DIRECTORS' REPORT

DEAR MEMBERS,

The Directors have pleasure in presenting the 58th Annual Report of your Company and the Audited Financial Statements for the year ended 30th September, 2015.

2. Operations

The Turnover of the Company decreased by approximately 2% and stood at Rs. 105,124 million as compared to Rs. 106,783 million in the previous year. The Company's Profit from Operations for the year ended 30th September, 2015 was Rs. 7,605 million as compared to Rs. 3,652 million in the previous year.

The Profit after Tax for the year ended 30th September, 2015 was Rs. 11,833 million, compared to Rs. 6,032 million during FY 2013-14.

3. Dividend

The Board of Directors recommend a Dividend of Rs. 6 per equity share and a Special Dividend of Rs. 4 per equity share (in view of the large exceptional income during the FY 2014-15) having face value of Rs. 2 each. This Dividend is subject to the approval of the Members at the 58th Annual General Meeting of the Company. In the previous year, the Company paid a Dividend of Rs. 6 per equity share of Rs. 2 each.

4. Divestment

Sale and Transfer of Metals Technologies Business (MT Business) of the Company

Pursuant to the approval granted by the Members by way of Postal Ballot on 15th December, 2014, MT Business of the Company was sold and transferred as a going concern on a Slump Sale basis to VAI Metals Technologies Private Limited ("VAI"), the then subsidiary of Siemens VAI Metals Technologies GmbH, Germany, with effect from the close of business hours on 31st December, 2014, for a consideration of Rs. 10,233 million and recorded a gain of Rs. 7,120 million, which forms part of exceptional items.

5. Subsidiary company

Siemens Rail Automation Private Limited (SRAPL) became a wholly-owned subsidiary of the Company with effect from 1st October, 2014. SRAPL is a non-material and non-listed subsidiary of the Company pursuant to Clause 49 of the Listing Agreement. SRAPL is engaged in the business of manufacture, supply, design, installation and commissioning of Railway Signaling equipment consisting of trackside and on board equipment.

Your Company has obtained a certificate from the Statutory Auditors certifying that the Company is in compliance with the Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000 with respect to the downstream investments made in SRAPL during the year.

A summary of performance of SRAPL is provided below.

The Turnover of SRAPL decreased by approximately 3% and stood at Rs. 577 million as compared to Rs. 591 million in the previous year and Loss from Operations for the year ended 30th September, 2015 was Rs. 15 million as compared to Profit from Operations of Rs. 43 million in the previous year.

SRAPL has reported Loss after Tax for the year ended 30th September, 2015 of Rs.19 million as compared to Profit after Tax of Rs. 15 million during FY 2013-14.

The Company does not have any joint venture or associate companies during the year.

Pursuant to the provisions of Section 129 (3) of the Companies Act, 2013 ("Act"), a statement containing salient features of financial statements of SRAPL in the prescribed Form AOC-1 is provided in Annexure I forming part of this Report. The Audited Financial Statements of SRAPL are available on the Company's website at www.siemens.co.in/en/index/investor/financials-of-our-subsidiaries.htm and the same are also available for inspection at the Registered Office of the Company as per the details mentioned in Notice of the 58th Annual General Meeting. Your Company will also make available these documents upon request by any Member of the Company interested in obtaining the same.

Consolidated Financial Statements

The Annual Audited Consolidated Financial Statements together with the Report of Auditors' thereon forms part of this Annual Report.

6. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Information as required to be given under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure II forming part of this Report.

7. Business Responsibility Report

Pursuant to Clause 55 of the Listing Agreement entered into with the Stock Exchanges (''Listing Agreement''), your Company is required to include as part of the Annual Report, Business Responsibility Report (BRR) which provides a suggested framework of a BRR, describing initiatives taken by the Company from an environmental, social and governance perspective.

As a Green Initiative, the complete BRR for the year FY 2014-15 has been hosted on the Company's website, which can be accessed at <http://www.siemens.co.in/en/index/investor/annual_report.htm> and < index/sustainability.htm

Any Member interested in obtaining a copy of BRR may write to the Company Secretary of the Company.

8. Corporate Governance

A detailed review of the operations, performance and future outlook of the Company and its business is given in the Management's Discussion and Analysis, which forms part of this Report as Annexure III.

As required by Clause 49 (X) of the Listing Agreement, a detailed report on Corporate Governance along with the Auditor's Certificate thereon, forms part of this Report as Annexure IV.

General Shareholder Information forms part of this Report as Annexure V.

9. Audit Committee

The Company has in place an Audit Committee in terms of the requirements of the Act read with the Rules framed thereunder and Clause 49 of the Listing Agreement. The details relating to the same are given in the Report on Corporate Governance forming part of this Report. The recommendations of the Audit Committee were duly approved and accepted by the Board of Directors.

