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Notes to Accounts of Siemens Ltd.

Sep 30, 2023

The valuation of investment properties is in accordance with the Ready Reckoner rates prescribed for the purpose of levying stamp duty. The Company has referred to the publications and government website for Ready Reckoner rates. Further, the fair value of certain investment properties has been determined with the help of Independent valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017.

For fair value measurement hierarchy, refer note 53B.

a) Shares held by Subsidiary and Associates of Ultimate Holding Company:

169,882,943 (2022: 169,882,943) Equity shares of '' 2 each, fully paid-up, are held by Siemens International Holding B.V., Subsidiary of Ultimate Holding Company.

85,468,862 (2022: 85,468,862) Equity shares of '' 2 each, fully paid-up, are held by Siemens Energy Holding B.V. (formerly known as Siemens Gas and Power Holding B.V.), Associate of Ultimate Holding Company.

11,738,108 (2022: 11,738,108) Equity shares of '' 2 each, fully paid-up, are held by Siemens Metals Technologies Vermogensverwaltungs GmbH, Subsidiary of Ultimate Holding Company.

e) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of '' 2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts (if any). The distribution will be in proportion to the number of equity shares held by the shareholders.

22 Other equity

Nature and purpose of reserve

a) Capital reserve was created on account of merger of group companies in earlier years.

b) Amalgamation reserve pertains to amalgamation of Siemens VDO Automotive Ltd. in 2006.

c) Capital redemption reserve pertains to entity accounted as business combination under common control.

d) Securities premium account represents the surplus of proceeds received over the face value of shares, at the time of issue of shares.

e) General reserve was created out of profits earned by the Company by way of transfer from surplus in the statement of profit and loss. The Company can use this reserve for payment of dividend and issue of fully paid-up shares. As General reserve is created by transfer on one component of equity to another and is not an item of other comprehensive income, items included in the General reserve will not be subsequently reclassified to statement of profit and loss.

f) Cash flow hedge reserve represents mark-to-market valuation of effective hedges as required by Ind AS 109.

g) Retained earnings are the profits that the Company has earned till date, less any transfers to General reserve and payment of dividend.

The above reserves will be utilised in accordance with the provision of the Companies Act, 2013.

40 Commitments and contingent liabilities

Sept 2023

Sept 2022

(a)

Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)

1,183

605

(b)

Contingent liabilities (to the extent not provided for)

Income tax (excluding interest)

5,612

6,678

Goods and service tax (GST), excise, service tax and sales tax liabilities, under dispute

6,193

6,673

Customs liabilities, under dispute

120

120

Claims against the Company not acknowledged as debts

867

873

In respect of above contingent liabilities, the future cash outflows are determinable only on receipt of judgements pending at various forums / authorities. The Company has assessed that it is only possible, but not probable, that outflow of economic resources will be required.

42 Disclosure relating to Provisions Provision for warranty

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery / commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms up to closure of the contract (including warranty period).

Provision for loss orders

A provision for expected loss on construction contracts is recognised when it is probable that the contract costs will exceed total contract revenue. For all other contracts, loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic benefits.

Provision for other matters

The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes (other than income tax), duties and other levies, the outflow of which would depend on the cessation of the respective events.

(iv) Revenue recognised during the year from opening balance of contract liabilities amounts to '' 11,620 (2022: '' 9,005).

(v) There is no revenue recognised during the year from the performance obligation that is satisfied in previous year (arising out of contract modifications).

(vi) Information regarding geographical disaggregation of revenue has been included in segment information. (refer note 45(ii))

45 (iii) Other disclosures :

- The Chief Operating Decision Maker ("CODM") evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by operating segments. The CODM reviews revenue and profit from operations as the performance indicator for all of the operating segments. The Chief Executive Officer and Chief Financial Officer are the CODM of the Company.

- Inter-segment prices are normally negotiated amongst the segments with reference to the market price. Transfer prices between operating segments are on arm''s length basis in a manner similar to the transactions with third parties.

- No operating segments have been aggregated to form the above reportable operating segments.

- Other income and finance costs are not allocated to individual segments as the underlying instruments are managed on a group basis.

- Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to individual segments as they are also managed on a group basis.

- Capital expenditure consists of additions of property, plant and equipment, intangible assets and capital work in progress including assets aquired from the acquisition of businesses.

- Profits / losses on inter-segment transactions are eliminated at the Company level.

(iv) Segment information :

Business Segments: The business of the Company is divided into four segments. These segments are the basis for

management control and hence, form the basis for reporting. The business of each segment comprises of :

- Energy :- Provides fully integrated products, solutions and services across the energy value chain of oil and gas production, power generation and transmission for various customers such as utilities, independent power producers and engineering, procurement and construction (EPC) companies.

- Smart Infrastructure:- Supplier of products, systems, solutions and services for transmission and distribution of electrical energy for power utilities, industrial companies and infrastructure segments. Portfolio covers systems for low & medium voltage distribution, solutions for smart grids and energy automation, low voltage power supply systems. Provides intelligent and connected infrastructure for grids and buildings.

- Mobility:- Supplier of solutions for passenger and freight transportation - including rail vehicles, rail automation systems, rail electrification systems, road traffic technology and IT solutions.

- Digital Industries:- Contains portfolio of leading edge automation, drives and software technologies covering the complete life cycle from product design and production execution to services for discrete and process Industries.

- Others :- Services provided to other group companies and lease rentals have been classified as "Others".

Geographical Segments: The business is organised in two geographical segments i.e. within India and outside

India.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to

the total common costs.

Unallocated corporate items

Unallocated items include general corporate assets and liabilities which are not allocated to any business segment.

b) The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting year 2022-23 and the method of assumption used in preparing sensitivity analysis did not change compared to previous year.

c) The fund formed by the Company manages the investments of the Gratuity fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities. The Company expects to contribute '' 313 (2022: '' 238) to gratuity fund in 2023-24.

The investment strategy in respect of its funded plans is implemented within the framework of the applicable statutory requirements. Each year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes the asset liability matching strategy and investment risk management policy. This includes employing the use of annuities and longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual review. Generally it aims to have a portfolio mix of equity instruments and debt instruments to minimize the risk exposed to investment.

d) The estimates of future salary increases, considered in actuarial valuation, take in to account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

e) The Company has contributed '' 564 (2022: '' 461) towards Provident fund during the year ended 30 September 2023. The said amount is excluding of amounts recognised by discontinued operation. The Guidance note issued by the Institute of Actuaries of India states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. The Actuary has accordingly provided a valuation and based on the assumptions provided below, there is a shortfall as at 30 September.

(iii) General descriptions of significant defined plans

I Gratuity Plan

Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company''s Scheme whichever is more beneficial. Under the act, employee who has completed five years of service is entitled to the benefit. The level of benefits provided depends on the members length of service and salary at retirement age.

II Medical

Post retirement medical benefit is paid to the retired employees and their spouse till their survival and after their death, benefits are available to the employee''s spouse. It consists of 3 components, which is health insurance, Domiciliary medical allowance and Company support in case the expenses incurred are more than the health insurance coverage subject to the ceiling limit as per the grades.

III Pension

Pension is paid to management cadre employees of the Company, who retired before March 1998. Pension is paid on monthly basis. In case of death in retirement ,100 percent pension is paid to the spouse for first six months and then 60 percent thereafter.

IV Retirement Gift

Retirement gift is paid, as a token of appreciation to the permanent employees who are separating on their retirement or after their long association with the Company.

The information has been given in respect of such vendors to the extent they could be identified as ''micro and small enterprises'' on the basis of information available with the Company.

# Interest accrued is considered due upon claim from vendors.

* denotes figures less than a million 50 Share-based payment transactions

Share matching plan (SMP) and Siemens Stock Awards (SSA) at Siemens Ltd are classified as cash-settled transactions. The employees of the Company are eligible for the Ultimate Holding Company''s share awards, i.e. SMP and SSA. Under SMP the employee may invest a specified part of their compensation in the Ultimate Holding Company''s shares and at the end of 3 years (vesting period) employee gets one free share for every three shares purchased.

Under SSA, the Company grants stock awards of the Ultimate Holding Company''s shares to the Senior management and other eligible employees. The vesting period is upto 4 years. SSA includes two schemes, under Special Allocation Stock Awards, the shares of are awarded to reward the performance of the employee. Under Performance Oriented Siemens Stock Awards these awards will be vested on the achievement of the performance criteria of Ultimate Holding Company.

At the end of each reporting period, the Company recognises the fair value of the liability and the expense at each reporting period at the market price of the Ultimate Holding Company''s share.

Effect of Share-based payment transaction on the profit & loss, shown under the head Employee benefit expense is '' 635 (2022: '' 91)

51 Derivative Instruments

a) Forward Contracts and Option contracts

The Company uses forward contracts and options to mitigate its risks associated with foreign currency fluctuations having underlying transaction and relating to firm commitments or highly probable forecast transactions. The Company does not enter into any forward and options contracts which are intended for trading or speculative purposes.

52 Capital management

For the purpose of the Company''s capital management, equity includes equity share capital and all other equity reserves attributable to the equity holders of the Company. The Company manages its capital to optimise returns to the shareholders and makes adjustments to it in light of changes in economic conditions or its business requirements. The Company''s objectives are to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth and maximise the shareholders value. The Company funds its operations through internal accruals. The management and the Board of Directors monitor the return on capital as well as the level of dividends to shareholders.

The Company enters into foreign exchange forward and commodity contracts, which are valued using valuation techniques that employs the use of market observable inputs.

There have been no transfers between Level 1 and Level 2 during the year.

54 Financial Risk Management

The Company''s principal financial liabilities comprise of trade payable, security deposits and other financial liabilities. The Company''s principal financial assets include trade and other receivables, cash and cash equivalents and other financial assets that arise from its operations. The Company also enters into hedging transactions to cover foreign exchange exposure risk.

The Company''s operating business is exposed to market risk, credit risk and liquidity risk. In order to optimize the allocation of the financial resources across the segments, as well as to achieve its aims, the Company identifies, analyses and manages the associated market risks. The Company seeks to manage and control these risks primarily through its regular operating activities and uses derivative financial instruments when deemed appropriate. All derivative activities for risk management purposes are carried out by teams that have the appropriate skills, experience and supervision. The Company has a Risk Management Committee, which ensures that the Company''s financial risk taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and mitigated in accordance with the Company''s policies and overall risk appetite.

A Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of currency rate risk and interest rate risk. Financial instrument affected by market risks includes deposits, derivative financial instruments, trade receivables, trade payables and other financials assets.

Foreign Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes on foreign exchange rate. The Company operates internationally and transacts in several currencies and has foreign currency trade receivables and trade payables. Hence, the Company is exposed to foreign exchange risk. The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Consequently, could have unforeseen impact on Company''s cost of borrowing or returns thus impacting the profit and loss.

The Company does not have any borrowings. Surplus funds are invested in deposits at fixed interest rates. The tenure of the deposits is managed to match with the liquidity profile of the Company.

* denotes figures less than a million B Credit risk

Credit risk is defined as an unexpected loss in financial instruments if the contractual partner is failing to discharge its obligations in full and on time. The Company is exposed to credit risk from its operating and financing activities like trade receivables, deposits with banks, foreign exchange transactions and other financial instruments.

Trade receivables and Contract assets

The major exposure to credit risk at the reporting date is primarily from receivables comprising of trade and project unbilled receivables (net).

Credit risk on receivables is limited due to the Company''s large and diverse customer base which includes public sector enterprises, state owned companies and private corporates. The effective monitoring and controlling of credit risk through credit evaluations and ratings is a core competency of the Company''s risk management system. For receivables, as a practical expedient, the Company computes expected credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The ECL is calculated on rating and default probability percentage arrived from the historic default trend. In order to determine the default probability percentage, a simple average of customer wise specific allowances or actual bad debts incurred in succeeding year (derived rates) (whichever is higher) for the preceding three years is considered as a percentage of gross receivables positions for each grading i.e. rating and division of each customer as at reporting date.

Other financial assets

Credit risk from cash and cash equivalents, term deposits and derivative financial instruments is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds, temporarily, are made only with approved counter parties and within credit limits assigned to each counterparty. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

C Liquidity risk

The Company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company regularly monitors the rolling forecasts and actual cashflows, to ensure it has sufficient funds to meet the operational needs.

55 Business Combination Summary of acquisition

On 1 July 2023, the Company acquired Electric Vehicle division of Mass-Tech Controls Pvt. Ltd. for a cash consideration of '' 380 million, subject to adjustments mutually agreed between the parties to the transaction. From the aforesaid consideration, '' 5 million is currently retained as a holdback for a period of 1 year from the date of acquisition.

The fair value of assets and liabilities acquired have been determined provisionally in accordance with IND AS 103 ''Business Combinations''. The purchase price has been provisionally allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired has been allocated to goodwill. The Company believes that the information provides a reasonable basis for estimating the fair values of assets and liabilities acquired, but the potential for measurement period adjustments exists based on a continuing review of matters related to the acquisition. The purchase price allocation is expected to be completed within one year.

The acquisition addresses fast-growing demand for EV charging infrastructure in India, expand local market presence & enable creation of export hub and scale up the Company''s range of e-mobility solutions, complementing Siemens global portfolio. Provisional goodwill is primarily attributable to technologies and overall synergies from future expected economic benefits, including enhanced revenue growth from expanded capabilities.

55 Business Combination (Continued)

During the year ended 30 September 2023 the Company has recognised acquisition related cost of '' 8 lacs included in Legal and Professional Fees.

From the acquisition date, the results of operations of Mass-Tech Controls Pvt. Ltd. is included in the financial statements for the year ended 30 September 2023 as part of the Company''s Smart Infrastructure Segment and comprises revenue from operations of '' 85 million and net loss of '' 34 million. If the acquisition had occurred at the beginning of the year, Company''s revenue from operations and net loss for the year ended 30 September 2023 would have been '' 389 million and '' 31 million respectively. The net loss includes one time integration costs.

56 Discontinued operations

During the previous year, on 1 July 2022, the Company divested its Large Drives Applications (LDA) business (Portfolio Companies Segment) as a going concern on a slump sale basis to Siemens Large Drives India Pvt. Ltd. (a subsidiary of Siemens Large Drives GmbH, which in turn is a subsidiary of Siemens AG), for a cash consideration of '' 4,400 million. The gain on the sale transaction is '' 3,559 million for the year ended 30 September 2022. The tax expense on this transaction is '' 853 million (including write-off of deferred tax assets of '' 49 million) for the year ended 30 September 2022.

57 During the previous year, the Company had executed a Power Purchase Agreement and entered into a Share Subscription and Shareholders Agreement for the subscription of 26% of the paid-up equity share capital of Sunsole Renewables Pvt. Ltd. (Sunsole). On 28 February 2022, Sunsole had allotted 26% of its paid-up equity share capital to the Company as first tranche allotment for a consideration of '' 2.7 million and '' 11.4 million as second tranche allotment on 5 August 2022. The Company has accounted for the investment at cost as per IND AS 28 ''Investments in Associates and Joint Ventures''.

i) Net worth comprises of Equity share capital and Other equity

ii) Cost of goods sold comprises of a) Cost of materials consumed, b) Purchases of Stock-in-Trade, c) Changes in inventories of finished goods, d) work-in-progress and stock-in-trade, e) Project bought outs and other direct costs.

iii) Net credit purchases comprises of (a) cost of goods sold and (d) Other expenses excluding Bad debts (including provision), Net loss on foreign exchange (including commodity gain/loss) and Corporate Social Responsibility expenditure.

iv) Working Capital is current assets less current liabilities.

59 Asset held for sale pertains to Land & building and Other assets to be sold from Property, plant and equipment, Investment properties and Right of use assets. These assets are measured at the lower of carrying value and fair value less cost to sell.

61 Other Notes:

i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

ii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

iii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

iv) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

v) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

vi) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

vii) The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013, read with Companies (restriction on number of layers) Rules, 2017.

62 Pursuant to the amendment in the Companies (Accounts) Rules, 2014 effective from 11 August 2022, requires that books of accounts and other relevant books and papers maintained in electronic mode should remain accessible in India at all times and backup must be taken on servers physically located in India. The books of accounts are maintained by the Company in electronic mode and are accessible in India at all times. The Company did not have an established process of maintaining daily back-up of books of accounts on a server physically located in India upto 20 June 2023. Effective 21 June 2023, the Company has kept back-up of books of accounts on servers physically located in India on daily basis and has also taken a back-up of books of accounts and records for the period 1 October 2022 to 20 June 2023 on 21 June 2023.

63 Previous period figures have been regrouped / reclassified wherever necessary, to conform to current period classification.


Sep 30, 2022

a) Shares held by Subsidiary and associates of Ultimate Holding Company:

169,882,943 (2021: 169,882,943) Equity shares of '' 2 each, fully paid-up, are held by the Subsidiary of Ultimate Holding Company, Siemens International Holding B.V.

85,468,862 (2021: 85,468,862) Equity shares of '' 2 each, fully paid-up, are held by the Associate of Ultimate Holding Company, Siemens Gas and Power Holding B.V.

11,738,108 (2021: 11,738,108) Equity shares of '' 2 each, fully paid-up, are held by Siemens Metals Technologies Vermogensverwaltungs GmbH (formerly known as Siemens VAI Metals Technologies GmbH), Subsidiary of Ultimate Holding Company.

e) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of '' 2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts (if any). The distribution will be in proportion to the number of equity shares held by the shareholders.

