INDEX

1. INTRODUCTION 1

2. MARKETING ANALYSIS OF THE COMPANY 4

3. FINANCIAL STATEMENTS OF THE COMPANY 7

4. INTERPRETATION OF DATA 9

5. CASH FLOW STATEMENT 16

6. REFERENCES 19

INTRODUCTION

Siemens is a German company headquartered in Berlin and Munich. The principal divisions of

the company are Industry, Energy, Healthcare, and Infrastructure & Cities, which represent the

main activities of the company.

It was founded on 12th October 1847, 168 years ago, in Berlin (then Kingdom of Prussia). It is

currently headquartered in Berlin and Munich. The company is a prominent maker of medical

diagnostics equipment and its medical health-care division, which generates about 12 percent of

the company's total sales, is its second-most profitable unit, after the industrial automation

division. Siemens and its subsidiaries employ approximately 362,000 people worldwide and

reported global revenue of around €71.9 billion in 2014 according to their annual report.

Siemens was founded by Werner von Siemens and Johann Georg Halskein in 1847. Currently Joe

Kaeser is the President & CEO of the Siemens group and Gerhard Cromme is the Chairman of

the Supervisory Board.

Siemens India

Siemens Ltd provides technology-enabled solutions operating in the core business segments of

industry, energy and healthcare. The company operates in eleven segments: Industry

Automation, Drive Technologies, Building Technologies, Industry Solutions, Mobility, Fossil

Power Generation, Oil & Gas, Power Transmission, Power Distribution, Healthcare and Real

Estate. Industry Automation provides automation products and systems, industrial automation

systems and low-voltage switchgears. Drive Technologies provides drives and motors, special

purpose motors, process and motion control systems. Building Technologies includes electrical

installation technologies. Mobility provides solutions for rail automation and railway

electrification. The Fossil Power Generation Division offers products and solutions for power

generation-based on fossil fuels.

Siemens Ltd was incorporated in the year 1957 as Siemens Engineering and Manufacturing

Company of India Pvt Ltd. In March 1957, the company entered into a collaboration agreement

with two foreign companies, viz., Siemens & Halske AG and Siemens Schuckertwerke AG of

West Germany.

The Chairman of Siemens India is Deepak S Parekh, its Managing Director is Sunil Mathur and

the Company Secretary is Ketan Thaker.

Siemens is a pioneer in infrastructure solutions and automation and software solutions for

industry. The company is also a leading supplier of medical imaging equipment – such as

computed tomography and magnetic resonance imaging systems – and a leader in laboratory

diagnostics as well as clinical IT.

Siemens has 22 factories located across India, 8 Centres of Competence and 11 R&D Centres

and a nation-wide sales and service network. The factories manufacture Steam Turbines,

Switchgear, Remote Monitoring Systems (RMS), Motors and Generators, Relays and Smart Grid

Systems, Transformers, Railway Bogies and X-ray Machines. These have been set up replicating

global, best-in-class manufacturing systems and practices.

Siemens India is supporting skill development through Corporate Citizenship initiatives such as

ITI upgradation, faculty development and Technical Skills Development Centre. Siemens has

also signed Memorandums of Understanding with the Government of Gujarat, and with Steel

Authority of India Ltd. Additionally, Siemens has partnered with industrial bodies such as

Automation Industry Association, Indian Machine Tool Manufacturers Association and CII to

impart technical education.

With about 4,500 employees, Siemens Technology and Services Private Limited (STS) combines

five units: Corporate Technology India, Functional Shared Services, Corporate Finance, and

Corporate Finance.

Mission and Vision

Siemens is a global and innovative network of people.

