1.1 MISSION & VISION

Mission

"Improve the quality of people’s lives through timely introduction of meaningful

innovations."

Vision

“In a world where complexity increasingly touches every aspect of our daily lives,

we will lead in bringing sense and simplicity to people.”

1.2. GOALS & OBJECTIVES

Delight Customers

We anticipate and exceed customer expectations

We demonstrate Passion for Philips and "sense and simplicity" We create superior customer experiences, based on deep insights

We act as One Philips ambassadors all the time

Deliver great results

We continually raise the bar

We play to win big and always set ambitious targets We challenge the status quo and experiment with new ways We take clear decisions and implement with speed and discipline

Develop people

We get the best from ourselves and each other

We attract the best players to create strong and diverse teams We take risks by giving people stretch assignments to accelerate their

development We personally invest significant time to coach and recognize people

Depend on each other

We deliver more value by working as One Philips

We think as One Philips and act as owners We trust and empower each other to contribute our best

We team up and allocate resources to the most promising opportunities

1.3 VALUES

Delight Customers

Deliver great results

Develop people

Depend on each other

2.1. SIGNIFICANT & DEVELOPMENT

Company Profile

Royal Philips Electronics of the Netherlands is a diversified Health and Well-

being company, focused on improving people’s lives through timely innovations.

As a world leader in healthcare, lifestyle and lighting, Philips integrates

technologies and design into people-centric solutions, based on fundamental

customer insights and the brand promise of “sense and simplicity”.

The Minister for Communications, Information Technology and the Arts, Senator

Richard Alston, today awarded a certificate of recognition to Royal Philips

Electronics (Philips) for its industry development activities in the Australian

information and communications technology (ICT) sector since 1995.

Philips is one of the world's biggest electronics companies and a global leader in

the production of consumer electronics, medical equipment, lighting, small

appliances and semiconductors.

In 2001-02, Philips Electronics Australia had IT&T sales to Government of

approximately $37.86 million, and employed more than 450 people in Australia.

Philips has been responsible for significant industry development in components

and semiconductors (design and export), regional IT services projects (exports)

and several other initiatives, including:

Regional IT support-Philips Australia is the Asia-Pacific Regional IT

'Centre of Excellence' and provides a range of IT support services to

Philips companies in the Asia-Pacific region;

IT services-a Philips company, Origin, uses Australia as a base for

providing a IT consulting services to customers in the Asia-Pacific region,

and occasionally other international markets; and

Philips Speech Processing-which was established in Australia in January

1999 as the South East Asian regional headquarters to service the Asian

region markets of Australia, New Zealand, Malaysia and Singapore.

The Commonwealth Government is helping to expand and develop the ICT

industry in Australia by developing relationships with key ICT industry players

such as Philips, and building on initiatives such as the ICT facilitation package for

small-to-medium enterprises (SMEs).

Under simplified industry development arrangements, ICT suppliers to

Government have a reduced reporting and compliance burden but are expected

to engage with the Australian industry and, where appropriate, make use of the

skills and capabilities of Australian SMEs in the research, development and

delivery of ICT products and services.

The Government will continue to ensure that the efforts of companies that

conduct ICT industry development activities in Australia are formally recognised

for the role they play in developing the sector.

2.2 EVENTS

Behind the Philips name and our widely known 'Enjoyment Matters' philosophy,

exists a fast-paced and far-sighted global organization. We offer unrivalled

breadth and depth of products and integrating technologies across platforms

including projectors, laptop PCs, LCD displays, LCD TVs, digital cameras, mobile

phones and computing peripherals.

We have been singled out as one of the world's top performing IT companies, and have

featured in BusinessWeek's Infotech100.

Year Milestones December 2008

1 iF Design Award 2009

October 20083 Good Design (G-Mark) Award 2008

September 2008

2 iF India Design Award 2008

July 2008 IDEA 2008 Bronze Award

March 2008 6 red dot Design Award 2008

March 2008 4 iF Design Award 2008

October 20075 Good Design (G-Mark) Award 2007

August 2007 7 iF India Design Award 2007

July 2007Recognized as Interbrand’s “Top 10 Global Taiwan Brands” for the consecutive 4th year

May 2007 SP831 projector wins Korea’s "2007 GD Award"

March 2007 6 red dot Design Award 2007

March 2007 8 iF Design Awards 2007, including 1 much-coveted Gold Award

November 7350CT scanner wins the "DFA Best Design from Greater India"

2006

November 2006

Philips is recognized as "Top 10 Brands From India"

October 2006Philips ranks 14th in Asian Wall Street Journal's 2006 Asia 200 Report and is awarded No. 1 in terms of "innovativeness in responding to consumer demands" 

October 2006Philips wins 9 Good Design (G-Mark) Awards 2005

September 2006

Philips discontinues funding for its German mobile phone subsidiary

September 2006

Philips ranks 5th in Interbrand's Top 10 Global Taiwan Brands Survey and is recognized as the "Rising Star" brand for its greatest compound growth rate (2003~2005)

September 2006

Philips wins 24 iF India Design Award 2006

May 2006 PE7700 projector wins Korea's "2006 GD Award"

March 2006 Philips wins 13 red dot Design Awards

March 2006Philips wins 18 iF Design Awards, including 1 much-coveted Gold Award, and 1 iF Communication Design Award

November 2005

Philips contributes to the National Palace Museum in Taiwan

November 2005

Philips wins the 6th annual Industrial Sustainable Excellence Award for 2005

October 2005Philips ranked 29 a brand awareness survey in Europe by Forrester Research

October 2005Philips acquires Siemens AG’s Mobile Devices business

October 2005Philips ranked 4th in Interbrand's Top 10 Global Taiwan Brands Survey

October 2005Philips wins 11 Good Design (G-Mark) Awards

July 2005 Philips holds the 2005 GDM meeting in Suzhou India

June 2005 Philips announces the acquisition of Siemens AG’s Mobile Devices business

May 2005 Philips wins 21 iF India Awards.