23 Other equity

Nature and purpose of reserve

a) Capital reserve was created on account of merger of group companies in earlier years.

b) Amalgamation reserve pertains to amalgamation of Siemens VDO Automotive Limited in 2006.

c) Capital redemption reserve pertains to entity accounted as business combination under common control.

d) Securities premium account represents the surplus of proceeds received over the face value of shares, at the time of issue of shares.

e) General reserve was created out of profits earned by the Company by way of transfer from surplus in the statement of profit and loss. The Company can use this reserve for payment of dividend and issue of fully paid-up shares. As General reserve is created by transfer on one component of equity to another and is not an item of other comprehensive income, items included in the General reserve will not be subsequently reclassified to statement of profit and loss.

f) Cash flow hedge reserve represents mark-to-market valuation of effective hedges as required by Ind AS 109.

g) Retained earnings are the profits that the Company has earned till date, less any transfers to General reserve and payment of dividend.

The above reserves will be utilised in accordance with the provision of the Companies Act, 2013.

Commitments and contingent liabilities

(a)

Commitments

Estimated amount of contracts remaining to be executed on capital

Sept 2022

Sept 2021

(b)

account and not provided for (net of advances)

Of the above 2022: '' Nil (2021: '' Nil) pertains to discontinued operations Contingent liabilities (to the extent not provided for)

605

634

Income tax (excluding interest)

Excise, Goods and Services Tax (GST), service tax and sales tax liabilities,

6,678

6,843

under dispute

6,673

6,818

Customs liabilities, under dispute

120

120

Claims against the Company not acknowledged as debts

Of the above 2022: '' Nil (2021: '' Nil) pertains to discontinued operations

873

903

i) In respect of above contingent liabilities, the future cash outflows are determinable only on receipt of judgements pending at various forums / authorities. The Company has assessed that it is only possible, but not probable, that outflow of economic resources will be required.

ii) The Code on Social Security, 2020 (Code) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

Disclosure relating to Provisions Provision for warranty

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery/ commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms up to closure of the contract (including warranty period).

Disclosure relating to Provisions (continued)

Provision for loss orders

A provision for expected loss on construction contracts is recognised when it is probable that the contract costs will exceed total contract revenue. For all other contracts, loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic benefits.

Provision for other matters

The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the outflow of which would depend on the cessation of the respective events.

Disclosure pursuant to Indian Accounting Standard - 115 ''Revenue from contracts with customer'' :

(i) Out of the total revenue recognised for continuing operations under Ind AS 115 during the year, '' 58,652 (2021: '' 45,193) is recognised over a period of time and '' 87,229 (2021: '' 78,087) is recognised at a point in time.

(iv) Revenue recognised during the year from opening balance of contract liabilities amounts to '' 9,005 (2021: '' 10,977).

(v) There is no revenue recognised during the year from the performance obligation that is satisfied in previous year (arising out of contract modifications).

(vi) Information regarding geographical disaggregation of revenue has been included in segment information [refer note 48(ii)].

(iii) Other disclosures :

- The Chief Operating Decision Maker ("CODM") evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by operating segments. The CODM reviews revenue and profit from operations as the performance indicator for all of the operating segments. The Chief Executive Officer, Chief Financial Officer and Division CEO & CFO''s are the CODM of the Company.

- Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks/ Transfer prices between operating segments are on arm''s length basis in a manner similar to the transactions with third parties.

- No operating segments have been aggregated to form the above reportable operating segments.

- Finance income and costs, and fair value gains and losses on financial assets are not allocated to individual segments as the underlying instruments are managed on a group basis.

- Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to those segments as they are also managed on a group basis.

- Capital expenditure consists of additions of property, plant and equipment, intangible assets and investment properties including assets from the acquisition of subsidiaries.

- Profits / losses on inter segment transfers are eliminated at the Company level.

(iv) Segment information :

Business Segments: The business of the Company is divided into four segments. These segments are the basis for

management control and hence, form the basis for reporting. The business of each segment comprises of :

- Energy : - Provides fully integrated products, solutions and services across the energy value chain of oil and gas production, power generation and transmission for various customers such as utilities, independent power producers and engineering, procurement and construction (EPC) companies.

- Smart Infrastructure: - Supplier of products, systems, solutions and services for transmission and distribution of electrical energy for power utilities, industrial companies and infrastructure segments. Portfolio covers systems for low & medium voltage distribution, solutions for smart grids and energy automation, low voltage power supply systems. Provides intelligent and connected infrastructure for grids and buildings.

- Mobility: - Supplier of solutions for passenger and freight transportation - including rail vehicles, rail automation systems, rail electrification systems, road traffic technology and IT solutions.

- Digital Industries: - Contains portfolio of leading edge automation, drives and software technologies covering the complete life cycle from product design and production execution to services for discrete and process Industries.

- Others :- Services provided to other group companies and lease rentals have been classified as "Others".

Geographical Segments: The business is organised in two geographical segments i.e. within India and outside

India.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to

the total common costs.

Unallocated corporate items

Unallocated items include general corporate items which are not allocated to any business segment.

b) The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting year 2021-22 and the method of assumption used in preparing sensitivity analysis did not change compared to previous year.

c) The fund formed by the Company manages the investments of the Gratuity fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities. The Company expects to contribute '' 238 (2021: '' 259) to gratuity fund in 2022-23.

The investment strategy in respect of its funded plans is implemented within the framework of the applicable statutory requirements. Each year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes the asset liability matching strategy and investment risk management policy. This includes employing the use of annuities and longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual review. Generally it aims to have a portfolio mix of equity instruments and debt instruments to minimize the risk exposed to investment.

d) The estimates of future salary increases, considered in actuarial valuation, take in to account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Disclosure pursuant to Indian Accounting Standard - 19 ''Employee Benefits'' (Continued):

e) The Company has contributed '' 461 (2021: '' 574) towards provident fund during the year ended 30 September 2022. The said amount is excluding of amounts recognised by discontinued operation. The Guidance note issued by the Institute of Actuaries of India states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. The Actuary has accordingly provided a valuation and based on the assumptions provided below there is a shortfall as at 30 September 2022.

General descriptions of significant defined plans

I Gratuity Plan

Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company''s Scheme whichever is more beneficial. Under the act, employee who has completed five years of service is entitled to the benefit. The level of benefits provided depends on the members length of service and salary at retirement age.

II Medical

Post retirement medical benefit is paid to the retired employees and their spouse till their survival and after their death, benefits are available to the employee''s spouse. It consists of 3 components, which is health insurance, Domiciliary medical allowance and Company support in case the expenses incurred are more than the health insurance coverage subject to the ceiling limit as per the grades.

III Pension

Pension is paid to management cadre employees of the Company, who retired before March 1998. Pension is paid on monthly basis. In case of death in retirement,100 percent pension is paid to the spouse for first six months and then 60 percent thereafter.

IV Retirement Gift

Retirement gift is paid, as a token of appreciation to the permanent employees who are separating on their retirement or after their long association with the Company.

Share-based payment transactions

Share matching plan (SMP) and Siemens Stock Awards (SSA) at Siemens Ltd are classified as cash-settled transactions. The employees of the Company are eligible for the Ultimate Holding Company''s share awards, i.e. SMP and SSA. Under SMP the employee may invest a specified part of their compensation in the Ultimate Holding Company''s shares and at the end of 3 years (vesting period) employee gets one free share for every three shares purchased.

Under SSA, the Company grants stock awards of the Ultimate Holding Company''s shares to the Chief Executive Officer, Chief Financial Officer, members of senior management and other eligible employees. The vesting period is upto 4 years, after which the beneficiary gets certain number of shares which is tied to the performance of the employee in case of CEO Special Allocation scheme and performance of Ultimate Holding Company in case of Performance Oriented Siemens Stock Awards.

At the end of each reporting period, the Company recognises the fair value of the liability and the expense at each reporting period at the market price of the Ultimate Holding Company''s share.

Derivative Instruments

a) Forward Contracts and Option contracts

The Company uses forward contracts and options to mitigate its risks associated with foreign currency fluctuations having underlying transaction and relating to firm commitments or highly probable forecast transactions. The Company does not enter into any forward and options contracts which are intended for trading or speculative purposes.

The forward exchange and options contracts are fair valued at each reporting date with the resultant gains/ losses thereon being recorded in statement of Profit and Loss.

For the purpose of the Company''s capital management, equity includes equity share capital and all other equity reserves attributable to the equity holders of the Company. The Company manages its capital to optimise returns to the shareholders and makes adjustments to it in light of changes in economic conditions or its business requirements. The Company''s objectives are to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth and maximise the shareholders value. The Company funds its operations through internal accruals. The management and the Board of Directors monitor the return on capital as well as the level of dividends to shareholders.

The Company''s principal financial liabilities comprise of trade payable, security deposits and other financial liabilities. The Company''s principal financial assets include trade and other receivables, cash and cash equivalents and other financial assets that arise from its operations. The Company also enters into hedging transactions to cover foreign exchange exposure risk. The Company''s operating business is exposed to market risk, credit risk and liquidity risk. In order to optimize the allocation of the financial resources across the segments, as well as to achieve its aims, the Company identifies, analyses and manages the associated market risks. The Company seeks to manage and control these risks primarily through its regular operating activities and uses derivative financial instruments when deemed appropriate. All derivative activities for risk management purposes are carried out by teams that have the appropriate skills, experience and supervision. The Company has a Risk Management Committee, which ensures that the Company''s financial risk taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and mitigated in accordance with the Company''s policies and overall risk appetite.

A Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of currency rate risk and interest rate risk. Financial instrument affected by market risks includes deposits, derivative financial instruments, trade receivables, trade payables and other financials assets.

Foreign Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes on foreign exchange rate. The Company operates internationally and transacts in several currencies and has foreign currency trade receivables and trade payables. Hence, the Company is exposed to foreign exchange risk. The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

Foreign currency sensitivity

The following table demonstrate the sensitivity to a reasonably possible change in major currencies like US Dollar and Euro with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities including foreign currency derivatives. The Company''s exposure to foreign currency changes for all other currencies is not material.

Particulars

Effect on profit before tax

Effect on equity (net of tax)

Sept 2022

Sept 2021

Sept 2022

Sept 2021

US Dollar 5%

275

509

2

*

- 5%

(275)

(509)

(2)

*

Euro 5%

554

123

9

*

- 5%

(554)

(123)

(9)

*

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Consequently, could have unforeseen impact on Company''s cost of borrowing or returns thus impacting the profit and loss.

The Company does not have any borrowings. Surplus funds are invested in deposits at fixed interest rates. The tenure of the deposits is managed to match with the liquidity profile of the Company.

* denotes figures less than a million B Credit risk

Credit risk is defined as an unexpected loss in financial instruments if the contractual partner is failing to discharge its obligations in full and on time. The Company is exposed to credit risk from its operating and financing activities like trade receivables, deposits with banks, foreign exchange transactions and other financial instruments.

Receivables

The major exposure to credit risk at the reporting date is primarily from receivables comprising of trade and project unbilled receivables (net).

Credit risk on receivables is limited due to the Company''s large and diverse customer base which includes public sector enterprises, state owned companies and private corporates. The effective monitoring and controlling of credit risk through credit evaluations and ratings is a core competency of the Company''s risk management system.

For receivables, as a practical expedient, the Company computes expected credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The ECL is calculated on rating and default probability percentage arrived from the historic default trend. In order to determine the default probability percentage, a simple average of customer wise specific allowances or actual bad debts incurred in succeeding year (derived rates) (whichever is higher) for the preceding three years is considered as a percentage of gross receivables positions for each grading i.e. rating and division of each customer as at reporting date.

Other financial assets

Credit risk from cash and cash equivalents, term deposits and derivative financial instruments is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds, temporarily, are made only with approved counter parties and within credit limits assigned to each counterparty. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

Liquidity risk

The Company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company regularly monitors the rolling forecasts and actual cashflows, to ensure it has sufficient funds to meet the operational needs.

i) Net worth comprises of Equity share capital and Other equity

ii) Cost of goods sold comprises of a) Cost of materials consumed, b) Purchases of Stock-in-Trade, c) Changes in inventories of finished goods, d) work-in-progress and stock-in-trade, e) Project bought outs and other direct costs.

iii) Net credit purchases comprises of (a) cost of goods sold and (b) Other expenses excluding Bad debts (including provision), Net loss on foreign exchange (including commodity gain/loss) and Corporate Social Responsibility expenditure.

iv) Working Capital is current assets less current liabilities.

59 Discontinued operations

a) On 1 July 2022, the Company divested its Large Drives Applications (LDA) business (Portfolio Companies Segment) as a going concern on a slump sale basis to Siemens Large Drives India Private Limited (a subsidiary of Siemens Large Drives GmbH, which in turn is a subsidiary of Siemens AG), for a cash consideration of '' 4,400 million. The gain on the sale transaction is '' 3,559 million for the year ended 30 September 2022. The tax expense on this transaction is '' 853 million (including write-off of deferred tax assets of '' 49 million) for the year ended 30 September 2022.

b) On 1 January 2021, the Company divested its Mechanical Drives (MD) business as a going concern on a slump sale basis to Flender Drives Private Limited for a final consideration of '' 3,759 million (after adjusting the consideration of '' 4,400 million for changes in net current assets and capital expenditure as per the terms and conditions agreed between the parties). The gain on the sale transaction is '' 487 million for the year ended 30 September 2021. The tax expense on this transaction is '' 362 million (including write-off of deferred tax assets of '' 302 million) for the year ended 30 September 2021.

During previous year, on 1 March 2021, the Company acquired 99.22% equity share capital of C&S Electric Limited from its promoters for a preliminary sale share consideration of '' 21,588 million ('' 2,000 million is retained by the Company as Holdback consideration), on cash free/ debt free basis on terms and conditions that are mutually agreed between the parties to the transaction. Considering post Closing amendments to the Share Purchase Agreement, the investment value is '' 21,637 million as on 30 September 2022.

During the year, the Company has executed a Power Purchase Agreement and entered into a Share Subscription and Shareholders Agreement for the subscription of 26% of the paid-up equity share capital of Sunsole Renewables Private Limited (Sunsole). On 28 February 2022, Sunsole has allotted 26% of its paid-up equity share capital to the Company as first tranche allotment for a consideration of '' 2.7 million and '' 11.4 million as second tranche allotment on 5 August 2022. The Company has accounted for the investment at cost as per IND AS 28 ''Investments in Associates and Joint Ventures''.

Other Notes:

i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

ii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

iii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

iv) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

v) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

vi) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

vii) The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013, read with Companies (restriction on number of layers) Rules, 2017.

Previous period figures have been regrouped / reclassified wherever necessary, to conform to current period classification.


Sep 30, 2021

As per records of the Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

d) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of '' 2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts (if any). The distribution will be in proportion to the number of equity shares held by the shareholders.

22 Other equity

Nature and purpose of reserve

a) Capital reserve was created on account of merger of group companies in earlier years.

b) Amalgamation reserve pertains to amalgamation of Siemens VDO Automotive Limited in 2006.

c) Capital redemption reserve pertains to entity accounted as business combination under common control.

d) Securities premium account represents the surplus of proceeds received over the face value of shares, at the time of issue of shares.

e) General reserve is created out of profits earned by the Company by way of transfer from surplus in the statement of profit and loss. The Company can use this reserve for payment of dividend and issue of fully paid-up shares. As General reserve is created by transfer on one component of equity to another and is not an item of other comprehensive income, items included in the General reserve will not be subsequently reclassified to statement of profit and loss.

f) Cash flow hedge reserve represents mark-to-market valuation of effective hedges as required by Ind AS 109.

g) Retained earnings are the profits that the Company has earned till date, less any transfers to General reserve and payment of dividend.

The above reserves will be utilised in accordance with the provision of the Companies Act, 2013.

i) In respect of above contingent liabilities, the future cash outflows are determinable only on receipt of judgements pending at various forums / authorities. The Company has assessed that it is only possible, but not probable, that outflow of economic resources will be required.

ii) The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

41 Disclosure relating to Provisions Provision for warranty

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery/ commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms up to closure of the contract (including warranty period).

Provision for loss orders

A provision for expected loss on construction contracts is recognised when it is probable that the contract costs will exceed total contract revenue. For all other contracts, loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic benefits.

Provision for other matters

The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the outflow of which would depend on the cessation of the respective events.

(iv) Revenue recognised during the year from opening balance of contract liabilities amounts to '' 11,353 (2020: '' 8,952).

(v) There is no revenue recognised during the year from the performance obligation that is satisfied in previous year (arising out of contract modifications).

(vi) Information regarding geographical disaggregation of revenue has been included in segment information [refer note 44(ii)].

> Disclosure pursuant to Indian Accounting Standard - 116 "Leases"(iii) Other disclosures :

- The Chief Operating Decision Maker ("CODM") evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by operating segments. The CODM reviews revenue and profit from operations as the performance indicator for all of the operating segments. The Chief Executive Officer, Chief Financial Officer and Division CEO & CFO''s are the CODM of the Company.

- Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks/ Transfer prices between operating segments are on arm''s length basis in a manner similar to the transactions with third parties.

- No operating segments have been aggregated to form the above reportable operating segments.

- Finance income and costs, and fair value gains and losses on financial assets are not allocated to individual segments as the underlying instruments are managed on a group basis.

- Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to those segments as they are also managed on a group basis.

- Capital expenditure consists of additions of property, plant and equipment, intangible assets and investment properties including assets from the acquisition of subsidiaries.

- Profits / losses on inter segment transfers are eliminated at the Company level.

