Cf Fiunal Report_2

8/3/2019 Cf Fiunal Report_2

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SUBMITTED TO:-

Ms.SANDHYA PRAKASHSUBMITTED BY:-

Anoop Singh

Anamika Rai

Sandeep arya

Shipra Bhargava

Suchita Sood

Vineet Singh

SECTION- F

ACKNOWLEDGEMENT

On the completion of this project we would like to thank large number ofindividuals who contributed to this project. As quotation goes:No single mole can move the mountain

First of all we would like to give our gratitude and sincere regards to Ms.

Shandhya prakash for giving us this opportunity and for her valuableguidance and support without which completion of this report would not bepossible.

We thank our classmates and group members for their support and valuablesuggestions for the completion of this report.


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BACKGROUND OF THE COMPANY

Siemens was founded in Berlin by Werner von

Siemens in 1847. As an extraordinary inventor,engineer and entrepreneur, Werner von

Siemens made the world's first pointer

telegraph and electric dynamo, inventions thathelped put the spin in the industrial revolution.

He was the man behind one of the most

fascinating success stories of all time - by turning a humble littleworkshop into one of the world's largest enterprises.

As Werner had envisioned, the company he started grew from strengthto strength in every field of electrical engineering. From constructing

the world's first electric railway to laying the first telegraph line linkingBritain and India, Siemens was responsible for building much of the

modern world's infrastructure.

Siemens is today a technology giant in more than 190 countries,employing some 440,000 people worldwide. Our work in the fields of

energy, industry, communications, information, transportation,healthcare, components and lighting has become essential parts ofeveryday life.

While Werner was a tireless inventor during his days, Siemens today

remains a relentless innovator. With innovations averaging 18 a day, itseems like the revolution Werner started is still going strong.

Siemens Company Profile

SIEMENS AG is a global powerhouse in electronics and electrical engineering, operating in the industry,

energy and healthcare sectors. For over 160 years, the company has stood for technical achievements,

innovation, quality, reliability and internationality.

SIEMENS is the world's biggest provider of ecofriendly technologies.The Siemens Group in india has

emerged as a leading inventor, innovator and implementer of leading-edge technology operating in the core

business segments of Industry,

Engery and Healthcare. The Siemens Group In over 17,000 persons. The company has 18 manufacturing

plants, a wide network of Sales and Service offices across the country and 500 channel partners.


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SIEMENS encourages all its investors and stakeholders to maintain good relations with utmost

transparency.

SIEMENS business philosphy-Giving back graciously to society a piece of our success.

Directors Report:-

The Board of Directors wishes to express itssincere appreciation for the excellent support and co-operationextendedBy Siemens AG - the parent company, members, customers,suppliers, bankers and other business associates.

1. Financial Performance:-(Rs

. in Million)

2008-09 2007-08 Growth 2008-092007-08 Growth%

Gross Profit before Interest, Depreciation and Exceptional Income 13,095.69

8,349.78 56.84

Less: Interest 58.7740.54

Depreciation 777.79637.34

Profit before Tax and Exceptional Income 12,259.137,671.90 59.79

Add: Exceptional Income

Profit on sale of Investments in Subsidiaries 2,059.46 -

Profit on sale of SBT Division -10.64

Profit on sale of SVDO Division -1,235.15

Profit before Tax 14,318.598,917.69 60.56


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Less: Tax 4,007.463,493.16

Deferred Tax (208.88)(629.04)

Fringe Benefit Tax 71.50

120.30

Net Profit after Tax 10,448.515,933.27 76.10

Amount available for appropriation 10,448.515,933.27Appropriations:

General Reserve 8,476.214,577.24

Net deficit on account of amalgamation of erstwhile Siemens

Industrial Turbo machinery Services Private Ltd. -172.64

Proposed Dividend 1,685.801,011.48

Dividend Distribution Tax 286.50171.90

3. Dividend: - The Board of Directors recommends a Dividend of Rs.5 per Equity Share ofRs.2 each. This Dividend is subject to theapproval of the Members at the forthcoming 52ndAnnual General Meeting to be held on 29 thJanuary, 2010.In the previous year, the Companypaid a Dividend of Rs.3 per Equity Share of Rs.2 each.

4. Managements Discussion and Analysis: - A detailed review of the operations,about the performance and future outlook of the Company and its businesses is given in theManagements Discussion and Analysis.

10. Corporate GovernanceTo the principles of Corporate Governance mandated by the Securities and Exchange Board ofIndia and have implemented all the prescribed stipulations. As required by Clause 49 VI of theListing Agreement, a detailed report on Corporate Governance forms part of this Report. TheAuditors Certificate on compliance with Corporate Governance requirements by the Companyis attached to the Corporate Governance Report.