1. Who use their knowledge in the field of electrical engineering and electronics and electrical

engineering to benefit customers throughout the world

2. Who learn continually

3. Who work together closely

4. Who have the courage to make quick decisions

5. Who are proud of their efforts to contribute to the company’s success

Unique Selling Proposition

Innovation power and customer proximity

Products and Services

Siemens offers a wide range of electrical engineering- and electronics-related products and

services. Its products can be broadly divided into the following categories:

1. Buildings-related products

2. Drives

3. Automation and industrial plant-related products

4. Energy-related products

5. Lighting

6. medical products

7. Transportation and logistics-related products.

Competitors

Siemens primary competitors are following:

1. ABB Ltd

2. Alstom

3. Bombardier Inc.

4. Honeywell International

5. Emerson Electric

6. Rockwell Automation

MARKETING ANALYSIS OF THE COMPANY

STP Strategy

SEGMENT Infrastructure and Cities, Industry, Energy and Healthcare, Financial

Solution, Mobility,

TARGET GROUP Power generation, Oil & Gas, Metal & Mining and Automation

Industries, Locomotives, Turnkey projects, Metropolitan and Urban

Infrastructure, Diagnostic and radiography sectors of healthcare, data

centers

POSITIONING Company meet the needs of people with different interests, from

different cultures and with different aims and requirements

Shareholder’s Profile

Shareholders are the owners of companies. Shareholders play an important role in the financing,

operations, governance and control aspects of a business. The shareholder information of the

Siemens Ltd for the FY 2014 and FY 2015 are given below:

a) Market Price Data

The market price and volume of the Company’s Equity Shares traded on BSE and NSE of the

last Financial Year from 1st October, 2014 to 30th September, 2015 are as follows:

Face Value of 2 each₹NSE BSE

High

₹

Low

₹

Volume

Nos.

High

₹

Low

₹

Volume

Nos.

October 2014 880.00 768.80 3,917,249 880.00 770.00 476,568

September 2015 1,340.15 1,137.05 6,998,777 1,340.00 1,135.65 895,315

Table 2.1 (Source- Annual Report 2015, Siemens Ltd.)

b) Shareholder Profile as on 30 th September, 2015

Table 2.2 (Source- Annual Report 2015, Siemens Ltd.)

Category %

Total

Capital

Promoter (Siemens AG, Germany, and its

subsidiary)

75

Public 10.52

Insurance Companies 5.61

Directors & their Relatives 0.01

Mutual Funds and UTI 3.35

Foreign Institutional Investors 3.96

Bodies Corporate 1.24

Non-Resident Indians and Overseas

Corporate Bodies

0.27

Banks & Indian Financial Institutions 0.04

Total 100

SWOT Analysis

STRENGTHS Pioneer of technology driven services

Market leadership through innovation and has presence in industry, Energy, Healthcare, Infrastructure and Cities

Financial excellence and stability

Over 400,000 employees worldwide shows its commanding global position

Operates in about 180 companies

It has operations in over 190 countries

WEAKNESSESDependence on third party providers can affect operational efficiency

Few allegation of corruption in the corporate environment by individuals hit the headlines

OPPORTUNITIES Expanding market share in emerging markets

Strategic acquisitions, partnerships and collaborations

Setting up of institutions worldwide for in-house solutions

Increase in demand for electricity and related services and products

THREATS Strict government policies and environmental regulation affect operations

Economic fluctuations and currency devaluations affect the financial performance as it is an international company

Heavy dependence on few suppliers

FINANCIAL STATEMENTS OF THE COMPANY

Balance Sheet as at 30 September 2014 and 30 September 2015

( in Millions)₹

30th Sept, 2014 30th Sept, 2015SourcesShareholders’ fundsShare Capital 712 712 Reserves and Surpluses 43,044 50,554Total (a) 43,756 51,236Non-current liabilitiesTrade payables and other long term liabilities 522 1,217Long term provisions 2,669 2,516Total (b) 3,191 3,733Current liabilities Trade Payables:Total outstanding dues of micro and small enterprises

768 765

Total outstanding dues of creditors other than micro and small enterprises

26,170 22,882

Other current liabilities 16,908 12,687Short term provisions 12,110 13,944Total (c) 55,956 50,278Total Liabilities 102,903 105,277

Application of FundsNon-current assetsFixed Assets:Tangible Assets 13,442 13,444Intangible Assets 114 89Capital work-in-progress 409 321

Non-Current investments 82 1,764Deferred tax assets 3,738 3,175Long-term loans and advances 6,671 7,260Other non-current assets 4,183 1,761Total (a) 28,639 27,814Current assets Inventories 10,472 9,509

Trade receivables 36,874 30,183Cash and cash equivalents 11,210 20,959Short term loans and advances 7,341 7,698Other current assets 8,367 9,114Total (b) 74,264 77,463Total Assets 102,903 105,277

Table 3.1 (Source- Annual Report 2015, Siemens Ltd.)