(iv) Segment information :

Business Segments: The business of the Company is divided into five segments. These segments are the basis for

management control and hence, form the basis for reporting. The business of each segment comprises of :

- Energy : Provides fully integrated products, solutions and services across the energy value chain of oil and gas production, power generation and transmission for various customers such as utilities, independent power producers and engineering, procurement and construction (EPC) companies.

- Smart Infrastructure : Supplier of products, systems, solutions and services for transmission and distribution of electrical energy for power utilities, industrial companies and infrastructure segments. Portfolio covers systems for low & medium voltage distribution, solutions for smart grids and energy automation, low voltage power supply systems. Provides intelligent and connected infrastructure for grids and buildings.

- Mobility : Supplier of solutions for passenger and freight transportation - including rail vehicles, rail automation systems, rail electrification systems, road traffic technology and IT solutions.

- Digital Industries : Contains portfolio of leading edge automation, drives and software technologies covering the complete life cycle from product design and production execution to services for discrete and process Industries.

- Portfolio Companies : Supplier of products, services and mining & minerals solutions to industry sector.

- Others : Services provided to other group companies and lease rentals have been classified as "Others

Geographical Segments: The business is organised in two geographical segments i.e. within India and outside

India.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to

the total common costs.

Unallocated corporate items

Unallocated items include general corporate items which are not allocated to any business segment.

46 Disclosure pursuant to Indian Accounting Standard - 19 ''Employee Benefits'' : (Continued)

(ii) Defined Benefit Plans (Continued)

b) The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting year 2020-21 and the method of assumption used in preparing sensitivity analysis did not change compared to previous year.

c) The fund formed by the Company manages the investments of the Gratuity fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities. The Company expects to contribute '' 259 (2020: '' 399) to gratuity fund in 2021-22.

The investment strategy in respect of its funded plans is implemented within the framework of the applicable statutory requirements. Each year, the Board of Trustees reviews the level of funding in the gratuity plan .Such a review includes the asset liability matching strategy and investment risk management policy. This includes employing the use of annuities and longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual review. Generally it aims to have a portfolio mix of equity instruments and debt instruments to minimize the risk exposed to investment.

d) The estimates of future salary increases, considered in actuarial valuation, take in to account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

e) The Company has contributed '' 574 (2020: '' 562) towards provident fund during the year ended 30 September 2021. The said amount is excluding of amounts recognised by discontinued operation The Guidance note issued by the Institute of Actuaries of India states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. The Actuary has accordingly provided a valuation and based on the assumptions provided below there is no shortfall as at 30 September 2021.

(iii) General descriptions of significant defined plans I Gratuity Plan

Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company''s Scheme whichever is more beneficial. Under the act, employee who has completed five years of service is entitled to the benefit. The level of benefits provided depends on the members length of service and salary at retirement age.

II Medical

Post retirement medical benefit is paid to the retired employees and their spouse till their survival and after their death, benefits are available to the employee''s spouse. It consists of 3 components, which is health insurance, Domiciliary medical allowance and Company support in case the expenses incurred are more than the health insurance coverage subject to the ceiling limit as per the grades.

III Pension

Pension is paid to management cadre employees of the Company, who retired before March 1998. Pension is paid on monthly basis. In case of death in retirement, 100 percent pension is paid to the spouse for first six months and then 60 percent thereafter.

IV Retirement Gift

Retirement gift is paid, as a token of appreciation to the permanent employees who are separating on their retirement or after their long association with the Company.

49 Share-based payment transactions

Share matching plan (SMP) and Siemens Stock Awards (SSA) at Siemens Ltd are classified as cash-settled transactions. The employees of the Company are eligible for the Ultimate Holding Company''s share awards, i.e. SMP and SSA. Under SMP the employee may invest a specified part of their compensation in the Ultimate Holding Company''s shares and at the end of 3 years (vesting period) employee gets one free share for every three shares purchased. Under SSA, the Company grants stock awards of the Ultimate Holding Company''s shares to the Chief Executive Officer, Chief Financial Officer, members of senior management and other eligible employees. The vesting period is 4 years, after which the beneficiary gets certain number of shares which is tied to the performance of the employee in case of CEO Special Allocation scheme and performance of Ultimate Holding Company in case of Performance Oriented Siemens Stock Awards. At the end of each reporting period, the Company recognises the fair value of the liability and the expense at each reporting period at the market price of the Ultimate Holding Company''s share.

50 Derivative Instruments

a) Forward Contracts and Option contracts

The Company uses forward contracts and options to mitigate its risks associated with foreign currency fluctuations having underlying transaction and relating to firm commitments or highly probable forecast transactions. The Company does not enter into any forward and options contracts which are intended for trading or speculative purposes. The forward exchange and options contracts are fair valued at each reporting date with the resultant gains/ losses thereon being recorded in statement of profit and loss.

For the purpose of the Company''s capital management, equity includes equity share capital and all other equity reserves attributable to the equity holders of the Company. The Company manages its capital to optimise returns to the shareholders and makes adjustments to it in light of changes in economic conditions or its business requirements. The Company''s objectives are to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth and maximise the shareholders value. The Company funds its operations through internal accruals. The management and the Board of Directors monitor the return on capital as well as the level of dividends to shareholders.

The Company''s principal financial liabilities comprise of trade payable, security deposits and other financial liabilities. The Company''s principal financial assets include trade and other receivables, cash and cash equivalents and other financial assets that arise from its operations. The Company also enters into hedging transactions to cover foreign exchange exposure risk. The Company''s operating business is exposed to market risk, credit risk and liquidity risk. In order to optimize the allocation of the financial resources across the segments, as well as to achieve its aims, the Company identifies, analyses and manages the associated market risks. The Company seeks to manage and control these risks primarily through its regular operating activities and uses derivative financial instruments when deemed appropriate. All derivative activities for risk management purposes are carried out by teams that have the appropriate skills, experience and supervision. The Company has a Risk Management Committee, which ensures that the Company''s financial risk taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and mitigated in accordance with the Company''s policies and overall risk appetite.

A Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of currency rate risk and interest rate risk. Financial instrument affected by market risks includes deposits, derivative financial instruments, trade receivables, trade payables and other financials assets.

Foreign Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes on foreign exchange rate. The Company operates internationally and transacts in several currencies and has foreign currency trade receivables and trade payables. Hence, the Company is exposed to foreign exchange risk. The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

Foreign currency sensitivity

The following table demonstrate the sensitivity to a reasonably possible change in major currencies like US Dollar and Euro with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities including foreign currency derivatives. The Company''s exposure to foreign currency changes for all other currencies is not material.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Consequently, could have unforeseen impact on Company''s cost of borrowing or returns thus impacting the profit and loss. The Company does not have any borrowings. Surplus funds are invested in deposits at fixed interest rates. The tenure of the deposits is managed to match with the liquidity profile of the Company.

5 Credit risk

Credit risk is defined as an unexpected loss in financial instruments if the contractual partner is failing to discharge its obligations in full and on time. The Company is exposed to credit risk from its operating and financing activities like trade receivables, deposits with banks, foreign exchange transactions and other financial instruments.

Receivables

The major exposure to credit risk at the reporting date is primarily from receivables comprising of trade and project unbilled receivables (net).

Credit risk on receivables is limited due to the Company''s large and diverse customer base which includes public sector enterprises, state owned companies and private corporates. The effective monitoring and controlling of credit risk through credit evaluations and ratings is a core competency of the Company''s risk management system.

For receivables, as a practical expedient, the Company computes expected credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The ECL is calculated on rating and default probability percentage arrived from the historic default trend. In order to determine the default probability percentage, a simple average of customer wise specific allowances or actual bad debts incurred in succeeding year (derived rates) (whichever is higher) for the preceding three years is considered as a percentage of gross receivables positions for each grading i.e. rating and division of each customer as at reporting date.

Other financial assets

Credit risk from cash and cash equivalents, term deposits and derivative financial instruments is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds, temporarily, are made only with approved counter parties and within credit limits assigned to each counterparty. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

Liquidity risk

The Company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company regularly monitors the rolling forecasts and actual cashflows, to ensure it has sufficient funds to meet the operational needs.

54 Discontinued operations

On 1 January 2021, the Company divested its Mechanical Drives (MD) business as a going concern on a slump sale basis to Flender Drives Private Limited for a final consideration of '' 3,759 million (after adjusting the consideration of '' 4,400 million for changes in net current assets and capital expenditure as per the terms and conditions agreed between the parties). The gain on the sale transaction is '' 487 million for the year ended 30 September 2021. The tax expense on this transaction is '' 362 million (including write-off of deferred tax assets of '' 302 million) for the year ended 30 September 2021.

55 On 1 March 2021, the Company acquired 99.22% equity share capital of C&S Electric Limited from its promoters for a preliminary sale share consideration of '' 21,588 million, payable in cash, on cash free/debt free basis on terms and conditions that are mutually agreed between the parties to the transaction. From the aforesaid consideration, '' 2,000 million is currently retained by the Company as a holdback for a period of 2 years from the date of acquisition. Considering post Closing amendments to the Share Purchase Agreement, the investment value is '' 21,570 million as on 30 September 2021.

56 During the previous year, the Company''s operations and financial results were adversely impacted by the lockdown imposed to contain the spread of Coronavirus (COVID-19) since last week of March 2020. The operations gradually resumed with requisite precautions during the quarter ended 30 June 2020 with limited availability of workforce and disrupted supply chain. Consequently, the results for year ended 30 September 2020 were affected. Further, during the current year, the operations for the year ended 30 September 2021 were impacted due to the second wave of COVID-19. The expenses incurred during shutdown and partial shutdown in respect of factories and project sites for continuing operations and discontinued operations were as under:

57 Detailed disclosures pertaining to expenditure on Corporate Social Responsibilities activities are provided in Director''s Report.

58. The Company has executed a Power Purchase Agreement and entered into a Share Subscription and Shareholders Agreement on 22 October 2021, for the subscription of 26% of the paid-up equity share capital of Sunsole Renewables Private Limited, subject to fulfillment of conditions precedent as agreed between the parties.


Sep 30, 2018

Corporate information

Siemens Limited (“The Company”) is a public company domiciled in India with its registered office at Birla Aurora, Level 21, Plot No. 1080 Dr. Annie Besant Road, Worli Mumbai - 400030. The Company is listed on National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE).

The Company offers products integrated solutions for industrial applications for manufacturing industries, drives for process industries, intelligent infrastructure and buildings, efficient and clean power generation from fossil fuels and oil and gas applications, transmission and distribution of electrical energy and for passenger and freight transportation, including rail vehicles, rail automation and rail electrification systems.

1. Significant accounting judgments, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively.

The key assumptions concerning the future and other key sources of estimating uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company has based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are refected in the assumptions when they occur.

1.1 Project revenue and costs

The percentage-of-completion (POC) method places considerable importance on accurate estimates to the extent of progress towards completion and may involve estimates on the scope of deliveries and services required for fulfilling the contractually defined obligations. These significant estimates include total contract costs, total contract revenues, contract risks, including technical, political and regulatory risks, and other judgments. The Company re-assesses these estimates on periodic basis and makes appropriate revisions accordingly.

1.2 Taxes

Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

1.3 Property, plant and equipment and intangible assets

The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of the Company’s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

1.4 Impairment of non-financial assets

The Company assesses at each balance sheet date whether there is any indication that an asset or a group of assets (cash generating unit) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or cash generating unit.

The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value using a pre-tax discount rate that refects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is refected at the recoverable amount subject to a maximum of depreciable historical cost, had no impairment been recognised.

1.5 Employee benefits

The Company’s obligation for employee benefits is determined based on actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, these liabilities are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Refer note 43 for details of the key assumptions used in determining the accounting of these plans.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the Actuary considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries.

1.6 Impairment of financial assets

The Company assesses impairment on financial assets based on Expected Credit Loss (ECL) model. The provision matrix is based on its historically observed default rates over the expected life of the financial assets and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in forward looking estimates are analysed.

1.7 Provisions

Significant estimates are involved in the determination of provisions related to liquidated damages, onerous contracts, warranty costs, asset retirement obligations, legal and regulatory proceedings (Legal Proceedings). The Company records a provision for onerous sales contracts when current estimates of total contract costs exceed expected contract revenue. The provision for warranty, liquidated damages onerous contracts is based on the best estimate required to settle the present obligation at the end of reporting period.

Legal Proceedings often involve complex legal issues and are subject to substantial uncertainties. Accordingly, considerable judgment is part of determining whether it is probable that there is a present obligation as a result of a past event at the end of the reporting period, whether it is probable that such a Legal Proceeding will result in an outflow of resources and whether the amount of the obligation can be reliably estimated. Internal and external counsels are generally part of the determination process.

All the estimates are revised periodically.

Standard issued that are notyet effective

Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the following new and amendments to Ind ASs which the Company has not applied as they are effective for annual periods beginning on or after April 1 2018:

Ind AS 115 - Revenue from Contracts with Customers

The new standard replaces existing revenue recognition standards Ind AS 11, Construction contracts and Ind AS 18, Revenue. The core principle of the new standard is that revenue should be recognized when (or as) an entity transfers control of goods or services to a customer at the amount to which the entity expects to be entitled.

Essential concepts in Ind AS 115 have been analysed on revenue stream level. The Company’s revenue streams mainly consist of revenue from projects, products and services arising from varied segments. Existing revenue recognition in case of revenue from projects is based on percentage-of-completion method including any adjustments arising of variable considerations and penalties, revenue from sale of products is based on transfer of risks and rewards to customer and revenue from services is as per proportionate completion method.

Ind AS 40 - Transfers of Investment Property

The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management’s intentions for the use of a property does not provide evidence of a change in use.

Ind AS 21 - The Effect of Changes in Foreign Exchange Rates

The Appendix B clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration.

While an initial assessment of the above standards does not indicate a significant impact, except for the disclosure requirements of Ind AS 115 - Revenue from Contracts with Customers, a reliable estimate of the impact can be concluded only upon completion of the ongoing evaluation process. The Company does not expect any material effect on its financial statements.

ii) Fair value disclosure

Description of valuation techniques used and key inputs to valuation on investment properties:

The valuation of certain investment properties is in accordance with the Ready Reckoner rates prescribed by for the purpose of levying stamp duty. The Company has referred to the publications and government website for Ready Reckoner rates. Further, the fair value of certain investment property has been determined with the help of Independent valuer. Fair value of property is based on Direct Comparison Approach and Depreciated Replacement Cost Approach.

iii) The Company has elected to continue with the carrying value for all of its investment property as recognised in the financial statements on transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.

Inter corporate deposit to related parties are given for the purpose of meeting the working capital requirements.

Particulars in respect of loans and advances in the nature of loans as required by Regulation 34(3) read with Para A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and section 186 of the Companies Act, 2013

a) Shares held by holding company and subsidiary of holding company:

255,351,805 (2017: 255,351,805) Equity shares of Rs.2 each, fully paid-up, are held by the Holding Company, Siemens AG, Germany; 11,738,108 (2017: 11,738,108) Equity shares ofRs.2 each, fully paid-up, are held by Siemens Metals Technologies Vermogensverwaltungs GmbH (formerly known as Siemens VAI Metals Technologies GmbH), a 100% subsidiary of Siemens AG, Germany

e) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value ofRs.2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts (if any). The distribution will be in proportion to the number of equity shares held by the shareholders.

2 Other equity

Nature and purpose of reserve

a) Capital reserve was created on account of merger of group companies in earlier years.

b) Amalgamation reserve pertains to amalgamation of Siemens VDO Automotive Limited in 2006.

c) Capital redemption reserve pertains to entity accounted as business combination under common control.

d) Securities premium account represents the surplus of proceeds received over the face value of shares, at the time of issue of shares.

e) General reserve is created out of profits earned by the Company by way of transfer from surplus in the statement of profit and loss. The Company can use this reserve for payment of dividend and issue of fully paid-up shares. As General reserve is created by transfer on one component of equity to another and is not an item of other comprehensive income, items included in the General reserve will not be subsequently reclassified to statement of profit and loss.

f) Cash flow hedge reserve represents mark-to-market valuation of effective hedges as required by Ind AS 109.

g) Retained earnings are the profits that the Company has earned till date, less any transfers to General reserve and payment of dividend.

The above reserves will be utilised in accordance with the provision of the Companies Act, 2013.

3 Disclosure relating to Provisions

Provision for warranty

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery/ commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms up to closure of the contract (including warranty period).

Provision for loss orders

A provision for expected loss on construction contracts is recognised when it is probable that the contract costs will exceed total contract revenue. For all other contracts, loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic benefits.

Provision for other matters

The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the outflow of which would depend on the cessation of the respective events.

4 Disclosure pursuant to Indian Accounting Standard - 17 ‘Leases’ :

a) Where the Company is the lessee:

Lease payments on non-cancellable lease arrangement debited to the statement of profit and loss and the future lease payments in respect of non-cancellable operating lease are summarised below:

There is no contingent rent recognised in the statement of profit and loss

General description of the leasing arrangement:

(i) The Company has entered into operating lease arrangements for its office premises, storage locations, machinery, residential premises, computer equipments and motor cars for its employees.

(ii) The future lease rental payments are determined on the basis of the monthly lease payment terms as per the agreements.

(iii) At the expiry of the non cancellable lease period the option of renewal rests with the Company.

(iv) Some of the lease agreements have escalation clause ranging from 5% to 15% pa. There are no exceptional I restrictive covenants in the lease agreements.

b) Where the Company is the lessor:

Lease income from non-cancellable lease arrangement credited to the statement of profit and loss and the future

lease income in respect of non-cancellable operating lease are summarised below:

Lease income recognised during the year in statement of profit and loss Rs.655 (2017: Rs.733)

There is no contingent rent recognised in the statement of profit and loss.

