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Notes to Accounts of Siemens Ltd.

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.