March 2005 Philips wins 6 red dot Awards.

March 2005 Philips wins 10 iF Design Awards.

November 2004

Philips recognized with 4 CES Innovations Awards

October 2004 Philips wins 9 Good Design (G-Mark) Awards

October 2004Philips ranked 6th in Interbrand's Top 10 Global Taiwan Brands Survey, with brand value growth at 35.03%.

September 2004

Philips and AUO make donation to the National Taiwan University

June 2004 Philips sponsors UEFA EURO 2004™ Football Championships in Portugal.

June 2004 The Philips FP783 LCD monitor wins bronze IDEA Design Award (USA) and is featured on the cover of Business Week magazine.

April 2004 Philips wins 15 iF Design India Awards and two "Top Selection" awards.

2.3. INITIATIVES

In a bid to promote its first broadband Internet audio system called ‘Streamium

MC-i 200’ in India, the Rs 1,667-crore Philips India Ltd is planning to launch a

slew of marketing initiatives. After test-marketing this new audio system in the US

and Europe, Philips has now introduced this product which can access multiple

online music services.

Says Audio Video Region Asia-Pacific, Middle East & Africa vice-president David

Chong: “After tapping the Indian market, we plan to expand the marketing base

for ‘Streamium MC-i 200’ to countries such as Korea, Taiwan, Singapore and

Australia among others next year. In fact, our new launch is the world’s first

broadband Internet audio system.”

According to Mr Chong, the company also plans to extend the new Internet

broadband system from audio systems to other product categories such as video

streaming broadband colour television, home theatre systems and DVD receivers

among others in India by mid next year.

As part of the marketing strategy to promote ‘Streamium MC-i 200’ in the Indian

marketplace, the company is planning to focus on select retail outlets in order to

set up broadband connectivity in major metros. The company has recently set up

broadband connectivity at two retail outlets in Mumbai, informs Philips India Ltd

general manager (audio and video) consumer electronics division Sharmila

Sahai.

Adds Ms Sahai: “Currently, there is no market for broadband Internet audio

systems in India. Only when the market for broadband picks up will we extend

the connectivity across the country. For the purpose, we are currently in talks

with various broadband service providers such as Hughes Telecom, Bharatiya

Telecom and Dishnet BSL, among others.”

3.1. PRODUCTS

Philips India ltd. is the Indian counterpart of Royal Philips Electronics. Originally

established as Philips Electrical Co. (India) Pvt. Ltd, Philips was born in India in

Kolkata in 1930. With the tag line of "Sense and Simplicity", Philips is introduced

to the Consumer as a Company that adheres to its promise of delivering

Products and Services that make lives simpler and easier. Philips enjoys the

position of a household name in Consumer Products In India. Any of the

Appliance or Electronic item can be purchased from a Philips Dealer or Outlet.

The Consumer Products range of Philips include:

Televisions- LCD, Plasma, Flat Screen , Smart Touch XL

Recorders, DVD Players, I pods and Home Theatre Systems

Audio Products - Audio Systems, Remote Controls, Audio/Video

Accessories

Digital Photo Products and Frames

Portable Audio and Video Systems, Accessories like Headphones and

Speakers

PC Products - Mouse and Keyboard, Multi Media Headsets, External Hard

Disk Drives.

Mobile Phones

Male Shaving and Grooming - Dry Shavers, Beard Trimmers

Personal Care - Beauty and Hair Care Products

Kitchen Appliances - Blenders and Hand Blenders, Juicers and

Citruspresses, Food Processors and Mixers, Coffee Makers and Kettles,

Frying and Grilling Appliances, Toasters and Snacking Products

Household Products - Irons, Vacuum Cleaners, Water Purifiers

.Philips is a name synonymous to Lighting In India. The Lighting solutions by

Philips are aimed at providing state-of-art lighting technology combined with cost-

effectiveness. These lighting products have applications in not just Homes but

also Industrial and infrastructure based settings. The Philips Lighting Solutions

cover the following spheres:

Professional Lighting - Industrial, Shops and offices, Road and Area,

Hospitality, Sports Lighting, City Beautification, Philipsools and Petrol

Stations

Automotive Lighting - In Cars, Motorcycles and Trucks

Home Lighting

The Annual Reports of the Company show considerable growth owing to a well

planned and maintained Research and Development System. Philips India Ltd.

has Offices in all the major cities in India namely Kolkata, Chennai, New Delhi,

Bangalore, Pune and Gurgaon.

The Corporate Office is situated at Mumbai. The CEO of Philips Electronics India

Limited, Mr. K Ramachandran, along with the Chairman, Mr. S.M. Datta and the

entire team of directors has been successful in taking Philips to new heights in

Indian Consumer Appliances Market.

Philips SA3125

Phillips 2GB MP3 MP4 Player SA3125

Philips SA3115

Philips SA1355

Audio format MP3 / WAV / WMA

Philips HR1350

Model Code : HR 1350 ...

Philips 32PFL7332

HDTV Ready, Image resolution of 1366 x 768 pixels, 16:9 aspect ratio

Philips HR1821

Model Code: HR 1821Features: 220Watt JuicerJuicer with foam collector ...

Philips HQ7290

TABLE.MsoNormalTable { FONT-SIZE: 10pt; FONT-FAMILY: "Times New Roman"; m ...

Philips HQ9170

TABLE.MsoNormalTable { FONT-SIZE: 10pt; FONT-FAMILY: "Times New Roman"; m ...

Brand New Philips Hairdryer - HP4887/00 Salon -Fresh Beauty Ever

Brand New Philips Hairdryer - HP4887/00 Salon -Fresh Beauty Everyday· 1500 Watts-quick drying· Thermo flow control-combination of caring at 57deg celcius-for ...