General description of the leasing arrangement:

(i) The Company has entered into operating lease arrangements of its factory premises, office premises, machinery and residential premises.

(ii) The future lease rental income is determined on the basis ofthe monthly lease terms as per the agreements.

(iii) At the expiry of the non cancellable lease period the option of renewal rests with both parties.

(iv) The lease agreements have escalation clause of 5% to 10% pa. There are no exceptional I restrictive covenants in the lease agreements.

(iii) Revenue from major customers

During current year, revenue from one of the customer is more than 10% of the total revenue. The same is forming part of Energy Management, Building Technologies, Digital Factory and Process Industries and Drives segment.

5 (iv) Other disclosures :

- The Chief Operating Decision Maker (“CODM”) evaluates the Company’s performance and allocates resources based on an analysis of various performance indicators by operating segments. The CODM reviews revenue and profit from operations as the performance indicator for all of the operating segments. The Chief Executive Officer, Chief Financial Officer and Division CEO & CFO’s are the CODM of the Company.

- Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks. Transfer prices between operating segments are on arm’s length basis in a manner similar to the transactions with third parties.

- No operating segments have been aggregated to form the above reportable operating segments.

- Finance income and costs are not allocated to individual segments as the underlying instruments are managed on a group basis.

- Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to those segments as they are also managed on a group basis.

- Capital expenditure consists of additions of property, plant and equipment, intangible assets and investment properties including assets from the acquisition of subsidiaries.

- Profits I losses on inter segment transfers are eliminated at the Company level.

(v) Segment information :

Business Segments: The business of the Company is divided into seven segments. These segments are the basis for management control and hence, form the basis for reporting. The business of each segment comprises of:

- Power and Gas :- Provides products and solutions for generation of electricity from fossil and renewable fuels for utilities, independent power producers and engineering, procurement and construction (EPC) companies and the reliable transport of oil and natural gas.

- Energy Management :-Supplier of products, systems, solutions and services for transmission and distribution of electrical energy for power utilities and industrial companies. 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.

- Building Technologies :- Provider of safe, secure, energy-efficient and eco-friendly building infrastructures. As a technology partner, consultant, service provider, systems integrator and product vendor, offerings range from fire safety, security, building automation, heating, ventilation, air conditioning and energy management.

- Mobility :- Supplier of solutions for passenger and freight transportation-including rail vehicles, rail automation systems, rail electrification systems, road traffic technology and IT solutions.

- Digital Factory :- Contains portfolio of leading edge software solutions and automation technologies covering the complete life cycle from product design and production execution to services for manufacturing companies.

- Process Industries and Drives :- Provides products, systems, solutions and services across entire life cycles for all industry sectors.

- Others :- Services provided to other group companies and lease rentals have been classified as “Others”.

Geographical Areas: The business is organised in two geographical areas i.e. within India and outside India.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated corporate items

Unallocated items include general corporate items which are not allocated to any business segment.

6 Related party transactions

6.1 Parties where control exists

Siemens AG Holding company

6.2 Subsidiary

Siemens Rail Automations Pvt. Ltd., India Subsidiary

* denotes figures less than a million

** Remuneration does not include the provisions made for gratuity, leave and medical benefits, as they are determined on an actuarial basis for the company as a whole.

All transactions entered into with related parties as defined under the Companies Act, 2013 during the financial year, were on an arm’s length pricing basis.

7 Disclosure pursuant to Indian Accounting Standard -19 ‘Employee Benefits’:

(i) Defined Contribution Plans

Amount ofRs.186 (2017: Rs.186) is recognised as an expense and included in “Employee benefits expense” (Refer note 33) in the statement of profit and loss.

(ii) Defined Benefit Plans

a) Amounts for the current period are as follows :

b) The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting year 2017-18 and the method of assumption used in preparing sensitivity analysis did not change compared to previous year.

c) The fund formed by the Company manages the investments of the Gratuity fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities. The Company expects to contribute Rs.125 (2017: Rs.208) to gratuity fund in 2018-19.

The investment strategy in respect of its funded plans is implemented within the framework of the applicable statutory requirements. Each year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes the asset liability matching strategy and investment risk management policy. This includes employing the use of annuities and longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual review. Generally it aims to have a portfolio mix of equity instruments and debt instruments to minimize the risk exposed to investment.

d) The estimates of future salary increases, considered in actuarial valuation, take in to account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

e) The Company has contributed Rs.556 (2017: Rs.475) towards provident fund during the year ended 30 September 2018. The Guidance note issued by the Institute of Actuaries of India states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. The Actuary has accordingly provided a valuation and based on the assumptions provided below there is no shortfall as at 30 September 2018.

(iii) General descriptions of significant defined plans

I Gratuity Plan

Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company’s Scheme whichever is more beneficial. Under the act, employee who has completed five years of service is entitled to the benefit. The level of benefits provided depends on the members length of service and salary at retirement age.

II Medical

Post retirement medical benefit is paid to the retired employees and their spouse till their survival and after their death, benefits are available to the employee’s spouse. It consists of 3 components, which is health insurance. Domiciliary medical allowance and Company support in case the expenses incurred are more than the health insurance coverage subject to the ceiling limit as per the grades.

III Pension

Pension is paid to management cadre employees of the company, who retired before March 1998. Pension is paid on monthly basis. In case of death in retirement,100 percent pension is paid to the spouse for first six months and then 60 Percent thereafter.

8 Share-based payment transactions

Share matching plan (SMP) and Siemens Stock Awards (SSA) at Siemens Ltd are classified as cash-settled transactions. The employees of the Company are eligible for the Holding Company’s share awards, i.e. SMP and SSA. Under SMP the employee may invest a specified part of their compensation in the Holding Company’s shares and at the end of 3 years (vesting period) employee gets one free share for every three shares purchased.

Under SSA, the Company grants stock awards of the Holding Company’s shares to the Chief Executive Officer, Chief Financial Officer, members of senior management and other eligible employees. The vesting period is 4 years, after which the beneficiary gets certain number of shares which is tied to the performance of the employee in case of CEO Special Allocation scheme and performance of Holding Company in case of Performance Oriented Siemens Stock Awards.

At the end of each reporting period, the Company recognises the fair value of the liability and the expense at each reporting period at the market price of the Holding Company’s share.

Under Siemens Profit Sharing (SPS), shares of Holding Company are granted to the eligible employees on achievement of the targets by Holding Company.

Effect of Share-based payment transaction on the profit & loss, shown under the head Employee benefit expense is Rs.285 (2017:? 429)

9 Derivative Instruments a) Forward Contracts and Option contracts

The Company uses forward contracts and options to mitigate its risks associated with foreign currency fluctuations having underlying transaction and relating to firm commitments or highly probable forecast transactions. The Company does not enter into any forward and options contracts which are intended for trading or speculative purposes.

The forward exchange and options contracts are fair valued at each reporting date with the resultant gains/ losses thereon being recorded in statement of profit and loss.

The details of forward contracts outstanding at the year end are as follows:-

For the purpose of the Company’s capital management, equity includes equity share capital and all other equity reserves attributable to the equity holders of the Company. The Company manages its capital to optimise returns to the shareholders and makes adjustments to it in light of changes in economic conditions or its business requirements. The Company’s objectives are to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth and maximise the shareholders value. The Company funds its operations through internal accruals. The management and the Board of Directors monitor the return on capital as well as the level of dividends to shareholders.

The carrying amounts of financial instruments such as cash and cash equivalents, other bank balances, short term loans, trade receivables, trade payables, current security deposits and other current financial assets and liabilities (except derivative financial instrument those being measured at fair value through other comprehensive income) are considered to be same as their fair values due to their short term nature.

The Company’s principal financial liabilities comprise of trade payable, security deposits and other financial liabilities. The Company’s principal financial assets include trade and other receivables, cash and cash equivalents and other financial assets that arise from its operations. The Company also enters into hedging transactions to cover foreign exchange exposure risk.

The Company’s operating business is exposed to market risk, credit risk and liquidity risk. In order to optimize the allocation of the financial resources across the segments, as well as to achieve its aims, the Company identifies, analyses and manages the associated market risks. The Company seeks to manage and control these risks primarily through its regular operating activities and uses derivative financial instruments when deemed appropriate. All derivative activities for risk management purposes are carried out by teams that have the appropriate skills, experience and supervision. The Company has a Risk Management Committee, which ensures that the Company’s financial risk taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and mitigated in accordance with the Company’s policies and overall risk appetite.

A Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of currency rate risk and interest rate risk. Financial instrument affected by market risks includes deposits, derivative financial instruments, trade receivables, trade payables and other financials assets.

Foreign Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes on foreign exchange rate. The Company operates internationally and transacts in several currencies and has foreign currency trade receivables and trade payables. Hence, the Company is exposed to foreign exchange risk. The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

Foreign currency sensitivity

The following table demonstrate the sensitivity to a reasonably possible change in major currencies like US Dollar and Euro with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities including foreign currency derivatives. The Company’s exposure to foreign currency changes for all other currencies is not material.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Consequently, could have unforeseen impact on Company’s cost of borrowing or returns thus impacting the profit and loss.

The Company does not have any borrowings. Surplus funds are invested in deposits at fixed interest rates. The tenure of the deposits is managed to match with the liquidity profile of the Company.

B Credit risk

Credit risk is defined as an unexpected loss in financial instruments if the contractual partner is failing to discharge its obligations in full and on time. The Company is exposed to credit riskfrom its operating and financing activities like trade receivables, deposits with banks, foreign exchange transactions and other financial instruments.

Receivables

The major exposure to credit risk at the reporting date is primarily from receivables comprising of trade and project unbilled receivables (net).

Credit risk on receivables is limited due to the Company’s large and diverse customer base which includes public sector enterprises, state owned companies and private corporates. The effective monitoring and controlling of credit risk through credit evaluations and ratings is a core competency of the Company’s risk management system.

For receivables, as a practical expedient, the Company computes expected credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted forforward-looking estimates.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The ECL is calculated on rating and default probability percentage arrived from the historic default trend. In order to determine the default probability percentage, a simple average of customer wise specific allowances or actual bad debts incurred in succeeding year (derived rates) (whichever is higher) for the preceding three years is considered as a percentage of gross receivables positions for each grading i.e. rating and division of each customer as at reporting date.

Other financial assets

Credit risk from cash and cash equivalents, term deposits and derivative financial instruments is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds, temporarily, are made only with approved counter parties and within credit limits assigned to each counterparty. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

C Liquidity risk

The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company regularly monitors the rolling forecasts and actual cashflows, to ensure it has sufficient funds to meet the operational needs.

The table below summarise the maturity profile of the Company’s financial liabilities based on contractually agreed undiscounted cash flows :

(a) During the previous year, the Company sold its wind power business forming part of Power and Gas segment of the Company for a consideration of Rs.75 and recorded a profit ofRs.72 on said transaction. Corresponding tax expense on the said transaction amounts to ?16.

(b) During the year, vide agreement dated 25 September 2017, the Company sold its Property located at Worli, Mumbai for a consideration ofRs.6,100 with a profit ofRs.5,603. The tax impact on the same is Rs.1,373.

10 The Company is eligible for incentives on export of certain goods and services under the Merchandise Exports from India Scheme and Service Exports from India Scheme respectively, under the Foreign Trade Policy for the period 2015-2020. During the year, the Company has started receiving the licenses under the schemes and consequently recognised an amount ofRs.1,333 (including an amount ofRs.852 for earlier years) which is refected in “Other operating income”.

11 The board of directors of the Company, at their meeting held on 21 February 2018, has agreed in-principle, subject to terms and conditions to be determined, to sell.

(i) its Mobility Division and Rail Traction Drives business (included in Process Industries and Drives Division which provides products and services to Mobility Division) as also its wholly owned subsidiary Siemens Rail Automation Private Limited, to Siemens AG, Germany (“SAG”) or its subsidiary.

(ii) its Mechanical Drives business (included in Process Industries and Drives Division) to SAG or its subsidiary.

Consequent to such in-principle approval, the Board of Directors have constituted a Committee of Directors to determine the consideration, terms and conditions and such other matters as may be considered expedient with respect to the aforesaid proposed transactions and make recommendations thereon to the Board of Directors for its consideration.

12 The revenue from operations for the year ended 30 September 2017 (up to period ended 30 June 2017) is inclusive of excise duty recovered and corresponding excise duty expense has been disclosed separately. The Government of India introduced Goods and Service Tax (‘GST’) with effect from 1 July 2017 which partly replaced excise duty and accordingly revenue from operations is disclosed net of GST. Corresponding excise duty expense has been disclosed separately.

13 Previous year’s figures have been regrouped I reclassified wherever necessary, to conform to current year’s classification.


Sep 30, 2017

Corporate information

Siemens Limited (“The Company”) is a public company domiciled in India with its registered office at Birla Aurora, Level 21, Plot No. 1080 Dr. Annie Besant Road, Worli Mumbai - 400030. The Company is listed on National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange of India Limited (BSE).

The Company offers products integrated solutions for industrial applications for manufacturing industries, drives for process industries, intelligent infrastructure and buildings, efficient and clean power generation from fossil fuels and oil and gas applications, transmission and distribution of electrical energy and for passenger and freight transportation, including rail vehicles, rail automation and rail electrification systems.

1. Significant accounting judgments, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively.

The key assumptions concerning the future and other key sources of estimating uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company has based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

1.1 Project revenue and costs

The percentage-of-completion method places considerable importance on accurate estimates to the extent of progress towards completion and may involve estimates on the scope of deliveries and services required for fulfilling the contractually defined obligations. These significant estimates include total contract costs, total contract revenues, contract risks, including technical, political and regulatory risks, and other judgments. The Company re-assesses these estimates on periodic basis and makes appropriate revisions accordingly.

1.2 Taxes

Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

1.3 Property, plant and equipment and intangible assets

The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of the Company’s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

1.4 Impairment of non-financial assets

The Company assesses at each balance sheet date whether there is any indication that an asset or a group of assets (cash generating unit) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or cash generating unit.

The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost, had no impairment been recognised.

1.5 Employee benefits

The Company’s obligation for employee benefits is determined based on actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, these liabilities are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Refer note 44 for details of the key assumptions used in determining the accounting of these plans.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries.

1.6 Impairment of financial assets

The Company assesses impairment on financial assets based on Expected Credit Loss (ECL) model. The provision matrix is based on its historically observed default rates over the expected life of the financial assets and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in forward looking estimates are analysed.

1.7 Provisions

Significant estimates are involved in the determination of provisions related to liquidated damages, onerous contracts, warranty costs, asset retirement obligations, legal and regulatory proceedings (Legal Proceedings). The Company records a provision for onerous sales contracts when current estimates of total contract costs exceed expected contract revenue. The provision for warranty, liquidated damages onerous contracts is based on the best estimate required to settle the present obligation at the end of reporting period.

Legal Proceedings often involve complex legal issues and are subject to substantial uncertainties. Accordingly, considerable judgment is part of determining whether it is probable that there is a present obligation as a result of a past event at the end of the reporting period, whether it is probable that such a Legal Proceeding will result in an outflow of resources and whether the amount of the obligation can be reliably estimated. Internal and external counsels are generally part of the determination process.

All the estimates are revised periodically.

Recent Accounting pronouncements

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment. The amendments are applicable to the Company from 1 October 2017.

Amendment to Ind AS 7

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company is evaluating the requirements of the amendment and its impact on its cash flows, which is not expected to be material.

Amendment to Ind AS 102

The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.

It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting conditions are reflected in the ‘fair values’, but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that includes a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement. The Company is evaluating the requirements of the amendment and its impact.

2 Other equity

Nature and purpose of reserve

a) Capital reserve was created on account of merger of group companies in earlier years.

b) Amalgamation reserve was created on account of amalgamation of Siemens VDO Automotive Ltd. in 2006.

c) Capital redemption reserve was created on account of business combination under common control.

d) Securities premium account represents the surplus of proceeds received over the face value of shares, at the time of issue of shares.

e) General reserve is created out of profits earned by the Company by way of transfer from surplus in the statement of profit and loss. The Company can use this reserve for payment of dividend and issue of fully paid-up shares. As General reserve is created by transfer on one component of equity to another and is not an item of other comprehensive income, items included in the General reserve will not be subsequently reclassified to statement of profit and loss.

f) Cash flow hedge reserve represents mark-to-market valuation of effective hedges as required by Ind AS 109.

g) Retained earnings are the profits that the Company has earned till date, less any transfers to General reserve and payment of dividend.

The above reserves will be utilised in accordance with the provision of the Companies Act, 2013.

3 Disclosure relating to Provisions

Provision for warranty

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery/ commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms upto closure of the contract (including warranty period).

Provision for loss orders

A provision for expected loss on construction contracts is recognised when it is probable that the contract costs will exceed total contract revenue. For all other contracts, loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic benefits.

Provision for other matters

The Group has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the outflow of which would depend on the cessation of the respective events.

4 Disclosure pursuant to Indian Accounting Standard - 17 ‘Leases’ :

a) Where the Company is the lessee:

Lease payments on non-cancellable lease arrangement debited to the statement of profit and loss and the future lease payments in respect of non-cancellable operating lease are summarised below:

Lease rent debited to the statement of profit and loss Rs.659 (2016: Rs.683)

Sub-lease payments recognised in the statement of profit and loss Rs.373 (2016: Rs.240)

The future sub-lease payments expected to be received under non-cancellable sub-lease as at 30th September 2017 are as follows :

There is no contingent rent recognised in the statement of profit and loss

General description of the leasing arrangement:

(i) The Company has entered into operating lease arrangements for its office premises, storage locations, machinery, residential premises and motor cars for its employees.

