Philips India Limited Annual Report FY 2015 2016 (English) CA20160901 CO 001 En In
User Manual: Philips Philips India Limited - Annual Report FY 2015 - 2016 (English) Investor Relations
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Philips India Limited
Sales
` in Mln
70000
60000
63,755
55,793
Sales by Activities - Apr’15-Mar’16
Others
0.7%
62,819
Healthcare
25.1%
58,387
53,674
50000
40000
Lighting
43.7%
30000
Software
Development
Services
12.8%
20000
10000
0
2011-12
(15M)
2012-13
2013-14
2014-15
Consumer
Lifestyle
17.7%
2015-16
Profit Before Tax
` in Mln
6,278
6000
5000
4000
3,170
3000
2000
1,854
1,858
2011-12
(15M)
2012-13
1000
0
2013-14
2014-15
2015-16
Fixed Assets
11,010
11000
10000
13,034
11,070
9,977
Mar-12
Mar-13
Mar-16
Current Assets
` in Mln
28000
9,550
24,018
24000
8000
7,390
20000
6,715
6000 5,578
Mar-15
Reserves and Surplus
28,529
10,362
7000
Mar-14
32000
11,327
9000
6,082
5,267
5000
19,431
23,379
20,779
16000
12000
4000
3,188
3000
2000
8000
4000
1000
0
17,973
17,061
Share Capital
` in Mln
12000
` in Mln
19000
18000
17000
16000
15000
14000
13000
12000
11000
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
7000
6,275
Net Worth
Mar-12
Mar-13
Mar-14
Accumulated Depreciation
Mar-15
Mar-16
Gross Fixed Assets
0
Mar-12
Inventories
Mar-13
Mar-14
Mar-15
Mar-16
Debtors, Cash and Bank Balances, Loans and Advances
PHILIPS INDIA LIMITED
CONTENTS
Board of Directors
:
2
Notice of Annual General Meeting
:
3
Directors’ Report
: 15
Standalone Financial Statements
Independent Auditors’ Report
: 46
Balance Sheet as at 31 March 2016
: 52
Statement of Profit and Loss for the year ended 31 March 2016
: 53
Cash flow Statement for the year ended 31 March 2016
: 54
Notes forming part of the Financial Statements
: 55
Consolidated Financial Statements
Independent Auditors’ Report
: 87
Balance Sheet as at 31 March 2016
: 92
Statement of Profit and Loss for the year ended 31 March 2016
: 93
Cash flow Statement for the year ended 31 March 2016
: 94
Notes forming part of the Financial Statements
: 95
Statement pursuant to Section 129(3) of the Companies Act, 2013
relating to Subsidiary/Associate Companies (AOC-1)
: 126
Annual General Meeting on Thursday, September 29, 2016 at 10.30 a.m.
At Vidya Mandir, 1, Moira Street, Kolkata 700 017
For route map to the venue, please refer the AGM Notice that forms part of the
Annual Report.
You are requested to kindly carry your copy of the Annual report to the Meeting.
Annual
Report 2015-16
1
PHILIPS INDIA LIMITED
BOARD OF DIRECTORS
Chairman & Non-Executive Director
S. M. Datta
Vice – Chairman & Managing Director
V. Raja
Whole-Time Director and Company Secretary
Rajiv Mathur
Whole-Time Director and CFO
Hariharan Madhavan
Non-Executive Directors
Vivek Gambhir
Vikram Mukund Limaye
Geetu Gidwani Verma
AUDITORS
B S R & Co. LLP
Chartered Accountants
BANKERS
Citibank N.A.
Bank of America N.A.
Deutsche Bank AG
State Bank of India
HDFC Bank
Standard Chartered Bank
BNP Paribas
REGISTERED OFFICE
7, Justice Chandra Madhab Road, Kolkata-700 020.
2
NOTICE OF ANNUAL GENERAL MEETING
NOTICE is hereby given that the Eighty-Sixth Annual General Meeting of PHILIPS INDIA LIMITED will be held at Vidya Mandir, 1,
Moira Street, Kolkata – 700 017 on Thursday, September 29, 2016 at 10.30 a.m. to transact the following business:
ORDINARY BUSINESS:
1.
To receive, consider and adopt the standalone and consolidated Financial Statements of the Company for the financial year
ended March 31, 2016, including the audited Balance Sheet as at March 31, 2016, the Statement of Profit and Loss for the
year ended on that date and the reports of the Auditors and Directors thereon.
2.
To declare dividend for the financial year ended March 31, 2016.
3.
To appoint a Director in place of Mr. Hariharan Madhavan (DIN 07217072), who retires by rotation and being eligible, offers
himself for re-appointment.
4.
To appoint M/s S.R. Batliboi & Co. LLP, Chartered Accountants (Firm Registration Number 301003E /E300005) as Statutory
Auditors of the Company and fix their remuneration; and pass the following resolution:
“RESOLVED THAT pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules made thereunder
and pursuant to the recommendations of the Audit Committee of the Board of Directors, M/s S.R. Batliboi & Co. LLP,
Chartered Accountants (Firm Registration Number 301003E /E300005), be and are hereby appointed as the Statutory
Auditors of the Company, to hold office for a term of five years, from the conclusion of this Annual General Meeting, subject
to ratification of the appointment by the members at every Annual General Meeting held after this Annual General Meeting
and that the Board of Directors be and are hereby authorized to fix such remuneration as may be determined by the Audit
Committee in consultation with the auditors and that such remuneration may be paid on a progressive billing basis.
RESOLVED FURTHER THAT all the Directors of the Company be and are hereby authorized to file all the requisite forms
and other relevant documents with the Registrar of Companies and any other authority as may be required to give effect
to the appointment of Auditors.”
SPECIAL BUSINESS:
5.
APPOINTMENT OF MR.V. RAJA (DIN 00669376) AS A DIRECTOR
To consider and if thought fit, to pass, with or without modification, the following resolution as an Ordinary Resolution:
“RESOLVED THAT Mr. V. Raja (DIN 00669376), who was appointed as an Additional Director of the Company under
Section 161(1) of the Companies Act, 2013 (the “Act”) with effect from December 15, 2015 by the Board of Directors and
who holds office upto the date of this Annual General Meeting of the Company and who is eligible for appointment and in
respect of whom the Company has received a notice in writing under Section 160(1) of the Act from a Member proposing
his candidature for the office of Director, be and is hereby appointed as a Director of the Company.
RESOLVED FURTHER THAT the Board of Directors be and are hereby authorized to take all such steps as may be necessary,
proper or expedient to give effect to this Resolution.’’
6.
APPOINTMENT OF MR.V. RAJA (DIN 00669376) AS VICE-CHAIRMAN AND MANAGING DIRECTOR OF THE COMPANY
To consider and if thought fit, to pass, with or without modification, the following resolution as a Special Resolution:
“RESOLVED THAT pursuant to the recommendation of the Nomination and Remuneration Committee and approval of
the Board and subject to the provisions of Sections 196, 197, 203 and any other applicable provisions of the Companies Act,
2013 and the Companies (Appointment and Remuneration of Personnel) Rules, 2014, including any statutory modification(s)
or re-enactment thereof for the time being in force, read with Schedule V to the Companies Act, 2013 and subject to
the requisite approval of the Central Government, if required, the approval of the Company be and is hereby accorded
to appoint Mr. V. Raja, having DIN Number 00669376, as Managing Director of the Company with effect from December
15, 2015, for a period of 5 years as well as the payment of salary, commission and perquisites (hereinafter referred to as
“remuneration”), upon the terms and conditions as detailed in the Explanatory Statement attached hereto, which is hereby
approved and sanctioned with authority to the Board of Directors to alter and vary the terms and conditions of the said
appointment in such manner as may be agreed to between the Board of Directors and Mr.V. Raja.
RESOLVED FURTHER THAT Mr.V. Raja shall also serve as the Vice-Chairman of the Board.
RESOLVED FURTHER THAT in the event of loss or inadequacy of profits in the Company in any financial year during the
term of Mr. V. Raja’s office as Vice-Chairman and Managing Director, the remuneration and perquisites as set out in the
Explanatory Statement annexed to this notice, be paid or granted to Mr. V. Raja as minimum remuneration, provided that
the total remuneration by way of salary, perquisites and any other allowances shall not, unless approved by the Central
Annual
Report 2015-16
3
PHILIPS INDIA LIMITED
Government, exceed the ceiling as provided in Schedule V to the Companies Act, 2013 or any equivalent statutory reenactment(s) thereof.
RESOLVED FURTHER THAT the Board of Directors be and are hereby authorized to take all such steps as may be necessary,
proper or expedient to give effect to this Resolution.’’
7.
APPOINTMENT OF MS. GEETU GIDWANI VERMA (DIN 00696047) AS A DIRECTOR
To consider and if thought fit, to pass, with or without modification, the following resolution as an Ordinary Resolution:
“RESOLVED that pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Companies
Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time
being in force) read with Schedule IV to the Companies Act, 2013, Ms. Geetu Gidwani Verma (holding DIN 00696047),
who was appointed as an Additional Director of the Company under Section 149 & 161 of the Companies Act, 2013, on
recommendation of the Nomination and Remuneration Committee, by the Board of Directors effective September 29, 2015
and who holds office upto the date of this Annual General Meeting, in terms of Section 161 of the Companies Act, 2013 and
in respect of whom the Company has received a notice in writing from a member under Section 160 of the Companies Act,
2013 proposing her candidature for the office of the Director, be and is hereby appointed as an Independent Director of the
Company, for a term of five years, with effect from September 29, 2015.
RESOLVED FURTHER THAT the Board of Directors be and are hereby authorized to take all such steps as may be necessary,
proper or expedient to give effect to this Resolution.’’
8.
REVISION IN REMUNERATION OF MR. RAJIV MATHUR
To consider and if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution:
“RESOLVED THAT in partial modification of the resolution passed earlier by the shareholders at the Annual General Meeting
of the Company held on September 28, 2015, pursuant to the recommendation of the Nomination and Remuneration
Committee and approval of the Board of Directors of the Company and the provisions of Sections 196, 197, Schedule V and
other applicable provisions, if any, of the Companies Act, 2013, subject to such consents, approvals or permissions as may be
necessary, including an approval from the Central Government, if required, the approval of the Company be and is hereby
accorded for the revision in remuneration payable to Mr. Rajiv Mathur, having DIN No. 06931798, Whole-time Director,
to take effect from 1st April, 2016, for the balance term of his appointment on the Board, on the terms and conditions
as detailed in the Explanatory Statement attached hereto, which is hereby approved and sanctioned with authority to the
Board of Directors to alter and vary the terms and conditions of the said appointment in such manner as may be agreed to
between the Board of Directors and Mr. Rajiv Mathur.
RESOLVED FURTHER THAT in the event of loss or inadequacy of profits in the Company in any financial year during the
term of Mr. Rajiv Mathur’s office as Whole-time Director, the remuneration and perquisites set out in the Explanatory
Statement annexed hereto, be paid or granted to Mr. Rajiv Mathur as minimum remuneration, provided that the total
remuneration by way of salary, perquisites and any other allowances shall not, unless approved by the Central Government,
exceed the ceiling as provided in Schedule V to the Companies Act, 2013 or any equivalent statutory re-enactment(s)
thereof.
RESOLVED FURTHER THAT the Board of Directors be and are hereby authorized to take all such steps as may be necessary,
proper or expedient to give effect to this Resolution.’’
9.
REVISION IN REMUNERATION OF MR. HARIHARAN MADHAVAN
To consider and if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution:
“RESOLVED THAT in partial modification of the resolution passed earlier by the Board at its meeting held on August 18,
2015, subsequently approved by the shareholders at the Annual General Meeting of the Company held on September 28,
2015, pursuant to the recommendation of the Nomination and Remuneration Committee and approval of the Board of
Directors of the Company and the provisions of Sections 196, 197, Schedule V and other applicable provisions, if any, of the
Companies Act, 2013, subject to such consents, approvals or permissions as may be necessary, including an approval from the
Central Government, if required, the approval of the Company be and is hereby accorded for the revision in remuneration
payable to Mr. Hariharan Madhavan, having DIN No. 07217072, Whole-time Director, to take effect from 1st April, 2016, for
the balance term of his appointment on the Board, on the terms and conditions as detailed in the Explanatory Statement
attached hereto, which is hereby approved and sanctioned with authority to the Board of Directors to alter and vary the
terms and conditions of the said appointment in such manner as may be agreed to between the Board of Directors and Mr.
Hariharan Madhavan.
4
RESOLVED FURTHER THAT in the event of loss or inadequacy of profits in the Company in any financial year during
the term of Mr. Hariharan Madhavan’s office as Whole-time Director, the remuneration and perquisites set out in the
Explanatory Statement annexed hereto, be paid or granted to Mr. Hariharan Madhavan as minimum remuneration, provided
that the total remuneration by way of salary, perquisites and any other allowances shall not, unless approved by the Central
Government, exceed the ceiling as provided in Schedule V to the Companies Act, 2013 or any equivalent statutory reenactment(s) thereof.
RESOLVED FURTHER THAT the Board of Directors be and are hereby authorized to take all such steps as may be necessary,
proper or expedient to give effect to this Resolution.’’
10. APPROVAL OF REMUNERATION OF COST AUDITORS
To consider and if thought fit, to pass, with or without modification, the following resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to Section 148 and other applicable provisions, if any, of the Companies Act, 2013 (‘‘Act‘’)
and the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, the Company hereby approves the
remuneration of ` 5,00,000 (Rupees Five Lacs) plus service tax and out of pocket expenses payable to M/s. R. Nanabhoy
& Company, Cost Accountants, having registration number 7464 who are appointed by the Board of Directors as Cost
Auditors of the Company to conduct cost audit relating to cost records of the Company for the year ending 31st March,
2017.
RESOLVED FURTHER THAT the Board be and is hereby authorized to do all such acts, deeds and things and execute all
such documents, instruments and writings as may be required and to delegate all or any of its powers herein conferred to
any Committee of Directors or Director(s) to give effect to the aforesaid resolution.”
By Order of the Board
Rajiv Mathur
Director & Company Secretary
DIN No. 06931798
Place: Mumbai
Date: July 25, 2016
NOTES:
1.
A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT ONE OR MORE PROXIES
TO ATTEND AND VOTE INSTEAD OF HIMSELF / HERSELF ONLY ON A POLL AND THE PROXY NEED NOT BE A
MEMBER. PROXIES, IN ORDER TO BE EFFECTIVE, MUST BE RECEIVED BY THE COMPANY AT ITS REGISTERED OFFICE
NOT LESS THAN 48 HOURS BEFORE THE TIME OF HOLDING THE MEETING.
2.
A person can act as a proxy on behalf of not exceeding 50 members and holding in aggregate not more than 10% of the total
share capital of the Company.
3.
Members / Proxies / authorised representatives should bring the duly filled Attendance Slip enclosed herewith to attend the
meeting.
4.
Corporate members intending to send their authorised representatives to attend the meeting are requested to send a
certified copy of the Board resolution to the Company, authorizing their representative to attend and vote on their behalf
at the meeting.
5.
The relevant Explanatory Statement pursuant in Section 102 of the Companies Act, 2013 in respect of the Special Business
at Item nos. 5, 6, 7, 8, 9 and 10 of the Notice, is annexed hereto.
6.
The Statutory registers of the Company maintained as per the provisions of the Companies Act 2013, will be available for
inspection by the members at the AGM.
7.
The Share Transfer Books and the Register of Members of the Company will remain closed from September 23, 2016 to
September 29, 2016 (both days inclusive).
8.
Members whose shareholding is in electronic mode are requested to direct change of address notification and updates of
saving bank account details to their respective Depository Participant(s). Members are encouraged to utilize the Electronic
Clearing System (ECS) for receiving dividends.
Annual
Report 2015-16
5
PHILIPS INDIA LIMITED
9.
Subject to provisions of the Companies Act, 2013, dividend as recommended by the Board of Directors, if declared, at the
meeting, will be paid within 30 days from the date of declaration, to those members whose names appear on the Company’s
Register of Members as on September 29, 2016. In respect of demat shares, the dividend will be payable on the basis of
beneficial ownership as per the details furnished by the Depositories for this purpose.
10. Members may be aware that the Company has changed its Registrar and Share Transfer Agent (“RTA”)
and M/s Karvy Computershare Pvt. Ltd. has been appointed as RTA w.e.f. July 1, 2016. An intimation in this
regard was sent individually to each member at their address available in the Company’s records. Members are
requested to contact the Registrar and Share Transfer Agent, M/s Karvy Computershare Pvt. Ltd. for all matters connected
with Company’s shares at:
Karvy Computershare Pvt. Ltd.,
Karvy Selenium, Tower-B, Plot no.31-32, Gachibowli,
Financial District, Nanakrampuda, Hyderabad-500 032.
Toll Free no. 18 00 3454 001, Tel. +91 040 67162222
Fax no.+91 040 23001153
Email id: einward.ris@karvy.com
Karvy Computershare Private Limited
49 Jatin Das Road, Ist Floor
Kolkata 700 029, West Bengal,
Tel. +91 033 6619 2844
11. Pursuant to Section 205A(5) of the Companies Act, 1956, which continues to be in force, the unpaid dividend that are due
for transfer to the Investor Education and Protection Fund (IEPF) are as follows:
Dividend No.
Date of Declaration
For the year ended
Tentative date for transfer to IEPF
63
29.06.2010
31.12.2009
05.08.2017
64
10.06.2011
31.12.2010
17.07.2018
65
04.09.2012
31.03.2012
11.10.2019
66
20.09.2013
31.03.2013
27.10.2020
67
25.09.2014
31.03.2014
02.11.2021
68
28.09.2015
31.03.2015
05.11.2022
Members are requested to note that dividends not encashed/claimed within seven years from the date of declaration of
dividend will be transferred to the Investor Education and Protection Fund (IEPF). After transfer of the said amount to IEPF,
no claims in this respect shall lie against the Company.
Members, who have not encashed their dividend warrants pertaining to the aforesaid years may approach the Company/
Registrar and Share Transfer Agent, for obtaining payments thereof at least 30 days before they are due for transfer to the
said fund.
12. Members holding shares in physical form are requested to notify/send the following to the Company’s Registrar and Share
Transfer Agent to facilitate better service:
a. any change in their address/mandate/bank details, along with documentary proof in support of the same;
b. share certificate(s) held in multiple account name or joint accounts in the same order of names for consolidation of such
shareholdings into one account.
13. The Members desirous of appointing their nominees for the shares held by them may apply in the Nomination Form (Form SH-13).
14. Voting through electronic means
I.
In compliance with provisions of Section 108 of the Companies Act, 2013, read with Rule 20 of the Companies
(Management and Administration) Rules, 2014 as amended by the Companies (Management and Administration
Amendment Rules, 2015, the Company is pleased to provide members facility to exercise their right to vote on
resolutions proposed to be considered at the 86th Annual General Meeting (AGM) by electronic means and the
business may be transacted through e-voting services. The facility of casting the votes by the members using an
electronic voting system from a place other than venue of the AGM (“remote e-voting”) will be provided by National
Securities Depository Limited (NSDL).
II.
The facility for voting through ballot paper shall be made available at the AGM and the members attending the meeting
who have not cast their vote by remote e-voting shall be able to exercise their right at the meeting through ballot
paper.
III. The members who have cast their vote by remote e-voting prior to the AGM may also attend the AGM
but shall not be entitled to cast their vote again.
6
IV.
The remote e-voting period commences on September 26, 2016 (9:00 a.m.) and ends on September 28, 2016 (5:00
p.m.). During this period Members of the Company, holding shares either in physical form or in dematerialized form,
as on the cut-off date of September 22, 2016, may cast their vote by remote e-voting. The remote e-voting facility shall
be disabled by NSDL for voting thereafter. Once the vote on a resolution is cast by the member, the member shall not
be allowed to change it subsequently.
V. The process and manner for remote e-voting are as under:
(A) In case a Member receives an email from NSDL [for members whose email IDs are registered with the
Company/Depository Participants(s)]:
(i)
Open email and open PDF file viz; “PIL remote e-voting.pdf” with your Client ID or Folio No. as password. The said
PDF file contains your user ID and password/PIN for remote e-voting. Please note that the password is an initial
password.
You will not receive this PDF file if you are already registered with NSDL for e-voting then you can use you existing
password for casting the vote. If you have forgotten your password, you can reset your password by using “Forget User
Details/Password” option available available on www.evoting.nsdl.com or contact NSDL at the following toll free no.:
1800-222-990.
(ii)
Launch the internet browser by typing the following URL: https://www.evoting.nsdl.com/
(iii) Click on Shareholder – Login
(iv) Put user ID and password as initial password noted in step (i) above. Click Login.
(v)
Password change menu appears. Change the password with new password of your choice with minimum 8 digits/
characters or combination thereof. Note new password. It is strongly recommended not to share your password with
any other person and take utmost care to keep your password confidential.
(vi) Home page of e-voting opens. Click on e-voting: Active Voting Cycles.
(vii) Select “EVEN” of Philips India Limited.
(viii) Now you are ready for e-voting as the Cast Vote page opens.
(ix) Cast your vote by selecting appropriate option and click on “Submit” and also “Confirm” when prompted.
(x)
Upon confirmation, the message “Vote cast successfully” will be displayed.
(xi) Once you have voted on the resolution, you will not be allowed to modify your vote.
(xii) Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) are required to send scanned copy (PDF/JPG
Format) of the relevant Board Resolution/Authority letter etc. together with attested specimen signature of the duly
authorized signatory(ies) who are authorized to vote, to the Scrutinizer Dr. Asim Chattopadhyay, on his e-mail id:
asimsecy@gmail.com with a copy marked to evoting@nsdl.co.in. Please mention “E-voting - Philips India Limited” in
the subject-line of such email.
(B) In case of Shareholders receiving physical copy of the Notice of AGM and Attendance Slip.
I.
Initial password is provided at the bottom of the Attendance Slip of the AGM, in the Section “Electronic Voting
Particular”.
EVEN (Remote e-voting Event Number) USER ID PASSWORD/PIN
II.
Please follow all steps from Sl. No. (ii) to Sl. No. (xii) above, to cast vote.
III.
In case of any queries, you may refer to the ‘Frequently Asked Questions’ (FAQs) and ‘e-voting user manual’ available
in the downloads section of NSDL’s e-voting website https://evoting.nsdl.com.
IV.
If you are already registered with NSDL for remote e-voting then you can use your existing user ID and password/PIN
for casting your vote.
V.
You can also update your mobile number and e-mail id in the user profile details of the folio which may be used for
sending future communication(s).
VI.
The voting rights shall be as per the number of equity shares held by the Member(s) as on Thursday, September 22,
2016, being the cut-off date. Members are eligible to cast vote electronically only if they are holding shares as on that
date.
Annual
Report 2015-16
7
PHILIPS INDIA LIMITED
VII. Any person, who acquires shares of the Company and becomes member of the Company after August 19, 2016 i.e. the
date considered for dispatch of the notice and holding shares as of the cut-off date i.e. September 22, 2016, may obtain
the login ID and password by sending a request at evoting@nsdl.co.in.
VIII. A member may participate in the AGM even after exercising his right to vote through vote remote
through remote e-voting but shall not be allowed to vote again vote again at the AGM.
IX.
A person, whose name is recorded in the register of members or in the register of beneficial owners maintained by
the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting at
the AGM through ballot paper.
X.
Dr. Asim Chattopadhyay has been appointed as the Scrutinizer for providing facility to the Members of the Company
to scrutinize the voting and remote e-voting process in a fair and transparent manner.
XI.
The Chairman shall, at the AGM, at the end of discussion on the resolutions on which voting is to be held, allow voting
with the assistance of scrutinizer, by use of Ballot Paper for all those members who are present at the AGM but have
not cast their votes by availing the remote e-voting facility.
XII. The Scrutinizer shall after the conclusion of voting at the AGM, first count the votes cast at the meeting and thereafter
unblock the votes cast through remote e-voting in the presence of at least two witnesses not in the employment of the
Company and shall make, not later than three days of the conclusion of the AGM, a consolidated scrutinizer’s report
of the total votes cast in favour or against, if any, to the Chairman or a person authorized by him in writing, who shall
counter sign the same and declare the result of the voting forthwith.
XIII. The Results declared along with the report of the Scrutinizer shall be placed on the website of the Company and on
the website of NSDL immediately after the declaration of result by the Chairman or a person authorized by him in
writing.
EXPLANATORY STATEMENT
Under Section 102 of the Companies Act, 2013
ITEM NO. 5
The Board of Directors at their meeting held on December 15, 2015 appointed Mr.V. Raja as an Additional Director under Section
161(1) of the Companies Act, 2013 read with Article 109 of the Articles of Association of the Company. Mr. V. Raja holds office
only up to the date of this Annual General Meeting of the Company.
A notice has been received from a member proposing Mr.V. Raja as a candidate for the office of Director of the Company.
Mr. V. Raja brings with him a wealth of experience spanning over three decades across diverse industries including Healthcare,
Consumer Products, Food etc. in various leadership roles in Finance, Procurement, Business Development and Business
Management. He joins Philips from TE Connectivity where he was President and CEO of Indian Operations for four years. Prior
to TE Connectivity, Mr. V. Raja worked with GE for 14 years of which 7 years were as Business leader of GE Healthcare, South
Asia. He has also worked with Gillette, Unilever and other companies earlier, and has proven track record of delivering profitable
growth, turnarounds, nurturing talent and setting up new lines of business.
Mr.V. Raja is a Commerce Graduate from Kolkata and a qualified Chartered Accountant and a Company Secretary.
The appointment of Mr.V. Raja is appropriate and in the best interests of the Company.
The resolution seeks the approval of members for the appointment of Mr. V. Raja as a Director (not liable to determination
by retirement of directors by rotation) of the Company, with effect from December 15, 2015 pursuant to Section 161 of the
Companies Act, 2013 read with Article 109 of the Articles of Association of the Company and other applicable provisions of the
Companies Act, 2013 and the Rules made thereunder.
Except Mr.V. Raja, being the appointee, none of the Directors or Key Managerial Personnel of the Company and their relatives, is
concerned or interested, financially or otherwise, in the resolution set out at Item No. 5.
The Board recommends the resolution set forth in Item no. 5 for the approval of the members.
ITEM NO. 6
The Board of Directors, at their meeting held on December 15, 2015, had appointed Mr. V. Raja as a non-retiring Director of the
Company and subject to necessary approvals, as the Vice-Chairman and Managing Director of the Company, for a period of five
years with effect from December 15, 2015. He is also a member of the Banking and Other Operations Committee, Stakeholders’
8
Relationship Committee, Nomination and Remuneration Committee and the Corporate Social Responsibility Committee of the
Board of the Company.
Brief details about Mr. V. Raja`s educational qualifications and work experience have been included in Explanatory statement
related to Item No. 5.
The appointment of Mr.V. Raja as Vice-Chairman & Managing Director is appropriate and in the best interest of the Company.
The approval of the members is being sought with respect to the terms and conditions for the appointment of Mr. V. Raja as
the Vice-Chairman and Managing Director and the remuneration payable to him. The terms and conditions proposed for the
appointment of Mr. V. Raja, as fixed by the Board of Directors at their meeting held on 15th December, 2015, are keeping in line
with the remuneration package that is necessary to encourage good professional managers with a sound career record to assume
important positions in the Company, as that of the Managing Director.
An abstract of the terms & conditions of appointment of Mr.V. Raja,Vice-Chairman & Managing Director, is given hereunder:
1
Proposed
(`)
Comments
Total Fixed salary (Guaranteed Cash and
Retrials)
34,500,000
Variable Bonus @40% of Target Fixed Salary
(with an earnings potential upto 200%)
13,800,000 ALL Plan Design :
•
Weightage of Financials 70%;
•
Individual 30%
Financials Weightage 70% split as follows:
a) Own level ie HealthTech India (45%)
b) Next Level Financials -HealthTech Global (25%)
Combination of CSG, EBIT and AWOCA.
Total Target Cost (Total Fixed Salary + Target)
48,300,000
LTI - Annual Recuing Performance Share Plan
with a 3 year cliff vesting. The Actual grant will
be made in Euro (Euro 150K) and this Annual
LTIP grant will be as per April 2016
10,500,000 Long Term Incentive Plan Design:
Performance measurement at vesting (forward looking)
Vesting of shares based on 2 equally weighted performance
conditions: 50% adjusted Earnings Per Share growth (‘EPS’)
and 50% Relative Total Shareholder Return (‘TSR’)
Payout Max is at 200%
Total Cost To The Company
58,800,000
One Time Additional Special Grants:
Additional Partial PS Euro 37500*
Additional One time RSUs 450K*
(1/3rd over 3 years)
(* Conversion: I Euro to INR 70)
As per Philips Global Performance Share plan
2,625,000 One time LTI Sign-on made in Restricted Shares spread
31,500,000 over 3 years
Total
92,925,000
Annual
Report 2015-16
9
PHILIPS INDIA LIMITED
Mr.V. Raja shall be entitled to the following additional benefits:
•
First year Variable Pay bonus to be guaranteed at 100% target achievement.
•
An additional sign-on cash compensation of ` 20,00,000/- (` 20 Lakhs) shall be payable to Mr.V. Raja for loss of gratuity.
•
Parents’ health insurance to be covered over and above spouse and two children.
•
Gratuity will be paid as ex-gratia in case of exiting Philips before 5 years from date of joining.
•
Company Car — Provided as a Lifestyle benefit Car Value up to ` 60 lakhs.The employee buys-back at 1% of residual value
at the end of a 3 year period. Fuel and Maintenance is fully covered by the Company.
•
Medical reimbursement — up to a limit of ` 80,000 (for domiciliary as well as hospitalization)
•
Mediclaim - Family floater insurance cover of ` 5 Lakhs p.a. for self, spouse and up to two children. In addition, the insurance
provider will also provide parental cover under this policy as mentioned above.
•
Group Personal Accident Insurance - Coverage for ` 90 lakhs
•
Group Term Life Insurance — Cover equal to 24 month’s salary
•
Club Membership - DLF Golf Club — Gurgaon
2.
Minimum Remuneration: Notwithstanding anything hereinabove, where in any financial year during the term of office of
Mr.V. Raja, as the Vice-Chairman & Managing Director, the Company has no profits or its profits are inadequate, the Company
will pay the aforesaid remuneration as minimum remuneration by way of Salary, Variable Performance Linked Bonus and
Perquisites, subject to the approval of the Central Government, if required.
3.
Memorandum of Interest: None of the Directors of your Company except Mr.V. Raja himself, is interested in his appointment
and terms of remuneration.
In view of the provisions of Sections 196, 197, 203 and any other applicable provisions of the Companies Act, 2013 the Board
recommends the Special Resolution set out at item no. 6 of the accompanying Notice for the approval of the Members.
Except Mr. V. Raja, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives,
is concerned or interested, financially or otherwise, in the resolution set out at Item No. 6.
The Board recommends the resolution set forth in Item no. 6 for approval of the members.
ITEM NO. 7
In order to gain from her rich experience, Ms. Geetu Gidwani Verma was appointed as an Additional Director on the Board of the
Company with effect from September 29, 2015.
Ms.Verma is presently Executive Director, Foods business of Hindustan Unilever Limited. Ms.Verma has done her MBA, Marketing
from Faculty of Management Studies, University of Delhi. She has over 25 years of marketing, business & innovation experience in
leading FMCG firms – P&G, Seagram, PepsiCo in India & Europe. She joined Hindustan Unilever in November, 2011.
In the opinion of the Board of Directors, Ms. Geetu Gidwani Verma, proposed to be appointed as Independent Director, fulfils
the conditions specified in the Companies Act, 2013 and the Rules made thereunder and she is independent of the Management.
Your Directors recommend the resolution set forth in Item No. 7 for the approval of the members.
Except Ms. Geetu Gidwani Verma, being the appointee, none of the Directors is interested or concerned in the resolution placed
at Item no. 7.
ITEM NO. 8
The Board of Directors at their meeting held on June 25, 2013 had taken note of appointment of Mr. Rajiv Mathur as Company
Secretary of the Company. Further, pursuant to the recommendation of the Nomination and Remuneration Committee, the
Board of Directors, at their meeting held on August 18, 2015, appointed Mr. Rajiv Mathur as a Whole time Director of the
Company, with effect from August 18, 2015 to July 31, 2020, which was approved by the shareholders at the eighty – fifth Annual
General Meeting of the Company held on September 28, 2015.
Mr. Mathur has been responsible for enhancing the legal capabilities within Philips India and the group companies, guiding overall
group strategy, conducting several sessions on secretarial and other compliances impacting the Philips business in India. Mr. Mathur
has also led various restructuring exercises, including the separation of the Lighting business of the Company into a separate entity,
through Demerger, transfer of Woox business and Automotive lighting and Lumileds business to separate companies through
slump sale process; and driving special projects.
In view of the above, revision in remuneration payable to Mr. Rajiv Mathur was proposed, with effect from April 1, 2016.
The matter regarding revision in the remuneration of Mr. Rajiv Mathur was discussed in the Nomination and Remuneration
Committee of the Board and the meeting of the Board of Directors held on July 25, 2016, based on which the approval of the
members is requested for revision in the remuneration of Mr. Rajiv Mathur for the balance term of his appointment on the Board.
10
The terms and conditions of his appointment, including the remuneration payable to him, are detailed hereunder.
1.
Mr. Rajiv Mathur shall be entitled to receive remuneration for his services by way of Salary, Variable Performance Linked
Bonus and Perquisites as mentioned hereunder. Further, the details of the Salary, Variable Performance Linked Bonus and
Perquisites, presently being paid to Mr. Rajiv Mathur (prior to the proposed revision) are also mentioned in the table as
below:
Remuneration:
Particulars
Present Remuneration
(prior to the proposed revision)
Revised Remuneration
(as proposed)
Salary
` 10,63,935/- per month or such higher
amount as may be approved by the Board of
Directors or any Committee thereof from
time to time.
The amount includes:
1. Basic Salary: ` 4,14,935/2. House Rent Allowance: ` 2,50,000/3. Flexible Benefit Plan: `3,29,250/4. Retrial Benefit: ` 69,750/- (as set out in
Part B)
` 11,44,794/-per month or such higher
amount as may be approved by the Board of
Directors or any Committee thereof from
time to time.
The amount includes:
1. Basic Salary: ` 4,29,298/2. House Rent Allowance: ` 2,14,649/3. Flexible Benefit Plan: `4,28,683/4. Retrial Benefit: ` 72,165/- (as set out in
Part B)
Variable Performance Not exceeding one and half times the Salary,
Not exceeding one and half times the Salary,
Linked Bonus
payable annually, as may be approved by the
payable annually, as may be approved by the
Board of Directors or any Committee thereof. Board of Directors or any Committee thereof.
Perquisites
Subject to the limits contained in Schedule V of
the Companies Act, 2013. Perquisites shall be
payable as set out in Part A, as applicable. Mr.
Rajiv Mathur shall not be paid sitting fee for
attending meetings of the Board of Directors
of the Company or any Committee thereof.
Subject to the limits contained in Schedule V of
the Companies Act, 2013. Perquisites shall be
payable as set out in Part A, as applicable. Mr.
Rajiv Mathur shall not be paid sitting fee for
attending meetings of the Board of Directors
of the Company or any Committee thereof.
Part- A
i.
Mr. Rajiv Mathur shall also be entitled to perquisites and allowances including but not restricted to medical reimbursement
for self and family, club fees, medical insurance, personal accident insurance, Company stock (as per the global LTI plan),
Company’s car for official duties and such other perquisites and allowances in accordance with the Rules of the Company
as amended from time to time.
ii.
The perquisites and allowances as mentioned above, shall be evaluated as per Income Tax Rules, wherever applicable. In the
absence of any such Rules, perquisites shall be evaluated at actual cost. Provision for use of the telephone at residence shall
not be included in the computation of perquisites.
Part-B
i.
Company’s contribution towards Provident Fund and Pension Fund not exceeding 12% of the Basic Salary or such other
percentage as may be permitted in law from time to time, to the extent these either singly or together are not taxable under
the Income Tax Act, 1961.
ii.
Gratuity and encashment of leave are payable as per the Rules of the Company at the end of the tenure and shall not be
included in the computation of perquisites.
2.
Minimum Remuneration: Notwithstanding anything hereinabove, where in any financial year during the term of office of Mr.
Rajiv Mathur, as Director and Company Secretary, the Company has no profits or its profits are inadequate, the Company
will pay the aforesaid remuneration as minimum remuneration by way of Salary, Variable Performance Linked Bonus and
Perquisites. However, the total remuneration by way of salary, perquisites and any other allowance shall not, unless approved
by the Central Government, exceed the ceiling as provided in Schedule V to the Companies Act, 2013 or any re-enactment
thereof.
3.
All the above perquisites and benefits would be subject to the applicable Company policy.
4.
All other terms and conditions of Mr. Rajiv Mathur, as approved earlier by the Board and the shareholders, shall remain
unchanged.
Annual
Report 2015-16
11
PHILIPS INDIA LIMITED
The resolution for revision in remuneration of Mr. Rajiv Mathur is appropriate and in the best interests of the Company.
Except Mr. Rajiv Mathur, none of the Directors or Key Managerial Personnel of the Company and their relatives is concerned or
interested, financially or otherwise, in the resolution set out at Item No. 8.
Your Directors recommend the resolutions set forth in item No. 8 for approval of the members.
ITEM NO. 9
Based on the recommendation of Nomination and Remuneration Committee of the Board, the Board of Directors at their
meeting held on August 18, 2015, appointed Mr. Hariharan Madhavan as a Whole-time Director and Chief Financial Officer of the
Company for a period of 5 years from August 18, 2015 to July 31, 2020 on the terms and conditions agreed between the Board
and Mr. Hariharan Madhavan which was approved by the shareholders at the eighty- fifth Annual General Meeting of the Company
held on 28th September, 2015.
Mr. Madhavan has been with Philips for over 15 years and has held various leadership positions in the recent years. Before the
current position, he was Controller for the Business Group Automotive Lighting, Philips and strongly supported the separation
of that business, globally, into a separate entity and more recently, the separation of the Lighting business of the Company into a
separate entity, through Demerger and driving special projects.
In view of the above, revision in remuneration payable to Mr. Hariharan Madhavan was proposed, with effect from April 1, 2016.