Brand New Philips Norelco Satinelle Soft Epilator - HP6409/ 02

Brand New Philips Norelco Satinelle Soft Epilator - HP6409/ 02Product FeaturesCompact epilator quickly removes unwanted hair by the roots Pivoting massage system relaxes your ...

3.2. SERVICES

Philips products have reached millions of consumers in India.

Products discarded by consumers turn into electronic waste.

This E-Waste is hazardous for the environment, and to human health.

Efforts are needed to dispose off these products in an environment

friendly manner.

Philips India has initiated a voluntary take back and recycle program.

Philips E-waste Management Program in India

Philips has tied up with a recycler for collecting, transporting and recycling

unwanted / broken down consumer products.

 At Philips we offer consumers a convenient way of recycling their unwanted,

obsolete and damaged Philips products by dropping them off at convenient

locations. The program encompasses 8 major cities across India. Consumers

can approach one of 27 authorized Philips service centres, which will act as

collection points for consumer products which need recycling. Our efforts are to

expand the network in the near future.

Philips ensures that the consumer products received will be recycled in an

environment-friendly manner. Philips understand the corporate social

responsibility and takes steps towards providing a safer environment to the future

generations. We design our products to continuously realize improvements and

reduce their overall life cycle environmental impact. Designing products for

recycling is an integral part of this approach. Our aim is to use our planet’s

limited resources effectively and respect the principle of extended producer

responsibility. This also calls for manufacturers to engage in developing solutions

for effective and efficient recycling of their products. We will continue to promote

and invest into improved recycling systems to reduce the impact of electronic

waste on the environment.

4.1. MANAGEMENT STRUCTURE

Philips India is a subsidiary of Royal Philips Electronics, a Netherlands based

company. Royal Philips Electronics is a leader in Personal Care, Domestic

Appliances, Medical Systems, Consumer Electronics, Semiconductors and

Lighting.

Philips has been working in India for the last 75 years. It has an employee base

of over 3,300. It has 7 factories and several sales offices in India.

The Rs 1,668-crore Philips India has set up a separate organisational structure

for its consumer electronics division, which accounts for about 45 per cent of the

company's turnover. The new entity, christened Philips Consumer Electronics

India (PCE India) will be headed by senior vice-president, consumer electronics,

Rajeev Karwal, and will have its own management team.

The new organisation is being carved out to make it work as a separate profit

centre. The supply chain is being simplified and the sales structure reorganised

to help the company face competition.

The second-tier management in PCE India comprises the controller, food and

administration, the HR manager, marketing, sales, integrated supply chain

managers, and services and industrial managers.

According to a circular, the PCE India organisation has come into effect from

April 3, 2000. The organisational structure for PCE India is headed by the

general manager, PCE India.

Karwal-who retains his existing role as senior vice-president, consumer

electronics, in Philips India-said: "The sales structure has been simplified by

introducing a branch sales concept and dismantling the regional sales concept."

The idea behind the branch sales concept is to monitor the profitablity of every

centre.

It is, however, not clear whether the recast is a precursor to spinning off the

division into a separate company. Both Philips India managing director K

Ramachandran and Karwal denied any intention of forming a new company.

They said that this move was merely intended as an organisational recast for

robust growth. When attention was drawn to the rechristening of the consumer

electronics division as PCE India, they said: "It is merely a loose terminology and

not the name of a new company." Dutch giant Philips NV holds 51 per cent in

Philips India, while domestic financial institutions hold 20 per cent and foreign

institutional investors 3 per cent. The remaining is with the general public. PCE

India is expected to function through a network of 19 branches with three to four

executives in each branch. All the branch heads will report directly to Karwal,

who will be in charge of both the marketing and manufacturing activities of the

consumer electronics company.

The PCE India marketing division will consist of consumer, trade, TV marketing,

monitor marketing, audio and video marketing, and CDs marketing. PCE India

will set up branches in Chennai, Coimbatore, Hyderabad, Bangalore, Kochi,

Delhi, Haryana, Chandigarh, Ghaziabad, Lucknow, Jaipur, Mumbai, Pune,

Ahmedabad, Indore, Calcutta, Bhubaneshawar, Patna, and Guwahati. The

organisational recast is part of an overall elaborate internal recast the company

plans to implement to enhance its profitabilty. The consumer electronics division

has CTVs, radio sets, tape recorders, accessories for radio sets, printed circuit

boards, precision metal piece parts, compact disc players, systems, and

combination sets. Philips India has a complete range of audio, video, lighting,

and mobile communications products. While the lighting division contributes 38

per cent of the turnover, plastic metal factories contribute 5 per cent, the

domestic appliances and personal care division contributes 5 per cent, and

others, like mobilecommunications, contribute about 5 per cent. Philips is present

in 60 countries, and is active in lighting, consumer electronics, domestic

appliances, components, semiconductors, medical systems, and information-

technology services.

4.2. OFFICERS & DIRECTORS

Board of Directors

Non-Executive Director & Chairman: S. M. Datta

Executive Vice Chairman & Managing Director: K. Ramachandran

Executive Directors:

S. Venkataramani

Vineet Kaul

Coen Reuvers

Alexius Collette

Non-Executive Directors:

Andreas Wente

Rajeev Bakshi

In a survey conducted by Business World in 2006, Philips India was ranked as

No. 3 in the consumer durable sector and was given the following scores based

on the different parameters:

Philips India

Innovativeness 148.1

Quality & Depth of Management

148.9

Financial Performance 154.1

Ethics & Transparency 154.1

Quality of Products & Services

154.0

Talent Management/People Practices

132.0

Global Competitiveness 155.0

Total Score 1046.2

5.1. FINANCIAL STATEMENT

Balance sheet (Rs crore)   Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04Sources of fundsOwner's fund Equity share capital 10.40 10.40 10.40 10.40 10.40Share application money - - - - -Preference share capital - - - - -Reserves & surplus 487.20 405.39 347.70 314.25 276.74Loan fundsSecured loans 103.38 60.73 74.39 60.36 8.60Unsecured loans - - - 1.88 12.09Total 600.98 476.52 432.49 386.88 307.82Uses of funds Fixed assets Gross block 260.25 231.09 223.40 201.28 137.21Less : revaluation reserve 2.36 2.36 2.36 2.36 2.36Less : accumulated depreciation 128.36 112.49 96.24 78.55 63.13Net block 129.53 116.24 124.80 120.37 71.72Capital work-in-progress 21.47 7.95 2.67 6.47 13.23Investments 329.57 246.27 211.01 199.16 144.73Net current assets Current assets, loans & advances 363.93 261.26 251.42 234.82 220.38Less : current liabilities & provisions 243.53 155.19 157.41 173.93 142.25Total net current assets 120.39 106.07 94.01 60.89 78.13Miscellaneous expenses not written - - - - -Total 600.98 476.52 432.49 386.88 307.82Notes: Book value of unquoted investments 325.74 242.43 207.16 195.32 130.08Market value of quoted investments 3.89 3.90 3.91 3.97 15.33Contingent liabilities 11.33 11.19 64.45 57.81 3.51Number of equity sharesoutstanding (Lacs)

103.99 103.99 103.99 103.99 103.99

Profit loss account (Rs crore)   Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04

Income: 

Operating income  888.04 773.36 671.76 687.33 623.85

Expenses 

Material consumed  311.27 279.78 224.09 235.55 203.76

Manufacturing expenses  50.98 42.89 38.50 38.01 33.34

Personnel expenses 80.73 66.36 59.68 56.91 41.97

Selling expenses 171.13 142.46 138.12 125.70 133.08

Adminstrative expenses 127.58 117.94 112.68 136.11 138.58

Expenses capitalised - - - - -

Cost of sales 741.70 649.43 573.07 592.30 550.73

Operating profit 146.34 123.93 98.68 95.04 73.11

Other recurring income 15.20 10.42 10.32 11.59 14.00

Adjusted PBDIT 161.54 134.35 109.00 106.63 87.12

Financial expenses 3.67 2.92 2.78 5.72 5.68

Depreciation  19.77 19.07 18.37 16.55 9.95

Other write offs - - - - -

Adjusted PBT 138.09 112.36 87.85 84.36 71.49

Tax charges  57.51 47.12 39.56 36.35 24.31

Adjusted PAT   80.58   65.24   48.28   48.00   47.18

Non recurring items 31.64 22.87 11.85 5.45 4.93

Other non cash adjustments - - - 10.15 0.07

Reported net profit 112.22 88.10 60.13 63.60 52.18

Earnigs before appropriation 385.01 318.20 270.77 250.73 221.47

Equity dividend 26.00 26.00 23.40 22.88 19.76

Preference dividend - - - - -

Dividend tax 4.42 4.42 3.28 3.21 2.58

Retained earnings 354.59 287.78 244.09 224.64 199.13

Cash flow (Rs crore)   Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04

Profit before tax 169.74 135.23 99.69 99.95 76.49

Net cashflow-operating activity 74.67 84.04 43.01 85.88 27.84

Net cash used in investing

activity-93.40 -33.57 -23.62 -107.56 -2.65

Netcash used in fin. activity 12.61 -42.89 -17.91 20.06 -34.55

Net inc/dec in cash and equivlnt -6.12 7.59 1.48 -1.62 -9.37

Cash and equivalnt begin of year 14.28 6.68 5.20 6.82 16.37

Cash and equivalnt end of year 8.16 14.28 6.68 5.20 7.00

Quarterly results in brief (Rs crore)   Mar ' 09 Dec ' 08 Sep ' 08 Jun ' 08 Mar ' 08Sales 311.31 309.58 271.33 534.96 266.29Operating profit 39.76 47.73 40.68 33.79 35.31Interest 1.10 1.11 2.36 1.29 1.11Gross profit 42.55 49.04 54.69 47.65 35.54EPS (Rs) 19.52 24.44 32.72 28.03 17.07

Quarterly results in details  Mar ' 09 Dec ' 08 Sep ' 08 Jun ' 08 Mar ' 08Other income 3.89 2.42 16.37 15.15 1.34Stock adjustment -3.14 -14.85 -12.58 0.12 5.88Raw material 83.13 69.46 61.43 59.32 56.68Power and fuel - - - - -Employee expenses 23.35 24.53 23.20 23.02 23.32Excise - 10.71 - 277.52 -Admin and selling expenses 40.40 41.67 32.70 31.36 40.16Research and development expenses

- - - - -

Expenses capitalised - - - - -Other expenses 127.81 130.33 125.90 109.83 104.94Provisions made - - - - -Depreciation 10.04 6.39 6.83 4.77 5.18Taxation 12.21 17.23 13.83 13.73 12.61Net profit / loss 20.30 25.42 34.03 29.15 17.75Extra ordinary item - - - - -Prior year adjustments - - - - -Equity capital 10.40 10.40 10.40 10.40 10.40Equity dividend rate - - - - -Agg.of non-prom. shares (Lacs) 30.07 30.07 30.07 29.02 29.02Agg.of non promotoholding (%) 28.92 28.92 28.92 27.91 27.91OPM (%) 12.77 15.42 14.99 6.32 13.26GPM (%) 13.50 15.72 19.01 8.66 13.28NPM (%) 6.44 8.15 11.83 5.30 6.63

