Philips India Limited – Annual Report 2016 2017 PIL 17
User Manual: Philips Philips India Limited – Annual Report – 2016 – 2017 Investor Relations
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Philips India Limited
` in Mln Sales by Activities- Apr 2016 - Mar 2017
Sales
Others
70000
60000
53,674
58,387
63,755
2.5%
62,819
Personal Health
Innovation Services
50000
23.8%
24.9%
36,723
40000
30000
20000
10000
0
2012-13
2013-14
2014-15
2015-16
2016-17
Health Systems
48.8%
` in Mln Net Worth
Profit Before Tax
7000
6,275
` in Mln
25000
6,278
6000
20,025
20000
17,061
5000
15000
4000
3,252
3,170
3000
2000
10000
5000
2012-13
2013-14
2014-15
2015-16
2016-17
12000
10,362
11,010
Mar 13
Mar 14
Share Capital
Mar 15
Mar 16
Reserves and Surplus
Mar 17
` in Mln
32000
11,327
28000
10000
24000
8000
6,082
6,715
7,390
20000
3,188
2000
3,503
Mar 14
Mar 15
Accumulated Depreciation
Mar 16
Gross Fixed Assets
12000
17,725
18,837
15,142
16,702
8000
977
Mar 13
22,025
16000
5,267
4000
0
0
` in Mln Current Assets
Property, Plant & Equipment
6000
13,034
11,070
1,858
1000
0
17,973
Mar 17
4000
0
5,637
6,293
6,504
Mar 13
Mar 14
Mar 15
Inventories
4,542
4,554
Mar 16
Mar 17
Debtors, Cash & Bank Balances, Loans and Advances
PHILIPS INDIA LIMITED
Board of Directors
CONTENTS
:
2
Notice of Annual General Meeting
:
3
Directors’ Report
: 15
Standalone Financial Statements
Independent Auditors’ Report
: 46
Balance Sheet as at 31 March 2017
: 52
Statement of Profit and Loss for the year ended 31 March 2017
: 53
Statement of Changes in Equity for the year ended 31 March 2017
: 54
Cash flow Statement for the year ended 31 March 2017
: 55
Notes forming part of the Financial Statements
: 57
Consolidated Financial Statements
Independent Auditors’ Report
: 105
Balance Sheet as at 31 March 2017
: 110
Statement of Profit and Loss for the year ended 31 March 2017
: 111
Statement of Changes in Equity for the year ended 31 March 2017
: 112
Cash flow Statement for the year ended 31 March 2017
: 113
Notes forming part of the Financial Statements
: 125
Statement pursuant to Section 129(3) of the Companies Act, 2013
relating to Subsidiary/Associate Companies (AOC-1) : 168
Annual General Meeting on Friday, September 15, 2017 at 11.00 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 2016-17
1
PHILIPS INDIA LIMITED
BOARD OF DIRECTORS
Chairman and Non-Executive Independent Director
S. M. Datta
Vice – Chairman and Managing Director
V. Raja
Whole - Time Director and Company Secretary
Rajiv Mathur
Whole - Time Director and CFO
Hariharan Madhavan
Non-Executive Independent Directors
Vivek Gambhir
Geetu Gidwani Verma
STATUTORY AUDITORS
S. R. Batliboi & 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
REGISTERED OFFICE
3rd Floor, Tower A, DLF IT Park, 08 Block AF, Major Arterial Road,
New Town (Rajarhat), Kolkata, West Bengal- 700156.
2
NOTICE OF ANNUAL GENERAL MEETING
NOTICE is hereby given that the Eighty-Seventh Annual General Meeting of PHILIPS INDIA LIMITED will be held at Vidya Mandir,
1, Moira Street, Kolkata – 700 017 on Friday, September 15, 2017 at 11.00 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, 2017, including the audited Balance Sheet as at March 31, 2017, 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, 2017.
3.
To appoint a Director in place of Mr. Rajiv Mathur (DIN 06931798), who retires by rotation and being eligible, offers himself
for re-appointment.
4.
To ratify the appointment of Statutory Auditors of the Company for a further period of one year and to fix their remuneration
and pass the following resolution:
“RESOLVED THAT pursuant to the provisions of Section 139, 142 and other applicable provisions of the Companies Act, 2013
read with the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof
for the time being in force) and pursuant to the recommendations of the Audit Committee and the Board of Directors,
appointment of M/s S.R. Batliboi & Co. LLP, Chartered Accountants (Firm Registration Number 301003E /E300005), as the
Statutory Auditors of the Company be and is hereby ratified for a further period of one year, from the conclusion of this
Annual General Meeting till the conclusion of the next Annual General Meeting of the Company.
RESOLVED FURTHER THAT the Board of Directors of the Company 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 the Board of Directors of the Company be and are hereby also 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 ratification of appointment of Auditors.”
SPECIAL BUSINESS:
5.
REVISION IN REMUNERATION OF MR.V. RAJA (DIN 00669376)
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 29, 2016, 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. V. Raja, having DIN No. 00669376, Vice – Chairman &
Managing Director, to take effect from 1st April, 2017, 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. V. Raja.
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 set out in the Explanatory
Statement annexed hereto, 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 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.’’
6.
REVISION IN REMUNERATION OF MR. RAJIV MATHUR (DIN 06931798)
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 29, 2016, 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
Annual
Report 2016-17
3
PHILIPS INDIA LIMITED
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, designated as Director and Company Secretary, to take effect from 1st April, 2017, 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.’’
7.
REVISION IN REMUNERATION OF MR. HARIHARAN MADHAVAN (DIN 07217072)
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 29, 2016, 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, Wholetime Director, designated as Director and Chief Financial Officer, to take effect from 1st April, 2017, 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.
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.’’
8.
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 applicable taxes and out of pocket expenses payable to M/s. R. Nanabhoy
& Company, Cost Accountants, having registration number 7464 who have been 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 financial year ending
on 31st March, 2018.
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
Place : New Delhi
Date : July 18, 2017
4
Rajiv Mathur
Director and Company Secretary
DIN No. 06931798
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 to Section 102 of the Companies Act, 2013 in respect of the Special Business
at Item nos. 5, 6, 7 and 8 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 9, 2017 to
September 15, 2017 (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.
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 15, 2017. 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 Agents (“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 Agents, 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, Nanakramguda, Hyderabad-500 032.
Toll Free no. 18 00 3454 001, Tel. +91 040 67162222
Fax no.+91 04023001153
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 Sections 123, 124 and 125 of the Companies Act 2013 (previously 205A (5) of the Companies Act, 1956), 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
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
69
29.09.2016
31.03.2016
06.11.2023
The Ministry of Corporate Affairs has notified provisions relating to unpaid / unclaimed dividend under Sections 124 and
125 of the Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit,Transfer and Refund) Rules,
2016. As per these Rules, dividends which are not encashed / claimed by the shareholder for a period of seven consecutive
years shall be transferred to the Investor Education and Protection Fund (IEPF) Authority. The new IEPF Rules mandate
Annual
Report 2016-17
5
PHILIPS INDIA LIMITED
the Companies to transfer the shares of shareholders whose dividends remain unpaid / unclaimed for a period of seven
consecutive years to the demat account of IEPF Authority. The details of the unpaid / unclaimed amounts lying with the
Company as on September 29, 2016 (date of last Annual General Meeting) are available on the website of the Company
http://www.philips.co.in/a-w/about-philips/investor-relations.html.
In accordance with the aforesaid IEPF Rules, on March 29, 2017, the Company has sent notice to all the shareholders whose
shares are due to be transferred to the IEPF Authority and has also published newspaper advertisement on March 31, 2017
in regard to the same.
Members are requested to contact Karvy Computershare Private Limited for encashing the unclaimed dividends standing to
the credit of their account.
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 87th 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 Karvy
Computershare Private Limited (Karvy).
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.
IV.
The remote e-voting period commences on September 12, 2017 (9:00 a.m.) and ends on September 14, 2017
(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 8, 2017, may cast their vote by remote e-voting.The remote e-voting facility
shall be disabled by Karvy 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 of Members receiving an e-mail from Karvy Computershare Private Limited:
(i)
Launch an internet browser and open https://evoting.karvy.com/
(ii)
Enter the login credentials i.e. User ID and password, provided in the e-mail received from Karvy Computershare
Private Limited. However, if you are already registered with Karvy for e-voting, you can use your existing User ID and
password for casting your vote.
(iii) After entering the above details, click on - ‘Login’.
(iv) Password change menu will appear. Change the Password with a new Password of your choice. The new password
shall comprise minimum 8 characters with at least one upper case (A-Z),one lower case (a-z), one numeric (0-9) and
a special character (@,#,$,etc.) The system will also prompt you to update your contact details like mobile number,
e-mail ID, etc. on first login.You may also enter a secret question and answer of your choice to retrieve your password
6
in case you forget it. It is strongly recommended that you do not share your password with any other person and that
you take utmost care to keep your password confidential. After changing the password, you need to login again with
the new credentials.
(v)
On successful login, the system will prompt you to select the E-Voting Event.
(vi) Select ‘EVENT’ of Philips India Limited - AGM and click on - ‘Submit’.
(vii) Now you are ready for e-voting as ‘Ballot Form’ page opens.
(viii) Cast your vote by selecting appropriate option and click on‘Submit’. Click on ‘OK’ when prompted.
(ix) Upon confirmation, the message ‘Vote cast successfully’ will be displayed.
(x)
Once you have confirmed your vote on the resolution, you cannot modify your vote.
(xi) On the voting page enter the number of shares (which represents the number of votes) as on the cut-off date under
“FOR/AGAINST” or alternatively, you may partially enter any number in “FOR” and partially in “AGAINST” but the
total number in “FOR/AGAINST” taken together should not exceed your total shareholding as on the cut-off date.You
may also choose the option “ABSTAIN” and the shares held will not be counted under either head.
(xii) Members holding shares under multiple folios/demat accounts shall choose the voting process separately for each of
the folios/demat accounts.
(xiii) Voting has to be done for each item of the Notice separately. In case you do not desire to cast your vote on any specific
item it will be treated as abstained.
(xiv) You may then cast your vote by selecting an appropriate option and click on “Submit”.
(xv) A confirmation box will be displayed. Click “OK” to confirm else “CANCEL” to modify. Once you confirm, you will not
be allowed to modify your vote. During the voting period, Members can login any number of times till they have voted
on the Resolution(s).
(xvi) 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, along with attested specimen signature of the duly
authorised signatory(ies) who are authorised to vote, to the Scrutinizer by an e-mail at asimsecy@gmail.com. They
may also upload the same in the e-voting module in their login. The scanned image of the above mentioned documents
should be in the naming format “Corporate Name EVENT NO.”
(B) In case of Members receiving physical copy of the Notice of AGM and Attendance Slip
(i)
(ii)
Initial Password is provided at the bottom of the Attendance Slip in the following format:
USER ID
PASSWORD
-
-
Please follow all steps from Sr. No. (A)(i) to Sr. No. (A)(xvi)mentioned 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 the e-voting website of Karvy Computershare Private Limited i.e. https://evoting.karvy.com/.
(iv) 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.
(v)
The voting rights shall be as per the number of equity shares held by the Member(s) as on Friday, September 8, 2017,
being the cut-off date. Members are eligible to cast vote electronically only if they are holding shares as on that date.
(vi) Members who have acquired shares after 11th August, 2017 i.e. the date considered for dispatch of the Annual Report
and before the book closure may obtain the user ID and Password by sending a request at evoting@karvy.com.
However, if you are already registered with Karvy Computershare Private Limited for remote e-voting, then you can
use your existing user ID and password for casting your vote. If you have forgotten your password, you can reset your
password by using ‘Forgot Password’ option available on https://evoting.karvy.com or contact Karvy Computershare
Private Limited at toll free no. 1-800-3454-001 or e-mail at evoting@karvy.com. In case of any other queries / grievances
connected with voting by electronic means, you may also contact Mr. V. K. Jayaraman of Karvy Computershare Private
Limited, at telephone no. 040-67161662.
Annual
Report 2016-17
7
PHILIPS INDIA LIMITED
15. 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.
16. Dr. Asim Kumar 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.
17. 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.
18. 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.
19. The Results declared along with the report of the Scrutinizer shall be placed on the website of the Company 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
Based on the recommendation of Nomination and Remuneration Committee of the Board, the Board of Directors, at their
meeting held on December 15, 2015, had appointed Mr. V. Raja as the Vice-Chairman and Managing Director of the Company for
a period of 5 years, with effect from December 15, 2015, on the terms and conditions agreed between the Board and Mr. V. Raja.
The appointment of Mr. V. Raja as the Vice-Chairman and Managing Director of the Company was approved by the shareholders
at the Eighty-Sixth Annual General Meeting of the Company held on September 29, 2016.
In view of the annual performance review process followed by the Company, revision in remuneration payable to Mr. V. Raja was
proposed, with effect from April 1, 2017.
The matter regarding revision in the remuneration of Mr. V. Raja was discussed in the Nomination and Remuneration Committee
of the Board and the meeting of the Board of Directors held on July 18, 2017, based on which the approval of the members is
requested for revision in the remuneration of Mr. V. Raja for the balance term of his appointment on the Board.
The details of the present remuneration paid to Mr.V. Raja, along with the proposed remuneration are as below:
1.
Mr. V. Raja 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. V. Raja (prior to the proposed revision) are also mentioned in the table as below:
Remuneration:
Particulars
Present Remuneration
(prior to the proposed revision)
Amount (`)
Comments
Amount (`)
Comments
Total Annual
Fixed
salary
(Guaranteed Cash and Retrials)
34,500,000
-
35,362,500
-
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:
8
Revised Remuneration
(as proposed)
14,145,000
ALL Plan Design :
• Weightage of
Financials 70%;
• Individual 30%
Financials Weightage
70% split as follows:
Particulars
Present Remuneration
(prior to the proposed revision)
Amount (`)
Comments
Revised Remuneration
(as proposed)
Amount (`)
Comments
a) Own level i.e.
Health Tech India
(45%)
a) Own level i.e.
Health Tech India
(45%)
b)
Next
Level
Financials - Health
Tech Global (25%)
Combination
of
CSG, EBIT and
AWOCA.
b)
Next
Level
Financials - Health
Tech Global (25%)
Combination
of
CSG%,
Adjusted
EBITA and AWOCA.
Total Target Cost (Total Fixed
Salary + Target)
48,300,000
-
49,507,500
-
LTI
Annual
Recurring
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
-
49,507,500
-
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)
2,625,000
31,500,000
As
per
Philips
Global Performance
Share plan One time
LTI Sign-on made in
Restricted Shares
spread over 3 years
-
-
Total
92,925,000
-
49,507,500
-
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.
Mr. V. Raja shall be entitled to the following
additional benefits:
• 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 buy-back at 1% of residual
value at the end of a 3 year period. Fuel
and Maintenance is fully covered by the
company.
Annual
Report 2016-17
9
PHILIPS INDIA LIMITED
Particulars
Present Remuneration
(prior to the proposed revision)
Amount (`)
Comments
• 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
Revised Remuneration
(as proposed)
Amount (`)
Comments
• 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 ` 1 Crore.
• Group Term Life Insurance - Cover equal
to 24 month’s salary.
• Club Membership - DLF Golf Club –
Gurgaon.
2.
Minimum Remuneration: Notwithstanding anything stated 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.
All the above perquisites and benefits would be subject to the applicable Company policy.
4.
All other terms and conditions of Mr. V. Raja’s appointment, as approved earlier by the Board and the shareholders, shall
remain unchanged.
The resolution for revision in remuneration of Mr.V. Raja is appropriate and in the best interests of the Company.
Except Mr. V. Raja, 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. 5.
Your Directors recommend the resolutions set forth in item No. 5 for approval of the members.
ITEM NO. 6
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, had appointed Mr. Rajiv Mathur as a Whole time Director of the
Company, with effect from August 18, 2015 till July 31, 2020, which was approved by the shareholders of the Company at the
Eighty – Fifth Annual General Meeting of the Company held on September 28, 2015.
Further, based on the recommendation of the Nomination and Remuneration Committee and the Board of Directors of the
Company, at their meeting held on July 25, 2016, the revision in remuneration of Mr. Rajiv Mathur was approved by the shareholders
of the Company at the Eighty-Sixth Annual General Meeting of the Company held on September 29, 2016.
Mr. Mathur has been responsible for enhancing the legal capabilities within the Company and other companies of the group in the
Indian sub-continent, guiding overall group strategy, conducting several sessions on secretarial and other compliances impacting
the business of the Company.
In view of the above and as per annual performance review process followed by the Company, revision in remuneration payable
to Mr. Rajiv Mathur was proposed, with effect from April 1, 2017.
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 18, 2017, 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 details of the present remuneration paid to Mr. Rajiv Mathur, along with the proposed remuneration are as below:
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)
` 1,144,794 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: ` 429,298
2. House Rent Allowance: ` 214,649
3. Flexible Benefit Plan: ` 428,683
4. Retrial Benefit: ` 72,165 (as set out in
Part B)
`1,203,180 /- 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: ` 451,192
2. House Rent Allowance: ` 225,596
3. Flexible Benefit Plan: ` 450,546
4. Retrial Benefits: ` 75,846 (as set out in
Part B)
Variable
Performance Not exceeding one and half times the Salary,
Linked Bonus
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. Rajiv Mathur shall not be paid sitting fees
for attending meetings of the Board or any
Committee thereof of the Company.
Salary
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 have been
included in the remuneration amount mentioned above.
2.
Minimum Remuneration: Notwithstanding anything stated hereinabove, where in any financial year during the term of office
of Mr. Rajiv Mathur, as Whole-time 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 2016-17
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. 6.
Your Directors recommend the resolutions set forth in item No. 6 for approval of the members.
ITEM NO. 7
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.
Further, based on the recommendation of the Nomination and Remuneration Committee and the Board of Directors of the
Company, at their meeting held on July 25, 2016, the revision in remuneration of Mr. Hariharan Madhavan was approved by the
shareholders of the Company at the Eighty-Sixth Annual General Meeting of the Company held on September 29, 2016.
Mr. Madhavan has been with Philips for over 16 years and has been in various leadership positions in the recent years.Further to
his appointment as CFO of the Company and a member of its Board of Directors, Mr. Madhavan has played a significant role in
driving key initiatives like close focus on collection of receivable, cost optimization and other financial decisions of your Company.
In view of the above and as per annual performance review process followed by the Company, revision in remuneration payable
to Mr. Hariharan Madhavan was proposed, with effect from April 1, 2017.
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 18, 2017, 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 details of the present remuneration paid to Mr. Hariharan Madhavan, along with the proposed remuneration are as below:
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:
Particulars
Salary
Present Remuneration
(prior to the proposed revision)
Revised Remuneration
(as proposed)
` 1,237,500 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: ` 464,063
2. House Rent Allowance: ` 232,031
3. Flexible Benefit Plan: ` 393,788
4. Retrial Benefit: ` 147,618 (as set out in
Part B)
` 1,299,377 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: ` 487,266
2. House Rent Allowance: ` 243,633
3. Flexible Benefit Plan: ` 413,478
4. Retrial Benefit: ` 155,000 (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
12
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
fees for attending meetings of the Board or any
Committee thereof of the Company.