The matter regarding revision in the remuneration of Mr. Hariharan Madhavan was discussed in the Nomination and Remuneration
Committee of the Board and the meeting of the Board of Directors held on July 25, 2016, based on which the approval of the
members is requested for revision in the remuneration of Mr. Hariharan Madhavan for the balance term of his appointment on
the Board.
The terms and conditions of his appointment, including the remuneration payable to him, are detailed hereunder.
1.
Mr. Hariharan Madhavan shall be entitled to receive remuneration for his services by way of Salary, Variable Performance
Linked Bonus and Perquisites as mentioned hereunder. Further, the details of the Salary,Variable Performance Linked Bonus
and Perquisites, presently being paid to Mr. Hariharan Madhavan (prior to the proposed revision) are also mentioned in the
table as below:
Remuneration:
12
Particulars
Present Remuneration
(prior to the proposed revision)
Revised Remuneration (as proposed)
Salary
` 11,25,000/- per month or such higher amount as
may be approved by the Board of Directors or any
Committee thereof from time to time.
The amount includes:
1. Basic Salary: ` 4,38,750/2. House Rent Allowance: ` 2,50,000/3. Flexible Benefit Plan: ` 2,96,684/4. Retrial Benefit: ` 1,39,566/- (as set out in Part B)
` 12,37,500/- per month or such higher amount as
may be approved by the Board of Directors or any
Committee thereof from time to time.
The amount includes:
1. Basic Salary: ` 4,64,063 /2. House Rent Allowance: ` 2,32,031/3. Flexible Benefit Plan: ` 3,93,788/4. Retrial Benefit: ` 1,47,618/- (as set out in Part B)
Variable
Performance
Linked Bonus
Not exceeding one and half times the Salary,
payable annually, as may be approved by the Board
of Directors or any Committee thereof.
Not exceeding one and half times the Salary,
payable annually, as may be approved by the Board
of Directors or any Committee thereof.
Perquisites
Subject to the limits contained in Schedule V of the
Companies Act, 2013. Perquisites shall be payable
as set out in Part A, as applicable. Mr. Hariharan
Madhavan shall not be paid sitting fee for attending
meetings of the Board of Directors of the Company
or any Committee thereof.
Subject to the limits contained in Schedule V of the
Companies Act, 2013. Perquisites shall be payable
as set out in Part A, as applicable. Mr. Hariharan
Madhavan shall not be paid sitting fee for attending
meetings of the Board of Directors of the Company
or any Committee thereof.
Part- A
i.
Mr. Hariharan Madhavan shall also be entitled to perquisites and allowances including but not restricted to medical
reimbursement for self and family, club fees, medical insurance, personal accident insurance, Company stock (as per the
global LTI plan), Company’s car for official duties and such other perquisites and allowances in accordance with the Rules of
the Company as amended from time to time.
ii.
The perquisites and allowances as mentioned above, shall be evaluated as per Income Tax Rules, wherever applicable. In the
absence of any such Rules, perquisites shall be evaluated at actual cost. Provision for use of the telephone at residence shall
not be included in the computation of perquisites.
Part-B
i.
Company’s contribution towards Provident Fund and Pension Fund not exceeding 12% of the Basic Salary or such other
percentage as may be permitted in law from time to time, to the extent these either singly or together are not taxable under
the Income Tax Act, 1961.
ii.
Gratuity and encashment of leave are payable as per the Rules of the Company at the end of the tenure and shall not be
included in the computation of perquisites.
2.
Minimum Remuneration: Notwithstanding anything hereinabove, where in any financial year during the term of office of
Mr. Hariharan Madhavan, as the CFO and Wholetime Director, the Company has no profits or its profits are inadequate,
the Company will pay the aforesaid remuneration as minimum remuneration by way of Salary, Variable Performance Linked
Bonus and Perquisites. However, the total remuneration by way of salary, perquisites and any other allowance shall not, unless
approved by the Central Government, exceed the ceiling as provided in Schedule V to the Companies Act, 2013 or any reenactment thereof.
3.
All the above perquisites and benefits would be subject to the applicable Company policy.
4.
All other terms and conditions of Mr. Hariharan Madhavan, as approved earlier by the Board and the shareholders, shall
remain unchanged.
Except Mr. Hariharan Madhavan, none of the Directors or Key Managerial Personnel of the Company and their relatives, is
concerned or interested, financially or otherwise, in the resolution set out at Item No. 9.
Your Directors recommend the resolutions set forth in item No. 9 for approval of the members.
ITEM NO. 10
The Company is required to have the audit of its cost records conducted by a cost accountant in practice under Section 148 of
the Act, read with the Companies (Cost Records and Audit) Rules, 2014 (“the Rules”). The Board, on the recommendation of the
Audit Committee, has approved the appointment and remuneration of M/s. R. Nanabhoy & Company, Cost Accountants, having
registration number 7464, as the Cost Auditors, to conduct the audit of the cost records of the Company for the financial year
ending 31st March, 2017.
In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the
remuneration payable to the Cost Auditors has to be approved by the members of the Company.
Accordingly, consent of the members is sought for passing the Ordinary Resolution as set out at item no. 10 of the notice for
approval of the remuneration payable to the Cost Auditors for the financial year ending 31st March, 2017.
None of the Directors or Key Managerial Personnel (KMP) or relatives of Directors and KMPs is concerned or interested in the
Resolution set out at item no. 10 of the acCompanying notice.
The Board recommends the resolution set out at item no. 10 of the notice for approval by the members.
By Order of the Board
Rajiv Mathur
Director & Company Secretary
DIN No. 06931798
Place: Mumbai
Date: July 25, 2016
Annual
Report 2015-16
13
ROUTE MAP TO THE VENUE OF THE 86TH ANNUAL GENERAL MEETING
TO BE HELD ON SEPTEMBER 29, 2016 AT 10:30 A.M. AT
VIDYA MANDIR, 1, MOIRA STREET, KOLKATA – 700 017
PHILIPS INDIA LIMITED
14
DIRECTORS’ REPORT
For the financial year ended March 31, 2016
To the Members,
Your Company’s Directors are pleased to present the 86th Annual Report of the Company, along with the Audited Annual
Accounts for the financial year ended March 31, 2016.
1.
FINANCIAL PERFORMANCE
1.1 RESULTS
Gross Income
Profit before tax and exceptional items
` Million
2015-16
2014-15
63,717
64,622
6,503
5,600
Exceptional Items
(225)
675
Profit before tax
6,278
6,275
(2,438)
(2,353)
Provision for current tax
Deferred tax–Release/(Charge)
Profit after tax
Transfer to General Reserve
135
313
3,975
4,235
398
424
1.2 SECTORWISE SALES
2015-16
2014-15
Lighting
27,490
34,488
Consumer Lifestyle
11,046
9,247
Healthcare
15,764
12,992
8,024
6,567
Innovation Campus
Others
Total
495
461
62,819
63,755
All the key sectors of your Company – Healthcare, Personal Health (for FY 2015-16) and Lighting (for the period till
January 31, 2016), posted robust top line growth and an increase in their respective market share.
In accordance with Section 134 (3) (a) of the Companies Act 2013, an extract of the annual return in the prescribed
format (MGT 9) is appended as Annexure I to the Board’s Report.
1.3 FINANCE & ACCOUNTS
Your Company has delivered positive net cash from operations through improved sales performance. The Company
has not made any major borrowings in this year and has managed working capital requirements from internal cash
generation.
Capital expenditure during the year was ` 929 million (vis – a – vis ` 859 million during Apr’14 – Mar’15) and this
expense was incurred towards new Chennai and Mumbai office set up, servers and other IT equipment, moulds etc.
During the year, your Company infused capital of ` 373.3 Crores (` 278 Crores equity capital and ` 95.3 Crores
preference capital) into Preethi Kitchen Appliances Pvt. Ltd. As a result, the Company retained 51.2% shareholding in
Preethi Kitchen Appliances Pvt. Ltd, post conversion of Compulsorily Convertible Debentures of ` 540 crores placed
by Koninklijke Philips N.V. in Preethi Kitchen Appliances Pvt. Ltd to equity. Further, during the year, the Company
invested ` 6.3 Crores in equity of HealthMap Diagnostics Private Limited.
During the year, the Company received full repayment of inter-company deposits (ICD) placed with Preethi Kitchen
Appliances Pvt. Ltd. to the tune of ` 269.8 Crores and Philips Lighting India Ltd. to the tune of ` 29.7 Crores. These
ICDs were from internal accruals.
Annual
Report 2015-16
15
PHILIPS INDIA LIMITED
Your Company continued facilitating Healthcare sales with innovative financial solutions to support customers and
business to keep up pace with the market growth to the tune of ` 2,146 million using internal accruals.
During the year, the Company has transferred unpaid dividend of ` 1.17 million to Investor Education and Protection
Fund.
2.
DIVIDEND
Your Directors recommend payment of ` 3/- per share as dividend on the fully paid equity shares for the financial year ended
March 31, 2016.This will absorb ` 172.60 million as dividend and ` 35.1 million as dividend distribution tax.
3.
TRANSFER TO RESERVES
In the year 2015 -16, your Company proposes to transfer ` 398 Million to General reserve.
4.
DEPOSITS
Your Company has not accepted/renewed any deposits from the public during the year.
5.
BUSINESS PERFORMANCE
The Notes to the Profit and Loss Account for the year provide segment results. The required disclosure is made below for
the Healthcare, Consumer Lifestyle, Philips Innovation Campus (Software) and Lighting Sectors.
5.1 HEALTHCARE
16
Health Systems delivered another year of strong performance in 2015-16 with an overall revenue growth of 15.6%
amidst focus on profitability improvement and cost reduction initiatives. A very strong performance in Diagnostic
imaging, Interventional guided therapy and Ultrasound led to the strong growth. Customer Services revenue continued
to register strong growth as well, during the same period.This has been achieved despite significant increase in imports
duty, fluctuating currency and high interest costs.
Health systems consolidated its market share in diagnostic imaging, interventional x-ray, and ultrasound businesses
while its patient monitoring business saw a decline. It continued to lose market share in Oncology (source: COCIR).
In 2015, Government sector tenders (postponed in 2014) opened up which resulted in a substantial upswing in the
Govt. business.With a favorable investment scenario promised by Govt. of India, private hospitals have started investing
in infrastructure and capex. Philips continued to grow faster than the market (~9%) and retain a strong position with
significant market share gains in DXR, led by Govt. tenders for Mobile Diagnost Opta & DiDi High.
Philips has strengthened its business with most of its strategic key accounts focusing on multi-modality deals. Philips
global innovation strengths at Bangalore (PIC) along with global design and manufacturing centre in Pune (HIC) are
delivering “Made in India” medical equipment at India-centric price-points. HIC is focusing on bringing more integrated
solutions to its customers to increase penetration. Informatics Solutions such as Healthcare informatics, Infrastructure
& Consulting solutions continue to support profitable growth. During the year Philips’ world class Customer Care
Service Centre has further strengthened its position in quality metrics. Our business has been fortified further with
strategic launches in Ultrasound (Clearvue Elite), Interventional X-Ray (Intuis - manufactured at Pune), CPAP (Dreamseries) and IVUS (Volcano) which are expected to create thought leadership in their respective businesses.
In order to further grow and expand healthcare business in India, a special purpose Company (“SPV”) under the name
Healthmap Diagnostics Private Limited was incorporated in partnership with Manipal Hospitals group (35% stake held
by your Company) to set up radiology centers under Public Private Partnership (PPP) model. This SPV has already set
up 5 centers across Haryana and has major expansion plans in Haryana & Jharkhand.
In addition to the above, Philips Healthcare Innovation Center (HIC), based at Pune, continued to develop and deliver
meaningful innovations for local and global customers. Pune is also one of the global hubs for Mobile Surgery and x-ray
businesses.
Highlights of Philips Healthcare Innovation Center (HIC) of your Company are as below:
a)
US FDA registration received for complaint handling unit for mammography services.
b)
Vectra, the system conceptualized, developed and manufactured in Pune, is shipped to Europe, Africa and APAC
countries. A new model of the Vectra was recently launched with different voltage configuration for catering to
LATAM and Japan.
c)
Commenced commercialisation of Intuis, a flat panel detector value cathlab for the Global markets.
Healthcare Innovation Center (“HIC”) continues to grow and develop “best in class” healthcare systems at optimized
costs for local and global customers.
In line with plans and the in-principle approval of the Board granted on July 16, 2015, an approval for subsidy under
Modified Special Incentive Package Scheme “M-SIPS” on capex investments has been obtained. The construction/site
development will take place in phases.
The manufacturing facility of HIC has been awarded “Sustainability award- 2016 by Frost & Sullivan”.
During the year, HIC participated in Water Conservation Program run by Govt. of Maharashtra under the banner of
“Jalyukt Shivar Yojana” to make Maharashtra drought free by 2019.
Your Company was awarded the coveted Medical Technology Company of the Year at the Frost and Sullivan 7th Annual
India Healthcare Excellence Awards 2015.
5.2 PERSONAL HEALTH
The Personal Health Division of your Company continued to gain this year and strengthened market share by
introduction of new premium products such as Soup Makers, Garment Steamers and Body Groomers. Personal Health
business grew by 19.4% over previous financial year.
In the Domestic Appliances business, healthy living portfolio gained momentum through awareness building. A 360
degree campaign around four key sub categories – Air fryers, Soup Makers, Juicers and Mixer Grinders and product
demonstrations on air fryers, soup makers and juicers across 150 cities in the country helped business grow 9.2% over
previous financial year.
Your Company continued to build share in the Personal Care business in India, led by Male Grooming and Beauty
products. Strong focus on market expansion and market share gain around Trimmers and Shavers helped drive growth
in Male Grooming. Your Company also opened up a new product category ‘Body Grooming’. Low cost innovation for
the Indian market and new categories like epilation further strengthened Beauty business. Personal Care business grew
by 28.6% over previous financial year.
Air Purifiers - a category introduced last year in India, continued to grow disproportionately driven by sustained public
awareness drive on the importance of pure indoor air, driving thought leadership & strong media campaign.
Your Company has also emphasized on a new “Go to Market” strategy, which has helped in connecting better with the
Customers. The Company intends to further penetrate into new channels by consistently focusing in this area. Your
Company’s business grew significantly with emergence of online channel which is expected to grow in coming years.
This year, the Company continued to invest in Innovation by introducing products like the new variants of Shavers, Soup
Makers and a range of body grooming products.
Industrial activity which depicts the Company’s local-for-local aspiration also took shape during the year and your
Company gained significantly by expanding industrial foot-print to include Straighteners from Beauty Category. The
Company’s outlook remains to optimally expand industrialization across categories within Personal Health Division.
Your Company’s goal remains to grow faster than the market and stay focused on providing relevant product categories
through consumer insights and transform Philips as a health and well-being Company nationwide.
Your Company remains committed to launch new and relevant products in the coming years which not only suit the
local consumer tastes but also meet the fast changing needs of the Indian consumers. Moreover, the Personal Health
Division of your Company continues to focus on building talent, competencies and processes to drive sustainable
profitable growth.
5.3 PHILIPS INNOVATION CAMPUS (PIC)
Philips Innovation Campus (PIC), based at Bangalore, initially started as a software center and has now developed into
a product engineering site with a focus on delivering meaningful innovations for local and global markets. Engineers
and domain experts work on end to end products and solutions across the health continuum, from healthy living, to
prevention, diagnosis and treatment. PIC is harnessing the power of technologies such as mobile, digital and cloud
to improve patient outcomes through care coordination and patient empowerment. PIC is proud to have delivered
affordable and accessible healthcare solutions last year for India and other growth geographies like Africa and Indonesia.
PIC is also involved in creating experience-centric products and service innovation.With expertise in mobile technology,
the Consumer Lifestyle Digital Innovations team creates apps for iOS & Android, validates the solutions end to end,
publishes the apps and then is involved with the continuous enhancement of the apps after they go live. Its expertise
include developing solutions that provide connectivity to a range of home appliances from air purifiers to coffee
makers, oral care for kids and adults, which make consumers’ lives easier in today’s busy world.
PIC has established practices in identifying analytics as a key enabler, key areas include, sales analytics, marketing
analytics, supply chain analytics, finance & risk management analytics, pricing analytics, connected propositions analytics,
Annual
Report 2015-16
17
PHILIPS INDIA LIMITED
healthcare analytics and big data analytics & visualization. It continues to contribute significantly to realize Philips’ open,
cloud-based digital platform that can link to all kinds of devices, allows doctors to feed information about patients,
allows patients, relatives and doctors to be connected to each other, and do large scale analytics. PIC engineers are
engaged in design, development, testing & qualifying of the platform.
Some market relevant innovations from the campus include:
Children’s Respiration Monitor
In support of the fight against child mortality as a result of pneumonia, Philips has developed an affordable respiration
monitor that automatically and accurately measures the breath rate of a child under the age of 5. Specifically designed
for use in low resource areas, it has clinical decision support functionality and provides instant feedback, to support the
care provider in determining a correct diagnosis, clearly indicating the risk of fast-breathing rate of the child, based on
the WHO IMCI guidelines.
Wind-up Fetal Doppler
Philips Wind-up Fetal Doppler is a robust, portable, power-independent Doppler that can quickly identify any abnormal
fetal heart activity. It has built-in batteries that provide up to 10 hours of use and when no mains supply is available, the
device can be used by cranking the wind-up handle for 1min which provides power up to 10 mins of operation. The
robust outer casing also makes it ideal for usage in remote and rural areas.
Sales (Export in Foreign Currency) amounted to ` 8.0 billion (` 6.6 billion in 2014-15). PIC’s average employee strength
during 2015-16 was 2508 (2373 in 2014-15).
5.4 LIGHTING
The Lighting Sector of your Company grew by 1.0 % for the 10 month period ending January 31, 2016, over the
corresponding period of the previous financial year. Overall landscape transformation from conventional to LED has
resulted in decline in conventional category, though our market share has improved for conventional business. Strong
growth in LED and Home Lighting business on the back of aggressive LED penetration, reach expansion in semiurban market, increasing your Company’s retail presence through Light Lounges and Light Shops and by driving LED
installations in the Professional Segment, has helped in increasing the LED business share of Lighting business to 36%.
Professional Lighting Solutions witnessed growth of 3.6% driven by strong growth in LED across segments, with
continuous focus on new and differentiated product offerings. Company’s LED contribution in Professional Lighting
Solutions business now stands at 75% compared to 64% for the current period in previous financial year, with clear
leadership in LED.Your Company has also diversified its portfolio mix with introduction of new offerings in ‘connected
lighting/ system & services’, which has contributed to new opportunities in big projects on Office lighting space
The Home lighting business continued the growth momentum during the financial year 2015-16 with 11.7% growth,
driven by strong LED penetration, continuous expansion of locally relevant portfolio and low cost downlights to
gain market share, addition of 45 new brand retail stores across India and improving the efficiency of existing stores.
Focused marketing activities and investments in advertising and promotions have aided this growth. Your Company’s
advertising campaigns during the year have helped in improving its brand health.
The light sources business has witnessed slight de-growth of -2.2%. Strong growth in LED lamps and drivers by 68%
offset by faster decline in conventional Lamps business. This adverse impact is due to growing awareness on LED
augmented by the drive by government to support the conversion to LED lamps through UJALA program.
Pursuant to the Demerger of the Lighting business of the Company w.e.f. February 1, 2016, the Lighting business is
being operated by Philips Lighting India Limited, an indirect subsidiary of Koninklijke Philips N.V.
6.
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 THE REPORT
Your Company carried out detailed feasibility analysis and prepared a business case for operating the Home Healthcare
business with investment in the 100% subsidiary. The assumptions taken in the business model for the business were based
on results of the Pilot (“Project Vijay”), which was operated by the Company for over a year. The business case was agreed
and approved by the Board of Directors in their meeting held on April 25, 2016.
Post the approval of the Board, a wholly owned subsidiary of the Company, under the name of Philips Home Care Services
India Private Limited was incorporated, on May 25, 2016. The Company will carry out the activities to provide, initiate,
encourage or promote home healthcare services, treatment, diagnosis or care for ailments such as chronic heart failure,
chronic respiratory disease, post-surgical treatment, sleep disorders, nephrology care, oncology care and similar such
18
diseases, afflictions or any injury, providing of Home care services to patients at home through a team of nurses, paramedics, respiratory therapists and other trained personnel monitored remotely by doctors, providing sleep diagnostic
services, providing medical equipment and other devices required for taking care of patients at home. The business of home
healthcare services to be operated by Philips Home Care Services has significant potential in a country like India.
7.
SIGNIFICANT AND MATERIAL ORDERS IMPACTING GOING CONCERN STATUS OF THE COMPANY
There are no significant and material orders passed by regulators, courts or tribunals impacting the going concern status of
the Company and its operations in the future.
8.
DETAILS OF SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES
As of March 31, 2016, your Company had a subsidiary, Preethi Kitchen Appliances Private Limited (“Preethi”) and an Associate
Company, Healthmap Diagnostics Private Limited (“Healthmap”) within the meaning of Section 2(6) of the Companies Act,
2013 (“Act”).
As highlighted earlier, your Company infused capital of ` 373.3 Crores into Preethi to retain 51.2% shareholding in Preethi,
post conversion of Compulsorily Convertible Debenture held by Koninklijke Philips N.V. to equity. Further, the Company
invested ` 6.3 Crores in equity of Healthmap during the year.
Further, during the year, the Company has set up a 100% subsidiary, Philips Lighting India Limited, for the purpose of
implementing the Scheme of Arrangement of Demerger of the Lighting business of the Company. Pursuant to the orders of
Hon`ble Kolkata High Court dated January 7, 2016, the Lighting business of the Company was demerged into Philips Lighting
India Limited and simultaneous with the same, Philips Lighting India Limited ceased to be a subsidiary of the Company.
Pursuant to provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the
Company’s subsidiary, Preethi and Associate Company Healthmap, in Form AOC-1, forms part of the financial statements of
the Company.
Pursuant to the provisions of section 136 of the Act, the consolidated and standalone financial statements of the Company,
along with relevant documents and separate audited accounts in respect of subsidiary(ies), are available on the website of
the Company.
9.
PERFORMANCE OF THE SUBSIDARY
PREETHI KITCHEN APPLIANCES PRIVATE LIMITED (“PREETHI”):
Preethi has launched a new series of products (Aries, Taurus and Zodiac – A Mixer Grinder that can chop, grate and slice in
seconds, knead atta in a minute and deliver fresh juice in no time”) in Mixer Grinder category during the year.This is Preethi’s
first ever platform based launch series developed by the Company’s Innovation and Development Centre at Chennai. The
product is powered by state-of-the-art Vega W5 Motor which comes with 5 years Warranty.
Preethi has also launched new models in Glass Top Stoves (GTS) and Stainless Steel (SS) category with a feature of single
burner to four burners to strengthen the category.
Moreover, Preethi continued to build the relationship with the Trade Partners by conducting Dealers Meet across markets.
The response received from both the Trade as well as from the Customers has been encouraging.
Preethi is on growth track and has achieved growth of 14% over the previous financial year.
Preethi has continued to be recognized by different agencies for its high quality performance in various parameters. During
the year, Preethi has bagged the following Awards:
•
“Make in India” Excellence Award 2015 awarded by Krazy Mantra– Preethi was the only Brand to receive the award in
the Kitchen Appliance Category.
•
“W3 Silver Award” awarded by Academy of Interactive and Visual Arts, USA for creative excellence on the Web.
•
“No.1 Kitchen Appliance Brand” awarded by IBC Info Media (USA) and No. 1 Brand Council.
During the year, Preethi has successfully completed strategic review on a project “LEAN” Excellence Phase II at both sites
Nalagarh and Chennai. Preethi has also successfully completed a project on “TUV OSHA”.
The outlook for Preethi looks positive and it is optimistic in increasing it’s market share through launch of new models that
cater to the customer needs.
Preethi has also initiated steps to expand pan-India in the Large Format Retail Category (LFR) and Canteen Store Department
Category (GTS and Grinders).
Annual
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PHILIPS INDIA LIMITED
Preethi is continuing its exports through servicing Global Philips Organizations and direct exports as well catering to the
demands of Indian diaspora in different countries.
10. BUSINESS RESTRUCTURING
During the year, the Lighting business of your Company was demerged to Philips Lighting India Limited, a Company
incorporated in India, which is an indirect subsidiary of Koninklijke Philips N.V., the parent Company.
The divestment was carried out through Demerger pursuant to the scheme of arrangement for demerger which was duly
approved by the Hon`ble Calcutta High Court by an order dated January 7, 2016, in accordance to which the shareholders
of the Company were entitled to receive, on proportionate basis, for every one fully paid-up equity share of ` 10/- each held
by them in the Company, one fully paid up equity share of ` 10/- (Rupees ten) each of Philips Lighting India Limited (‘Philips
Lighting’). Accordingly, the Board of directors of Philips Lighting allotted fully paid equity shares on April 15, 2016 to those
shareholders of the Company, whose names appeared in the Register of Members as on the Record Date i.e. April 8, 2016.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year 2015-16, the Board of Directors, in their meeting held on September 27, 2015 approved the appointment of
Ms. Geetu Gidwani Verma as Non- Executive Additional Director of the Company with effect from September 29, 2015 for
a term of 5 years.
Further, pursuant to his transfer to a global assignment within Philips, Mr. Krishnakumar Ananthasubramanian stepped down
from the Board with effect from December 15, 2015, after serving on the Board for almost two years as Managing Director
and Chief Executive officer of the Company. Your Directors wish to record their appreciation of the valuable contributions
made by Mr. Ananthasubramanian to the Board’s deliberations and proceedings during his term on the Board.
The Board of Directors, in their meeting held on December 15, 2015 appointed Mr.V. Raja as Non- Retiring Vice- Chairman
and Managing Director of the Company for a period of 5 years, with effect from December 15, 2015.
The appointment of Mr. V. Raja as Vice Chairman and Managing Director and Ms. Geetu Gidwani Verma as Non- Executive
Independent Director is required to be regularised and your Directors recommend their appointment for your approval.
12. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
Meetings of the Board were held seven times during the financial year, on April 1, 2015, April 27, 2015, August18, 2015,
September 27, 2015, December 15, 2015, February 15, 2016 and March23, 2016.
13. BOARD EVALUATION
The Nomination and Remuneration Committee of the Company approved a Performance Evaluation Policy, which was
adopted by the Board of Directors. The key features of this Policy have also been included in the report. The Policy provides
for evaluation of the Board, the Committees of the Board and individual Directors, including the Chairman of the Board and
Independent Directors.
The Board has carried out an annual evaluation of its own performance, Board Committees and Individual Directors
pursuant to the provisions of the Act.The performance of the Board was evaluated after seeking inputs from all the directors
on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and
functioning for the Board and composition of committees, effectiveness of committee meetings, etc. for the Committees of
the Board.
In a separate meeting of the Independent Directors held on May 25, 2016, performance of Non-Independent Directors,
performance of the Board as a Whole and performance of the Chairman was evaluated, taking into account the views from
Executive Directors. The discussions were also held on the performance of the Committees of the Board and Individual
Directors of the Company.
The results of the evaluation were shared with the Board, Chairpersons of respective Committees and individual Directors
and noted by them.
14. COMMITTEES OF THE BOARD
14.1 AUDIT COMMITTEE
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Audit Committee of the Board is responsible for monitoring and providing an effective supervision of the management`s
financial reporting, to ensure accurate and timely disclosures, with highest levels of transparency, recommending the
appointment, re-appointment, remuneration and terms of appointment of auditors and approval of payment for any
other services rendered by statutory auditors; reviewing the annual financial statements before submission to the
Board for approval.
The powers of Audit Committee include investigating any activity within its terms of reference as specified by the
Board and seeking information from any employee, obtain professional advice from external sources and have full
access to information contained in the records of the Company, approval or any subsequent modification of any
transactions of the Company with related parties; review and monitor the auditor’s independence and performance
and effectiveness of audit process; scrutiny of inter corporate loans and investments.
The Audit Committee also mandatorily reviews information such as internal audit reports related to internal control
weakness and analysis of financial condition and results of operations.
The Audit Committee of the Board was re-constituted on September 27, 2015 after appointment of Ms. Geetu
Gidwani Verma, as a Non- Executive Additional Director of the Company with effect from September 29, 2015. The
Audit Committee presently comprises of the following members:
•
Mr. S M Datta, Non-Executive Director
Chairman
•
Mr.Vivek Gambhir, Non-Executive Director
Member
•
Mr. Hariharan Madhavan, Director
Member
•
Mr. Rajiv Mathur, Director
Member & Secretary
•
Ms. Geetu Gidwani Verma, Non- Executive Director Member
During the year, the Audit Committee met six times i.e. on April 27, 2015, August 18, 2015, September 27, 2015,
December 15, 2015, February 15, 2016 and March 23, 2016.The Chairman of Audit Committee, Mr. S M Datta, attended
the Annual General Meeting of the Company held on September 28, 2015 to respond to the shareholders’ queries.
14.2 CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Committee was setup to oversee the corporate social responsibility and other business related matters referred
by the Board, as and when deemed necessary, for the consideration and recommendation of the Committee. The
Committee adopted a Corporate Social Responsibility (CSR) policy to discharge the role of Corporate Social
Responsibility Committee as envisaged under Section 135 of the Companies Act, 2013 which includes formulating and
recommending to the Board the activities to be undertaken by the Company as per Schedule VII to the Companies Act,
2013 and the amount of expenditure to be incurred on the same.
The Corporate Social Responsibility Committee of the Board was re-constituted on December 15, 2015 after cessation
of Mr. Krishnakumar Ananthasubramanian as Managing Director and appointment of Mr. V. Raja as Vice Chairman and
Managing Director. The Corporate Social Responsibility Committee presently comprises of the following members:
•
Mr.Vivek Gambhir, Non-Executive Director
Chairman
•
Mr.V. Raja, Managing Director
Member
•
Mr. Rajiv Mathur, Director
Member & Secretary
•
Mr. Hariharan Madhavan, Director
Member
During the year, the Committee met three times i.e. on August 18, 2015, September 27, 2015 and December 15, 2015.
Your Company was engaged in Corporate Social Responsibility (CSR) initiatives in various fields, during the year 201516, the details of which are set out in Annual Corporate Social Responsibility report attached as Annexure II to the
Board’s report.
14.3 STAKE HOLDERS’ RELATIONSHIP COMMITTEE
The Stakeholders’ Relationship Committee was constituted by the Board of your Company in its meeting held on June
25, 2014 as per the provisions of Section 178 of the Companies Act 2013, the Stakeholders Relationship Committee
oversees, inter-alia, redressal of shareholder and investor grievances, transfer/transmission of shares, issue of duplicate
shares, exchange of share certificates, recording dematerialisation/rematerialization of shares and related matters.
The Committee was re - constituted on December 15, 2015 on appointment of Mr.V. Raja in place of Mr. Krishnakumar
Ananthasubramanian as Vice Chairman and Managing Director and presently consists of the following members:-
•
Mr. S M Datta, Non-Executive Director
Chairman
•
Mr.V. Raja, Managing Director
Member
•
Mr. Rajiv Mathur, Director
Member & Secratary
Mr, Hariharan Madhavan, Director
Member
•
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PHILIPS INDIA LIMITED
During the year, the Committee met three time i.e. on August 18, 2015, December 15, 2015 and February 15, 2016.
14.4 NOMINATION AND REMUNERATION COMMITTEE
Nomination and Remuneration Committee covers the areas as contemplated under Section 178 of the Companies
Act, 2013, besides other terms as referred by the Board of Directors.
The role includes formulation of criteria for determining qualifications, positive attributes and independence of a
director and recommending to the Board the remuneration for the directors, key managerial personnel and other
employees; formulation of criteria for evaluation of Independent Directors, the Board and Committees of the Board;
identification of persons who are qualified to become directors and who may be appointed in senior management in
accordance with the criteria laid down.
The Committee was re- constituted on December 15, 2015 after the appointment of Mr.V. Raja as Vice Chairman and
Managing Director and Ms. Geetu Gidwani Verma as Non- executive Director and presently consists of the following
members:-
•
Mr.Vivek Gambhir, Non-Executive Director
Chairman
•
Mr. S M Datta, Non-Executive Director
Member
•
Mr.Vikram Mukund Limaye, Non-Executive Director
Member
•
Ms. Geetu Gidwani Verma, Non- Executive Director
Member
•
Mr.V. Raja, Managing Director
Member
•
Mr. Rajiv Mathur, Director
Member & Secretary
The broad terms of reference of the nomination and Remuneration Committee are as under:
•
Recommend to the Board, the set up and composition of the Board and its committees, including the “formulation
of the criteria for determining qualifications, positive attributes and independence of a director”. The Committee
will consider periodically reviewing the composition of the Board with the objective of achieving an optimum
balance of size, skills, independence, knowledge, age, gender and experience.
•
Recommend to the Board the appointment or reappointment of directors.
•
Recommend to the Board appointment of key managerial personnel (“KMP” as defined by the Act) and executive
team members of the Company (as defined by this Committee).
•
Carry out evaluation of every Director’s performance and support the board and independent directors in
evaluation of the performance of the board, its committees and individual directors.This shall include “formulation
of criteria for evaluation of independent directors and the board” as per Performance Evaluation Policy of the
Company.
•
Recommend to the Board the remuneration policy for directors, executive team or key managerial personnel as
well as the rest of the employees.
•
Recommend to the Board the remuneration payable to the Directors and oversee the remuneration to executive
team or key managerial personnel of the Company.
•
Performing such other duties and responsibilities as may be consistent with the provisions of the committee
charter.
During the year, the Committee met three time i.e. on August 18, 2015, September 27, 2015 and December 15, 2015.
15. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received a declaration from each of the independent Directors under Section 149(7) of the Companies
Act, 2013, that they meet the Criteria of Independence laid down in Section 149(6) of the Companies Act, 2013.
16. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company remains committed to maintaining internal controls designed to safeguard the efficiency of operations
and security of our assets. Accounting records are adequate for preparation of financial statements and other financial
information. Through our internal audit processes at the sectoral and corporate levels, both the adequacy and effectiveness
of internal controls across various businesses and compliance with laid-down systems and policies are regularly monitored.A
trained internal audit team also periodically validates the major IT-enabled business applications for their integration, control
22
and quality of functionality. The Audit Committee of the Board met periodically during the year to review internal control
systems as well as financial disclosures.
17. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such
controls were tested and no reportable material weakness in the design or operation were observed.
18. HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The four core pillars of HR namely - Talent Acquisition, Learning & Talent Development, Total Rewards and Industrial &
Employee relations have focused on offering innovative programs and solutions to employees in the year 2015-16.
In the Talent Acquisition space, your Company rolled out new initiatives to strengthen our Employer brand on campus and
in the job market. The Leadership Programs for New Hires – BLP/ CLP/ TLP offer job opportunities to right talent from
Premiere B-Schools and Technical institutions, help source good talent into the organization at entry levels.Your Company’s
presence at the premier management campuses has been strengthened with activities like sponsorship of campus workshops
and talks by the Philips India Leadership Team. Your Company has been successful in identifying and hiring right talent from
premier campuses through Blueprint, which is a case study competition.We continued with the 3rd year of Back In the Game
(BIG) program – an opportunity to provide a second chance to women on sabbatical to come back to the mainstream work.
To encourage internal talent to take on diverse and bigger roles, all job openings are shared through a mailer ‘Opportunity
Knocks’ with internal employees first.
There is a continued focus on the learning and development through a variety of experiences: towards this your Company
has launched many new programs and revamped certain existing ones. To ensure that our sales and marketing teams are
adequately equipped, functional programs such as Sales Excellence, Gurukool (clinical selling), Customer Focused Selling
training sessions were continued this year. To build a high-performance and learning culture, your Company continued
with the 2nd edition of Learning Fiesta, which is designed like a Learning Supermarket to provide everyone exposure to a
variety of powerful learning experiences to choose from. Your Company launched LEAD India towards building business
and functional leaders for leadership roles in future. LEAD India integrates classroom sessions and experiences to provide
an integrated learning journey around key skills including strategic thinking, commercial acumen, storytelling and influencing
skills. Catalyst program for people managers was introduced with the objective of building capability amongst line managers
to be talent developers, and equipping them with tools and competencies to build high-performing and effective teams.
In the area of Rewards, your Company focused on designing and introducing new employee benefits to enable health and wellbeing for employees; these included crèche reimbursement to enable employees manage work life balance, Sabbatical Leave
and Gym Reimbursement policy for promoting health and well-being. Health camps, expert talks and a Health Challenge
was organized to improve health and employee productivity. Building a culture of recognition was another focus area to
engage and motivate employees. A special Thank You month was organized, where employees were encouraged to recognize
and thank their peers, subordinates, superiors and support staff. Your Company also took the opportunity to reward and
recognize its top talents across the business verticals at Pan-India level through CEO Awards. Salary review cycles & benefits
awareness sessions continue as usual.
Our journey in digitalization of the HR function continues on track, HR workday was launched in 2013, Phase 2 included
Philips Performance Measurement (PPM) evaluation and goal settings, in 2015 we launched compensation and leave
management in Workday and intend to implement Annual Compensation Review process in 2016. Going forward Workday
will be the single source of all employee related data and further enhance process efficiency and cost optimization in HR.
Industrial Relations were cordial across all sites & we have done significant improvement on enhancing continuous
improvement behavior at shop-floor.We have introduced Graduate Engineer Training Program to strengthen talent pipe-line
at Industry. Standing orders have been certified at Pune Healthcare factory & Wage negotiations are in progress at both
industrial sites.
Information under Section 197 of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personal) Rules, 2014, forms part of the Board’s Report.
19. CONSERVATION OF ENERGY, FOREIGN EXCHANGE OUTGO AND TECHNOLOGY ABSORPTION
Information on Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo, required to
be given pursuant to Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is
provided in Annexure III to this Report.
20. ENVIRONMENT, ENERGY, OCCUPATIONAL HEALTH & SAFETY
The Company’s Mohali Light Factory (MLF) has been actively involved in implementing Philips Eco Vision program. 100%
Annual
Report 2015-16
23
PHILIPS INDIA LIMITED
of waste generated is being recycled. Many energy saving projects were undertaken. Safety of employees is the foremost
concern at MLF and working towards providing a safe and accident free working environment is a culture here. Regular
trainings and awareness sessions are carried out on Behaviour Based Safety (BBS), Machine Safety for the employees to
achieve zero accidents in the factory.