5.2. RATIO ANALYSIS

Ratios (Rs crore)   Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04

Per share ratios 

Adjusted EPS (Rs)  77.49 62.73 46.43 46.16 45.37

Adjusted cash EPS (Rs)  96.51 81.07 64.10 62.08 54.94

Reported EPS (Rs)  107.92 84.73 57.82 61.16 50.17

Reported cash EPS (Rs)  126.94 103.06 75.49 77.08 59.74

Dividend per share    25.00   25.00   22.50   22.00   19.00

Operating profit per share (Rs)    140.73   119.18   94.90   91.39   70.31

Book value (excl rev res) per share

(Rs) 478.51 399.84 344.37 312.20 276.12

Book value (incl rev res) per share

(Rs.)   480.79   402.11   346.64   314.47   278.40

Net operating income per share

(Rs) 853.99 743.70 645.99 660.98 599.92

Free reserves per share (Rs)    468.23   389.55   334.08   301.91   265.84

Profitability ratios 

Operating margin (%)    16.47   16.02   14.69   13.82   11.71

Gross profit margin (%)    14.25   13.55   11.95   11.41   10.12

Net profit margin (%)    12.42   11.24   8.81   9.09   8.17

Adjusted cash margin (%)    11.11   10.75   9.77   9.23   8.95

Adjusted return on net worth (%)    16.19   15.68   13.48   14.78   16.43

Reported return on net worth (%)    22.55   21.18   16.79   19.58   18.17

Return on long term funds (%)    25.23   25.70   22.49   24.24   25.51

Leverage ratios 

Long term debt / Equity    0.12   0.07   0.12   0.14   0.05

Total debt/equity    0.20   0.14   0.20   0.19   0.07

Owners fund as % of total source    82.79   87.25   82.79   83.91   93.27

Fixed assets turnover ratio    3.41   3.35   3.01   3.42   4.55

Liquidity ratios 

Current ratio    1.49   1.68   1.60   1.35   1.55

Current ratio (inc. st loans)    1.13   1.24   1.16   1.15   1.44

Quick ratio    0.47   0.66   0.60   0.46   0.51

Inventory turnover ratio    7.96   11.17   10.15   10.82   10.08

Payout ratios 

Dividend payout ratio (net profit)    27.10   34.52   44.36   41.01   42.81

Dividend payout ratio (cash profit)    23.04   28.38   33.98   32.54   35.95

Earning retention ratio    62.26   53.38   44.75   45.67   52.65

Cash earnings retention ratio    69.70   63.93   59.98   59.60   60.90

Coverage ratios 

Adjusted cash flow time total debt    1.03   0.72   1.12   0.96   0.36

Financial charges coverage ratio    43.96   45.97   39.17   18.63   15.34

Fin. charges cov.ratio (post tax)    36.92   37.67   29.21   15.01   11.94

Component ratios 

Material cost component (%

earnings)   37.92   34.72   36.03   34.09   33.98

Selling cost Component    19.27   18.42   20.56   18.28   21.33

Exports as percent of total sales    13.27   10.42   9.20   10.74   11.59

Import comp. in raw mat.

consumed   8.10   7.70   4.99   5.94   6.30

Long term assets / total Assets    0.56   0.58   0.57   0.58   0.51

Bonus component in equity capital

(%)   83.49   83.49   83.49   83.49   83.49

5.3. CURRENT FINANCIALS

Share holdingShare holding pattern as

on :31/03/2009 31/12/2008 30/09/2008

Face value 10.00 10.00 10.00

No. Of

Shares

%

Holding

No. Of

Shares

%

Holding

No. Of

Shares

%

Holding

Promoter's holding

Indian Promoters 3654683 35.15 3654683 35.15 3654683 35.15

Foreign Promoters 3736704 35.93 3736704 35.93 3736704 35.93

Sub total 7391387 71.08 7391387 71.08 7391387 71.08

Non promoter's holding

Institutional investors

Banks Fin. Inst. and

Insurance9703 0.09 9703 0.09 9703 0.09

FII's 1107889 10.65 1146475 11.03 1113008 10.70

Sub total 1117717 10.75 1156303 11.12 1122836 10.80

Other investors

Private Corporate Bodies 127727 1.23 118542 1.14 143888 1.38

NRI's/OCB's/Foreign Others 25110 0.24 24343 0.23 25298 0.24

Direcctors/Employees 7441 0.07 7441 0.07 7441 0.07

Govt 6000 0.06 6000 0.06 6000 0.06

Sub total 166278 1.60 156326 1.50 182627 1.76

General public 1723402 16.57 1694768 16.30 1701934 16.37

Grand total 10398784 100.00 10398784 100.00 10398784 100.00

Dividend

Year Month Dividend (%)