Statement of Profit and Loss

for the Year ended 30 September 2014 and 30 September 2015

( in Millions)₹

September 2015 September 2014INCOMERevenue From Operations (Gross) 108,486 109,701Less: Excise Duty (3,362) (2,918)Net Sales 105,124 106,783Other Income 1,604 1039Gross Revenue 106,728 107,822

EXPENDITURERaw Materials Consumed 24,219 25,870Purchase of Traded Goods 24,802 24,413Increase/Decrease in Inventory 1,062 (1,487)Other Direct Costs 20,531 26,903Employee Benefit Expense 13,942 14,118Finance Cost 73 82Other Expenses 10,607 11,023Total Expenses 95,436 103,213

Operating Profit 11,292 4,609

Interest 281 313Gross Profit 11,573 4,922Depreciation 2,156 2,291Profit Before Exceptional Items and Tax 13,729 7,283Exceptional Items 3,235 1,156Profit Before Tax 16,964 8,436

TAX EXPENSESCurrent Tax (4,575) (1,845)Deferred Tax Credit (556) (59)Total Tax Expense (5,131) (2,404)

Profit After Tax 11,833 6,247Table 3.2 (Source- Annual Report 2015, Siemens Ltd.)

INTERPRETATION OF DATA

Comparative Analysis of Balance Sheet

as at 30 September 2014 and 30 September 2015

( in Millions)₹

31st March, 2014

31st March, 2015

Absolute Change

% Change

SourcesShareholders’ fundsShare Capital 712 712 0 0Reserves and Surpluses 43,044 50,554 7510 17.44Total (a) 43,756 51,236 7480 17.16Non-current liabilitiesTrade payables and other long term liabilities

522 1,217 695 133.14

Long term provisions 2,669 2,516 (153) -5.73Total (b) 3,191 3,733 542 16.98Current liabilities Trade Payables:Total outstanding dues of micro and small enterprises

768 765 (3) -0.39

Total outstanding dues of creditors other than micro and small enterprises

26,170 22,882 (3288) -12.56

Other current liabilities 16,908 12,687 (4221) -24.96Short term provisions 12,110 13,944 1834 15.14Total (c) 55,956 50,278 (5678) -10.15Total Liabilities 102,903 105,277 2374 2.31

Application of FundsNon-current assetsFixed Assets:Tangible Assets 13,442 13,444 2 0.02Intangible Assets 114 89 (25) -0.22Capital work-in-progress 409 321 (88) -21.52

Non-Current investments 82 1,764 1682 2051.22Deferred tax assets 3,738 3,175 (563) -15.06

Long-term loans and advances 6,671 7,260 589 8.83Other non-current assets 4,183 1,761 (2422) -57.90Total (a) 28,639 27,814 (825) -2.88Current assets Inventories 10,472 9,509 963 9.19Trade receivables 36,874 30,183 (6,691) -0.18Cash and cash equivalents 11,210 20,959 9,749 86.96Short term loans and advances 7,341 7,698 357 4.86Other current assets 8,367 9,114 747 8.93Total (b) 74,264 77,463 3,199 4.31Total Assets 102,903 105,277 2374 2.31

Table 4.1 (Source- Annual Report 2015, Siemens Ltd.)

Increase in Shareholder’s Funds: The Shareholder’s Funds of Siemen Ltd has increased

from 43,756 million to 51,236 million over FY2015 by 17.16%. It shows that the₹ ₹

shareholders are showing interest in the company’s operations and are investing more into it

rather than looking out for investing into its competitors.

Increase in Non- Current Liabilities: There is a possibility that the company might be

planning to diversify its operations in India or is planning to buy long term assets. But with

16.98% increase in outsider’s funds to the company, the financial risk to the stakeholders

may also increase.