The Company’s Vadodara Light Factory (VLF), with its focus on the environment and safety issues, has been very well
appreciated during various audits done in the year. National Safety and World Environment day are celebrated every year
in the plant to spread awareness and safety culture within the factory. VLF had switched over from liquid mercury to solid
mercury in Fluorescent Lamps manufacturing which resulted in drastic reduction of mercury consumption and its emission.
Regular training and seminars are conducted on Behaviour Based Safety and Machine safety to motivate and inculcate
behaviour change amongst its employees in pursuit of the Company’s our aim of zero accidents at the site.VLF is also actively
involved in implementing the Philips Eco-Vision program. During the year, substantial part of the waste generated at VLF was
recycled. E-waste also was disposed through Proper and authorised TSDF-Treatment, Storage and Disposal Facilities.
21. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of Loans, Guarantees and Investments covered under section 186 of the Companies Act, 2013 form part of
the notes to the financial statements, which form part of the Company’s Annual Report.
22. RELATED PARTY TRANSCATIONS
Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the
Companies(Accounts) Rules, 2014 are given in Annexure IV in Form AOC-2 and the same forms part of this report.
23. STATEMENT OF RISK MANAGEMENT
Risk management forms an integral part of the business planning and review cycle. The Company’s risk management
initiatives are designed to overview the main risks known to your Company, which could hinder it in achieving its strategic
and financial business objectives. The objectives are met by integrating management control into the daily operations, by
ensuring compliance with legal requirements and by safeguarding the integrity of the Company’s financial reporting and its
related disclosures like businesses, objectives, revenues, income, assets, liquidity or capital resources. Your Company’s risk
management approach is embedded in the areas of corporate governance, Philips Business Control Framework and Philips
General Business Principles.
24. DIRECTORS’ RESPONSIBILITY STATEMENT
As required under Section 134 (3)(c) of the Companies Act, 2013, your Directors, to the best of their knowledge confirm that:
i.
In the preparation of the annual accounts, applicable accounting standards have been followed along with proper
explanations relating to material departures;
ii.
The Directors have selected such accounting policies and applied them consistently and made judgments and estimates
that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as on March31,
2016 and of the profit of the Company for the year ended March 31, 2016;
iii.
The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance
with the provisions of this Act, to safeguard the assets of the Company and to prevent and detect fraud and other
irregularities;
iv.
The Directors have prepared the annual accounts on a going concern basis.
v.
They have laid down internal financial controls to be followed by the Company and such internal financial controls are
adequate and operating effectively.
vi.
They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such
systems were adequate and operating effectively.
25. AUDITORS
In terms of provisions of Section 139 and 141 of the Companies Act, 2013 and Rules framed thereunder, the Board of
your Company at its meeting held on July 25, 2016 has appointed M/s S R Batliboi & Co LLP, Chartered Accountants (Firm
Registration No. 301003E/E300005), as Statutory Auditors of your Company, subject to the approval of the Shareholders of
the Company. The Board of Directors of your Company recommend their appointment for your approval.
26. COST AUDITORS
The Central Government has directed your Company to carry out an audit of the Company’s cost accounts in respect of
healthcare equipment. Pursuant to the provisions of Section 148 of the Companies Act, 2013, your Directors have approved
the appointment of M/s Nanabhoy & Company, a firm of cost accountants, to conduct the Cost Audit for the year ending
24
March 31, 2017, at a remuneration of ` 5, 00,000 (Rupees Five Lacs only) plus service tax and out of pocket expenses, subject
to the approval of such remuneration by the members of the Company at its Annual General Meeting.
27. SECRETARIAL AUDITORS’ QUALIFICATION
The Secretarial Audit was carried out by Mr. Ashok Tyagi, Company Secretary (PCS Registration No. 7322) for the financial
year ended on March 31, 2016. The Report given by the Secretarial Auditors is annexed as Annexure V and forms integral
part of this Report.There has been no qualification, reservation or adverse remark or disclaimer in their Report. During the
year under review, the Secretarial Auditors had not reported any matter under Section 143 (12) of the Act, therefore no
detail is required to be disclosed under Section 134 (3)(ca) of the Act.
However, the Secretarial Audit Report carries the following observation, which is self-explanatory and requires no further
explanation/ response from the Board of Directors:
“I further report that during the Audit Period:
(1) The Hon’ble Calcutta High Court vide its Order dated January 07, 2016 had accorded its approval to the Scheme of
Arrangement of lighting business of the Company to Philips Lighting India Limited.”
28. PREVENTION, PROHIBITION AND REDRESSAL AGAINST SEXUAL HARASSMENT OF WOMEN
EMPLOYEES AT WORKPLACE POLICY
In order to ensure a safe working environment for all women employees, your Company has a Prevention, Prohibition
and Redressal against Sexual Harassment of Women Employees at Workplace Policy in place, adhering with the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Consequently, the Company has set
up a Core Complaints Redressal Committee at the Corporate Office in Gurgaon and Site Complaint Redressal Committees
in Pimpri, Chakan, Bangalore, Mumbai, Chennai and Kolkata consisting of 2-4 members, along with an external member
appointed from an NGO or Association, with experience in the field of sexual harassment.
The procedure followed by the Committee is as follows - If any incident of sexual harassment occurs, a complaint is to be
filed by the complainant with the respective Internal Complaint Redressal Committee or with the Employer within 30 days
from the incident, along with supporting documents and details of the witnesses and evidences. The same is reported to
the Employer (Mr. Rajiv Mathur, who also serves as the Country Compliance Officer). A copy of the same is forwarded to
the respondent within 7 days. The respondent is requied to file his reply, along with supporting documents and details of
witnesses in the next 10 days.
The Committee attempts to reconcile the written request of the victim or proceed with the inquiry, which is to be
completed within 90 days. The inquiry report is issued within 10 days from completion of the inquiry and forwarded to the
Employer. If the Employer is satisfied with the findings of the Committee, appropriate action is taken on the lines of issuing
a warning or stern warning or even termination of service, within 60 days from the date of receipt of the inquiry report.
Necessary face to face trainings and online courses along with the mandatory questionnaires are circulated to disseminate
to all employees including contractual/consultant the nuances of the Act and the Rules. List of pending and closed cases, are
also shared with the Directors on quarterly basis.
During the year, 3 complaints of sexual harassment were received, all of which were resolved. Appropriate action was taken
against the employees, where the allegations made against them were found to be correct
ACKNOWLEDGEMENT
The Directors thank the Customers, vendors, Investors and bankers for their continued support during this year. We appreciate
the contribution made by our employees at all levels. The growth of the Company is made possible by their hard work, solidarity,
co-operation and support.
The Directors also thank the government of various countries, government of India, the governments of various states in India
and concerned government departments/ agencies for their co-operation.
The Directors appreciate and value the contributions made by every member of the Philips family.
On behalf of the Board of Directors
For Philips India Limited
S.M. Datta
(Chairman)
DIN: 00032812
Place: Mumbai
Date: July 25, 2016
Annual
Report 2015-16
25
PHILIPS INDIA LIMITED
Annexure - I
Form No. MGT 9
Extract of Annual Return
As on financial year ended on 31.03.2016 [Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company
(Management & Administration ) Rules, 2014.
I.
II.
REGISTRATION & OTHER DETAILS:
i
CIN
U31902WB1930PLC006663
ii
Registration Date
31/01/1930
iii
Name of the Company
PHILIPS INDIA LIMITED
iv
Category/Sub-category of the Company
Public Company / Subsidiary of Foreign Company limited by shares
v
Address of the Registered office
& contact details
7, Justice Chandra Madhab Road, Kolkata, West Bengal - 700020
vi
Whether listed company
No
vii
Name , Address & contact details of the
Registrar & Transfer Agent, if any
Sharepro Services (India) Pvt. Ltd.
13 AB Samhita Warehousing Complex,
2nd Floor, Sakinaka Telephone Exchange Lane,
Off Andheri-Kurla Road, Sakinaka,
Andheri (E), Mumbai - 400 072
Tel.: +91-22-6772 0300
Please Note with effect from July 1, 2016 Karvy
Computershare Pvt. Ltd. is appointed as new
Registrar & Transfer Agent of the Company,
Address: Karvy Selenium,Tower-B, Plot
no.31-32, Gachibowli, Financial District,
Nanakrampuda, Hyderabad-500 032.
Toll Free no. 18 00 3454 001,
Tel. +91-040-67162222,
Fax no. +91-40-23001153,
Email id: einward.ris@karvy.com
PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10% or more of the total turnover of the company are stated as below:
SL No Name & Description of main
products/services
NIC Code of the
Product /service
% to total turnover
of the company
1
Lamps
2740
23
2
Fittings
2740
14
3
Diagnostic imaging equipments
2660
14
4
Domestic appliances
2750
9
5
Software development
5820
13
III. PARTICULARS OF HOLDING , SUBSIDIARY & ASSOCIATE COMPANIES
Sl No Name & Address of the
Company
1.
26
Koninklijke Philips
N.V. (KPNV)
High Tech Campus 5,
5656 AE Eindhoven, the
Netherlands
CIN/GLN
N.A
HOLDING/
% OF
SUBSIDIARY/ SHARES
ASSOCIATE
HELD
Holding
96.13
APPLICABLE
SECTION
2(46)
IV.
2.
Preethi Kitchen Appliances U36993MH2011PTC213827
Private Limited
Unit No. 506, 5th Floor,
Boomrang Chandivali
Farm Road, Powai, Mumbai,
Maharashtra - 400 072,
India
Subsidiary
51.2
2(87)
3.
Healthmap Diagnostics
Private Limited
The Annexe, # 98/2,
Rustom Bagh Hal Airport
Road Bangalore Karnataka
- 560017, India
Associate
35
2(6)
U85110KA2015PTC079665
SHAREHOLDING PATTERN (Equity Share capital Break up as % to total Equity)
Category of
Shareholders
No. of Shares held at the beginning of the No. of Shares held at the end of the year
year April 1, 2015
March 31, 2016
Demat
Physical
Total
% of
Demat
Total
Shares
Physical
Total
% change
during the
year
% of
Total
Shares
A. Promoters
(1) Indian
a) Individual/HUF
-
-
-
-
-
-
-
-
-
b) Central Govt.or
State Govt.
-
-
-
-
-
-
-
-
-
c) Bodies Corporates
-
-
-
-
-
-
-
-
-
d) Bank/FI
-
-
-
-
-
-
-
-
-
e) Any other
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
a) NRI- Individuals
-
-
-
-
-
-
-
-
-
b) Other Individuals
-
-
-
-
-
-
-
-
-
96.13 1,30,28,754 4,22,61,488 5,52,90,242
96.13
0.00
-
SUB TOTAL : (A) (1)
(2) Foreign
c) Bodies Corp.
1,30,28,754 4,22,61,488 5,52,90,242
d) Banks/FI
-
-
-
-
-
-
-
-
e) Any other
-
-
-
-
-
-
-
-
-
SUB TOTAL : (A) (2) 1,30,28,754 4,22,61,488 5,52,90,242
96.13 1,30,28,754 4,22,61,488 5,52,90,242
96.13
0.00
Total Shareholding of
Promoter (A)= (A) 1,30,28,754 4,22,61,488 5,52,90,242
(1)+(A)(2)
96.13 1,30,28,754 4,22,61,488 5,52,90,242
96.13
0.00
B. PUBLIC SHARE HOLDING
1. Institutions
a) Mutual Funds
4
3,058
3,062
0.01
-
3,058
3,058
0.01
-
2,346
8,623
10,969
0.02
2,346
8,623
10,969
0.02
-
C) Cenntral govt
-
-
-
-
-
-
-
-
-
d) State Govt.
-
-
-
-
-
-
-
-
-
e) Venture Capital Fund
-
-
-
-
-
-
-
-
-
f) Insurance Companies
-
-
-
-
-
-
-
-
-
g) FIIS
-
-
-
-
-
-
-
-
-
b) Banks/FI
Annual
Report 2015-16
27
PHILIPS INDIA LIMITED
Category of
Shareholders
No. of Shares held at the beginning of the No. of Shares held at the end of the year
year April 1, 2015
March 31, 2016
Demat
Physical
Total
% of
Demat
Total
Shares
Physical
Total
% change
during the
year
% of
Total
Shares
h) Foreign Venture
Capital Funds
-
-
-
-
-
-
-
-
0.00
i) Others (specify)
NBFC
1
-
1
-
11
-
11
-
0.00
2,351
11,681
14,032
0.02
2,357
11,681
14,038
0.02
0.00
34,653
11,884
46,537
0.08
36,629
12,351
48,980
0.09
0.00
-
-
-
-
-
-
-
-
-
7,70,036
12,72,546
20,42,582
3.55
7,81,203
12,39,896
20,21,099
3.51
-0.04
82,050
-
82,050
0.14
82,050
-
82,050
0.14
0.00
2,508
-
2,508
-
17,720
-
17,720
0.03
0.03
-
-
-
-
21
-
21
-
0.00
NRI (REP)
13,871
12,434
26,305
0.05
15,328
11,884
27,212
0.05
0.00
NRI (NON-REP)
12,610
376
12,986
0.02
15,504
376
15,880
0.03
0.01
SUB TOTAL: (B)(2)
9,15,728
12,97,240
22,12,968
3.85
9,48,455
12,64,507
22,12,962
3.85
0.00
Total Public
Shareholding
(B)= (B)(1)+(B)(2)
9,18,079
13,08,921 22,27,000
3.87
9,50,812 12,76,188 22,27,000
3.87
0.00
C. Shares held by
Custodian for GDRs
& ADRs
-
-
-
-
100.00 1,39,79,566 4,35,37,676 5,75,17,242
100.00
0.00
SUB TOTAL: (B)(1)
(2) Non Institutions
a) Bodies corporates
i) Indian
ii) Overseas
b) Individuals
i) Individual
shareholders holding
nominal share capital
upto ` 2 lakhs
ii) Individuals
shareholders holding
nominal share capital in
excess of ` 2 lakhs
c) Others (specify) Trust
Foreign National
Grand Total (A+B+C) 1,39,46,833
ii.
-
4,35,70,409 5,75,17,242
-
-
-
SHARE HOLDING OF PROMOTERS
Sl No.
Shareholders Name Shareholding at the
beginning of the year
No. of
shares
1
2
% of total
shares
of the
company
Koninklijke Philips N.V. 5,52,90,182
Philips Radio B.V.
Total
28
-
Shareholding at the
end of the year
% of shares
NO of
pledged
shares
encumbered to
total shares
96.13
-
% of total
shares
of the
company
5,52,90,182
% change
in share
holding
during the
year
% of shares
pledged
encumbered
to total shares
96.13
-
-
60
0.00
-
60
0.00
-
-
5,52,90,242
96.13
-
5,52,90,242
96.13
-
-
(iii) CHANGE IN PROMOTERS’ SHAREHOLDING ( SPECIFY IF THERE IS NO CHANGE)
Sl.
No.
Share holding at the beginning Cumulative Share holding
of the Year
during the year
No. of
Shares
At the beginning of the year
Date wise increase/decrease in Promoters
Share holding during the year specifying
the reasons for increase/decrease (e.g.
allotment/transfer/bonus/sweat equity etc)
At the end of the year
iv)
% of total shares
of the company
5,52,90,242
No of
shares
% of total shares
of the company
96.13
" There was no change in Promoters’ Shareholding
between 01.04.2015 to 31.03.2016 "
5,52,90,242
96.13
Shareholding Pattern of Top Ten Shareholders (other than Directors, Promoters and Holders of GDRs and
ADRs)– as on 31st March 2016 :
Sl No. Name of Shareholers
Shareholding
Cumulative Shareholding
during the year
No.of shares
1
2
3
4
5
6
% of total
shares of the
company
No.of shares
% of total
shares of the
company
PAYAL BHANSHALI
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
54,700
54,700
0.10
0.10
54,700
54,700
54,700
54,700
0.10
0.10
0.10
0.10
SURESH GUPTA
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
13,600
13,600
0.02
0.02
13,600
13,600
13,600
13,600
0.02
0.02
0.02
0.02
PUNIT KUMAR
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
11,621
379
12,000
0.02
0.02
11,621
12,000
12,000
12,000
0.02
0.02
0.02
0.02
AMISH NARENDRA SHAH
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
10,276
10,276
0.02
0.02
10,276
10,276
10,276
10,276
0.02
0.02
0.02
0.02
HINA KIRTI DOSHI
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
10,000
10,000
0.02
0.02
10,000
10,000
10,000
10,000
0.02
0.02
0.02
0.02
HITESH SHANTILAL MEHTA
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
10,000
10,000
0.02
0.02
10,000
10,000
10,000
10,000
0.02
0.02
0.02
0.02
Annual
Report 2015-16
29
PHILIPS INDIA LIMITED
Sl No. Name of Shareholers
Shareholding
Cumulative Shareholding
during the year
No.of shares
7
8
9
% of total
shares of the
company
No.of shares
% of total
shares of the
company
SUSHILA NAYYAR
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
9,300
9,300
0.02
0.02
9,300
9,300
9,300
9,300
0.02
0.02
0.02
0.02
EMERALD SECURITIES PRIVATE LTD
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
6,576
906
7,482
0.01
0.01
6,576
7,482
7,482
7,482
0.01
0.01
0.01
0.01
CENTBANK FINANCIAL SERVICES LTD
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
6,537
6,537
0.01
0.01
6,537
6,537
6,537
6,537
0.01
0.01
0.01
0.01
10
KEWAL KUMAR VOHRA
At the beginning of the year
6,513
0.01
6,513
0.01
Bought during the year
6,513
0.01
Sold during the year
6,513
0.01
At the end of the year
6,513
0.01
6,513
0.01
The shares of the Company are traded on a very frequent basis and hence the datewise increase / decrease in shareholding is
not indicated.
Change in Top 10 Shareholders at the beginning of the year and at the end of the year is indiacted in the table above.
iv)
Shareholding Pattern of Directors and Key Managerial Personnel
Sr.No
For each of the Directors and KMP
1
2
3
30
Shareholding at the
beginning of the year
No. of
% of total
Shares
Shares of the
Company
Cumulative Shareholding
during the year
No. of Shares % of total
Shares of the
Company
At the begning of the year
Krishna Kumar Ananthasubramanian
6
-
6
-
V. Raja
-
-
-
-
Date wise Increase/decrease in shareholding
during the year specifying the reasons for
increase/decrease (e.g. allotment, transfer/
bonus/ sweat equity etc.)
At the end of the year
During the year Mr.V. Raja bought 6 shares from Mr. Krishna Kumar
Ananthasubramanian on December 15, 2015
Krishna Kumar Ananthasubramanian
-
-
-
-
V. Raja
6
-
6
-
V
INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
(Amounts in ` Million)
Unsecured Deposits Total
Loans
Indebtedness
Secured Loans
excluding
deposits
Indebtness at the beginning of the financial year
i) Principal Amount
349
287
-
636
ii) Interest due but not paid
-
-
-
-
iii) Interest accrued but not due
-
-
-
-
349
287
-
636
Additions
162
-
-
162
Reduction
(250)
(287)
-
(537)
(88)
(287)
-
(375)
261
0
-
261
ii) Interest due but not paid
-
-
-
-
iii) Interest accrued but not due
-
-
-
-
261
0
-
261
Total (i+ii+iii)
Change in Indebtedness during the financial year
Net Change
Indebtedness at the end of the financial year
i) Principal Amount
Total (i+ii+iii)
VI
REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A.
Remuneration to Managing Director, Whole time director and/or Manager:
(Amounts in ` Million paid during FY 2015-16)
Sl. Particulars of Remuneration
No
Name of the MD/WTD/Manager
Krishnakumar
Ananthasubramanian
1
Total
Amount
Rajiv
Hariharan V. Raja
Mathur Madhavan
Gross salary
(a) Salary as per provisions contained
in section 17(1) of the Income Tax Act,
1961
19.34
12.99
9.35
11.02
52.70
(b) Value of perquisites u/s 17(2) of the
Income Tax Act, 1961
1.77
3.16
2.30
1.90
9.13
-
-
-
(c ) Profits in lieu of salary under section
17(3) of the Income Tax Act, 1961
-
2
Stock option
5.68
-
-
3
Sweat Equity
-
-
-
4
Commission as % of profit
-
-
-
-
-
5
Others, please specify
26.79
16.15
11.65
12.92
67.5
Total (A)
Ceiling as per the Act
-
5.68
-
` 640.8 Million
Annual
Report 2015-16
31
PHILIPS INDIA LIMITED
B.
Remuneration to other directors:
(Amounts in ` Million)
Sl. Particulars of Remuneration
No
Name of the Directors
1
S. M.
Datta
Independent Directors
Total
Amount
Vivek
Vikram
Gambhir Mukund
Limaye
Geetu
Gidwani
Verma
(a) Fee for attending Board, Committee meetings
0.38
0.26
0.18
0.14
0.96
(b) Commission
1.00
0.80
0.80
-
2.60
1.38
1.06
0.98
0.14
3.56
(c ) Others, please specify
Total (1)
2
Other Non Executive Directors
-
-
-
-
(a) Fee for attending
Board, Committee meetings
-
-
-
-
(b) Commission
-
-
-
-
(c ) Others, please specify.
-
-
-
-
Total (2)
-
-
-
-
1.06
0.98
Total (B)=(1+2)
1.38
0.14
Total Managerial Remuneration
Overall Cieling as per the Act
C.
3.56
3.56
` 64.08 Million
Remuneration to Key Managerial Personnel other than MD/Manager/WTD
(Amounts in ` Million)
Sl. Particulars of Remuneration
No.
Key Managerial Personnel
1
V. Raja, Vice Rajiv Mathur,
Chaiman and
Director &
Managing Drector Company
Secretary
Gross Salary
Hariharan
Madhavan,
Director
& Cheif
Financial
Officer
(a) Salary as per provisions contained in section
17(1) of the Income Tax Act, 1961.
(b) Value of perquisites u/s 17(2) of the Income
Tax Act, 1961
(c ) Profits in lieu of salary under section 17(3) of
the Income Tax Act, 1961
2
Stock Option
3
Sweat Equity
4
Commission
as % of profit
others, specify
5
Others, please specify
Total
32
Information disclosed in point A above.
Total
VII
PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES
There were no penalties, punishment or compounding of offences during the year ended March 31, 2016.
For and on behalf of the Board
Place: Mumbai
Date: July 25, 2016
S .M. Datta
Chairman
(DIN: 00032812)
Annual
Report 2015-16
33
PHILIPS INDIA LIMITED
Annexure II
ANNUAL REPORT ON CSR ACTIVITIES
1.
A brief outline of the Company’s CSR policy, including overview of projects or programs proposed to be undertaken and a
reference to the web-link to the CSR policy and projects or programs.
The Board of Directors approved CSR Policy of the Company, pursuant to the provisions of Section 135 of
the Companies Act, 2013 and the rules notified thereunder.
The CSR Policy of the Company is accessible on its website by following the link:
http://www.philips.co.in/b-dam/corporate/about-philips-n/investor-relations/india/CSR_policy-signed.pdf
In terms of the mandate of the CSR Committee and being a Healthcare Company, the focus of CSR
programs of the Company has been on healthy living and providing access to quality healthcare facilities to
the underprivileged, who do not have access to the same.
The Company has carried on CSR programs and activities, over last ten years, on a voluntary basis, some
of which were continued during the year under reference. These activities included contribution to small
educational institutions that focus on providing vocational skills to the underprivileged women, having
centres at Bangalore, Karnataka and Delhi/NCR, being the locations where the Company has major offices
i.e. Philips Innovation Campus (PIC) at Bangalore and the Company’s corporate headquarters at Gurgaon,
Haryana. The Company continues its campaigns with respect to mother and child care and in continuation
of the campaign from the previous financial year, on increasing awareness about Breast Cancer, the presence
and impact of which is being noted increasingly in India, through HIM campaign. The CSR program of the
Company also included a campaign to raise awareness about Sleep Apnea. As part of its earlier commitment,
the Company continued to contribute to the cause of eradication of avoidable blindness.
2.
34
The Composition of the CSR Committee:
1.
Mr.Vivek Gambhir, Non-Executive Director
Chairman
2.
Mr.V Raja, Managing Director
Member
3.
Mr. Rajiv Mathur, Director
Member & Secretary
4.
Mr. Hariharan Madhavan, Director
Member
3.
Average net profit of the Company for last three financial years: ` 3,419 Million
4.
Prescribed CSR Expenditure (two per cent. of the amount as in item 3 above): ` 68.40 Million
5.
Details of CSR spent during the financial year:
(a)
Total amount to be spent for the financial year: ` 68.40 Million
(b)
Amount unspent, if any: During the year, an amount of ` 33.10 Million was spent on the CSR Activities.
Therefore, an amount of ` 35.30 Million remained Unspent.
(c)
Manner in which the amount spent during the financial year is detailed below:
S.
No.
CSR project
or activity
identified
Sector in
which the
project is
covered
Projects or
programme
(1) Local area or
other
(2) Specify the
state and district
where projects
or programs was
undertaken
Amount
outlay
(budget
project or
programme
wise)
Amount spent
on the project
or programme
Sub Heads;
(1) Direct
expenditure
on projects or
programmes
(2) Overheads
Cumulative
expenditure
up to
the
reporting
period
Amount spent:
Direct or
through
implementing
agency
1
Program with
Impact Foundation
India (Dasra) for
Mother and Child
Care - Maternal
and Newborn
Health and Child
Health and
Nutrition, with
support provided
by NGOs Sneha,
based at Mumbai
and Mamta, having
centres nationwide.
Healthcare
and medical
facilities
The Project was
implemented through
centres operated by
Mamta at Delhi and
Sneha at Mumbai.
` 9.7 Million
` 8.5 Million
` 9.7
The payments of
a total amount
of ` 9.7 Million
were made by the
Company to Impact
Foundation. Impact
Foundation remitted
contributions of
amounts ` 6.7
Million to Mamta
and ` 1.8 Million to
Sneha and retained
the balance amount
of ` 1.2 Million for
Plan development
and overheads
related to the
management of the
Project.
Campaign for
eradication/
reduction
of avoidable
blindness in
partnership
with Dr. Shorff’s
Charity Eye
Hospital
Healthcare
and medical
facilities
The programmes
were undertaken in
the following cities,
through the branches of
Dr. Shroff’s Charity
Eye Hospital: Gurgaon,
Delhi,Various districts
of UP and Rajasthan
` 2.42 Million ` 2.42 Million
for period
April 1 to
March 31,
2016
was spent directly
on the activities
forming part
of the Project.
No overhead
expenses are
included in the
aforesaid amount.
` 2.42
The payments were
made to Dr. Shroff’s
Charity Eye Hospital,
who carried out the
activity on behalf of
the Company.
Campaign for
eradication/
reduction
of avoidable
blindness in
partnership with
Sankara Eyecare
Institutions
India (Sri Kanchi
Kamakoti Medical
trust)
Healthcare
and medical
facilities
The programmes were
undertaken in the
areas/cities as listed
below, through the
network of hospitals
operated by Sankara
Eyecare Institutions
India:Various Districts
of Tamil Nadu,
Karnataka and
Andhra Pradesh
` 2.71
` 2.71 Million
` 2.71
The payments were
made to Sankara
Eyecare Institutions
India who carried
out the activity
on behalf of the
Company.
2
3
for period
April 1 to
March 31,
2016
Million for
period April
1 to March
31, 2016
was spent on
the activities
forming part of
the Project, which
were managed
by Sneha and
Mamta, NGOs
which partnered
the Company in
the project. In
addition to this,
an amount of `
1.2 Million was
paid to Impact
Foundation 1ndia,
towards:
- Plan
Development
Fee (One Time)
` 0.6 Million;
and
- Overheads
related to the
management of
the project `
0.6 Million
was spent directly
on the activities
forming part
of the Project.
No overhead
expenses are
included in the
aforesaid amount.
Million
Million
Million
Annual
Report 2015-16
35
PHILIPS INDIA LIMITED
S.
No.
CSR project
or activity
identified
Sector in
which the
project is
covered
Projects or
programme
(1) Local area or
other
(2) Specify the
state and district
where projects
or programs was
undertaken
Amount
outlay
(budget
project or
programme
wise)
4
Employability
Program with
Smile Foundation
for skill
development of
underprivileged
young women
through centres
operated by Smile
Foundation in
Bangalore and
Delhi NCR
Promotion
of
education
Activity undertaken
in Bangalore, being
the location where
the Philips Innovation
Campus of the
Company is situated
and in Delhi NCR
where the Corporate
Headquarters of the
Company is situated.
HIM Campaign for
raising awareness
with respect to
Breast Cancer
Healthcare
and medical
facilities
A Wake Up
Campaign for
raising awareness
with respect to
Sleep Apnea
Healthcare
and Medical
Facilities
5
6.
Cumulative
expenditure
up to
the
reporting
period
Amount spent:
Direct or
through
implementing
agency
` 0.87 Million ` 0.87 Million
for period
April 1 to
March 31,
2016
was spent directly
on the activities
forming part
of the Project.
No overhead
expenses are
included in the
aforesaid amount.
` 0.87
The expenses on
these activities
were incurred in
partnership with
Smile Foundation,
an NGO operating
vocational skill
development
centres at Bangalore
and Delhi NCR.
This campaign, part of
overall CSR programme
of the Company, has
been carried out
on ground at places
like Gurgaon and
Delhi. As part of the
campaign, awareness
material produced
by the Company was
circulated in print
media, television
broadcasts and through
social media channels
including YouTube.
Activations was also
carried out in Malls
of Delhi NCR, Street
Plays in Delhi NCR for
creating awareness.
Outdoor campaigns
were carried out in
Delhi and Mumbai.
Office activations in
Gurgaon, Mumbai and
Calcutta offices
`15.05
` 15.05 Million
`15.05
Million for
period April
1 to March
31, 2016
was spent directly
on the activities
forming part
of the Project.
No overhead
expenses are
included in the
aforesaid amount.
Million
The expenses on
this campaign have
been spent directly
by the Company.
This campaign, part of
overall CSR project
of the Company,
was carried out, on
ground, at places like
Bangalore, Mumbai and
Hyderabad. Circulation
of awareness material
produced by the
Company was carried
out in Print, Radio,
Digital and Regional
TV’s with an estimated
reach of over ` 30
Million people
` 2.34 Million ` 2.34 Million
*Give details of implementing agency: the details are listed above.
36
for period
April 1 to
March 31,
2016
Amount spent
on the project
or programme
Sub Heads;
(1) Direct
expenditure
on projects or
programmes
(2) Overheads
was spent directly
on the activities
forming part
of the Project.
No overhead
expenses are
included in the
aforesaid amount.
Million
` 2.34
Million
The expenses on
this campaign have
been incurred
directly by the
Company.
6.
In case the company has failed to spend the two per cent of the average net profit of the last three financial years or any
part thereof, the company shall provide the reasons for not spending the amount in its Board report.
The Company was required to spend an amount of ` 68.40 Million towards CSR activities, in terms of the
provisions of Section 135 of the Companies Act, 2013. The Company spent an amount of ` 33.10 Million
on the Projects and related activities, as detailed above. Therefore, an amount of ` 35.30 Million remained
unspent during the year.
The reasons for the aforesaid amount remaining unspent were as below:
Some of the CSR programmes were initiated by the Company during the FY 2015-16 to contribute funds
from the CSR corpus for the initiatives, while some programmes were carried forward from previous years.
As per the mandate from the CSR Committee of the Company, the programmes start on a conservative
note and only after assessment of the impact made by the programme, the Company would scale up the
programme, whereby scope of the programme would be expanded, requiring further monetary commitment
from the Company. On becoming aware of total CSR corpus available to it, post the finalisation of its audited
financials for the FY 2014-15, the Company tried to increase its monetary commitments to the programmes
identified by it. However, the NGO partners that the Company had tied up with for its CSR programmes,
expressed their inability to absorb any additional funds, beyond the funds initially agreed to be spent by them
for the projects being undertaken by them on behalf of the Company. The Company also made efforts to
initiate new CSR Programmes, so that the funds could be deployed from CSR corpus of the Company for
these programmes. However, due to lead time involved, any new Programme would not go live until the end
of / after the close of financial year 2015 -16. The Company had also considered other options to spend the
remaining funds from the CSR corpus like contribution to Prime Minister’s Relief Fund. However, to enable
optimal utilization of funds for the identified causes, it was decided to preserve the funds and endeavor to
use the same in the next Financial year for the identified causes/ programs. The Company shall endeavour
to spend the unspent amount from CSR corpus for the present financial year, in later years, after the funds
earmarked for the said year have been utilised.
7.
We hereby declare that implementation and monitoring of the CSR policy are in compliance with CSR objectives and policy
of the Company.
Place: Mumbai
Date: July 25, 2016
For and on behalf of the Board
Vivek Gambhir
Non-Executive Director
Chairman, CSR Committee
(DIN : 06527810)
Rajiv Mathur
Director and Company Secretary
Member, CSR Committee
(DIN : 06931798)
Annual
Report 2015-16
37
PHILIPS INDIA LIMITED
Annexure - III
Information in accordance with Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies
(Accounts) Rules, 2014 and forming part of the Board’s Report for the year ended 31st March 2016.
A.
ENERGY CONSERVATION
The following measures were implemented during the Financial Year 2015-16:
1.
2.
Steps taken or impact on conservation of energy
a)
Reduction of molten glass to save energy.
b)
Fix bed sintering is done in the TL production line to improve energy efficiency.
c)
Reduction in electricity consumption by optimization of VTL pumping oven and PSCS shrink tunnel.
d)
Reduction in glass draw is done to conserve energy.
e)
Cooling tower optimization to save energy consumed by compressors.
f)
Relocation of VTL common cooling tower to optimize energy consumed by stop one recirculating pump.
g)
To save electricity consumption, transitioned from electric heating to Natural Gas fired.
h)
Replacement of conventional lights with LED at administration building,VTL & GLS.
i)
Reduction of compressed air consumption by 10% at VTL.
j)
Using electronic ballast instead of electric ballast to save electricity.
k)
Testing fewer lamps which leads to sample size reduction in GLS life testing rack.
l)
Optimization in suspension room motors usage.
m)
Shafts & sprockets substituted with Guide to save heat loss on CFL sintering machines.
n)
Installation of T5 Pumping oven insulation which has been redesigned to reduce heat loss
o)
Reduction in energy consumption by improving optical parts of Laser cutting machines
Steps taken by the Company for utilizing alternate sources of energy
Since the last few years, the Company, at its Vadodara Light Factory, has been availing some of its energy through wind
power which is being generated from windmill installed at Rajkot by third party, who is a wind energy vendor. The average
consumption is upto 500k units from the same.
3.
The Capital Investment on energy conservation on equipments
The Company has invested ` 10. 1 million during this year on Capex for energy saving equipments.
B.
RESEARCH & DEVELOPMENT (R & D)
Your Company continues to derive the sustainable benefits from the strong foundation and Long tradition of Research
and development. During the year the Company continued to focus on the development of its products to preserve and
strengthen its competitive position in various product segments. Your Company believes that process development and
import substitution are of paramount importance and put all its efforts to establish the same. The Company’s R & D
laboratories have been instrumental in providing the Company with a sustainable competitive advantage through application
of Science and Technology.
1.
Specific areas in which R & D has been carried out
i)
38
LED luminaires, solar powered LED luminaires, configurable luminaires, DC power packs for multiple application areas
like street area, sports, Garden, office, retail outlets and Industry.
2.
3.
ii)
Development of an affordable respiration monitor that automatically and accurately measures the breath rate of a child
under the age of 5.
iii)
Design, development and testing of medical imaging products such as cardio vascular systems, surgery C-Arms, digital/
analog radiography systems etc.
iv)
Development of Wind – up Fetal Doppler
Benefits derived as a result of above efforts
i)
Energy efficient and environment friendly lighting solution with better design and superior to competition. Significant
growth in LED market with enhanced affordability (lower cost) and reliability (enhanced useful life) imparted to the
new products.
ii)
In support of the fight against child mortality as a result of pneumonia, an affordable children`s respiration monitor has
been developed. It is specifically designed for use in low resource areas, has clinical decision support functionality and
provides instant feedback to support the care provider in determining a correct diagnosis, clearly indicating the risk of
fast-breathing rate of the child.
iii)
Philips Wind-up Fetal Doppler is a robust, portable, power-independent Doppler that can quickly identify any abnormal
fetal heart activity.
iv)
An existing C Arm was rolled out for LATAM & Japan markets and a wireless Digital X Ray solution (Opta Mobile
wireless) was developed.
Future plan of action
i)
4.
Continue to engage in design & development of new generation cath labs, mobile surgery and diagnostic X-rays
equipment segment.
Expenditure incurred on R&D
` in Million
Particulars
2015-16
2014-15
16.64
19.87
B Net Revenue Expenditure
209.01
175.10
TOTAL
225.65
194.97
A Capital Expenditure
C.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
1.
Efforts made towards technology absorption, adaptation and innovation
1)
2.
Benefits derived as a result of above efforts
1)
D.
Imbibing a strong digital capability, adding features related to Customer interface and connectivity.
Improvement in Product quality, cost reduction, product development and import substitution.
FOREIGN EXCHANGE EARNINGS & OUTGO (CASH BASIS)
During the year, total inflows (on cash basis) in foreign exchange was ` 12,984.56 million and total outflows (on cash basis)
in foreign exchange was ` 15,440.70 million.
Annual
Report 2015-16
39
PHILIPS INDIA LIMITED
Annexure - IV
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties
referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions
under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm’s length basis:
There were no contracts or arrangements or transactions entered into during the year ended March 31, 2016, which were not
on an arm`s length basis.
2. Details of material contracts or arrangement or transactions at arm’s length basis: #
Name(s) of
the related
party and
nature of
relationship
Nature of
contracts/
arrangements/
transactions
Duration of
the contracts /
arrangements/
transactions
Salient
terms of the
contracts or
arrangements
or transactions
including the
value, if any
Date(s) of
approval by
the Board,
if any
Amount paid
as advances,
if any
Value of
Transactions
during the
year ended
March 31,
2016
(` Million)
Philips
Consumer
Lifestyle B.V.
Purchase of
goods
Yearly
Based on
Transfer Pricing
guidelines
Not
Applicable,
since the
contract
was entered
into in the
ordinary
course of
business and
on arm`s
length basis
Not Applicable
3409
Philips Medical Purchase of
Systems
goods
Nederland
B.V.