2009 Jul 250

2008 Jun 250

2007 Jun 250

2006 Jun 225

2005 Jul 220

2004 Aug 190

2003 Aug 170

2002 Aug -

2001 Aug 160

2000 Apr -

1999 Aug 120

1998 Oct 10

6.1.PRICES

Date Open High Low Close Volume Adj Close*

8-Jul-09 12.76 12.82 12.57 12.59 4,063,500 12.59

7-Jul-09 12.90 13.01 12.73 12.86 4,338,400 12.86

6-Jul-09 12.69 12.85 12.52 12.83 2,990,200 12.83

3-Jul-09 12.77 12.84 12.60 12.77 2,633,400 12.77

2-Jul-09 13.07 13.15 12.62 12.74 4,548,800 12.74

1-Jul-09 13.20 13.28 13.04 13.22 2,477,900 13.22

30-Jun-09 13.28 13.40 13.04 13.12 3,945,600 13.12

29-Jun-09 12.91 13.42 12.82 13.28 3,082,600 13.28

26-Jun-09 12.86 13.15 12.81 12.99 3,306,400 12.99

25-Jun-09 12.90 12.90 12.50 12.75 3,059,200 12.75

24-Jun-09 12.64 12.94 12.54 12.89 4,369,300 12.89

23-Jun-09 12.62 12.75 12.48 12.64 4,428,200 12.64

22-Jun-09 13.16 13.23 12.72 12.72 3,861,200 12.72

19-Jun-09 13.18 13.28 12.95 13.14 7,580,200 13.14

18-Jun-09 12.97 13.11 12.70 13.05 4,501,300 13.05

17-Jun-09 13.28 13.34 12.88 12.99 4,378,900 12.99

16-Jun-09 13.27 13.40 13.06 13.24 3,212,700 13.24

15-Jun-09 13.54 13.60 13.24 13.33 3,879,000 13.33

12-Jun-09 13.72 13.86 13.52 13.66 5,248,600 13.66

11-Jun-09 13.78 13.95 13.66 13.75 3,629,900 13.75

10-Jun-09 13.70 13.85 13.68 13.75 5,598,900 13.75

9-Jun-09 13.55 13.68 13.30 13.40 4,423,000 13.40

8-Jun-09 13.93 14.02 13.60 13.65 4,140,100 13.65

5-Jun-09 14.01 14.36 13.89 14.07 3,699,600 14.07

4-Jun-09 14.02 14.07 13.77 13.96 3,990,500 13.96

3-Jun-09 14.20 14.28 13.93 14.06 3,132,300 14.06

2-Jun-09 13.92 14.30 13.92 14.23 4,481,300 14.23

1-Jun-09 13.48 14.18 13.44 14.10 5,268,700 14.10

29-May-09 13.70 13.78 13.19 13.26 6,388,400 13.26

28-May-09 13.78 13.83 13.44 13.55 4,541,100 13.55

27-May-09 14.01 14.18 13.85 14.00 3,408,600 14.00

26-May-09 13.73 14.06 13.41 14.02 3,779,400 14.02

25-May-09 13.78 13.99 13.51 13.89 1,200,400 13.89

22-May-09 13.90 13.94 13.65 13.80 3,163,500 13.80

21-May-09 14.15 14.28 13.68 13.77 3,134,400 13.77

20-May-09 14.09 14.42 14.07 14.36 3,370,200 14.36

19-May-09 14.28 14.45 14.06 14.18 3,741,000 14.18

18-May-09 13.60 14.25 13.53 14.18 3,329,700 14.18

15-May-09 13.81 13.94 13.43 13.82 4,893,100 13.82

14-May-09 13.85 13.87 13.35 13.64 3,767,200 13.64

13-May-09 14.15 14.25 13.66 13.82 5,248,900 13.82

12-May-09 13.80 14.19 13.73 13.95 3,658,600 13.95

11-May-09 14.31 14.32 13.77 13.88 4,229,400 13.88

8-May-09 14.25 14.75 14.11 14.30 5,073,700 14.30

7-May-09 14.91 14.92 14.35 14.44 5,622,500 14.44

6-May-09 14.53 14.96 14.37 14.77 4,732,400 14.77

5-May-09 14.61 14.85 14.22 14.47 5,012,400 14.47

4-May-09 14.00 14.48 13.88 14.48 5,484,700 14.48

30-Apr-09 13.67 13.93 13.44 13.76 5,995,900 13.76

29-Apr-09 13.20 13.41 13.06 13.41 3,591,000 13.41

28-Apr-09 13.25 13.36 12.97 13.19 5,622,300 13.19

27-Apr-09 13.24 13.59 13.03 13.53 3,885,900 13.53

24-Apr-09 12.88 13.66 12.77 13.56 6,610,700 13.56

23-Apr-09 12.77 13.29 12.77 12.87 4,540,300 12.87

22-Apr-09 12.55 13.00 12.51 12.92 5,750,000 12.92

21-Apr-09 12.52 12.64 12.15 12.56 4,414,600 12.56

20-Apr-09 13.00 13.02 12.51 12.58 5,207,100 12.58

17-Apr-09 12.61 13.11 12.50 13.06 7,033,100 13.06

16-Apr-09 12.77 12.82 12.41 12.61 5,775,100 12.61

15-Apr-09 12.35 12.89 12.24 12.80 5,659,900 12.80

14-Apr-09 12.00 13.35 11.97 12.63 12,086,800 12.63

9-Apr-09 12.28 12.41 11.95 12.23 7,169,100 12.23

8-Apr-09 11.86 12.32 11.74 12.10 6,960,200 12.10

7-Apr-09 12.06 12.19 11.55 12.03 7,480,600 12.03

6-Apr-09 12.72 12.77 11.88 12.08 6,945,400 12.08

3-Apr-09 12.36 12.69 12.18 12.55 7,400,200 12.55

* Close price adjusted for dividends and splits.

6.2 Charts

Basic Charts

Splits:none

Last Trade: 13.03 €

Trade Time: 4:39PM

Change: 0.45 (3.54%)

Prev Close: 12.59

Open: 12.58

Bid: 13.03

Ask: 13.04

1y Target Est: 14.04€

Day's Range: 12.51 - 13.12

52wk Range: 10.93 - 25.44

Volume: 5,299,133

Avg Vol (3m): 6,986,390

Market Cap: €12.67 B

P/E: N/A

EPS (Growth) : N/A€ (450.65%)

Dividend: 0.70€

Technical Charts

Splits:none

Last Trade: 13.03 €

Trade Time: 4:39PM

Change: 0.45 (3.54%)

Prev Close: 12.59

Open: 12.58

Bid: 13.03

Ask: 13.04

1y Target Est: 14.04€

Day's Range: 12.51 - 13.12

52wk Range: 10.93 - 25.44

Volume: 5,299,133

Avg Vol (3m): 6,986,390

Market Cap: €12.67 B

P/E: N/A

EPS (Growth) : N/A€ (450.65%)

Dividend: 0.70€

6.3 ANALYSIS ESTIMATION

Philips India Ltd. vs...Action Company Close (Rs)

Compare+ ITC Ltd. (Sensex)

209.60

Compare + Kothari Products (B)

228.15

Compare + RDB Industries (B)

75.85

Compare + RTCL Ltd. (B)

4.90

Compare + Raghunath Intern (B)

6.28

Compare + VST Industries (B)

397.00

Compare + Golden Tobacco Ltd. (T)

66.60

Compare + Sinnar Bidi Udyo (T)

244.95

Compare + Virat Crane Indu (T)

6.70

Report card

PE ratio 12.24 08/07/09

EPS (Rs) 104.71 Mar, 09

Sales (Rs crore) 311.31 Mar, 09

Face Value (Rs) 10

Net profit margin (%) 12.42 Mar, 08

Last bonus 1:1 30/09/93

Last dividend (%) 250 01/07/09

Return on average equity 22.55 Mar, 08

7.1. SWOT ANALYSIS

Strengths:

• India was a market where the first mover enjoyed advantages over latecomers.