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 have been
included in the remuneration amount mentioned above.
2.
Minimum Remuneration: Notwithstanding anything stated hereinabove, where in any financial year during the term of office
of Mr. Hariharan Madhavan, as the Whole-time Director and CFO, 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. 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. 7.
Your Directors recommend the resolutions set forth in item No. 7 for approval of the members.
ITEM NO. 8
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 on 31st March, 2018.
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. 8 of the notice for
approval of the remuneration payable to the Cost Auditors for the financial year ending on 31st March, 2018.
The Board recommends the Ordinary Resolution set out at item no. 8 of the notice for approval by the members.
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. 8 of the accompanying notice.
By Order of the Board
Rajiv Mathur
Director and Company Secretary
DIN No. 06931798
Place : New Delhi
Date : July 18, 2017
Annual
Report 2016-17
13
ROUTE MAP TO THE VENUE OF THE 87TH ANNUAL GENERAL MEETING
TO BE HELD ON SEPTEMBER 15, 2017 AT 11:00 A.M. AT
VIDYA MANDIR, 1, MOIRA STREET, KOLKATA – 700 017
PHILIPS INDIA LIMITED
14
DIRECTORS’ REPORT
For the financial year ended March 31, 2017
To the Members,
Your Company’s Directors are pleased to present the 87th Annual Report of the Company, along with the Audited Annual
Accounts for the financial year ended March 31, 2017.
1.
FINANCIAL PERFORMANCE
1.1 RESULTS
Gross Income
Profit before tax from continuing operations
Provision for current tax
Deferred tax–Release/(Charge)
Profit after tax from continuing operations
` Million
2016-17
2015-16*
37,408
36,031
3,252
3,056
(1,244)
(1,194)
56
7
2,064
1,869
Profit before tax from discontinued operations
-
3,208
Provision for current tax
-
(1,244)
Deferred Tax- Release/(Charge)
-
133
Profit after tax from discontinued operations
-
2,097
2016-17
2015-16
Personal Health
8,728
10,954
Health Systems
17,936
15,764
9,133
8,024
926
425
36,723
35,167
1.2 SECTORWISE SALES
Innovation Services
Others
Total
* The financial results for the year 2015-16 have been restated to show Lighting as discontinued business.
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 INDIAN ACCOUNTING STANDARDS (Ind AS)
Your Company has adopted Indian Accounting Standards (Ind AS) as per the notification dated February 16, 2015,
issued by the Ministry of Corporate Affairs (MCA). Ind AS has replaced the existing Indian GAAP prescribed under
Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. Your Company
has published financials using Ind AS for the year ended March 31, 2017, along with comparable figures as on March 31,
2016 and Opening Statement of Assets and Liabilities as on April 1, 2015.
The reconciliations and descriptions of the effect of the transition from Indian GAAP to Ind AS have been provided in
the Note 44 to the standalone and Note 47 to the consolidated financial statements.
1.4 FINANCE & ACCOUNTS
Your Company has delivered positive net cash from operations through improved sales performance. Your Company
has not made any major borrowings in this financial year and has managed working capital requirements from internal
cash generation.
Capital expenditure during the year was ` 1,223 million (vis – a – vis ` 929 million during Apr’15 – Mar’16) and this
expense was incurred towards expansion of Philips Innovation Campus and manufacturing facility at Pune, servers and
other IT devices and moulds etc.
During the year, your Company infused an amount of ` 2,698 million into Preethi Kitchen Appliances Private Limited
(‘‘Preethi’’) towards its preference share capital. Further to this infusion and reduction of its equity share capital carried
Annual
Report 2016-17
15
PHILIPS INDIA LIMITED
out by Preethi with the approval of the Hon’ble Mumbai High Court, your Company consolidated its shareholding in
Preethi to 100% and Preethi became a wholly owned subsidiary of your Company with effect from November 22, 2016.
Further, during the year, your Company also invested ` 50 million in equity share capital of Healthmap Diagnostics
Private Limited, joint venture Company and ` 61 million in equity share capital of Philips Home Care Services India
Private Limited, a wholly owned subsidiary of your Company. Your Company has invested its surplus funds in Fixed
Deposits and is earning interest on the same.
During the year, your Company has transferred unpaid dividend of ` 1.24 million to Investor Education and Protection
Fund (IEPF).
2.
DIVIDEND
Your Directors recommend payment of ` 3/- per share (@30%) as dividend on the fully paid equity shares, for the financial
year ended March 31, 2017.This will absorb ` 172.60 million as dividend and ` 35.10 million as dividend distribution tax.
3.
TRANSFER TO RESERVES
In the financial year 2016 -17, your Company does not propose any transfer 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 Consolidated Statement of Profit and Loss Account for the year provide segment results. The required
disclosure is made below for the Health Systems, Personal Health and Innovation Services businesses of your Company.
5.1 HEALTH SYSTEMS
16
Health Systems business of your Company delivered another year of strong performance in 2016-17 with an overall
revenue growth of 13.8% amidst focus on profitability improvement and cost reduction initiatives. A strong performance
in diagnostic imaging, Interventional Guided Therapy and Ultrasound led to the strong growth of the business during
the period. Customer Services revenue continued to register strong growth as well, during the same period. This has
been a remarkable achievement despite the external factors which severely affected the healthcare equipment market
in 2016-17. Significant increase in imports duty of 7%, in 2016-17, was one of the prominent external factors impacting
the business. In 2016-17, it was observed that premium segment customers are tending to Value segment for their new
additions / replacements for faster break even. Further, during the period, Government tenders were deferred and
were on lower side as compared to previous years. The recent GST roll out is expected to lead to price escalation,
which could impact the market affordability further.
During the year, Health Systems business of your Company consolidated its business position in Diagnostic imaging,
interventional X-Ray and ultrasound businesses, while its patient monitoring business saw a decline due to sluggish
market conditions during the year. In the MRI segment, Philips conceded market share due to market preference
towards value 1.5 T MRI, where the presence of competition is relatively strong. During the year, your Company
focused on protecting its margins and to that objective decided to not participate in certain 3T MRI deals with
negligible margins. This focus has resulted in your Company improving its profitability.
In the CT segment, your Company’s share marginally de-grew, led by higher market growth in 16 slice and below (which
is currently about 45% of total CT market) where competition is very stiff due to price sensitivity, Your Company
continues its strong share in the premium segment CT market with Ingenuity CT. The launch of Access CT during FY
2016-17 is expected to grow revenues of your Company in the value segment.
In the Interventional X Ray segment, a slow growth market, your Company’s market share grew marginally during the
year, due to strong demand for Philips’ premium segment of FD 10 and 10C. In 2017-18, the introduction of the cutting
edge Azurion 3 and 7 series, in the premium segment, is expected to garner further share for your Company in the
segment. Moreover, in view of the faster growth trend of value segment market, Philips Intuis is being positioned to
counter Indian Cathlab players.
In Ultrasound, your Company’s market share de-grew due to steep de-growing market till Q3, which showed signs of
rebound in Q4. Your Company continues to be a strong player in Premium Ultrasound market. Due to market factors,
the demand for value segment portfolio was high. The expected new launch of Innosight in FY 2017-18 is expected to
address value segment ultrasound market demand.
Your Company’s Patient monitoring and critical care business also continues to face stiff competition driven by the
increased demand for mid and low-end monitors and top of the line ventilator players, while Philips sustains its
premium segment share in Patient monitors. Your Company has a strong pipeline of value segment product launches
in 2017-18 in Diagnostic imaging, Cathlabs, Ultrasound, Patient Monitoring which would strengthen its market share
further.
Health Systems continued its focus on most of its strategic key accounts, on multi-modality deals and government
tenders. Your Company’s global innovation strengths at Philips Innovation Campus (PIC), Bangalore, along with global
design and manufacturing centre in Healthcare Innovation Campus (HIC), Pune are delivering world-class “Made
in India” medical equipment. During the year, HIC continued to develop and deliver meaningful value segment and
connected care innovations for local and global customers. It is one of the global hubs for Mobile Surgery and X-ray
businesses where Intuis Cathlab and strategic Mobile Surgery products are being manufactured.
Healthmap Diagnostics Private Limited (Healthmap) (your Company’s JV with Manipal Hospitals group, where it holds
35% stake) has set up radiology centers under Public Private Partnership (PPP) model. Healthmap has already set
up 5 centers across Haryana and has major expansion plans in Haryana & Jharkhand.
5.2 PERSONAL HEALTH
The Personal Health business of your Company declined this year by 20.3% over the previous financial year, after last
few years of strong growth. The decline was driven, among other factors, due to amended regulations announced by
Government of India in April, 2016 in online retail space, which impacted the business of the Company and lower
festival sales in traditional and modern trade.
Mixers and Irons also showed decline over previous financial year leading to overall decline of 14.3% in domestic
appliances category. Air Purifiers continued to grow significantly, driven by strong media campaign during periods of
high levels of air pollution. The Air Purifier category grew by over 63% versus previous financial year.
Your Company has built strong category around Personal Care products over the past few years, however, continued
festival discounting during the year lowered the confidence of traditional and modern retailers. The business further
dropped due to entry of low cost players in this category. This resulted in 34.7% decline in Personal Care business,
over the previous financial year.
In the upcoming years, your Company has strong product pipelines and innovations to stay competitive with sustainable
growth.Though your Company could not invest in marketing plans this year due to budget constraints in light of falling
sales, there is a robust plan in place to inject strong enablers backed by multi-channel activation to boost sales and gain
market share.The Company has implemented a new “Go to Market” strategy which would further penetrate into new
category specific channels.
Industrial activity which depicts our local-for-local aspiration, gained momentum with expansion of beauty portfolio.
The Company’s outlook remains to optimally expand industrialization across categories within Personal Health
Division.
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 INNOVATION SERVICES
Philips Innovation Campus (PIC), Bangalore, which initially started as a software center in 1996, is now a critical
innovation center with a focus on delivering meaningful innovations for local and global markets. The evolution of
this expertise is enabled by strategic thought and leadership, working with dedicated, highly qualified and passionate
professionals over the last 20 years.
PIC builds products and solutions across the health continuum starting with healthy living, prevention to diagnosis,
treatment and home based care.
PIC’s software and product innovations enable global advancements in MRI, CT, Advanced Molecular Imaging and
Diagnostic X-Ray. PIC has extensive expertise in cutting-edge technologies such as mobile, digital, cloud, AI, Deep
Learning, Machine learning, big data analytics and IOT to improve patient outcomes through care coordination and
patient empowerment. PIC also engages with the markets to understand their challenges and provide clinically relevant
Annual
Report 2016-17
17
PHILIPS INDIA LIMITED
solutions to make healthcare affordable and accessible in India and other growth geographies like Africa and Indonesia.
Creating experience-centric products and service innovations, PIC has dedicated team focused on harmonizing
software through a common platform approach. They help businesses design, build and launch connected digital health
solutions. Its expertise also include developing solutions that provide connectivity to a range of home appliances from
air purifiers to coffee makers, oral care products for kids and adults, which make consumers’ lives easier in today’s busy
world.
Some market relevant innovations from PIC include:
Heart Safe City:
Heart Safe City is a solution that is developed to address sudden cardiac arrest which claims 6 million lives annually.
Early response and prompt care (Cardiac Pulmonary Resuscitation + defibrillation) plays a key role in improving
survival rates. This subscriber based workflow solution is enabled with the help of a central command center that
ties up Automated External Defibrillator (AED) availability, CPR / AED volunteer network for delivering the first
aid, interfaces with local ambulance service and collaborates with regional hospital network to respond to cardiac
emergency. This working prototype uses cloud infrastructure, GPS technology and mobile applications.
Philips Sonicare Flexcare Platinum Connected:
Philips Sonicare Flex Care Platinum Connected is a Bluetooth based connected tooth brush which works together
with the Philips Sonicare app developed by team at PIC. It is available for both Android and iOS. This app along with
the connected brush helps patients with real-time feedback and personalized coaching to build new, healthy brushing
habits. This connected solution also provides post-brushing analysis of users’ coverage, pressure and scrubbing results,
helping them improve their brushing technique overtime.
During the year, the Sales (Export in Foreign Currency) effected by PIC amounted to ` 9.1 billion (` 8.0 billion in 201516). PIC’s average employee strength during 2016-17 was 3141 Full Time Equivalents (2508 in 2015-16).
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
No material changes and commitments affecting the financial position of the Company occurred between the end of the
financial year to which the financial statements relate and as on the date of this report.
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 VENTURES / ASSOCIATE COMPANIES
As of March 31, 2017, your Company had two wholly owned subsidiaries, Preethi Kitchen Appliances Private Limited (“Preethi”)
and Philips Home Care Services India Private Limited (‘‘Philips Home Care’’) along with a Joint Venture Company, Healthmap
Diagnostics Private Limited (“Healthmap”) within the meaning of Section 2(6) of the Companies Act, 2013 (“Act”).
During the year, your Company further invested an amount of ` 2,698 Million in Preethi by subscribing to its Convertible
Preference shares (“CPS”). Further to this infusion and reduction of its equity share capital carried out by Preethi with the
approval of the Hon’ble Mumbai High Court, your Company consolidated its shareholding in Preethi to 100% and Preethi
became a wholly owned subsidiary of your Company with effect from November 22, 2016.
Further, your Company invested ` 50 Million in the equity share capital of Healthmap and ` 61 Million in the equity share
capital of Philips Home Care in the Financial Year 2016- 17.
Pursuant to provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the
Company’s subsidiaries, Preethi and Philips Home Care, along with Joint Venture Company Healthmap, in Form AOC-1, is
attached as an Annexure to 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 each subsidiary, are available on the website of
the Company.
18
9.
PERFORMANCE OF THE SUBSIDARY COMPANIES
PREETHI KITCHEN APPLIANCES PRIVATE LIMITED (“PREETHI”):
During the year, Preethi launched a new model in Mixer Grinder Category under the name Galaxy, which can grind up to
500 Kg of batter in batches. This model has been developed by Preethi’s Innovation and Development Centre at Chennai.
The product is powered by state-of-the-art Vega W5 Motor which comes with a 5 year Warranty.
Preethi has launched new designer models in Glass Top Stoves (GTS) – Bronze, Inspire & Electra to strengthen the Category.
In Electric Cooker category, new Glitter series has been launched with attractive designs. Preethi has developed Mixer
Grinder series for online category to cater the needs of the online customers. During the year, Preethi converted all the
750 W Motors under a 5 Year Motor Warranty.
Preethi continued to build its relationship with the Trade Partners by conducting Dealers Meet across markets. The
responses received from both the Trade as well as from the Customer are encouraging. Preethi continues to be on growth
path and during the year, achieved growth of 14.2% over the previous financial year.
Preethi continued to be recognized by different agencies for its high quality performance in various parameters and during
the year, it bagged the following Awards:
•
“Longest Mixer Grinder Grinding Marathon” entered in Asia Book of Records and India Book of Records-Preethi was
the only Brand to enter into the books of records in the Kitchen Appliance Category
•
“CII Award” for Active Customer Engagement.
•
“2 Maddys Silver Awards”, “2 Pepper Silver Awards” and “7 Awards at Afaqs Fox Glove Award”.
During the year, Preethi’s manufacturing locations successfully entered Lean Phase III after completing the necessary
requirements and were also certified under OHSAS 18001 and ISO 14001. As part of its continued commitment to improve
safety, Preethi introduced self-bonded Aluminum wire for reducing the exposure to Hazardous chemical in the process,
which is first such initiative in Kitchen Appliances Industry.
The outlook for Preethi looks positive with a strong pipeline of innovations. It is optimistic about increasing its market share
through launch of new models that cater to the customer needs and high trade engagement. It has also initiated steps to
expand its presence in the Large Format Retail Category (LFR) stores.
Preethi has further strengthened the Canteen Stores Department (CSD) Category portfolio by enlisting Glass Top Stoves
(GTS) and Table Top Grinders (TTG).
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.
PHILIPS HOME CARE SERVICES INDIA PRIVATE LIMITED (“PHILIPS HOME CARE”)
In line with the Health Tech vision and to offer products and services across the health continuum, your Company set
up a 100% subsidiary company Philips Homecare Services India Private Limited (Philips Home Care) for chronic disease
management, leveraging learnings on similar project undertaken by Sleep and Respiratory Care team in Japan and pilot in
India under the name “Project Vijay”.
The business of Philips Home Care envisages enrolling patients through physicians, providing home equipment, providing
respiratory therapist / nurse for home visits, monitoring of vital parameters, counseling, rehab backed by a data management
/ clinical decision support backbone based on the eCC platform. Philips Home Care business became operational on
September 1, 2016, with a team of 27 people, which had expanded to 45 employees as of March 2017.
During the period September, 2016 to March, 2017, Philips Home Care served more than 1100 patients and more than 70
physicians had signed up with it for providing the services to the patients.
Under the Respiratory segment, a Care plan is derived based on device given to the patient and the number of respiratory
therapist visits, which range from 2 to 30 visits in a month. A report is sent to the patient’s primary physician after every
visit of the Respiratory therapists, based on various vital parameters noted by the respiratory therapist.
Philips Home Care launched its Critical care segment effective March, 2017 wherein the step down version of ICU is made
in the patient’s home with 24x7 Nurse along with wide range of equipment like BIPAP, Multi para Monitor / pulse oxymeter,
DVT pump, infusion pump, hospital bed, doctor visit, physiotherapist visit and respiratory visit as required in the home
ICU. Patients will be monitored remotely through its App ICCA by the team of doctors centrally with every 6 hour vital
Annual
Report 2016-17
19
PHILIPS INDIA LIMITED
monitoring and report of patient condition will be shared with patient’s primary physician on daily basis.
The outlook of homecare business is very promising and the business expects to expand through new segment called
“Critical care” which was launched in Q1 of FY 2017-18. Philips Home Care will be hiring a medical team of Nurses along
with Nurse Supervisor and Doctor in each city to take care of critical care segment which will be remotely monitored
through its App ICCA. It will be spending highly in marketing in all forms like Digital media as well as print media and also
through conducting Continuing Medical Education sessions with senior Key Opinion Leaders to address their concerns and
making them aware about Philips’ entry into the homecare segment.
10. BUSINESS RESTRUCTURING
During the year, your Company completed the remaining steps related to demerger of its Lighting business to Philips Lighting
India Limited, which had been effected in the previous financial year, pursuant to an Order of Hon’ble Calcutta High Court
dated January 7, 2016. In terms of the provisions of the Scheme of Arrangement for Demerger, Philips Lighting India
Limited allotted to the shareholders of your Company, for every fully paid-up equity share of face value ` 10/- each held by
them, one fully-paid up equity share of face value ` 10/- each of Philips Lighting India Limited. The allotment was made by
Philips Lighting India Limited on April 15, 2016, basis the shareholding data provided to it by your Company as of the Record
date notified for the purpose i.e. April 8, 2016.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year, there was no change in the constitution of the Board of Directors of your Company.
