forming part of the Report. In terms of Section 136 of the Act, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding aforesaid Annexure. The said information is available for inspection by the Members at the Registered Office of the Company as per the details mentioned in notice of the 59th Annual General Meeting on any working day of the Company up to the date of the 59th Annual General Meeting. Any Member interested in obtaining a copy of the same may write to the Company Secretary.
25. Policy on Prevention of Sexual Harassment at Workplace
The Company has in place a Policy on Prevention of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed there under and Internal Complaints Committee has also been set up to redress complaints received regarding sexual harassment. During the year, one complaint with allegations of sexual harassment was received by the Company and the same was investigated and resolved.
26. Statutory Auditors
Pursuant to provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, Messrs S R B C & CO LLP, Chartered Accountants (Firm Registration No. 324982E/E300003) were appointed as Statutory Auditors of the Company for a term of four years, to hold office from the conclusion of 57th Annual General Meeting held on 30th January, 2015, until the conclusion of 61st Annual General Meeting, subject to ratification of their appointment at every subsequent Annual General Meeting.
A certificate from Statutory Auditors has been received to the effect that their appointment as Statutory Auditors of the Company, if ratified at ensuing Annual General Meeting, would be according to the terms and conditions prescribed under Section 139 of the Act and Rules framed there under.
A resolution seeking ratification of their appointment, forms part of the Notice convening the 59th Annual General Meeting and the same is recommended for your consideration and approval.
27. Cost Auditors
The Board of Directors, on recommendation of the Audit Committee, has appointed Messrs R. Nanabhoy & Co., Cost Accountants (Firm Registration No. 7464), as Cost Auditors of the Company, for the Financial Year ending 30th September, 2017, at a remuneration as mentioned in the Notice convening the 59th Annual General Meeting.
A resolution seeking ratification for the remuneration payable to Cost Auditors forms part of the Notice of the 59th Annual General Meeting of the Company and same is recommended for your consideration and ratification.
A certificate from Cost Auditors 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 Section 141 of the Act and rules framed there under.
The Company had filed the Cost Audit Report for FY 2014-15 on 23rd February, 2016, which is within the time limit prescribed under the Companies (Cost Records and Audit) Rules, 2014.
28. Secretarial Audit
Pursuant to provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), the Secretarial Audit Report for FY 2015-16 issued by Secretarial Auditors i.e. Messrs Parikh Parekh & Associates, Practicing Company Secretaries (CP No. 1228), is provided as Annexure XI to this Report.
29. Material changes and commitment, if any, affecting Financial position of the Company from financial year end and till the date of this report
There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of the report.
30. Significant and Material Orders passed by the Regulators or Courts
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and operations of the Company in future.
The Board of Directors takes 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 Siemens Limited
Deepak S. Parekh
DIN - 00009078
Wednesday, 23rd November, 2016