10. Directors and Key Managerial Personnel

The Board of Directors offers its deep condolence for the sad demise of Mr. Narendra J. Jhaveri (DIN: 00198912), who passed away on 6th June, 2015, peacefully in his sleep. Mr. Jhaveri, 79, was a Member (Independent Director) of the Board of Directors of the Company since November 2000. Mr. Jhaveri's visionary foresight and business acumen had helped to steer the Company in the right direction. His legacy shall continue to guide the Company in the future as well.

At 58th Annual General Meeting, Mr. Johannes Apitzsch (DIN: 05259354) retires by rotation and being eligible, offers himself for re-appointment.

The resolution for the above re-appointment along with the brief profile forms part of the Notice of the 58th Annual General Meeting and the resolution for his re-appointment is recommended for your approval.

The Members at the 57th Annual General Meeting held on 30th January, 2015, appointed Independent Directors for the Company viz. Mr. Deepak S. Parekh (DIN: 00009078), Mr. Yezdi H. Malegam (DIN: 00092017), Mr. Darius C. Shroff (DIN: 00170680), Mr. Narendra J. Jhaveri (DIN: 00198912), Mr. Keki B. Dadiseth (DIN: 00052165) and Mr. Pradip V. Nayak (DIN: 00032403) as Independent Directors for a term of five years as per requirements of the Act.

The abovenamed Independent Directors except Late Mr. Narendra J. Jhaveri have furnished declarations to the Company under Section 149(7) of the Act, confirming that they meet the criteria prescribed for independent directors under Section 149(6) of the Act as well as Clause 49(II)(B) of the Listing Agreement.

Mr. Sunil Mathur, Managing Director and Chief Executive Officer (DIN: 02261944), Mr. Christian Rummel, Executive Director and Chief Financial Officer (DIN: 01992982) and Mr. Ketan Thaker, Company Secretary, are the Key Managerial Personnel of the Company as on the date of this Report.

11. Board Meetings

During the financial year ended 30th September, 2015, five meetings of the Board of Directors were held. The details of the attendance of Directors at the Board Meetings are mentioned in the Corporate Governance Report annexed hereto.

12. Annual evaluation of Board, its Committees and individual Directors

The details of the Annual evaluation of Board, its Committees and individual Directors are mentioned in the Corporate Governance Report.

13. Corporate Social Responsibility

The Company has always endeavored to be an integral part of the society for more than 5 decades - as an employer, customer, investor, vendor and corporate citizen. The initiatives in the social sphere, generally known as Corporate Social Responsibility, are referred to as Corporate Citizenship in the Company. Corporate Citizenship is the Company's contribution to sustainable communities and are built on the Company's Values of being Responsible, Excellent and Innovative. The Company considers it as its economic, environmental and social responsibility to foster sustainable local development as well as add value to the local economy in which it operates.

Further, in accordance with the provisions of Section 135 of the Act and Rules framed there under, the Company has constituted a Corporate Social Responsibility ("CSR") Committee of Directors comprising of Mr. Deepak Parekh (Chairman), Ms. Mariel von Schumann, Mr. Sunil Mathur and Mr. Christian Rummel. The Committee on a regular basis reviews and monitors the CSR projects and expenditure undertaken by the Company.

The Company has implemented CSR projects directly and / or through implementing partners. The Company's initiatives towards sustainable communities have been addressed under the areas of enhancing living conditions, skill development, technical education, healthcare and sanitation and conservation of water. The details of such initiatives, CSR spend, CSR Policy, etc., have been provided as Annexure VI to this Report, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014.

14. Remuneration Policy

The details of the Remuneration Policy are mentioned in the Corporate Governance Report.

A Statement of Disclosure of Remuneration pursuant to Section 197 of the Act read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided as Annexure VII forming part of this Report.

15. Extracts of Annual Return

The extracts of Annual Return in Form MGT-9 as required under Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 forms part of this Report as Annexure VIII

16. Particulars of contracts or arrangements with Related Parties

The particulars of contracts or arrangements with Related Parties referred to in Section 188(1) of the Act in the prescribed Form AOC - 2, is provided as Annexure IX forming part of this Report.

17. Particulars of Loans, Guarantees or Investments

A statement providing particulars of Loans, Guarantees or Investments under Section 186 of the Act is provided as Annexure X forming part of this Report.

18. Vigil Mechanism

As per the provisions of Section 177(9) of the Act, the Company is required to establish an effective Vigil Mechanism for Directors and employees to report genuine concerns. The Company has a Policy for Prevention, Detection and Investigation of Frauds and Protection of Whistleblowers ("Whistleblower Policy") in place and the details of the Whistleblower Policy are provided in the Report on Corporate Governance forming part of this Report. The Company has disclosed information about the establishment of the Whistleblower Policy on its website <http://www.siemens.co.in/pool/investor_relations/whistleblower-policy---oct-2014--01.pdf>

19. Risk Management Policy

Siemens Enterprise Risk Management (ERM) is a company-wide framework of methods and processes used to identify, assess, monitor and mitigate risks and seize opportunities related to achievement of Siemens business objectives. The Siemens ERM approach is based on the globally accepted "The Committee of Sponsoring Organizations of the Treadway Commission" ("COSO") framework i.e. "ERM - Integrated Framework". The COSO framework provides a generic concept which has been customized to refect Company's requirements.