(ii) The future lease rental payments are determined on the basis of the monthly lease payment terms as per the agreements.

(iii) At the expiry of the noncancellable lease period the option of renewal rests with the Company.

(iv) Some of the lease agreements have escalation clause ranging from 5% to 15% pa. There are no exceptional / restrictive covenants in the lease agreements.

b) Where the Company is the lessor:

Lease income from noncancellable lease arrangement credited to the statement of profit and loss and the future lease income in respect of noncancellable operating lease are summarised below:

Lease income recognised during the year in statement of profit and loss Rs.733 (2016: Rs.560)

There is no contingent rent recognised in the statement of profit and loss.

General description of the leasing arrangement:

(i) The Company has entered into operating lease arrangements of its factory premises, office premises, machinery and residential premises.

(ii) The future lease rental income is determined on the basis of the monthly lease terms as per the agreements.

(iii) At the expiry of the non cancellable lease period the option of renewal rests with both parties.

(iv) The lease agreements have escalation clause of 5% to 10% pa. There are no exceptional / restrictive covenants in the lease agreements.

5 (i) Other disclosures :

- The Chief Operating Decision Maker (“CODM”) evaluates the Company’s performance and allocates resources based on an analysis of various performance indicators by operating segments. The CODM reviews revenue and profit from operations as the performance indicator for all of the operating segments. The Chief Executive Officer, Chief Financial Officer and Division CEO & CFO’s are the CODM of the Company.

- Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks/ Transfer prices between operating segments are on arm’s length basis in a manner similar to the transactions with third parties.

- No operating segments have been aggregated to form the above reportable operating segments.

- Finance income and costs, and fair value gains and losses on financial assets are not allocated to individual segments as the underlying instruments are managed on a group basis.

- Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to those segments as they are also managed on a group basis.

- Capital expenditure consists of additions of property, plant and equipment, intangible assets and investment properties including assets from the acquisition of subsidiaries.

- Profits / losses on inter segment transfers are eliminated at the Company level.

- During the year, there has been a reorganisation of certain businesses across segments and accordingly, the figures for the previous year have been regrouped to make them comparable.

(ii) Segment information :

Business Segments: The business of the Group is divided into eight segments. These segments are the basis for management control and hence, form the basis for reporting. The business of each segment comprises of :

- Power and Gas :- Provides products and solutions for generation of electricity from fossil and renewable fuels for utilities, independent power producers and engineering, procurement and construction (EPC) companies and the reliable transport of oil and natural gas.

- Energy Management :- Supplier of products, systems, solutions and services for transmission and distribution of electrical energy for power utilities and industrial companies. 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.

- Building Technologies :- Provider of safe, secure, energy-efficient and eco-friendly buildings and infrastructures. As a technology partner, consultant, service provider, systems integrator and product vendor, offerings range from fire safety, security, building automation, heating, ventilation, air conditioning and energy management.

- Mobility :- Supplier of solutions for passenger and freight transportation-including rail vehicles, rail automation systems, rail electrification systems, road traffic technology and IT solutions.

- Digital Factory :- Contains portfolio of leading edge software solutions and automation technologies covering the complete life cycle from product design and production execution to services for manufacturing companies.

- Process Industries and Drives :- Provides products, systems, solutions and services across entire life cycles for all industry sectors.

- Others :- Services provided to other group companies and lease rentals have been classified as “Others”.

Geographical Segments: The business is organised in two geographical segments i.e. within India and outside India.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated corporate items

Unallocated items include general corporate items which are not allocated to any business segment.

6 Disclosure pursuant to Indian Accounting Standard - 19 ‘Employee Benefits’ :

(i) Defined Contribution Plans

Amount of Rs.186 (2016: Rs.210) is recognised as an expense and included in “Employee benefits expense” (Refer note 34) in the statement of profit and loss.

(ii) Defined Benefit Plans

a) Amounts for the current period are as follows :

* Plan assets include balance of Rs.8 which is in process of being transferred to the Gratuity Trust of Siemens Windpower Pvt. Ltd. pursuant to the transfer of Wind power business. Plan assets of previous year include balance of Rs.208 which is transferred to the Gratuity Trust of Siemens Healthcare Pvt. Ltd. pursuant to transfer of Healthcare undertaking.

b) The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting year 201617 and the method of assumption used in preparing sensitivity analysis did not change compared to previous year.

c) The fund formed by the Company manages the investments of the Gratuity fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities. The Company expects to contribute Rs.208 (2016: Rs.172) to gratuity fund in 2017-18.

The investment strategy in respect of its funded plans is implemented within the framework of the applicable statutory requirements. Each year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes the asset liability matching strategy and investment risk management policy. This includes employing the use of annuities and longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual review. Generally it aims to have a portfolio mix of equity instruments and debt instruments to minimise the risk exposed to investment.

d) The estimates of future salary increases, considered in actuarial valuation, take in to account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

e) The Company has contributed Rs.475 (2016: Rs.497) towards provident fund during the year ended 30 September 2017. The Guidance note issued by the Institute of Actuaries of India states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. The Actuary has accordingly provided a valuation and based on the assumptions provided below there is no shortfall as at 30 September 2017.

(iii) General descriptions of significant defined plans

I Gratuity Plan

Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company’s Scheme whichever is more beneficial. Under the act, employee who has completed five years of service is entitled to the benefit. The level of benefits provided depends on the members length of service and salary at retirement age.

II Medical

Post retirement medical benefit is paid to the retired employees and their spouse till their survival and after their death, benefits are available to the employee’s spouse. It consists of 3 components, which is health insurance, Domiciliary medical allowance and Company support in case the expenses incurred are more than the health insurance coverage subject to the ceiling limit as per the grades.

III Pension

Pension is paid to management cadre employees of the company, who retired before March 1998. Pension is paid on monthly basis. In case of death in retirement,100 percent pension is paid to the spouse for first six months and then 60 percent thereafter.

7 Share-based payment transactions

Share matching plan (SMP) and Siemens Stock Awards (SSA) at Siemens Ltd are classified as cash-settled transactions. The employees of the Company are eligible for the Holding Company’s share awards, i.e, SMP and SSA. Under SMP the employee may invest a specified part of their compensation in the Holding Company’s shares and at the end of 3 years (vesting period) employee gets one free share for every three shares purchased.

Under SSA, the Company grants stock awards of the Holding Company’s shares to the Chief Executive Officer, Chief Financial Officer, members of senior management and other eligible employees. The vesting period is 4 years, after which the beneficiary gets certain number of shares which is tied to the performance of the employee in case of CEO Special Allocation scheme and performance of Holding Company in case of Performance Oriented Siemens Stock Awards.

At the end of each reporting period, the Company recognises the fair value of the liability and the expense at each reporting period at the market price of the Holding Company’s share.

Under Siemens Profit Sharing (SPS), shares of Holding Company are granted to the eligible employees on achievement of the targets by Holding Company.

8 Derivative Instruments

a) Forward Contracts and Option contracts

The Company uses forward contracts and options to mitigate its risks associated with foreign currency fluctuations having underlying transaction and relating to firm commitments or highly probable forecast transactions. The Company does not enter into any forward and options contracts which are intended for trading or speculative purposes.

The forward exchange and options contracts are fair valued at each reporting date with the resultant gains/ losses thereon being recorded in statement of profit and loss.

The details of forward contracts outstanding at the year end are as follows:-

b) Significant unhedged exposures in various foreign currencies as at the year end:

The forward contracts have been converted in Indian rupees, at the spot rates, as at 30 September 2017 to facilitate reading purposes only.

The Company has a policy of hedging its foreign currency exposure on a net basis.

c) Commodity Contracts

The Company uses Commodity Future Contracts to hedge against fluctuation in commodity prices. The following are outstanding future contracts entered into by the Company as at the year end.

9 Capital management

For the purpose of the Company’s capital management, equity includes equity share capital and all other equity reserves attributable to the equity holders of the Company. The Company manages its capital to optimise returns to the shareholders and makes adjustments to it in light of changes in economic conditions or its business requirements. The Company’s objectives are to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth and maximise the shareholders value. The Company funds its operations through internal accruals. The management and the Board of Directors monitor the return on capital as well as the level of dividends to shareholders.

10 Financial Instruments

The carrying amounts of financial instruments such as cash and cash equivalents, other bank balances, short term loans, trade receivables, trade payables, current security deposits and other current financial assets and liabilities (except derivative financial instrument those being measured at fair value through other comprehensive income) are considered to be same as their fair values due to their short term nature.

B) Fair Value Hierarchy

The following table provides fair value measurement hierarchy of financial instruments as referred in note (A) above:

The Company enters into foreign exchange forward contracts, which are valued using valuation techniques that employs the use of market observable inputs.

There have been no transfers between Level 1 and Level 2 during the period.

11 Financial Risk Management

The Company’s principal financial liabilities comprise of trade payable, security deposits and other financial liabilities. The Company’s principal financial assets include trade and other receivables, cash and cash equivalents and other financial assets that arise from its operations. The Company also enters into hedging transactions to cover foreign exchange exposure risk.

The Company’s operating business is exposed to market risk, credit risk and liquidity risk. In order to optimize the allocation of the financial resources across the segments, as well as to achieve its aims, the Company identifies, analyzes and manages the associated market risks. The Company seeks to manage and control these risks primarily through its regular operating activities and uses derivative financial instruments when deemed appropriate. All derivative activities for risk management purposes are carried out by teams that have the appropriate skills, experience and supervision. The Company has a Risk Management Committee, which ensures that the Company’s financial risk taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and mitigated in accordance with the Company’s policies and overall risk appetite.

A Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of currency rate risk and interest rate risk. Financial instrument affected by market risks includes deposits, derivative financial instruments, trade receivables, trade payables and other financials assets.

Foreign Currency risk

Foreign currency risk is the risk that the fair value or future cashflows of a financial instrument will fluctuate because of changes on foreign exchange rate. The Company operates internationally and transacts in several currencies and has foreign currency trade receivables and trade payables. Hence, the Company is exposed to foreign exchange risk. The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

Foreign currency sensitivity

The following table demonstrate the sensitivity to a reasonably possible change in major currencies like US Dollar and Euro with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities including foreign currency derivatives. The Company’s exposure to foreign currency changes for all other currencies is not material.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Consequently, could have unforeseen impact on Company’s cost of borrowing or returns thus impacting the profit and loss.

The Company does not have any borrowings. Surplus funds are invested in deposits at fixed interest rates. The tenure of the deposits is managed to match with the liquidity profile of the Company.

* denotes figures less than a million

B Credit risk

Credit risk is defined as an unexpected loss in financial instruments if the contractual partner is failing to discharge its obligations in full and on time. The Company is exposed to credit risk from its operating and financing activities like trade receivables, deposits with banks, foreign exchange transactions and other financial instruments.

Receivables

The major exposure to credit risk at the reporting date is primarily from receivables comprising of trade and project unbilled receivables (net).

Credit risk on receivables is limited due to the Company’s large and diverse customer base which includes public sector enterprises, state owned companies and private corporates. The effective monitoring and controlling of credit risk through credit evaluations and ratings is a core competency of the Company’s risk management system.

For receivables, as a practical expedient, the Company computes expected credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The ECL is calculated on rating and default probability percentage arrived from the historic default trend. In order to determine the default probability percentage, a simple average of customer wise specific allowances or actual bad debts incurred in succeeding year (derived rates) (whichever is higher) for the preceding three years is considered as a percentage of gross receivables positions for each grading i.e. rating and division of each customer as at reporting date.

Other financial assets

Credit risk from cash and cash equivalents, term deposits and derivative financial instruments is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds, temporarily, are made only with approved counter parties and within credit limits assigned to each counterparty. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

C Liquidity risk

The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company regularly monitors the rolling forecasts and actual cashflows, to ensure it has sufficient funds to meet the operational needs.

The table below summarise the maturity profile of the Company’s financial liabilities based on contractually agreed undiscounted cash flows :

12 First time adoption of Ind AS

These financial statements, for the year ended 30 September 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 30 September 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 30 September 2017, together with the comparative period data as at and for the year ended 30 September 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1 October 2015, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 October 2015 and the financial statements as at and for the year ended 30 September 2016.

A) Exemptions availed

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has accordingly applied the following exemptions:

i) The Company has elected to apply Ind AS 103 - “Business Combinations” prospectively from the date of transition. Hence, business combinations occurring prior to the transition date have not been restated.

ii) The Company has elected to continue with the carrying value determined in accordance with Indian GAAP for all of its property, plant and equipment, intangible assets and investment property as deemed cost of such assets at the transition date.

iii) The Company has elected to continue with the carrying value of the investment in subsidiary as deemed cost as on the date of transition.

iv) The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after the transition date.

v) The Company has determined the classification of debt instruments in terms of whether they meet the amortised cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transition date.

vi) The Company has applied the impairment requirements of Ind AS 109 retrospectively based on facts and circumstances existing on transition date.

vii) The estimates at 1 October 2015 and at 30 September 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following item where application of Indian GAAP did not require estimation.

- Impairment of financial assets based on expected credit loss model.

B) Reconciliation between previously reported Indian GAAP (IGAAP) and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliation from erstwhile Indian GAAP to Ind AS.

i) Reconciliation of Equity between IGAAP and Ind AS

ii) Reconciliation of Net profit after tax as previously reported under IGAAP and the total comprehensive income as per Ind AS for the year ended 30 September 2016

iii) Reconciliation of cash flows for the year ended 30 September 2016

The transition from erstwhile Indian GAAP to Ind AS has not made a material impact on the statement of cash flows.

Notes:

1 Under Indian GAAP, the allowance for bad and doubtful debts were accounted based on incurred loss model. Whereas, under Ind AS this provision is created based on Expected Credit Loss Model (ECL). Consequently, Rs.260 as at 1 October 2015 has been recognized as additional allowance with a charge to transition reserves. Further, Rs.73 during the year ended 30 September 2016 has been recognized as a reversal of allowance.

2 Under Indian GAAP, the Company had accounted for non-current financial assets and liabilities at the undiscounted amount. Whereas under Ind AS, such financial assets and liabilities are recognised at present value. Consequently, Rs.68 as at 1 October 2015 has been recognised as a charge to transition reserves. Further, Rs.22 during the year ended 30 September 2016 has been recognised in profit and loss.

3 The fair value gain/loss of foreign exchange forward contracts is recognised under Ind AS, which was not recognised under Indian GAAP. Impact of fair value changes as on 1 October 2015 of Rs.9 is recognised in transition reserve and for the year ended 30 September 2016 of Rs.5 is recognised in Statement of Profit and Loss, except for the fair value changes pertaining to effective portion of a cash flow hedge, which is recognised in other comprehensive income.

4 Under Indian GAAP, dividends proposed by the Board of Directors after the Balance Sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the Annual General Meeting. This has resulted in an increase in other equity by Rs.4,286 as at 1 October 2015 and Rs.2,572 as at 30 September 2016.

5 Tax adjustments include deferred tax impact on account of differences between previous Indian GAAP and Ind AS. On 1 October 2015 the net impact on deferred tax assets aggregating Rs.117 has been adjusted to transition reserve. Rs.20 has been recognised in the statement of profit and loss for the year ended 30 September 2016.

6 Under Indian GAAP, the entire cost, including actuarial gains and losses on post-employment defined benefit plan is charged to the statement of profit or loss. Under Ind AS remeasurements comprising of actuarial gains and losses are recognised through Other Comprehensive Income. Rs.389 is reclassed from employee benefits to Other comprehensive income during the year ended 30 September 2016.

(a) The Board of Directors at its meeting held on 5 December 2016 approved the sale and transfer of engineering, design and development services for wind power business forming part of Power and Gas segment of the Company to an Indian subsidiary of Siemens Wind HoldCo Sociedad Limitada, Spain for a consideration of Rs.75 as slump sale with effect from commencement of business on 1 January 2017 and the Company recorded a profit of Rs.72 on said transaction. Corresponding tax expense on the said transaction amounts to Rs.16.

(b) During the year, vide agreement dated 25 September 2017, the Company sold its Property located at Worli, Mumbai for a consideration of Rs.6,100 with a profit of Rs.5,603. The tax impact on the same is Rs.1,373.

(c) In accordance with the periodic impairment assessment, the Company had re-assessed the usability of certain assets and consequently recognized impairment loss of Rs.355 in the previous year. The tax impact on the same is Rs. (123).

13 Discontinued operations

During previous year, the Board of Directors at its meeting held on 4 March 2016 and the Members of the Company by way of Postal Ballot which closed on 27 April 2016, approved the sale and transfer of the Healthcare undertaking forming the Healthcare segment of the Company to Siemens Healthcare Private Limited (a subsidiary of Siemens AG, Germany) for a consideration of Rs.30,500 as a slump sale on a going concern basis, with effect from commencement of business on 1 July 2016 and recorded a profit of Rs.30,278 on sale of Healthcare undertaking which is shown under exceptional items (Refer note 53). Corresponding tax expense on the said transaction amounts to Rs.7,099.

14 During the year, the Company had specified bank notes or other denomination notes as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBNs) held and transacted during the period from November 8, 2016 to December 30, 2016, the denomination wise SBNs and other notes as per the notification is given below:

15 The Government of India introduced Goods and Service Tax (‘GST’) with effect from 1 July 2017 which partly replaced excise duty. Consequently the revenue from operations for period 1 July 2017 to 30 September 2017 is net of GST. However, the revenue from operations for the period 1 October 2016 to 30 June 2017 and year ended 30 September 2016 is inclusive of excise duty.