However, after the close of the financial year, on June 11, 2017, Mr. Vikram Mukund Limaye, Non-Executive Independent
Director resigned from the Board of Directors of your Company. Your Directors wish to record their appreciation of
the valuable contributions made by Mr. Limaye to the Board’s deliberations and proceedings during his tenure on the Board.
12. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the financial year, the meetings of the Board were held six times, on April 25, 2016, May 25, 2016, July 25, 2016,
September 28, 2016, December 19, 2016, and February 22, 2017, which were attended by all the Directors in person, except
for Ms. Geetu Gidwani Verma, who was allowed leave of absence for the meetings held on April 25, 2016 and September 28,
2016 and Mr. Hariharan Madhavan, who was allowed leave of absence for the meeting held on September 28, 2016, at their
request.
13. BOARD EVALUATION
The Nomination and Remuneration Committee of your 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, Committees of the Board 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, 2017, 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 performance of the Committees of the Board and Individual Directors of the Company were also
discussed.
The results of the evaluation were shared with the Board, Chairpersons of the respective Committees and the individual
Directors and noted by them.
14. COMMITTEES OF THE BOARD
14.1 AUDIT COMMITTEE
20
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, approval of payment for any other
services rendered by statutory auditors and 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 get 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 Committee also mandatorily reviews information such as internal audit reports related to internal control
weakness, analysis of financial condition and results of operations.
As of March 31, 2017, the Audit Committee of your Company comprised of five members, three of whom are NonExecutive Independent Directors. 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 and Secretary
•
Ms. Geetu Gidwani Verma, Non- Executive Director
Member
There was no change in the composition of the Committee during the year.
The meetings of the Committee were held six times during the year i.e. on April 25, 2016, May 25, 2016, July 25, 2016,
September 28, 2016, December 19, 2016 and February 22, 2017, which were attended by all the Directors in person
except for Ms. Geetu Gidwani Verma, who was allowed leave of absence for the meetings held on April 25, 2016
and September 28, 2016 and Mr. Hariharan Madhavan, who was allowed leave of absence for the meeting held on
September 28, 2016, at their request.
The Chairman of Audit Committee, Mr. S M Datta, attended the Annual General Meeting (AGM) of year Company held
on September 29, 2016 to Chair the AGM and to respond to the shareholders’ queries.
14.2 CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Committee was setup to oversee the corporate social responsibility programs of your Company and other
business related matters referred by the Board or the Chairman, 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 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.
During the year, there was no change in the composition of the Committee. 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 and Secretary
•
Mr. Hariharan Madhavan, Director
Member
During the year, the meettings of the Committee were held three times i.e. on July 25, 2016, October 13, 2016 and
March 17, 2017, which were attended by all the Directors in person except for Mr.V. Raja and Mr. Hariharan Madhavan,
both of whom were allowed leave of absence for the meetings held on October 13, 2016 and March 17, 2017, at their
request.
Your Company was engaged in Corporate Social Responsibility (CSR) initiatives in various fields, during the year 201617, the details of which are set out in Annual Corporate Social Responsibility report attached as Annexure II to the
Board’s report.
14.3 STAKEHOLDERS’ RELATIONSHIP COMMITTEE
The Stakeholders Relationship Committee was constituted by the Board of your Company 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 dematerialization / rematerialization of shares and related matters.
Annual
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PHILIPS INDIA LIMITED
There was no change in the composition of the Committee during the year. The Committee presently comprises of
the following members:-
•
Mr. S M Datta, Non-Executive Director
Chairman
•
Mr. V Raja, Managing Director
Member
•
Mr. Hariharan Madhavan, Director
Member
•
Mr. Rajiv Mathur, Director
Member and Secretary
During the year, the meetings of the Committee were held three times i.e. on May 25, 2016, December 19, 2016 and
February 22, 2017, which were attended by all the Directors, in person.
14.4 NOMINATION AND REMUNERATION COMMITTEE
22
Nomination and Remuneration Committee of your Company 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,
Developing on diversity of Board of Directors, and identification of persons who are qualified to become Directors
and who may be appointed in senior management in accordance with the criteria laid down.
During the year, there was no change in the composition of the Committee. However, after the close of the financial
year, the Committee was re-constituted in the Meeting of the Board held on July 18, 2017 after the resignation of
Mr. Vikram Mukund Limaye from the Board of the Company. The Committee presently consists of the following
members:-
•
Mr. Vivek Gambhir, Non-Executive Director
Chairman
•
Mr. S M Datta, Non-Executive Director
Member
•
Ms. Geetu Gidwani Verma, Non-Executive Director
Member
•
Mr. V Raja, Managing Director
Member
•
Mr. Rajiv Mathur, Director
Member and 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 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 re-appointment of Directors.
•
Recommend to the Board appointment of Key Managerial Personnel (“KMP” as defined under the Act) and
executive team members of the Company (as defined by the 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 meetings of the Committee were held three times i.e. on May 25, 2016, July 25, 2016 and December
19, 2016, which were attended by all the Directors, in person.
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 its 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
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
At Philips, its approach to personalized innovation is reflected in its ways of doing business and the way it runs its workplace.
The four core pillars of HR namely – Business Partner, Talent Acquisition, Learning & Talent Development and Total Rewards
have focused on offering innovative programs and solutions to employees in the financial year 2016-17. The HR function of
your Company has played a vital role in keeping its business at the forefront of successful and meaningful innovation.
In the Talent Acquisition space, your Company rolled out new initiatives to strengthen its Employer brand on campus and in
the job market.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. The Leadership Programs for new hires – BLP (Business Leadership
Program), TLP (Technical Leadership Program) and Sales Trainee Internship offer job opportunities to select talent from
Premiere B-Schools and Technical institutions. This is a good source of talent in the organization at entry levels. Your
Company’s presence at the premier management campuses has been strengthened with activities like 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 an exclusive case study competition.Your Company continued with the fourth
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.
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 your Company’s 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. Your Company launched LEAD India program 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, business and 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 reviewing existing benefits to align with talent market as well as legislation
and drive health and well-being for employees; these included enhanced maternity and child adoption benefits, review
of leave accumulation and encashment to encourage employees to utilize leaves and create work life balance, enhanced
scope of gym reimbursement entitlement to other fitness related activities 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.
Critical milestone in terms of HR digitization was also accomplished with the implementation of the annual compensation
review module in Workday in 2016. Change management and communication was done to ensure a smooth transition.
Salary review cycles and benefits awareness sessions continue as usual. The ongoing focus is to fortify Workday information
integrity and quality such that it is used as the singular source of truth for all employee level data and all their work related
lifecycle information. The HR shared services function continues to consolidate its position as an efficient, scalable and high
quality HR services provider for the India market.
Annual
Report 2016-17
23
PHILIPS INDIA LIMITED
Chakan industrial site for Health Systems has embarked on a lean principles journey and has made significant improvement
in institutionalizing lean philosophy in its culture.Your Company’s focus on enabling right culture to deliver Business growth
continues to drive it in its daily actions. Your Company made significant progress on its Lean journey, it has successfully
completed Phase II exit and is embarking on its journey towards Phase III, in the near future. Industrial Relations were cordial
across all sites of your Company.
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 Section134 (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
Your Company’s Healthcare Innovation Campus (HIC) has been actively involved in implementing Philips Eco Vision program.
Safety of employees is the foremost concern at HIC 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. National Safety and World Environment day are
celebrated every year in the plant to spread awareness and culture within the factory.
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, actively working
and monitoring on risk mitigation initiatives identified by the business leadership for the risks emanating from the external
business environment through a regular cadence, 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, Philips General Business Principles and Risk Management framework.
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 March
31, 2017 and of the profit of the Company for the year ended March 31, 2017;
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 18, 2017 has recommended to the shareholders of the Company, ratification of
appointment of M/s S R Batliboi & Co LLP, Chartered Accountants, as Statutory Auditors of your Company for a further
period of 1 year.
24
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
March 31, 2018, at a remuneration of ` 5,00,000 (Rupees Five Lacs only) plus applicable taxes and out of pocket expenses,
subject to the confirmation of such remuneration by the Members of the Company at its Annual General Meeting.
27. SECRETARIAL AUDIT
The Secretarial Audit was carried out by Mr. Ashok Tyagi, Company Secretaries (PCS Registration No. 7322) for the financial
year ended on March 31, 2017. The Report given by the Secretarial Auditors is annexed as Annexure V and forms integral
part of this Report. There is no qualification, reservation or adverse remark or disclaimer in their Report. During the year
under review, the Secretarial Auditors did not report any matter under Section 143 (12) of the Act, therefore no disclosure
is required under Section 134 (3) (ca) of the Act.
28. PREVENTION, PROHIBITION AND REDRESSAL AGAINST SEXUAL HARASSMENT OF WOMEN
EMPLOYEES AT WORKPLACE POLICY
In compliance of the law laid down by Hon’ble Supreme Court of India in Vishakha v State of Rajasthan and in accordance
with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, (“Act”), your Company
formulated a Prevention, Prohibition and Redressal against Sexual Harassment of Women Employees at Workplace Policy
(“Policy”) and accordingly established a Core Complaints Redressal Committee at the Corporate Office in Gurgaon and
Site Complaint Redressal Committees in Pimpri, Chakan, Bangalore, Mumbai, Chennai and Kolkata.
During the year, no sexual harassment complaints were received by the Committee.
29. CHANGE IN REGISTERED OFFICE OF THE COMPANY
After the close of the Financial Year, with effect from April 15, 2017, your Company shifted its registered office to a new
location within Kolkata. The present registered office address of the Company, after the aforesaid change, is as below:
PHILIPS INDIA LIMITED
3rd Floor, Tower A,
DLF IT Park, 08 Block AF,
Major Arterial Road,
New Town (Rajarhat),
Kolkata, West Bengal – 700156
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 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 : New Delhi
Date : July 18, 2017
Annual
Report 2016-17
25
PHILIPS INDIA LIMITED
Annexure - I
FORM MGT 9
EXTRACT OF ANNUAL RETURN
As on financial year ended on 31.03.2017 [Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the
Companies (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
3rd Floor, Tower A, DLF IT Park, 08 Block AF, Major Arterial Road,
New Town (Rajarhat) Kolkata, West Bengal- 700156, India.
vi
Whether listed company
No
vii
Name, Address & contact details of the
Registrar & Transfer Agent, if any
Karvy Computershare Pvt. Ltd.
Address: Karvy Selenium, Tower-B,
Plot no.31-32, Gachibowli, Financial District,
Nanakramguda, Hyderabad-500 032.
Toll Free no. 18 00 3454 001,
Tel. 040-67162222,
Fax no. 040-23001153,
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 Name & Description of main
No products/services
III
NIC Code of the
Product /service
% to total turnover
of the company
1
Diagnostic imaging equipments
2660
30
2
Software development
5820
25
3
Domestic appliances
2750
14
PARTICULARS OF HOLDING , SUBSIDIARY AND ASSOCIATE COMPANIES
Sl
No
Name & Address of the Company
CIN/GLN
HOLDING/
SUBSIDIARY/
ASSOCIATE
% OF
SHARES
HELD
APPLICABLE
SECTION
1
Koninklijke Philips N.V (KPNV)
N.A
Holding
96.13
2(46)
U36993MH2011PTC213827
Subsidiary
100
2(87)
Philips Home Care Services India Private U74994WB2016PTC215908
Limited.
Subsidiary
100
2(87)
Associate
35
2(6)
High Tech Campus 5, 5656 AE
Eindhoven, the Netherlands
2
Preethi Kitchen Appliances Private
Limited.
Unit No. 506, 5th Floor, Boomerang
Chandivali Farm Road, Powai Mumbai
Maharashtra 400072
3
3rd Floor, Tower A, DLF IT Park, 08
Block AF Major Arterial Road, New
Town (Rajarhat) Kolkata West Bengal
700156
4
Healthmap Diagnostics Private Limited.
The Annexe, # 98/2, Rustom Bagh Hal
Airport Road Bangalore Karnataka
560017, India
26
U85110KA2015PTC079665
IV
SHAREHOLDING PATTERN (Equity Share capital Break up as percentage 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 % change
year i.e. April 1, 2016
i.e. March 31, 2017
during the
year
Demat
Physical
Total
% of Demat
Total
Shares
Physical
Total
% of
Total
Shares
a) Individual/HUF
-
-
-
-
-
-
-
-
-
b) Central Govt.or
State Govt.
-
-
-
-
-
-
-
-
-
c) Bodies Corporates
-
-
-
-
-
-
-
-
-
d) Bank/FI
-
-
-
-
-
-
-
-
-
e) Any other
-
-
-
-
-
-
-
-
-
SUB TOTAL:(A) (1)
-
-
-
-
-
-
-
-
-
(2) Foreign
-
-
-
-
-
-
a) NRI- Individuals
-
-
-
-
-
-
-
-
-
b) Other Individuals
-
-
-
-
-
-
-
-
-
13,028,754
42,261,488
55,290,242
96.13
-
55,290,242
55,290,242
96.13
-
d) Banks/FI
-
-
-
-
-
-
-
-
-
e) Any other.
-
-
-
-
-
-
-
-
-
SUB TOTAL (A) (2)
13,028,754 42,261,488 55,290,242
96.13
0 55,290,242 55,290,242
96.13
-
Total Shareholding of
Promoter
(A)= (A)(1)+(A)(2)
13,028,754 42,261,488 55,290,242
96.13
0 55,290,242 55,290,242
96.13
-
A. Promoters
(1) Indian
c) Bodies Corp.
B. PUBLIC
SHAREHOLDING
(1) Institutions
a) Mutual Funds
-
3,058
3,058
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
-
-
-
-
-
-
-
-
-
h) Foreign Venture
Capital Funds
-
-
-
-
-
-
-
-
-
11
-
11
-
11
-
11
-
-
2,357
11,681
14,038
0.02
2,357
11,681
14,038
0.02
-
b) Banks/FI
i) Others (specify) NBFC
SUB TOTAL (B)(1):
Annual
Report 2016-17
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 % change
year i.e. April 1, 2016
i.e. March 31, 2017
during the
year
Demat
Physical
Total
% of Demat
Total
Shares
Physical
Total
% of
Total
Shares
36,629
12,351
48,980
0.09
30,798
11,831
42,629
0.07
-0.01
-
-
-
-
-
-
-
-
-
781,203
1,239,896
2,021,099
3.51 809,223
1,217,682
2,026,905
3.52
0.01
ii) Individuals
shareholders holding
nominal share capital in
excess of ` 2 lakhs
82,050
-
82,050
0.14
82,050
-
82,050
0.14
-
c) Others (specify) - Trust
17,720
-
17,720
0.03
17,797
-
17,797
0.03
-
21
-
21
0.00
21
-
21
0.00
-
NRI (REP)
15,328
11,884
27,212
0.05
14,166
11,884
26,050
0.05
-
NRI (NON-REP)
15,504
376
15,880
0.03
16,913
597
17,510
0.03
-
SUB TOTAL (B)(2):
948,455
1,264,507
2,212,962
3.85 970,968
1,241,994
2,212,962
3.85
-
Total Public
Shareholding
(B)= (B)(1)+(B)(2)
950,812
1,276,188
2,227,000
3.87 973,325
1,253,675
2,227,000
3.87
-
-
-
-
-
-
-
-
13,979,566 43,537,676 57,517,242 100.00 973,325 56,543,917 57,517,242 100.00
-
(2) Non Institutions
a) Bodies corporates
i) Indian
ii) Overseas
b) Individuals
i) Individual shareholders
holding nominal share
capital upto `2 lakhs
Foreign National
C. Shares held by
Custodian for
GDRs & ADRs
Grand Total (A+B+C)
-
-
(ii) SHARE HOLDING OF PROMOTERS
Sl
Shareholders Name
No.
Shareholding at the beginning of the
year i.e. April 1, 2016
No. of % of total
% of shares
shares
shares
pledged
of the
encumbered
company to total shares
1
Koninklijke Philips N.V.
2
Philips Radio B.V.
Total
28
Shareholding at the end of the year
i.e. March 31, 2017
% change
in share
holding
during the
year
No. of % of total
% of shares
shares
shares
pledged
of the
encumbered
company to total shares
55,290,182
96.13
-
55,290,182
96.13
-
-
60
0.00
-
60
0.00
-
-
55,290,242
96.13
- 55,290,242
96.13
-
-
(iii) CHANGE IN PROMOTERS’ SHAREHOLDING (SPECIFY IF THERE IS NO CHANGE)
Sl.
No.
Share holding at the beginning
of the year
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)
Cumulative Share holding
during the year
No. of Shares
% of total shares
of the company
55,290,242
96.13
No of shares
% of total shares
of the company
There was no change in Promoters’ Shareholding
between 01.04.2016 to 31.03.2017
55,290,242
96.13
Shareholding Pattern of Top Ten Shareholders (other than Directors, Promoters and Holders of GDRs and
ADRs) - as on 31st March 2017 :
Name of Shareholers
Shareholding
Cumulative Shareholding
during the year
No. of shares
% of total shares
of the company
No. of shares
% of total shares
of the company
54,700
0.10
54,700
0.10
Bought during the year
-
-
0
0.10
Sold during the year
-
-
0
0.10
54,700
0.10
54,700
0.10
27,350
0.05
27,350
0.05
0
-
0
0.00
PAYAL BHANSHALI
At the beginning of the year
At the end of the year
VALLABH ROOPCHAND BHANSHALI
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
0
-
0
0.00
27,350
0.05
27,350
0.05
12,000
0.02
12,000
0.02
4,000
-
4,000
0.01
0
-
0
0.00
16,000
0.03
16,000
0.03
10,836
0.02
10,836
0.02
3,208
-
3,208
0.01
PUNIT KUMAR
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
AJAY KUMAR
At the beginning of the year
Bought during the year
Sold during the year
0
-
0
0.00
14,044
0.02
14,044
0.02
13,600
0.02
13,600
0.02
Bought during the year
0
0.00
0
0.00
Sold during the year
0
-
0
0.00
13,600
0.02
13,600
0.02
At the beginning of the year
4,249
0.01
4,249
0.01
Bought during the year
6,537
-
6,537
0.01
10,786
0.02
At the end of the year
SURESH GUPTA
At the beginning of the year
At the end of the year
YOGESH RASIKLAL DOSHI
Sold during the year
At the end of the year
-
0.00
10,786
0.02
Annual
Report 2016-17
29
PHILIPS INDIA LIMITED
Name of Shareholers
Shareholding
Cumulative Shareholding
during the year
No. of shares
% of total shares
of the company
No. of shares
% of total shares
of the company
10276
0.02
10276
0.02
-
-
0
0.00
AMISH NARENDRA SHAH
At the beginning of the year
Bought during the year
Sold during the year
-
-
0
0.00
10276
0.02
10276
0.02
10000
0.02
10000
0.02
Bought during the year
-
-
0
0.00
Sold during the year
-
-
0
0.00
10000
0.02
10000
0.02
10000
0.02
10000
0.02
0
0.00
0
0.00
At the end of the year
HINA KIRTI DOSHI
At the beginning of the year
At the end of the year
HITESH SHANTILAL MEHTA
At the beginning of the year
Bought during the year
Sold during the year
0
-
0
0.00
10000
0.02
10000
0.02
9300
0.02
9300
0.02
Bought during the year
0
-
0
0.00
Sold during the year
0
-
0
0.00
9300
0.02
9300
0.02
At the end of the year
SUSHILA NAYYAR
At the beginning of the year
At the end of the year
*The shares of the Company are traded on a frequent basis and hence the datewise increase / decrease in shareholding is
not indicated.
