Bilal's+Part

= **Competitors** = According to Siemens Pakistan’s value system, they have always vouched for or favored healthy and fair competition. One of their key values is to be fair in relationship with their competitors, which would mean that they do not engage themselves in trying to form a monopoly in the market, where they would be the only company to drive prices.

This point has further been explained in the company conduct guidelines, which requires them to abide by Fair competition and Anti-Trust laws. Siemens believes in talking to competitors about prices, output, capacities, sales, bids, profits, profit margins, costs, methods of distribution or any other parameter that determines or influences the Company’s competitive behavior with the aim to solicit parallel behavior from the competitor.

To counter its competitors Siemens has come up with a first focus initiative, called SMART (Simple, Maintenance-friendly, Affordable, Reliable, Timely to market). The top+ SMART Initiative means high tech at low cost. It has two goals: leading positions in emerging markets and increased value-added in low-cost countries. Medium and low-end market segments offer enormous potential for the company, and have yet to be addressed by all businesses. The company needs to strengthen its position against new and aggressive competitors in the market. For Siemens, low-cost means always fulfilling the customer’s expectation and guaranteeing a high level of quality, while also incurring a lower level of production cost. Even in the business of low-cost products, our goal is always to be Best-in-Class.

** Pak Elektron Limited (PEL) **
PEL is one of the major competitors of Siemens, especially in the Distribution and Power Transformers business segment. Pak Elektron Limited (PEL) is the pioneer manufacturer of electrical goods in Pakistan. It was established in 1956 in technical collaboration with M/s AEG of Germany. In October 1978, the company was taken over by Saigol Group of Companies. Since its inception, the company has always been contributing towards the advancement and development of the engineering sector in Pakistan by introducing a range of quality electrical equipments and home appliances and by producing hundreds of engineers, skilled workers and technicians through its apprenticeship schemes and training programmes.

The company comprises of two divisions:
 * Appliances Division
 * Power Division

** Climax Engineering Co. Ltd. **
The Climax Engineering Company Co. Ltd was established in 1940. It is a major competitor to Siemens in the Distribution transformer sector. The Company started manufacturing Machine Tools and has a wide range of products which are being manufactured.

The Company started manufactured home appliance like Electric Heater and Electric Cattle in 1950. In 1951 Company Started Producing Electric Fans and developed Capacitor Fans first time in PAKISTAN. In 1958 the Company converted into a private Ltd Company. The Company started manufacturing Electric Motors in 1955. The Company also started manufacturing of transformer with the collaboration of English electric company England. Company was converted into public limited company in 1971. Company started manufacturing Electric Heater in 1978. Company started manufacturing Air Conditioners in 1980. The paid up capital of the company is RS. 33.12 Millions. The Company employed more than 500 Workers. The Company is listed on Karachi & Lahore Stock Exchanges. The Company is registered with all Government & Semi Government Organizations for supply of "CLIMAX" Products.

** The ABB Group **
ABB is a global leader in power and automation technologies that enable utility and industry customers to improve their performance while lowering environmental impact. It hold the major share (approx 60%) in the transformer market and is also a major competitor in switchgears.

ABB is a Swiss-Swedish multinational corporation headquartered in Zürich, Switzerland, operating mainly in the power and automation technology areas. ABB is one of the largest engineering companies as well as one of the largest conglomerates in the world. ABB has operations in around 100 countries, with approximately 117,000 employees, and reported global revenue of $31.8 billion for 2009.

= **Financials** = In FY07 too, the company had made record sales and pre-tax profits in its history and over achieved all its budgeted targets in FY07.

New orders of Rs 32,040 million were received which is an all time record. Major contributions include projects for building grid stations/substations for various customers locally as well as in Dubai, supply of power and distribution transformers to various power generation companies and SAP Enterprise Resource Planning (ERP) implementation for Pakistan Telecommunication Company Limited.

Healthcare sector with their Digital Linear Accelerators for cancer treatment, Diesel Generating Sets particularly for the telecommunication sector and first ever order of SGT-400 Gas Turbine Compressor Trains in Pakistan for Kandhkot Compression Project also played a significant role.

Sales increased by 5.32% as compared to the corresponding period to Rs 21.902 billion - again a record performance. The major increase contributed by Power Transmission and Distribution and Communication Divisions (projects being undertaken in the energy sector). The total turnover includes business of Rs 5,611 million conducted outside Pakistan, especially in construction of substations, which grew by 20.46% over last year.

Profit before tax increased by 30.25% compared to the corresponding period of last year showing an all time high value of Rs 1.965 billion. The major contributors are higher sales volume, higher commission income, lower selling and marketing expenses as a percentage of sales and well-controlled general administration expenses.

After tax profit aggregated to Rs 2,481 million which is 2.4 times higher than the corresponding year's after tax profit. This disproportionate increase in profit is attributable to profit of Rs 1,498 million, net of income tax, on sale of discontinued COM business.

As a result, a negative profitability trend of FY06 reversed in FY07. The higher increase in profit and gross profits further diminished the effect of an increase in sales. Both the margins recovered greatly in FY07 on the account of 11% increase in sales (much higher than COGS and other expenses), mainly due to the projects being undertaken in the energy sector. Initially investors were willing to pay relatively little for a dollar of Siemens's book value however 2003 onwards, the company has turned into a financially strong setup. A major factor of the increase in this book value per share is the positive image the company projects through its marketing activities and focus on quality.

Despite significant capital investments over the years, the overall cash position of the company improved which is evident by the positive trend of DPS. It has increased from Rs 26/share in FY03 to Rs 90/share in FY07, showing the good return to shareholders as the primary objective of Siemens.

The profit after tax of Siemens Pakistan Engineering Company increased to Rs 525.613 million in the six months period ended March 31, 2010 as compared to Rs 369.108 million earned in the corresponding period last year. The company's earning per share surged to Rs 63.73 in the period under review against Rs 44.78 in the same period a year back.

May 1, 2010 saw the board of directors recommending an interim cash dividend for the six months period at Rs 30 per share, i.e. 300 percent. According to financial results sent to Karachi Stock Exchange (KSE), the company's net sales and services had declined to Rs 14.276 billion in the six months period against Rs 19.028 billion in the same period last year. The cost of sales and services decreased to Rs 12.560 billion against Rs 17.511 billion. The company's profit before tax increased to Rs 820.911 million in the six-month period.

// Source: //[|//http://www.corporateinformation.com/Company-Snapshot.aspx?cusip=C586ET960//]

**Exhibit 2**
//Source: Annual Report 2009// **
 * Exhibit 3 Income Statement 2006-09

// Source: //[|//http://investing.businessweek.com/businessweek/research/stocks/financials/financials.asp?ticker=SIEM:PA&dataset=incomeStatement&period=A&currency=native//]

// Source: //[|//http://investing.businessweek.com/businessweek/research/stocks/financials/financials.asp?ticker=SIEM:PA&dataset=balanceSheet&period=A&currency=native//]
 * Exhibit 4 Balance Sheet 2006-09 **