PROJECT REPORT ON

“Risk Return & Other Aspects Of SIEMENS ”

Submitted to-Prof. Moid Ahmad

Submitted by

Vishal Jamwal PGSF 1658

Ashish Kumar PGSF 1614

Medha Gupta PGSF 1626

Shikha Chaudhary PGSF 1647

Rishabh Tyagi PGSF 1638

1

ACKNOWLEDGEMENT

We wish to express sincere gratitude to Prof. Modi Ahmad for providing us an opportunity to complete our Financial management project in “SIEMENS INDIA LTD”.

I Sincerely thank Prof.Moid Ahmad for their guidance and encouragement in carrying out this project work .I also wish to express my gratitude to the officials and other staff members who rendered their help during the pe-riod of our project work.

I also thank Director of Jaipuria Institute Of Management , for providing me the opportunity to embark on this project.

2

Summary

India’s progress as a nation involves finding sustainable solutions to chal-lenges such as ever-growing demand for energy, higher industrial produc-tivity, modern urban infrastructure and high-quality healthcare.

Siemens, as an integrated technology provider, has a wide range of future-oriented solutions to meet these challenges and be a partner in India’s growth.

Leveraging the 160-year-long heritage of technology leadership, Siemens offers a solution portfolio consisting of industry-specific applications to optimize an the performance of enterprises across the entire value chain, sustainable solutions for energy generation, transmission, distribution and consumption, value-added services and consulting.

Siemens in India is a leading powerhouse in electronics and electrical en-gineering with a business volume aggregating about Rs. 12,000 crore.

3

Siemens Ltd., in which Siemens AG (Germany) holds 75% of the capital, is the flagship listed company of the Siemens group in India. It is the only Siemens company in the world other than parent Siemens AG and Siemens Inc. in America that is listed on the stock exchanges (NSE: SIEMENS; BSE: SIEMENS).

It has a nation-wide sales and service network, 22 manufacturing plants and employs about 16,000 people.

Siemens in India focuses on sustainable growth, innovation and environ-mental solutions. Along with leveraging its strong presence in the high-end technology segment, Siemens is also building a portfolio of innovative, simple-to-use, maintenance-friendly, affordable, reliable and timely-to-market solutions customized for India.

With over 53,000 patents filed globally and over 27,800 researchers and developers operating in the fields of research and development, Siemens aims to address the impact of the megatrends that is shaping the world: globalization, urbanization, climate change and demographic change. Siemens has been a technology partner to some of the most developed cities in the world.

4

RECENT FINANCIAL POSITION IN INDIA

PARAMETER VALUES

Market cap (in cr.) 38,416.45

Earning per share (EPS TTM) 81.10

Book value per share 144.01

EBIT Margin (%) 15.90

PAT Margin (%) 10.91

ROCE (%) 36.30

PAT Growth (%) 96.17

Total debt to equity (D/E) Ratio 0.00

SHAREHOLDERS OF SIEMENS LTD

DESCRIPTION PERCENT OF SHARE(%)

Promoters 75.00

Individuals 11.35

Institutions 8.40

FII 3.22

Govt. 0.00

5

Others 2.03

PROMOTERS

Indian promoters (whole time directors & their relatives)

Foreign promoters- Siemens AG, Germany

Siemens VDO Automotive AG

PRODUCTS

• Automation

• Building Technologies

• Drive Technology

• Healthcare

• Mobility

• Consumer Products

• Services

6

CALCULATIONS

YEAR CLOSE PRICE RETURN

2010 820.75 0

2011 642.3 -0.21742

2012 667 0.038456

2013 663.7 -0.00495

2014 907.05 0.366657

2015

2016

1200.8

1107.2

0.323852

-0.07795

BETA 1.68

RISK FREE RETURN 6.45

MARKET RETURN 0.3(30%)

AVERAGE RETURN 0.061235

S.D 0.211314

CAPM 16.7827

Dividend % face value Dividend g(%)

  10    

28 10 2.8  

30 10 3 7.14

30 10 3 0

33 10 3.3 10

35 10 3.5 6.06

36 10 3.6 2.85

      26.05

g(%) of 2017 5.21

D1 3.78756

Ke(%) 8.35

8

value of firm= D1/ke-g

= 120.6229299

ANALYSIS

WORKING CAPITAL DECISIONS

Siemens Limited is rated third in working capital category among related companies.

Working Capital is measure of company efficiency and operating liquidity. The working capital is usually calculated by subtracting Current Liabilities from Current Assets. It is important indicator of the firm ability to con-tinue its normal operations without additional debt obligations.

9

Working Capital can be positive or negative, depending on how much of current debt the company is carrying on its balance sheet. In general terms, companies that have a lot of working capital will experience more growth in the near future since they can expand and improve their opera-tions using existing resources. On the other hand, companies with small or negative working capital may lack the funds necessary for growth or fu-ture operation. Working Capital also shows if the company has sufficient liquid resources to satisfy short-term liabilities and operational expenses.

SIEMENS LTD Working capital= Current Assets- Current Liabilities=18.62 billion.

Since the current asset of Siemens ltd is more than its current liabilities i.e working capital is positive so it is clear that it can have more growth, can expand their business and can improve their existing resources and also they can cover their short term business obligations with liquid resources.

DIVIDEND DECISIONS

The firm has to balance between the growth of the company and the distri-bution to the shareholders.It has a critical influence on the value of the fir-m.It has to also to strike a balance between the long term financing deci-sion( company distributing dividend in the absence of any investment op-portunity) and the wealth maximisation .The market price gets affected if dividends paid are less.Retained earnings helps the firm to concentrate on the growth, expansion and modernisation of the firm.To sum up, it to a

10

large extent affects the financial structure, flow of funds, corporate liquid-ity, stock prices, and growth of the company and investor’s satisfaction.

Since the year 2010 the company growth rate is increasing stagnantly from 2.8%(2010) to 3.6%(2015) which means it is a profitable organisation and pays well to its equity shareholders as well with keeping retained earnings 3084 million $ (2015) from 2907 million $ (2014) which means 6% growth in retained earnings as well , so it can invest more now in further projects in order to build more equity for its shareholders.

11