Major risks identified by the business Divisions and Corporate Departments are systematically addressed through mitigating actions on a continuing basis. During the financial year under review, the Company has set up a Risk Management Committee (RMC) in accordance with the requirements of the Listing Agreement, inter alia, to monitor the risks and their mitigating actions. The Board of Directors of the Company also reviews the Risk Assessment and Mitigation Report annually.

Details in respect of adequacy of internal financial controls with reference to the Financial Statements are given in the Management's Discussion and Analysis, which forms part of this Report.

20. Directors' Responsibility Statement

Pursuant to the provisions of Section 134 (3)(c) and 134 (5) of the Act, the Directors confirm, to the best of their knowledge and belief:

a) that in the preparation of the annual Financial Statements for the year ended 30th September, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30th September, 2015 and of the profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that the annual Financial Statements have been prepared on a going concern basis;

e) that proper internal financial controls are in place and that such internal financial controls were adequate and were operating effectively;

f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and are adequate and operating effectively.

21. Reporting of frauds

There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Act and Rules framed there under either to the Company or to the Central Government.

22. Fixed Deposits

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

23. Amount, if any, proposed to be transferred to Reserves

The Company has made no transfers to Reserves during the financial year 2014-15.

24. Employees:

Your Directors place on record their deep appreciation for the contribution made by the employees of the Company at all levels.

The information on employees particulars as required under Section 197 (12) of the Act read with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of the Report. In terms of Section 136 of the Act, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding aforesaid Annexure. The said information is available for inspection by the Members at the Registered Office of the Company as per the details mentioned in the Notice of the 58th Annual General Meeting on any working day of the Company up to the date of the 58th Annual General Meeting. Any Member interested in obtaining a copy of the same may write to the Company Secretary of the Company.

25. Policy on Prevention of Sexual Harassment at Workplace

The Company has in place a Policy on Prevention of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder and Internal Complaints Committee has also been set up to redress complaints received regarding sexual harassment. During the year, no complaint with allegations of sexual harassment was received by the Company.

26. Statutory Auditors

Pursuant to provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, Messrs S R B C & CO LLP, Chartered Accountants (Firm Registration No. 324982E), were appointed as Statutory Auditors of the Company for a term of four years, to hold office from the conclusion of 57th Annual General Meeting held on 30th January, 2015, until the conclusion of 61st Annual General Meeting, subject to ratification of their appointment at every subsequent Annual General Meeting.

A certificate from them has been received to the effect that their appointment as Statutory Auditors of the Company, if ratified at ensuing Annual General Meeting, would be according to the terms and conditions prescribed under Section 139 of the Act and Rules framed there under.

A resolution seeking ratification of their appointment, forms part of the Notice convening the 58th Annual General Meeting and the same is recommended for your consideration and approval.

27. Cost Auditors

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors, on the recommendation of the Audit Committee, have appointed Messrs R. Nanabhoy & Co., Cost Accountants (Firm Registration No. 7464), as Cost Auditors of the Company, for the financial year ending 30th September, 2016, at a remuneration as mentioned in the Notice convening the 58th Annual General Meeting for conducting the audit of the cost records maintained by the Company for the various products as mandated by the Central Government, pursuant to its order dated 30th June, 2014 and any amendments thereof, subject to the approval of the Members on the remuneration to be paid to the Cost Auditor.

A certificate from them has been received to the effect that their appointment as Cost Auditors of the Company, if made, would be in accordance with the limits specified under Section 141 of the Act and Rules framed there under.

A resolution seeking Member's ratification for the remuneration payable to Cost Auditors forms part of the Notice of the 58th Annual General Meeting of the Company and same is recommended for your consideration and approval.

The Company had fled the Cost Audit Report for FY 2013-14 on 9th March, 2015, which is within the time limit prescribed under the Companies (Cost Audit Report) Rules, 2011.

28. Secretarial Audit

Pursuant to provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messers Parikh Parekh & Associates, Practicing Company Secretaries (C.P.No.1228), for conducting the Secretarial Audit of the Company for the financial year ended 30th September, 2015. The Secretarial Audit Report is provided as Annexure XI to this Report.

29. Material changes and commitment, if any, affecting financial position of the Company from the end of financial year and till the date of this Report

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of this Report.

30. Significant and Material Orders passed by the Regulators or Courts

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company in future.

31. Acknowledgements

The Board of Directors take this opportunity to thank Siemens AG - the Parent Company, customers, members, suppliers, bankers, business partners / associates and Central and State Governments for their consistent support and co-operation to the Company.

On behalf of the Board of Directors

For Siemens Limited

Deepak S. Parekh

Chairman

DIN : 00009078

Place : Mumbai

Date : Friday, 27th November, 2015