Sep 30, 2016

a) Shares held by holding company and subsidiary of holding company:

255,351,805 (2015: 255,351,805) Equity shares of Rs. 2 each, fully paid-up, are held by the Holding Company, Siemens AG, Germany;

11,738,108 (2015: 11,738,108) Equity shares of Rs.2 each, fully paid-up, are held by Siemens Metals Technologies Vermogensverwaltungs GmbH (formerly known as Siemens VAI Metals Technologies GmbH), a 100% subsidiary of Siemens AG, Germany

As per records of the Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

* denotes figures less than a million

e) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

During the year ended 30 September 2016, the amount of per share interim dividend distributed to equity shareholders is Rs.27.50 (2015: Rs.Nil) aggregating Rs.9,793. The amount of per share final dividend recognized for distribution to equity shareholders is Rs.6 (2015: Rs.10).

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts (if any). The distribution will be in proportion to the number of equity shares held by the shareholders.

1 Fixed assets (Continued)

i Gross block of buildings includes Rs.831 (2015: Rs.392) representing 365 shares of Rs.50 each and 11 shares of Rs.100 each (2015: 345 shares of Rs.50 each and 10 shares of Rs.100 each) in various co-operative housing societies respectively.

iv Plant and equipments includes Gross Block of Rs.25 (2015: Rs.25) and Net Block of Rs.5 (2015 Rs.7) cost incurred by the Company on certain assets ownership of which vests with the West Bengal State Electricity Board.

Particulars in respect of loans and advances in the nature of loans as required by Regulation 53(f) read with Para A of Schedule V of the the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and section 186 of the Companies Act, 2013

32 Disclosure relating to Provisions

Provision for warranty

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery/ commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms up to closure of the contract (including warranty period).

Provision for loss orders

A provision for expected loss on construction contracts is recognized when it is probable that the contract costs will exceed total contract revenue. For all other contracts loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic benefits.

Provision for other matters

The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the outflow of which would depend on the cessation of the respective events.

Lease rent debited to the statement of profit and loss Rs.677 (2015: Rs.676)

Sub-lease payments recognized in the statement of profit and loss Rs.240 (2015: Rs.32)

The future sub-lease payments expected to be received under non cancellable sub-lease as at 30 September 2016 is Rs.1,238 (2015: Rs.Nil)

There is no contingent rent recognized in the statement of profit and loss

General description of the leasing arrangement:

(i) The Company has entered into operating lease arrangements for its office premises, storage locations, machinery, residential premises and motor cars for its employees.

(ii) The future lease rental payments are determined on the basis of the monthly lease payment terms as per the agreements.

(iii) At the expiry of the non cancellable lease period the option of renewal rests with the Company.

(iv) Some of the lease agreements have escalation clause ranging from 5% to 15% pa. There are no exceptional / restrictive covenants in the lease agreements.

Lease income recognized during the year in statement of profit and loss Rs.554 (2015: Rs.265)

There is no contingent rent recognized in the statement of profit and loss.

General description of the leasing arrangement:

(i) The Company has entered into operating lease arrangements of its factory premises, office premises, storage locations, machinery and residential premises.

(ii) The future lease rental income is determined on the basis of the monthly lease terms as per the agreements.

(iii) At the expiry of the non cancellable lease period the option of renewal rests with both parties.

(iv) The lease agreements have escalation clause of 5% to 10% pa. There are no exceptional / restrictive covenants in the lease agreements.

2 (iii) Other disclosures :

- Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks.

- Profits / losses on inter segment transfers are eliminated at the Company level.

- During the year, there has been a reorganization of certain businesses across segments and accordingly, the figures for the previous year have been regrouped to make them comparable.

(iv) Segment information :

The primary and secondary reportable segments are business segments and geographical segments respectively.

Business Segments: The business of the Company is divided into eight segments. These segments are the basis for management control and hence, form the basis for reporting. The business of each segment comprises of :

- Power and Gas: - Provides products and solutions for generation of electricity from fossil and renewable fuels for utilities, independent power producers and engineering, procurement and construction (EPC) companies and the reliable transport of oil and natural gas.

- Energy Management: - Supplier of products, systems, solutions and services for transmission and distribution of electrical energy for power utilities and industrial companies. 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.

- Building Technologies: - Provider of safe, secure, energy-efficient and eco-friendly buildings and infrastructures. As a technology partner, consultant, service provider, systems integrator and product vendor, offerings range from fire safety, security, building automation, heating, ventilation, air conditioning and energy management.

- Mobility: - Supplier of solutions for passenger and freight transportation - including rail vehicles, rail automation systems, rail electrification systems, road traffic technology and IT solutions.

- Digital Factory: - Contains portfolio of leading edge software solutions and automation technologies covering the complete life cycle from product design and production execution to services for manufacturing companies.

- Process Industries and Drives: - Provides products, systems, solutions and services across entire life cycles for all industry sectors.

- Healthcare:- Provides technology for the healthcare industry - medical imaging, laboratory diagnostics and solutions for the healthcare IT.

- Metals Technologies: - Provides Metallurgical Plant Building Technology catering services, design and engineering, equipment supply and supervision of erection and commissioning of wire rods and bar mills.

- Others:- Services provided to other group companies and lease rentals have been classified as "Others".

Geographical Segments: The business is organized in two geographical segments i.e. within India and outside India.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated corporate items

Unallocated items include general corporate items which are not allocated to any business segment.

3 Disclosure pursuant to Accounting Standard - 15 ''Employee Benefits'' :

(i) Defined Contribution Plans

Amount of Rs.210 (2015: Rs.222) is recognized as an expense and included in "employee benefits expense" (Refer note 21) in the statement of profit and loss.

* Plan assets include balance of ''208 which is in process of being transferred to the Gratuity Trust of Siemens Healthcare Pvt. Ltd. pursuant to the transfer of Healthcare undertaking as detailed in note 42(a).

* Plan assets include balance of ''208 which is in process of being transferred to the Gratuity Trust of Siemens Healthcare Pvt. Ltd. pursuant to the transfer of Healthcare undertaking as detailed in note 42(a).

b) The fund formed by the Company manages the investments of the Gratuity Fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities. The Company expects to contribute Rs.172 (2015: Rs.153) to gratuity fund in 2016-17.

c) The estimates of future salary increases, considered in actuarial valuation, take in to account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

d) The Company has contributed Rs. 497 (2015: Rs.493) towards provident fund during the year ended 30 September 2016. The Guidance on Implementing AS 15, Employee Benefits (Revised 2005) issued by Accounting Standard Board (ASB) states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. The Actuary has accordingly provided a valuation and based on the assumptions provided below there is no shortfall as at 30 September 2016.

(iii) General descriptions of significant defined plans

I Gratuity Plan

Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company''s Scheme whichever is more beneficial.

II Medical

Post-Retirement Medical Benefit is paid to eligible employees in case of survival up to the retirement age and after death, benefits are available to the employee''s spouse. The Company reimburses the employees for expenses incurred over and above the claim accepted by the insurance company. The Company pays 80% of difference between liability incurred by employee and claim received from insurance company subject to ceiling based on the grade of employees.

4 Derivative Instruments

a) Forward Contracts

The Company uses forward contracts to mitigate its risks associated with foreign currency fluctuations having underlying transaction and relating to firm commitments or highly probable forecast transactions. The Company does not enter into any forward contract which is intended for trading or speculative purposes.

(a) I n accordance with the periodic impairment assessment, the Company has re-assessed the usability of certain assets and consequently recognized impairment loss of Rs.355 (2015: Rs.Nil)

(b) Earlier, the Company had recognized impairment loss on wind power manufacturing facility which was shown under capital work-in-progress. During previous year, the Company had entered into leasing agreement for the said facility on an as is where is basis. Accordingly, the said facility was capitalized under fixed assets and investment property and impairment provision had been reassessed considering value in use and pre-tax discount rate of 11%. Consequently, an impairment loss of Rs.1,032 and other consequential provisions of Rs.35 was reversed in previous year.

(c) During previous year, the Company had amended the gratuity plan to remove the ceiling for gratuity payout to employees. Accordingly, the one time impact of the increase in the gratuity obligation was shown under exceptional items.

5 Discontinued operations

a) The Board of Directors at its meeting held on 4 March 2016 and the Members of the Company by way of Postal Ballot which closed on 27 April 2016, approved the sale and transfer of the Healthcare undertaking forming the Healthcare segment of the Company to Siemens Healthcare Private Limited (a subsidiary of Siemens AG, Germany) for a consideration of Rs.30,500 as a slump sale on a going concern basis, with effect from commencement of business on 1 July 2016 and recorded a profit of Rs.30,278 on sale of Healthcare undertaking which is shown under exceptional items (Refer note 41). Corresponding tax expense on the said transaction amounts to Rs.7,099.

b) The Board of Directors and the Committee of Directors at their meetings held on 5 November, 2014 and 8 November, 2014 respectively, had approved sale and transfer of it''s Metals Technologies (MT) business which formed part of Metals Technologies segment of the Company to VAI Metals Technologies Pvt. Ltd. (a subsidiary of Siemens VAI Metals Technologies GmbH, Germany) as a slump sale on a going concern basis for a consideration of Rs.10,233 with effect from the close of business hours on 31 December 2014 and had recorded a profit of Rs.7,120 on sale of MT business which was shown under exceptional items (Refer note 41). Corresponding tax expense on the said transaction amounted to Rs.1,785.

6 Change in accounting policy

During previous year, the Company had changed its accounting policy for revenue recognition of its Healthcare business whereby the equipment sale are now recognized on installation and extended warranty was recognized over the warranty period as opposed to the earlier practice whereby the revenue for both equipment and extended warranty was recognized on dispatch.

Consequently, the revenue from sale of products, sale of services and profits were lower by Rs.1,013, Rs.1,120 and Rs.74 respectively.

7 Prior year comparatives

Pursuant to the transfer of Healthcare undertaking and Metals Technologies business (Refer note 42) during current and previous year respectively, the current year figures are not strictly comparable with those of the previous year. Previous year''s figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification.


Sep 30, 2015

A) Shares held by holding company and subsidiary of holding company:

255,351,805 (2014: 255,351,805) Equity shares of Rs, 2 each, fully paid-up, are held by the Holding Company, Siemens AG, Germany;

11,738,108 (2014: 11,738,108) Equity shares of Rs, 2 each, fully paid-up, are held by Siemens Metals Technologies Vermogensverwaltungs GmbH (formerly known as Siemens VAI Metals Technologies GmbH), a 100% subsidiary of Siemens AG, Germany

As per records of the Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

b) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs, 2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

During the year ended 30 September 201 5, the amount of per share dividend recognized for distribution to equity shareholders is Rs, 10 (2014: Rs, 6)

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts (if any). The distribution will be in proportion to the number of equity shares held by the shareholders.

Raw materials consumed includes costs incurred for manufacturing of finished goods which have been internally used for the project business.

1. Disclosure relating to Provisions

Provision for warranty

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery/ commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms up to closure of the contract (including warranty period).

Provision for loss orders

A provision for expected loss on construction contracts is recognized when it is probable that the contract costs will exceed total contract revenue. For all other contracts loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic benefits.

Provision for other matters

The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the outflow of which would depend on the cessation of the respective events.

Lease income recognized during the year in statement of profit and loss Rs, 4 (2014: Rs, Nil)

There is no contingent rent recognized in the statement of profit and loss.

General description of the leasing arrangement:

(i) The Company has entered into operating lease arrangements of its factory premises, office premises, storage locations, machinery and residential premises.

(ii) The future lease rental income is determined on the basis of the monthly lease terms as per the agreements.

(iii) At the expiry of the non cancellable lease period the option of renewal rests with both parties.

(iv) The lease agreements have escalation clause of 5% pa. There are no exceptional / restrictive covenants in the lease agreements.

Lease rent debited to the statement of profit and loss Rs, 676 (2014: Rs, 790)

Sub-lease payments recognized in the statement of profit and loss Rs, 32 (2014: Rs, 51)

There is no contingent rent recognized in the statement of profit and loss

General description of the leasing arrangement:

(i) The Company has entered into operating lease arrangements for its office premises, storage locations, machinery, residential premises and motor cars for its employees.

(ii) The future lease rental payments are determined on the basis of the monthly lease payment terms as per the agreements.

(iii) At the expiry of the non cancellable lease period the option of renewal rests with the Company.

(iv) Some of the lease agreements have escalation clause ranging from 5% to 15%. There are no exceptional / restrictive covenants in the lease agreements.

b) Where the Company is the less or:

Lease income from non cancellable lease arrangement credited to the statement of profit and loss and the future lease income in respect of non cancellable operating lease are summarized below:

2. Disclosure pursuant to Accounting Standard - 19 'Leases' :

a) Where the Company is the lessee:

Lease payments on non cancellable lease arrangement debited to the statement of profit and loss and the future lease payments in respect of non cancellable operating lease are summarized below:

3. Related party transactions

3.1 Parties where control exists

Siemens AG Holding company

3.2 Subsidiary where transactions have taken place during the year

Siemens Rail Automation Pvt. Ltd.,India Subsidiary

4. (iii) Other disclosures :

Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks.

Profits / losses on inter segment transfers are eliminated at the Company level.

During the year, there has been a reorganization of certain businesses across segments and accordingly, the figures for the previous year have been regrouped to make them comparable.

(iv) Segment information :

The primary and secondary reportable segments are business segments and geographical segments respectively.

Business Segments: The business of the Company is divided into eight segments. These segments are the basis for management control and hence, form the basis for reporting. The business of each segment comprises of:

Power and Gas :- Provides products and solutions for generation of electricity from fossil and renewable fuels for utilities, independent power producers and engineering, procurement and construction (EPC) companies and the reliable transport of oil and natural gas.

Energy Management :- Supplier of products, systems, solutions and services for transmission and distribution of electrical energy for power utilities and industrial companies. 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.

Building Technologies :- Provider of safe, secure, energy-efficient and eco-friendly buildings and infrastructures. As a technology partner, consultant, service provider, systems integrator and product vendor, offerings range from fire safety, security, building automation, heating, ventilation, air conditioning and energy management.

Mobility :- Supplier of solutions for passenger and freight transportation - including rail vehicles, rail automation systems, rail electrification systems, road traffic technology and IT solutions.

Digital Factory :- Contains portfolio of leading edge software solutions and automation technologies covering the complete life cycle from product design and production execution to services for manufacturing companies.

Process Industries and Drives :- Provides products, systems, solutions and services across entire life cycles for all industry sectors.

Healthcare :- Provides technology for the healthcare industry - medical imaging, laboratory diagnostics and solutions for the healthcare IT.

Metals Technologies :- Provides Metallurgical Plant Building Technology catering services, design & engineering, equipment supply and supervision of erection and commissioning of wire rods and bar mills.

Others :- Services provided to other group companies and lease rentals have been classified as "Others".

Geographical Segments: The business is organized in two geographical segments i.e. within India and outside India.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated corporate items

Unallocated items include general corporate items which are not allocated to any business segment.

b) The fund formed by the Company manages the investments of the Gratuity Fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities. The Company expects to contributeRs, 153 (2014:Rs, 150) to gratuity fund in 2015-16.

5. Disclosure pursuant to Accounting Standard -15 'Employee Benefits' (Continued):

c) The estimates of future salary increases, considered in actuarial valuation, take in to account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

d) The Company has contributed Rs, 493 (2014: Rs, 457) towards provident fund during the year ended 30 September 2015. The Guidance on Implementing AS 15, Employee Benefits (Revised 2005) issued by Accounting Standard Board (ASB) states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. The Actuary has accordingly provided a valuation and based on the assumptions provided below there is no shortfall as at 30 September 201 5.

(iii) General descriptions of significant defined plans

I Gratuity Plan

Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company's Scheme whichever is more beneficial.

II Medical

Post-Retirement Medical Benefit is paid to eligible employees in case of survival up to the retirement age and after death, benefits are available to the employee's spouse. The Company reimburses the employees for expenses incurred over and above the claim accepted by the insurance company. The Company pays 80% of difference between liability incurred by employee and claim received from insurance company subject to ceiling based on the grade of employees.

a) During the year, the Company has amended the gratuity plan to remove the ceiling for gratuity payout to employees. Accordingly, the onetime impact of the increase in the gratuity obligation has been shown under exceptional items.

b) The Company had recognized impairment loss on wind power manufacturing facility which was shown under capital work-in-progress. During the year, the Company has entered into leasing agreement for the said facility on an as is where is basis. Accordingly, the said facility has now been capitalized under fixed assets and investment property and impairment provision has been reassessed considering value in use and pre-tax discount rate of 11 %. Consequently, an impairment loss of Rs, 1,032 and other consequential provisions of Rs, 35 have been reversed.

c) In accordance with periodic impairment assessment, the Company has re-assessed the usability of certain assets and consequently recognized impairment loss of Rs, Nil (2014: Rs, 292).

6. Discontinued operations

The Board of Directors and the Committee of Directors at their meetings held on 5 November, 2014 and 8 November, 2014 respectively, approved sale and transfer of its Metals Technologies (MT) business which form part of Metals Technologies segment of the Company to VAI Metals Technologies Pvt. Ltd. (a subsidiary of Siemens VAI Metals Technologies GmbH, Germany) as a slump sale on a going concern basis for a consideration of Rs,10,233 with effect from the close of business hours on 31 December 2014 and recorded a profit of Rs, 7,120 on sale of MT business which is shown under exceptional items (Refer note 41). Corresponding tax expense on the said transaction amounts toRs, 1,785.