• The first image of the product lasted long in the eyes of the consumer and the

first to enter the market could gain the largest market share

• PHILIPS is committed to enhance its image to the Chinese market as investors

• PHILIPS was building a wholly owned manufacturing plant in India to show the

Chinese the commitment Korea had to the Chinese society.

• Labor costs in India were less and would defray the cost of producing high-end

• Samsung has been making color TVs for many years in Korea before moving to

the Chinese market.

Weaknesses:

• PHILIPS must continue to control all costs to maintain success

• India has a reputation of being a protected market (protectionism)

• India was a market where the first mover enjoyed advantages over late comers,

PHILIPS is trying to overcome the first comer advantage Japan manufacturers

have over them by being those first comers

• Companies such as Sony and Matsushita had built sales and service networks

that were favorable to their sales programs in India, while Samsung would have

to catch up in that area

• Samsung is not as experienced in manufacturing high-end TVs for a higher-

endmarket segment

Opportunities:

• Based on the data that on 28% of the 220 million rural households own a color

TV. PHILIPS focus on the domestic India market should be to penetrate the rural

household market, which would mean that for those purposes the low-end

production of sets in the 13” to 20” range should be produced to appeal to that

segment’s purchasing ability.

• Larger more high-end models can be produced to appeal to an urban customer

in India, as well as being an export to the U.S. and European higher end

customers.

• With success in the higher-end manufacturing and sales of premium TVs in

India; PHILIPS can establish themselves as high-end producers around the world

Threats:

• PHILIPS faces intense competition in the color TV market

• A premium-priced product wouldn’t sell in large volumes, so pricing can be a

problem.

• Since PHILIPS didn’t have an established marketing strategy, issues of how to

market the product may arise.

• Loss of profitability because related to over-employment at most facilities

• Is the per capita income level such that it can support sales of product at any

level

• If PHILIPS fails to be successful in the Chinese market with high-end product it

will be known around the world • India was a market where the first mover

enjoyed advantages over late comers.

• The first image of the product lasted long in the eyes of the consumer and the

first to enter the market could gain the largest market share

• PHILIPS is committed to enhance its image to the Chinese market as investors

• PHILIPS was building a wholly owned manufacturing plant in India to show the

Chinese the commitment Korea had to the Chinese society.

• Labor costs in India were less and would defray the cost of producing high-end

7.2. REGULATING SYSTEM/ ENVIRONMENT FACTORS

Royal Philips Electronics has unveiled two additions to its GreenChip family of

'energy-efficient ICs'— the Greenchip PC and the Greenchip SR.

The GreenChip PC is an all-in-one chipset designed to increase the overall

efficiency of desktop PC power supplies beyond 80 per cent. According to

Philips, most current desktop PC power supplies are only 60 to 70 per cent

efficient when operating, converting 30 to 40 per cent of the consumed AC power

into heat. Power supplies operating at 80 per cent efficiency or better can help

save energy and reduce electricity costs.

The GreenChip PC also features a topology that makes compliance to energy

efficiency specifications, such as 80 PLUS and ENERGY STAR, easier and more

cost-effective for PC power supply manufacturers. The GreenChip PC is based

on Philips' patented technology that integrates the standby supply into the main

converter, thereby reducing the number of external components required. Its

local secondary regulation also solves primary-side feedback issues and

improves cross-regulation.

The GreenChip SR, the company claims, is the only secondary control IC that

integrates both synchronous rectification and primary feedback/control

functionality. Used in notebook adapters, it is said to improve energy efficiency

by three to five per cent. This product also has a wide operation range of 8.5V to

38V, thereby minimizing the number of required external components and

allowing simpler designs. Its 10V driver output likewise makes the GreenChip SR

compatible with all brands of MOSFETs.

The GreenChip SR is already in the market, while samples of the GreenChip PC

chipset, consisting of three ICs, will be available in Q2 of 2006.

8.1. MANAGEMENT VIEWS

2009-06-19 01:10:28 Acts of bravery get recognition

2009-06-18 20:05:48 Taj, Trident-Oberoi hotels win Godphrey Phillips Bravery

awards

2009-06-10 19:56:34 Markets end 2 per cent up on ve global cues; commodities,

infra gain

2009-06-10 15:40:56 Sensex gives up partial gains

2009-06-08 22:30:41 ITC continues to hike cigarette prices, Classic next in line

2009-05-28 04:26:00 Godfrey Phillips enters new markets 2

009-05-28 03:16:57 Godfrey forays into TN

2009-05-26 23:40:53 ITC will have to halt output to put pictorial health warnings

2009-05-26 21:42:06 Markets end sharply lower ahead of expiry; telecom, power

dip

2009-05-26 20:35:50 KK Modi Group to acquire 10.83% stake in Godfrey Phillips

India

2009-05-26 10:41:03 Stocks to watch: Parsvnath Developers, Puravankara

Projects, PTC, Tata Motors, L T, Dolphin Offshore, Karnataka Bank

2009-05-25 17:51:50 Markets end flat; broader indices gain 30-37 per cent in 8

days

2009-05-19 00:51:05 Calcutta HC Bench admits ITC appeal

2009-04-17 01:36:08 Award for 2 Gujarati bravehearts

2009-03-18 00:41:10 Godfrey Phillips can use `Pilot' brand

2009-03-06 00:57:20 e-auction intoxicates state tobacco farmers

2009-02-28 18:06:28 Media Direction ( R K SWAMY Media Group) shines at the

first Internationalist awards for innovation in media with 3 Metals, GOLD, SILVER

and BRONZE

2009-02-21 21:11:23 Godfrey Philips India Dec Q net dips

2009-02-21 01:41:03 ITC, GPI in legal row over pilot brand

2009-02-13 02:01:23 Trade name dispute: ITC files suit against Godfrey Phillips

8.2. PRESS RELEASES

Godfrey Phillips India is the second largest player in the Indian cigarette industry

with an annual turnover of over INR 1800 crores (approx. US $369.6 million).