Yearly
Based on
Transfer Pricing
guidelines
Not
Applicable,
since the
contract
was entered
into in the
ordinary
course of
business and
on arm`s
length basis
Not Applicable
2540
Yearly
Based on
Transfer Pricing
guidelines
Not
Applicable,
since the
contract
was entered
into in the
ordinary
course of
business and
on arm`s
length basis
Not Applicable
2050
Fellow
Subsidiary
Company
Fellow
Subsidiary
Company
Philips Medical Sale of Services
Systems
Nederland
B.V.
Fellow
Subsidiary
Company
40
Name(s) of
the related
party and
nature of
relationship
Nature of
contracts/
arrangements/
transactions
Duration of
the contracts /
arrangements/
transactions
Salient
terms of the
contracts or
arrangements
or transactions
including the
value, if any
Date(s) of
approval by
the Board,
if any
Amount paid
as advances,
if any
Value of
Transactions
during the
year ended
March 31,
2016
(` Million)
Philips
Electronics
Nederland
B.V.
Sale of Services
Yearly
Based on
Transfer Pricing
guidelines
Not
Applicable,
since the
contract
was entered
into in the
ordinary
course of
business and
on arm`s
length basis
Not Applicable
1801
Purchase of
goods
Yearly
Based on
Transfer Pricing
guidelines
Not
Applicable,
since the
contract
was entered
into in the
ordinary
course of
business and
on arm`s
length basis
Not Applicable
1361
Sale of Services
Yearly
Based on
Transfer Pricing
guidelines
Not
Applicable,
since the
contract
was entered
into in the
ordinary
course of
business and
on arm`s
length basis
Not
Applicable
1217
Fellow
Subsidiary
Company
Philips
Electronics
Singapore Pte
Ltd.
Fellow
Subsidiary
Company
Philips
Electronics
North
America
Corporation
Fellow
Subsidiary
Company
# Please note that transactions with related parties of value ` 1000 Million or more have been taken into account while preparing this form. The
complete list of related party transactions forms part of Notes to the financial statements, forming part of this Annual Report.
For and on behalf of the Board
S. M. Datta
Chairman
(DIN: 00032812)
Place: Mumbai
Date: July 25, 2016
Annual
Report 2015-16
41
PHILIPS INDIA LIMITED
Annexure - V
FORM NO. MR.3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2016
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies
(Appointment and Remuneration of Managerial Personnel Rules), 2014]
To,
The Members,
Philips India Limited
{CIN:U31902WB1930PLC006663}
7, Justice Chandra Madhab Road,
Kolkata-700020,
West Bengal.
SECRETARIAL AUDIT REPORT
I have conducted the Secretarial Audit of the compliances for the financial year ended March 31, 2016 of applicable statutory
provisions and the adherence to good corporate practices by Philips India Limited (hereinafter called as ‘the Company’). Secretarial
Audit was conducted in a manner that provided me a reasonable basis for evaluating the statutory compliances and expressing
my opinion thereon.
Management’s Responsibility for Secretarial Compliances
The Company’s Management is responsible for preparation and maintenance of secretarial records and for devising proper
systems to ensure compliance with the provisions of all applicable laws and regulations.
Auditor’s Responsibility
My responsibility is to express an opinion on the secretarial records, standards and procedures followed by the Company with
respect to secretarial compliances.
I believe that audit evidence and information obtained from the Company’s management is adequate and appropriate for me to
provide a basis for my opinion.
Opinion
Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by
the Company and also the information provided by the Company, its officers and authorized representatives during the conduct
of Secretarial Audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year
ended on March 31, 2016, complied with the statutory provisions listed hereunder and also that the Company has proper Board
processes and compliance mechanism in place to the extent, in the manner, subject to the reporting made hereinafter:
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the
financial year ended on March 31, 2016 according to the provisions of:
42
•
The Companies Act, 1956 / the Companies Act, 2013 and Rules made under that Act(“the Act”);
•
The Memorandum and Articles of Association of the Company;
•
The Negotiable Instrument Act, 1881;
•
Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign
Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
•
The Central Sales Tax Act, 1956 & Local Sales Tax Acts;
•
The Customs Act, 1962;
•
The Industries (Development & Regulation) Act, 1951;
•
The Water (Prevention and Control of Pollution) Act, 1974;
•
The Air (Prevention and Control of Pollution) Act, 1981;
•
The Environment (Protection) Act, 1986;
•
The Employees State Insurance Act, 1948;
•
The Entry Tax Act, 1976;
•
The Professional Tax Act;
•
The Legal Metrology Act, 2009;
•
The Shops and Establishment Act, 1953;
•
The Factories Act, 1948 / Applicable Rules;
•
The Industrial Disputes Act, 1947;
•
The Minimum Wages Act, 1948 / Applicable Rules;
•
The Contract Labour (Regulation & Abolition) Act, 1970 / Applicable Rules;
•
The Industrial Employment (Standing Orders) Act, 1946 / Applicable Rules;
•
The Employment Exchange (Compulsory Notification of Vacancies) Act, 1959 / Applicable Rules;
•
The Payment of Wages Act, 1936 / Applicable Rules;
•
The Payment of Bonus Act, 1965 / Applicable Rules;
•
The Payment of Gratuity Act, 1972 / Applicable Rules;
•
The Equal Remuneration Act, 1976 / Applicable Rules;
•
The Employees’ Provident Fund & Miscellaneous Provisions Act, 1952/Applicable Rules;
•
The Maternity Benefit Act, 1961 / Applicable Rules;
•
The National & Festival Holidays Act / Applicable Rules;
•
The Labour Welfare Fund Act / Applicable Rules;
•
The Indian Contract Act, 1872;
•
The Competition Act, 2002;
•
The Central Excise Act 1944;
•
The Electronic Waste Act 2003;
•
The Official Secrets Act,1923;
•
The Entertainment Tax Act;
•
And other applicable Acts and rules
Based on my examination and verification of records produced to me and according to the information and explanations given
to us by the Company, in my opinion, the Company has complied with the provisions of the Companies Act, 1956 as well
as Companies Act, 2013, wherever applicable (the Act) and Rules made under the Act and the Memorandum and Articles of
Association of the Company with regard to:
(a)
Maintenance of statutory registers and documents and making necessary entries therein;
(b)
Contracts, Registered Office and publication of the Name of the Company;
(c)
Filing of the requisite forms and returns with the Registrar of Companies and Central Government within the time prescribed
or within the extended time with additional fee as prescribed under the Act and rules made thereunder;
(d)
Service of Documents by the Company on its Members, Auditors;
(e)
Convening and holding of the meetings of Directors and Committees of the Directors;
(f)
Convening and holding of the 85th Annual General Meeting of the Company on September 28, 2015;
(g)
Minutes of the proceedings of General Meeting, Board Meetings and Board Committees were properly recorded in loose
leaf form, which are being bound in a book form at regular intervals;
(h)
Appointment and Remuneration of Auditors;
Annual
Report 2015-16
43
PHILIPS INDIA LIMITED
(i)
Reconstitution of the Statutory Committees;
(j)
Declaration and Payment of Dividend;
(k)
Borrowings and Registration, Modification and Satisfaction of Charges, wherever applicable;
(l)
Deposit of both the Employees and Employers contribution relating to Provident Fund;
(m) Form of Balance Sheet, Statement of Profit and Loss and disclosures to be made therein as per the Schedule III to the Act
issued by the Ministry of Corporate Affairs (MCA);
(n)
Appointment of Internal Auditor as per the provisions of Section 138 of the Companies Act, 2013;
I further report that
(1)
The Board of Directors of the Company is duly constituted. The changes in the composition of the Board of Directors that
took place during the period under review were carried out in compliance with the provisions of the Act.
(2)
Adequate notice is given to all the directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent
in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before
the meeting and for meaningful participation at the meeting.
(3)
Majority decisions are carried as there was no dissent raised by any member of the Board.
(4)
The Directors have disclosed their interest and concerns in contracts and arrangements, shareholdings and directorships in
other companies and interests in other entities as and when required and their disclosures have been noted and recorded
by the Board.
(5)
The Company has obtained all the necessary approvals under the various provisions of the Act.
(6)
There was no prosecution initiated and no fines or penalties were imposed during the year under review as per the Act and
other applicable laws, Rules,Regulations and Guidelines framed under these Acts on the Company, its Directors and Officers.
I further report that there are adequate systems and processes in the Company that commensurate with the size and operations
of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines,
Standards etc. mentioned above.
I further report that during the Audit Period:
(1)
The Hon’ble Calcutta High Court vide its Order dated January 07, 2016 had sanctioned the Scheme of Arrangement
pursuant to Section 391 to Section 394 of Companies Act 1956, thereby hiving off the lighting business division of the
Company to Philips Lighting India Limited.
Place: New Delhi
Date: July 25, 2016
CS Ashok Tyagi
Company Secretaries
FCS No: 2968
C P No: 7322
Note: This Report is to be read with our letter of even date which is annexed as Annexure - A and forms an
integral part of this Report.
44
ANNEXURE A
To
The Members,
Philips India Limited
{CIN: U31902WBl930PLC006663}
7, Justice Chandra Madhab Road,
Kolkata-700020,
West Bengal.
1.
Maintenance of secretarial record is the responsibility of the management of the Company. My responsibility is to express
an opinion on these secretarial records based on my audit.
2.
1 have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness
of the contents of secretarial records. The verification was done on the random test basis to ensure that correct facts are
reflected in secretarial records. I believe that the processes and practices I have followed, provide a reasonable basis for my
opinion.
3.
1 have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
4.
Where ever required, I have obtained the Management representation about the compliances of laws, rules and regulations
and happening of events etc.
5.
The compliances of the provisions of Corporate and other applicable laws, rules, regulations, standards are the responsibility
of management. My examination was limited to the verification of procedures on, the random test basis.
6.
The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or
effectiveness with which the management has conducted the affairs of the Company.
Place: New Delhi
Date: July 25, 2016
CS Ashok Tyagi
Company Secretaries
FCS No: 2968
C P No: 7322
Annual
Report 2015-16
45
PHILIPS INDIA LIMITED
Independent Auditor’s Report
To the members of Philips India Limited
1. Report on the Financial Statements
We have audited the accompanying standalone financial statements of Philips India Limited (‘the Company’), which comprise
the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year ended, and a
summary of significant accounting policies and other explanatory information (or ‘the financial statements’).
2. Management’s Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”)
with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally
accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014. This responsibility also includes 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 frauds and other irregularities;
selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements
that give a true and fair view and are free from material misstatement, whether due to fraud or error.
3. Auditor’s Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into
account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with
the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial
control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit
procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the
standalone financial statements.
4. Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial
statements give the information required by the Act in the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2016, and its profit and
its cash flows for the year ended on that date.
5. Report on Other Legal and Regulatory Requirements
(i) As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order’) issued by the Central Government of India
in terms of sub- section (11) of Section 143 of the Act, we give in Annexure A, a Statement of the matters specified in
paragraphs 3 and 4 of the Order.
(ii)
46
As required by Section 143 (3) of the Act, we report that:
(a)
We have sought and obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit;
(b)
In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from
our examination of those books;
(c)
The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in
agreement with the books of account;
Standalone
(d)
In our opinion, the aforesaid Standalone financial statements comply with the Accounting Standards specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e)
On the basis of the written representations received from the directors as on 31 March 2016 taken on record by the
Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in
terms of Section 164 (2) of the Act;
(f)
With respect to the adequacy of the internal financial controls over financial reporting of the Company and the
operating effectiveness of such controls, refer to our separate Report in “Annexure B”; and
(g)
With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations
given to us:
i.
The Company has disclosed the impact of pending litigations on its financial position in its financial statements –
Refer Note 41 to the financial statements;
ii.
The Company did not have any long-term contracts including derivative contracts for which there were any
material foreseeable losses;
iii.
There has been no delay in transferring amounts, required to be transferred, to the Investor Education and
Protection Fund by the Company.
For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 101248W/W-100022
Place: Mumbai
Date: 25 July 2016
Vikram Advani
Partner
Membership No.: 091765
Annual
Report 2015-16
47
PHILIPS INDIA LIMITED
Annexure A referred to in paragraph 5 (i) of the Independent Auditor’s Report to the Members of Philips India
Limited on the financial statements for the year ended 31 March 2016
(i)
(ii)
(a)
According to the information and explanation given to us, the Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed assets.
(b)
As informed to us, the Company has a regular programme of physical verification of its fixed assets by which all fixed
assets are verified in a phased manner over a period of three years, except for certain assets which are verified on the
basis of third party confirmations. In our opinion, this periodicity of physical verification is reasonable having regard to
the size of the Company and the nature of its assets. However, no physical verification has been carried out during the
current year.
(c)
According to the information and explanations given to us and on the basis of our examination of the records of the
Company, title deeds of immovable properties are held in the name of the Company.
The inventories except goods-in-transit, have been physically verified by the management during the year. In our opinion, the
frequency of such verification is reasonable. For stocks lying with third parties at the year end, written confirmations have
been obtained. As informed to us, discrepancies noticed on verification between physical stocks and book records were not
material and have been properly dealt within the books of accounts.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured,
to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of
the Companies Act, 2013. Thus, paragraph 3(iii) (a) and (b) of the Order is not applicable.
(iv) According to the information and explanations given to us and on the basis of our examination of the records of the
Company, the provisions of section 185 and 186 of the Act have been complied with.
(v)
The Company has not accepted any deposits from the public during the year.
(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central
Government for maintenance of cost records under sub- section 1 of Section 148 of the Act in respect of Electric Lamps,
Fluorescent Tubes, Diagnostic imaging equipment’s and Patient monitoring equipment’s and are of the opinion that prima facie,
the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination
of the records.
(vii) (a)
According to the information and explanations given to us and on the basis of our examination of the records of
the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including
provident fund, employees’ state insurance, income tax, sales tax, service tax, value added tax, duty of customs, duty of
excise, cess and other material statutory dues have been regularly deposited during the year by the Company with the
appropriate authorities, though there has been slight delay in a few cases.
According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund,
employees’ state insurance, income tax, sales tax, service tax, value added tax, duty of customs, duty of excise, cess and
other material statutory dues were in arrears as at 31 March 2016 for a period of more than six months from the date
they became payable.
(b)
According to the information and explanations given to us, there are no dues of duty of customs which have not been
deposited on account of any dispute. The dues of Income tax, Sales tax, Service tax and duty of excise as disclosed in
Appendix 1 have not been deposited by the Company on account of disputes.
(viii) According to the information and explanations given to us, the Company has not defaulted in repayment of loans or
borrowings to its bankers and financial institutions during the year. Further, the Company did not have any outstanding
debentures or dues to any government during the year.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and
term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.
(x)
According to the information and explanations given to us, no material fraud by the Company or on the Company by its
officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations give to us and based on our examination of the records of the Company,
the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the
provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company.
Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company,
transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of
such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
48
Standalone
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the
Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures
during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the
Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph
3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 101248W/W-100022
Vikram Advani
Partner
Membership No.: 091765
Place: Mumbai
Date: 25 July 2016
Annexure to the Independent Auditors’ report (Contd.)
Appendix 1 to annexure to the audit report
Name of the statute / period to
which the amount relates
Custom Act, 1962
2015-16
Central Excise Act, 1944
Above 7 years
Service tax, Finance Act, 1994
2014-15
Nature of dues
` in Mln
Forum where dispute is pending
Appellate
Tribunal Honourable Amount Net total
authority upto
High court
paid
Commissioner
under
(Appeals)
protest
Custom duty
including interest
and Penalty where
applicable
95.29
-
-
(82.00)
13.29
Excise duty
including interest
and Penalty where
applicable
13.2
18.5
15.7
(2.50)
44.90
Service tax
16.16
including interest
and Penalty where
applicable
Central Sales Tax Act, 1956 and Individual State Sales Tax Act
2015-16
Sales Tax including
5.89
2014-15
10.42
Interest and
3 - 7 years
834.28
penalty where
Above 7 years
343.37
applicable
Income Tax Act , 1961
3 - 7 years
Income tax
3,145.66
Above 7 years
552.89
Including interest
and Penalty where
Applicable
Note: Net of amount transferred to lighting under Demerger Scheme.
3 - 7 years
Above 7 years
-
-
-
16.16
92.14
80.04
-
(0.80)
-
91.34
80.04
252.66
0.76
26.34
(0.47)
(1.61)
(115.82)
(147.84)
5.42
8.80
719.22
474.52
104.80 (1073.68)
4,328.45
866.14
1,182.79
1,282.13
Annual
Report 2015-16
49
PHILIPS INDIA LIMITED
Annexure - B to the Auditor’s Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies
Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of Philips India Limited (“the Company”) as of 31 March
2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control
over financial reporting criteria established by the Company considering the essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants
of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls
that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s
policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our
audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section
143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an
audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the
Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether adequate internal financial controls over financial reporting was established and maintained and if such controls
operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system
over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists,
and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the
Company’s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the company; (2) 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 only in accordance with authorisations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or
improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also,
projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk
that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
50
Standalone
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting
and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal
control over financial reporting criteria established by the Company considering the essential components of internal control
stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting, issued by the Institute of Chartered
Accountants of India.
For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 101248W/W-100022
Place: Mumbai
Date: 25 July 2016
Vikram Advani
Partner
Membership No.: 091765
Annual
Report 2015-16
51
PHILIPS INDIA LIMITED
Balance Sheet as at 31 March 2016
Note
EQUITY AND LIABILITIES
Shareholders’ funds
Share capital
Reserves and surplus
2
3
As at 31 March 2016
575
17,398
Amounts in ` Mln
As at 31 March 2015
575
16,486
17,973
Non-current liabilities
Long-term borrowings
Other long term liabilities
Long-term provisions
4
5
6
155
685
591
17,061
218
598
843
1,431
Current liabilities
Short-term borrowings
Trade Payables
Dues to micro and small enterprises
Dues to others
Other current liabilities
Short-term provisions
1,659
7
-
287
8
8
9
6
39
5,367
4,155
1,800
91
9,038
4,013
2,126
11,361
30,765
ASSETS
Non-current assets
Fixed assets
Tangible assets
Intangible assets
Capital work-in-progress
Non-current investments
Deferred tax assets (net)
Long-term loans and advances
Other non-current assets
10
11
12
13
14
15
2,001
78
4,797
510
2,800
1,693
15,555
34,275
3,834
103
1,000
809
3,401
2,263
11,879
Current assets
Inventories
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets
16
17
18
14
19
4,542
6,821
5,406
1,845
272
11,410
6,504
8,679
3,705
3,797
180
18,886
30,765
22,865
34,275
Significant accounting policies
1
The notes referred to above 1-44 form an integral part of the Standalone Financial Statements
As per our report of even date attached
For and on behalf of the Board
For B S R & Co. LLP
Chairman
S.M.DATTA
Chartered Accountants
(DIN: 00032812)
ICAI Firm Registration No. 101248W / W-100022
Managing Director
V. RAJA
(DIN: 00669376)
Director & CFO
HARIHARAN MADHAVAN
VIKRAM ADVANI
(DIN: 07217072)
Partner
Director & Company Secretary
RAJIV MATHUR
Membership No.: 091765
(DIN: 06931798)
Mumbai
Mumbai
Date: 25 July 2016
Date: 25 July 2016
52
Standalone
Statement of Profit and Loss for the year ended 31 March 2016
Note
Income
Revenue from operations (gross)
Less: Excise duty recovered
Revenue from operations (net)
Other income
Total revenue
Expenses
Cost of raw materials consumed
Purchases of stock-in-trade
Changes in inventories of work-in-progress,
finished goods and stock-in-trade
Employee benefits expense
Finance costs
Depreciation and amortisation expense
Other expenses
Total expenses
Profit / (loss) before exceptional items and tax
Exceptional items
Profit / (loss) before tax
Profit / (loss) from continuing operations
Tax expense
Current tax
Deferred tax - release / (charge)
Profit / (loss) after tax from continuing
operations
Profit / (loss) from discontinuing operations
Tax expense
Current tax
Deferred tax - release / (charge)
Profit / (loss) after tax from discontinuing
operations
Profit / (loss) for the year
Basic and diluted earnings per equity share of ` 10
each (in `)
Significant accounting policies
20
21
Year ended 31 March 2016
63,201
619
62,582
516
Amounts in ` Mln
Year ended 31 March 2015
64,203
745
63,458
419
63,098
63,877
22
23
24
3,524
30,554
(398)
4,271
31,115
(350)
25
26
27
28
11,214
54
775
10,872
10,169
88
1,058
11,926
56,595
6,503
(225)
6,278
33
58,277
5,600
675
6,275
3,070
2,772
(1,194)
2
(932)
23
1,878
37
37
42
1,863
3,208
3,503
(1,244)
133
(1,421)
290
2,097
3,975
69.11
2,372
4,235
73.63
1
The notes referred to above 1-44 form an integral part of the Standalone Financial Statements
As per our report of even date attached
For and on behalf of the Board
For B S R & Co. LLP
Chairman
S.M.DATTA
Chartered Accountants
(DIN: 00032812)
ICAI Firm Registration No. 101248W / W-100022
Managing Director
V. RAJA
(DIN: 00669376)
Director & CFO
HARIHARAN MADHAVAN
VIKRAM ADVANI
(DIN: 07217072)
Partner
Director & Company Secretary
RAJIV MATHUR
Membership No.: 091765
(DIN: 06931798)
Mumbai
Mumbai
Date: 25 July 2016
Date: 25 July 2016
Annual
Report 2015-16
53
PHILIPS INDIA LIMITED
Cash Flow Statement for the year ended 31 March 2016
A. Cash flow from operating activities
Profit before tax
Exceptional items
Net profit before tax and exceptional items
Adjusted for
(Profit) / loss on disposal of fixed assets
Write off and other adjustment of fixed assets
Depreciation and amortisation
Unrealized foreign exchange (gain) and loss (net)
Provision for doubtful trade receivables and loans and advances
Liabilities no longer required written back
Interest received
Finance costs
Operating profit before working capital changes
Changes in:
Trade receivables and other loans & advances
Inventories
Trade payables and other liabilities
Year ended
31 March 2016
6,278
(225)
6,503
775
(8)
197
(31)
(776)
54
(2,307)
(542)
2,188
Cash generated from operations
Income tax paid (net of refunds)
Exceptional items (VRS Payment)
NET CASH GENERATED FROM OPERATING ACTIVITIES
B. Cash flow from investing activities
Purchase of fixed assets
Proceeds from sale of fixed assets
Proceeds from divestment [refer note 33 (b)]
a. Consideration received (net of expenses)
b. Capital gain tax
Investment in associate
Investment in subsidiary
Interest received
NET CASH FROM / (USED IN) INVESTING ACTIVITIES
C. Cash flow from financing activities
Finance costs
Proceeds / (repayments) of short term borrowings
Dividend paid (including tax thereon)
NET CASH FROM / (USED IN) FINANCING ACTIVITIES
(DECREASE)/INCREASE IN CASH & CASH EQUIVALENTS
(A+B+C)
CASH AND CASH EQUIVALENTS - OPENING BALANCE
Cash and cash equivalents (refer note 18)
Inter corporate deposits
Deposits with Banks
TOTAL
CASH AND CASH EQUIVALENTS - CLOSING BALANCE
Cash and cash equivalents (refer note 18)
Inter corporate deposits
Deposits with Banks
TOTAL
211
6,714
(661)
6,053
(1,990)
(260)
3,803
54
Standalone
Mumbai
Date: 25 July 2016
6,275
(675)
5,600
(8)
7
1,058
6
35
(81)
(617)
88
(1,503)
(488)
1,261
(991)
52
-
(63)
(3,734)
780
(3,956)
As per our report of even date attached
For and on behalf of the Board
For B S R & Co. LLP
Chairman
Chartered Accountants
ICAI Firm Registration No. 101248W / W-100022
Managing Director
Director & CFO
VIKRAM ADVANI
Partner
Director & Company Secretary
Membership No.: 091765
Mumbai
Date: 25 July 2016
Amounts in ` Mln
Year ended
31 March 2015
488
6,088
(730)
5,358
(2,484)
2,874
(774)
916
378
(78)
300
592
1,034
(78)
(287)
(207)
(572)
(725)
(89)
(910)
(134)
(1,133)
2,775
1,435
2,425
2,260
6,120
1,395
1,950
3,345
1,316
4,079
5,395
1,435
2,425
2,260
6,120
S.M.DATTA
(DIN: 00032812)
V. RAJA
(DIN: 00669376)
HARIHARAN MADHAVAN
(DIN: 07217072)
RAJIV MATHUR
(DIN: 06931798)
STATEMENT OF ACCOUNTING POLICIES (Note 1)
BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared under the historical cost convention, on accrual basis and presented in accordance with
Indian Generally Accepted Accounting Principles (‘Indian GAAP’). Indian GAAP comprises mandatory accounting standards as
prescribed under Section133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014 and
other accounting pronouncements of the Institute of Chartered Accountants of India.
All assets and liabilities have been classified as “current or non-current” as per Company’s normal operating cycle and other
criteria set out in “Schedule III to the Companies Act, 2013 (‘Act’)” based on the nature of products and the time between the
acquisition of assets for processing and their realization in cash and cash equivalents.
1.
REVENUE RECOGNITION
Sales are recorded net of trade discounts, rebates, sales tax but include excise duty.
Sales of goods / equipments are recognised on transfer of risks and rewards of ownership in the goods to the customers /
completion of installation.
Income from annual maintenance service contracts is recognised on a straight-line basis over the period of contracts and
income from other service contracts is recognised on completion of the service rendered.
Revenue from assets given on operating leases is recognised as per terms and conditions of the agreements.
Revenue from software development services is billed to clients on cost plus basis as per the terms of the specific contracts.
Cost and earnings in excess of billings are classified as unbilled revenue.
Interest income is recorded on a time proportion basis taking into account the amounts invested and the rate of interest.
2.
INTANGIBLE ASSETS
Intangible assets are being recognized if the future economic benefits attributable to the assets are expected to flow to the
Company and cost of the same can be measured reliably. Intangible assets are amortised on the straight line basis based on
the useful lives, which, in management’s estimate represent the period during which economic benefit will be derived from
their use. The period of amortisation for intangible assets is as (a) Goodwill – 60 months, (b) Software – 36 months, (c)
Brands – 60 months (d) Non-compete fees – 36 months.
3.
FIXED ASSETS AND DEPRECIATION
Fixed assets are valued at cost. Depreciation is provided on the original cost on a straight line method as per the useful
lives of the assets as estimated by the management which are equal to the useful lives prescribed under Schedule II of
the Companies Act, 2013. Depreciation on medical equipments given on operating leases and leasehold improvements is
provided on a straight-line basis over the period of the lease or their estimated useful life, whichever is shorter.
Assets costing less than ` 5000 are fully depreciated in the year of purchase.
4.
LEASES:
Operating lease payments are recognised as an expense in the Statement of Profit and Loss on straight line basis over the
period of the lease.
Assets acquired under finance lease from April 1, 2001 are capitalised at the lower of their fair value and the present value
of the minimum lease payments at the inception of lease. Assets obtained on finance lease are depreciated over the lease
period.
Assets given out on financial leases are recognised as receivable at an amount equal to the net investment in the lease.
The rentals received on such leases are apportioned between the financial charge using the implicit rate of return, which
is recognised as income over the period of lease and against principal outstanding, which is reduced from the amounts
receivable.
5.
IMPAIRMENT OF ASSETS
The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any
such indication exists, the Company estimates the recoverable amount (higher of net realizable value and value in use) of
the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset
Annual
Report 2015-16
55
PHILIPS INDIA LIMITED
belongs is less than the carrying amount, the carrying amount is reduced to its recoverable amount.The reduction is treated
as an impairment loss and is recognized in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication
that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected
at the recoverable amount subject to a maximum of depreciable historical cost.
6.
INVENTORIES
Inventories are valued at cost or net realisable value whichever is lower. In case of medical equipments / systems, cost is
determined on the basis of “First in First Out” method and inventories for ongoing projects are valued at specific identification
of cost method due to nature of the business. For all other items, cost is determined on the basis of the weighted average
method and includes all costs incurred in bringing the inventories to their present location and condition. Finished goods
and work-in-progress include appropriate proportion of costs of conversion. Obsolete, defective and unserviceable stocks
are duly provided for.
7.
INVESTMENTS
Long-term investments are stated at cost less any decline, other than temporary in value, determined on an individual
investment basis.
8.
RESEARCH AND DEVELOPMENT
Revenue expenditure is charged to the Statement of Profit and Loss in the year in which it is incurred and expenditure of a
capital nature is capitalized as fixed assets.
9.
FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions are recorded in the books of the Company at standard exchange rates fixed every month on
the basis of a review of the actual exchange rates.The difference between the actual rate of settlement and the standard rate
is charged or credited to the Statement of Profit and Loss.
In respect of monetary assets and monetary liabilities, the overall net loss or gain, if any, on conversion at the exchange rates
prevailing on the date of the Balance Sheet is charged to revenue.
The premium or discount arising at the inception of forward exchange contracts, which are not intended for trading or
speculation purposes, are amortised as expense or income over the life of the contract. Exchange differences on such
contracts are recognized in the Statement of Profit and Loss in the reporting period in which the exchange rates change. Any
profit or loss arising on cancellation or renewal of such forward exchange contracts is recognised as income or as expense
for the period.
Forward contracts which are not covered by Accounting Standard (AS) 11 are measured using “Mark to Market” principle
with resulting net losses thereon being recorded in the Statement of Profit and Loss.
10. REPLACEMENT GUARANTEE
The Company periodically assesses and provides for the estimated liability on guarantees given on sale of its products based
on past performance of such products.
11. RETIREMENT BENEFITS
Liability for defined benefit plan is provided on the basis of actuarial valuation carried out by an independent Actuary at
year end using the Projected Unit Credit Method. Actuarial gains and losses are recognised immediately in the Statement of
Profit and Loss. Company’s contributions to defined contribution plans are charged to the Statement of Profit and Loss as
incurred. The discount rate used for determining the present value of the obligation under defined benefit plans, is based on
the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the
related obligations at the Balance Sheet date. Termination benefits are recognised as and when incurred.
The Company covers a part of the liability towards employees’ gratuity by way of contributing to a registered trust. Liability
with respect to the Gratuity plan, determined on basis of actuarial valuation as described above, and any differential between
the fund amount as per the trust and the liabilities as per actuarial valuation is recognised as an asset or liability.
Annual contributions are made to the employee’s gratuity fund, established with the LIC based on an actuarial valuation
carried out by the LIC as at 31 March each year. The fair value of plan assets is reduced from the gross obligation under the
defined benefit plans, to recognise the obligation on net basis. Actuarial gains and losses are recognised immediately in the
Statement of Profit and Loss. Gains or losses on the curtailment or settlement of any defined benefit plan are recognised
when the curtailment or settlement occurs.
56
Standalone
12. BORROWING COST
Borrowing costs that are directly attributable to acquisition or construction of qualifying assets are capitalized. A qualifying
asset is one that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are
recognised as an expense in the year in which they are incurred.
13. PROVISIONS AND CONTINGENCIES
A provision is recognised when:
•
The Company has a present obligation as a result of a past event;
•
It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
•
A reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is possible obligation or a present obligation that may, but probably
will not, require outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of
outflow of resources is remote, no provision or disclosure is made.
14. TAXATION
Income-tax expense comprises current tax and deferred tax charge or release. Current tax is determined as the amount of
tax payable in respect of taxable income for the period. The deferred tax charge or credit is recognised using current tax
rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is
virtual certainty of realization of such assets. Other deferred tax assets are recognised only to the extent there is reasonable
certainty of realization in future. Such assets are reviewed as at each Balance Sheet date to reassess realization.
For and on behalf of the Board
Chairman
Managing Director
Director & CFO
S.M.DATTA
(DIN: 00032812)
V. RAJA
(DIN: 00669376)
HARIHARAN MADHAVAN
(DIN: 07217072)
Place: Mumbai
Director & Company Secretary
RAJIV MATHUR
Date: 25 July 2016
(DIN: 06931798)
Annual
Report 2015-16
57
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
As at 31 March 2016
2
Share capital
No. of shares
As at 31 March 2015
Amount
No. of shares
Amount
Authorised
Equity shares of ` 10 each
92,000,000
920
92,000,000
920
Non convertible cumulative redeemable preference shares
of ` 10 each
20,000,000
200
20,000,000
200
1,120
1,120
Issued, subscribed and paid-up
Equity shares of ` 10 each, fully paid up
57,517,242
575
57,517,242
575
Add: Forfeited shares (amount paid up)
575
575
2.1. Reconciliation of the number of equity shares
outstanding
At the beginning and at the end of the reporting
period
57,517,242
575
57,517,242
575
55,290,182
553
55,290,182
553
2.2. Rights, preferences and restrictions attached
to the equity shares
The Company has one class of equity shares.
Accordingly all the equity shares rank equally with
regard to voting rights, dividends and shares in the
Company’s residual assets.
2.3. Details of equity shares held by the holding
and the ultimate holding Company
Koninklijke Philips N.V (KPNV)
2.4. Details of shareholders holding more than 5%
shares of the Company
Koninklijke Philips N.V (KPNV)
2.5. Aggregate number of equity shares bought
back during a period of five years immediately
preceding the reporting date
58
Standalone
% holding
% holding
55,290,182
96.13
55,290,182
96.13
-
-
-
-
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
As at 31 March 2015
As at 31 March 2016
3
Reserves and surplus
Capital reserve
At the beginning of the year
Less:Transfer as per Scheme of Arrangement for Demerger
- refer note 37
(includes ` NIL (Previous year - ` 168) created on account
of amalgamation in earlier years)
At the end of the year
Capital redemption reserve
At the beginning of the year
Less:Transfer as per Scheme of Arrangement for Demerger
- refer note 37
At the end of the year
Securities premium account
At the beginning of the year
Less:Transfer as per Scheme of Arrangement for Demerger
- refer note 37
At the end of the year
General reserve
At the beginning of the year
Less:Transfer as per Scheme of Arrangement for Demerger
- refer note 37
Less: Demerged Company’s share of demerger expenses
Add: Transfer from Statement of Profit and Loss
At the end of the year
Other reserves
Capital subsidy
At the beginning and at the end of the year
Surplus / (Deficit) in the Statement of Profit and Loss
At the beginning of the year
Add: Profit for the year
Less: Appropriations
Proposed dividend [` 3 per share (Previous year - ` 3
per share)]
Tax on proposed dividend
Transfer to General reserve
At the end of the year
169
169
169
-
228
169
228
228
-
1,153
228
1,153
1,153
-
1,153
3,213
2,789
1,215
81
1,917
398
2,789
424
2,315
3,213
-
9
11,714
3,975
8,111
4,235
173
35
398
173
35
424
15,083
17,398
11,714
16,486
Annual
Report 2015-16
59
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
As at
31 March 2016
4
As at
31 March 2015
Long-term borrowings
Long term maturities of finance lease obligations (secured)
155
218
155
218
Additional disclosure relating to long-term borrowings
The finance lease obligations are secured by underlying assets (leased vehicles) [refer note 10(a)].The legal title of the vehicles
vests with the lessors and the lease term varies between 3-5 years, the total minimum lease liability for assets obtained on
finance lease is ` 318 (Previous year - ` 426) which includes interest of ` 57 (Previous year - ` 77). The maturity profile of
finance lease obligations is as follows:
Minimum lease payments
Payable within 1 year
138
169
Payable between 1-5 years
180
257
Payable within 1 year
106
131
Payable between 1-5 years
155
218
Income received in advance
409
451
Employee related payables
270
140
6
7
685
598
Present value
5
Other long term liabilities
Others
Security deposits
60
Standalone
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
6
Provisions
Provision for employee benefits
Gratuity (refer note 36)
Compensated absences (refer note 36)
Post-employment medical benefits
Retention and performance pay (refer note 6.1)
Others
Replacement guarantee (refer note 6.1)
Legal and regulatory (refer note 6.1)
Miscellaneous risks (refer note 6.1)
Provision for taxation (net of advances)
Proposed dividend
Tax on proposed dividend
Long-term
As at 31
As at 31
March 2016
March 2015
Short-term
As at 31
As at 31
March 2016
March 2015
353
238
-
494
334
15
8
21
19
92
33
33
23
95
591
843
228
333
891
173
35
1,800
527
683
82
442
173
35
2,126
Additional disclosure relating to provisions:
6.1. Movement in provisions:
Particulars of disclosure
Replacement
guarantee
Opening balance
527
(515)
Add: Accruals
922
(1,022)
Less: Utilisation
914
(1,010)
Less: Write back
Less: Transfer as per Scheme of
307
Arrangement for Demerger
Closing balance
228
(527)
Figures given in (brackets) relate to previous year.
Class of provisions
Legal and
Personnel
Miscellaneous
regulatory
related
risks
683
110
82
(715)
(129)
(86)
34
171
2
(39)
(154)
(4)
178
(173)
19
12
(71)
(8)
365
11
72
333
(683)
92
(110)
(82)
Total
1,402
(1,445)
1,129
(1,219)
1,092
(1,183)
31
(79)
755
653
(1,402)
6.2. Nature of provisions:
(a) Replacement guarantee
The Company provides for the estimated liability on guarantees given on sale of its products based on past performance
of such products. The provision represents the expected cost of replacement and free of charge services and it is
expected that the expenditure will be incurred over the guarantee period which usually ranges from 12 months to 24
months.
(b) Legal and regulatory
The Company has made provision for taxes and duties relating to cases that are pending assessments before Adjudicating
Authorities where possible outflow of resources may arise in future which would depend on the ultimate outcome on
conclusion of the cases.
(c) Personnel related
The Company has made provisions in respect of amounts payable to certain employees based on their retention and
performance, which are payable over a three year and one year period respectively.
(d) Miscellaneous risks
The Company has created provisions following the accounting concept of conservatism towards possible outflow of
resources in respect of other claims against the Company.