Change in shareholding of Top 10 Shareholders excluding the promoters at the beginning of the year and at the end of the
year is indicated in the table above.
iv)
Shareholding Pattern of Directors and Key Managerial Personnel
Sr.
No
Shareholding at the beginning
of the year
For each of the Directors and
KMP
Cumulative Shareholding
during the year
No. of Shares
% of total
Shares of the
Company
No. of Shares
% of total
Shares of the
Company
6
-
6
-
At the beginning of the year
1
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.)
There was no change in shareholding of the KMPs
between 01.04.2016 to 31.03.2017
At the end of the year
2
30
V. Raja
6
-
6
-
V
INDEBTEDNESS
Indebtedness of the Company including interest outstanding / accrued but not due for payment
(Amounts in ` Million)
Secured Loans
excluding
deposits
Unsecured
Loans
Deposits
Total
Indebtedness
261
-
261
ii) Interest due but not paid
-
-
-
iii) Interest accrued but not due
-
-
-
261
-
261
Additions
585
-
585
Reduction
(160)
-
(160)
425
-
425
Indebtness at the beginning of the financial
year
i) Principal Amount
Total (i+ii+iii)
Change in Indebtedness during the financial
year
Net Change
Indebtedness at the end of the financial year
i) Principal Amount
686
0
-
686
ii) Interest due but not paid
-
-
-
-
iii) Interest accrued but not due
-
-
-
-
686
0
-
686
Total (i+ii+iii)
VI
REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole time director and / or Manager:
Sl. Particulars of Remuneration
No
Name of the MD/WTD/Manager
V. Raja Rajiv Mathur
1
(Amounts in ` Million)
Total Amount
Hariharan
Madhavan
Gross salary
(a) Salary as per provisions contained in section
17(1) of the Income Tax. 1961.
(b) Value of perquisites u/s 17(2) of the Income tax
Act, 1961
44.90
15.64
25.69
86.23
1.18
0.20
0.93
2.30
-
-
-
-
3.48
16.06
-
-
-
(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
-
-
-
-
5
Others, please specify
-
-
-
-
58.67
15.84
30.10
104.60
Total (A)
Ceiling as per the Act
12.59
` 500.9 Million
Annual
Report 2016-17
31
PHILIPS INDIA LIMITED
B. Remuneration to other directors:
(Amounts in ` Million)
Sl. Particulars of Remuneration
No
1
Independent Directors
Name of the Directors
S. M Datta
Total
Amount
Vivek Geetu Gidwani
Vikram
Gambhir
Verma Mukund Limaye
(a) Fee for attending Board, Committee
meetings
0.36
0.38
0.22
0.18
1.14
(b) Commission
1.00
0.80
0.80
0.80
3.40
(c) Others, please specify
Total (1)
2
1.36
1.18
1.02
0.98
4.54
Other Non Executive Directors
-
-
-
-
-
(a) Fee for attending Board, Committee
meetings
-
-
-
-
-
(b) Commission
-
-
-
-
-
(c) Others, please specify.
-
-
-
-
-
Total (2)
-
-
-
-
-
Total (B)=(1+2)
1.36
1.18
1.02
0.98
4.54
Total Managerial Remuneration
4.54
Overall Ceiling as per the Act
C.
` 50.09 Million
REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD
Sl. Particulars of Remuneration
No.
1
Gross Salary
Key Managerial Personnel
V. Raja
Rajiv Mathur Hariharan
Madhavan
Total
Total
(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
Information disclosed in point A above.
as % of profit
others, specify
5
Others, please specify
Total
VII PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES
There were no penalties, punishment or compounding of offences by the Company during the year ended March 31, 2017.
For and on behalf of the Board
Place: New Delhi
Date: July 18, 2017
32
S .M. DATTA
Chairman
(DIN: 00032812)
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 your Company, pursuant to the provisions of Section 135 of
the Companies Act, 2013 and the rules notified thereunder.
The CSR Policy of your Company is accessible on its website by following the link http://www.philips.co.in/bdam/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
program of your Company, in the last few years, has been on healthy living and providing access to quality
healthcare facilities to the underprivileged, who do not have access to the same. The state of health of
women and children in India is dismal, especially in urban slums and rural areas. Through its CSR initiatives
your Company pledges its support to the Health and welfare of Women and Children in India.
During the year, the focus of your Company’s CSR programs was on improving maternal and child health
services and livelihood opportunities across different states of the country through 7 running projects, the
details of which are mentioned in the report.
Through its community centers and mobile vans your Company has worked towards better reproductive,
maternal, newborn, child and adolescent health.Your Company is now working closely with NGOs like Dasra,
Mamta and Smile Foundation and adopting a strategic and holistic approach to ensure positive outcomes
for its social investment programs. Under this umbrella, surgeries of underprivileged children affected by
CHD (Congenital Heart Disease) was also taken up by Aishwarya Trust.
Further, the women centric skill centers operated by the Company in partnership with the NGOs,
target prospective candidates in the age group of 18-25 who have dropped out of school, junior college
and sometimes even graduates, without the requisite skills needed for employment, as well as assist in
employment.
During the year, your Company won the Certificate of “Best CSR Practice in Healthcare” for HIM Campaign
@ ABP News Healthcare Leadership Awards. Your Company’s efforts in improving maternal and child
health through its CSR Programs were appreciated by Smt. Anupriya Patel, Honorable Minister of State for
Health and Family welfare at BISICON 2016. Environment preservation through tree plantation and rural
livelihood program was undertaken through Sankalptaru Foundation.
2.
The Composition of the CSR Committee:
The composition of the CSR Committee of the Board is as below:
1.
Mr.Vivek Gambhir, Non-Executive Director
Chairman
2.
Mr.V Raja, Managing Director
Member
3.
Mr. Rajiv Mathur, Director
Member
4.
Mr. Hariharan Madhavan, Director
Member
3.
Average net profit of the Company for last three financial years: ` 4,938 Million
4.
Prescribed CSR Expenditure (two per cent. of the amount as in item 3 above): ` 98.76 Million
5.
Details of CSR spent during the financial year:
(a)
Total amount to be spent for the financial year; ` 98.76 Million
(b)
Amount unspent, if any: Your Company contributed the entire CSR Corpus of ` 98.76 Million on the CSR
Projects. An amount of ` 74.68 Million was spent towards CSR activities. Further, for an amount of `
24.08 Million, pertaining to CSR activities carried out during the year, the payment for which could
not be released before the end of the year, a provision was created in the books of accounts of your
Company.
(c)
Manner in which the amount was spent during the financial year is detailed below:
Annual
Report 2016-17
33
PHILIPS INDIA LIMITED
34
S.
CSR project or
Sector in which Projects or
No. activity identified the project is
programme
Program
covered
(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
1
Program with
Healthcare and
Impact Foundation Medical facilities
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.
The Project was
implemented
through centres
operated by
Mamta at Delhi
and Sneha at
Mumbai.
` 20.4 Million for
period April 1,
2016 to March
31, 2017
` 20.4 Million
` 21.66 Million
was spent on
the activities
forming part
of the Project.
This included an
amount of ` 18.4
Million towards
direct expenses
on the activities
forming part
of the Project
and ` 2 Million
towards Project
Development Fee
and overheads.
In addition, an
amount of ` 1.26
Million, being part
of the overheads
incurred on the
CSR Projects of
your Company,
has been
apportioned
towards this
Project.
The amount has
been spent in
partnership with
the NGO, Impact
Foundation, who
carried out the
activities towards
the Project
through NGOs
Mamta and Sneha.
2
Program for
accessible
healthcare with
Smile FoundationMobile vans at
Chennai, Bangalore,
Kolkata and Pune.
In addition to
the above, the
Company operated
Employability
Program with Smile
Foundation for
underprivileged
Young Women,
skill development
of underprivileged
young women
through centres
operated by Smile
Foundation
The project
is operating
at Chennai,
Bangalore,
Kolkata and Pune.
` 17.52 Million
for period April
1, 2016 to March
31, 2017
` 11.67 Million
` 12.39 Million
was spent directly
on the activities
forming part
of the Project.
In addition, an
amount of `
0.72Million,
being part of
the overheads
incurred on the
CSR Projects of
your Company
has been
apportioned
towards this
Project.
The amount has
been spent in
partnership with
the NGO, Smile
Foundation, who
has carried out
the activities
forming part of
the Project.
Healthcare and
Medical facilities
and promotion of
Education
Cumulative
expenditure
up to the
reporting
period
Amount
spent: Direct
or through
implementing
agency
S.
CSR project or
Sector in which Projects or
No. activity identified the project is
programme
Program
covered
(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
3
Program with
Aishwarya
Foundation –
carrying out
operations for
children below
the poverty line,
suffering from
Congenial Heart
Disease (CHD)
The project was
operational in the
city of Chennai
and surrounding
areas
` 2.0 Million for
period April 1,
2016 to March
31, 2017
` 2.0 Million was ` 2.12 Million
spent directly
on the activities
forming part
of the Project.
In addition, an
amount of ` 0.12
Million, being part
of the overheads
incurred on the
CSR Projects of
your Company
has been
apportioned
towards this
Project.
The expenses on
the surgeries for
children suffering
from CHD
were incurred in
partnership with
Aishwarya Trust,
NGO.
4
Program with
Healthcare and
Mamta- Community Medical facilities
centres for Women
to promote
health seeking
behaviour, adopting
a holistic approach
to care through
Reproductive,
Maternal, Newborn,
Child and
Adolescent Health
(RMNCHA) cycle
with a mental
health component.
Centres at Pune
(Maharashtra),
Blore (Karnataka),
Sahibgunj
(Jharkhand) and
Khagaria (Bihar)
The Project was
operational in
the following
locations: Pune,
Bangalore,
Sahibgunj
(Jharkhand) and
Khagaria (Bihar)
` 16.77 Million
for period April
1, 2016 to March
31, 2017
` 9.78 Million
` 10.38 Million
was spent directly
on the activities
forming part
of the Project.
In addition, an
amount of ` 0.60
Million, being part
of the overheads
incurred on the
CSR Projects of
your Company
has been
apportioned
towards this
Project.
The expenses
on the activities
forming part of
the CSR Project
were incurred in
partnership with
the NGO, Mamta.
5
HIM Campaign for
raising awareness
with respect to
Breast Cancer
This campaign,
part of overall
CSR programme
of the Company
has carried out
an awareness
campaign through
media. Material
produced by the
Company was
circulated in print
media, television
broadcasts and
through social
media channels
including YouTube.
Nukkad Nataks
or Street plays
and checkup
camps screenings
with the Asha
Jyoti van and
leveraging our
community
centres and
mobile vans
were part of this
campaign
` 25.10 Million
for period April
1, 2016 to March
31, 2017
An amount of
` 24.55 Million
23.13 Million
was spent on
the activities
forming part
of the project.
In addition, an
amount of ` 1.42
Million, being part
of the overheads
incurred on the
CSR Projects of
your Company
has been
apportioned
towards this
Project.
The expenses
on this campaign
have been spent
directly by the
Company.
Health and
Medical Facilities
Healthcare and
Medical facilities
Cumulative
expenditure
up to the
reporting
period
Amount
spent: Direct
or through
implementing
agency
Annual
Report 2016-17
35
PHILIPS INDIA LIMITED
S.
CSR project or
Sector in which Projects or
No. activity identified the project is
programme
Program
covered
(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
6
` 4.2 Million for
period April 1,
2016 to March
31, 2017
The expenses
` 1.38 Million
of 1.3 Million
were incurred
on the activities
forming part
of the project.
In addition, an
amount of ` 0.08
Million, being part
of the overheads
incurred on the
CSR Projects of
your Company
has been
apportioned
towards this
Project.
The expenses
were incurred
by the Company
in partnership
with Sankalp Taru
Foundation.
` 2.2 Million for
period April 1,
2016 to March
31, 2017
2.06 Million was ` 2.19 Million
spent directly
on the activities
forming part
of the Project.
In addition, an
amount of ` 0.13
Million, being part
of the overheads
incurred on the
CSR Projects of
your Company
has been
apportioned
towards this
Project.
The payments
were made to Dr.
Shroff’s Charity
Eye Hospital,
who carried out
the activities
on behalf of the
Company.
Campaign in
partnership with
Sankalp Taru
Foundation for
Tree plantation and
livelihood creation
Environment
preservation
Philips, in
partnership
with Sankalp
Taru Foundation
implemented a
drive towards a
Greener India
that breathes
Cleaner Air.
As part of the
initiative, trees
were planted
and will be
maintained on
an ongoing basis
in various cities
and rural areas
across India while
also supporting
rural livelihood,
empowering
women and
promoting biodiversity.
Cumulative
expenditure
up to the
reporting
period
Amount
spent: Direct
or through
implementing
agency
Employees of the
Company were
also encouraged
to participate
and turned up in
good numbers at
both Delhi and
Bangalore
7
Campaign for
eradication of
avoidable blindness
in partnership with
Dr. Shroff’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
In addition to the expenses of ` 74.68 Million, as detailed above, a provision of ` 24.08 Million was created during the year, towards activities
undertaken during the year as part of the CSR programs of the Company – with Impact Foundation (` 22.78 Million) and Smile Foundation (`
1.3 Million), the payment for which could not be made during the year.
*Give details of implementing agency: The details are listed above.
36
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 ` 98.76 Million towards CSR activities, in terms of the
provisions of Section 135 of the Companies Act, 2013. During the year, the Company spent an amount of `
74.68 Million on the CSR Projects and related activities, as detailed above. As mentioned above, in addition
to the same, a provision was created in the books of accounts, for the balance amount of ` 24.08 Million, to
cover the activities that were carried out by Impact Foundationand Smile Foundation during the year, but
for which the payment to the NGOs concerned could not be made.Therefore, no amount remained unspent
during the year.
7.
We hereby declare that implementation and monitoring of the CSR policy are in compliance with CSR objectives and policy
of the Company.
Vivek Gambhir
Non- Executive Director
Chairman, CSR Committee
(DIN: 06527810)
Rajiv Mathur
Director and Company Secretary
Member, CSR Committee
(DIN: 06931798)
Date : July 18, 2017
Place : New Delhi
Annual
Report 2016-17
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 2017.
A.
ENERGY CONSERVATION
The following measures were implemented during the Financial Year 2016-17:
1.
2.
Steps taken or impact on conservation of energy
a)
Installation of energy efficient Variable Refrigerant Volume (VRV) system for maintaining controlled environment at the
shop floor.
b)
Insulation of shop floor building to reduce heat loss on the VRV system.
c)
Motion / Occupancy sensors installed at office and conference rooms.
d)
Identification of lighting circuits with adequate visuals to ensure focused lighting utilization.
e)
Various initiatives were made by Company to maintain Unity Power Factor.
Steps taken by the Company for utilizing alternate sources of energy
For the last few years your Company, at its Healthcare Innovation Campus (HIC), Pune, has been using the solar powered
lights to light up the streets. This has helped your Company to conserve resources and make its contribution to the
environment.
3.
The Capital Investment on energy conservation on equipment
The Company has invested ` 23.5 Million during this year on Capex for energy saving equipment.
B.
RESEARCH & DEVELOPMENT (R & D)
1.
Your Company continues to derive the sustainable benefits from the strong foundation and long tradition of Research
and development. During the year, your 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 towards the same. Your Company’s R & D
laboratories have been instrumental in providing it with a sustainable competitive advantage through application of Science
and Technology.
2.
Benefits derived as a result of above efforts:
Some of the products/ solutions developed by your Company, utilizing its R&D capabilities are as below:
3.
i)
Heart Safe City is a subscriber based workflow solution enabled with the help of a central command center that ties up
Automated External Defibrillator (AED) availability, CPR/AED volunteer network for delivering the first aid, interfaces
with local ambulance service and collaborates with regional hospital network to respond to cardiac emergency.
ii)
Philips Sonicare Flex Care Platinum through an app helps patients with real-time feedback and personalized coaching
to build new, healthy brushing habits. This connected solution also provides post-brushing analysis of users’ coverage,
pressure and scrubbing results, helping them improve their brushing technique over time.
Future plan of action
i)
4.
Continue to engage in design & development of new generation Cath Labs, mobile surgery and diagnostic X-ray
equipment segment.
Expenditure incurred on R&D
During the year, your Company has incurred an expenditure of ` 49 Million on activities related to research and development.
C.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
The details of some of the steps taken by your Company for absorption of technology, adapting to the same in its operations
and the innovations made during the year, have been included in the R&D section above.
D.
FOREIGN EXCHANGE EARNINGS & OUTGO (CASH BASIS)
During the year, total inflows (on cash basis) in foreign exchange was `11132.72 Million and total outflows (on cash basis)
in foreign exchange was ` 15129.49 Million.
38
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, 2017, 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
Philips
Medical
Systems
Nederland
B.V.
Purchase of
goods
Yearly
Based on Transfer
Pricing guidelines
Not Applicable, Not Applicable 2,861
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Sale of Services
Yearly
Based on Transfer
Pricing guidelines
Not Applicable, Not Applicable 2,378
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Sale of goods
Yearly
Based on Transfer
Pricing guidelines
Not Applicable, Not Applicable 1,993
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Fellow
Subsidiary
Company
Philips
Electronics
Nederland
B.V.
Fellow
Subsidiary
Company
Philips
Medical
Systems
Nederland
B.V.
Fellow
Subsidiary
Company
Amount
paid as
advances, if
any
Value of
Transactions
during the
year ended
March 31,
2017
(` Millions)
Annual
Report 2016-17
39
PHILIPS INDIA LIMITED
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
Philips
Healthcare
Informatics,
Inc.
Sale of Services
Yearly
Based on Transfer
Pricing guidelines
Not Applicable, Not Applicable 1,916
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Sale of Services
Yearly
Based on Transfer
Pricing guidelines
Not Applicable, Not Applicable 1,727
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Purchase of
goods
Yearly
Based on Transfer
Pricing guidelines
Not Applicable, Not Applicable 1,707
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Purchase of
goods
Yearly
Based on Transfer
Pricing guidelines
Not Applicable, Not Applicable 1,586
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Fellow
Subsidiary
Company
Philips
Medical
Systems
Nederland
B.V.