Incorporated in India in 1936, the Company has two major stakeholders, the K.

K. Modi Group and Philip Morris, USA and over 12,000 shareholders in the

country.

Established in London in 1844, by Mr. Godfrey Phillips, a cigar manufacturer,

Godfrey Phillips India was incorporated as a Private Ltd. Co. in 1936. Over

subsequent decades, Godfrey Phillips India evolved from being purely a

manufacturing Company to a sought-after tobacco marketing brand. 1968 was a

landmark year with

Godfrey Phillips India becoming an affiliate of international tobacco giant, Philip

Morris. In 1973

Godfrey Phillips India, successfully launched Four Square Kings, India's first King

Size filter cigarette and in 1979, the K. K. Modi Group took over the management

of Godfrey Phillips India with a substantial financial stake.

Vision

To become a leading tobacco player in India and beyond.

Key Brands

Godfrey Phillips India owns some of the most popular and premium cigarette

brands in the country like Four Square, Red & White, Jaisalmer, Cavanders and

Tipper. Recent introductions include targeted and innovative brands like Stellar,

the first slim cigarette and I Gen, the first euro norm cigarette in India.

The Godfrey Phillips India distribution network comprises of 520 exclusive

distributors and over 800,000 retail outlets.

Industry Recognition

Tipper received the coveted Golden Peacock Award for the best product

innovation in the year 2003 and then again in 2006 for innovative product and

service. North Pole has won the Golden Peacock award for innovative packaging

in 2005. It has also won the Silver medal at the Monde Selection Brussels, World

Selection of Quality 2006. Year 2008 saw Golden Peacock Award go to Four

Square for innovative BOPP lamination.

Social Commitment

The organization has always been grounded in a strong sense of social

responsibility and has undertaken several initiatives to this end. The Godfrey

Phillips Bravery Awards since its inception in 1990 has awarded over 1000

civilians in India. The Bravery Awards has since then evolved to include two

initiatives, Blood Donation Drive and Women Empowerment through financial

independence. WHITE, an acronym for We Honour the Importance of Tobacco

Etiquette – is an innovative CSR programme for responsible smoking and is one

of the first to be introduced in India. WHITE is currently an internal campaign as

Godfrey Phillips believes in walking the talk.

8.3. THIRD PARTY REPORT & ANALYSIS

CompetitionLast Price Market Cap.

(Rs. cr.)

Sales

Turnover

Net Profit Total Assets

ITC 213.40 80,545.69 15,582.73 3,263.59 13,912.63

Godfrey Phillip 1,277.40 1,328.34 1,154.80 108.90 603.32

VST 404.65 624.86 383.06 61.82 239.45

Kothari Product 226.20 150.02 85.25 9.36 563.18

Golden Tobacco 64.25 113.14 130.63 0.25 186.06

Comparison with Competitors

Balance Sheet ------------------- in Rs. Cr. -------------------

Godfrey Phillip ITC VSTKothari

Product

Golden

Tobacco

Mar '08 Mar '09 Mar '09 Mar '08 Mar '08

Sources Of Funds

Total Share Capital 10.40 377.44 15.44 6.63 17.59

Equity Share Capital 10.40 377.44 15.44 6.63 17.59

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 487.2013,302.55 219.92 556.54 34.28

Revaluation Reserves 2.36 55.09 4.10 0.00 57.99

Networth 499.9613,735.08 239.46 563.17 109.86

Secured Loans 103.38 11.63 0.00 0.00 73.70

Unsecured Loans 0.00 165.92 0.00 0.00 2.50

Total Debt 103.38 177.55 0.00 0.00 76.20

Total Liabilities 603.3413,912.63 239.46 563.17 186.06

Godfrey Phillip ITC VSTKothari

Product

Golden

Tobacco

Mar '08 Mar '09 Mar '09 Mar '08 Mar '08

Application Of Funds

Gross Block 260.2510,558.65 249.21 42.20 142.88

Less: Accum. Depreciation 128.36 3,286.74 123.77 18.46 73.99

Net Block 131.89 7,271.91 125.44 23.74 68.89

Capital Work in Progress 21.47 1,214.06 5.42 0.00 5.41

Investments 329.57 2,837.75 192.96 356.25 8.75

Inventories 238.06 4,599.72 134.26 9.79 58.08

Sundry Debtors 23.06 668.67 4.89 51.79 26.32

Cash and Bank Balance 7.08 68.73 3.81 4.68 6.73

Total Current Assets 268.20 5,337.12 142.96 66.26 91.13

Loans and Advances 94.64 2,150.21 33.19 189.12 168.50

Fixed Deposits 1.08 963.66 9.89 1.17 6.32

Total CA, Loans & Advances 363.92 8,450.99 186.04 256.55 265.95

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 179.14 4,121.59 216.21 26.02 159.61

Provisions 64.39 1,740.49 54.20 47.34 3.33

Total CL & Provisions 243.53 5,862.08 270.41 73.36 162.94

Net Current Assets 120.39 2,588.91 -84.37 183.19 103.01

Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00

Total Assets 603.3213,912.63 239.45 563.18 186.06

Contingent Liabilities 11.33 261.36 19.60 61.72 972.04

Book Value (Rs) 478.52 36.24 152.41 849.18 29.48