Annual
Report 2015-16
61
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
As at 31
March 2016
7
As at 31
March 2015
Short-term borrowings
Loans repayable on demand
From banks
-
287
-
287
39
91
5,367
9,038
5,406
9,129
Current maturities of finance lease obligations (refer note 4)
106
131
Income received in advance
714
609
Unpaid dividend
11
10
Book overdraft
63
37
58
61
1,736
1,304
617
1,031
10
10
840
820
4,155
4,013
Bank overdraft (unsecured)
8
Trade payables
Dues to micro and small enterprises - (refer note 38)
Dues to others
9
Other current liabilities
Other payables:
Payables for purchase of fixed assets (other than micro and small enterprises)
Advance received from customers
Employee related payables
Security deposits
Statutory dues
62
Standalone
14
13
536
49
162
20
160
954
6,786
167
702
7
552
527
694
10,657
(2)
(1)
32
168
1,022
Additions
As at
1 April
2015
(3)
(8)
(307)
(148)
(102)
(23)
(26)
(837)
(42)
(109)
(6,682)
(128)
(81)
(5,318)
(167)
(4)
Gross block at cost
Disposals and
Transfer as
adjustments
per Scheme of
Arrangement
for Demerger
8
362
4,803
54
450
3
218
366
559
6,823
1,981
167
558
7
438
364
737
4,622
(6)
(1+2+3+4)
(5)
4
168
198
As at
1 April
2015
As at
31 March
2016
(7)
43
886
127
32
588
16
48
32
(8)
(3)
(255)
(108)
(95)
(23)
(26)
-
(366)
(58)
(4,833)
(49)
(49)
(4,208)
(103)
(9)
Accumulated depreciation
Depreciation
On disposals
Transfer as
for the year
and
per Scheme of
adjustments
Arrangement
for Demerger
541
2,621
3
188
254
1,160
70
369
8
28
(6+7+8+9)
(10)
As at
31 March
2016
(1)
165
230
22
150
567
As at
1 April
2015
(2)
Additions
-
(3)
-
(4)
Gross block at cost
Disposals and
Transfer as
adjustments
per Scheme of
Arrangement
for Demerger
-
(1+2+3+4)
(5)
165
230
22
150
567
As at
31 March
2016
(6)
165
230
22
150
567
As at
1 April
2015
Based on expected future cash flows, no impairment provision has been made during the current year and previous year.
Goodwill
Brands
Software
Non-compete fees
Total
11(a) Intangible fixed assets
(7)
-
(8)
-
(9)
Accumulated amortisation
Amortisation
On disposals
Transfer as
for the year
and
per Scheme of
adjustments
Arrangement
for Demerger
-
(6+7+8+9)
(10)
165
230
22
150
567
As at
31 March
2016
(5-10)
(11)
-
Net block
As at
31 March
2016
196
2,001
4
250
110
821
97
189
4
160
170
(5-10)
(11)
Net block
As at
31 March
2016
Amounts in ` Mln
Depreciation includes ` 111 (Previous year ` 125) on account of additional depreciation for writing down the value of certain Plant and equipment (owned) no longer in active use (refer note 33 c).
Land
Freehold
Leasehold
Buildings
Plant and equipment
Owned
Given on lease (refer note 39)
Furniture and fixtures
Vehicles
Owned
Held under finance lease
Office equipment
Others
Leasehold Improvements
Total
10(a) Tangible fixed assets
Notes to the Financial Statements for the year ended 31 March 2016
Annual
Report 2015-16
63
64
Standalone
614
23
212
44
46
939
6,552
167
687
7
470
486
648
10,260
(3)
(542)
(130)
(3)
(380)
(8)
(21)
694
10,657
7
552
527
6,786
167
702
32
168
1,022
As at
31 March
2015
(1+2+3)
(4)
(5)
517
6,148
3
191
326
4,340
38
405
6
322
As at
1 April 2014
(6)
42
1,183
142
43
838
16
51
2
49
(7)
(508)
(115)
(3)
(375)
(6)
(9)
Accumulated depreciation
Depreciation
On disposals
for the year
and
adjustments
559
6,823
3
218
366
4,803
54
450
8
362
As at
31 March
2015
(5+6+7)
(8)
135
3,834
4
334
161
1,983
113
252
32
160
660
Net block
As at
31 March
2015
(4-8)
(9)
Amounts in ` Mln
(1)
165
230
22
150
567
(2)
-
(3)
-
As at
31 March
2015
(1+2+3)
(4)
165
230
22
150
567
(5)
165
230
22
150
567
As at
1 April 2014
(6)
-
(7)
Accumulated amortisation
Amortisation On disposals
for the year
and
adjustments
Based on expected future cash flows, no impairment provision has been made during the current year and previous year.
Goodwill
Brands
Software
Non-compete fees
Total
As at
1 April 2014
Gross block at cost
Additions
Disposals and
adjustments
-
As at
31 March
2015
(5+6+7)
(8)
165
230
22
150
567
Net block
As at
31 March
2015
(4-8)
(9)
-
Pursuant to enactment of the Companies Act, 2013 (the ‘Act’) being effective from 1 April 2014, the Company has revised depreciation rates of fixed assets as per the useful life
specified in Schedule II of the Act. Consequently, the depreciation charge for the year is higher by ` 256.
Depreciation includes ` 125 on account of additional depreciation for writing down the value of certain Plant and equipment (owned) no longer in active use (refer note 33 c).
-
(2)
Gross block at cost
Additions
Disposals and
adjustments
32
168
1,043
(1)
11(b) Intangible fixed assets (Previous Year)
(ii)
(i)
Land
Freehold
Leasehold
Buildings
Plant and equipment
Owned
Given on lease (refer note 39)
Furniture and fixtures
Vehicles
Owned
Held under finance lease
Office equipment
Others
Leasehold Improvements
Total
As at
1 April 2014
10(b) Tangible fixed assets (Previous Year)
Notes to the Financial Statements for the year ended 31 March 2016
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
12
13
Non-current investments
(Valued at cost, unless stated otherwise)
Trade investments
Investment in equity instruments - unquoted
49,263,413 (Previous year - 14,294,860) equity shares of ` 10/- each fully paid up in
Preethi Kitchen Appliances Private Limited - subsidiary
6,300,000 (Previous year - NIL) equity shares of 10/- each fully paid up in HealthMap
Diagnostics Private Limited- an associate
Investment in preference instruments - unquoted
11,987,421 (Previous year - NIL) 8% Compulsorily Convertible preference shares of
` 10/- each fully paid up in Preethi Kitchen Appliances Private Limited - subsidiary
Deferred tax assets (net)
Deferred tax assets
Provision for employee benefits
Doubtful trade receivables and loans and advances
Difference between book and tax depreciation
Other timing differences
Deferred tax liabilities
Assets given on finance lease
14
Loans and advances
(Unsecured, unless otherwise stated)
Capital advances (considered good)
Security deposits
Considered good
Considered doubtful
Less: Provision for doubtful deposits
Loans and advances to related parties (considered good)
Inter-corporate deposits to wholly owned subsidiary
Other advances to fellow subsidiaries
Other loans and advances
Considered good
Advance to suppliers
CENVAT credit receivable
VAT credit receivable
Deposits against legal cases
Special additional duty receivables and drawback
claims
Balances with customs and port trust
Prepaid expenses
Claims receivables
Advances to employees
Advance income tax (net of provision)
Considered doubtful
Advance to suppliers
Deposits against legal cases
Claims receivables
Less: Provision for doubtful other loans and advances
Advance to suppliers
Deposits against legal cases
Claims receivables
Long-term
As at 31
March 2016
11
11
Amounts in ` Mln
As at 31
As at 31
March 2016
March 2015
3,780
1,000
63
-
954
-
4,797
1,000
215
106
319
232
872
310
115
203
530
1,158
362
362
510
349
349
809
Long-term
Short-term
As at 31
As at 31
March 2015
March 2016
56
56
-
Short-term
As at 31
March 2015
-
281
281
375
375
180
60
(60)
180
245
51
(51)
245
-
-
544
544
2,425
175
2,600
335
80
287
56
676
83
401
56
228
558
8
67
310
196
23
140
8
1,742
12
1,742
150
90
20
-
70
168
34
11
-
54
4
54
4
-
21
-
(54)
2,508
2,800
(4)
(54)
2,970
3,401
(4)
1,121
1,845
(21)
952
3,797
Annual
Report 2015-16
65
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
15
Other non-current assets
Long term trade receivables
Secured, considered good (refer note 17.1)
Unsecured, considered good
Doubtful
Less: Provision for doubtful receivables
Bank deposits (due to mature after 12 months from the reporting date)
16
17
Inventories
(At lower of cost and net realisable value)
Raw materials
[including goods-in-transit - ` 15 (Previous year - ` 333)]
Work-in-progress
Finished goods
[including goods-in-transit - ` 106 (Previous year - ` 27)]
Stock-in-trade (goods purchased for resale)
[including goods-in-transit - ` 413 (Previous year - ` 458)]
Stores and spares
Trade receivables
Receivables outstanding for a period exceeding six months
from the date they are due for payment
Secured, considered good (refer note 17.1)
Unsecured, considered good
Doubtful
Less: Provision for doubtful receivables
Other receivables
Secured, considered good (refer note 17.1)
Unsecured, considered good
Doubtful
Less: Provision for doubtful receivables
Amounts in ` Mln
As at 31
As at 31
March 2016
March 2015
1,687
1,687
1,687
6
6
1,693
2,064
193
2,257
2,257
6
6
2,263
434
862
950
112
540
308
3,026
4,695
20
4,542
99
6,504
18
389
190
597
(190)
407
6
462
204
672
(204)
468
441
5,973
6,414
6,414
6,821
405
7,806
8,211
8,211
8,679
Additional disclosure relating to finance lease receivables:
17.1 Secured trade receivables includes finance lease receivables amounting to ` 698 (Previous year - ` 716) relating to
medical equipments leased out by the Healthcare division of the Company.The lease term varies between 5-7 years.The total
minimum lease payments for assets given on finance lease is ` 941 (Previous year - ` 929) which includes unearned interest of
` 243 (Previous year - ` 213). The maturity profile of finance lease obligation is as follows:
Minimum lease payments
Receivable within 1 year
Receivable between 1-5 years
Receivable after 5 years
Total
Present value
Receivable within 1 year
Receivable between 1-5 years
Receivable after 5 years
Total
Unearned interest
66
Standalone
231
638
72
941
238
634
57
929
152
480
66
698
243
164
499
53
716
213
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
As at 31 March 2016
18
As at 31 March 2015
Cash and bank balances
Cash and cash equivalents
Cash on hand
234
1,027
On current accounts
1,082
408
On deposit accounts (with original maturity of 3
months or less)
4,079
2,260
Cheques and drafts on hand
Balances with banks
5,395
3,695
Other bank balances
Bank deposits (due to mature within 12 months from
the reporting date)
Unpaid dividend accounts
19
-
-
11
10
11
10
5,406
3,705
238
142
34
24
-
14
272
180
Other current assets
(Unsecured, considered good unless otherwise stated)
Unbilled revenue
Interest accrued on deposits with banks
Interest accrued on Inter-corporate deposits
Annual
Report 2015-16
67
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
20
Revenue from operations
Year ended
31 March 2016
Year ended
31 March 2015
Sale of products (gross)
49,830
53,541
Sale of services
12,989
10,214
382
448
63,201
64,203
Lamps
14,531
19,711
Fittings
8,663
9,718
Diagnostic imaging equipments
8,902
7,445
Domestic appliances
5,956
5,271
Personal care
4,781
3,725
Accessories for fittings
1,636
2,042
Patient monitoring equipments
1,667
1,781
Electronic HF ballasts
1,880
2,321
Health and wellness
285
210
Modular switches
690
452
Operation theatre lights
761
646
70
208
8
11
49,830
53,541
Software development
8,024
6,567
Product maintenance
3,023
2,359
Service income
1,493
877
449
411
12,989
10,214
31
81
Other operating revenues
Revenue from operations (gross)
Breakup of revenue from sale of products
Filaments
Glass shells
Breakup of revenue from sale of services
Others
Breakup of other operating revenues
Liabilities no longer required written back
4
6
288
227
Scrap sales
27
76
Miscellaneous
32
58
382
448
Export incentives
Finance income - leases
68
Standalone
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
21
Other income
Interest income (other than on investments)
Insurance and other claims
Surplus on disposal of fixed assets
Other non-operating income
22
Cost of raw materials consumed
Inventory of raw materials at the beginning of the year
Add: Purchases
Less: Inventory of raw materials at the end of the year
Less: Transfer as per Scheme of Arrangement for Demerger
Cost of raw materials consumed
Circuits
Caps
Lamps consumables
Medical equipment components
Breakup of inventory of raw materials at the end of the year
Medical equipment components
Circuits
Caps
Lamps consumables
Transfer as per Scheme of Arrangement for Demerger
Circuits
Caps
Lamps consumables
23
Breakup of purchases of stock-in-trade (goods purchased for resale):
Lamps
Fittings
Diagnostic imaging equipments
Domestic appliances
Personal care
Accessories for fittings
Patient monitoring equipments
Electronic HF ballasts
Service consumables
Health and wellness
Modular switches
Operation theatre lights
Year ended
31 March 2016
488
7
21
516
Year ended
31 March 2015
390
11
8
10
419
529
3,751
419
337
3,524
558
4,242
529
4,271
3
404
1,576
1,541
3,524
29
596
2,384
1,262
4,271
419
419
221
1
15
292
529
22
315
337
-
7,052
4,830
4,200
4,127
3,246
1,010
1,393
1,306
2,056
121
682
531
30,554
9,249
5,469
2,710
4,086
2,416
1,657
928
1,680
1,871
177
477
395
31,115
Annual
Report 2015-16
69
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
24
Amounts in ` Mln
Changes in inventories of finished goods, stock-in-trade and work-in-progress:
Year ended 31 March 2016
Opening
inventory
Transfer
Closing
as per
inventory
Scheme of
Arrangement
for Demerger
Year ended 31 March 2015
(Increase)/
decrease
in inventory
Opening
inventory
Closing
inventory
(Increase)/
decrease
in inventory
Finished goods
281
226
-
55
292
281
-
-
6
(6)
-
-
-
281
226
6
49
292
281
11
Lamps
826
531
-
295
859
826
33
Fittings
546
644
-
(98)
673
546
127
Accessories for fittings
235
222
-
13
163
235
(72)
Electronic HF ballasts
160
173
-
(13)
123
160
(37)
50
91
-
(41)
36
50
(14)
Diagnostic imaging equipments
451
-
203
248
557
451
106
Domestic appliances
596
-
653
(57)
610
596
14
Personal care
453
-
685
(232)
-
453
(453)
Patient monitoring equipments
260
-
242
18
139
260
(121)
Service consumables
488
-
663
(175)
700
488
212
Health and wellness
95
-
69
26
26
95
(69)
Lamps
Diagnostic imaging equipments
Stock-in-trade
resale)
(goods
purchased
11
for
Modular switches
77
-
98
(21)
72
77
(5)
4,237
1,661
2,613
(37)
3,958
4,237
(279)
Operation theatre lights
Work-in-progress
540
-
950
(410)
458
540
(82)
5,058
1,887
3,569
(398)
4,708
5,058
(350)
Diagnostic imaging equipments
Total
Year ended 31
March 2016
25
Employee benefits expense
Salaries, wages and bonus
Contribution to provident and other funds
Expense on Employee Stock Option Schemes
Staff welfare expenses
26
9,072
364
345
84
106
589
646
11,214
10,169
54
88
54
88
775
1,058
775
1,058
Depreciation and amortisation expense
Depreciation of tangible fixed assets
70
10,177
Finance costs
Interest expense
27
Year ended 31
March 2015
Standalone
Notes to the Financial Statements for the year ended 31 March 2016
28
Amounts in ` Mln
Other expenses
Year ended
31 March 2016
Consumption of stores and spare parts
Year ended
31 March 2015
113
96
6
9
Power and fuel
577
655
Packing, freight and transport
767
895
Rent
817
719
Repairs to buildings
248
208
Excise duty
Repairs to machinery
Insurance
Rates and taxes
Travelling and conveyance
23
82
126
120
93
160
1,267
1,302
382
452
Publicity
2,488
2,238
IT and Communication
Legal and professional
1,241
1,408
Provision for doubtful trade receivables and loans and advances
197
35
Replacement guarantee
922
1,022
Management support services
-
384
Research and development services
-
48
Net loss on foreign currency transaction and translation
Miscellaneous
(a)
(b)
(c)
(d)
120
339
1,485
1,754
10,872
11,926
Excise duty recovered through sales is disclosed as a reduction from sales and the excise duty not recovered from sales
is disclosed as expense above.
Legal and professional includes payments to auditors as given below:
As Auditor - statutory audit fees ` 9.9 (Previous year - ` 8.3), tax audit fees ` 2 (Previous year - ` 2);
In other capacity - taxation matters ` 0.3 (Previous year - ` 0.3), certification ` 1.1 (Previous year - ` 0.4) and
reimbursement of expenses ` 1 (Previous year - ` 1).
Pursuant to the agreement entered into by the Company with Koninklijke Philips N.V.(KPNV), the Company has
incurred ` Nil (Previous year - ` 384) towards the support services provided by KPNV and ` Nil (Previous year ` 48) for accessing the benefit resulting from common research and development programmes.
Miscellaneous include - (i) undepreciated value of fixed assets written off / provided for - ` NIL (Previous year ` 7), (ii) handling charges - ` 199 (Previous year - ` 284), (iii) royalty - ` 250 (Previous year - ` 242), (iv) commission
- ` 125 (Previous year - ` 101), (v) donation - ` NIL (Previous year - ` 2) and (vi) Corporate Social Responsibility
expenditure - Gross amount required to be spent ` 68 (Previous year - ` 46), amount spent towards various schemes
as prescribed under Section 135 of the Companies Act, 2013 ` 33 (Previous year - ` 26).
Annual
Report 2015-16
71
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
Related party transactions
(a) Names of companies where control exists:
Holding and ultimate holding company
: Koninklijke Philips N.V (KPNV)
Subsidiary Company
: Preethi Kitchen Appliances Private Limited
Associate Company
: HealthMap Diagnostics Private Limited
(b) Other related parties with whom transactions have taken place during the year:
(i) Fellow Subsidiary Companies
: As per list given below
Argus Imaging B.V. Philips Healthcare (Suzhou) Co., Ltd.
Burton Medical Products Corporation Philips Healthcare Informatics, Inc.
Chicago Magnet Wire Corp. Philips Innovative Applications
Dameca A/S Philips International B.V.
Dynalite Intelligent Light Pty. Limited Philips IPSC Tamasi Kft.
Genlyte Thomas Group LLC Philips Lanka Solutions (Private) Limited
Ilti Luce S.r.l. Philips Lighting B.V.
Indalux Iluminación Técnica, S.L. Philips Lighting Bielsko Sp.z.o.o.
Lifeline Systems Company Philips Lighting Central America, Sociedad Anónima de Capital Variable
Limited Liability Company “Philips” Philips Lighting India Limited
Luceplan S.p.A Philips Lighting Industry (China) Co., Ltd.
Lumileds India Private Limited Philips Lighting Luminaires (Shanghai) Co., Ltd.
Lumileds LLC Philips Lighting Maseru Pty. Ltd.
P.T. Philips Industries Batam Philips Lighting Poland S.A.
Philips (China) Investment Company, Ltd. Philips Luminaires (Chengdu) Co., Ltd.
Philips Aktiebolag Philips Malaysia Sdn. Berhad
Philips Austria GmbH Philips Medical Systems (Cleveland), Inc.
Philips Belgium Philips Medical Systems DMC GmbH
Philips Chilena S.A. Philips Medical Systems Nederland B.V.
Philips Colombiana S.A.S. Philips Medical Systems Technologies Ltd.
Philips Consumer Lifestyle B.V. Philips Medizin Systeme Böblingen GmbH
Philips Digital Mammography Sweden AB Philips Mexicana, S.A. de C.V.
Philips do Brasil Ltda. Philips Nederland B.V.
Philips Domestic Appliances and Personal Care Philips New Zealand Limited
Company of Zhuhai SEZ, Ltd.
Philips Egypt (Limited Liability Company) Philips Oral Healthcare, Inc.
Philips Electrical Industries of Pakistan Limited Philips Oy
Philips Electronics (Thailand) Ltd. Philips Peruana S.A.
Philips Electronics and Lighting, Inc. Philips Polska Sp.z.o.o.
Philips Electronics Australia Limited Philips Solid-State Lighting Solutions, Inc.
Philips Electronics Bangladesh Private Limited Philips South Africa (Proprietary) Limited
Philips Electronics Hong Kong Limited Philips Taiwan Ltd.
Philips Electronics Japan, Ltd. Philips Technologie GmbH
Philips Electronics Korea Ltd. Philips Ultrasound, Inc.
Philips Electronics Ltd Philips Uruguay S.A.
Philips Electronics Middle East & Africa B.V. PITS
Philips Electronics Nederland B.V. PT. Philips Indonesia
Philips Electronics North America Corporation Respironics California, Inc.
Philips Electronics Singapore Pte Ltd Respironics, Inc.
Philips Electronics UK Limited Saeco International Group S.p.A.
Philips Electronics Vietnam Limited Shenzhen Goldway Industrial Inc.
Philips Electronique Maroc Türk Philips Ticaret Anonim Sirketi
Philips Export B.V. VISICU, Inc.
Philips France Volcano Europe, B.V.B.A.
Philips GmbH Witt Biomedical Corporation
(ii) Employee Trusts
Philips India Ltd Management Staff Provident Fund Trust
(iii) Key Management Personnel
(1) Executive Directors:
(i) Mr.A.Krishnakumar - Ceased to be Executive Director w.e.f. 15 Dec 2015
(ii) Mr.Hariharan Madhavan - Executive Director w.e.f. 28 Sep 2015
(iii) Mr.V. Raja - Executive Director w.e.f. 15 Dec 2015
(2) Non-Executive Directors:
(i) Mr.S.M.Datta
(ii) Mr.Vikram Mukund Limaye
(iii) Mr.Vivek Gambhir
(iv) Ms.Geetu Gidwani Verma -Non-Executive Director w.e.f. 29 Sep 2015
(3) Company Secretary:
Mr.Rajiv Mathur
29
72
Standalone
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
(c) Nature of transactions
Year ended 31 March 2016
Year ended 31 March 2015
Ultimate Subsidiary
Fellow Associate
Key Employee Ultimate Subsidiary
Fellow Associate
Key Employee
Holding Company Subsidiary Company Managerial
Trusts Holding Company Subsidiary Company Managerial
Trusts
Company
Companies
Personnel
Company
Companies
Personnel
PURCHASES
Goods
-
387
12,182
-
-
-
-
297
11,422
-
-
-
Fixed assets
-
-
59
-
-
-
-
-
61
-
-
-
91
24
1,238
-
-
-
521
82
1,071
-
-
-
-
-
100
-
-
-
-
-
227
-
-
-
84
-
-
-
-
-
106
-
-
-
-
-
Goods
-
3
2,443
398
-
-
-
2
2,362
-
-
-
Fixed assets
-
-
-
-
-
-
-
-
-
-
-
-
1,243
67
8,661
-
-
-
877
52
6,934
-
-
-
-
1
601
-
-
-
-
3
130
-
-
-
Charge
-
-
-
-
-
-
-
-
1
-
-
-
Recovery
-
-
5
-
-
-
-
-
7
-
-
-
Mr.A.Krishnakumar
-
-
-
-
27
-
-
-
-
-
44
-
Mr.Jan Hendrik
Gerardus Louwman
-
-
-
-
-
-
-
-
-
-
72
-
Mr.Hariharan
Madhavan
-
-
-
-
12
-
-
-
-
-
-
-
Mr.V. Raja
-
-
-
-
13
-
-
-
-
-
-
-
Mr.Rajiv Mathur
-
-
-
-
16
-
-
-
-
-
15
-
Mr.S.M.Datta
-
-
-
-
1
-
-
-
-
-
1
-
Mr.Vikram Mukund
Limaye
-
-
-
-
1
-
-
-
-
-
1
-
Mr.Vivek Gambir
-
-
-
-
1
-
-
-
-
-
1
-
Ms.Geetu Gidwani
Verma
-
-
-
-
-
-
-
-
-
-
-
Services
Reimbursements
Others
SALES
Services
Reimbursements
DEPUTATION OF
PERSONNEL
MANAGERIAL
REMUNERATION
FINANCE
166
-
-
-
-
111
-
-
-
-
Interest income
-
227
-
-
-
-
202
-
-
-
-
Inter corporate
deposits given
-
1,670
134
-
-
-
-
1,958
-
-
-
-
Inter corporate
deposits repaid
-
4,095
134
-
-
-
-
1,483
-
-
-
-
Others - Proceeds
from divestment
-
-
-
-
-
-
-
-
378
-
-
-
Others - Purchase of
Investment
-
3,734
-
63
-
-
-
-
-
-
-
-
Contributions
to Employees’
Benefit Plans
-
-
-
-
-
620
-
-
-
-
-
543
Payable
27
36
2,033
-
-
54
140
34
2,673
-
-
46
Receivable
99
-
2,008
9
-
-
43
2,469
2,073
-
-
-
Dividend Paid
OUTSTANDINGS
Annual
Report 2015-16
73
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
Relationship / Name of the related party
(i)
Description of the nature
of transaction
Value of the transactions
Year ended
31 March 2016*
Year ended
31 March 2015
Fellow subsidiary Companies:
Philips Electronics Hong Kong Limited
Purchase of goods
-
1,902
Philips Medical Systems Nederland B.V.
Purchase of goods
2,540
1,619
Philips Consumer Lifestyle B.V.
Purchase of goods
3,409
2,935
Philips Electronics Singapore Pte Ltd
Purchase of goods
1,361
-
Philips Electronics Singapore Pte Ltd
Purchase of fixed assets
28
25
Philips Medical Systems Nederland B.V.
Purchase of fixed assets
10
9
Philips Lighting Maseru Pty. Ltd.
Purchase of fixed assets
-
9
PT. Philips Indonesia
Purchase of fixed assets
10
7
Philips Electronics Nederland B.V.
Purchase of services
881
860
Philips Electronics Bangladesh Private Limited
Reimbursements paid
15
-
Philips Electronics Nederland B.V.
Reimbursements paid
55
200
Philips Medical Systems Nederland B.V.
Sale of goods
994
555
Philips Electronics Hong Kong Limited
Sale of goods
248
532
Philips Electronics Nederland B.V.
Sale of services
1,801
5,320
Philips Electronics North America Corporation
Sale of services
1,217
-
Philips Medical Systems Nederland B.V.
Sale of services
2,050
-
Lumileds India Private Limited
Proceeds from divestment
-
378
Philips Lighting B.V.
Reimbursements received
-
22
Philips Electronics Nederland B.V.
Reimbursements received
-
61
Philips (China) Investment Company, Ltd.
Reimbursements received
-
19
Philips Lighting India Limited
Reimbursements received
544
-
Philips Electronics Nederland B.V.
Deputation charge
-
1
Philips Electronics Hong Kong Limited
Deputation recovery
-
2
Philips South Africa (Proprietary) Limited
Deputation recovery
-
2
Philips International B.V.
Deputation recovery
-
2
Philips Polska Sp.z.o.o.
Deputation recovery
1
-
Philips Belgium
Deputation recovery
2
-
Philips Lighting India Limited
Inter Corporate Deposit taken
134
-
Philips Lighting India Limited
Inter Corporate Deposit given
134
-
Philips Electronics Hong Kong Limited
Payable
-
405
Philips Medical Systems Nederland B.V.
Payable
642
547
Philips Consumer Lifestyle B.V.
Payable
533
512
Philips Medical Systems Nederland B.V.
Receivable
528
587
Philips Lighting India Limited
Receivable
544
-
Philips Electronics Nederland B.V.
Receivable
316
-
Contributions
620
543
(ii) Employee Trusts:
Philips India Ltd Management Staff Provident
Fund Trust
Philips India Ltd Management Staff Provident
Payable
54
Fund Trust
* represents transactions with parties which comprise more than 10% of aggregate value of transactions.
74
Standalone
46
Notes to the Financial Statements for the year ended 31 March 2016
30
Amounts in ` Mln
INFORMATION ABOUT BUSINESS SEGMENTS
Description
(A) PRIMARY SEGMENT INFORMATION:
(1) SEGMENT REVENUE
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
Year
ended
31 March
2016
Year
ended
31 March
2015
Description
OTHER INFORMATION
(12) SEGMENT ASSETS
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
f. Other unallocable
TOTAL
27,003
11,056
8,023
16,076
74
33,916
9,259
6,567
13,190
96
TOTAL
(2) INTER SEGMENT REVENUE
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
TOTAL
62,232
63,028
(3) OTHER UNALLOCABLE INCOME
REVENUE FROM OPERATIONS (NET) (1+3)
(4) SEGMENT RESULT
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
TOTAL
(5) FINANCE COST
(6) OTHER UNALLOCABLE
EXPENDITURE NET OF INCOME
(7) PROFIT BEFORE EXCEPTIONAL
ITEMS AND TAX (4+5+6)
(8) EXCEPTIONAL ITEMS
350
62,582
- (13) SEGMENT LIABILITIES
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
f. Other unallocable
430
63,458 TOTAL
3,440
596
783
1,508
5
6,332
(54)
225
6,503
-
10,029
3,057
2,165
8,954
4
10,066
34,275
1,271
1,930
6,561
5
3,025
6,050
2,130
1,547
5,734
15
1,738
12,792
17,214
3,463 (14) CAPITAL EXPENDITURE
199
a. Lighting
560
b. Consumer Lifestyle
1,244
c. Software development services
10
d. Healthcare
5,476
e. Other segments
(88)
f. Other unallocable
212
124
139
279
144
243
265
114
242
195
1
42
5,600 TOTAL
929
859
(418)
(50)
(172)
(103)
(143)
(886)
(671)
(39)
(180)
(96)
(1)
(196)
(1,183)
(56)
(4)
(35)
(93)
(188)
(52)
(10)
(62)
29,194
1,571
30,765
32,104
2,171
34,275
(15) DEPRECIATION AND AMORTISATION
EXPENSE
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
f. Other unallocable
TOTAL
(16) NON-CASH EXPENSES OTHER THAN
DEPRECIATION AND AMORTISATION
EXPENSE
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
f. Other unallocable
TOTAL
40
635
675
6,275
(10) TAX EXPENSE
a. Current tax
b. Deferred tax - release / (charge)
(2,438)
135
(2,353)
313
TOTAL
(11) PROFIT FOR THE YEAR
(2,303)
3,975
(2,040)
4,235
49,707
12,875
62,582
ASSETS
52,576 a. Within India
10,882 b. Outside India
63,458 TOTAL
(B) SECONDARY SEGMENT INFORMATION:
REVENUE
a. Within India
b. Outside India
TOTAL
CAPITAL EXPENDITURE
a. Within India
b. Outside India
TOTAL
929
929
Year
ended
31 March
2015
4,886
2,466
9,976
7
13,430
30,765
(225)
(225)
6,278
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
f. Other unallocable
TOTAL
(9) PROFIT BEFORE TAX
Year
ended
31 March
2016
859
859
The secondary segment revenue and assets in the geographical segments considered for disclosure are as follows:
(1) Revenue and assets within India.
(2) Revenue and assets outside India.
Annual
Report 2015-16
75
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
30
INFORMATION ABOUT BUSINESS SEGMENTS (Contd.)
(C) OTHER DISCLOSURES:
Amounts in ` Mln
Inter segment revenue / result:
Inter-segment revenue has been recognised at competitive prices.
Allocation of corporate expenses to other segments is at cost.
All profits / losses on inter segment transfers are eliminated at Company level.
Types of products and services in each business segment:
Business Segments
Type of products / services
a.
Lighting
Lamps, Glass shells, Fittings, Accessories for fittings, Electronic HF Ballasts,
Glass tubings and Modular Switches
b. Consumer Lifestyle
Domestic Appliances, Health & Wellness products and Personal care
products
c.
Software development services
Development of embedded software
d. Healthcare
Medical electronics equipments
e. Other segments
Philips Design
Year ended
Year ended
31 March 2016
31 March 2015
31 Consumption of raw materials and spares
% of total
% of total
consumption
consumption
`
`
Raw materials:
Imported
31.1
1,096
40.0
1,707
Indigenous
68.9
2,428
60.0
2,564
Spares:
Imported
7.0
8
14.0
13
Indigenous
93.0
105
86.0
83
32 Earnings, expenditure and dividend remittance in foreign currency
Earnings
3,002
3,068
Exports on F.O.B. basis including ` 146 (Previous year ` 27) through rupee trade arrangements
Service revenue
9,873
7,814
Expenditure
Management support services
342
Research and development services
43
Royalty
250
215
Legal and Professional
17
21
IT and Communication
934
924
Employee related
84
106
Training
15
21
Travel
353
318
Others
222
150
Dividend remittance
Number of equity shares held on which dividend was
55,290,242
55,290,242
remitted
Period to which dividend relates to
April 2014 to March 2015
April 2013 to March 2014
Number of non-resident shareholders
2
2
Amount remitted
166
111
Value of imports on C.I.F. basis
Traded goods
11,819
12,455
Raw materials
1,177
1,655
Spares
42
33
Capital goods
237
186
76
Standalone
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
33
Exceptional items include:
(a)
Profit on sale of property - ` NIL (Previous year - ` 760).
(b)
` NIL (Previous year - ` 388) Net surplus on divestment of Lumileds LED Component and Automotive Lighting
Business and Tax thereon ` NIL (Previous year - ` 78) included in current tax.
(c)
Restructuring costs incurred at Mohali Light Factory and Vadodara Light Factory:
-
(d)
34
Compensation for Employees’ Voluntary Separation ` 114 (Previous year – ` 223).
Additional depreciation ` 111 (Previous year - ` 125) provided for writing down certain plant and equipment no
longer in active use.
Settlement of erstwhile Mumbai Employees’ VRS claim ` NIL (Previous year - ` 125).
The Company uses forward exchange contracts to hedge its exposure in foreign currency. The information
on forward contracts is as follows:
(a) Forward contracts outstanding
USD Currency
Details
As at 31 March 2016
INR
As at 31 March 2016
As at 31 March 2015
FC (in 000s)
INR
INR
FC (in 000s)
As at 31 March 2015
FC (in 000s)
INR
FC (in 000s)
-
-
-
-
-
-
-
-
2,683.33
40,500.00
2,397.83
38,500.00
-
-
-
-
Receivables
Payables
Euro Currency
(b) Foreign exchange currency exposures not covered by Forward Contracts
As at 31 March 2016
Details
INR
Receivables
Details
Receivables
Payables
INR
FC (in 000s)
INR
FC (in 000s)
INR
FC (in 000s)
19,902.89
1,780.34
28,585.48
250.82
3,326.71
404.12
6,047.17
-
-
113.98
1,830.05
105.78
1,403.03
336.50
5,035.28
SGD Exposure
INR
FC (in 000s)
CNY Exposure
INR
FC (in 000s)
INR
FC (in 000s)
INR
FC (in 000s)
-
-
-
-
-
-
-
-
3.08
62.56
3.83
84.47
1.76
171.72
-
-
Receivables
Payables
FC (in 000s)
As at 31 March 2015
Euro Exposure
1,318.67
Payables
Details
As at 31 March 2016
As at 31 March 2015
USD Exposure
AUD Exposure
INR
FC (in 000s)
GBP Exposure
INR
FC (in 000s)
INR
FC (in 000s)
INR
FC (in 000s)
-
-
-
-
-
-
1.38
15.00
0.11
2.11
8.56
180.79
-
-
0.92
9.99
Annual
Report 2015-16
77
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
35
Employees’ Share-based Payments:
Certain employees of the company are eligible for stock options granted by the Holding Company (“KPNV”). In conformity
with the guidance note on “Accounting for Employee Share-based Payments” issued by The Institute of Chartered
Accountants of India (ICAI) in respect of the grants made on or after 1 April 2005, the following disclosures are made:
(a) Method adopted for valuation
Stock compensation expenses under the “Fair Value Method” are determined based on the “Fair Value of the Options”
and amortised over the vesting period. The “Fair Value of the Options” is determined using “Black-Scholes” option
pricing model.
(b) Nature and extent of Employee Share-based Payment Plans:
As from 2003 onwards, the Holding Company (KPNV) issued restricted share rights that vest in equal annual
installments over a three-year period. Restricted shares are KPNV’s shares that the grantee will receive in three
successive years, provided the grantee is still with the Company on the respective delivery dates. If the grantee still
holds the shares after three years from the delivery date, Philips will grant 20% additional (premium) shares, provided
the grantee is still with Philips. As from 2002, the Holding Company granted fixed stock options that expire after 10
years. Generally, the options vest after 3 years; however, a limited number of options granted to certain employees of
acquired businesses contain accelerated vesting. In prior years, fixed and variable (performance) options were issued
with terms of ten years, vesting one to three years after grant.
Since 2013, a new Plan has been introduced which consists of performance shares only. The performance is measured
over a three-year performance period. The performance shares vest three years after the grant date. The number of
performance shares that will vest is dependent on achieving performance conditions, which are equally weighted, and
provided that the grantee is still employed with the Company.
(c) Number and weighted average grant-date fair value of Stock Options (EUR)
Grant Date
April 18, 2005
April 18, 2006
April 16, 2007
April 14, 2008
July 14, 2008
April 14, 2009
April 19, 2010
July 19, 2010
April 18, 2011
July 18, 2011
October 17, 2011
January 30, 2012
April 23, 2012
Weighted average
grant-date fair
value of the share
(in Euros)
19.41
26.28
30.96
23.11
20.67
12.63
24.90
24.01
20.90
17.20
14.52
15.24
14.82
Previous Year
Outstanding
as at 1 April
2015
1,251
4,662
7,749
3,402
1,800
3,300
6,904
7,125
11,664
3,600
3,378
5,000
44,559
104,394
177,223
Grants Cancellation
-
(3,033)
(3,690)
(7,050)
(13,773)
(14,772)
Transfer in /
(out)
3,717
3,690
(666)
4,500
4,125
(2,160)
(6,045)
900
(750)
(1,350)
5,000
(5,325)
5,636
(4,253)
Exercise Outstanding
as at 31
March 2016
(1,935)
(306)
(4,500)
(5,175)
(3,450)
(678)
(5,000)
(9,150)
(30,194)
(53,804)
Exercisable
4,356
7,083
3,402
1,800
2,250
4,744
1,080
9,114
2,850
1,350
5,000
23,034
66,063
104,394
4,356
7,083
3,402
1,800
2,250
4,744
1,080
9,114
2,850
1,350
5,000
23,034
66,063
59,835
Exercise Outstanding
as at 31
March 2016
Exercisable
(d) Number and weighted average grant-date fair value of Stock Options (USD)
Grant Date Weighted average
grant-date fair
value of the share
(in USD)
April 18, 2005
25.28
April 14, 2008
36.63
April 19, 2010
33.51
Previous year
78
Standalone
Outstanding
as at 1 April
2015
504
306
480
1,290
1,623
Grants Cancellation
-
(504)
(504)
(333)
Transfer in /
(out)
-
-
306
480
786
1,290
306
480
786
1,290
Notes to the Financial Statements for the year ended 31 March 2016
35
Amounts in ` Mln
Employees’ Share-based Payments: (Contd.)