Fellow
Subsidiary
Company
Philips
Electronics
Singapore Pte
Ltd.
Fellow
Subsidiary
Company
Philips
Consumer
Lifestyle B.V.
Fellow
Subsidiary
Company
Amount
paid as
advances, if
any
Value of
Transactions
during the
year ended
March 31,
2017
(` Millions)
# 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 : New Delhi
Date : July 18, 2017
40
Annexure - V
FORM NO. MR.3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2017
[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}
3rd Floor, Tower A, DLF IT Park,
08 Block AF Major Arterial Road,
New Town (Rajarhat) Kolkata,
West Bengal - 700156
SECRETARIAL AUDIT REPORT
I have conducted the Secretarial Audit of the compliances for the financial year ended March 31st, 2017of 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, 2017, 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, 2017 according to the provisions of:
•
The Companies Act, 1956 / the Companies Act, 2013 and Rules made under that Act (“the Act”);
•
The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; Not applicable to the
Company for the year under review;
•
The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
•
The Foreign Exchange Management Act, 1999 (FEMA) and the rules and regulations made there under to the extent of
Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
The following regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):
•
The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 - Not
applicable to the Company during the Audit Period;
•
The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; Not applicable to the
Company for the year under review;
Annual
Report 2016-17
41
PHILIPS INDIA LIMITED
42
•
The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 - Not
applicable to the Company during the Audit Period;
•
The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 - Not applicable to the
Company during the Audit Period;
•
The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 - Not applicable to the Company
during the Audit Period;
•
The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993, regarding
the Companies Act, 2013 and dealing with client; Not applicable to the Company during the Audit Period;
•
The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 and The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 - Not
applicable to the Company during the Audit Period;
•
The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 - Not applicable to
the Company during the Audit Period.
•
The Secretarial Standards issued by the Institute of Company Secretaries of India;
•
The Memorandum and Articles of Association of the Company;
•
The Negotiable Instrument Act, 1881;
•
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 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;
•
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 86th Annual General Meeting of the Company on September 29, 2016;
(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)
Disclosure of interests and concerns in contracts and arrangements, shareholdings and directorships in other companies and
interest in other entities by the Directors;
(i)
Appointment, re-appointment and retirement of Directors including the Managing Director and Executive Directors and
payment of remuneration to them.
(j)
Appointment and Remuneration of Auditors;
(k)
Board’s Report for the financial year under review;
(l)
Reconstitution of the Statutory Committees, if required;
(m) Declaration and Payment of Dividend;
(n)
Borrowings and Registration, Modification and Satisfaction of Charges, wherever applicable;
(o)
There are adequate systems and processes in the Company that are commensurate with the size and operations of the
Company to monitor and ensure compliance with all applicable laws, rules, regulations and guidelines;
(p)
Deposit of both the Employees and Employers contribution relating to Provident Fund;
(q)
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);
(r)
Appointment of Internal Auditor as per the provisions of Section 138 of the Companies Act, 2013;
(s)
Appointment of Key Managerial Personnel as per Section 203 the Act;
I further report that:
(1)
Based on examination of the records and documents of the Company, we observed that :
a.
The Company, during the course of its internal reconciliation observed that in some transactions, credits had been
wrongly transferred from a Customer to the account of a Channel Partner. This transaction was understood to have
been mistakenly carried out.
b.
The matter has been taken up with the Channel Partner concerned, who has acknowledged a liability of ` 2.93 crores
after all adjustments.
c.
The management has informed us that the matter was under investigation and the Company has already initiated
recovery proceedings against the Channel Partner for the aforesaid amount.
(2)
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.
(3)
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.
Annual
Report 2016-17
43
PHILIPS INDIA LIMITED
(4)
Majority decisions are carried as there was no dissent raised by any member of the Board.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, the Company has following events having major bearing on the Company’s
affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc.:
1.
The Company has incorporated a new 100% subsidiary for healthcare business with name “Philips Home Care Services India
Private Limited”.
2.
The Company has appointed KPMG for forensic audit of Sharepro and has appointed Karvy Computershare Private Limited
as its new RTA.
3.
The Company has made an additional investment of an amount of ` 5 crores in Healthmap Diagnostics Pvt. Ltd.
4.
An additional investment of an amount of ` 269.80 crores was made by the Company in Preethi Kitchen Appliances Pvt. Ltd.
5.
Shifting of registered office of the Company within the local Municipal limits of Kolkata.
CS Ashok Tyagi
Company Secretaries
FCS No: 2968
C P No: 7322
Place: New Delhi
Date: July 18, 2017
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
The Members,
Philips India Limited
{CIN: U31902WB1930PLC006663}
3rd Floor, Tower A, DLF IT Park,
08 Block AF Major Arterial Road,
New Town (Rajarhat) Kolkata,
West Bengal - 700156
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.
I 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.
I 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.
CS Ashok Tyagi
Company Secretaries
FCS No: 2968
C P No: 7322
Place : New Delhi
Date : July 18, 2017
Annual
Report 2016-17
45
PHILIPS INDIA LIMITED
Independent Auditor’s Report
To the Members of Philips India Limited
Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Philips India Limited (“the Company”), which
comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including the statement of Other
Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended,
and a summary of significant accounting policies and other explanatory information.
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 of these Ind AS financial statements that give a true and fair view of
the financial position, financial performance including other comprehensive income, cash flows and changes in equity
of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting
Standards (Ind AS) specified under section 133 of the Act. read with the Companies (Indian Accounting Standards)
Rules, 2015, as amended.This responsibility also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of 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 the design, implementation and maintenance of adequate internal financial
control that were operating effectively for ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these Ind AS 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
of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute
of Chartered Accountants of India, as 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 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 Ind AS 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 Ind
AS 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 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 Ind AS 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 Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the Ind AS 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
March 31, 2017, its profit including other comprehensive income, its cash flows and the changes in equity for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1.
46
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 the Annexure 1 a statement on the
matters specified in paragraphs 3 and 4 of the Order.
Standalone
2.
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 purpose 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, Statement of Profit and Loss including the Statement of Other Comprehensive Income,
the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement
with the books of account;
(d) In our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards specified
under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as
amended;
(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on
record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, 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 2” to this report;
(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 Ind AS
financial statements – Refer Note 30 and 16 to the Ind AS 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 were no amounts which were required to be transferred to the Investor Education and
Protection Fund by the Company.
iv.
As per books of accounts of the Company and as represented by the management of the Company,
the Company did not have cash balance as on November 8, 2016 and December 30, 2016 and had no
cash dealings during this period (refer note 45)
Other Matter
The comparative financial information of the Company for the year ended March 31, 2016 and the transition date
opening balance sheet as at April 01, 2015 included in these standalone Ind AS financial statements, are based on the
previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards)
Rules, 2006 audited by the predecessor auditor whose report for the year ended March 31, 2016 and March 31, 2015
dated July 25, 2016 and August 18, 2015 respectively expressed an unmodified opinion on those standalone financial
statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the
Ind AS, which have been audited by us.
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
______________________________
per Manoj Kumar Gupta
Partner
Membership Number: 83906
Place of Signature: Gurgaon
Date: July 18, 2017
Annual
Report 2016-17
47
PHILIPS INDIA LIMITED
Annexure 1 referred to in paragraph 1 under “Report on Other Legal and Regulatory Requirements” section of
our report of even date
Re: Philips India Limited
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the
fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme
of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets.
No material discrepancies were noticed on such verification
(c) According to the information and explanations given by the management, the title deeds of immovable properties
included in property, plant and equipment/ fixed assets are held in the name of the company.
(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification
is reasonable. For stocks lying with third parties at the year end, written confirmations have been obtained. No material
discrepancies were noticed on such physical verification.
(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. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the
Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the
Companies Act 2013 in respect of loans to directors including entities in which they are interested and in respect of loans
and advances given, investments made and, guarantees, and securities given have been complied with by the company.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies
(Acceptance of Deposits) Rules, 2014 (as amended).Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central
Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the
manufacture of Healthcare Products, and are of the opinion that prima facie, the specified accounts and records have been
made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund,
employees’ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and
other statutory dues applicable to it.
(vii) (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident
fund, employees’ state insurance, income-tax, , service tax, sales-tax, duty of custom, duty of excise, value added tax,
cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date
they became payable.
(vii) (c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, duty of custom, duty of excise,
value added tax and cess on account of any dispute, are as follows:
Name of the
statute
Amount (Rs.
in million)
Period to
which the
amount
relates
Forum where
dispute is pending
Custom Act, 1962
Custom duty Including interest and
Penalty where Applicable
108.58
2015-16
Appellate authority
upto Commissioner
(Appeals)
Central Excise Act,
1944
Excise duty including interest and
Penalty where applicable
10.70
2009-2010 to
2013-14
Appellate authority
upto Commissioner
(Appeals)
13.20
Above 7 year
Appellate authority
upto Commissioner
(Appeals)
16.00
Above 7 year
Tribunal
15.70
Above 7 year
High Court
16.16
2014-15
161.48
2004-2005 to
2013-14
1,115.32
1986-87 to
2016-17
Appellate authority
upto Commissioner
(Appeals)
276.57
1986-87 to
2014-2015
Tribunal
Service tax, Finance
Act, 1994
Central Sales Tax Act,
1956 and Individual
State Sales Tax Act
48
Nature of dues
Standalone
Service tax including interest and
Penalty where applicable
Sales Tax including Interest and
penalty where applicable
Appellate authority
upto Commissioner
(Appeals)
Tribunal
Name of the
statute
Income Tax Act , 1961
Nature of dues
Income tax disallowances and
transfer pricing additions Including
interest and Penalty where applicable
Amount (Rs.
in million)
Period to
which the
amount
relates
6.53
1998-1999 to
2006-2007
High Court
1,828.35
A.Y.2013-14
Appellate authority
upto Commissioner
(Appeals)
3,363.14
A.Y.2011-12
& 2012-13
Tribunal
34.80
A.Y.2003-04
High Court
902.78
196.79
Forum where
dispute is pending
A.Y.2006-2007 Tribunal
to 2010-11
A.Y.2002-03
to 2004-05
Appellate authority
upto Commissioner
(Appeals)
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted
in repayment of loans or borrowing to a financial institution or bank. The Company did not have any outstanding loans or
borrowings towards the Government or debenture holders.
(ix) According to the information and explanations given by the management, the Company has not raised any money way of
initial public offer / further public offer / debt instruments) and term loans hence, reporting under clause (ix) is not applicable
to the Company and hence not commented upon.
(x) We report that during the year under audit, the management has noticed an instance of fraud on the Company by an
employee involving funds collected in an earlier year from a Channel Partner being deposited in his personal account
amounting to Rs.29.3 million instead of depositing the same in the company’s bank account. The Company has taken all
necessary steps including taking legal action against the Channel Partner and the said employee who has now left the
Company and has fully provided for the same in these financial statements
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid /
provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the
Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi company.Therefore, the provisions of clause 3(xii) of the order are not applicable
to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in
compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the
notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company
has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during
the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not
commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash
transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act,
1934 are not applicable to the Company.
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E /E300005
per Manoj Kumar Gupta
Partner
Membership Number: 83906
Place of Signature: Gurgaon
Date: July 18, 2017
Annual
Report 2016-17
49
PHILIPS INDIA LIMITED
ANNEXURE 2 TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE
STANDALONE FINANCIAL STATEMENTS OF PHILIPS INDIA LIMITED
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 March 31, 2017 in conjunction with our audit of the standalone 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. 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 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 as specified under section
143(10) of the Companies Act, 2013, to the extent 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 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
50
Standalone
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.
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 March 31, 2017,
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 S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
______________________________
per Manoj Kumar Gupta
Partner
Membership Number: 83906
Place of Signature: Gurgaon
Date: July 18, 2017
Annual
Report 2016-17
51
PHILIPS INDIA LIMITED
Balance Sheet as at 31 March 2017
NOTES
ASSETS
Non-current assets
Property, Plant and Equipment
Capital work-in-progress
Investment Property
Intangible assets
Investment in subsidiaries and associates
Financial Assets
a. Trade Receivables
b. Other Financial Assets
Deferred tax assets (net)
Advance Income tax (net of provision)
Other non current assets
Current assets
Inventories
Financial Assets
a. Trade receivables
b. Cash and cash equivalents
c. Other Financial Assets
Other current assets
Assets classified as discontinued operations
2
2
3
4
5
6
7
8
9
10
11
Amounts in ` Mln
As at
31 March 2017
1,984
78
17
4,797
1,900
36
17
1,000
1,088
206
572
2,142
901
1,688
181
510
1,742
812
2,064
217
809
1,742
1,151
Current liabilities
Financial Liabilities
a. Borrowings
b. Trade Payables
c. Other financial liabilities
Other current liabilities
Provision for taxation (Net of Advances)
Provisions
Liabilities classified as discontinued operations
15,040
11,809
4,554
4,542
3,777
4,982
5,161
914
1,308
6,823
5,406
822
1,363
5,331
2,534
2808
860
39
16,919
31,959
12
13
575
19,450
18,956
30,765
575
20,025
17,606
15,310
10,029
34,275
18,181
16,695
17,270
14
15
16
17
18
16
39
405
752
651
5,061
1,110
2,871
442
642
1,808
10,126
-
155
685
591
5,406
865
3,291
891
700
As per our report of even date attached
For and on behalf of the Board
For S.R. Batliboi & Co LLP
Chairman
Chartered Accountants
Firm registration number: 301003E/E300005
Managing Director
Director & CFO
Manoj Kumar Gupta
Director & Company Secretary
Partner
Membership No.: 83906
Non-Executive Director
Place: New Delhi
Place: New Delhi
Date: July 18, 2017
Date: July 18, 2017
Standalone
8,936
575
1,431
11,153
-
TOTAL EQUITY AND LIABILITIES
31,959
30,765
Basis of preparation, measurement and significant
1
accounting policies
Refer accompanying notes forming part of the Standalone Financial Statements
52
As at
1 April 2015
2,403
106
17
7,605
TOTAL ASSETS
EQUITY AND LIABILITIES
EQUITY
Equity share capital
Other Equity
Equity attributable to equity shareholders
LIABILITIES
Non-current liabilities
Financial Liabilities
Borrowings
Other non-current liabilities
Provisions
As at
31 March 2016
186
542
471
287
4,866
981
2,291
442
889
1,199
9,756
6,050
34,275
S.M.DATTA
(DIN: 00032812)
V. RAJA
(DIN: 00669376)
HARIHARAN MADHAVAN
(DIN: 07217072)
RAJIV MATHUR
(DIN: 06931798)
GEETU GIDWANI VERMA
(DIN: 00696047)
Statement of Profit and Loss for the year ended 31 March 2017
CONTINUING OPERATIONS
Income
Revenue from operations
Other income
Total Income
Expenses
Cost of raw materials consumed
Purchases of stock-in-trade
Changes in inventories of work-in-progress, finished
goods and stock-in-trade
Excise duty on sale of goods
Employee benefits expense
Finance costs
Depreciation and amortization expense
Other expenses
Total expenses
Profit before tax from continuing operations
Tax expense
Current tax
Deferred tax - release / (charge)
Profit after tax from continuing operations
Discontinuing Operations
Profit before tax from discontinuing operations
Tax expense
Current Tax
Deferred tax - release / (charge)
Profit after tax from discontinuing operations
Profit for the year (A)
Other comprehensive income
Re-measurement gains / (losses) on defined
benefit plans
Income tax effect on defined benefit plans
Other comprehensive income for the year (B)
Total comprehensive income for the year (A+B)
Earnings per equity share (for continuing operations)
Basic and diluted earnings per equity share of ` 10
each (in `)
Earnings per equity share (for discontinuing operations)
Basic and diluted earnings per equity share of ` 10
each (in `)
Basis of preparation, measurement and significant
accounting policies
NOTES Year ended 31 March 2017
Amounts in ` Mln
Year ended 31 March 2016
19
20
36,989
419
21
22
23
2,175
13,969
(18)
1,542
15,674
(609)
24
25
26
27
86
9,989
113
507
7,335
63
9,151
112
469
6,573
7
7
39
40
37,408
34,156
3,252
35,479
552
(1,244)
56
2,064
32,975
3,056
(1,194)
7
1,869
-
3,208
-
(1,244)
133
2,064
36,031
2,097
3,966
(18)
12
6
(12)
2,052
(4)
8
3,974
35.88
32.50
-
36.45
40
1
Refer accompanying notes forming part of the Standalone Financial Statements
As per our report of even date attached
For and on behalf of the Board
For S.R. Batliboi & Co LLP
Chairman
Chartered Accountants
Firm registration number: 301003E/E300005
Managing Director
Director & CFO
Manoj Kumar Gupta
Director & Company Secretary
Partner
Membership No.: 83906
Non-Executive Director
Place: New Delhi
Place: New Delhi
Date: July 18, 2017
Date: July 18, 2017
S.M.DATTA
(DIN: 00032812)
V. RAJA
(DIN: 00669376)
HARIHARAN MADHAVAN
(DIN: 07217072)
RAJIV MATHUR
(DIN: 06931798)
GEETU GIDWANI VERMA
(DIN: 00696047)
Annual
Report 2016-17
53
PHILIPS INDIA LIMITED
Statement of Changes in Equity for the year ended 31 March 2017
A. EQUITY SHARE CAPITAL
Equity shares of ` 10 each issued, subscribed and fully paid up
Amounts in ` Mln
Number of shares
Amount
57,517,242
57,517,242
57,517,242
575
575
575
As at 1 April 2015
Changes in equity share capital during the year
As at 31 March 2016
Changes in equity share capital during the year
As at 31 March 2017
B.