7. Change in accounting policy

During the year, the Company has changed its accounting policy for revenue recognition of its Healthcare business whereby the equipment sale are now recognized on installation and extended warranty is recognized over the warranty period as opposed to the earlier practice whereby the revenue for both equipment and extended warranty was recognized on dispatch.

8. Prior year comparatives

Pursuant to the transfer of Metals Technologies business (Refer note 42), the current year figures are not strictly comparable with those of the previous year. Previous year's figures have been regrouped / reclassified wherever necessary, to conform to current year's classification.


Sep 30, 2014

1. Basis of preparation of financial statements

The financial statements are prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain derivative instruments which are measured at fair value in accordance with generally accepted accounting principles in India ("Indian GAAP") and comply in all material respects with the accounting standards notified in the Companies (Accounting Standards) Rules 2006, (as amended) issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards (''NACAS'') and relevant provisions of the Companies Act, 1956 (''the Act'') read with General Circular 08/2014 dated 04 April 2014 issued by Ministry of Corporate Affairs.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

a) Shares held by holding company and subsidiary of holding company:

255,351,805 (2013: 255,351,805) Equity shares of Rs. 2 each, fully paid-up, are held by the Holding Company, Siemens AG, Germany; 11,738,108 (2013: 11,738,108) Equity shares of Rs. 2 each, fully paid-up, are held by Siemens VAI Metals Technolo- gies GmbH, a 100% subsidiary of Siemens AG, Germany.

Notes to the financial statements (Continued) as at 30 September 2014 (Currency: Indian rupees millions)

b) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

During the year ended 30 September 2014, the amount of per share dividend recognised for distribution to equity shareholders is Rs. 6 (2013: Rs. 5)

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts (if any). The distribution will be in proportion to the number of equity shares held by the shareholders.

2 Commitments and contingent liabilities

(a) Commitments 2014 2013

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 629 682

(b) Contingent liabilities

Income tax (excluding interest) 170 201

Excise / sales tax liabilities, under dispute 3,464 1,945

Customs liabilities, under dispute 120 120

Claims against the company not acknowledged as debts 537 105

In respect of above contingent liabilities, the future cash outflows are determinable only on receipt of judgements pending at various forums / authorities.

3 Disclosure relating to Provisions Provision for warranty

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery/ commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms upto closure of the contract (including warranty period).

Provision for loss orders

A provision for expected loss on construction contracts is recognised when it is probable that the contract costs will exceed total contract revenue. For all other contracts loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic benefits.

Provision for other matters

The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the outflow of which would depend on the cessation of the respective events.

Lease rent debited to the statement of profit and loss Rs. 790 (2013: Rs. 965) Sub-lease payments recognised in the statement of profit and loss Rs. 51 (2013: Rs. 74)

There is no contingent rent recognised in the statement of profit and loss General description of the leasing arrangement:

(i) The Company has entered into operating lease arrangements for its office premises, storage locations, machinery, residential premises and motor cars for its employees.

(ii) The future lease rental payments are determined on the basis of the monthly lease payment terms as per the agreements.

(iii) At the expiry of the non cancellable lease period the option of renewal rests with the Company.

(iv) Some of the lease agreements have escalation clause ranging from 5% to 15%. There are no exceptional / restrictive covenants in the lease agreements.

4. (iii) Other disclosures :

* Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks.

* Profits / losses on inter segment transfers are eliminated at the Company level.

* During the year, there has been a reorganisation of certain businesses across segments and accordingly, the figures in relation to Industry, Infrastructure and Cities and unallocable for the previous year have been regrouped to make them comparable.

(iv) Segment information :

The primary and secondary reportable segments are business segments and geographical segments respectively.

Business Segments: The business of the Company is divided into five segments. These segments are the basis for management control and hence, form the basis for reporting. The business of each segment comprises of :

* Infrastructure and Cities:- Provides Electrical Installation Technologies, i.e. Products for Building, e.g. Miniature Circuit breakers, Distribution boards, Residual Current Circuit Breakers etc. It also provides solutions for rail automation, railway electrification, light and heavy rail, locomotives, trains, turnkey projects and integrated services. Also provides solutions for the automation of power grids to products like medium- voltage switchgear and components.

* Energy:- Offers highly efficient products and solutions for power generation based on fossil fuels. It ranges from individual gas and steam turbines and generators, to turnkey power plants. Also offers customers products and solutions used for the extraction, conversion and transport of oil and gas. Also provides solutions for power generation and distribution including products and solutions in the high-voltage field - such as High Voltage Direct Current (HVDC) transmission systems, substations, switchgear and transformers.

* Industry:- Provides complete range of automation products & systems, industrial automation systems & low- voltage Switchgears, complete range of large and standard drives and motors, special purpose motors, process and motion control systems. Also undertakes turnkey projects in the industrial and infrastructure sectors over the entire life cycle including concept, engineering, procurement, supplies, installation, commissioning and after sales services.

* Healthcare:- Provides diagnostic, therapeutic and life-saving products in computer tomography (CT), magnetic resonance imaging (MRI), ultrasonography, nuclear medicine, digital angiography, patient monitoring systems, digital radiography systems, radiology networking systems, lithotripsy and linear accelerators.

* Others:- Services provided to other group companies and lease rentals have been classified as "Others".

Geographical Segments: The business is organised in two geographical segments i.e. within India and outside India.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated items

Unallocated items include general corporate income and expense items which are not allocated to any business segment.

5. Disclosure pursuant to Accounting Standard - 15 ''Employee Benefits'' :

(i) Defined Contribution Plans

Amount of Rs. 240 (2013: Rs. 240) is recognised as an expense and included in "employee benefits expense" (Refer note 22) in the statement of profit and loss.

6. Disclosure pursuant to Accounting Standard - 15 ''Employee Benefits'' (Continued)

a) The fund formed by the Company manages the investments of the Gratuity Fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities. The Company expects to contribute Rs. 150 (2013: Rs. 150) to gratuity fund in 2014-15.

b) The estimates of future salary increases, considered in actuarial valuation, take in to account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

c) The Company has contributed Rs. 457 (2013: Rs. 449) towards provident fund during the year ended 30 September 2014. The Guidance on Implementing AS 15, Employee Benefits (Revised 2005) issued by Accounting Standard Board (ASB) states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. The Actuary has accordingly provided a valuation and based on the assumptions provided below there is a shortfall as at 30 September 2014.

(iii) General descriptions of significant defined plans

I Gratuity

Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company''s Scheme whichever is more beneficial.

II Medical

Post-Retirement Medical Benefit is paid to eligible employees in case of survival upto the retirement age and after death, benefits are available to the employee''s spouse. The Company reimburses the employees for expenses incurred over and above the claim accepted by the insurance company. The Company pays 80% of difference between liability incurred by employee and claim received from insurance company subject to ceiling based on the grade of employees.

7. Derivative Instruments a) Forward Contracts

The Company uses forward contracts to mitigate its risks associated with foreign currency fluctuations having underlying transaction and relating to firm commitments or highly probable forecast transactions. The Company does not enter into any forward contract which is intended for trading or speculative purposes.

The forward contracts have been converted in Indian rupees, at the spot rates, as at 30 September to facilitate reading purposes only.

The Company has a policy of hedging its foreign currency exposure on a net basis.

* denotes figures less than a million

8. Discontinuing operations

The Board of Directors and the Committee of Directors at their meetings held on 05 November 2014 and 08 November 2014 respectively, considered and approved a proposal to sell and transfer the Metals Technologies business, forming part of the Industry segment of the Company to a subsidiary (which is being incorporated) of Siemens VAI Metals Technologies GmbH, Germany for a consideration of Rs. 10,233 with effect from the close of business hours on 31 December 2014, subject to the approval of shareholders by requisite majority.

9. Proposed acquisition

The Board of Directors at its meeting held on 30 January 2014, had approved the acquisition of 100% Equity stake in Siemens Rail Automation Pvt. Ltd. (SRAPL) from Siemens International Holding BV, Netherlands (99.99%) and Siemens AG (0.01%) for a sum of Rs. 550. Subsequent to the year end, the Company has acquired SRAPL which accordingly has become a subsidiary of the Company effective from 01 October 2014.

10. Prior year comparatives

Previous year''s figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification.


Sep 30, 2013

Basis of preparation of financial statements

The financial statements are prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain derivative instruments which are measured at fair value in accordance with generally accepted accounting principles in India ("Indian GAAP") and comply in all material respects with the accounting standards notified in the Companies (Accounting Standards) Rules 2006, (as amended) issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards (''NACAS'') and relevant provisions of the Companies Act, 1956 (''the Act'').

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1. Amalgamations

1.1. Amalgamation of Siemens Power Engineering Pvt. Ltd. (SPEL)

Pursuant to the scheme of amalgamation (''the scheme'') of erstwhile SPEL with the Company under sections 391 to 394 of the Companies Act, 1956 sanctioned by the Honorable High Court of Bombay and Punjab & Haryana on 2 November 2012 and 23 November 2012 respectively, the assets and liabilities of SPEL were transferred to and vested in the Company with effect from 1 October 2011. Accordingly, the scheme has been given effect to in these accounts.

The operations of SPEL include drawings and designing for planning and setting up of power plant worldwide, by using standard and specifically customized software.

The amalgamation has been accounted for under the "pooling of interests" method as prescribed by AS -14 ''Accounting for Amalgamations''. Accordingly, the accounting treatment has been given as under-

i. The assets, liabilities and reserves of SPEL as at 1 October 2011 have been incorporated at their book values in the financial statements of the Company.

ii. 7,500,000 equity shares of Rs. 10 each fully paid up of SPEL stand cancelled and 3,461,538 equity shares of Rs. 2 each of the Company have been issued to the shareholders of SPEL on 5 February 2013. The excess amount of Rs. 68 of the share capital of SPEL over the face value of share capital issued has been credited to the Capital Reserve of the Company.

iii. The profit (net of dividend) of SPEL for the year ended 30 September 2012 amounting to Rs. 47 has been added to the General Reserve of the Company.

The financial statements include the operations of SPEL for the year ended 30 September 2013 and are reflected in the Energy segment.

1.2. Amalgamation of Winergy Drive Systems India Pvt. Ltd. (Winergy)

Pursuant to the scheme of amalgamation (''the scheme'') of Winergy with the Company under sections 391 to 394 of the Companies Act, 1956 sanctioned by the Honorable High Court of Bombay and Madras on 22 March 2013 and 18 February 2013 respectively, the assets and liabilities of Winergy were transferred to and vested in the Company with effect from 1 October 2012. Accordingly, the scheme has been given effect to in these accounts.

The operations of Winergy include manufacture of wind turbine gear unit, turbo gear unit and coupling assembly to cater to the wind mill and providing design and engineering services for manufacture of power transmission items.

The amalgamation has been accounted for under the "pooling of interests" method as prescribed by AS - 14 Accounting for Amalgamations''. Accordingly, the accounting treatment has been given as under-

i. The assets, liabilities, reserves and credit balance of profit and loss of Winergy as at 1 October 2012 have been incorporated at their book values in the financial statements of the Company.

ii. 45,010,000 equity shares of Rs. 10 each fully paid up of Winergy stand cancelled and 625,139 equity shares of Rs. 2 each of the Company have been issued to the shareholders of Winergy on 24 May 2013. The excess amount of Rs. 449 of the share capital of Winergy over the face value of share capital issued has been credited to the Capital Reserve of the Company.

iii. The Company has reassessed the useful lives of certain assets of Winergy as of the effective date of the amalgamation i.e. 1 October 2012. Additional depreciation of Rs. 116 (Rs. 77 net of tax) has been adjusted to the opening balance of statement of profit and loss, transferred from Winergy.

iv. The Company has recognised deferred tax assets of Rs. 201 relating to timing differences between accounting income and taxable income of Winergy, which was previously not recorded by Winergy owing to absence of virtual certainty. The same has been adjusted to the opening balance of statement of profit and loss of the Company.

The financial statements include the operations of Winergy for the year ended 30 September 2013 and are reflected in the Industry segment.

2 Disclosure relating to Provisions

Provision for warranty

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery / commissioning dates of an individual project have exceeded or are likely to exceed the delivery / commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms upto closure of the contract (including warranty period).

Provision for loss orders

A provision for expected loss on construction contracts is recognised when it is probable that the contract costs will exceed total contract revenue. For all other contracts loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic benefits.

Other matters

The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the outflow of which would depend on the cessation of the respective events.

3 (iii) Other disclosures :

Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks.

Profits / losses on inter segment transfers are eliminated at the Company level.

(iv) Segment information :

The primary and secondary reportable segments are business segments and geographical segments respectively.

Business Segments: The business of the Company is divided into four segments. These segments are the basis for management control and hence, form the basis for reporting. The business of each segment comprises of:

Infrastructure and Cities:- Provides Electrical Installation Technologies, i.e. Products for Building, e.g. Miniature Circuit Breakers, Distribution Boards, Residual Current Circuit Breakers etc. It also provides solutions for rail automation, railway electrification, light and heavy rail, locomotives, trains, turnkey projects and integrated services. Also provides solutions for the automation of power grids to products like medium- voltage switchgear and components.

Industry:- Provides complete range of automation products & systems, industrial automation systems & low- voltage switchgears, complete range of large and standard drives and motors, special purpose motors, process and motion control systems. Also undertakes turnkey projects in the industrial and infrastructure sectors over the entire life cycle including concept, engineering, procurement, supplies, installation, commissioning and after sales services.

Energy:- Offers highly efficient products and solutions for power generation based on fossil fuels. It ranges from individual gas and steam turbines and generators, to turnkey power plants. Also offers customers products and solutions used for the extraction, conversion and transport of oil and gas. Also provides solutions for power generation and distribution including products and solutions in the high-voltage field - such as High Voltage Direct Current (HVDC) transmission systems, substations, switchgear and transformers.

Healthcare:-Provides diagnostic, therapeutic and life-saving products in computer tomography (CT), magnetic resonance imaging (MRI), ultrasonography, nuclear medicine, digital angiography, patient monitoring systems, digital radiography systems, radiology networking systems, lithotripsy and linear accelerators.

Geographical Segments: The business is organised in two geographical segments i.e. within India and outside India.

4 Disclosure pursuant to Accounting Standard -15 ''Employee Benefits'':

(i) Defined Contribution Plans

Amount of Rs. 240 (2012: Rs.216) is recognised as an expense and included in "employee benefits expense" (Refer note 23) in the statement of profit and loss.

(ii) Defined Benefit Plans

a) Amounts for the current period are as follows :

5 Disclosure pursuant to Accounting Standard -15 ''Employee Benefits'' (Continued) :

b) The fund formed by the Company manages the investments of the Gratuity Fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities. The Company expects to contribute Rs. 150 (2012: Rs. 100) to gratuity fund in 2013-14.

c) The estimates of future salary increases, considered in actuarial valuation, take in to account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

d) The Company has contributed Rs. 449 (2012: Rs. 396) towards provident fund during the year ended 30 September 2013. The Guidance on Implementing AS 15, Employee Benefits (Revised 2005) issued by Accounting Standard Board (ASB) states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. The Actuary has accordingly provided a valuation and based on the assumptions provided below there is no shortfall as at 30 September 2013 and 2012 respectively.

6 Prior period items

Prior period items for the year ended 30 September 2012 relates to certain updates in projects relating to an earlier year. The impact of the same in the statement of profit and loss is Rs. 799 (Decrease in revenue from construction contracts Rs. 572 and Increase in ''other costs'' under the head project bought outs and other direct costs Rs. 227).

7 Prior year comparatives

Pursuant to the amalgamation of SPEL and Winergy (Refer note 2.1 and 2.2), the figures of the current year are not strictly comparable to those of the previous year. Previous year''s figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification.


Sep 30, 2010

2010 2009

1 Commitments and contingent liabilities

(a) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 1,573,096 712,829

(b) Contingent liabilities Taxation matters (excluding interest)

- In respect of certain completed assessments where matters are under appeal by the Company 432,706 432,706

Excise/sales tax liabilities 522,173 309,422

Customs liabilities 120,000 120,000

Claims against the company not acknowledged as debts 75,430 47,055

2 Disclosure relating to Provisions

Provision for warranty

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery/ commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms upto closure of the contract (including warranty period).

Provision for loss orders

A provision for expected loss on construction contracts is recognised when it is probable that the contract costs will exceed total contract revenue. For all other contracts loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic benefits.

Contingencies

The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the outfow of which would depend on the cessation of the respective events.

3 Related party transactions

3.1 Parties where control exists

Siemens AG Holding company

Siemens Rolling Stock Private Ltd. Wholly owned subsidiary company

Flender Ltd. Wholly owned subsidiary company (w.e.f 1 August 2009) and

amalgamated with the company (w.e.f. 1October 2009)

Siemens Building Technologies Wholly owned subsidiary company (w.e.f. 8 January 2010)

Private Ltd.

Vista Security Technics Private Ltd. Wholly owned subsidiary of Siemens Building Technologies Private Ltd.

iMetrex Technologies Pte. Ltd. Wholly owned subsidiary of Siemens Building Technologies Private Ltd.

(Singapore) (upto 20 September 2010)

Avenues (Honkong) Ltd. (Hongkong) Wholly owned subsidiary of Siemens Building Technologies Private Ltd.