(e) Number and weighted average grant date fair value of Restricted Shares (EUR)
Grant Date
April 23, 2012
July 25, 2014
October 24, 2014
February 2, 2015
May 5, 2015
July 31, 2015
February 1, 2016
Weighted average
grant-date fair
value of the share
(in Euro)
14.07
22.80
20.43
23.89
25.19
25.32
24.33
Outstanding
as at 1 April
2015
Grants
Cancellation
Transfer in /
(out)
Delivered
Outstanding
as at 31 March
2016
3,970
4,248
1,415
4,027
13,660
13,993
1,168
8,391
18,586
28,145
9,690
(627)
(2,124)
(2,751)
(1,247)
(1,422)
(1,422)
(963)
(1,921)
(2,124)
(707)
(4,752)
(7,813)
708
4,027
1,168
8,391
18,586
32,880
13,660
Previous Year
Restricted shares exclude 20% additional (premium) shares that may be received if shares awarded under the restricted
share rights plan are not sold for a three-year period.
(f)
Method and assumptions for arriving at the Fair Value of Restricted Shares
The fair value of restricted shares is equal to the Fair Value of the stock at grant date net of the present value of dividends
which will not be received up to the vesting date. The expected dividend used is the dividend of the preceding year.
(g) Number and weighted average grant date fair value of Performance Shares (EUR)
Grant Date
May 3, 2013
October 25, 2013
April 28, 2014
July 25, 2014
October 24, 2014
May 5, 2015
February 1, 2016
Weighted average
grant date fair
value (in Euro)
23.45
30.38
22.92
22.80
20.43
25.19
24.33
Previous Year
Outstanding
as at 1 April
2015
50,318
967
71,911
4,992
708
128,896
66,140
Grants
Cancellation
Transfer in /
(out)
Delivered
71,774
1,549
73,323
85,146
(14,741)
(14,340)
(3,186)
(10,509)
(42,776)
17,651
(4,740)
(967)
(8,132)
(13,839)
4,739
-
Outstanding
as at 31 March
2016
30,837
49,439
1,806
708
61,265
1,549
145,604
128,896
(h) Method and assumptions for arriving at the Fair Value of Performance Shares
(i)
(j)
The fair value of the performance shares is measured based on Monte-Carlo simulation and the following weighted
average assumptions:
1.
Risk free interest rate
2.
Expected dividend yield
3.
Expected share price volatility
-0.11%
4.00%
25%
Employee Share Purchase Plan:
Under the terms of Employee Share Purchase Plan established by the Holding Company, substantially all employees are
eligible to purchase a limited number of KPNV shares at discounted prices through payroll withholdings, of which the
maximum range is 10% of total salary. Generally, the discount provided to the employees is in the range of 10% to 20%.
A total of 19,110 (Previous year -19,369) shares were bought by employees during the year at an average price of EUR
24 (Previous year - EUR 24).
Expense recognised on account of “Employee Share-Based Payment” is ` 84 (Previous year - ` 106) and carrying
liability as at 31 March 2016 is ` 392 (Previous year - ` 317).
Annual
Report 2015-16
79
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
36
Disclosure relating to Defined Benefit Plans / Long Term Compensated Absences - As per Actuarial Valuation
as on 31 March 2016 and recognised in the financial statements in respect of Retirement Benefits:
Gratuity
Year ended
31 March 2016
Particulars
Funded
A. Present value of obligations as at
beginning of the year
Compensated absences
Provident Fund
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2016
2015
2016
2015
Unfunded
Year ended
31 March 2015
Unfunded
Funded
504
311
377
263
367
304
3,473
2,649
(1) Current service cost
80
48
62
41
116
100
241
227
(2) Interest cost
40
24
32
23
24
25
11
269
(41)
(37)
(50)
(20)
(106)
(73)
(335)
(312)
(3) Benefits settled
-
-
-
-
-
-
-
-
(36)
150
83
9
31
15
-
-
(6) Actuarial (gain) / loss due to
Interest rate guarantee
-
-
-
-
-
-
244
90
(7) Employees’ contribution
-
-
-
-
-
-
349
311
(8) Acquisition/Business
Combination/Divestiture
(130)
(385)
-
(5)
(173)
(4)
(781)
-
(9) Change in reserves
-
-
-
-
-
-
-
-
(10) Transfer in
-
-
-
-
-
-
195
239
78
-
495
111
504
311
259
367
3,397
3,473
288
-
256
-
-
-
3,564
2,671
27
-
24
-
-
-
11
271
-
(4) Settlements
(5) Actuarial (gain) / loss
(11) Past service cost
Present value of obligations as at end
of the year
B. Change in Plan Assets
Plan assets as at beginning of the year
(1) Expected return on plan assets
59
-
62
-
-
-
-
(41)
-
(50)
-
-
-
-
-
-
-
-
-
-
-
590
537
-
-
-
-
-
-
195
239
(6) Benefit payments
-
-
-
-
-
-
(335)
(312)
(7) Asset gain / (loss)
(4)
-
(4)
-
-
-
273
158
-
-
-
-
-
-
-
-
(84)
-
-
-
-
-
(827)
-
245
-
288
-
-
-
3,471
3,564
-
-
-
-
-
74
91
(2) Contributions
(3) Benefits settled
(4) Employer
and
contribution
Employee
(5) Transfer in
(8) Settlements
(9) Acquisition/Business
Combination/Divestiture
Plan assets as at end of the year
Surplus
The above surplus of ` 74 (Previous year - ` 91) has not been recognised in the financial statements in accordance with
Paragraph 59 of Accounting Standard (AS15) Employee Benefits, since the surplus is not available to the Company either in
form of refunds or as reduction of future contributions.
80
Standalone
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
Gratuity
Year ended
31 March 2016
Particulars
Funded
C. Actual return on plan assets
Compensated absences
Provident Fund
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2016
2015
2016
2015
Unfunded
Year ended
31 March 2015
Unfunded
22
-
Funded
20
-
-
-
-
-
D. Reconciliation of present value of the obligation and the fair value of the plan assets:
(1) Present value of obligations at
end of the year
(2) Fair value of Plan assets
Liability recognised in Balance Sheet
(495)
(111)
(504)
(311)
(259)
(367)
-
-
245
-
288
-
-
-
-
-
(250)
(111)
(216)
(311)
(259)
(367)
-
-
80
48
62
41
116
100
-
-
E. Components of Employer Expense:
(1) Current service cost
(2) Interest cost
(3) Expected return
assets(estimated)
on
plan
(4) Curtailments
24
32
23
24
24
-
-
-
(24)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
78
(5) Past service cost
(6) Actuarial (gain) / loss
Total
expense
recognised
Statement of Profit and Loss
40
(27)
in
(161)
150
87
9
31
15
-
-
10
222
157
73
171
139
-
-
The gratuity and compensated absences expenses have been recognised in “Employee benefits expenses” under note 25 to
the Financial Statements.
F.
Assumptions
(1) Discount factor
7.55%
-
7.80%
-
7.55%
7.80%
(2) Estimated rate of return on plan
assets
9.00%
-
9.00%
-
-
-
(3) Mortality
(4) Disability
IALM (2006-08)
None
IALM (2006-08)
None
(5) Salary Increase
Management, PMS
and PIC - 11%,
DMC factory - 12%,
MLF factory - 11%,
VLF factory - 11%
Management, PMS and
PIC - 11%,
DMC factory - 12%,
MLF factory - 11%,
VLF factory - 11%
(6) Attrition rate
Management, PMS
and PIC - 10%,
DMC factory - 5%,
MLF factory - 4.5%,
VLF factory - 8%
Management, PMS and
PIC - 10%,
DMC factory - 5%,
MLF factory - 4.5%,
VLF factory - 8%
(7) Retirement age
Management and PIC Management and PIC - 60 years,
60 years,
Others - 58 years
Others - 58 years
Annual
Report 2015-16
81
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
G.
Experience Adjustments
Gratuity (Funded)
Description
Defined Benefit Obligations
Plan Assets
Surplus/(Deficit)
Experience adjustments on Plan assets/liabilities
(gain) / loss
Year ended
31 March 2016
495
Year ended
31 March 2015
Year ended
31 March 2014
504
Year ended
31 March 2013
377
Period ended
31 March 2012
329
180
245
288
256
203
142
(250)
(216)
(121)
(126)
(38)
(47)
306
65
80
17
Gratuity (Unfunded)
Description
Defined Benefit Obligations
Plan Assets
Surplus/(Deficit)
Experience adjustments on Plan assets/liabilities
(gain) / loss
Year ended
31 March 2016
Year ended
31 March 2015
Year ended
31 March 2014
Year ended
31 March 2013
Period ended
31 March 2012
111
311
263
264
150
-
-
-
-
-
(111)
(311)
(263)
(264)
(150)
148
(22)
(44)
13
25
Provident Fund
Description
Year ended
31 March 2016
Year ended
31 March 2015
Year ended
31 March 2014
Year ended
31 March 2013
Period ended
31 March 2012
Defined Benefit Obligations
3,397
3,473
2,649
2,149
1,650
Plan Assets
3,471
3,564
2,671
2,176
1,703
74
91
22
27
53
(273)
(158)
69
(13)
42
Surplus/(Deficit)
Experience adjustments on Plan assets/liabilities
(gain) / loss
Notes:
82
1.
Plan assets comprise of contribution to Group Gratuity Schemes of Life Insurance Corporation of India in case of
gratuity and investments under Philips India Limited Employees’ Provident Fund Plan in case of Provident Fund.
2.
Actuarial (gain) / loss is due to change in actuarial assumptions as stated in 36 F above.
3.
The company provides retirement benefits in the form of Provident Fund, Gratuity, Compensated absences,
Superannuation and other benefits. Provident fund contributions made to “Government Administered Provident
Fund” are treated as defined contribution plan since the Company has no further obligations beyond it’s monthly
contributions. Provident Fund contributions made to “Trust” administered by the Company are treated as Defined
Benefit Plan. As per actuarial valuation, the trust has surplus fund to cover shortfall, if any, on account of guaranteed
interest benefit obligation.
4.
The actuarial valuation in respect of gratuity and compensated absences has been done as at end 31 March 2016. In
case of Mohali Light factory, Healthcare and Software Centre the gratuity liabilities are provided as per the actuarial
valuation and are funded through Group Gratuity Schemes of Life Insurance Corporation of India (LIC) to the extent
requested by LIC.
Standalone
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
Discontinuing Operations - Demerger:
As part of global restructuring exercise announced by ultimate holding company Koninklijke Philips N.V (KPNV) in September
2014, the proposal for demerger of Lighting business (Demerged Undertaking) was approved by Board of Directors of the
Company on 27th April 2015 and by shareholders in the Court Convened meeting of the shareholders held on 06 July 2015
in Kolkata, India.
In pursuance of the restructuring mentioned above, a Scheme of Arrangement for Demerger (“Scheme”) under Section 391
to 394 and other relevant provisions of the Companies Act, 1956 and Companies Act, 2013, amongst “Philips India Limited”
(Demerged Company) and “Philips Lighting India Limited” (Resulting Company) and their respective shareholders was
approved by the Hon’ble High Court of Calcutta vide order dated 07 January 2016, received by the Company on 29 January
2016, which was filed with the Registrar of Companies and was approved by them on 24 February 2016. In accordance with
the Scheme, the assets and liabilities pertaining to Lighting business were transferred to and vested with Philips Lighting India
Limited with effect from the appointed date i.e. 01 February 2016 and shareholders of the Company were allotted 1 fully
paid equity share of Philips Lighting India Limited for each fully paid equity share held by them in the Company.
Consequent to the demerger;
a) The assets and liabilities of the Demerged Company are reduced at their book value.
b) The difference between the Book Value of assets and Book Value of liabilities of the Demerged Undertaking stands
adjusted against the following, in the order specified below:
i.
Capital reserve account
ii.
Capital redemption reserve account
iii. Securities premium account
iv. General reserve account
c) Share capital of the Resulting Company stands credited with the aggregate face value new equity shares - 57,517,242
of ` 10 each, being the equity shares issued by it to the members of the Demerged Company.
In view of the aforesaid Demerger with effect from 1 February 2016, figures for the current year are not comparable
with those of the previous year.
Business segment “Lighting” as reported in note 30 consists of manufacture and sale of lighting and allied products and
Lighting system solutions.
Lighting business primarily involves local purchase, import, systems solutions and sales of the following PHILIPS brand
products in India:
(i) Lighting and Allied products - light source, special lighting, lighting electronics, switches, professional lighting,
consumer luminaires and anything related to providing lighting products etc.
(ii) Lighting Systems Solutions - Softwares and services, designing and developing applications (Mobile, Enterprise PC
and Cloud), embedded software for lighting systems and solutions, creating user interface designs for application
software, providing support for product and system level testing of software and lighting systems etc, and
(iii) new product introduction in manufacturing sites, technical consultancy and training to market teams for
deployment of lighting systems and developing proof of concept for lighting systems that includes hardware
design and development.
37
Break-up of aggregate amounts in respect of revenue and expenses
along with pre-tax profit or loss of Lighting operations are as follows:
Particulars
Revenue from operations (net)
Operating expenses
Profit / (loss) before tax
Income tax expense
Profit / (loss) after tax
The carrying amounts of the assets and liabilities of Lighting
operations transferred to the Resulting Company are as follows:
Discontinuing Operations
Period ended
31 Jan 2016
Year ended
31 Mar 2015
27,003
33,916
(23,795)
(30,413)
3,208
3,503
(1,111)
(1,131)
2,097
2,372
As at
31 Jan 2016
As at
31 Mar 2015
Total assets
9,396
10,029
Total liabilities
6,631
6,050
Net assets
2,765
3,979
Annual
Report 2015-16
83
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
The net cash flows attributable to the Lighting operations is as follows: Period ended
31 Jan 2016
Net cash inflow / (outflow) from operating activities
4,030
3,490
Net cash inflow / (outflow) from investing activities
(196)
200
(7)
-
3,827
3,690
Net cash inflow / (outflow) from financing activities
Net cash inflow / (outflow)
38
Year ended
31 Mar 2015
Additional disclosure as per Micro, Small and Medium Enterprises Development (MSMED) Act, 2006
The Company has identified enterprises which have provided goods and services and which qualify under the definition of
micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. The details of
overdue amount and interest payable are set out below.
As at
31 March 2016
39
91
Amount of interest paid in terms of section 16 of the Micro, Small and Medium
Enterprises Act, 2006 and amounts of payment made to the suppliers beyond the
appointed day during the year.
-
-
Amount of interest due and payable for the period of delay in making payment but
without adding the interest specified under this Act.
-
-
Amount of interest accrued and remaining unpaid at the end of the year.
-
Amount of further interest remaining due and payable even in the succeeding
years, until such date when the interest dues as above are actually paid to the small
enterprises.
-
a)
b)
39
As at
31 March 2015
Principal amount remaining unpaid to any supplier as at the end of the year
Interest due on the above amount
-
Disclosure relating to assets given on operating lease:
The company has entered into operating lease arrangements for medical equipments.
As at
31 March 2016
a)
Total of future minimum lease payments receivable under non-cancellable
operating lease
Receivable within 1 year
Receivable between 1-5 years
Receivable after 5 years
b)
40
Total contingent rent recognised as income in the Statement of Profit and Loss
for the year
As at
31 March 2015
19
26
7
7
12
19
-
-
20
20
In-house Research and Development
The Company has obtained approval of in-house research and development facility located at Sector 57, Noida, UP from
Ministry of Science and Technology, Department of Scientific and Industrial Research (DSIR) for both capital and revenue
expenditure incurred on research & development of the said facility. The objective of scientific research is to improve
people’s life through meaningful innovations. The said facility is also approved under Section 35 (2AB) of the Income-tax Act
1961.
During the financial year 2015-16, the Company has incurred revenue expenditure amounting to ` 209 and capital
expenditure amounting to ` 4 on the said facility.
84
Standalone
Notes to the Financial Statements for the year ended 31 March 2016
41
Amounts in ` Mln
Contingent liabilities and commitments (to the extent not provided for)
(a) Contingent liabilities
(i)
Claims not acknowledged as debts by the Company - ` 48 (Previous year - ` 48).
(ii)
In respect of disputed excise demands - ` 19 (Previous year - ` 359), income tax demands - ` 6,268 (Previous
year - ` 4,765) and service tax demands - ` 82 (Previous year - ` 82).
(iii) In respect of suppliers’ / customers’ demands and certain tenancy / customs / sales tax / service tax disputes for
which the liability is not ascertainable.
The Company does not expect any reimbursements in respect of the above contingent liabilities. It is not practicable
to estimate the timing of cash outflows, if any, in respect of (i), (ii), and (iii) above pending resolution of the legal
proceedings.
(b) Commitments
42
Estimated amount of contracts remaining to be executed on capital account and not provided for - ` 11 (Previous
year - ` 87).
Earnings per share
Calculation of earnings per share
Year ended
31 March 2016
Year ended
31 March 2015
Number of shares at the beginning of the year
57,517,242
57,517,242
Total number of equity shares outstanding at the end of the year
57,517,242
57,517,242
Weighted average number of equity shares outstanding during the year
57,517,242
57,517,242
Profit after tax attributable to equity share holders
3,975
4,235
Basic and diluted earnings per share (in `)
69.11
73.63
43
All amounts are in ` Million, figures in this financial statements below ` 1 million are shown as blank.
44
Previous year’s figures have been regrouped / reclassified wherever necessary to conform to the current year’s classification
/ disclosure.
As per our report of even date attached
For and on behalf of the Board
For B S R & Co. LLP
Chairman
S.M.DATTA
Chartered Accountants
(DIN: 00032812)
ICAI Firm Registration No. 101248W / W-100022
Managing Director
V. RAJA
(DIN: 00669376)
Director & CFO
HARIHARAN MADHAVAN
VIKRAM ADVANI
(DIN: 07217072)
Partner
Director & Company Secretary
RAJIV MATHUR
Membership No.: 091765
(DIN: 06931798)
Mumbai
Mumbai
Date: 25 July 2016
Date: 25 July 2016
Annual
Report 2015-16
85
PHILIPS INDIA LIMITED
TEN YEAR REVIEW
PARTICULARS
Amounts in ` Mln
2010 2011-12 2012-13 2013-14 2014-15 2015-16
(15 M)
2006
2007
2008
2009
26,486
28,906
31,356
32,656
37,249
55,793
53,674
58,387
63,755
62,819
1,485
2,456
1,900
1,688
1,451
1,813
1,752
3,096
5,600
6,503
5.6
8.5
6.1
5.2
3.9
3.2
3.3
5.3
8.8
10.4
3,029
2,894
2,106
1,850
1,433
1,854
1,858
3,170
6,275
6,278
11.4
10.0
6.7
5.7
3.8
3.3
3.5
5.4
9.8
10.0
2,130
1,903
1,351
1,175
889
1,338
1,228
2,099
4,235
3,975
8.0
6.6
4.3
3.6
2.4
2.4
2.3
3.6
6.6
6.3
27.7
20.2
15.3
14.6
10.1
13.4
11.1
16.1
24.8
22.1
30.32
27.08
19.71
18.97
15.46
23.26
21.35
36.49
73.63
69.11
2.0
2.0
2.0
2.0
2.0
2.5
2.0
2.0
3.0
3.0
2,661
2,694
2,825
3,463
3,524
3,972
4,280
4,295
3937
2079
11
16
442
5
-
1,000
1,000
1,000
1,000
4,797
254
240
296
352
363
462
437
496
809
510
1,902
2,255
2,849
3,608
4,131
5,362
5,637
6,293
6,504
4,542
and cash & bank balances
9,264
11,297
10,072
10,258
11,580
14,069
15,142
17,725
22,025
18,837
Current liabilities & provisions
6,307
6,951
7,493
9,485
10,690
12,585
14,737
15,277
16,578
12,531
Net current assets
4,859
6,601
5,428
4,381
5,021
6,846
6,042
8,741
11,951
10,848
Net Investment
7,785
9,551
8,991
8,201
8,908
12,280
11,759
14,532
17,697
18,234
703
703
634
575
575
575
575
575
575
575
Other reserves
6,957
8,709
8,197
7,476
8,231
9,402
10,495
12,459
16,486
17,398
Shareholders’ interest (net worth)
7,677
9,412
8,831
8,051
8,806
9,977
11,070
13,034
17,061
17,973
Loans
108
139
160
150
102
2,303
689
1,498
636
261
Total
7,785
9,551
8,991
8,201
8,908
12,280
11,759
14,532
17,697
18,234
454
330
418
482
1,033
1,839
1,933
2,541
3,068
3,002
3,268
2,635
3,019
3,311
4,075
7,174
7,427
8,314
10,169
11,214
1:99
1:99
2:98
2:98
1:99
19:81
6:94
10:90
4:96
1:99
3,440
3,135
3,317
3,775
4,762
5,658
5,617
5,830
5,507
3,283
Income and Dividends
Sales
Operating profit
As percentage of sales
Profit before tax
As percentage of sales
Profit after tax
As percentage of sales
As percentage of net worth
Earnings per share (`)
Dividend per equity share (`)
Assets and Liabilities
Net fixed assets
Investments
Deferred tax assets - net
Inventories
Debtors, loans & advances
Represented by
Equity share capital
General
Exports (F.O.B)
Salaries, bonus & staff welfare
(excluding V.R.S)
Debt : Equity Ratio
Number of employees at year end
86
Standalone
Independent Auditor’s Report
To the Members of Philips India Limited
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of Philips India Limited (hereinafter referred to as “the
Holding Company”) and its Subsidiary (the Holding Company and its Subsidiary together referred to as “the Group”), and its
Associate, comprising the Consolidated Balance Sheet as at 31 March 2016, the Consolidated Statement of Profit and Loss,
the consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other
explanatory information (hereinafter referred to as “the consolidated financial statements”).
Management’s Responsibility for the Consolidated Financial Statements
The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in
terms of requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the
consolidated financial position, consolidated financial performance and consolidated cash flows of the Group, including its
Associate, in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified
under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (particularly Accounting Standard
21 - Consolidated Financial Statements and Accounting Standard 23- Accounting for investments in Associates in Consolidated
Financial Statements). The respective Board of Directors of the companies included in the Group and of its Associate are
responsible for maintenance of adequate accounting records in accordance with the provisions of the Act; for safeguarding the
assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness
of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view
and are free from material misstatements, whether due to fraud or error, which have been used for the purpose of preparation
of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under sub section 10 of Section 143 of the
Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial
statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit
also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates
made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial
statements.
We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditor in terms of their
reports referred to in Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on
the consolidated financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration
Annual
Report 2015-16
87
PHILIPS INDIA LIMITED
of report of other auditor on separate financial statements and on the other financial information of its Associate, the aforesaid
consolidated financial statements give the information required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in India,
i)
in the case of consolidated Balance sheet, of the consolidated state of affairs of the Group, and its Associate as at 31 March
2016;
ii)
in the case of Consolidated Statement of Profit and Loss Account, of the consolidated profits for the year ended on that
date; and
iii)
in the case of the Consolidated Cash Flow Statement, of the consolidated cash flows for the year ended on that date.
Other Matters
We did not audit the financial statements of its Associate, whose financial statements reflect total assets of Rs.518 Million
as at 31 March 2016, total revenues of Rs. 26 Million and net cash flows amounting to Rs. 8 Million for the year then ended,
as considered in the consolidated financial statements. These financial statements have been audited by other auditor whose
report have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it
relates to the amounts and disclosures included in respect of its Associate and our report in terms of subsections (3) and (11)
of Section 143 of the Act, in so far as it relates to the aforesaid Associate, is based solely on the report of the other auditor.
Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below,
is not modified in respect of this matter with respect to our reliance on the work done and the report of the other auditor.
Report on Other Legal and Regulatory Requirements
88
1.
As required by Section 143 (3) of the Act, based on our audit and on the consideration of report of the other auditor
on separate financial statements of its Associate, as noted in the ‘Other Matter’ paragraph, we report, to the extent
applicable, that:
(a)
We have sought and obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit of the aforesaid consolidated financial statements.
(b)
In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial
statements have been kept so far as it appears from our examination of those books and the report of the other auditor.
(c)
The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow
Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of
preparation of the consolidated financial statements.
(d)
In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e)
On the basis of the written representations received from the directors of the Holding Company as on 31 March
2016, taken on record by the Board of Directors of the Holding Company, its Subsidiary company and on the basis
of the relevant assertion contained in the audit report on standalone financial statements of its Associate which are
incorporated in India, none of the directors of the Group and its Associate incorporated in India are disqualified as on 31
March 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
(f)
With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating
effectiveness of such controls, refer to our separate report in “Annexure A”; and
(g)
With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies
(Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to the explanations
given to us and based on the consideration of the report of the other auditor on separate financial statement of its
Associate, as noted in the ‘Other Matter’ paragraph:
Consolidated
i.
The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position
of the Group and its Associate - Refer note 40 to the consolidated financial statements.
ii.
The Group and its Associate did not have any material foreseeable losses on long term contracts including derivative
contracts.
iii.
There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection
Fund by the Group and it Associate incorporated in India.
For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 101248W/W-100022
Place: Mumbai
Date: 25 July 2016
Vikram Advani
Partner
Membership No.: 091765
Annual
Report 2015-16
89
PHILIPS INDIA LIMITED
Annexure A to the Independent Auditor’s Report to the Members of
Philips India Limited on the consolidated financial statements
Report on the Internal Financial Controls under Clause (i) of Sub-section (3) of Section 143 of the Companies Act, 2013 (“the
Act”)
In conjunction with our audit of the consolidated financial statements of Philips India Limited (“the Holding Company”) as
of and for the year ended 31 March 2016, we have audited the internal financial controls over financial reporting of the Holding
Company, its Subsidiary and based on the consideration of the report of the other auditor of its Associate, which are incorporated
in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The respective Board of Directors of the of the Holding Company, its Subsidiary and its Associate, which are incorporated in India,
are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting
criteria established by the Company considering the essential components of internal control stated in the Guidance Note on
‘Audit of Internal Financial Controls Over Financial Reporting’ issued by the Institute of Chartered Accountants of India (ICAI)”.
These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were
operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s
policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Holding Company, its Subsidiary and its Associate incorporated in India, internal
financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note
on ‘Audit of Internal Financial Controls Over Financial Reporting’ (the “Guidance Note”) and the Standards on Auditing, issued
by ICAI and deemed to be prescribed under section 143 (10) of the Act, to the extent applicable to an audit of internal financial
controls, and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial
reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves
performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial
reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and audit evidence obtained by other auditor in terms of their report
referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the
Holding Company, its Subsidiary and its Associate incorporated in India, internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the company; (2) 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 only in accordance with authorisations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or
improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also,
projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk
90
Consolidated
that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Holding Company, its Subsidiary and its Associate which are incorporated in India, have in all material respects,
an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting
were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by
the Holding Company, its Subsidiary and its Associate considering the essential components of internal controls stated in the
Guidance Note on ‘Audit of Internal Financial Controls Over Financial Reporting’ issued by the ICAI.
Other Matters
Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial
controls over financial reporting in so far as it relates to its Associate, which is a company incorporated in India, is based on the
corresponding report of the auditor of such company.
For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 101248W/W-100022
Place: Mumbai
Date: 25 July 2016
Vikram Advani
Partner
Membership No.: 091765
Annual
Report 2015-16
91
PHILIPS INDIA LIMITED
Consolidated Balance Sheet as at 31 March 2016
EQUITY AND LIABILITIES
Shareholders’ funds
Share capital
Reserves and surplus
Minority Interest
Non-current liabilities
Long-term borrowings
Other long term liabilities
Long-term provisions
Current liabilities
Short-term borrowings
Trade payables
Dues to micro and small enterprises
Dues to others
Other current liabilities
Short-term provisions
ASSETS
Non-current assets
Fixed assets
Tangible assets
Intangible assets
Capital work-in-progress
Non-current investments
Deferred tax assets (net)
Long-term loans and advances
Other non-current assets
Current assets
Inventories
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets
Group Information
Significant accounting policies
Note
As at 31 March 2016
Amounts in ` Mln
As at 31 March 2015
3
4
575
13,525
5
6
7
158
685
632
8
154
402
9
9
10
7
123
5,819
4,321
1,837
91
9,459
4,255
2,160
11
12
13
14
15
16
2,544
2,343
109
36
510
2,875
1,693
17
18
19
15
20
5,089
6,915
6,383
1,938
277
1
2
575
11,330
14,100
2,883
11,905
5,622
598
887
1,475
7,107
12,254
30,712
16,367
35,379
4,431
3,124
103
809
3,484
2,263
10,110
14,214
7,134
8,700
3,728
1,437
166
20,602
30,712
21,165
35,379
The notes referred to above 1-43 form an integral part of the Consolidated Financial Statements
As per our report of even date attached
For and on behalf of the Board
For B S R & Co. LLP
Chairman
S.M.DATTA
Chartered Accountants
(DIN: 00032812)
ICAI Firm Registration No. 101248W / W-100022
Managing Director
V. RAJA
(DIN: 00669376)
Director & CFO
HARIHARAN MADHAVAN
VIKRAM ADVANI
(DIN: 07217072)
Partner
Director & Company Secretary
RAJIV MATHUR
Membership No.: 091765
(DIN: 06931798)
Mumbai
Mumbai
Date: 25 July 2016
Date: 25 July 2016
92
Consolidated
Consolidated Statement of Profit and Loss for the year ended 31 March 2016
Note
Income
Revenue from operations (gross)
Less: Excise duty recovered
Revenue from operations (net)
Other income
Total revenue
Expenses
Cost of raw materials consumed
Purchases of stock-in-trade
Changes in inventories of work-in-progress,
finished goods and stock-in-trade
Employee benefits expense
Finance costs
Depreciation and amortisation expense
Other expenses
Total expenses
Profit / (loss) before exceptional items and tax
Exceptional items
Profit / (loss) before tax
Profit / (loss) from continuing operations
Tax expense
Current tax
Deferred tax - release / (charge)
Profit / (loss) after tax from continuing operations
Profit / (loss) from discontinuing operations
Tax expense
Current tax
Deferred tax - release / (charge)
Profit / (loss) after tax from discontinuing operations
Profit / (loss) after tax and before minority interest
Add : Minority Interest
Less : Share in Profit/(Loss) of Associate
Profit for the year
Basic earnings per equity share of ` 10 each (in `)
Diluted earnings per equity share of ` 10 each (in `)
Group Information
Significant accounting policies
21
22
Year ended 31 March 2016
67,650
761
66,889
297
Amounts in ` Mln
Year ended 31 March 2015
68,106
871
67,235
222
67,186
67,457
23
24
25
5,780
30,754
(312)
6,192
31,509
(376)
26
27
28
29
11,623
596
1,621
11,827
10,510
643
1,899
12,651
61,889
5,297
(225)
5,072
32
63,028
4,429
675
5,104
1,864
1,601
(1,194)
2
(932)
23
672
36
36
41
41
1
2
692
3,208
3,503
(1,244)
133
(1,421)
290
2,097
2,769
2
(27)
2,744
48.14
31.70
2,372
3,064
3,064
53.27
34.49
The notes referred to above 1-43 form an integral part of the Consolidated Financial Statements
As per our report of even date attached
For and on behalf of the Board
For B S R & Co. LLP
Chairman
S.M.DATTA
Chartered Accountants
(DIN: 00032812)
ICAI Firm Registration No. 101248W / W-100022
Managing Director
V. RAJA
(DIN: 00669376)
Director & CFO
HARIHARAN MADHAVAN
VIKRAM ADVANI
(DIN: 07217072)
Partner
Director & Company Secretary
RAJIV MATHUR
Membership No.: 091765
(DIN: 06931798)
Mumbai
Mumbai
Date: 25 July 2016
Date: 25 July 2016
Annual
Report 2015-16
93
PHILIPS INDIA LIMITED
Consolidated Cash Flow Statement for the year ended 31 March 2016
A. Cash flow from operating activities
Profit before tax
Exceptional items
Net profit / (loss) before tax and exceptional items
Adjusted for
(Profit) / loss on disposal of fixed assets
Write off and other adjustment of fixed assets
Depreciation and amortisation
Unrealized foreign exchange (gain) and loss (net)
Provision for doubtful trade receivables and loans and advances
Liabilities no longer required written back
Interest received
Finance costs
Operating profit before working capital changes
Changes in:
Trade receivables and other loans & advances
Inventories
Trade payables and other liabilities
5,072
225
5,297
19
1,621
(9)
197
(69)
(554)
596
(2,350)
(459)
2,324
Cash generated from operations
Income tax paid (net of refunds)
Exceptional items (VRS Payment)
NET CASH GENERATED FROM OPERATING ACTIVITIES
B. Cash flow from investing activities
Purchase of fixed assets
Proceeds from sale of fixed assets
Proceeds from divestment [refer note 33 (b)]
a. Consideration received (net of expenses)
b. Capital gain tax
Investment in associate
Interest received
NET CASH FROM/(USED IN) INVESTING ACTIVITIES
C. Cash flow from financing activities
Finance costs
Proceeds / (repayments) of short term borrowings
Dividend paid (including tax thereon)
NET CASH FROM/(USED IN) FINANCING ACTIVITIES
(DECREASE)/INCREASE IN CASH & CASH
EQUIVALENTS (A+B+C)
CASH AND CASH EQUIVALENTS - OPENING BALANCE
Deposits with Banks
TOTAL
CASH AND CASH EQUIVALENTS - CLOSING BALANCE
Cash and cash equivalents (refer note 19)
Deposits with Banks
TOTAL
1,801
7,098
(485)
6,613
(1,992)
(260)
4,361
94
Consolidated
Mumbai
Date: 25 July 2016
5,104
(675)
4,429
(8)
7
1,899
6
37
(133)
(419)
643
(1,419)
(479)
1,395
(1,049)
58
-
(63)
557
(497)
2,032
6,461
(503)
5,958
(2,490)
3,468
(893)
916
378
(78)
300
394
717
(755)
(248)
(207)
(1,210)
2,654
(643)
(1,121)
(134)
(1,898)
2,287
1,458
2,260
3,718
1,431
1,431
2,293
4,079
6,372
1,458
2,260
3,718
As per our report of even date attached
For and on behalf of the Board
For B S R & Co. LLP
Chairman
Chartered Accountants
ICAI Firm Registration No. 101248W / W-100022
Managing Director
Director & CFO
VIKRAM ADVANI
Partner
Director & Company Secretary
Membership No.: 091765
Mumbai
Date: 25 July 2016
Amounts in ` Mln
Year ended
31 March 2015
Year ended
31 March 2016
S.M.DATTA
(DIN: 00032812)
V. RAJA
(DIN: 00669376)
HARIHARAN MADHAVAN
(DIN: 07217072)
RAJIV MATHUR
(DIN: 06931798)
Group Information (Note 1)
Philips India Limited (the ‘Company’) is a public limited company domiciled in India. The Company operates in Lighting, Consumer
Lifestyle and Healthcare businesses. The company is a market leader in the Lighting business comprising Lighting and Allied
products and Lighting system solutions. The Company has manufacturing facilities in Punjab and Maharashtra and Development
centres in Pune, Noida and Bangalore. The company sells its products primarily in India through independent distributors and
modern trade.
The Company, its subsidiary (jointly referred to as the ‘Group’ herein under) and its associate considered in these
consolidated financial statements are:
a)
Subsidiary:
Name of the Company
Country of
Incorporation
% voting power
held as at
31st March, 2016
India
51.2
Country of
Incorporation
% voting power
held as at
31st March, 2016
India
35
Preethi Kitchen Appliances Private Limited
b)
Associate
Name of the Company
HealthMap Diagnostics Private Limited
c)
Net Assets
(Total Assets - Total Liabilities)
As % of
consolidated net
assets
Amount
Share in Profit or Loss
As % of
consolidated
profit or loss
Amount
Parent Company
Philips India Limited
127%
17,973
145%
3,975
Subsidiary
27%
3,778
-44%
(1,202)
Total eliminations
Preethi Kitchen Appliances Private Limited
-54%
(7,651)
-1%
(29)
Total
100%
14,100
100%
2,744
Annual
Report 2015-16
95
PHILIPS INDIA LIMITED
STATEMENT OF ACCOUNTING POLICIES (Note 2)
BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
These consolidated financial statements have been prepared to comply in all material aspects with applicable accounting principles
in India, the applicable Accounting Standards prescribed under Section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of
the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and other accounting principles generally
accepted in India, to the extent applicable and in particular Accounting Standard 21 (AS 21) - ‘Consolidated Financial Statements’.
The financial statements of the Company and its subsidiary have been combined on a line-by-line basis by adding together the
book values of like items of assets, liabilities, income and expenses. Intra company balances and intra company transactions and
resulting unrealised profits are eliminated in full. Unrealised profits or losses resulting from intra company transactions are also
eliminated unless cost cannot be recovered.
The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events
in similar circumstances. The accounting policies adopted in the preparation of financial statements are consistent with those of
previous year.
All assets and liabilities have been classified as current or non-current as per the Group’s normal operating cycle and other criteria
set out in the Schedule III to the Companies Act, 2013.
Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash
equivalents, the Group has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of
assets and liabilities.
Transactions and balances with values below the rounding off norm adopted by the Group have been reflected as blank in the
relevant notes in these consolidated financial statements.
“Minority Interest in the net assets of consolidated subsidiary is identified and presented in the consolidated Balance Sheet
separately from liabilities and equity of the Company’s shareholders”.
Minority interest in the net assets of consolidated subsidiaries consists of:
(a)
The amount of equity attributable to minority at the date on which investment in a subsidiary is made; and
(b)
The minority share of movements in equity since the date parent subsidiary relationship came into existence.