OTHER EQUITY
For the year ended 31 March 2017
Reserves and Surplus
Items of OCI
Securities
Capital
Capital
Capital General Retained RemeasurePremium* redemption reserve* Subsidy* reserve* earnings*
ment*
reserve*
As at 1 April 2015 (A)
1,153
228
169
9
2,789
12,347
Profit for the year
3,966
Remeasurement benefit of defined benefit
8
plans
Total Comprehensive Income for
3,966
8
the year (B)
Transfer as per Scheme of Arrangement
(1,153)
(228)
(169)
(1,296)
for Demerger
Others
(9)
Reductions during the year
Transfer to General Reserve
424
(424)
Dividend (Note 38)
(173)
Dividend distribution tax (Note 38)
(35)
Total (C)
424
(632)
As at 31 March 2016 (A+B+C)
1,917
15,681
8
As at 1 April 2016 (D)
1,917
15,681
8
Profit for the year
2,064
Remeasurement benefit of defined benefit
(12)
plans
Total Comprehensive Income for
2,064
(12)
the year (E)
Reductions during the year
Transfer to General Reserve
398
(398)
Dividend (Note 38)
(173)
Dividend distribution tax (Note 38)
(35)
Total (F)
398
(606)
As at 31 March 2017 (D+E+F)
2,315
17,139
(4)
* Refer Note 13
Particulars
Total
16,695
3,966
8
3,974
(2,846)
(9)
(173)
(35)
(208)
17,606
17,606
2,064
(12)
2,052
(173)
(35)
(208)
19,450
Refer accompanying notes forming part of the Standalone Financial Statements
As per our report of even date attached
For and on behalf of the Board
For S.R. Batliboi & Co LLP
Chairman
Chartered Accountants
Firm registration number: 301003E/E300005
Managing Director
Director & CFO
Manoj Kumar Gupta
Director & Company Secretary
Partner
Membership No.: 83906
Non-Executive Director
Place: New Delhi
Place: New Delhi
Date: July 18, 2017
Date: July 18, 2017
54
Standalone
S.M.DATTA
(DIN: 00032812)
V. RAJA
(DIN: 00669376)
HARIHARAN MADHAVAN
(DIN: 07217072)
RAJIV MATHUR
(DIN: 06931798)
GEETU GIDWANI VERMA
(DIN: 00696047)
Cash Flow Statement for the year ended 31 March 2017
Year ended
31 March 2017
Cash flow from operating activities
Profit before tax (continuing operations)
Profit before tax (discontinuing operations)
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 amortization
Unrealized foreign exchange (gain) and loss (net)
Provision for doubtful trade receivables and loans and advances
Liabilities no longer required written back
Interest on advances, current accounts and deposits
Finance costs
Operating profit before working capital changes
Changes in:
Trade receivables and other loans & advances
Inventories
Trade payables and other liabilities
Cash generated from operations
Income tax paid (net of refunds)
Exceptional items (VRS Payment)
Net Cash Flow from Operating activities-continuing operations
Net Cash Flow from operating activities-discontinued operations
Net cash generated from operating and discontinuing activities
Cash flow from investing activities
Purchase of Property, Plant and Equipment
Proceeds from sale of Property, Plant and Equipment
Investment in associate
Investment in subsidiaries
Interest received
Net Cash flow from Investing Activities-continuing operations
Net Cash flow from Investing Activities-discontinued operations
Net cash used in investing and discontinuing activities
Cash flow from financing activities
Finance costs
Proceeds / (repayments) of short term borrowings
Dividend paid (including tax thereon)
Cash flow from Financing Activities-continuing operations
Net Cash flow from Financing Activities-discontinued operations
Net cash used in financing and discontinuing activities
Increase / (Decrease) in cash and cash equivalents (A+B+C)
Amounts in ` Mln
Year ended
31 March 2016
3,252
3,252
(12)
23
507
(32)
113
(26)
(598)
113
88
3,340
2,220
(12)
(426)
3,056
3,208
225
6,489
775
(8)
197
(31)
(749)
54
238
6,727
(2,306)
(542)
2,179
1,782
5,122
(2,117)
3,005
3,005
(669)
6,058
(1,994)
(260)
(226)
4,030
3,804
(986)
249
(50)
(2,758)
557
(2,988)
(2,988)
(991)
52
(63)
(3,734)
780
(3,760)
(196)
(3,956)
(55)
(207)
(262)
(262)
(245)
(78)
(287)
(207)
(565)
(7)
(572)
(724)
Annual
Report 2016-17
55
PHILIPS INDIA LIMITED
Cash Flow Statement for the year ended 31 March 2017 (Contd.)
Amounts in ` Mln
Year ended
31 March 2017
Cash and cash equivalents - Opening Balance
Cash and cash equivalents [refer note 10 (b)]
Inter corporate deposits
Unpaid dividend
Deposits with Banks
TOTAL
Cash and cash equivalents - Closing Balance
Cash and cash equivalents [refer note 10 (b)]
Unpaid dividend
Deposits with Banks
TOTAL
Cash and Cash Equivalent from continuing operations
Cash and Cash Equivalent from discontinued operations
Cash and Cash Equivalent from continuing and discontinued
operations
* Includes discontinuing operations (refer Note 39)
Year ended
31 March 2016
1,316
11
4,079
5,406
1,435
2,425
10
2,260
*6,130
445
12
4,704
5,161
(245)
(245)
1,316
11
4,079
5,406
(4,551)
3,827
(724)
The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the
Indian Accounting Standard (IND AS-7) - Statement of Cash Flows.
As per our report of even date attached
For and on behalf of the Board
For S.R. Batliboi & Co LLP
Chairman
S.M.DATTA
Chartered Accountants
(DIN: 00032812)
Firm registration number: 301003E/E300005
Managing Director
V. RAJA
(DIN: 00669376)
Director & CFO
HARIHARAN MADHAVAN
(DIN: 07217072)
Manoj Kumar Gupta
Director & Company Secretary
RAJIV MATHUR
Partner
(DIN: 06931798)
Membership No.: 83906
Non-Executive Director
GEETU GIDWANI VERMA
(DIN: 00696047)
Place: New Delhi
Place: New Delhi
Date: July 18, 2017
Date: July 18, 2017
56
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
CORPORATE INFORMATION
Philips India Limited (the ‘Company’) is a public limited company domiciled in India with its registered office at 3rd Floor,
Tower A, DLF IT Park, 08 Block AF, Major Arterial Road, New Town (Rajarhat) Kolkata - 700156, West Bengal, India. The
Company’s business segments comprise of (a) Personal Health, (b) Health Systems and (c) Innovation Services.The Company
has manufacturing facilities in Pune, Maharashtra and Software Development center in Bangalore. The company sells its
products primarily in India through independent distributors and modern trade. The Financial statements were authorized
by the Board of Directors for issue in accordance with resolution passed on July 18 2017.
I
SIGNIFICANT ACCOUNTING POLICIES
1.1 (a) Basis of preparation of financial statements
These financial statements are the separate financial statements of the Company (also called standalone financial
statements) prepared in accordance with Indian Accounting Standards (‘Ind AS’) notified under Section 133 of the
Companies Act, 2013, read together with the Companies (Indian Accounting Standards) Rules, 2015.
For all periods up to and including the year ended 31st March, 2016, the Company had prepared its financial statements
in accordance with Accounting Standards notified under the Section 133 of the Companies Act, 2013, read together
with Rule 7 of the Companies (Accounts) Rules, 2014 (‘Previous GAAP’). Detailed explanation on how the transition
from previous GAAP to Ind AS has affected the Company’s Balance Sheet, financial performance and cash flows is given
under Note 43.
These financial statements have been prepared and presented under the historical cost convention, on the accrual
basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the end
of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied
consistently over all the periods presented in these financial statements.
(b) Current / Non Current classification
Any asset or liability is classified as current if it satisfies any of the following conditions:
i.
the asset/liability is expected to be realized/settled in the Company’s normal operating cycle;
ii.
the asset is intended for sale or consumption;
iii.
the asset/liability is held primarily for the purpose of trading;
iv.
the asset/liability is expected to be realized/settled within twelve months after the reporting period;
v.
the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting date;
vi.
in the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for
at least twelve months after the reporting date.
All other assets and liabilities are classified as non-current.
For the purpose of current/non-current classification of assets and liabilities, the Company has ascertained its normal
operating cycle as twelve months.This is based on the nature of services and the time between the acquisition of assets
or inventories for processing and their realization in cash and cash equivalents.
1.2 Key Accounting Estimates and Judgements
The preparation of financial statements requires management to make judgments, estimates and assumptions in the application
of accounting policies that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates. Continuous evaluation is done on the estimation and judgments based on historical experience and
other factors, including expectations of future events that are believed to be reasonable. Revisions to accounting estimates
are recognized prospectively.
Information about critical judgments in applying accounting policies, as well as estimates and assumptions that have the most
significant effect to the carrying amounts of assets and liabilities within the next financial year, are included in the following
notes:
•
Measurement of defined benefit obligations – Note 32
•
Measurement and likelihood of occurrence of provisions and contingencies – Note 16
•
Recognition of deferred tax assets – Note 7
1.3 Recent Accounting Developments
Standards issued but not yet effective:
The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company’s financial
statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.
Annual
Report 2016-17
57
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules,
2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment.’ The amendments
are applicable to the Company from April 1, 2017.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate
changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes,
suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising
from financing activities, to meet the disclosure requirement. The effect on the financial statements is being evaluated by the
Company.
Amendment to Ind AS 102:
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cashsettled awards and awards that include a net settlement feature in respect of withholding taxes. It clarifies that the
fair value of cash-settled awards is determined on a basis consistent with that used for equity settled awards. Marketbased performance conditions and non-vesting conditions are reflected in the ‘fair values’, but non-market performance
conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also,
the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified
with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as
such from the date of the modification. Further, the amendment requires the award that include a net settlement feature
in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is
treated as if it was part of an equity settlement. The effect on the financial statements is being evaluated by the Company.
The Company will adopt these amendments, if applicable from their applicable date.
1.4 a)
Property, plant and equipment:
Under the previous GAAP (Indian GAAP), property, plant and equipment were carried in the balance sheet on cost
basis less depreciation and accumulated impairment losses, if any. The company has elected to regard the values of
Property, plant and equipment as deemed cost at the date of transition to Ind AS i.e. 1 April 2015.
Property, plant and equipment is stated at acquisition cost net of accumulated depreciation and accumulated impairment
losses, if any. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company
and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of
Profit and Loss during the period in which they are incurred.
Gains or losses arising on retirement or disposal of property, plant and equipment are recognised in the Statement of
Profit and Loss.
Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as
“Capital work-in-progress”.
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 straightline basis over the period of the lease on their estimated useful life, whichever is shorter.
Assets costing ` 5,000 or less are fully depreciated in the year of purchase.
b)
Investment Property
The company has elected to regard the value of Investment Property as deemed cost at the date of transition to Ind
AS i.e. 1 April 2015.
c)
Capital work in progress and Capital advances:
Cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work in progress. Advances
given towards acquisition of fixed assets outstanding at each Balance Sheet date are disclosed as Other Non-Current
Assets.
1.5 Intangible assets:
The Company has applied principles of Ind AS 38 Intangible Assets retrospectively from date of acquisition and considered
the same as deemed cost in accordance with Ind AS 101 First Time adoption. Intangible assets acquired separately are
measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated
amortization and accumulated impairment losses, if any. Internally generated intangibles, excluding capitalised development
cost, are not capitalised and the related expenditure is reflected in statement of Profit and Loss in the period in which the
expenditure is incurred. Cost comprises the purchase price and any attributable cost of bringing the asset to its working
condition for its intended use.
58
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
The useful lives of intangible assets are assessed as either finite or indefinite. Finite-life intangible assets are amortised on a
straight- line basis over the period of their expected useful lives. Estimated useful lives by major class of finite-life intangible
assets are as follows:
Computer Software
-
3 years
Non Compete Fees
-
3 years
The amortisation period and the amortisation method for finite-life intangible assets is reviewed at each financial year end
and adjusted prospectively, if appropriate.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or
at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite
life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
1.6 Investments in Subsidairies and Associates:
Investments in subsidiaries and associates are carried at cost less accumulated impairment losses, if any.Where an indication
of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable
amount. On disposal of investments in subsidiaries and associates, the difference between net disposal proceeds and the
carrying amounts are recognized in the Statement of Profit and Loss.
Upon first-time adoption of Ind AS, the Company has elected to measure its investments in subsidiaries and associates at the
Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1st April,2015.
1.7 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.
1.8 Cash and Cash equivalents:
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original
maturity of three months or less, which are subject to insignificant risk of changes in value.
1.9 Financial Instruments:
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
i)
Financial Assets
The Company classifies its financial assets in the following measurement categories:
-
Those to be measured subsequently at fair value (either through other comprehensive income, or through profit
or loss)
-
Those measured at amortised cost”
Initial Recognition and Measurement:
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value
through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent Measurement:
For purposes of subsequent measurement financial assets are classified in following categories:
-
Debt instruments at fair value through profit and loss (FVTPL)
-
Debt instruments at fair value through other comprehensive income (FVTOCI)
-
Debt instruments at amortised cost
-
Equity instruments
Where assets are measured at fair value, gains and losses are either recognised entirely in the statement of profit
and loss(i.e. fair value through profit or loss), or recognised in other comprehensive income(i.e. fair value through
other comprehensive income). For investment in debt instruments, this will depend on the business model in which
the investment is held. For investment in equity instruments, this will depend on whether the Company has made an
irrevocable election at the time of initial recognition to account for equity instruments at FVTOCI.
Annual
Report 2016-17
59
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
Debt instruments at amortised cost
A Debt instrument is measured at amortised cost if both the following conditions are met:
a)
Business Model Test : The objective is to hold the debt instrument to collect the contractual cash flows (rather
than to sell the instrument prior to its contractual maturity to realize its fair value changes).
b)
Cash flow characteristics test : The contractual terms of the debt instrument give rise on specific dates to
cash flows that are solely payments of principal and interest on principal amount outstanding.
This category is most relevant to the Company. After initial measurement, such financial assets are subsequently
measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking
into account any discount or premium on acquisition and fees or costs that are an integral part of EIR. EIR is the
rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a
shorter period, where appropriate, to the gross carrying amount of the financial asset. When calculating the effective
interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial
instrument but does not consider the expected credit losses. The EIR amortization is included in inance income in
profit or loss.The losses arising from impairment are recognised in the profit or loss.This category generally applies to
trade and other receivables.
Debt instruments at fair value through OCI
A Debt instrument is measured at fair value through other comprehensive income if following criteria are met:
a)
Business Model Test : The objective of financial instrument is achieved by both collecting contractual cash
flows and for selling financial assets.
b)
Cash flow characteristics test : The contractual terms of the debt instrument give rise on specific dates to
cash flows that are solely payments of principal and interest on principal amount outstanding.
Debt instrument included within the FVTOCI category are measured initially as well as at each reporting date at fair
value. Fair value movements are recognised in the other comprehensive income (OCI), except for the recognition of
interest income, impairment gains or losses and foreign exchange gains or losses which are recognised in statement
of profit and loss. On derecognition of asset, cumulative gain or loss previously recognised in OCI is reclassified from
the equity to statement of profit & loss. Interest earned whilst holding FVTOCI financial asset is reported as interest
income using the EIR method.
Debt instruments at FVTPL
FVTPL is a residual category for financial instruments. Any financial instrument, which does not meet the criteria for
amortised cost or FVTOCI, is classified as at FVTPL. A gain or loss on a Debt instrument that is subsequently measured
at FVTPL and is not a part of a hedging relationship is recognised in statement of profit or loss and presented net in
the statement of profit and loss within other gains or losses in the period in which it arises. Interest income from these
Debt instruments is included in other income.
Equity investments of other entities
All equity investments in scope of IND AS 109 are measured at fair value. Equity instruments which are held for trading
and contingent consideration recognised by an acquirer in a business combination to which IND AS103 applies are
classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present
in other comprehensive income all subsequent changes in the fair value. The Company makes such election on an
instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument,
excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to profit and loss, even
on sale of investment. However, the Company may transfer the cumulative gain or loss within equity. Equity instruments
included within the FVTPL category are measured at fair value with all changes recognised in the Profit and loss.\
Derecognition
60
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is
primarily derecognised (i.e, removed from the Company’s statement of financial position) when:
-
the rights to receive cash flows from the asset have expired, or
-
the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a “pass through” arrangement and
either;
(a)
the Company has transferred the rights to receive cash flows from the financial assets or
(b)
the Company has retained the contractual right to receive the cash flows of the financial asset, but assumes a
contractual obligation to pay the cash flows to one or more recipients.
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all the
risks and rewards of the ownership of the financial assets. In such cases, the financial asset is derecognised.Where the
entity has not transferred substantially all the risks and rewards of the ownership of the financial assets, the financial
asset is not derecognised.
Where the Company has neither transferred a financial asset nor retains substantially all risks and rewards of ownership
of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset.
Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of
continuing involvement in the financial asset.
Impairment of financial assets
In accordance with IND AS 109, the Company applies expected credit losses (ECL) model for measurement and
recognition of impairment loss on the following financial asset and credit risk exposure
-
Financial assets measured at amortised cost;
-
Financial assets measured at fair value through other comprehensive income (FVTOCI);
the Company follows “simplified approach” for recognition of impairment loss allowance on:
-
Trade receivables or contract revenue receivables;
-
All lease receivables resulting from the transactions within the scope of IND AS 17
Under the simplified approach, the Company does not track changes in credit risk. Rather, it recognizes impairment
loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. the Company uses a
provision matrix to determine impairment loss allowance on the portfolio of trade receivables. The provision matrix
is based on its historically observed default rates over the expected life of trade receivable and is adjusted for forward
looking estimates.At every reporting date, the historical observed default rates are updated and changes in the forward
looking estimates are analyzed.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there
has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly,
12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL
is used. If, in subsequent period, credit quality of the instrument improves such that there is no longer a significant
increase in credit risk since initial recognition, then the Company reverts to recognizing impairment loss allowance
based on 12- months ECL.
ii)
Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified at initial recognition as financial liabilities at fair value through profit or loss, loans and
borrowings, and payables, net of directly attributable transaction costs. the Company financial liabilities include loans
and borrowings including bank overdraft, trade payable, trade deposits, retention money, liabilities towards services,
sales incentives and other payables.
The measurement of financial liabilities depends on their classification, as described below:
Trade Payables
These amounts represents liabilities for goods and services provided to the Company prior to the end of financial
year which are unpaid.The amounts are unsecured and are usually paid within 120 days of recognition.Trade and other
payables are presented as current liabilities unless payment is not due within 12 months after the reporting period.
They are recognised initially at fair value and subsequently measured at amortised cost using EIR method.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for
trading if they are incurred for the purpose of repurchasing in the near term.
Gains or losses on liabilities held for trading are recognised in the statement of profit and loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at
the initial date of recognition, and only if the criteria in IND AS 109 are satisfied. For liabilities designated as FVTPL,
fair value gains/ losses attributable to changes in own credit risk are recognised in OCI. These gains/ loss are not
subsequently transferred to profit and loss. However, the Company may transfer the cumulative gain or loss within
equity. All other changes in fair value of such liability are recognised in the statement of profit or loss. the Company has
not designated any financial liability as at fair value through profit and loss.
Annual
Report 2016-17
61
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
Loans and borrowings
Borrowings are initially recognised at fair value, net of transaction cost incurred. After initial recognition, interestbearing loans and borrowings are subsequently measured at amortised cost using the EIR method.
Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR
amortization process. Amortised cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of
profit and loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or medication is treated as the derecognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in
the statement of profit and loss.
Offsetting of financial instruments:
Financials assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to
realize the assets and settle the liabilities simultaneously.
Reclassification of financial assets:
The Company determines classification of financial assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities.
For financial assets which are debt instruments, a reclassification is made only if there is a change in the
business model for managing those assets. Changes to the business model are expected to be infrequent. The
Company’s senior management determines change in the business model as a result of external or internal
changes which are significant to the Company’s operations. Such changes are evident to external parties.