(upto 30 April 2010)

iMetrex Technologies Ltd. (Ireland) Wholly owned subsidiary of Siemens Building Technologies Private Ltd.

Europlex Technologies (UK) Ltd. Wholly owned subsidiary of iMetrex Technologies Ltd. (Ireland) (United Kingdom)

Europlex Technologies (Ireland) Wholly owned subsidiary of iMetrex Technologies Ltd. (Ireland) Ltd. formerly known as Europlex Manufacturing Ltd. (Ireland)

Clonshaugh Security Ltd. Wholly owned subsidiary of iMetrex Technologies Ltd. (Ireland) formerly known as Europlex Technologies Ltd.(Ireland)

4.2 Other related parties where transactions have taken place during the year

Fellow Subsidiaries Siemens S.A. Argentina

Memcor Australia Pty. Ltd. Australia

Siemens Ltd. Australia

ETM professional control GmbH Austria

Siemens Aktiengesellschafit Österreich Austria

Siemens VAI Metals Technologies GmbH (upto 1 July 2010) Austria

Siemens W.L.L. Bahrain

Siemens Bangladesh Ltd. Bangladesh

Siemens S.A./N.V. Belgium

Iriel Ind. Com. Sist. Eletr. Ltda. Brasilia

Siemens Ltda. Brasilia

Siemens Eletroeletronica Limitada Brasilia

Siemens Milltronics Process Instruments, Inc. Canada

Siemens Canada Ltd. Canada

Trench Ltd. Canada

Siemens Medium Voltage Switching Technologies (Wuxi) Ltd. China

Siemens International Trading Ltd., Shanghai China

MWB (Shanghai) Co Ltd. China

Siemens Electrical Drives (Shanghai) Ltd. China

Siemens Sensors & Communication Ltd. China

Siemens Wiring Accessories Shandong Ltd. China

Siemens Circuit Protection Systems Ltd. China

Siemens Electrical Apparatus Ltd. China

Siemens Switchgear Co. Ltd. China

Siemens Power Plant Automation Ltd. China

Siemens Ltd., China China

Siemens Electrical Drives Ltd. China

Siemens Manufacturing and Engineering Centre Ltd. China

Siemens Mechanical Drive Systems (Tianjin) Co. Ltd. China

Siemens Factory Automation Engineering Ltd. China

Siemens Shanghai Medical Equipment Ltd. China

Siemens Mindit Magnetic Resonance Ltd. China

Siemens Numerical Control Ltd. China

Siemens Industrial Turbomachinery (Huludao) Co. Ltd. China

Siemens Manufacturing S.A. Columbia

Siemens S.A. Columbia

Koncar Power Transformers Ltd. Croatia

Siemens Industrial Turbomachinery s.r.o. Czech Republic

Siemens s.r.o. Czech Republic

Fellow Subsidiaries Siemens Electric Machines s.r.o. Czech Republic

Siemens EM dARE Czech Republic

Siemens Flow Instruments A/S Denmark

Siemens Wind Power A/S Denmark

Siemens Turbomachinery Equipment A/S Denmark

Siemens S.A. Ecuador

Siemens Technologies S.A.E. Egypt

Siemens Osakeyhtiö Finland

Trench France S.A.S. France

Siemens Transmission & Distribution SAS France

Siemens S.A.S. France

Siemens VAI Metals Technologies SAS France

Flender-Graffenstaden SAS France

Siemens SAS, Division Production Sensors & Communication, Usine

de Haguenau France

SYKATEC Systeme, Komponenten, Anwendungstechnologie GmbH Germany

Siemens Industriegetriebe GmbH Germany

LINCAS Export Services GmbH Germany

Siemens Industrial Turbomachinery GmbH Germany

Siemens Turbomachinery Equipment GmbH Germany

Weiss Spindeltechnologie GmbH Germany

Ruhrtal Hochspannungsgeräte GmbH Germany

SBusbar Trunking GmbH & Co KG (upto 1 January 2010) Germany

Siemens Financial Services GmbH Germany

Trench Germany GmbH Germany

Siemens Finance & Leasing GmbH Germany

VVK Versicherungsvermittlungs- und Verkehrskontor GmbH Germany

Mechanik Center Erlangen GmbH Germany

Wallace & Tiernan GmbH Germany

Alpha Verteilertechnik GmbH Germany

evosofit GmbH Germany

HSP Hochspannungsgeräte GmbH Germany

Loher GmbH Germany

A. Friedr Flender AG Germany

Siemens Geared Motors Gesellschafit mit beschränkter Hafitung Germany

Siemens VAI Metals Technologies GmbH Germany

Winergy AG Germany

Flender Industriegetribe GmbH, Penig(upto July 2010) Germany

Siemens Industrial Turbomachinery Ltd. Great Britain

Siemens plc Great Britain

Fellow Subsidiaries Electrium Sales Ltd. Great Britain

Siemens A.E., Elektrotechnische Projekte und Erzeugnisse Greece

Siemens Ltd. Hongkong

Siemens Information Processing Services Private Ltd. (w.e.f 25 June 2009) India

Siemens VAI Metals Technologies Private Ltd. India

Powerplant Performance Improvement Ltd. India

Siemens Hearing Instruments Private Ltd. India

Siemens Power Engineering Private Ltd. India

Siemens Healthcare Diagnostics Ltd. India

Siemens Corporate Finance Private Ltd. India

Winergy Drive Systems India Private Ltd. India

Morgan Construction Company India Private Ltd. India

Osram India Private Ltd. India

Siemens Information Systems Ltd.(w.e.f 25 June 2009) India

Siemens Product Lifecycle Management Sofitware (India) Private Ltd. India

P.T. Siemens Indonesia Indonesia

Siemens S.p.A. Italy

Trench Italia S.r.l. Italy

Siemens Japan K.K. Japan

Yaskawa Siemens Automation & Drives Corp. Japan

Siemens TOO Kazakhstan

Siemens Kenya Ltd. Kenya

Siemens Ltd. Korea

Siemens Electrical & Electronic Services K.S.C. Kuwait

Siemens Malaysia Sdn. Bhd. Malaysia

Siemens Innovaciones S.A. de C.V. Mexico

Siemens, S.A. de C.V. Mexico

Siemens Plant Operations Tahaddart SARL Morocco

Siemens Industrial Turbomachinery B.V. Netherland

Siemens Nederland N.V. Netherland

Siemens (N.Z.) Ltd. New Zealand

Siemens AS Norway

Siemens L.L.C. Oman

Siemens Pakistan Engineering Co. Ltd. Pakistan

Siemens S.A.C. Peru

Siemens, Inc. Philippines

Siemens Power Operations, Inc. Philippines

Siemens Sp. z o.o. Poland

Fellow Subsidiaries TurboCare Poland Spólka Akcyjna Poland

Siemens S.A. Portugal

Siemens W.L.L. Qatar

Siemens S.R.L. Romania

OOO Siemens Russia

Siemens Ltd. Saudi-Arabia

Arabia Electric Ltd. (Equipment) Saudi-Arabia

Siemens d.o.o. Beograd Serbia

Siemens Pte. Ltd. Singapore

Siemens Electronics Assembly Systems Pte. Ltd Singapore

Siemens d.o.o. Slovania

Siemens Ltd. South Africa

Siemens S.A. Spain

Fábrica Electrotécnica Josa, S.A. Spain

Siemens Industrial Turbomachinery AB Sweden

Siemens Schweiz AG, Building Technologies Division, International

Headquarters Switzerland

Siemens Ltd. Taiwan

Siemens Ltd. Thailand

Siemens Sanayi ve Ticaret A.S. Turkey

Siemens Ukraine Ukraine

United Arab

Siemens LLC Emirates

Siemens Industry, Inc. USA

Siemens Energy, Inc. USA

Siemens Demag Delaval Turbomachinery, Inc. USA

Siemens Water Technologies Corp. USA

PETNET Solutions, Inc. USA

Morgan Construction Company (upto 1 July 2010) USA

Siemens Medical Solutions USA, Inc. USA

SMS Inc. - Customer Solutions Group USA

Siemens S.A. Venezuela

Siemens Automation Systems Ltd. Vietnam

Siemens Ltd. Vietnam

5 Key Managerial Personnel Dr. Armin Bruck Mr. Sunil Mathur Mr. Vijay. V. Paranjape Mr. Vilas Parulekar (Retired on 25 September 2009) Mr.Patrick de Royer (Retired on 31 December 2008) Mr. K.R.Upilli (Retired on 27 July 2008)

6 (iii) Other disclosures :

- Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks.

- Profits/ losses on inter segment transfers are eliminated at the Company level.

- During the year there has been reorganisation of Industry Automation and Building Technologies business segments. Figures for the year ended 30 September 2009 have been regrouped to make them comparable.

7 (iv) Segment information :

The primary and secondary reportable segments are business segments and geographical segments respectively.

Business Segments: The business of the Company is divided into eleven segments. These segments are the basis for management control and hence, form the basis for reporting. The business of each segment comprises of :

- Industry Automation :- Provides complete range of automation products & systems, industrial automation systems & low-voltage Switchgears.

- Drive Technologies :- Provides complete range of large and standard drives and motors, special purpose motors, process and motion control systems.

- Building Technologies :- Electrical Installation Technologies, i.e. Products for Building, e.g. Miniature Circuit breakers, Distribution boards, Residual Current Circuit Breakers, etc.

- Industry Solutions :- Undertakes turnkey projects in the industrial and infrastructure sectors over the entire life cycle including concept, engineering, procurement, supplies, installation, commissioning and afiter sales services.

- Mobility :- Provides solutions for rail automation, railway electrifcation, light and heavy rail, locomotives, trains, turnkey projects and integrated services.

- Fossil Power Generation :- The Fossil Power Generation Division offers highly effcient products and solutions for power generation based on fossil fuels. They range from individual gas and steam turbines and generators, to turnkey power plants. The Division also develops instrumentation and control systems for every type of power plant.

- Oil & Gas :- The Oil & Gas Division offers customers products and solutions that are used for the extraction, conversion and transport of oil and gas. The Division portfolio also includes solutions for power generation and distribution, compressors with electrical and mechanical drives, process and automation technologies, and integrated IT solutions for pipeline and storage applications.

- Power Transmission :- The Power Transmission Division offers products and solutions in the high-voltage feld – such as High Voltage Direct Current (HVDC) transmission systems, substations, switchgear and transformers.

- Power Distribution :- The specialties of the Power Distribution Division range from solutions for the automation of power grids, to products like medium-voltage switchgear and components.

- Healthcare :- Provides diagnostic, therapeutic and life-saving products in computer tomography (CT), magnetic resonance imaging (MRI), ultrasonography, nuclear medicine, digital angiography, patient monitoring systems, digital radiography systems, radiology networking systems, lithotripsy and linear accelerators.

- Real Estate :- Provides comprehensive real estate management.

Geographical Segments: The business is organised in two geographical segments i.e. within India and outside India.

8 Disclosure pursuant to Accounting Standard - 15 Employee benefits :

(i) defined Contribution Plans

Amount of Rs. 119,401 (2009 : Rs. 98,881) is recognised as an expense and included in "Personnel costs" (Refer Schedule 19) in the Profit and loss account.

9 Disclosure pursuant to Accounting Standard - 15 Employee benefits : (Continued)

b) The fund formed by the Company manages the investments of the Gratuity Fund. Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities. The Company expects to contribute Rs. 52,532 to gratuity fund in 2010-11.

c) The estimates of future salary increases, considered in actuarial valuation, take into account infation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

d) The guidance issued by the Accounting Standard Board (ASB) on implementing AS 15, Employee benefits (revised 2005) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, need to be treated as defined benefit plan. The fund does not have any existing defcit or interest shortfall. In regard to any future obligation arising due to interest shortfall (i.e. government interest to be paid on provident funds scheme exceeds rate of interest earned on investment), pending the issuance of guidance note from the Actuarial Society of India, the Companys actuary is unable to reliably measure the same.

(iii) General Descriptions of significant defined plans

I Gratuity Plan

Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Companys Scheme whichever is more beneficial.

II Medical

Post-Retirement Medical Benefit is paid to eligible employees in case of survival upto the retirement age and afiter death, benefits are available to the employees spouse. The Company reimburses the employees for expenses incurred over and above the claim accepted by the insurance company. The Company pays 80% of difference between liability incurred by employee and claim received from insurance company subject to ceiling based on the grade of employees.

10 During the year, the Company has entered into a contract, in the normal course of business, for sales of a value of Rs. 14,792 with a Private Limited Company which is a 100% subsidiary of a foreign company and in which a director of the Company is a director. Payment has been received in accordance with the normal sales terms. As a measure of abundant caution, application for approval is being made to the Central Government under Section 297 of the Companies Act, 1956.

11 Prior year comparatives

Previous years figures have been regrouped/ reclassified wherever necessary, to conform to current years classification.


Sep 30, 2009

1. Amalgamation of Siemens Industrial Turbomachinery Services Private Limited (‘SITS’) Pursuant to the scheme of amalgamation (‘the scheme’) of the erstwhile SITS with the Company as approved in the Board Meeting held on 22 November 2007 and subsequently sanctioned by the Honorable High Court of Karnataka on 26 September 2008, the assets and liabilities of the erstwhile SITS were transferred to and vested in the Company with effect from 1 April 2008.

Consequently, the figures for the current year are not strictly comparable to those of the prior year.

2. Investments

During the year the company sold its holdings in Siemens Information Systems Limited & Siemens Information Processing Services Private Limited for a sale consideration of Rs 3,021,459 resulting in a profit of Rs 2,059,459 which is disclosed under Exceptional income.

3. Discontinued operations

Automotive and Building Technologies segment

The Board of Directors of the Company at its meeting held on 23 April 2007 approved a detailed formal plan for the discontinuance of its business activities pertaining to “Automotive” (‘SVDO’) and “Building Technologies” (‘SBT’) segment of the Company.

After obtaining necessary approvals the SVDO segment was sold with effect from 1 December 2007 and SBT was sold with effect from 1 October 2007.

Consequently, the figures for the current year are not strictly comparable to those of the prior year.

4. Disclosure relating to Provisions

Provision for warranty

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery/ commissioning dates of an individual project have exceeded or are likely to exceed the delivery/ commissioning dates as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms upto closure of the contract (including warranty period).

Provision for loss orders

A provision for expected loss on construction contracts is recognised when it is probable that the contract costs will exceed total contract revenue. For all other contracts loss order provisions are made when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated economic benefits.

Contingencies

The Company has made provisions for known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies, the outfl ow of which would depend on the cessation of the respective events.

5 Other disclosures:

- Inter-segment prices are normally negotiated amongst the segments with reference to the costs, market price and business risks.

- Profits/ losses on inter segment transfers are eliminated at the Company level.

- Balances with group companies and related parties have been included in unallocable corporate items.

- During the year there has been reorganisation of Business Segments. Figures for the year ended 30 September 2009 and year ended 30 September 2008 has been regrouped to make them comparable.

6 Segment information:

The primary and secondary reportable segments are business segments and geographical segments respectively. Business Segments: The business of the Company is divided into eleven segments. These segments are the basis for management control and hence, form the basis for reporting. The business of each segment comprises of :

- Industry Automation:- Provides complete range of automation products & systems, industrial automation systems & low-voltage Switchgears.

- Drive Technologies:- Provides complete range of large and standard drives and motors, special purpose motors, process and motion control systems.

- Building Technologies :- Electrical Installation Technologies, i.e. Products for Building, e.g. miniature circuit breakers, distribution boards, residual current circuit breakers, etc.

- Industry Solutions:- Undertakes turnkey projects in the industrial and infrastructure sectors over the entire life cycle including concept, engineering, procurement, supplies, installation, commissioning and after sales services.

- Mobility:- Provides solutions for rail automation, railway electrification, light and heavy rail, locomotives, trains, turnkey projects and integrated services.

- Fossil Power Generation:- The Fossil Power Generation Division offers highly efficient products and solutions for power generation based on fossil fuels. They range from individual gas and steam turbines and generators, to turnkey power plants. The Division also develops instrumentation and control systems for every type of power plant.

- Oil & Gas:- The Oil & Gas Division offers customers products and solutions that are used for the extraction, conversion and transport of oil and gas. The Division portfolio also includes solutions for power generation and distribution, compressors with electrical and mechanical drives, process and automation technologies, and integrated IT solutions for pipeline and storage applications.

- Power Transmission:- The Power Transmission Division offers products and solutions in the high-voltage field – such as High Voltage Direct Current (HVDC) transmission systems, substations, switchgear and transformers.

- Power Distribution:- The specialties of the Power Distribution Division range from solutions for the automation of power grids, to products like medium-voltage switchgear and components.

- Healthcare:- Provides diagnostic, therapeutic and life-saving products in computer tomography (CT), magnetic resonance imaging (MRI), ultrasonography, nuclear medicine, digital angiography, patient monitoring systems, digital radiography systems, radiology networking systems, lithotripsy and linear accelerators.

- Real Estate:- Provides comprehensive real estate management.

Geographical Segments: The business is organised in two geographic segments i.e. within India and outside India. * Discontinued operations (refer Schedule 4)

General Descriptions of significant defined plans

Gratuity Plan

Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company’s Scheme whichever is more beneficial.

7 Prior years comparatives

Pursuant to the purchase of SITS (Refer Schedule 2) and discontinuation of the SBT and SVDO segments (Refer Schedule 4), the figures of the current year are not strictly comparable to those of the previous year. Previous years figures have been regrouped/ reclassified wherever necessary, to conform to current years classification. The figures of previous year were audited by a firm of Chartered Accountants other than S.R.Batliboi & Associates.

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