Minority interest’s share of Net Profit / (Loss) for the year of consolidated subsidiaries is identified and adjusted against the profit
after tax of the Group.”
Investment in an entity in which the Group has significant influence but not a controlling interest, is reported according to
the equity method i.e. the investment is initially recorded at cost in accordance with Accounting Standard 23 “Accounting for
Investments in associates in Consolidated Financial Statements”. The carrying amount of the investment is adjusted thereafter for
the post acquisition change in the Company’ share of net assets of the associate.
1.
REVENUE RECOGNITION
Sales are recorded net of trade discounts, rebates, sales tax but include excise duty.
Sales of goods / equipments are recognised on transfer of risks and rewards of ownership in the goods to the customers /
completion of installation.
Income from annual maintenance service contracts is recognised on a straight-line basis over the period of contracts and
income from other service contracts is recognised on completion of the service rendered.
Revenue from assets given on operating leases is recognised as per terms and conditions of the agreements.
Revenue from software development services is billed to clients on cost plus basis as per the terms of the specific contracts.
Cost and earnings in excess of billings are classified as unbilled revenue.
Interest income is recorded on a time proportion basis taking into account the amounts invested and the rate of
interest.
2.
INTANGIBLE ASSETS
Intangible assets are being recognized if the future economic benefits attributable to the assets are expected to flow to the
Company and cost of the same can be measured reliably. Intangible assets are amortised on the straight line basis based on
the useful lives, which, in management’s estimate represent the period during which economic benefit will be derived from
their use. The period of amortisation for intangible assets is as (a) Goodwill – 60 months, (b) Software – 36 months, (c)
Brands – 60 months (d) Non-compete fees – 36 months.
For PKAPL, the period of amortization for Brands is 8 years which represents the economic useful life of Brands. Goodwill
96
Consolidated
that arises on the acquisition of a business is presented as an intangible asset. Goodwill arising on acquisition of a business
is measured at cost less any accumulated amortisation and any accumulated impairment loss. Goodwill is amortised over a
period of 8 years.
3.
FIXED ASSETS AND DEPRECIATION
Fixed assets are valued at cost. Depreciation is provided on the original cost on a straight line method as per the useful
lives of the assets as estimated by the management which are equal to the useful lives prescribed under Schedule II of
the Companies Act, 2013. Depreciation on medical equipments given on operating leases and leasehold improvements is
provided on a straight-line basis over the period of the lease or their estimated useful life, whichever is shorter
Assets costing less than ` 5000 are fully depreciated in the year of purchase.
4.
LEASES:
Operating lease payments are recognised as an expense in the Statement of Profit and Loss on straight line basis over the
period of the lease.
Assets acquired under finance lease from April 1, 2001 are capitalised at the lower of their fair value and the present value
of the minimum lease payments at the inception of lease. Assets obtained on finance lease are depreciated over the lease
period.
Assets given out on financial leases are recognised as receivable at an amount equal to the net investment in the lease.
The rentals received on such leases are apportioned between the financial charge using the implicit rate of return, which
is recognised as income over the period of lease and against principal outstanding, which is reduced from the amounts
receivable.
5.
IMPAIRMENT OF ASSETS
The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any
such indication exists, the Company estimates the recoverable amount (higher of net realizable value and value in use) of
the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset
belongs is less than the carrying amount, the carrying amount is reduced to its recoverable amount.The reduction is treated
as an impairment loss and is recognized in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication
that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected
at the recoverable amount subject to a maximum of depreciable historical cost.
6.
INVENTORIES
Inventories are valued at cost or net realisable value whichever is lower. In case of medical equipments / systems, cost is
determined on the basis of “First in First Out” method and inventories for ongoing projects are valued at specific identification
of cost method due to nature of the business. For all other items, cost is determined on the basis of the weighted average
method and includes all costs incurred in bringing the inventories to their present location and condition. Finished goods
and work-in-progress include appropriate proportion of costs of conversion. Obsolete, defective and unserviceable stocks
are duly provided for.
7.
INVESTMENTS
Long-term investments are stated at cost less any decline, other than temporary in value, determined on an individual
investment basis.
8.
RESEARCH AND DEVELOPMENT
Revenue expenditure is charged to the Statement of Profit and Loss in the year in which it is incurred and expenditure of a
capital nature is capitalized as fixed assets.
9.
FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions are recorded in the books of the Company at standard exchange rates fixed every month on
the basis of a review of the actual exchange rates.The difference between the actual rate of settlement and the standard rate
is charged or credited to the Statement of Profit and Loss.
In respect of monetary assets and monetary liabilities, the overall net loss or gain, if any, on conversion at the exchange rates
prevailing on the date of the Balance Sheet is charged to revenue.
The premium or discount arising at the inception of forward exchange contracts, which are not intended for trading or
speculation purposes, are amortised as expense or income over the life of the contract. Exchange differences on such
contracts are recognized in the Statement of Profit and Loss in the reporting period in which the exchange rates change. Any
profit or loss arising on cancellation or renewal of such forward exchange contracts is recognised as income or as expense
for the period.
Forward contracts which are not covered by Accounting Standard (AS) 11 are measured using “Mark to Market” principle
with resulting net losses thereon being recorded in the Statement of Profit and Loss.
Annual
Report 2015-16
97
PHILIPS INDIA LIMITED
10. REPLACEMENT GUARANTEE
The Company periodically assesses and provides for the estimated liability on guarantees given on sale of its products based
on past performance of such products.
11. RETIREMENT BENEFITS
Liability for defined benefit plan is provided on the basis of actuarial valuation carried out by an independent Actuary at
year end using the Projected Unit Credit Method. Actuarial gains and losses are recognised immediately in the Statement of
Profit and Loss. Company’s contributions to defined contribution plans are charged to the Statement of Profit and Loss as
incurred. The discount rate used for determining the present value of the obligation under defined benefit plans, is based on
the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the
related obligations at the Balance Sheet date. Termination benefits are recognised as and when incurred.
The Company covers a part of the liability towards employees’ gratuity by way of contributing to a registered trust. Liability
with respect to the Gratuity plan, determined on basis of actuarial valuation as described above, and any differential between
the fund amount as per the trust and the liabilities as per actuarial valuation is recognised as an asset or liability.
Annual contributions are made to the employee’s gratuity fund, established with the LIC based on an actuarial valuation
carried out by the LIC as at 31 March each year. The fair value of plan assets is reduced from the gross obligation under the
defined benefit plans, to recognise the obligation on net basis. Actuarial gains and losses are recognised immediately in the
Statement of Profit and Loss. Gains or losses on the curtailment or settlement of any defined benefit plan are recognised
when the curtailment or settlement occurs.
12. BORROWING COST
Borrowing costs that are directly attributable to acquisition or construction of qualifying assets are capitalized. A qualifying
asset is one that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are
recognised as an expense in the year in which they are incurred.
13. PROVISIONS AND CONTINGENCIES
A provision is recognised when:
•
The Company has a present obligation as a result of a past event;
•
It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
•
A reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is possible obligation or a present obligation that may, but probably
will not, require outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of
outflow of resources is remote, no provision or disclosure is made.
14. TAXATION
Income-tax expense comprises current tax and deferred tax charge or release. Current tax is determined as the amount of
tax payable in respect of taxable income for the period. The deferred tax charge or credit is recognised using current tax
rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is
virtual certainty of realization of such assets. Other deferred tax assets are recognised only to the extent there is reasonable
certainty of realization in future. Such assets are reviewed as at each Balance Sheet date to reassess realization.
For and on behalf of the Board
Chairman
S.M.DATTA
(DIN: 00032812)
Managing Director
V. RAJA
(DIN: 00669376)
Director
HARIHARAN MADHAVAN
(DIN: 07217072)
Secretary
RAJIV MATHUR
(DIN: 06931798)
Place : Mumbai
Date: 25 July 2016
98
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
As at 31 March 2016
3
Share capital
As at 31 March 2015
No. of shares
Amount
No. of shares
Amount
Equity shares of ` 10 each
92,000,000
920
92,000,000
920
Non convertible cumulative redeemable preference shares
of ` 10 each
20,000,000
200
20,000,000
200
Authorised
1,120
1,120
Issued, subscribed and paid-up
Equity shares of ` 10 each, fully paid up
57,517,242
575
57,517,242
575
575
575
3.1. Reconciliation of the number of equity shares
outstanding
At the beginning and at the end of the reporting
period
57,517,242
575
57,517,242
575
55,290,182
553
55,290,182
553
3.2. Rights, preferences and restrictions attached
to the equity shares
The Company has one class of equity shares.
Accordingly all the equity shares rank equally with
regard to voting rights, dividends and shares in the
Company’s residual assets.
3.3. Details of equity shares held by the holding
and the ultimate holding Company
Koninklijke Philips N.V (KPNV)
3.4. Details of shareholders holding more than 5%
shares of the Company
Koninklijke Philips N.V (KPNV)
% holding
55,290,182
96.13
% holding
55,290,182
96.13
Annual
Report 2015-16
99
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
As at 31 March 2016
4
As at 31 March 2015
Reserves and surplus
Capital reserve
At the beginning of the year
169
169
Less:Transfer as per Scheme of Arrangement for Demerger
- refer note 36
169
-
(includes ` NIL (Previous year - ` 168) created on account
of amalgamation in earlier years)
-
At the end of the year
169
Capital redemption reserve
At the beginning of the year
228
Less:Transfer as per Scheme of Arrangement for Demerger
- refer note 36
228
228
-
At the end of the year
228
Securities premium account
At the beginning of the year
1,153
1,153
Less:Transfer as per Scheme of Arrangement for Demerger
- refer note 36
1,153
-
At the end of the year
1,153
General reserve
At the beginning of the year
3,213
2,789
Less:Transfer as per Scheme of Arrangement for Demerger
- refer note 36
1,215
-
Less: Demerged Company’s share of demerger expenses
Add: Transfer from Statement of Profit and Loss
81
-
1,917
2,789
398
424
At the end of the year
2,315
3,213
-
9
Other reserves
Capital subsidy
At the beginning and at the end of the year
Surplus/(Deficit) in the Statement of Profit and Loss
At the beginning of the year
6,558
Add: Transfer to minority Interest
2,514
-
Add: Profit for the year
2,744
3,064
173
173
35
35
398
424
Less: Proposed dividend [` 3 per share (Previous year - `
3 per share)]
Less: Tax on proposed dividend
Less: Transfer to General reserve
At the end of the year
100
Consolidated
4,126
11,210
6,558
13,525
11,330
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
As at
31 March 2016
5
As at
31 March 2015
Long-term borrowings
Long term maturities of finance lease obligations (secured)
Compulsorily convertible debentures
158
222
-
5,400
158
5,622
46,956,522 Compulsorily convertible debentures (‘CCD’) were allotted to Koninklijke Philips N.V, (the ultimate holding
company), on 7 April 2011 carrying an interest rate of 10% per annum. The face value of these debentures was ` 115
aggregating to ` 5,400. The CCDs were convertible into equal number of equity shares at the end of 5 years from the date
of issue with a face value of ` 10 and at a premium of ` 105. The CCDs have been converted into Equity on 31 March 2016.
Additional disclosure relating to long-term borrowings
The finance lease obligations are secured by underlying assets (leased vehicles) [refer note 11]. The legal title of the vehicles
vests with the lessors and the lease term varies between 3-5 years, the total minimum lease liability for assets obtained on
finance lease is ` 324 (Previous year - ` 433) which includes interest of ` 58 (Previous year - ` 78). The maturity profile of
finance lease obligations is as follows:
Minimum lease payments
Payable within 1 year
141
172
Payable between 1-5 years
183
261
Payable within 1 year
108
133
Payable between 1-5 years
158
222
Income received in advance
409
451
Employee related payables
270
140
6
7
685
598
Present value
6
Other long term liabilities
Others
Security deposits
Annual
Report 2015-16
101
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
7 Provisions
Long-term
As at 31
As at 31
March 2016
March 2015
Provision for employee benefits
Gratuity (refer note 35)
Compensated absences (refer note 35)
Post-employment medical benefits
Retention and performance pay (refer note 7.1)
Others
Replacement guarantee (refer note 7.1)
Legal and regulatory (refer note 7.1)
Miscellaneous risks (refer note 7.1)
Provision for taxation (net of advances)
Proposed dividend
Tax on proposed dividend
Additional disclosure relating to provisions:
7.1. Movement in provisions:
Particulars of Disclosure
Opening balance
Add: Accruals
Less: Utilisation
Less: Write back
Less: Transfer as per Scheme of
Arrangement for Demerger
Replacement
guarantee
567
(548)
981
(1,079)
969
(1,060)
307
272
(567)
Figures given in (brackets) relate to previous year.
Closing balance
Short-term
As at 31
As at 31
March 2016
March 2015
371
252
-
516
348
15
8
23
19
92
33
35
23
95
9
632
8
887
263
333
891
173
35
1,837
559
683
82
442
173
35
2,160
Class of Provisions
Legal and
Personnel Miscellaneous
regulatory
related
risks
683
110
82
(715)
(129)
(86)
34
171
2
(39)
(154)
(4)
178
(173)
19
12
(71)
(8)
365
11
72
333
(683)
92
(110)
(82)
Total
1,442
(1,478)
1,188
(1,276)
1,147
(1,233)
31
(79)
755
697
(1,442)
7.2. Nature of provisions:
(a) Replacement guarantee
The Company provides for the estimated liability on guarantees given on sale of its products based on past performance
of such products. The provision represents the expected cost of replacement and free of charge services and it is
expected that the expenditure will be incurred over the guarantee period which usually ranges from 12 months to 24
months.
(b) Legal and regulatory
The Company has made provision for taxes and duties relating to cases that are pending assessments before Adjudicating
Authorities where possible outflow of resources may arise in future which would depend on the ultimate outcome on
conclusion of the cases.
(c) Personnel related
The Company has made provisions in respect of amounts payable to certain employees based on their retention and
performance, which are payable over a three year and one year period respectively.
(d) Miscellaneous risks
102
The Company has created provisions following the accounting concept of conservatism towards possible outflow of
resources in respect of other claims against the Company.
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
As at 31
March 2016
8
As at 31
March 2015
Short-term borrowings
Loans repayable on demand
From banks
6
302
148
100
154
402
123
91
5,819
9,459
5,942
9,550
Current maturities of finance lease obligations (refer note 5)
108
133
Income received in advance
714
609
Unpaid dividend
11
10
Book overdraft
63
37
-
121
91
69
1,743
1,322
656
1,070
18
15
917
869
4,321
4,255
Bank overdraft (unsecured)
Other facilities from Bank of America (Unsecured)
9
Trade payables
Dues to micro and small enterprises - refer note 37
Dues to others
10 Other current liabilities
Other payables:
Interest accured but not due
Payables for purchase of fixed assets (other than micro and small enterprises)
Advance received from customers
Employee related payables
Security deposits
Statutory dues
Annual
Report 2015-16
103
104
Consolidated
14
15
566
51
164
20
160
990
7,150
167
716
23
559
527
694
11,475
(2)
(1)
170
168
1,301
Additions
As at
1 April
2015
(3)
(8)
(357)
(1)
(149)
(102)
(67)
(29)
(1)
(837)
(42)
(109)
(6,682)
(128)
(81)
(5,318)
(167)
(4)
Gross block at cost
Disposals and
Transfer as
adjustments
per Scheme of
Arrangement
for Demerger
8
382
4,991
54
455
10
219
366
559
7,044
2,331
167
571
22
446
364
737
5,426
(6)
(1+2+3+4)
(5)
142
168
478
As at
1 April
2015
As at
31 March
2016
(7)
43
951
3
128
32
639
16
49
41
(8)
(3)
(280)
(1)
(108)
(95)
(46)
(27)
-
(366)
(58)
(4,833)
(49)
(49)
(4,208)
(103)
(9)
Accumulated depreciation
Depreciation
On disposals
Transfer as
for the year
and
per Scheme of
adjustments
Arrangement
for Demerger
541
2,882
12
190
254
1,376
70
374
8
57
(6+7+8+9)
(10)
As at
31 March
2016
196
2,544
10
256
110
955
97
197
142
160
421
(5-10)
(11)
Net block
As at
31 March
2016
Amounts in ` Mln
(1)
3,010
3,143
22
150
6,325
As at
1 April
2015
(2)
Additions
-
(3)
-
(4)
Gross block at cost
Disposals and
Transfer as
adjustments
per Scheme of
Arrangement
for Demerger
-
(1+2+3+4)
(5)
3,010
3,143
22
150
6,325
As at
31 March
2016
(6)
1,384
1,645
22
150
3,201
As at
1 April
2015
(7)
406
375
781
(8)
-
(9)
Accumulated amortisation
Amortisation
On disposals
Transfer as
for the year
and
per Scheme of
adjustments
Arrangement
for Demerger
Based on expected future cash flows, no impairment provision has been made during the current year and previous year.
For the subsidiary company, the remaining amortisation period of Brands and Goodwill is 3 years.
Goodwill
Brands
Software
Non-compete fees
Total
12 (a) Intangible fixed assets
-
(6+7+8+9)
(10)
1,790
2,020
22
150
3,982
As at
31 March
2016
(5-10)
(11)
1,220
1,123
2,343
Net block
As at
31 March
2016
Depreciation includes ` 111 (Previous year ` 125) on account of additional depreciation for writing down the value of certain Plant and equipment (owned) no longer
in active use (refer note 32 c).
Land
Freehold
Leasehold
Buildings
Plant and equipment
Owned
Given on lease (refer note 38)
Furniture and fixtures
Vehicles
Owned
Held under finance lease
Office equipment
Others
Leasehold Improvements
Total
11(a) Tangible fixed assets
Notes to Consolidated Financial Statements for the year ended 31 March 2016
PHILIPS INDIA LIMITED
(1)
144
671
23
2
213
44
46
1,143
6,860
167
701
22
476
486
648
10,876
(2)
(3)
(544)
(1)
(130)
(3)
(381)
(8)
(21)
Gross block at cost
Additions
Disposals and
adjustments
170
168
1,178
As at
1 April 2014
694
11,475
23
559
527
7,150
167
716
170
168
1,301
As at
31 March 2015
(1+2+3)
(4)
(5)
517
6,310
8
191
326
4,479
38
409
6
336
As at
1 April 2014
(6)
42
1,243
2
143
43
888
16
52
2
55
(7)
(509)
(115)
(3)
(376)
(6)
(9)
Accumulated depreciation
Depreciation
On disposals
for the year
and adjustments
559
7,044
10
219
366
4,991
54
455
8
382
As at
31 March 2015
(5+6+7)
(8)
135
4,431
13
340
161
2,159
113
261
170
160
919
Net block
As at
31 March 2015
(4-8)
(9)
Amounts in ` Mln
(1)
3,010
3,143
22
150
6,325
(2)
-
(3)
Gross block at cost
Additions
Disposals and
adjustments
-
As at
31 March 2015
(1+2+3)
(4)
3,010
3,143
22
150
6,325
(5)
978
1,270
22
150
2,420
As at
1 April 2014
(6)
406
375
781
(7)
-
Accumulated amortisation
Amortisation
On disposals
for the year
and adjustments
Based on expected future cash flows, no impairment provision has been made during the current year and previous year.
For the subsidiary company , the remaining amortisation period of Brands and Goodwill is 4 years.
Goodwill
Brands
Software
Non-compete fees
Total
As at
1 April 2014
Net block
As at
As at
31 March 2015 31 March 2015
(5+6+7)
(4-8)
(8)
(9)
1,384
1,626
1,645
1,498
22
150
3,201
3,124
Pursuant to enactment of the Companies Act, 2013 (the ‘Act’) being effective from 1 April 2014, the Company has revised depreciation rates of fixed assets as per
the useful life specified in Schedule II of the Act. Consequently, the depreciation charge for the year is higher by ` 256.
(ii) Depreciation includes ` 125 on account of additional depreciation for writing down the value of certain Plant and equipment (owned) no longer in active use (refer
note 32 c).
12(b) Intangible fixed assets
(i)
Land
Freehold
Leasehold
Buildings
Plant and equipment
Owned
Given on lease (refer note 38)
Furniture and fixtures
Vehicles
Owned
Held under finance lease
Office equipment
Others
Leasehold Improvements
Total
11(b) Tangible fixed assets
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Annual
Report 2015-16
105
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2016
13
14
Non-current investments
(Valued at cost, unless stated otherwise)
6,300,000 (Previous year - NIL) equity shares of 10/- each fully paid up in HealthMap
Diagnostics Private Limited- an associate
^includes share of post-investment loss of ` 27
Deferred tax assets (net)
Deferred tax assets
Provision for employee benefits
Doubtful trade receivables and loans and advances
Difference between book and tax depreciation
Other timing differences
Deferred tax liabilities
Assets given on finance lease
15
36^
-
36
-
215
106
319
232
872
310
115
203
530
1,158
362
362
510
349
349
809
Loans and advances
(Unsecured, unless otherwise stated)
Capital advances (considered good)
Security deposits
Considered good
Considered doubtful
Less: Provision for doubtful deposits
Loans and advances to related parties (considered good)
Other advances to fellow subsidiaries
Other loans and advances
Considered good
Advance to suppliers
CENVAT credit receivable
VAT credit receivable
Deposits against legal cases
Special additional duty receivables and drawback claims
Balances with customs and port trust
Prepaid expenses
Claims receivables
Advances to employees
Advance income tax (net of provision)
Considered doubtful
Advance to suppliers
Deposits against legal cases
Claims receivables
Less: Provision for doubtful other loans and advances
Advance to suppliers
Deposits against legal cases
Claims receivables
106
Amounts in ` Mln
As at 31
As at 31
March 2016
March 2015
Consolidated
Long-term
Short-term
As at 31
As at 31
As at 31
As at 31
March 2016
March 2015
March 2016
March 2015
33
60
33
60
281
281
375
375
206
60
(60)
206
268
51
(51)
268
-
-
544
544
175
175
334
125
287
56
8
1,751
676
155
401
56
12
1,749
263
575
8
67
10
152
90
23
-
325
209
23
140
78
171
34
14
-
54
4
54
4
-
(54)
2,561
2,875
(4)
(54)
3,049
3,484
(4)
1,188
1,938
22
(22)
994
1,437
Notes to Consolidated Financial Statements for the year ended 31 March 2016
16
Other non-current assets
Long term trade receivables
Secured, considered good (refer note 18.1)
Unsecured, considered good
Doubtful
Less: Provision for doubtful receivables
Bank deposits (due to mature after 12 months from the reporting date)
17
18
Inventories
(At lower of cost and net realisable value)
Raw materials
[including goods-in-transit - ` 15 (Previous year - ` 334)]
Work-in-progress
Finished goods
[including goods-in-transit - ` 106 (Previous year - ` 45)]
Stock-in-trade (goods purchased for resale)
[including goods-in-transit - ` 414 (Previous year - ` 460)]
Stores and Spares
Trade receivables
Receivables outstanding for a period exceeding six months from the date they
are due for payment
Secured, considered good (refer note 18.1)
Unsecured, considered good
Doubtful
Less: Provision for doubtful receivables
Other receivables
Secured, considered good (refer note 18.1)
Unsecured, considered good
Doubtful
Less: Provision for doubtful receivables
Amounts in ` Mln
As at 31
As at 31
March 2016
March 2015
1,687
1,687
6
6
1,693
2,064
193
2,257
6
6
2,263
643
1,068
950
374
540
586
3,102
4,841
20
5,089
99
7,134
18
395
190
603
(190)
413
6
462
205
673
(205)
468
441
6,061
6,502
6,502
6,915
405
7,827
8,232
8,232
8,700
Additional disclosure relating to finance lease receivables:
18.1 Secured trade receivables includes finance lease receivables amounting to ` 698 (Previous year - ` 716) relating to
medical equipments leased out by the Healthcare division of the Company. The lease term varies between 5-7 years. The
total minimum lease payments for assets given on finance lease is ` 941 (Previous year - ` 929) which includes unearned
interest of ` 243 (Previous year - ` 213). The maturity profile of finance lease obligation is as follows:
Minimum lease payments
Receivable within 1 year
231
238
Receivable between 1-5 years
638
634
Receivable after 5 years
72
57
Total
941
929
Present value
Receivable within 1 year
152
164
Receivable between 1-5 years
480
499
Receivable after 5 years
66
53
Total
698
716
Unearned interest
243
213
Annual
Report 2015-16
107
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
As at 31 March 2016
19
As at 31 March 2015
Cash and bank balances
Cash and cash equivalents
1
2
253
1,043
On current accounts
1,086
413
On deposit accounts (with original maturity of 3
months or less)
4,079
2,260
Cash on hand
Cheques and drafts on hand
Balances with banks
5,419
3,718
Other bank balances
Bank deposits (due to mature within 12 months from
the reporting date)
Unpaid dividend accounts
20
953
-
11
10
964
10
6,383
3,728
238
142
34
24
5
-
277
166
Other current assets
(Unsecured, considered good unless otherwise stated)
Unbilled revenue
Interest accrued on deposits with banks
Insurance claim receivable
108
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2016
21
Amounts in ` Mln
Revenue from operations
Year ended
31 March 2016
Year ended
31 March 2015
Sale of products (gross)
54,302
57,431
Sale of services
12,922
10,167
426
508
67,650
68,106
Lamps
14,531
19,711
Fittings
8,663
9,718
Diagnostic imaging equipments
8,902
7,445
Other operating revenues
Revenue from operations (gross)
Breakup of revenue from sale of products
10,428
9,161
Personal care
4,781
3,725
Accessories for fittings
1,636
2,042
Patient monitoring equipments
1,667
1,781
Electronic HF Ballasts
Domestic appliances
1,880
2,321
Health and wellness
285
210
Modular switches
690
452
Operation theatre lights
761
646
70
208
Filaments
8
11
54,302
57,431
Software development
8,024
6,567
Product maintenance
2,956
2,359
Service income
1,493
888
449
353
12,922
10,167
69
133
4
11
288
227
27
76
Glass shells
Breakup of revenue from sale of services
Others
Breakup of other operating revenues
Liabilities no longer required written back
Export incentives
Finance income - leases
Scrap sales
Miscellaneous
38
61
426
508
Annual
Report 2015-16
109
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
22
Other income
Interest income (other than on investments)
Insurance and other claims
Surplus on disposal of fixed assets
Other non-operating income
23
Cost of raw materials consumed
Inventory of raw materials at the beginning of the year
Add: Purchases
Less: Inventory of raw materials at the end of the year
Less: Transfer as per Scheme of Arrangement for Demerger
Cost of raw materials consumed
Circuits
Caps
Lamps consumables
Medical equipment components
Domestic appliances components
Breakup of inventory of raw materials at the end of the year
Circuits
Caps
Lamp consumables
Medical equipment components
Domestic appliances components
Transfer as per Scheme of Arrangement for Demerger
Circuits
Caps
Lamp consumables
24
110
Breakup of purchases of stock-in-trade (goods purchased for resale):
Lamps
Fittings
Diagnostic imaging equipments
Domestic appliances
Personal care
Accessories for fittings
Patient monitoring equipments
Electronic HF ballasts
Service consumables
Health and wellness
Modular switches
Operation theatre lights
Consolidated
Year ended
31 March 2016
261
7
29
297
Year ended
31 March 2015
188
11
8
15
222
735
6,010
628
337
5,780
802
6,125
735
6,192
3
404
1,576
1,541
2,256
5,780
29
596
2,384
1,262
1,921
6,192
419
209
628
1
15
292
221
206
735
22
315
337
-
7,052
4,830
4,200
4,327
3,246
1,010
1,393
1,306
2,056
121
682
531
30,754
9,249
5,469
2,710
4,480
2,416
1,657
928
1,680
1,871
177
477
395
31,509
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
25 Changes in inventories of finished goods, stock-in-trade and work-in-progress:
Year ended 31 March 2016
Opening
inventory
Transfer
Closing
as per
inventory
Scheme of
Arrangement
for Demerger
Year ended 31 March 2015
(Increase)/
decrease
in inventory
Opening
inventory
Closing
inventory
(Increase)/
decrease in
inventory
Finished goods
281
226
-
55
292
281
-
-
6
(6)
-
-
-
278
-
261
17
346
278
68
559
226
267
66
638
559
79
Lamps
826
531
-
295
859
826
33
Fittings
546
644
-
(98)
673
546
127
Accessories for fittings
235
222
-
13
163
235
(72)
Electronic HF ballasts
160
173
-
(13)
123
160
(37)
50
91
-
(41)
36
50
(14)
Diagnostic imaging equipments
451
-
203
248
557
451
106
Domestic appliances
742
-
730
12
646
742
(96)
Personal care
453
-
685
(232)
-
453
(453)
Patient monitoring equipments
260
-
242
18
139
260
(121)
Service consumables
488
-
663
(175)
700
488
212
Health and wellness
95
-
69
26
26
95
(69)
Lamps
Diagnostic imaging equipments
Domestic appliances
11
Stock-in-trade (goods purchased for resale)
Modular switches
77
-
98
(21)
72
77
(5)
4,383
1,661
2,690
32
3,994
4,383
(389)
-
-
-
-
16
540
-
950
(410)
458
540
(82)
Operation theatre lights
Work-in-progress
Domestic appliances
Diagnostic imaging equipments
Total
16
540
-
950
(410)
474
540
(66)
5,482
1,887
3,907
(312)
5,106
5,482
(376)
Year ended
31 March 2016
26
Employee benefits expense
Salaries, wages and bonus
Contribution to provident and other funds
9,343
384
380
84
106
681
11,623
10,510
596
643
596
643
Depreciation of tangible fixed assets
840
1,118
Amortisation of intangible fixed assets
781
781
1,621
1,899
Staff welfare expenses
Finance costs
Interest expense
28
10,526
629
Expense on Employee Stock Option Schemes
27
Year ended
31 March 2015
Depreciation and amortisation expense
Annual
Report 2015-16
111
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
29
Other expenses
Year ended
31 March 2016
113
96
3
13
Power and fuel
594
673
Packing, freight and transport
955
1,042
Rent
854
756
Repairs to buildings
252
215
35
93
Insurance
131
126
Rates and taxes
119
162
1,321
1,352
403
467
Publicity
2,834
2,478
IT and Communication
1,250
1,430
Provision for doubtful trade receivables and loans and advances
197
37
Replacement guarantee
981
1,079
Management support services
-
384
Research and development services
-
48
120
339
1,665
1,861
11,827
12,651
Consumption of stores and spare parts
Excise duty
Repairs to machinery
Travelling and conveyance
Legal and professional
Net loss on foreign currency transaction and translation
Miscellaneous
(a)
(b)
(c)
(d)
112
Year ended
31 March 2015
Excise duty recovered through sales is disclosed as a reduction from sales and the excise duty not recovered from sales
is disclosed as expense above.
Legal and professional includes payments to auditors as given below:
As Auditor - statutory audit fees ` 12.9 (Previous year - ` 10.3), tax audit fees ` 2 (Previous year - ` 2);
In other capacity - taxation matters ` 0.3 (Previous year - ` 0.3), certification ` 1.1 (Previous year - ` 0.4) and
reimbursement of expenses ` 1 (Previous year - ` 1).
Pursuant to the agreement entered into by the Company with Koninklijke Philips N.V. (KPNV), the Company has
incurred ` Nil (Previous year - ` 384) towards the support services provided by KPNV and ` Nil (Previous year ` 48) for accessing the benefit resulting from common research and development programmes.
Miscellaneous include - (i) undepreciated value of fixed assets written off / provided for - ` NIL (Previous year - ` 7),
(ii) handling charges - ` 199 (Previous year - ` 284), (iii) royalty - ` 250 (Previous year - ` 242), (iv) commission - ` 125
(Previous year - ` 101), (v) donation - ` NIL (Previous year - ` 2) and (vi) Corporate Social Responsibility expenditure
- Gross amount required to be spent ` 68 (Previous year - ` 46), amount spent towards various schemes as prescribed
under Section 135 of the Companies Act, 2013 ` 33 (Previous year - ` 27).
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
Related party transactions
(a) Names of companies where control exists:
Holding and ultimate holding company
: Koninklijke Philips N.V (KPNV)
(b) Other related parties with whom transactions have taken place during the year:
(i) Fellow Subsidiary Companies
: As per list given below
Argus Imaging B.V. Philips GmbH
Burton Medical Products Corporation Philips Healthcare (Suzhou) Co., Ltd.
Chicago Magnet Wire Corp. Philips Healthcare Informatics, Inc.
Dameca A/S Philips Innovative Applications
Dynalite Intelligent Light Pty. Limited Philips International B.V.
Genlyte Thomas Group LLC Philips IPSC Tamasi Kft.
Ilti Luce S.r.l. Philips Lanka Solutions (Private) Limited
Indalux Iluminación Técnica, S.L. Philips Lighting B.V.
Lifeline Systems Company Philips Lighting Bielsko Sp.z.o.o.
Limited Liability Company “Philips” Philips Lighting Central America, Sociedad Anónima de Capital Variable
Luceplan S.p.A Philips Lighting India Limited
Lumileds India Private Limited Philips Lighting Industry (China) Co., Ltd.
Lumileds LLC Philips Lighting Luminaires (Shanghai) Co., Ltd.
P.T. Philips Industries Batam Philips Lighting Maseru Pty. Ltd.
Philips (China) Investment Company, Ltd. Philips Lighting Poland S.A.
Philips Aktiebolag Philips Luminaires (Chengdu) Co., Ltd.
Philips Austria GmbH Philips Malaysia Sdn. Berhad
Philips Belgium Philips Medical Systems (Cleveland), Inc.
Philips Chilena S.A. Philips Medical Systems DMC GmbH
Philips Colombiana S.A.S. Philips Medical Systems Nederland B.V.
Philips Consumer Lifestyle B.V. Philips Medical Systems Technologies Ltd.
Philips Consumer Life Style , Korea Philips Medizin Systeme Böblingen GmbH
Philips Digital Mammography Sweden AB Philips Mexicana, S.A. de C.V.
Philips do Brasil Ltda. Philips Nederland B.V.
Philips Domestic Appliances and Personal Care Philips New Zealand Limited
Company of Zhuhai SEZ, Ltd.
Philips Egypt (Limited Liability Company) Philips Oral Healthcare, Inc.
Philips Electrical Industries of Pakistan Limited Philips Oy
Philips Electronics (Thailand) Ltd. Philips Peruana S.A.
Philips Electronics and Lighting, Inc. Philips Polska Sp.z.o.o.
Philips Electronics Australia Limited Philips Solid-State Lighting Solutions, Inc.
Philips Electronics Bangladesh Private Limited Philips South Africa (Proprietary) Limited
Philips Electronics Hong Kong Limited Philips Taiwan Ltd.
Philips Electronics Japan, Ltd. Philips Technologie GmbH
Philips Electronics Korea Ltd. Philips Ultrasound, Inc.
Philips Electronics Ltd Philips Uruguay S.A.
Philips Electronics Malaysia Pte Limited PITS
Philips Electronics Middle East & Africa B.V. PT. Philips Indonesia
Philips Electronics Nederland B.V. Respironics California, Inc.
Philips Electronics North America Corporation Respironics, Inc.
Philips Electronics Singapore Pte Ltd Saeco International Group S.p.A.
Philips Electronics UK Limited Shenzhen Goldway Industrial Inc.
Philips Electronics Vietnam Limited Türk Philips Ticaret Anonim Sirketi
Philips Electronique Maroc VISICU, Inc.
Philips Export B.V. Volcano Europe, B.V.B.A.
Philips France Witt Biomedical Corporation
(ii) Employee Trusts
Philips India Ltd Management Staff Provident Fund Trust
(iii) Key Management Personnel
(1) Executive Directors:
(i) Mr.A.Krishnakumar - Ceased to be Executive Director w.e.f. 15 Dec 2015
(ii) Mr.Hariharan Madhavan - Executive Director w.e.f. 28 Sep 2015
(iii) Mr.V. Raja - Executive Director w.e.f. 15 Dec 2015
(iv) Mr.A.D. Aditya Ratnam - Chairman of PKAPL
(v) Mr. Rupendra Yadav - CEO and Managing Director of PKAPL
(2) Non-Executive Directors:
(i) Mr.S.M.Datta
(ii) Mr.Vikram Mukund Limaye
(iii) Mr.Vivek Gambhir
(iv) Ms.Geetu Gidwani Verma -Non-Executive Director w.e.f. 29 Sep 2015
(3) Company Secretary:
Mr.Rajiv Mathur
30
Annual
Report 2015-16
113
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
(c) Nature of transactions
Year ended 31 March 2016
Year ended 31 March 2015
Ultimate
Fellow
Associate
Key
Employee
Holding Subsidiary Company Managerial
Trusts
Company Companies
Personnel
Ultimate
Holding
Company
Fellow
Subsidiary
Companies
Associate
Key
Employee
Company Managerial
Trusts
Personnel
-
11,422
-
-
-
PURCHASES
Goods
Fixed assets
Services
Reimbursements
Others
-
12,182
-
-
-
-
59
-
-
-
-
61
-
-
-
91
1,238
-
-
-
521
1,071
-
-
-
-
100
-
-
-
-
227
-
-
-
84
-
-
-
-
116
1
-
-
-
SALES
-
2,596
398
-
-
-
2,494
-
-
-
1,252
8,662
-
-
-
891
6,934
-
-
-
-
601
-
-
-
-
130
-
-
-
Charge
-
-
-
-
-
-
1
-
-
-
Recovery
-
5
-
-
-
-
7
-
-
-
Mr.A.Krishnakumar
-
-
-
27
-
-
-
-
44
-
Mr.Jan Hendrik Gerardus Louwman
-
-
-
-
-
-
-
-
72
-
Mr.Hariharan Madhavan
-
-
-
12
-
-
-
-
-
-
Mr.V. Raja
-
-
-
13
-
-
-
-
-
-
Mr.Rajiv Mathur
-
-
-
16
-
-
-
-
15
-
Mr. Rupendra Yadav
-
-
-
-
-
-
-
-
-
-
Mr.S.M.Datta
-
-
-
1
-
-
-
-
1
-
Mr.Vikram Mukund Limaye
-
-
-
1
-
-
-
-
1
-
Mr.Vivek Gambir
-
-
-
1
-
-
-
-
1
-
Ms. Geetu Gidwani Verma
-
-
-
-
-
-
-
-
-
-
-
-
Goods
Services
Reimbursements
DEPUTATION OF PERSONNEL
-
MANAGERIAL REMUNERATION
FINANCE
Dividend Paid
166
-
-
-
111
Interest income
-
-
-
-
-
-
-
-
-
Inter corporate deposits given
-
134
-
-
-
-
-
-
-
-
Inter corporate deposits repaid
-
134
-
-
-
-
-
-
-
-
-
-
-
-
-
-
378
-
-
-
540
-
-
-
-
540
-
-
-
-
-
-
63
-
-
-
-
-
-
-
Face value of equity shares on
conversion of compulsorily convertible
debentures
469
-
-
-
-
-
-
-
-
-
Securities premium on conversion of
compulsorily convertible debentures
4,931
-
-
-
-
-
-
-
-
-
Contributions to Employees' Benefit
Plans
-
-
-
-
620
-
-
-
-
543
Compulsorily convertible debentures
-
-
-
-
-
5,400
-
-
-
-
Debentures interest payable
-
-
-
-
-
122
-
-
-
-
Payable
46
2,033
-
-
54
151
2,673
-
-
46
Receivable
99
2,033
9
-
-
43
2,083
-
-
-
Others - Proceeds from divestment
Debenture interest expenses
Purchase of Investment
OUTSTANDINGS
114
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
Relationship / Name of the related party
Description of the nature
of transaction
Value of the
transactions
Value of the
transactions
Year ended
31 March 2016*
(i)
Year ended
31 March 2015
Fellow subsidiary Companies:
Philips Electronics Hong Kong Limited
Purchase of goods
-
1,902
Philips Medical Systems Nederland B.V.