Decrease in Current Liabilities: There has been a decline of 10.51% in the company’s

current liabilities and thus the company’s liquidity position has improved. The company is

expected to be currently in a position to pay its current liabilities through its current assets.

Decrease in Non- Current Assets: The Company might be in need of funds to pay back its

debts and credit loans. The company has also started to heavily invest for long term and

might be needing more funds to continue investment for future returns.

Increase in Current Assets: There has been massive increase in cash and cash equivalents

within the company by 86.96% which means there is idle cash in the business which needs

to be invested within a short span. Decrease in trade receivables show that the debtors are

returning the money to the business. Slight increase in inventory by 9.19% indicates that

there might be the possibility of overproduction or stock might be piling up, though it is not

an alarming state.

Ratio Analysis of the Company

(for the Financial Year 2014 and 2015)

Efficiency Ratio

Ratio: 2015 2014 % Change

Inventory Turnover Ratio 10.71 10.92 -1.92

Debtor Turnover Ratio 3.19 2.90 10.00

Creditor Turnover Ratio 3.47 3.55 -2.25

Fixed Assets Turnover Ratio 2.21 2.54 -13.00

Working Capital Turnover Ratio 3.99 5.99 -33.39

Inventory Turnover Ratio: It indicates the number of times a year, the stock is converted

into sales. The ITR of Siemens Ltd for the last two years has been near about the same. The

company was able to rotate its inventory 10.71 times in the last financial year and the

company took near about 40 days to convert the inventory into stock.

Debtor Turnover Ratio: It indicates the number of times a year, the debtors are converted

into cash. The DTR of the company has increased by 10% in the last financial year indicating

steady payment received from the debtors. The company was able to receive a return from its

debtors every 113 days.

Creditor Turnover Ratio: It has declined slightly by 2.25% indicating that the creditors are

being repaid smoothly and liquid cash in the business can be used for slightly long term goals

rather than replaying the short term liabilities. The company’s average payment period for

FY 2015 was 104 days.

Fixed Assets Turnover Ratio: It has declined by 13% last year compared to its value in

2014 indicating that the company was not able to use its fixed assets for higher production as

it did in FY 2014.

Working Capital Turnover Ratio: It is the ability of a business to pay its current liabilities

through its current assets. The current assets of the company were 3.99 times the current

liabilities in the FY 2015. Though it has declined largely b 33.39% compared to FY2014, its

value was greater than 2.00 indicating good short term liquidity position of the company.

Profitability Ratio

Ratio: 2015 2014 % Change

Gross Profit Ratio 7.23 3.42 111.40

Net Profit Ratio 11.25 5.60 100.89

Operating Ratio 9.28 5.57 66.60

Return on Capital Employed (ROCE) 36.60 20.82 75.79

Return on Assets (ROA) 8.70 5.33 63.23

Return on Equity (ROE) 24.91 14.36 7.35

Gross Profit Ratio: The gross profit margin is used to analyze how efficiently a company is

using its raw materials, labor and manufacturing-related fixed assets to generate profits.

Siemens Ltd had 7.23% GPR in FY 2015 with a growth rate of 111.40% compared to FY

2014 indicating a favorable profit indicator.

Net Profit Ratio: It gives the overall view of the company’s profit margin. There has been a

growth of 100.89% in the company’s NPR within an year indicating that the company made

a huge profit compared to last year and maybe very attractive to the shareholders.

Operating Ratio: A company's operating income figure is often the preferred metric of

investment analysts, versus its net income figure, for making inter-company comparisons and

financial projections. Siemens Ltd had a growth in Operating Margin by 66.60% indicating

an increase in the operating expenses of the company. But, the Operating Profit Ratio of the

company in FY 2015 was still 90.72% indicating that the management had much more

control over operating expenses than its cost of sales outlays. 

Return on Capital Employed (ROCE): It is a measure of the returns that a business is

achieving from the capital employed, in other words all the long-term funds used by the

company. The ROCE of the company was 36.60%, which had increased 75.79 times

compared to FY 2014. It indicates profit in company’s capital investments.

Return on Assets (ROA): It is a key profitability ratio which measures the amount of profit

made by a company per unit of its assets. It shows the company's ability to generate profits

before leverage, rather than by using leverage. A 63.23% increase in ROA in the FY 2015

compared to FY 2014 indicates that the management at Siemens Ltd is capable of skillfully

utilizing its assets to generate profits.

Return on Equity (ROE): It is the amount of net income returned as a percentage of

shareholders equity. It reveals how much profit a company earned in comparison to the total

amount of shareholder equity found on the balance sheet. Siemens Ltd had a growth of

7.35% in its ROE in FY 2015 compared to FY 2014 indicating 7.35% increase in the

company’s profit other than the shareholder’s contributions.

Ratio Analysis of the Company

(Comparison with Competitor)

Efficiency Ratio for the Financial Year 2015

Ratio: Siemens Ltd. Honeywell India Ltd.

Inventory Turnover Ratio 10.71 19.76

Debtor Turnover Ratio 3.19 6.88

Creditor Turnover Ratio 3.47 3.93

Fixed Assets Turnover Ratio 2.21 2.89

Working Capital Turnover Ratio 3.99 4.43

Inventory Turnover Ratio: While Siemens Ltd was able to rotate its inventory 10.71 times

a fiscal year, Honeywell India Ltd was able to do so 1.76 times. Thus Siemens Ltd took 34

days to convert its stock to sales while Honeywell India Ltd did that 18days. It can be

concluded that Honeywell India Ltd was more efficiently handle its inventory and generate

sales from it that Siemens Ltd.

Debtor Turnover Ratio: Siemens Ltd was able to convert the debtors into cash 3.19 times a

year in FY2015 while Honeywell India Ltd achieved 6.88 times a year. Hence collection

period for Siemens Ltd was 113 days while that of Honeywell India Ltd was 52 days. Thus it

can be concluded that Honeywell India Ltd was able to recover the payments from its

creditors more efficiently than Siemens Ltd last year.

Creditor Turnover Ratio: Siemens Ltd repaid its creditors 3.47 times a year in FY2015

while Honeywell India Ltd did it 3.93 times a year. Hence average payment period for

Siemens Ltd was 104 days while that of Honeywell India Ltd was 92 days. Thus it can be

concluded that Siemens Ltd was able to retain more funds in the business for further

investments than Honeywell India Ltd last year.

Fixed Assets Turnover Ratio: While FATR for Siemens Ltd was 2.21 last year, it was 2.89

for Honeywell India Ltd. Hence, Honeywell India Ltd was capable of having more

production efficiency from its fixed assets which in turn would have increased their sales,

compared to Siemens.

Working Capital Turnover Ratio: WCTR for Siemens Ltd was 3.99 last fiscal year while it

was 4.43 for Honeywell India Ltd. It indicated that last year, the overall liquidity position of

Honeywell India Ltd was better than Siemens Ltd.

Profitability Ratio for the Financial Year 2015

Ratio: Siemens Ltd. Honeywell India Ltd.

Gross Profit Ratio 7.23 8.12

Net Profit Ratio 11.25 4.75

Operating Ratio 9.28 8.82

Return on Capital Employed (ROCE) 36.60 21.37

Return on Assets (ROA) 8.70 6.78

Return on Equity (ROE) 24.91 13.74

Gross Profit Ratio: The GPR of Honeywell India Ltd for FY 2015 was 8.12% while that of

Siemens Ltd was 7.23% indicating that Honeywell India Ltd was able to efficiently use its

raw materials, labor and manufacturing-related fixed assets to generate profits last year

compared to Siemens Ltd.

Net Profit Ratio: Honeywell India Ltd had NPR of 4.75% while Siemens Ltd had it for

11.25%, indicating that overall, the Siemens Ltd made more profits compared Honeywell

India Ltd in FY 2015, non-operating and operating incomes/expenses included.

Operating Ratio: While Honeywell India Ltd has Operating Profit Ratio of 91.18% last

year, Siemens Ltd had it at 90.72%. This means that both companies were comparatively

similar in operations performance with Honeywell India Ltd performing slightly better that

Siemens Ltd.