A change in the business model occurs when the Company either begins or ceases to perform an activity that is
significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively
from the reclassification date which is the first day of the immediately next reporting period following the change in
business model. The Company does not restate any previously recognised gains, losses (including impairment gains or
losses) or interest.
1.10 Provisions & Contingencies
Provisions
A provision is recognised when the Company has a present obligation (legal or constructive) as a result of 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. These estimates are reviewed at each reporting date and adjusted to
reflect the current best estimates.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of
time is recognised as a finance cost.
Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence
or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation
that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A
contingent liability also arises in extremely rare cases, where there is a liability that cannot be recognised because it cannot
be measured reliably. the Company does not recognize a contingent liability but discloses its existence in the financial
statements unless the probability of outflow of resources is remote.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
1.11 Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined
terms of payment and excluding taxes or duties collected on behalf of the government. Revenue is recognised to the extent
that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless
of when the payment is being made. Amounts disclosed are inclusive of Excise Duty, and net of returns, trade discounts,
rebates, value added taxes and amount collected on behalf of third parties.
62
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
a)
b)
Sale of goods
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the
goods have passed to the buyer, usually on delivery of the goods and is measured at fair value of consideration
received/receivable, net of returns and allowances, discounts, volume rebates and cash discounts. Revenue
is usually recognised when it is probable that economic benefits associated with the transaction will flow
to the entity, amount of revenue can be measured reliably and entity retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the goods sold.
Rendering of Services
Revenue from service related activities is recognised as and when services are rendered and on the basis of
contractual terms with the parties.
Revenue from the sale of goods/ equipments is recognised when the significant risks and rewards of ownership of the
goods have passed 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.
Income from export incentives such as duty drawback and premium on sale of import licenses, and lease license fee
are recognised on accrual basis.
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.
d)
Interest Income
Interest income is recorded on a time proportion basis taking into account the amounts invested and the rate of
interest.
1.12 Employee Benefits
Short-term obligations
Liabilities for wages and salaries, including non monetary benefits that are expected to be settled wholly within twelve
months after the end of the period in which the employees render the related service are recognised in respect of employee
service upto the end of the reporting period and are measured at the amount expected to be paid when the liabilities are
settled. the liabilities are presented as current employee benefit obligations in the balance sheet.
Defined Contribution Plans
Contributions to defined contribution schemes such as employees’ state insurance, labour welfare fund, superannuation
scheme, employee pension scheme etc. are charged as an expense based on the amount of contribution required to be
made as and when services are rendered by the employees. Company’s provident fund contribution, in respect of certain
employees, is made to a government administered fund and charged as an expense to the Statement of Profit and Loss. The
above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond
the monthly contributions.
Defined Benefit Plans
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. 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.
Any differences between the interest income on plan assets and the return actually achieved, and any changes in the
liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised
immediately in ‘Other comprehensive income’ and subsequently not reclassified to the Statement of Profit and Loss.
Annual
Report 2016-17
63
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
Post-Retirement Medical benefit plan
The Company operates a defined post-retirement medical benefit plan for certain specified employees and is payable upon
the employee satisfying certain conditions.
1.13 Impairment of Non-Financial Assets
Assessment for impairment is done at each Balance Sheet date as to whether there is any indication that a non-financial asset
may be impaired. Indefinite life intangibles are subject to a review for impairment annually or more frequently if events or
circumstances indicate that it is necessary. For the purpose of assessing impairment, the smallest identifiable group of assets
that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups
of assets is considered as a cash generating unit. Goodwill acquired in a business combination is, from the acquisition date,
allocated to each of the Company’s cash-generating units that are expected to benefit from the synergies of the combination,
irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
If any indication of impairment exists, an estimate of the recoverable amount of the individual asset/cash generating unit
is made. Asset/cash generating unit whose carrying value exceeds their recoverable amount are written down to the
recoverable amount by recognising the impairment loss as an expense in the Statement of Profit and Loss. The impairment
loss is allocated first to reduce the carrying amount of any goodwill (if any) allocated to the cash generating unit and then to
the other assets of the unit, pro rata based on the carrying amount of each asset in the unit. Recoverable amount is higher
of an asset’s or cash generating unit’s fair value less cost of disposal and its value in use. Value in use is the present value
of estimated future cash flows expected to arise from the continuing use of an asset or cash generating unit and from its
disposal at the end of its useful life. Assessment is also done at each Balance Sheet date as to whether there is any indication
that an impairment loss recognised for an asset in prior accounting periods may no longer exist or may have decreased, basis
the assessment a reversal of an impairment loss for an asset other than goodwill is recognised in the Statement of Profit and
Loss account.
1.14 Income taxes
Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the Statement of Profit and
Loss except to the extent it relates to a business combination or to an item which is recognised directly in equity or in other
comprehensive income.
Current tax
Current income tax, assets and liabilities are measured at the amount expected to be paid to or recovered from the taxation
authorities in accordance with the Income Tax Act, 1961 and the Income Computation and Disclosure Standards (ICDS)
enacted in India by using tax rates and the tax laws that are enacted at the reporting date.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets and liabilities are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax
losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.”
1.15 Leases
Leases in which a substantial portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases. Payments and receipts under such leases are recognised to the Statement of Profit and Loss on a straightline basis over the term of the lease unless the lease payments to the lessor are structured to increase in line with expected
general inflation to compensate for the lessor’s expected inflationary cost increases, in which case the same are recognised
as an expense in line with the contractual term.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards
incidental to ownership to the lessee.
64
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
1.16 Foreign currencies
The financial statements are presented in INR, the functional currency of the Company. Items included in the financial
statements of the Company are recorded using the currency of the primary economic environment in which the Company
operates (the ‘functional currency’).
Foreign currency transactions are recorded on initial recognition in the functional currency, using the exchange rate prevailing
at the date of transaction.
Measurement of foreign currency items at the balance sheet date
Foreign currency monetary assets and liabilities denominated in foreign currencies are translated at the functional currency
spot rates of exchange at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value is determined.
Exchange differences
Exchange differences arising on settlement or translation of monetary items are recognised as income or expense in the
period in which they arise with the exception of exchange differences on gain or loss arising on translation of non-monetary
items measured at fair value which is treated in line with the recognition of the gain or loss on the change in fair value of
the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also
recognised in OCI or profit or loss, respectively).
Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/ liability
The premium or discount arising at the inception of forward exchange contract is amortised and recognised as an expense/
income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and
loss in the period in which the exchange rates changes. Any profit or loss arising on cancellation or renewal of such forward
exchange contract is also recognised as income or expense for the period.
1.17 Fair value measurement of Financial Instruments
When the fair values of financials assets and financial liabilities recorded in the Balance Sheet cannot be measured based on
quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow
model, which involve various judgements and assumptions.
1.18 Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders
by the weighted average number of equity shares outstanding during the period. The weighted average number of equity
shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split,
and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a
corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all
potentially dilutive equity shares.
For and on behalf of the Board
Chairman
Managing Director
Director & CFO
Director & Company Secretary
Non-Executive Director
Place: New Delhi
Place: New Delhi
Date: July 18, 2017
Date: July 18, 2017
S.M.DATTA
(DIN: 00032812)
V. RAJA
(DIN: 00669376)
HARIHARAN MADHAVAN
(DIN: 07217072)
RAJIV MATHUR
(DIN: 06931798)
GEETU GIDWANI VERMA
(DIN: 00696047)
Annual
Report 2016-17
65
2
66
Standalone
-
Transfer as per Scheme of
Arrangement for Demerger*
147
147
As at 31 March 2017
257
171
169
14
8
6
243
197
132
93
50
43
43
336
-
96
240
(49)
(5)
162
132
Leasehold
Improvements
625
821
699
415
193
222
222
1,040
(125)
122
1,043
(48)
-
392
699
Plant and
Equipment
(Owned)
54
97
113
31
15
16
16
85
(46)
18
113
-
-
-
113
Plant and
Equipment
(given on
operating
lease)
241
111
149
86
52
34
34
327
(49)
231
145
(22)
(3)
21
149
Office
Equipment
203
188
209
69
32
37
37
272
-
47
225
(31)
(1)
48
209
Furniture
5
5
5
-
-
-
5
5
-
-
-
5
Vehicles
(Owned)
313
248
277
231
119
112
112
544
(49)
233
360
(22)
(35)
140
277
Vehicles
(taken on
finance
lease)
315
-
-
38
38
-
-
353
-
353
-
-
-
-
-
Plant and
Machinery
(taken on
finance
lease)
2,403
1,984
1,900
977
507
470
470
3,380
(271)
1,196
2,455
(172)
(44)
771
1,900
Total
Amounts in ` Mln
Capital Work in Progress
Net book value
106
As at 31 March 2017
78
As at 31 March 2016
36
As at 1 April 2015
The Company has elected to measure all its Property, Plant and Equipment at the previous GAAP carrying amount i.e.31 March 2015 as its deemed cost (Gross carrying
value) on the date of transition to Ind AS i.e.1 April, 2015.
* Asset Transfer as per Scheme of Arrangement for Demerger is net of gross assets ` 417 and accumulated depreciation ` 245. Accordingly the WDV ` 172 has been
reduced from the opening deemed cost.
147
As at 31 March 2016
-
-
As at 1 April 2015
Net book value
As at 31 March 2017
Disposals
Depreciation
As at 31 March 2016
Transfer as per Scheme of
Arrangement for Demerger
Disposals
Depreciation
As at 1 April 2015
6
As at 31 March 2017
Depreciation
(2)
271
Disposals
147
96
177
-
-
8
169
Buildings
Additions
147
-
Disposals
As at 31 March 2016
-
147
Leasehold
Land
Additions
As at 1 April 2015
Gross carrying value
(Deemed cost)
Particulars
Property, Plant and Equipment
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
3
Investment Property
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Deemed cost
At the beginning of the year
17
17
17
End of the year
17
17
17
-
-
-
Depreciation
End of the year
Net Block
17
17
17
1. The “Investment Property” consists of Freehold and Leasehold Land held by the Company and located in the states
of Maharashtra, Gujarat and Goa. The fair value hierarchy disclosures for Investment properties have been provided in
note 35.
2.
4
The Company has obtained independent valuation for its investment property as at March 31, 2017 and has reviewed
the fair valuation based on best evidence of fair value determined using replacement cost of an asset of equivalent utility,
depreciation and obsolescence. Fair market value is the amount expressed in terms of money that may reasonably be
expected to be exchanged between a willing buyer and a willing seller, with equity or both. The valuation assumes that
Company shall continue to operate and run the assets to have economic utility. The fair value is on ‘as is where’ basis.
Intangible assets
Particulars
Goodwill
Brands
Software
Non
Compete
Fees
Total
Deemed Cost
As at 1 April 2015
165
230
22
150
567
Additions
-
-
-
-
-
Disposals and adjustments
-
-
-
-
-
-
-
-
-
-
165
230
22
150
567
Additions
-
-
-
-
-
Disposals and adjustments
-
-
-
-
-
165
230
22
150
567
165
230
22
150
567
Amortization for the year
-
-
-
-
-
Disposals and adjustments
-
-
-
-
-
Transfer as per Scheme of Arrangement for Demerger
-
-
-
-
-
Transfer as per Scheme of Arrangement for Demerger
As at 31 March 2016
As at 31 March 2017
Amortization and impairment
As at 1 April 2015
As at 31 March 2016
165
230
22
150
567
Amortization for the year
-
-
-
-
-
Disposals and adjustments
-
-
-
-
-
165
230
22
150
567
As at 1 April 2015
-
-
-
-
-
As at 31 March 2016
-
-
-
-
-
As at 31 March 2017
-
-
-
-
-
As at 31 March 2017
Net book value
Annual
Report 2016-17
67
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
5
Amounts in ` Mln
Investment in subsidiaries and associates
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Unquoted Investments
Investment in equity instruments
49,263,413 (31 March 2016 - 49,263,413; 1 April 2015 - 14,294,860)
equity shares of ` 10/- each fully paid up in Preethi Kitchen Appliances
Private Limited - a subsidiary
6,050,000 (31 March 2016 - Nil; 1 April 2015 - Nil)) equity shares of
` 10/- each fully paid up in Philips Home Care Services India Private
Limited - wholly owned subsidiary
11,300,000 (31 March 2016 - 6,300,000; 1 April 2015 - Nil) equity
shares of ` 10/- each fully paid up in Healthmap Diagnostics Private
Limited - an associate
3,780
3,780
1,000
61
-
-
113
63
-
Investment in preference instruments
45,924,527 (31 March 2016 - 11,987,421; 1 April 2015 - Nil) 8%
Compulsorily Convertible preference shares of ` 10/- each fully paid
up in Preethi Kitchen Appliances Private Limited - a subsidiary
3,651
954
-
7,605
4,797
1,000
7,605
4,797
1,000
Trade receivables
1,088
1,688
2,064
Total
1,088
1,688
2,064
Non-Current
6(a) Non-current Financial assets - Trade Receivables
Particulars
Break up for security details and more than six months
overdue
Particulars
1,055
1,688
2,064
Unsecured, considered good
33
-
-
Doubtful
18
22
18
-
-
-
1,106
1,710
2,082
(18)
(22)
(18)
1,088
1,688
2,064
201
175
211
Secured, considered good {(refer note 10(a)}
Other Debts
Provision for bad and doubtful debts
Doubtful
6(b) Non-current financial assets - others
Loans (Unsecured considered good unless otherwise stated)
Particulars
Security Deposits
- Considered good
Bank Deposits (due to mature after 12 months from reporting date)
68
Standalone
5
6
6
206
181
217
Notes to the Financial Statements for the year ended 31 March 2017
7
Amounts in ` Mln
Deferred Tax Assets (Net)
A.
Components of Income Tax Expense
(i)
Tax expense recognised in Statement of Profit and Loss
Year ended 31 Year ended 31
March 2017
March 2016
Current Tax
- Continuing operations
1,244
1,194
-
1,244
1,244
2,438
56
7
-
133
56
140
- Discontinued Operations
Total (a)
Deferred tax charge / (release)
Relating to origination and reversal of temporary differences (continuing operations)
Relating to origination and reversal of temporary differences (discontinued operations)
Total (b)
(ii) Tax on Other Comprehensive Income
Year ended 31 Year ended 31
March 2017
March 2016
Deferred tax
- (Gain) / Loss on measurement of net defined benefit plans
Total
B. Reconciliation of Tax expense and the accounting profit for the year is as under:
Particulars
6
(4)
6
(4)
Year ended 31 Year ended 31
March 2017
March 2016
3,252
3,056
-
3,208
34.608%
34.608%
1,125
2,169
- Expenses not deductible for tax purposes
49
8
- Others
Profit/ (Loss) before tax from continuing operations
Profit/ (Loss) before tax from discontinued operations
Income tax calculated @
Computed tax expense
Differences due to:
15
121
Income tax charged to Statement of Profit and Loss at effective tax rate of 36.53%
(Previous year - 36.69%)
1,189
2,298
Income tax expense reported in statement of profit and loss
1,189
1,187
Income tax expense attributable to discontinuing operations
-
1,111
C.
Components of Deferred Tax Assets (net) are as follows:
Balance Sheet
Particulars
As at 31
March 2017
As at 31
March 2016
Recognized in Statement of
profit and loss
As at 1 For year ended For year ended 31
April 2015
31 Mar 2017
Mar 2016
243
215
310
28
(95)
and
112
106
115
6
(9)
- Difference between book and tax
depreciation
359
319
203
40
116
- Other timing differences
228
232
530
(4)
(298)
(370)
(362)
(349)
(8)
(13)
Deferred tax expense/(income)
-
-
-
-
-
Transfer as a part of demerger
-
-
-
-
434
572
510
809
62
135
- Provision for employee benefits
- Doubtful
advances
trade
receivables
- Assets given on finance lease
Net deferred tax assets/(liabilities)
Annual
Report 2016-17
69
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
7
Amounts in ` Mln
Deferred Tax Assets (Net) (Contd.)
D.
Reconciliation Deferred Tax Assets / (Liabilities) - Net
Particulars
As at 31
March 2017
Opening balance as of 1 April
Tax income/(expense) during the period recognized in profit and loss
510
809
56
139
6
(4)
-
(434)
572
510
Tax income/(expense) during the period recognized in OCI
Discontinuing operations
Closing balance as at 31 March
8
As at 31
March 2016
Other non-current assets
(Unsecured, considered good unless otherwise stated)
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Advance Rentals
38
36
68
Capital Advances
4
11
42
370
334
606
CENVAT credit receivable
VAT credit receivable
Deposits against legal cases
Special additional duty receivables and drawback claims
Balances with customs and port trust
80
80
83
345
287
284
56
56
56
8
8
12
-
-
4
54
54
54
-
-
(4)
(54)
(54)
(54)
901
812
1,151
Considered doubtful
Deposits against legal cases
Claims receivables
Less: Provision for doubtful other loans and advances
Deposits against legal cases
Claims receivables
9
Inventories (at lower of cost and net realisable value whichever is lower)
Particulars
As at 31
March 2016
As at 1
April 2015
585
434
554
1,016
950
540
Finished Goods
(includes goods-in-transit ` 207 (31 March 2016 ` 106, 1 April 2015
` Nil)
214
112
27
Stock-in-Trade (goods purchased for resale)
(includes goods-in-transit ` 165 (31 March 2016 ` 413, 1 April 2015
` 284)
2,729
3,026
2,656
Raw materials
(includes goods-in-transit ` 79 (31 March 2016 ` 15, 1 April 2015
` 312)
Work in Progress
Stores and Spares
70
As at 31
March 2017
Standalone
10
20
-
4,554
4,542
3,777
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
10
(a) Current assets - Trade Receivables
Particulars
Trade receivables
Receivables from an associate (Note 31)
Receivables from related parties (Note 31)
Total
Break up for security details
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
4,415
5,252
3,711
6
9
-
561
1,562
1,620
4,982
6,823
5,331
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Secured, considered good **
273
459
410
Unsecured, considered good
4,709
6,364
4,921
Doubtful
166
168
107
5,148
6,991
5,438
-
-
-
Provision for bad and doubtful debts
Unsecured, considered good
Doubtful
(166)
(168)
(107)
4,982
6,823
5,331
No trade or other receivable are due from directors or other officers of the company either severally or jointly with any
other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director
is a partner, a director or a member. Trade receivables other than finance lease receivables are non-interest bearing.