Purchase of goods
2,540
1,619
Philips Consumer Lifestyle B.V.
Purchase of goods
3,409
2,935
Philips Electronics Singapore Pte Ltd
Purchase of goods
1,361
Philips Electronics Singapore Pte Ltd
Purchase of fixed assets
28
25
Philips Medical Systems Nederland B.V.
Purchase of fixed assets
10
9
Philips Lighting Maseru Pty. Ltd.
Purchase of fixed assets
-
9
PT. Philips Indonesia
Purchase of fixed assets
10
7
Philips Electronics Nederland B.V.
Purchase of services
881
860
Philips Electronics Bangladesh Private Limited
Reimbursements paid
15
-
Philips Electronics Nederland B.V.
Reimbursements paid
55
200
Philips Medical Systems Nederland B.V.
Sale of goods
994
555
Philips Electronique Maroc
Sale of goods
-
532
Philips Electronics Nederland B.V.
Sale of services
1,801
5,320
Philips Electronics North America Corporation
Sale of services
1,217
-
Philips Medical Systems Nederland B.V.
Sale of services
2,050
-
Lumileds India Private Limited
Proceeds from divestment
-
378
Philips Lighting B.V.
Reimbursements received
-
22
Philips Electronics Nederland B.V.
Reimbursements received
-
61
Philips (China) Investment Company, Ltd.
Reimbursements received
-
19
Philips Lighting India Limited
Reimbursements received
544
-
Philips Electronics Nederland B.V.
Deputation charge
-
1
Philips Electronics Hong Kong Limited
Deputation recovery
-
2
Philips South Africa (Proprietary) Limited
Deputation recovery
-
2
Philips International B.V.
Deputation recovery
-
2
Philips Polska Sp.z.o.o.
Deputation recovery
1
-
Philips Belgium
Deputation recovery
2
-
Philips Lighting India Limited
Inter Corporate Deposit taken
134
-
Philips Lighting India Limited
Inter Corporate Deposit given
134
-
Philips Electronics Hong Kong Limited
Payable
-
405
Philips Medical Systems Nederland B.V.
Payable
642
547
Philips Consumer Lifestyle B.V.
Payable
533
512
Philips Medical Systems Nederland B.V.
Receivable
528
587
Philips Lighting India Limited
Receivable
544
-
Philips Electronics Nederland B.V.
Receivable
316
-
Philips India Ltd Management Staff Provident
Fund Trust
Contributions
620
543
Philips India Ltd Management Staff Provident
Fund Trust
Payable
54
46
(ii) Employee Trusts:
* represents transactions with parties which comprise more than 10% of aggregate value of transactions.
Annual
Report 2015-16
115
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
31
INFORMATION ABOUT BUSINESS SEGMENTS
Description
(A) PRIMARY SEGMENT INFORMATION:
(1) SEGMENT REVENUE
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
Year
ended
31 March
2016
Year
ended
31 March
2015
27,003
15,363
8,023
16,076
74
33,916
13,036
6,567
13,190
96
TOTAL
(2) INTER SEGMENT REVENUE
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
TOTAL
66,539
66,805
(3) OTHER UNALLOCABLE INCOME
REVENUE FROM OPERATIONS (NET) (1+3)
(4) SEGMENT RESULT
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
TOTAL
(5) FINANCE COST
(6) OTHER UNALLOCABLE EXPENDITURE
NET OF INCOME
(7) PROFIT BEFORE EXCEPTIONAL ITEMS
AND TAX (4+5+6)
(8) EXCEPTIONAL ITEMS
-
Description
OTHER INFORMATION
(12) SEGMENT ASSETS
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
f. Other unallocable
TOTAL
4,836
2,466
9,976
7
13,430
30,715
10,029
4,162
2,165
8,954
4
10,065
35,379
350
66,889
2,208
1,930
6,561
5
3,025
6,050
8,390
1,547
5,734
15
1,738
13,729
23,474
3,440
159
783
1,508
5
5,895
(596)
3,463 (14) CAPITAL EXPENDITURE
(215)
a. Lighting
560
b. Consumer Lifestyle
1,244
c. Software development services
9
d. Healthcare
5,061
e. Other segments
(643)
f. Other unallocable
124
206
279
144
243
265
244
242
195
1
42
(2)
5,297
11
4,429 TOTAL
996
989
(418)
(896)
(172)
(103)
(143)
(1,732)
(671)
(880)
(180)
(96)
(1)
(196)
(2,024)
(56)
(4)
(35)
(93)
(188)
(52)
(10)
(62)
29,119
1,596
30,715
33,198
2,181
35,379
(15) DEPRECIATION AND AMORTISATION
EXPENSE
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
f. Other unallocable
TOTAL
(16) NON-CASH EXPENSES OTHER THAN
DEPRECIATION AND AMORTISATION
EXPENSE
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
f. Other unallocable
TOTAL
40
635
675
5,104
(10) TAX EXPENSE
a. Current tax
b. Deferred tax - release / (charge)
(2,438)
135
(2,353)
313
TOTAL
(11) PROFIT FOR THE YEAR
(2,303)
2,769
(2,040)
3,064
53,714
13,175
66,889
ASSETS
56,101
a. Within India
11,134
b. Outside India
67,235 TOTAL
(B) SECONDARY SEGMENT INFORMATION:
REVENUE
a. Within India
b. Outside India
TOTAL
CAPITAL EXPENDITURE
a. Within India
b. Outside India
TOTAL
Year
ended
31 March
2015
- (13) SEGMENT LIABILITIES
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
f. Other unallocable
430
67,235 TOTAL
(225)
(225)
5,072
a. Lighting
b. Consumer Lifestyle
c. Software development services
d. Healthcare
e. Other segments
f. Other unallocable
TOTAL
(9) PROFIT BEFORE TAX
Year
ended
31 March
2016
996
996
989
989
The secondary segment revenue and assets in the geographical segments considered for disclosure are as follows:
(1)
Revenue and assets within India.
(2)
Revenue and assets outside India.
116
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2016
31
INFORMATION ABOUT BUSINESS SEGMENTS (Contd.)
(C) OTHER DISCLOSURES:
Amounts in ` Mln
Inter segment revenue / result:
Inter-segment revenue has been recognised at competitive prices.
Allocation of corporate expenses to other segments is at cost.
All profits / losses on inter segment transfers are eliminated at Company level.
Types of products and services in each business segment:
Business Segments
Type of products / services
a.
Lighting
Lamps, Glass shells, Fittings, Accessories for fittings, Electronic HF Ballasts,
Glass tubings and Modular Switches
b. Consumer Lifestyle
Domestic Appliances, Health and Wellness products and Personal care
products
c.
Software development services
Development of embedded software
d. Healthcare
Medical electronics equipments
e. Other segments
Philips Design
32 Exceptional items include:
(a) Profit on sale of property - ` NIL (Previous year - ` 760).
(b) ` NIL (Previous year - ` 388) Net surplus on divestment of Lumileds LED Component and Automotive Lighting
Business and Tax thereon ` NIL (Previous year - ` 78) included in current tax.
(c) Restructuring costs incurred at Mohali Light Factory and Vadodara Light Factory:
Compensation for Employees’ Voluntary Separation ` 114 (Previous year – ` 223).
Additional depreciation ` 111 (Previous year - ` 125) provided for writing down certain plant and equipment no
longer in active use.
(d) Settlement of erstwhile Mumbai Employees’ VRS claim ` NIL (Previous year - ` 125).
33
The Company uses forward exchange contracts to hedge its exposure in foreign currency. The information
on forward contracts is as follows:
(a) Forward contracts outstanding
USD Currency
Details
As at 31 March 2016
As at 31 March 2015
INR
FC (in 000s)
INR
FC (in 000s)
Receivables
Payables
2,683.33
40,500.00
2,438.83
39,181.24
Euro Currency
As at 31 March 2016
As at 31 March 2015
INR
FC (in 000s)
INR
FC (in 000s)
-
(b) Foreign exchange currency exposures not covered by Forward Contracts
As at 31 March 2016
As at 31 March 2015
As at 31 March 2016
As at 31 March 2015
Details
USD Exposure
Euro Exposure
INR
FC (in 000s)
INR
FC (in 000s)
INR
FC (in 000s)
INR
FC (in 000s)
Receivables
1,343.67
20,276.89
1,790.34
28,751.48
250.82
3,326.71
404.12
6,047.17
Payables
28.00
420.00
132.98
2,128.05
105.78
1,403.03
336.50
5,035.28
Details
INR
Receivables
Payables
Details
INR
Receivables
Payables
Details
Receivables
Payables
INR
SGD Exposure
FC (in 000s)
INR
FC (in 000s)
3.08
69.56
3.83
84.47
AUD Exposure
FC (in 000s)
INR
FC (in 000s)
0.11
2.11
8.56
180.79
INR
INR
CNY Exposure
FC (in 000s)
INR
1.76
171.72
-
CHF Exposure
FC (in 000s)
INR
2.00
-
FC (in 000s)
-
FC (in 000s)
-
GBP Exposure
FC (in 000s)
INR
FC (in 000s)
1.38
15.00
0.92
9.99
Annual
Report 2015-16
117
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2016
34
Amounts in ` Mln
Employees’ Share-based Payments:
Certain employees of the company are eligible for stock options granted by the Holding Company (“KPNV”). In conformity
with the guidance note on “Accounting for Employee Share-based Payments” issued by The Institute of Chartered
Accountants of India (ICAI) in respect of the grants made on or after 1 April 2005, the following disclosures are made:
(a) Method adopted for valuation
Stock compensation expenses under the “Fair Value Method” are determined based on the “Fair Value of the Options”
and amortised over the vesting period. The “Fair Value of the Options” is determined using “Black-Scholes” option
pricing model.
(b) Nature and extent of Employee Share-based Payment Plans:
As from 2003 onwards, the Holding Company (KPNV) issued restricted share rights that vest in equal annual
installments over a three-year period. Restricted shares are KPNV’s shares that the grantee will receive in three
successive years, provided the grantee is still with the Company on the respective delivery dates. If the grantee still
holds the shares after three years from the delivery date, Philips will grant 20% additional (premium) shares, provided
the grantee is still with Philips. As from 2002, the Holding Company granted fixed stock options that expire after 10
years. Generally, the options vest after 3 years; however, a limited number of options granted to certain employees of
acquired businesses contain accelerated vesting. In prior years, fixed and variable (performance) options were issued
with terms of ten years, vesting one to three years after grant.
Since 2013, a new Plan has been introduced which consists of performance shares only. The performance is measured
over a three-year performance period. The performance shares vest three years after the grant date. The number of
performance shares that will vest is dependent on achieving performance conditions, which are equally weighted, and
provided that the grantee is still employed with the Company.
(c) Number and weighted average grant-date fair value of Stock Options (EUR)
Grant Date
Weighted average
grant-date fair
value of the share
(in Euros)
Outstanding
as at 1 April
2015
April 18, 2005
19.41
1,251
-
(3,033)
3,717
(1,935)
-
-
April 18, 2006
26.28
4,662
-
(3,690)
3,690
(306)
4,356
4,356
April 16, 2007
30.96
7,749
-
-
(666)
-
7,083
7,083
April 14, 2008
23.11
3,402
-
-
4,500
(4,500)
3,402
3,402
July 14, 2008
20.67
1,800
-
-
-
-
1,800
1,800
April 14, 2009
12.63
3,300
-
-
4,125
(5,175)
2,250
2,250
April 19, 2010
24.90
6,904
-
-
(2,160)
-
4,744
4,744
July 19, 2010
24.01
7,125
-
-
(6,045)
-
1,080
1,080
April 18, 2011
20.90
11,664
-
-
900
(3,450)
9,114
9,114
July 18, 2011
17.20
3,600
-
-
(750)
-
2,850
2,850
October 17, 2011
14.52
3,378
-
-
(1,350)
(678)
1,350
1,350
January 30, 2012
15.24
5,000
-
-
5,000
(5,000)
5,000
5,000
April 23, 2012
14.82
44,559
-
(7,050)
(5,325)
(9,150)
23,034
23,034
1,04,394
-
(13,773)
5,636
(30,194)
66,063
66,063
1,77,223
-
(14,772)
(4,253)
(53,804)
1,04,394
59,835
Exercise Outstanding
as at 31
March 2016
Exercisable
Previous Year
Grants
Cancellation Transfer in /
(out)
Exercise
Outstanding
as at 31
March 2016
Exercisable
(d) Number and weighted average grant-date fair value of Stock Options (USD)
Grant Date
Weighted average
grant-date fair
value of the share
(in USD)
Outstanding
as at 1 April
2015
April 18, 2005
25.28
504
-
(504)
-
-
-
-
April 14, 2008
36.63
306
-
-
-
-
306
306
April 19, 2010
33.51
Previous year
118
Consolidated
Grants Cancellation
Transfer in /
(out)
480
-
-
-
-
480
480
1,290
-
(504)
-
-
786
786
1,623
-
(333)
-
-
1,290
1,290
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
(e) Number and weighted average grant date fair value of Restricted Shares (EUR)
Grant Date
April 23, 2012
July 25, 2014
October 24, 2014
February 2, 2015
May 5, 2015
July 31, 2015
February 1, 2016
Weighted average
grant-date fair
value of the share
(in Euro)
14.07
22.80
20.43
23.89
25.19
25.32
24.33
Outstanding
as at 1 April
2015
3,970
4,248
1,415
4,027
13,660
13,993
Previous Year
Grants
Cancellation
1,168
8,391
18,586
28,145
9,690
(627)
(2,124)
(2,751)
(1,247)
Transfer in /
(out)
(1,422)
(1,422)
(963)
Delivered
Outstanding
as at 31 March
2016
(1,921)
(2,124)
(707)
(4,752)
(7,813)
708
4,027
1,168
8,391
18,586
32,880
13,660
Restricted shares exclude 20% additional (premium) shares that may be received if shares awarded under the restricted
share rights plan are not sold for a three-year period.
(f)
Method and assumptions for arriving at the Fair Value of Restricted Shares
The fair value of restricted shares is equal to the Fair Value of the stock at grant date net of the present value of
dividends which will not be received up to the vesting date.The expected dividend used is the dividend of the preceding
year.
(g) Number and weighted average grant date fair value of Performance Shares (EUR)
Grant Date
May 3, 2013
October 25, 2013
April 28, 2014
July 25, 2014
October 24, 2014
May 5, 2015
February 1, 2016
Weighted average
grant date fair
value ( in Euro)
23.45
30.38
22.92
22.80
20.43
25.19
24.33
Previous Year
Outstanding
as at 1 April
2015
50,318
967
71,911
4,992
708
1,28,896
66,140
Grants
Cancellation
71,774
1,549
73,323
85,146
(14,741)
(14,340)
(3,186)
(10,509)
(42,776)
17,651
Transfer in /
(out)
(4,740)
(967)
(8,132)
(13,839)
4,739
Delivered
-
Outstanding
as at 31 March
2016
30,837
49,439
1,806
708
61,265
1,549
1,45,604
1,28,896
(h) Method and assumptions for arriving at the Fair Value of Performance Shares
(i)
(j)
The fair value of the performance shares is measured based on Monte-Carlo simulation and the following weighted
average assumptions:
1.
Risk free interest rate
2.
Expected dividend yield
3.
Expected share price volatility
-0.11%
4.00%
25%
Employee Share Purchase Plan:
Under the terms of Employee Share Purchase Plan established by the Holding Company, substantially all employees are
eligible to purchase a limited number of KPNV shares at discounted prices through payroll withholdings, of which the
maximum range is 10% of total salary. Generally, the discount provided to the employees is in the range of 10% to 20%.
A total of 19,110 (Previous year -19,369) shares were bought by employees during the year at an average price of EUR
24 (Previous year - EUR 24).
Expense recognised on account of “Employee Share-Based Payment” is ` 84 (Previous year - ` 106) and carrying
liability as at 31 March 2016 is ` 392 (Previous year - ` 317).
Annual
Report 2015-16
119
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
35
Disclosure relating to Defined Benefit Plans / Long Term Compensated Absences - As per Actuarial Valuation
as on 31 March 2016 and recognised in the financial statements in respect of Retirement Benefits:
Gratuity
Year ended
31 March 2016
Particulars
Funded
A. Present value of obligations as at
beginning of the year
Compensated absences
Year ended
31 March 2015
Unfunded Funded
Provident Fund
Year ended Year ended Year ended Year ended
31 March
31 March
31 March
31 March
2016
2015
2016
2015
Unfunded
550
311
406
263
383
313
3,473
2,649
(1) Current service cost
91
48
68
41
124
104
241
227
(2) Interest cost
44
24
35
23
25
25
11
269
(44)
(37)
(52)
(20)
(108)
(75)
(335)
(312)
-
-
-
-
-
-
-
-
(48)
150
93
9
24
19
-
-
-
-
-
-
-
244
90
(3) Benefits settled
(4) Settlements
(5) Actuarial (gain) / loss
(6) Actuarial (gain) / loss due to
Interest rate guarantee
(7) Employees’ contribution
-
-
-
-
-
-
349
311
(8) Acquisition/Business
Combination/Divestiture
(130)
(385)
-
(5)
(173)
(4)
(781)
-
(9) Change in reserves
-
-
-
-
-
-
-
-
(10) Transfer in
-
-
-
-
-
-
195
239
78
-
-
-
-
-
-
-
541
111
550
311
275
383
3,397
3,473
312
-
274
-
-
-
3,564
2,671
(1) Expected return on plan assets
29
-
25
-
-
-
11
271
(2) Contributions
59
-
68
-
-
-
-
-
(44)
-
(52)
-
-
-
-
-
5
-
-
-
-
-
590
538
(5) Transfer in
-
-
-
-
-
-
195
239
(6) Benefit payments
-
-
-
-
-
-
(335)
(312)
(7) Asset gain / (loss)
(4)
-
(3)
-
-
-
273
158
-
-
-
-
-
-
-
-
(84)
-
-
-
-
-
(827)
-
273
-
312
-
-
-
3,471
3,565
-
-
-
-
-
-
74
91
(11) Past service cost
Present value of obligations as at end
of the year
B. Change in Plan Assets
Plan assets as at beginning of
the year
(3) Benefits settled
(4) Employer
and
contribution
Employee
(8) Settlements
(9) Acquisition/Business
Combination/Divestiture
Plan assets as at end of the year
Surplus
The above surplus of ` 74 (Previous year - ` 91) has not been recognised in the financial statements in accordance with Paragraph 59 of Accounting
Standard (AS15), Employee Benefits, since the surplus is not available to the Company either in form of refunds or as reduction of future contributions.
120
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
Gratuity
Year ended
31 March 2016
Particulars
Funded
C. Actual return on plan assets
Compensated absences
Year ended
31 March 2015
Unfunded Funded
24
-
Unfunded
22
Provident Fund
Year ended Year ended Year ended Year ended
31 March
31 March
31 March 31 March
2016
2015
2016
2015
-
-
-
-
-
(275)
(383)
-
-
D. Reconciliation of present value of the obligation and the fair value of the plan assets:
(541)
(1) Present value of obligations at
end of the year
(111)
(550)
(311)
273
-
312
-
-
-
-
(268)
(111)
(238)
(311)
(275)
(383)
-
-
(1) Current service cost
91
48
68
41
124
104
-
-
(2) Interest cost
44
24
35
23
25
25
(29)
-
(25)
-
-
-
-
-
(2) Fair value of Plan assets
Liability recognised in Balance
Sheet
E. Components of Employer Expense:
(3) Expected return
assets(estimated)
on
plan
(4) Curtailments
(5) Past service cost
(6) Actuarial (gain) / loss
Total expense recognised
Statement of Profit and Loss
in
-
-
-
-
-
-
-
-
-
78
-
-
-
-
-
-
-
(173)
150
97
9
24
19
-
-
11
222
175
73
173
148
-
-
The gratuity and compensated absences expenses have been recognised in “Employee benefits expenses” under note 25 to the Financial Statements.
F.
Assumptions
(1) Discount factor
(2) Estimated rate of return on plan
assets
(3) Mortality
PIL
7.55%
and
PKAPL
7.7%
PIL 7.8%
and
PKAPL
7.8%
PIL 9.0%
and
PKAPL
8.75%
PIL 9.0%
and
PKAPL
8.75%
IALM (2006-08)
Ultimate
7.55%
IALM (2006-08)
Ultimate
None
None
(5) Salary Increase
Management, PMS
and PIC - 11%,
DMC factory - 12%,
MLF factory - 11%,
VLF factory - 11%
PKAPL- 12%
Management, PMS and
PIC - 11%,
DMC factory - 12%,
MLF factory - 11%,
VLF factory - 11%
PKAPL- 12%
(6) Attrition rate
Management, PMS
and PIC - 10%,
DMC factory - 5%,
MLF factory - 4.5%,
VLF factory - 8%
PKAPL CG- 12%
PKAPL Staff-20%
PKAPL Workers-8%
Management, PMS and
PIC - 10%,
DMC factory - 5%,
MLF factory - 4.5%,
VLF factory - 8%
PKAPL CG- 10%
PKAPL Staff-18%
PKAPL Workers-3%
Management and
PIC - 60 years,
Others - 58 years
PKAPL- 58 years
Management and PIC 60 years,
Others - 58 years
PKAPL- 58 years
(4) Disability
(7) Retirement age
7.80%
Annual
Report 2015-16
121
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
G.
Experience Adjustments
Gratuity (Funded)
Description
Year ended
31 March
2016
Defined Benefit Obligations
541
Plan Assets
Surplus/(Deficit)
Experience adjustments on Plan assets/
liabilities (gain) / loss
Year ended
31 March
2015
Year ended
31 March
2014
550
Year ended
31 March
2013
406
Period ended
31 March
2012
368
204
273
312
273
220
155
(268)
(238)
(133)
(148)
(49)
(59)
316
78
89
30
Gratuity (Un Funded)
Description
Year ended
31 March
2015
Defined Benefit Obligations
111
Plan Assets
Surplus/(Deficit)
Experience adjustments on Plan assets/
liabilities (gain) / loss
Year ended
31 March
2014
Year ended
31 March
2013
311
Period ended Period ended
31 March
31 March
2012
2012
263
264
150
-
-
-
-
-
(111)
(311)
(263)
(264)
(150)
148
(22)
(44)
13
25
Provident Fund
Description
Year ended
31 March
2015
Defined Benefit Obligations
3,413
3,489
2,649
2,149
1,650
Plan Assets
3,471
3,564
2,671
2,176
1,703
58
75
22
27
53
(273)
(158)
69
(13)
42
Surplus/(Deficit)
Experience adjustments on Plan assets/
liabilities (gain) / loss
Year ended
31 March
2014
Year ended
31 March
2013
Period ended Period ended
31 March
31 March
2012
2012
Notes:
122
1.
Plan assets comprise of contribution to Group Gratuity Schemes of Life Insurance Corporation of India in case of
gratuity and investments under Philips India Limited Employees’ Provident Fund Plan in case of Provident Fund.
2.
Actuarial (gain) / loss is due to change in actuarial assumptions as stated in 35 F above.
3.
The company provides retirement benefits in the form of Provident Fund, Gratuity, Compensated absences,
Superannuation and other benefits. Provident fund contributions made to “Government Administered Provident
Fund” are treated as defined contribution plan since the Company has no further obligations beyond it’s monthly
contributions. Provident Fund contributions made to “Trust” administered by the Company are treated as Defined
Benefit Plan. As per actuarial valuation, the trust has surplus fund to cover shortfall, if any, on account of guaranteed
interest benefit obligation.
4.
The actuarial valuation in respect of gratuity and compensated absences has been done as at end 31 March 2016. In
case of Mohali Light factory, Healthcare and Software Centre the gratuity liabilities are provided as per the actuarial
valuation and are funded through Group Gratuity Schemes of Life Insurance Corporation of India (LIC) to the extent
requested by LIC.
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2016
Amounts in ` Mln
36
Discontinuing Operations - Demerger:
As part of global restructuring exercise announced by ultimate holding company Koninklijke Philips N.V (KPNV) in September
2014, the proposal for demerger of Lighting business (Demerged Undertaking) was approved by Board of Directors of the
Company on 27th April 2015 and by shareholders in the Court Convened meeting of the shareholders held on 06 July 2015
in Kolkata, India.
In pursuance of the restructuring mentioned above, a Scheme of Arrangement for Demerger (“Scheme”) under Section 391
to 394 and other relevant provisions of the Companies Act, 1956 and Companies Act, 2013, amongst “Philips India Limited”
(Demerged Company) and “Philips Lighting India Limited” (Resulting Company) and their respective shareholders was
approved by the Hon’ble High Court of Calcutta vide order dated 07 January 2016, received by the Company on 29 January
2016, which was filed with the Registrar of Companies and was approved by them on 24 February 2016. In accordance with
the Scheme, the assets and liabilities pertaining to Lighting business were transferred to and vested with Philips Lighting India
Limited with effect from the appointed date i.e. 01 February 2016 and shareholders of the Company were allotted 1 fully
paid equity share of Philips Lighting India Limited for each fully paid equity share held by them in the Company.
Consequent to the demerger;
a) The assets and liabilities of the Demerged Company are reduced at their book value.
b) The difference between the Book Value of assets and Book Value of liabilities of the Demerged Undertaking stands
adjusted against the following, in the order specified below:
i.
Capital reserve account
ii.
Capital redemption reserve account
iii. Securities premium account
iv. General reserve account
c) Share capital of the Resulting Company stands credited with the aggregate face value new equity shares - 57,517,242
of Rs.10/- each -, being the equity shares issued by it to the members of the Demerged Company.
In view of the aforesaid Demerger with effect from 1 February 2016, figures for the current year are not comparable
with those of the previous year.
Business segment “Lighting” as reported in note 31 consists of manufacture and sale of lighting and allied products and
Lighting system solutions.
Lighting business primarily involves local purchase, import, systems solutions and sales of the following PHILIPS brand
products in India:
(i) Lighting and Allied products - light source, special lighting, lighting electronics, switches, professional lighting,
consumer luminaires and anything related to providing lighting products etc.
(ii) Lighting Systems Solutions - Softwares and services, designing and developing applications (Mobile, Enterprise PC
and Cloud), embedded software for lighting systems and solutions, creating user interface designs for application
software, providing support for product and system level testing of software and lighting systems etc, and
(iii) new product introduction in manufacturing sites, technical consultancy and training to market teams for
deployment of lighting systems and developing proof of concept for lighting systems that includes hardware
design and development.
Break-up of aggregate amounts in respect of revenue and expenses
along with pre-tax profit or loss of lighting operations are as follows:
Particulars
Revenue from operations (net)
Operating expenses
Profit / (loss) before tax
Income tax expense
Profit / (loss) after tax
The carrying amounts of the assets and liabilities of lighting operations
transferred to the Resulting Company are as follows:
Discontinuing Operations
Period ended
31 Jan 2016
Year ended 31
Mar 2015
27,003
33,916
(23,795)
(30,413)
3,208
3,503
(1,111)
(1,131)
2,097
As at
31 Jan 2016
2,372
As at
31 Mar 2015
Total assets
9,396
10,029
Total liabilities
6,631
6,050
Net assets
2,765
3,979
Annual
Report 2015-16
123
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2016
36
Amounts in ` Mln
Discontinuing Operations - Demerger: (Contd.)
The net cash flows attributable to the Lighting operations is as follows: Period ended
31 Jan 2016
Net cash inflow / (outflow) from operating activities
4,030
3,490
Net cash inflow / (outflow) from investing activities
(196)
200
Net cash inflow / (outflow) from financing activities
(7)
-
3,827
3,690
Net cash inflow / (outflow)
37
Year ended
31 Mar 2015
Additional disclosure as per Micro, Small and Medium Enterprises Development (MSMED) Act, 2006
The Company has identified enterprises which have provided goods and services and which qualify under the definition of
micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. The details of
overdue amount and interest payable are set out below.
Year ended
31 March 2016
123
205
Amount of interest paid in terms of section 16 of the Micro, Small and Medium
Enterprises Act, 2006 and amounts of payment made to the suppliers beyond the
appointed day during the year.
-
-
Amount of interest due and payable for the period of delay in making payment but
without adding the interest specified under this Act.
-
-
Amount of interest accrued and remaining unpaid at the end of the year.
-
-
Amount of further interest remaining due and payable even in the succeeding
years, until such date when the interest dues as above are actually paid to the small
enterprises.
-
-
a) Principal amount remaining unpaid to any supplier as at the end of the year
b) Interest due on the above amount
38
Disclosure relating to assets given on operating lease: The company has entered into operating lease
arrangements for medical equipments.
Year ended
31 March 2016
a)
Total of future minimum lease payments receivable under non-cancellable
operating lease
Receivable within 1 year
Receivable between 1-5 years
Receivable after 5 years
b)
39
Year ended
31 March 2015
Total contingent rent recognised as income in the Statement of Profit and
Loss for the year
Year ended
31 March 2015
19
26
7
7
12
19
-
-
20
20
In-house Research and Development
The Company has obtained approval of in-house research and development facility located at Sector 57, Noida, UP from
Ministry of Science and Technology, Department of Scientific and Industrial Research (DSIR) for both capital and revenue
expenditure incurred on research & development of the said facility.The objective of scientific research is to improve people’s
life through meaningful innovations. The said facility is also approved under Section 35 (2AB) of the Income-tax Act 1961.
During the financial year 2015-16, the Company has incurred revenue expenditure amounting to ` 209 and capital
expenditure amounting to ` 4 on the said facility.
124
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2016
40
Contingent liabilities and commitments (to the extent not provided for)
Amounts in ` Mln
(a) Contingent liabilities
(i)
Claims not acknowledged as debts by the Company - ` 48 (Previous year - ` 48).
(ii)
In respect of disputed excise demands - ` 19 (Previous year - ` 359), income tax demands - ` 6,268 (Previous
year - ` 4,765) and service tax demands - ` 82 (Previous year - ` 82)
(iii) In respect of suppliers’ / customers’ demands and certain tenancy / customs / sales tax / service tax disputes for
which the liability is not ascertainable.
The Company does not expect any reimbursements in respect of the above contingent liabilities. It is not practicable
to estimate the timing of cash outflows, if any, in respect of (i), (ii), and (iii) above pending resolution of the legal
proceedings.
(b) Commitments
41
Estimated amount of contracts remaining to be executed on capital account and not provided for - ` 74 (Previous
year - ` 87).
Earnings per share
(a) Basic Earnings per share
Calculation of basic earnings per share
Year ended
31 March 2016
Year ended
31 March 2015
Number of shares at the beginning of the year
57,517,242
57,517,242
Total number of equity shares outstanding at the end of the year
57,517,242
57,517,242
Weighted average number of equity shares outstanding during the year
57,517,242
57,517,242
Profit after tax attributable to equity share holders
2,769
3,064
Basic earnings per share (in `)
48.14
53.27
(b) Diluted Earnings per share – In below table, number of shares includes potential equity shares of NIL (previous
year - 46,956,522) on account of compulsorily convertible debentures and profit after tax is adjusted for interest
thereon.
Calculation of diluted earnings per share
Year ended
31 March 2016
Number of shares at the beginning of the year
104,473,764
104,473,764
57,517,242
104,473,764
Total number of equity shares outstanding at the end of the year
Year ended
31 March 2015
104,345,467
104,473,764
Profit after tax attributable to equity share holders
3,308
3,604
Diluted earnings per share (in `)
31.70
34.49
Weighted average number of equity shares outstanding during the year
42
All amounts are in ` Million, figures in this financial statements below `1 million are shown as blank.
43
Previous year’s figures have been regrouped / reclassified wherever necessary to conform to the current year’s classification
/ disclosure.
As per our report of even date attached
For and on behalf of the Board
For B S R & Co. LLP
Chairman
S.M.DATTA
Chartered Accountants
(DIN: 00032812)
ICAI Firm Registration No. 101248W / W-100022
Managing Director
V. RAJA
(DIN: 00669376)
Director & CFO
HARIHARAN MADHAVAN
VIKRAM ADVANI
(DIN: 07217072)
Partner
Director & Company Secretary
RAJIV MATHUR
Membership No.: 091765
(DIN: 06931798)
Mumbai
Mumbai
Date: 25 July 2016
Date: 25 July 2016
Annual
Report 2015-16
125
PHILIPS INDIA LIMITED
Form AOC-I
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of subsidiaries/associate companies/joint
ventures
Part “A”: Subsidiaries
(Information in respect of each subsidiary to be presented with amounts in `)
1.
Sl. No. : 1
2.
Name of the subsidiary: Preethi Kitchen Appliances Private Limited
3.
Reporting period for the subsidiary concerned, if different from the holding company’s reporting period: Same as Holding
Company
4.
Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries. NA
5.
Share capital: ` 1,082 Million
6.
Reserves & surplus: ` 2,696 Million
7.
Total assets: ` 4,751 Million
8.
Total Liabilities: ` 4,751 Million
9.
Investments: NIL
10. Turnover: ` 4,796 Million
11. Profit before taxation: ` (1,202) Million
12. Provision for taxation: NIL
13. Profit after taxation: ` (1,202) Million
14. Proposed Dividend: NIL
15. % of shareholding: 51%
Part “B”: Associates and Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint
Ventures
1.
Sl. No. : 1
2.
Name of associates/Joint Ventures: HealthMap Diagnostics Private Limited
I.
Latest audited Balance Sheet Date: 31.03.2016
II.
Shares of Associate/Joint Ventures held by the company on the year end
a)
Number of shares: 6,300,000
b)
Amount of Investment in Associates/Joint Venture: ` 63,000,000
c)
Extend of Holding %: 35%
3.
Description of how there is significant influence: HealthMap Diagnostics Private Limited (“HealthMap”) is an
Associate company of Philips India Limited. HealthMap has three directors on the Board out of which
two Directors are representatives of Manipal Health Enterprises Private Limited and one Director is a
representative of Philips India Limited, who is also an employee of the Company and any resolution in the
Board of HealthMap can be passed by simple majority,
Philips India Limited does not participate in the day to day operations of HealthMap.
Hence, it can be concluded that the Company has a significant influence over HealthMap but has no control
over the same. Acordingly, HealthMap has been considered as an Associate company of Philips India Limited,
for the purposes of Consolidated Financial Statements.
126
4.
Reason why the associate/joint venture is not consolidated: As detailed in point 3 above, Philips India Limited has
significant influence over HealthMap but has no control over the same, HealthMap is considered as its
Associate company. Accordingly, the financial statements of HealthMap, being an Associate of Philips India
Limited are not proportionally consolidated in the Consolidated Financial Statements of the Company.
Further, the results of HealthMap for the financial Year 2015- 16 have been incorporated in line with
Accounting Standard 23 - Accounting for Investments in Associates in Consolidated Financial Statements,
issued by the Institute of Chartered Accountants of India.
5.
Net worth attributable to shareholding as per latest audited Balance Sheet: ` 35,493,222
6.
Profit/Loss for the year: ` (78,590,795)
I.
Considered in Consolidation:
II.
Not Considered in Consolidation
For and on behalf of the Board
Chairman
S M Datta
(DIN: 0032812)
Managing Director
V Raja
(DIN: 00669376)
Director and CFO
Hariharan Madhavan
(DIN:07217072)
Director and Company Secretary
Rajiv Mathur
(DIN: 06931798)
Mumbai
Date : July 25, 2016
Annual
Report 2015-16
127
PHILIPS INDIA LIMITED
NOTES
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128
Registered Office
Philips India Limited
7, Justice Chandra Madhab Road, Kolkata - 700 020
Tel.: 91-33-4402 4000, Fax : 91-33-2486 7839
Corporate Office
Philips India Limited
8th Floor, 9B Cyber City.
DLF Phase 3, Gurgaon - 122 002, Haryana
Tel.: 91-124-460 6000, Fax : 91-124-460 6666
Northern Region
Philips India Limited
9th Floor, 9B Cyber City.
DLF Phase 3, Gurgaon - 122 002, Haryana
Tel.: 91-124-460 6000, Fax : 91-124-460 6666
Eastern Region
Philips India Limited
7, Justice Chandra Madhab Road, Kolkata - 700 020
Tel.: 91-33-4402 4000, Fax : 91-33-2486 7839
Western Region
Philips India Limited,
Boomerang, B2 Wing, 5th Floor, Unit No. 506,
Chandivali Farm Road, Near Chandivali Studio,
Andheri (East) Mumbai - 400 072
Tel.: 91– 022-6691200
Southern Region
Philips India Ltd
3rd Floor, Western Block, Sunny Side,
Municipal Door No. 8/17, Shafee Mohammed Road,
Rutland Gate, Chennai - 600006
Tel.: 91-44-66501000
Royal Philips
Koninklijke Philips N.V.
Philips Center, Amstelplein2
1096 BC Amsterdam,
P.O. Box 77900
1070 MX Amsterdam,
The Netherlands
Tel.: 31-20-597 7777
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