Managements Discussions and Analysis:-

General Performance Review


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The fiscal year 2008-09 began amidst financial slowdown,which decelerated the economic growth of India to 6.7%.This depicted a decline of 2.1% fromthe average growth rate of 8.8% recorded in the previous five years. While the GDP growth inthe first two quarters was above 7.5%, it fell sharply in the third and fourth quarter to 5.8% ascompared to GDP growth rate of 9.3% and 8.6% recorded in Q3 and Q4 of 2007-08. Themoderation in growth for 2008-09 is mainly attributed to steep slowdown in growth in industryto 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 andquarrying sector showed a marginal growth.The growth was led by an estimated 7% growth inthe industrial sector, as compared to 5% in the first quarter. While, the industry as well asservices sector were on recovery track, the performance of the agriculture sector remained acause of concern. Considering the overall market conditions during the last fiscal of thecompany (October September 2009), Siemens continued to achieve stable performance.Further reviews on each of Siemens sector businesses are given separately in the followingparagraphs:

Corporate Governance

The Companys philosophy on Corporate Governance is to observe the highestlevel of ethics in all its dealings, to ensure the efficient conduct of the affairs of the Companyto achieve its goal of maximizing value for all its stakeholders.

Book ClosureThe Companys Register of Members and Share Transfer Books will remain

closed from Thursday, 21stJanuary, 2010 to Friday, 29thJanuary, 2010 (both days inclusive).

DividendDividend will be paid on or before Wednesday, 24 th February, 2010.

Siemens Limited (Annual Report) forThe year ended 30 September

2009.

Balance sheet as at 30 September 2009(Currency: Indian rupees thousands)

Schedule2009 2008SOURCES OF FUNDSShareholders' funds

Share capital 5 674,320674,320

Reserves and surplus 6 28,491,88720,016,524

29,166,207 20,690,844


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Loan funds

Unsecured loans 7 5,90610,614

29,172,11320,701,458

APPLICATION OF FUNDS

Fixed assets 8

Gross block 11,347,7749,910,985

Accumulated depreciation/ amortization(5,052,761) (4,339,333)

Net block 6,295,0135,571,652

Capital work-in-progress including capital advances 1,057,018

870,136

7,352,031 6,441,788

Investments 94,769,723 5,236,464

Deferred tax asset, net 101,119,126 910,247

Current assets, loans and advances

Inventories 11

9,721,971 7,621,143

Sundry debtors 1234,583,115 34,327,991

Cash and bank balances 1314,449,022 9,130,895

Loans and advances 1410,457,640 6,312,513

69,211,748 57,392,542Current liabilities and provisions

Current liabilities 15(40,585,370) (42,663,570)

Provisions 16(12,695,145) (6,616,013)

(53,280,515) (49,279,583)


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Net current assets15,931,233 8,112,959

29,172,113 20,701,458

Profit and loss account for the year ended 30September 2009(Currency: Indian rupees thousands)

Schedule2009 2008

INCOMESales and services (gross) 85,554,11485,588,746

Excise duty (2,186,779 )

(3,085,118)

Sales and services (net) 83,367,33582,503,628

Commission income 520,410451,826

83,887,745 82,955,454

Interest income 17 523,002471,937

Other operating income, net 18 697,219621,790

Other income 19 2,341,18867,214

87,449,154 84,116,395

EXPENDITURE

Cost of sales and services 20 63,976,91267,730,513

Personnel costs 21 5,498,9894,475,751

Depreciation/amortisation 8 777,794637,344

Interest Expense 58,77240,535

Other costs, net 22 4,877,5533,560,352

75,190,020 76,444,495

Profit before tax before exceptional income12,259,134 7,671,900Exceptional income:


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- Profit on sale of investments in subsidiaries 3 2,059,459-

- Profit on sale of Building Technologies division -10,635

- Profit on sale of Automotive division -1,235,151Profit before tax

14,318,593 8,917,686Consists of:- Discontinued operations 4 -8,232

- Continuing operations14,318,593 8,909,454

14,318,593 8,917,686

Provision for taxCurrent tax(4,007,464) (3,493,161)

Deferred tax credit/(charge)208,879 629,037

Fringe benefit tax(71,500) (120,296)Profit after tax10,448,508 5,933,266Consists of:

- Discontinued operations 4 -5,434

- Continuing operations10,448,508 5,927,832Profit available for appropriation10,448,508 5,933,266

Appropriations:

Proposed dividend1,685,801 1,011,481

Tax on proposed dividend286,502 171,901

Net defi cit on account of amalgamation of erstwhile 2 -172,640

Transfer to general reserve8,476,205 4,577,244

10,448,508 5,933,266

Earnings per share ('EPS')(Equity share of face value Rs 2 each)- Basic and diluted 34

30.99 17.60

Cash flow statementfor the year ended 30 September 2009


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(Currency : Indian rupees thousands)

