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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%