** Additional disclosure relating to finance lease receivables:
Secured trade receivables includes finance lease receivables amounting to ` 672 (31 March 2016 - ` 698, 1 April 2015 ` 716) relating to medical equipment 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 ` 907 (31 March 2016 - ` 941, 1 April 2015
` 929) which includes unearned interest of ` 235 (31 March 2016 ` 243, 1 April 2015 ` 213). The maturity profile of finance
lease obligation is as follows:
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Minimum lease payments
Receivable within 1 year
214
231
238
Receivable between 1-5 years
599
638
634
94
72
57
907
941
929
Receivable within 1 year
136
152
164
Receivable between 1-5 years
450
480
499
Receivable after 5 years
Total
Present value
86
66
53
Total
672
698
716
Unearned interest
235
243
213
Receivable after 5 years
Annual
Report 2016-17
71
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
10
Amounts in ` Mln
(b) Cash and cash equivalents
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Balances with banks:
– On current accounts
– Deposits with original maturity of less than three months
Cheques/ drafts on hand
345
1,082
132
4,704
4,079
2,261
100
234
131
-
-
-
5,149
5,395
2,524
Cash on hand
Other Bank Balances
Unpaid dividend accounts
10
(c) Current Financial assets - Others
Particulars
Dues from fellow subsidiary companies (Note 31)
12
11
10
5,161
5,406
2,534
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
577
544
98
-
-
2,425
306
244
261
83
60
38
(83)
(60)
(38)
31
34
24
914
822
2,808
Inter-corporate deposits to wholly owned subsidiary (Note 31)
Security Deposits
- Considered good
- Considered doubtful
Less: Provision for doubtful deposits
Interest accrued on deposits with banks
11
Other current assets
(Unsecured, considered good unless otherwise stated)
Particulars
Unbilled revenue
Interest accrued on Inter-corporate deposits
Advance Rentals
As at 31
March 2017
As at 31
March 2016
153
As at 1
April 2015
238
142
-
-
14
18
6
-
159
206
253
Advance to related party
86
21
-
CENVAT credit receivable
465
558
86
11
8
23
170
67
72
Advance to suppliers
VAT credit receivable
Special additional duty receivables and drawback claims
7
-
60
Prepaid expenses
179
150
166
Claims receivables
42
89
34
Advances to employees
18
20
10
6
4
21
(6)
(4)
(21)
1,308
1,363
860
Balances with customs and port trust
Considered doubtful
Advance to suppliers
Less: Provision for doubtful other loans and advances
Advance to suppliers
72
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
12
Equity Share Capital
As at 31 March 2017
Authorised
Equity shares of ` 10 each
Non-convertible cumulative
preference shares of ` 10 each
As at 31 March 2016
As at 1 April 2015
No. of shares
Amount
No. of shares
Amount
No. of shares
Amount
92,000,000
920
92,000,000
920
92,000,000
920
20,000,000
200
20,000,000
200
20,000,000
200
112,000,000
1,120
112,000,000
1,120
112,000,000
1,120
Issued, subscribed and paid-up No. of shares
Amount
No. of shares
Amount
No. of shares
Amount
Equity shares of ` 10 each
57,517,242
575
57,517,242
575
57,517,242
575
Total
57,517,242
575
57,517,242
575
57,517,242
575
Total
(i)
Reconciliation of the number of equity shares outstanding
As at 31 March 2017
At the beginning and at the end of
the reporting period
As at 31 March 2016
As at 1 April 2015
No. of shares
Amount
No. of shares
Amount
No. of shares
Amount
57,517,242
575
57,517,242
575
57,517,242
575
(ii) Rights, preferences and restrictions attached to the equity shares
The Company has only one class of equity shares having a par value of ` 10/- per share (March 31, 2016 : ` 10/- per
share) (April 1, 2015: ` 10/- per share). Each holder of equity shares is entitled to one vote per share. The dividend
proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General
Meeting.
(iii) Shares held by holding and the ultimate holding company
As at 31 March 2017
Koninklijke Philips N.V (KPNV)
As at 31 March 2016
As at 1 April 2015
No. of shares
Amount
No. of shares
Amount
No. of shares
Amount
55,290,182
553
55,290,182
553
55,290,182
553
(iv) Details of shareholders holding more than 5% shares of the company
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
No. of shares % holding No. of shares % holding No. of shares % holding
Koninklijke Philips N.V (KPNV)
55,290,182
96.13
55,290,182
96.13
55,290,182
96.13
Annual
Report 2016-17
73
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
13
Amounts in ` Mln
Other Equity
As at 31 March 2017
Capital Reserve
As at the beginning of the year
Less: Transfer as per Scheme of
Arrangement for Demerger
As at the end of the year
Capital Redemption Reserve
As at the beginning of the year
Less: Transfer as per Scheme of
Arrangement for Demerger
As at the end of the year
Securities premium account
As at the beginning of the year
Less: Transfer as per Scheme of
Arrangement for Demerger
As at the end of the year
General reserve
As at the beginning of the year
Less: Transfer as per Scheme of
Arrangement for Demerger
Add: Transfer from Statement of Profit
and Loss
Less: Demerged Company's share of
demerger expenses
As at the end of the year
Other reserves
Capital subsidy
Retained Earnings
As at the beginning of the year
Add: Profit for the year
Less: Reductions during the year
Dividend
Dividend distribution tax
Transfer to General reserve
Unwinding of discount
Total
-
As at 31 March 2016
As at 1 April 2015
169
-
169
169
-
-
-
169
228
-
228
228
-
-
-
228
1,153
-
1,153
1,153
-
-
-
1,153
1,917
2,789
2,789
-
1,215
-
398
424
-
-
81
-
2,315
-
1,917
2,789
-
9
15,689
2,052
12,347
3,974
8,111
4,235
173
35
398
-
173
35
424
-
1
17,135
19,450
15,689
17,606
12,347
16,695
The disaggregation of changes in OCI by each type of reserves in equity is disclosed in note 41.
A.
Summary of Other Equity
Particulars
As ar 31
March 2016
As at 1
April 2015
Capital Reserve
-
-
169
Capital Redemption Reserve
-
-
228
-
-
1,153
2,315
1,917
2,789
-
-
9
Retained Earnings
17,135
15,689
12,347
Total other Equity
19,450
17,606
16,695
Securities premium account
General Reserve
Other Reserves
74
As at 31
March 2017
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
13
Amounts in ` Mln
Other Equity (Contd.)
B.
Description of nature and purpose of each reserve
Securities Premium account
Security premium account is created when shares were issued at premium.The Company may issue fully paid-up bonus
shares to its members out of the security premium reserve account, and company can use this reserve for buy-back of
shares. However, these reserves were transferred as a part of scheme of demerger.
Capital Redemption reserve
Capital Redemption reserve was created for buy back of shares. The company may issue fully paid-up bonus shares
to its members out of Capital Redemption reserve. However, these reserves were transferred as a part of scheme of
demerger.
Capital Reserve
Capital Reserve was created as a result of amalgamation of various legal entities in earlier years. The same has been
transferred as a part of scheme of demerger.
General Reserve and Retained Earnings
These represent the accumulated profit the company has. These are free reserves for the company. The company can
declare dividend or retain it for future use.
Other Reserves
14
Other reserves pertain to capital subsidy.
Non-current financial liabilities - Borrowings
As at 31
March 2017
As at 31
March 2016
As at 1 April
2015
Long Term maturities of finance lease obligations (secured)
405
155
186
The finance lease obligations are secured by underlying assets (leased vehicles and IT devices) [refer note 2].The legal title of
the vehicles and IT devices vests with the lessors and the lease term varies between 3-5 years.The total minium lease liability
for assets obtained on finance lease is ` 814 (Previous year - ` 318) which includes interest of `128 (Previous year - ` 57).
The maturity profile of finance lease obligations is as follows:
15
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
Minimum
Lease
payments
Present
value
Minimum
Lease
payments
Present
value
Minimum
Lease
payments
Present
value
Payable within 1 year
330
280
138
106
140
108
Payable between 1-5 years
484
405
180
155
218
186
Total minimum lease
payments
814
685
318
261
358
294
Less: Interest
129
-
57
-
64
-
Present value of minimum
lease payments
685
685
261
261
294
294
Other non-current liabilities
As at 31 March 2017
As at 31 March 2016
As at 1 April 2015
Income received in advance
537
409
451
Employee related payables
209
270
84
Security deposits
6
6
7
752
685
542
Annual
Report 2016-17
75
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
16
Amounts in ` Mln
Provisions
Long-term
Short-term
As at 31
As at 31
March 2017 March 2016
As at 1
As at 31
As at 31
April 2015 March 2017 March 2016
As at 1
April 2015
Provision for employee benefits
Gratuity (refer note 28)
415
353
247
23
8
17
Compensated absences (refer note 28)
236
238
211
29
21
21
Post-employment medical benefits
-
-
-
18
19
23
Retention and performance pay
(refer note 16.1)
-
-
13
-
91
95
Warranty (refer note 16.1)
-
-
-
242
228
206
Legal and regulatory (refer note 16.1)
-
-
-
330
333
491
Others
-
-
-
-
-
36
651
591
471
642
700
889
Personnel Miscellaneous
related
risks
Total
Miscellaneous risks (refer note 16.1)
Additional disclosure relating to provisions:
16.1 Movement in provisions:
Class of provisions
Warranty
Opening balance
Add: Accruals
Less: Utilisation
Legal and
regulatory
228
333
91
-
652
(206)
(491)
(108)
(36)
(841)
(173)
(524)
(129)
(34)
(860)
428
23
169
-
620
(461)
(29)
(172)
-
(662)
(427)
(23)
(152)
(2)
(604)
413
-
260
-
673
(178)
-
(617)
-
(173)
-
(567)
-
26
-
-
26
-
(18)
-
(12)
(30)
(439)
(394)
Less: Write back
Less: Transfer as per Scheme of Arrangement
for Demerger
Closing balance
-
(56)
-
-
(56)
-
-
-
-
-
-
(169)
(11)
(24)
(204)
-
-
-
-
-
243
330
-
-
573
(228)
(333)
(91)
-
(652)
(491)
(108)
(36)
(841)
(206)
Figures given in (brackets) relate to previous years as applicable.
76
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
16.2 Nature of provisions:
(a) Warranty
The Company provides for the estimated liability on warranty given on sale of its products based on past
performance of such products. The provision represents the expected cost of warranty and free of charge
services and it is expected that the expenditure will be incurred over the warranty 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
(d) Miscellaneous risks
17
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.
The Company has created provisions following the accounting concept of conservatism towards possible outflow
of resources in respect of other claims against the Company.
Current Financial Liabilities
As at 31
March 2017
(a) Borrowings
Loans repayable on demand
From banks
Bank overdraft (unsecured)
As at 31
March 2016
-
-
287
287
69
3,546
1,446
5,061
Trade payables are non-interest bearing and are normally settled on sixty day terms.
(c) Other financial liabilities
Current maturities of finance lease obligations (refer note 14)
280
Interest accrued but not paid
12
Unpaid dividend
12
Book overdraft
8
Other payables:
Payables for purchase of fixed assets (other than micro and small
35
enterprises)
Employee related payables
753
Security deposits
10
1,110
Other current liabilities
39
3,217
2,150
5,406
91
2,742
2,033
4,866
106
11
63
108
10
37
58
51
617
10
865
767
8
981
(b) Trade Payables
Dues to Micro, Small and Medium Enterprises (refer note 42)
Dues to others
Dues to related parties
18
As at 1
April 2015
As at 31
March 2017
Income received in advance
847
As at 31
March 2016
714
Other payables:
Advances received from customers
Statutory dues
As at 1
April 2015
609
-
1,366
1,737
1,191
658
840
491
2,871
3,291
2,291
Annual
Report 2016-17
77
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
19
Revenue from operations
Sale of products (Including excise duty)
Sale of services
Other operating revenues
Revenue from operations (net)
Breakup of other operating revenues
Liabilities no longer required written back
Finance income - leases
Miscellaneous
20
21
31
261
20
312
352
12
20
24
11
419
488
27
16
21
552
419
2,262
506
2,175
222
1,739
419
1,542
13,969
15,674
6
950
2,613
3,569
540
2,420
2,960
7
1,016
2,564
3,587
(18)
6
950
2,613
3,569
(609)
8,998
8,155
306
290
Defined benefit plan expense
95
179
Expense on Employee Stock Option Schemes
85
71
Other income
Interest income (other than on investments)
Surplus on disposal of fixed assets
Interest income on defined benefit plan
Interest income on Security Deposits
Other non-operating income
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
Cost of raw materials consumed
* represents Medical equipment components
Purchases of stock-in-trade (goods purchased for resale)
23
Changes in inventories of finished goods, stock-in-trade and work-in-progress
Stock at the beginning of the year
Finished goods
Work-in-Progress
Stock-in-trade (goods purchased for resale)
Total
Stock at the end of the year
Finished goods
Work-in-Progress
Stock-in-trade (goods purchased for resale)
Changes in inventories of finished goods, stock-in-trade and work-in-progress
Employee benefits expense
Salaries, wages and bonus
Contribution to provident and other funds
Staff welfare expenses
78
Year ended 31 Year ended 31
March 2017
March 2016
21,512
22,189
15,211
12,978
266
312
36,989
35,479
26
198
42
266
22
24
Amounts in ` Mln
Standalone
505
456
9,989
9,151
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
Year ended 31 Year ended 31
March 2017
March 2016
25
26
27
Finance costs
Interest on Finance Lease
Net interest on the net defined benefit liability
Other interest expense
Total interest expense
Unwinding of discount and effect of changes in discount rate on provisions
Total Finance costs
Depreciation and amortization expense
Depreciation of tangible fixed assets (refer note 2)
Other expenses
Power and fuel
Packing, freight and transport
Rent
Repairs to buildings
Insurance
Rates and taxes
Travelling and conveyance
Legal and professional
Publicity
IT and Communication
Provision for doubtful trade receivables and loans and advances
Warranty
Net loss on foreign currency transaction and translation
Miscellaneous
(a)
(b)
Legal and professional includes payments to auditors as given below:
57
44
11
112
1
113
42
64
5
111
1
112
507
507
469
469
118
686
710
121
91
22
1,049
456
974
1,072
113
428
293
1,202
7,335
141
331
548
231
88
48
984
305
1,787
605
138
455
57
855
6,573
As Auditor - statutory audit fees ` 3.2 (Previous year - ` 9.9), tax audit fees ` 1.5 (Previous year - ` 2); In other
capacity - taxation matters ` 0.3 (Previous year - ` 0.3), certification ` 0.2 (Previous year - ` 1.1) and reimbursement
of expenses ` 0.5 (Previous year - ` 1).
Miscellaneous include - (i) undepreciated value of fixed assets written off / provided for - ` 23 (Previous year - ` Nil,
(ii) handling charges - ` 64 (Previous year - ` 200), (iii) royalty - ` 169 (Previous year - ` 187), (iv) commission - ` 166
(Previous year - ` 123), (v) donation - ` NIL (Previous year - ` Nil and (vi) Corporate Social Responsibility expenditure
- Gross amount required to be spent ` 99 (Previous year - ` 68), amount spent towards various schemes as prescribed
under Section 135 of the Companies Act, 2013 ` 75 (Previous year - ` 33).
Details of CSR Expenditure:
a)
b)
Gross amount required to be spent by the group during the year
Amount spent during the year ending on 31st March, 2017:
i)
For Purposes mentioned below:
In Cash
Yet to be paid in Cash
ii) On purposes other than (i) above
In Cash
Yet to be paid in Cash
Year Ended 31 Year Ended 31
March 2017
March 2016
99
68
75
24
33
35
Annual
Report 2016-17
79
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
28
Gratuity and other post-employment benefit plans (As per Ind AS 19 Employee Benefits)
The Company has a defined gratuity benefit plan which is governed by Payment of Gratuity Act, 1972. Under the Act, an
employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends
on the member’s length of service and salary at the retirement age. The Company covers a part of the liability towards
employees’ gratuity by way of contributing to a registered trust. Plan assets comprise of contribution to Group Gratuity
Scheme 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. The following table summarizes the components of net benefit expense
recognized in the statement of profit and loss and the amounts recognized in the balance sheet.
Statement of Profit and Loss
Net employee benefit expense (recognized in Employee Cost)
Particulars
Gratuity
Year ended 31 Year ended 31
March 2017
March 2016
Current service cost
Past service cost
Interest cost on benefit obligation
Expected return on plan assets
Curtailment Cost
Settlement cost
Net actuarial (gain)/ loss recognised in the year
Expenses recognized in the statement of profit & loss and Other Comprehensive Income
115
128
-
78
44
64
(20)
(27)
-
-
-
-
18
(12)
157
231
Changes in the present value of the defined benefit obligation are as follows
Particulars
A. Present value
of obligations as at
beginning of the year
Compensated absences
Year ended
31 March 2017
Year ended
31 March 2016
Year ended
31 March 2015
Funded Unfunded
Funded Unfunded
Funded Unfunded
494
111
(1) Current service cost
97
(2) Interest cost
36
Provident Fund
Year
Year
Year
Year
Year
Year
ended
ended
ended
ended
ended
ended
31 March 31 March 31 March 31 March 31 March 31 March
2017
2016
2015
2017
2016
2015
504
311
377
263
260
367
304
18
80
48
62
8
40
24
32
41
92
116
23
19
24
(39)
(19)
(41)
(37)
-
-
-
-
(50)
(20)
(75)
-
-
(5) Actuarial (gain) / loss
(23)
38
(36)
150
83
9
(6) Actuarial (gain) /
loss due to Interest rate
guarantee
-
-
-
-
-
(7) Employees’
contribution
-
-
-
-
(8) Acquisition/Business
Combination/Divestiture
-
(3)
(130)
(9) Change in reserves
-
-
(10) Transfer in
-
(11) Past service cost
565
(3) Benefits settled
(4) Settlements
Present value of
obligations as at end of
the year
80
Gratuity
Standalone
3,397
3,473
2,649
100
448
241
227
25
323
11
269
(106)
(73)
(411)
(335)
(312)
-
-
-
-
-
(28)
31
15
-
-
-
-
-
-
-
562
244
90
-
-
-
-
-
636
349
311
(385)
-
(5)
(2)
(173)
(4)
-
(781)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
190
195
239
-
78
-
-
-
-
-
-
-
-
-
153
495
111
504
311
266
259
367
5,145
3,397
3,473
Notes to the Financial Statements for the year ended 31 March 2017
28
Amounts in ` Mln
Gratuity and other post-employment benefit plans (As per Ind AS 19 Employee Benefits) (Contd.)
Changes in the defined benefit obligation and fair value of plan assets as at 31 March 2017:
Change in the fair value of plan assets are as follows:
Particulars
Year ended
31 March 2017
Gratuity
Year ended
31 March 2016
Year ended
31 March 2015
Compensated absences
Provident Fund
Year
Year
Year
Year
Year
Year
ended
ended
ended
ended
ended
ended
31 March 31 March 31 March 31 March 31 March 31 March
2017
2016
2015
2017
2016
2015
Funded Unfunded Funded Unfunded Funded Unfunded
B. Change in Plan
Assets
Plan assets as at
245
288
256
3,473
3,564
2,671
beginning of the year
(1) Expected return on
20
27
24
365
11
271
plan assets
(2) Contributions
58
59
62
(3) Benefits settled
(39)
(41)
(50)
(4) Employer and
1,084
590
537
Employee contribution
(5) Transfer in
190
195
239
(6) Benefit payments
(411)
(335)
(312)
(7) