Overview
The global macro-economic scenario in financial year 2023 was another
period of slow growth marked by high inflation, high interest rates, geo-political
tensions, concerns of recession and supply chain constraints.
The Indian economy, bolstered by strong macro fundamentals, retained
its growth momentum primarily driven by government investments in infrastructure. Among
key economic indicators, the S&P Global India Manufacturing Purchasing Managers
Index was stable at 57.5 in September 2023. Retail inflation in India eased to 5% in
September 2023 – compared to 7.4% in September 2022. While the RBI had raised
interest rates in 2022 – after being at record lows for almost two years – it
maintained the rate at 6.5% for the latter half of the financial year (since February
2023). The Union Budget allocated 33% higher capital expenditure compared to the previous
year while the expenditure for Railways was the highest ever. Another key focus of the
Government has been on sustainability and green growth. All these measures had a cascading
effect on capacity utilization, and with the strong corporate balance sheet, private
sector is at the threshold of resurgent investment cycle.
Siemens Limited operates in sectors that are directly linked to the
sustainable economic and industrial growth of India – manufacturing, infrastructure,
transportation and energy. The Companys performance across all businesses was
strong. Growth in demand continued for digital solutions, railways, digital grid, power
transmission and distribution segments as well as for e-mobility, decarbonization, waste
heat recovery, power evacuation, energy storage and optimization.
During the year, Siemens Limited achieved a significant milestone for
the Siemens Xcelerator platform with the inclusion of 100 India-relevant digital use and
cases across multiple industries such as Food & Beverage, Data Centers, Commercial
Buildings, Power Utilities and others.
During the financial year 2023, New Orders increased by 138.8 percent
at Rs 463,829 million, compared to Rs 194,221 million in financial year 2022. Sales
(excluding Other operating revenues) increased by 21.3 percent to Rs 177,007 million,
compared to Rs 145,881 million in financial year 2022. Profit after Tax (PAT) was at Rs
19,113 million compared to Rs 12,497 million in financial year 2022. The Companys
Operating Profit Margin (percent) and Net Profit Margin (percent) for financial year 2023
was 11.4 and 10.8 compared to 9.6 and 8.6, respectively, in financial year 2022. The
Companys Debtors Turnover stood at 4.3 times while Inventory Turnover was at 5.9
times.
The above financial performance is from continuing operations.
The details of change in Return on Net Worth are as under:
Particulars |
Financial year 2023
(percent) |
Financial year 2022
(percent) |
| Return on Net Worth (after tax) |
15.5 |
14.0 |
DIGITAL INDUSTRIES
The Companys Digital Industries (DI) Business provides
technologies for automation and digitalization of discrete, hybrid and process industries,
supporting their digital transformation in order to become more sustainable. Its portfolio
consists of industrial software and automation & drive technologies (for optimizing
manufacturing value chain, covering product design, production planning, engineering,
execution and after-sales services). Its ‘Digital Enterprise Suite offers
flexibility and efficiency to various industries, general engineering segments and
original equipment manufacturers (OEM) engaged in machine tools, printing, packaging and
electrical panel manufacturing. The business environment is primarily driven by core
sector industries. During the financial year 2023, the DI Business witnessed positive
momentum for automation and digital solutions in the metal, chemical and pharmaceutical
segments. Emerging segments such as intralogistics, aviation and tunnel automation also
witnessed growth.
The financial year 2023 saw the Company extending its partnership with
customers across verticals with cutting edge solutions to advance their digital
transformation and sustainability initiatives. Notable amongst these were in the area of
Additive Manufacturing, Industrial Edge, IT-OT integration, Cybersecurity, Digital Twin
and Green Hydrogen. The Company also announced the launch of Industrial 5G devices.
For the financial year 2023, New Orders increased by 3.7 percent to Rs
47,529 million, Sales (excluding Other operating revenues) increased by 24.1 percent to Rs
43,366 million, while Profit from Operations was Rs 6,132 million compared to Rs 3,600
million in the previous year.
Outlook
We will see continued growth in manufacturing on account of government
programs (Atmanirbhar Bharat, Make in India), policy support, incentives and capex
investments by the private sector supported by the rising capacity utilization and
improving balance sheets. Sectors like Metals, Chemical and Pharma are some of the key
verticals expected to drive demand for automation projects. Digitalization is also
expected to be among the key priorities for organizations who are looking to remain
competitive through improved efficiencies. We also expect to see continued interest and
adoption of industrial cyber security, edge and Industrial Internet of Things (IIoT)
solutions.
ENERGY
As a leader in energy technology, the Companys Energy Business
offers products, solutions and services across the entire energy value chain, supporting
customers through the transition to a more sustainable world, based on its innovative
technologies. Its offerings encompass power and heat generation making the most of our
energy sources to support the energy transition, grid technologies with innovative
products and solutions for efficient, reliable and flexible power transmission,
transformation of industry with reliable products, systems and services that deliver
sustainable value across customers operations and energy services on and off-site
services for optimal performance and maximum success. It also helps deliver decentralized,
flexible and efficient power; manage the complexities of the grid; improve and de-risk
aging assets; and connect supply and demand through storage technologies such as
grid-scale batteries and Power-to-X technologies. The Energy Business has a broad customer
base that includes oil and gas, utilities, independent power producers, engineering,
procurement and construction companies (EPCs), transmission system operators and
industrial companies in sectors such as cement, metals and petrochemicals. The Energy
Business increased its focus on delivering technologies such as decarbonization for
industries, digitalization, grid stabilization, hydrogen and storage solutions. The growth
in demand for power generation and transmission solutions provided by the Energy business
is driven largely by industrial captive power plants, investments in clean energy,
capacity enhancements and grid stabilization due to integration of renewable energy. Among
the highlights, the Energy Business will supply steel tank traction transformers for 9000
HP locomotives. It won several orders for supplying power transformers to Indias
largest electric power transmission utility as part of the customers efforts for
integrating renewable energy. It also received safe practices appreciation from
ArcelorMittal Nippon Steel (AM/NS) Surat among others. Its Power Engineering Unit
celebrated 25 years since its formation in 1998. For the financial year 2023, New Orders
increased by 8.7 percent to Rs 67,722 million, Sales (excluding Other operating revenues)
increased by 13.0 percent to Rs 59,869 million, while Profit from Operations was Rs 6,873
million compared to Rs 5,648 million in the previous year.
Outlook
The Government of Indias initiatives to increase focus on demand
growth and on the 3Ds – decarbonization, decentralization and digitalization –
is beginning to bear results. With the Union Budget 2023, the Government of India
reiterated its commitment and focus on sustainability, allocating Rs 350 billion of
priority capital investment aimed at helping achieve net zero by 2070. This is a big boost
for the nations energy transition and contribute to the countrys energy
security. Further, India aims to be a global green hydrogen hub with approved investments
of 2.3 billion USD and additional 125 GW of renewables.
The Companys Energy Business has the capabilities to help power
generation and transmission companies in India supply affordable, sustainable and secure
energy, as well as decarbonize industrial operations.
SMART INFRASTRUCTURE
The Companys Smart Infrastructure (SI) Business combines the real
and digital worlds across grid infrastructure, industrial infrastructure, and urban
infrastructure, enhancing the way people live, work, and significantly improve efficiency
and sustainability. It is shaping the market for intelligent, adaptive infrastructure for
today and the future. "Smart infrastructure is sustainable infrastructure". The
Business helps to pave the way to an all-electric world, by supporting the transition from
fossil energy sources today to renewable energy sources and supporting the growth of
eMobility. The Business also helps buildings (that account for 40 percent of the
worlds energy use) become more people-oriented and more sustainable. SI provides
customers with a comprehensive end-to-end automation and digitalization portfolio from a
single source – with products, systems, solutions, and services from point of power
generation all the way to consumption. The SI Business has performed well during the
financial year 2023 with increased demand for solutions across sectors such as grid
infrastructure, industrial infrastructure, and urban infrastructure.
Among the highlights, the SI Business received orders for i)
strengthening reliability of power distribution systems (under Revamped Distribution
Sector Scheme) with automation, cybersecurity, distribution management systems and
simulation; ii) for helping metals, minerals and mining companies expand and upgrade their
capacities; and iii) assisting data centers and commercial buildings in improving their
energy and operational efficiency by supply of building management systems and IOT
solutions.
The Business also made a strategic acquisition of the e-Mobility
business of Masstech Controls to offer competitive charging portfolio and strengthened on
existing partnerships in e-mobility space. Similarly, the Business also bagged key
projects in sustainability space, including helping diverse set of customers, from
hospitality to airports, reduce their energy consumption and improve their carbon
footprint.
For the financial year 2023, New Orders increased by 24.8 percent to Rs
65,629 million, Sales (excluding Other operating revenues) increased by 20.0 percent to Rs
53,963 million, while Profit from Operations was Rs 6,587 million compared to Rs 3,918
million in the previous year.
Outlook
India will have one of the largest urban transformation of the 21st
century, as the country is poised to become the worlds 3rd largest
economy in coming years. The rapid pace of urbanization and energy transformation is being
driven by Government investments in power utilities (due to modernization of distribution
networks, integration of renewables). The production linked incentive scheme is
significantly boosting investments in manufacturing sector. Growth in urban infrastructure
in coming year is expected to continue in data centers (doubling of capacity forecasted in
next 3 years), commercial buildings and urban transportation. Investments in
transportation sector (e.g., metros, railways, airports) and healthcare are also expected
to remain strong while the increasing adoption of e-vehicles, both by public
transportation authorities and consumers, will result in increased investments in
e-charging infrastructure.
The Companys SI Business will bring to market, technology
solutions aimed at improving energy ecosystems and building technologies, which are key to
transforming cities and industries. Digitalization is also a key element of evolving
infrastructure sector, where decisions based on data and analytics can help make energy
systems and processes in buildings and industries more efficient and sustainable.
MOBILITY
The Companys Mobility Business offers intelligent transport
solutions and is constantly innovating its portfolio. Its core areas include rolling
stock, rail automation and electrification, a comprehensive software portfolio, turnkey
systems as well as related services. With digital products and solutions, the Mobility
Business is enabling operators to make infrastructure intelligent, increase value
sustainably over the entire lifecycle, enhance passenger experience and guarantee
availability. India has the fourth largest railway network in the world. The Ministry of
Railways under the Government of India made significant announcements during the year in
upgrading its infrastructure and rolling stock with sharp jump in capital outlay. Policies
were formulated for development and adoption of innovations and new technologies for both
passenger and freight transportation. The Mobility Business is supporting the sustainable
transformation of Indias transportation sector through its portfolio in line with
Make in India initiative. During the financial year 2023, The Mobility Business received
an order for 1,200 locomotives of 9,000 horsepower (HP) from Indian Railways, marking the
single largest order in the history of the Company. The Mobility Business will design,
manufacture, commission and test the locomotives. The locomotives will be assembled in the
Indian Railways factory in Dahod, in the state of Gujarat, India. Deliveries are planned
over an eleven-year period, and the contract includes 35 years of full-service
maintenance. In another significant win, Mobility Business in consortium with Rail Vikas
Nigam Limited (RVNL), secured orders for electrification of metro rail systems for Mumbai,
Surat and Ahmedabad. In Mumbai it will manufacture, install, and commission rail
electrification solutions and Supervisory Control and Data Acquisition (SCADA) systems for
Mumbai Metro line 2B. In Surat and Ahmedabad, it will provide project management, rail
electrification technologies, including advanced power supply and distribution systems,
and SCADA solution for Surat Metro for Phase 1 and Ahmedabad Metro for Phase2.
For the financial year 2023, New Orders increased by 745.9 percent to
Rs 282,950 million, Sales (excluding Other operating revenues) increased by 53.3 percent
to Rs 19,697 million, while Profit from Operations was Rs 533 million compared to Rs 727
million in the previous year.
Outlook
b>
The Mobility Business of the Company has a vision to help deliver
safer, greener and smarter railways. Along with sustainable mobility, it will continue to
focus on providing cutting-edge technologies for passenger train and freight
transportation. Together with Indian Railways and Metro operators, the Mobility Business
aims to achieve optimized rail network throughput and higher asset availability. The
Ministry of Railways has been driving upgradation of technology and modernization of its
infrastructure & rolling stock. It is working towards creating the worlds
largest green rail network. Innovation through research, design, manufacturing and
digitalization will continue to be key drivers in transformation of Indian Railways. While
the Mobility Business participates in many of these opportunities, its order position is
largely dependent on the timing when these opportunities would be tendered.
PEOPLE AND ORGANIZATION
We aim to be an employer of choice among technology companies in India,
and the Company has initiated various measures towards achieving this objective.
During financial year 2023, the Company implemented measures to
strengthen its internal practices and the overall culture for employees while enhancing
its employee value proposition. The Company hired experts in engineering, sales, and
digital domains in line with business requirements. It also focused on capability building
in technical skills, leadership readiness as well as upskilling of people engaged in
manufacturing, sales, and engineering to build a flexible and competitive workforce.
Several learning and development initiatives focused on strategic
learning priorities were launched, covering leadership capability, sustainability and
Siemens Xcelerator. One such program is Lead, Empower, Accelerate, Practice (LEAP), which
is an action-oriented learning program to build leadership capability and bring alignment
to the four strategic priorities. Sustainability basecamp and Leading in Sustainability
are programs to bring awareness about DEGREE Framework and commitment to sustainability.
The Company recorded over 227,000 cumulative hours of learning during the financial year
2023.
The Company is committed to ensuring that it has a diverse, inclusive,
and equitable workplace. The Gender Equity Program of the Company has led to an
improvement in the share of women employees recruited across business functions as well as
the representation of women in management positions. Initiatives to build awareness of
Diversity, Equity and Inclusion were sustained during the financial year 2023 such as
Diversity Talks, a series of conversations based on real experiences and aimed at breaking
biases, maintaining a mindset of inclusivity, and providing psychological safety. The
Company also enhanced the sick leave and paternity leave policies. The Company continues
to have a cordial relationship with its Unions.
As of September 30, 2023, Siemens Limited had 8,888 employees compared
to 8,317 as on September 30, 2022.
COMPLIANCE
The Companys active ownership culture makes the difference. We
place Integrity at the heart of everything we do. People rightly associate the Company
with Reliability, Fairness and Integrity. Promoting Integrity means acting in accordance
with our Values – Responsible, Excellent and Innovative. The Companys rules are
contained in the Business Conduct Guidelines ("BCG") which help its employees
apply Siemens values to conduct business, besides complying applicable laws of the land
and prohibition of corruption and other violations of the principles and rules of fair
competition. The Company has a 24/7 whistleblower hotline, "Tell Us" through
which any compliance violations including potential cases can be notified. This is
available for employees, directors, as well as external stakeholders. It is operated by a
provider that is independent of Siemens to enable receipt of anonymous as well as
protected information to be passed on without any bias or any sort of retaliation against
whistleblowers.
The Company continues to exhibit "zero tolerance" towards any
non-compliant behaviour and violations have attracted disciplinary consequences, in line
with the Companys stress on "Clean Business Everywhere, Every time".
(Details on compliance activities are included in the Business Responsibility and
Sustainability Report available on www. siemens.co.in.) The Company is fully aware of its
obligations to create a sustainable environment and thus continues its drive to create
awareness about a corruption-free environment. It has been doing so by addressing the
topic of corruption at public forums as well as inviting like-minded corporates –
sharing an overview of Siemens compliance processes and demonstrating by example the
feasibility of combating corruption. The Company aims at the creation of a level playing
field for corporates to operate in a corruption free environment.
RISK & INTERNAL CONTROL
The Management of the Company is responsible for establishing and
maintaining adequate internal control over financial reporting (ICFR). The ICFR is
designed to provide reasonable assurance regarding reliability of financial reporting and
preparation of financial statements for external purposes in accordance with applicable
accounting principles and includes those policies and procedures that: Pertain to
maintenance of records that in reasonable detail, accurately and fairly reflect the
transactions and dispositions of assets of the Company; Provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made in accordance with authorizations of management
and directors of the Company; and Provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of the Companys
assets that could have a material effect on the financial statements. The Companys
Management assessed the effectiveness of the Companys ICFR as of September 30, 2023.
As a result of the evaluation, the Management has concluded that the Companys ICFR
was effective as of September 30, 2023 with no significant deficiency. During the
financial year 2023, the Company actively participated in industry forums of Enterprise
Risk Managers. The Risk and Internal Control team is actively involved in training and
developing the employees of the Company, as well as of group companies to foster a
conducive internal control environment and risk culture. The Siemens Enterprise Risk
Register captures key points related to the risks that could impact the businesses and
ensures that adequate mitigation measures are put in place and monitored.
ENVIRONMENTAL PROTECTION, HEALTH MANAGEMENT AND SAFETY
TheCompanysEnvironmentalProtection,HealthManagement and Safety
(EHS) performance is monitored regularly by the Board of Directors as well as the Heads of
Business who actively propagate EHS through constant communications, location/ project
site visits and business review meetings. During the financial year 2023, the Company
renewed its focus on environment protection and sustainability measures, promoting the
wellbeing of its people and ensuring a safe working environment. With the aim of fostering
safety culture, the "Hamari Suraksha Hamara Sankalp" (Our Safety, Our Pledge)
campaign continues to effectively disseminate safe working practices and behavior through
ownership and proactive measures.
Zero harm is fostered across the Company through effective
implementation of CAPA (Corrective Action, Preventive Action) tracker initiative. Each
CAPA tracker cycle focused on high-risk, high-frequency activities at factories and
project sites, reviewed the risk assessments with active collaboration of experts and head
quarters and implemented engineering controls wherever applicable. The contractor
management processes have also been made more stringent to enhance safety compliance.
Focus on safety trainings continues including training on specific
safety topics like scaffolding and trainings. The Siemens Global Skill Center for
Occupational Safety, SITRUST has been instrumental in promoting safety competency and
imbibing the safety culture within the people of the Company as well as partners and
customer organizations by imparting core safety trainings as well as customized and onsite
programs, training more than 4,333 people in financial year 2023.
The Company also increased its focus on Health Management through
initiatives focusing on the psychosocial and physical wellbeing of all employees. The
Company conducted health camps at 63 remote project sites covering site workforce of over
2,700 people, including contract manpower. The Manager Sensitization program which enables
people managers to identify early signs of stress among the team covered 48 percent of the
people managers in its first year. It is a structured and effective program conducted in
collaboration with the Employee Wellbeing and Assistance Partner. Besides, to build a
resilient workforce, Health Education programs both on physical and mental health topics
continued. The Company received numerous accolades for its EHS initiatives – the
highlight being the Gold Award from CII for EHS Excellence in Power sector and CII Western
Region Awards for SHE Excellence and Innovation award 2022 – for Service sector.
Siemens has also won awards and appreciations from various customers for Best EHS
practices implemented during the project execution. Two of the offices at Mumbai and
Bengaluru have received LEED certification from Green Building Council for
environment-friendly interior design and construction. As part of its initiatives to
improve environmental protection, the Company undertook various measures that led to
improved energy and water efficiency in its manufacturing units. The Company complies with
the Extended Producer Responsibility for collection and recycling of electrical and
electronic waste, battery waste and plastic packaging waste. During the financial year
2023, the Company recycled 11.21 metric tons of e-waste, 1.09 metric tons of battery waste
and 341 metric tons of plastic waste.
The roof top solar photovoltaic power generation plants in Kalwa and
Aurangabad factories have generated 3,765 MWh of renewable energy which has resulted in
saving of 2,673 tons emissions equivalent. The Company has also partnered of CO2for
off-site solar power and got 1,196 MWh of energy saving 849 tons of equivalent. The
Company furthering its CO2 commitment to a sustainable future has purchased I
RECs across several factories offsetting 14,358 MWh of electricity equivalent to
10,194 tons of CO2. Several focused energy efficiency measures were
implementedsaving 767 MWh of electricity consumption equivalent to 545 Tons of CO2.
OUTLOOK
The Company expects its growth momentum to continue. With increased
economic activity in the country, the expectations are that India will double its
generation and transmission capacities in the next couple of years. The Government has
already set a target to have an installed capacity of 500 GW of Renewable Energy to cover
roughly 50% of Indias energy requirements.
Measures are being taken to drive demand side management through energy
efficiency measures in the distribution network through installation of Control Centers,
SCADA systems, E-metering, etc. The electrification of the Indian Railways is being done
at a fast pace while the regulatory environment conducive for increased adoption of
e-vehicles in the country are being created.
Indias economy will grow on the basis of increase in Capex
spending in infrastructure, increase in Private Capex spending in new age technologies
such as semiconductors, fuel cells, batteries, data centers and hydrogen and increased
capacities and strong drive towards decarbonization.
For all of these, digitalization is a key enabler to drive
productivity, quality, flexibility and above all decarbonization and sustainability. The
Company has a comprehensive portfolio of technology solutions, the knowhow and commitment
to support the nation in its growth. As proven by the 100 use and reference cases on the
open digital business platform Siemens Xcelerator, the Company is confident that customers
will be able to accelerate their digital transformation together with Siemens Limited as
their partner of choice.
In addition to providing more information about Industry use cases and
access to Siemens products, Siemens Xcelerator also provides access to an Ecosystem of
Partners who can bring in their expertise in simulation, industrial automation, IoT,
industrial edge, 5G, cybersecurity, product and application lifecycle management,
manufacturing execution systems, enterprise resource planning, enterprise asset management
and low-code application development but also on integrated building management solutions
and integration services of HVAC, fire safety and security systems, including energy
optimization, building information modeling integration, digitalization, cloud-based
offerings and building automation. No large company can achieve the level of
digitalization needed to be competitive unless the entire supply chain down the line is
also digitalized and integrated. With Siemens Xcelerator, Company is capable of supporting
the 60 million small and medium enterprises, many of whom are a part of the supply chains
of large companies, on their digital transformation and decarbonization journeys.
The Company will continue to focus on increasing its digitalization
business as well as sustainability solutions. The Company is well-positioned to leverage
industrial and infrastructure development opportunities and its focus remains on
sustainable profitable growth.
The Management of the Company believes that profitable growth would be
in line with the market in financial year 2024.
Note: This report contains forward-looking statements based on
beliefs of Siemens management. The words "anticipate,"
"believe," "estimate," "forecast," "expect,"
"intend," "plan," "should," and "project" are used
to identify forward-looking statements. Such statements reflect the Companys current
views with respect to future events and are subject to risks and uncertainties. Many
factors could cause the actual result to be materially different, including, among other
things, changes in general economic and business conditions, changes in currency exchange
rates and interest rates, introduction of competing products, lack of acceptance of new
products or services, and changes in business strategy. Actual results may vary materially
from those projected here. Siemens Limited does not intend to assume any obligation to
update these forward-looking statements.
On behalf of the Board of Directors For Siemens Limited
Deepak S. Parekh Chairman DIN - 00009078
Mumbai, Tuesday, 28th November 2023
+91-9892691696