Return on Capital Employed (ROCE): Siemens Ltd, at 36.60%, had a much higher ROCE

compared to Honeywell India Ltd, at 21.27%. This indicated that capital investments made

by Siemens Ltd were much profitable for the FY 2015 compared to Honeywell India Ltd.

Return on Assets (ROA): The ROA of Siemens Ltd were higher than Honeywell India Ltd

in FY 2015 indicating that Siemens Ltd was in a position to derive higher profits from its

assets compared to Honeywell India Ltd despite it a having lower efficiency in fixed assets

turnover.

Return on Equity (ROE): The ROE for Siemens Ltd was 24.91 whereas it was 13.74 for

Honeywell India Ltd. Thus Siemens Ltd was more profitable for the shareholders from the

investment point of view. Also, the equity was well managed by the company that the

Honeywell India Ltd.

CASH FLOW STATEMENT

Cash Flow Statement for the year ended 30th September 2015

2015Cash flow from Operating Activities

Profit Before Tax 16,964

Adjustments for:

Finance Cost 73

Bad Debts 162

Provisions for Doubtful Debts (net) (10)

Depreciation and Amortization Expense 2,156

Profit on Sales of Assets (net) (191)

Profit on Sales of Business (7,154)

Liabilities Written Back (152)

Reversal of Impairment Loss and other Provisions (1,067)

Unrealized Exchange Loss/Gain (net) (461)

Interest Income (1,327)

Operating Profit before Working Capital Changes 8,993

Working Capital Changes:

Decrease in Inventory 506

Increase in Trade and other Receivables (1,007)

Decrease in Trade Payables and other Liabilities (236)

Decrease in Provisions 241

Net Change in Working Capital (496)

Cash Generated from Operations 8,497

Direct Taxes Paid (net) (2,293)

Net Cash Generated from Operating Activities (A) 6,204

Cash Flow from Investing Activities

Purchase of Fixed Assets and Inventory Property (2,510)

Proceeds from Sales of Fixed Assets, Inventory Property 322

Proceeds from Sales of Business 8,726

Investment in Subsidiary Company (550)

Interest Received 1,278

Inter Corporate Deposits given (8,444)

Refund of Inter Corporate Deposits given 7,419

Net Cash Generated from Investing Activities (B) 6,241

Cash Flow from Financing Activities

Interest Paid (142)

Dividend Paid (2,561)

Net Cash Lost from Financing Activities (C) (2,703)

Net Increases in Cash and Cash Equivalents (A+B+C) 9,742

Cash and Cash Equivalents at beginning of the Year 11,210

Gain on Cash and Cash Equivalents 7

Cash and Cash Equivalents at the end of the Year 20,959

Table 5.1 (Source- Annual Report 2015, Siemens Ltd.)

Cash Flows from Operating Activities 

Operations is the key source of a company's cash generation. This section shows how

much cash comes from sales of the company's goods and services, less the amount of

cash needed to make and sell those goods and services. The positive cash flow from

operating activities indicates that the company is having profits in its operations which in

turn will result to future income for the company.

Cash Flow from Investing Activities

This section largely reflects the amount of cash the company has spent on capital

expenditures, such as new equipment or anything else that needed to keep the business

going. It also includes acquisitions of other businesses and monetary investments such as

money market funds.

The net positive cash flow from investing activities indicates that the company is making

profits from its investment decisions. The stakeholders may be finding the business

profitable and might be reinvesting in their business rather than investing in the market.

Cash Flows from Financing Activities

This section describes the goings-on of cash associated with outside financing activities.

Typical sources of cash inflow would be cash raised by selling stock and bonds or by

bank borrowings. Likewise, paying back a bank loan would show up as a use of cash

flow, dividend payments and common stock repurchases. 

The negative cash flow from financing activities indicates that the company is in a

financially sound position and is paying back its loans and liabilities.

REFERENCES

1. Annual Report, 2015, Siemens Limited.

2. http://www.investopedia.com/university/fundamentalanalysis/fundanalysis8.asp

3. http://www.investopedia.com/articles/stocks/07/easycashflow.asp