Schedule2009 2008Cash flow from operating activitiesProfit before tax14,318,593 8,917,686Adjustments for:Interest expense58,772 40,535

Bad debts 22246,216 34,943

Provision for doubtful debts/advances, net 22(121,563) 311,643

Depreciation and amortization 8777,794 637,344

Profit on sale of fixed assets, net 18(238,276) (259,256)Profit on sale of long term investment (equity shares inSiemens Information Systems Ltd.)(1,942,882) -Profit on sale of long term investment (equity shares in

Siemens Information Processing Systems Ltd.)(116,577) -

Profit on sale of Building Technologies division 4 -(10,635)

Profit on sale of Automotive division 4 -(1,235,151)

Sale of lease rights(78,000) -

Profit on sale of Electronics Assembly Division(30,307) -

Unrealised exchange gain, net(1,027,379) (232,046)

Interest income 17

(523,002) (471,937)

Dividend income 19(2,232,881) (67,214)

Operating profit before working capital changes9,090,508 7,665,912

Increase in inventories(2,100,828) (396,396)

Increase in sundry debtors and other receivables(1,261,079) (10,521,707)

Increase in sundry creditors and other current liabilities(1,862,579) 11,000,201

Increase in provisions5,233,690 1,138,892

Net change in working capital9,204 1,220,990

Cash generated from operations9,099,712 8,886,902

Direct taxes paid, net(5,631,333) (3,969,992)

Net cash provided by operating activities3,468,379 4,916,910


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of which discontinued operations 4 -(104,951)

of which continuing operations 3,468,3795,021,861

Cash flow from investing activitiesPurchase of fixed assets (1,708,871)(1,946,909)

Proceeds from sale of f ixed assets 258,268290,309Purchase of investments

- In subsidiary companies (total consideration is in cash or cash equivalent) (1,700,999)(250,000)

- In mutual funds -(962,215)Sale of investments- In subsidiary company (total consideration is in cash or cash equivalent) 3,021,459-

- In mutual funds 1,205,740744,889Dividend received- From subsidiary company 19 2,229,459-

- From mutual funds 19 3,42267,214

Interest received 520,377482,513

Inter corporate deposits placed(10,845,000) (750,000)

Inter corporate deposits received back 9,050,000325,000

Sale of Automotive division (total consideration is in cash or cash equivalent) 4 -1,700,000

Sale of lease rights (total consideration is in cash or cash equivalent) 78,000-

Sale of EA business (total consideration is in cash or cash equivalent) 28,150-

Cash generated from investing activities2,140,005 (299,199)

of which discontinued operations 4 -(42,358)

of which continuing operations2,140,005 (256,841)Cash flow from financing activitiesInterest paid(2,251) (20,535)

Dividend paid (including tax thereon)(1,180,526) (945,555)

Repayment of long term borrowings(4,708) (4,709)

Net cash used in financing activities(1,187,485) (970,799)

of which discontinued operations 4 --

of which continuing operations(1,187,485) (970,799)

Net increase in cash and cash equivalents4,420,899 3,646,912


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Cash and cash equivalents at beginning of the year9,130,895 4,636,219

Cash and cash equivalents acquired on merger of SITS 2- 114,609

Cash and cash equivalents on demerger of the Automotive division 4- 76,492

Effect of exchange gain/(loss) on cash and cash equivalents897,228 656,663

Cash and cash equivalents at the end of the year 1314,449,022 9,130,895

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).

CAPITAL STRUCTURE ANALYSIS

Capital Structure consists Equity Share, Preference Share, Debenture,Secured and Unsecured loan. Company can raise capital from any of the following means. SIEMENS has

authorized capital of Rs. 1000,000,000 equity share of Rs. 2 each.

In 2008, company raised 338,024,465 equity share of Rs. 2 each out of which 337,160,200 equity share are

fully paid up. In the same year company issued bonus share 55,500,000 of Rs. 2 each. In 2009 number

shares were issue. Reserve and surplus of company increase from Rs. 20,016,524 to Rs. 28,491,887 as the

amount is transferred to General Reserve.

SIEMENS has not even raised any secured or unsecured loan in 2009 rather the payment of Interest Free

Loan is done by the amount of Rs. 4708.

COST OF CAPITAL

COST OF DEBT = Interest rate (1-tax rate)

Interest rate= 2.02%Corporate tax= 15.07%

Cost of Debt= 2.02% * (1-0.1507)

Cost of Debt = 1.71%

COST OF EQUITY = (D/p0) +G

D=Dividend=13%

P0=Current share price=120.49

Growth= (1-dividend payout rate)*(return on equity)


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Dividend payout rate=20%

Return on equity=23.6%

Growth= (1-.20)*(23.6)

Growth rate=18.88%

Cost of equity=18.88+ (13/120.49)

Cost of equity=19.09%

Cf Fiunal Report_2

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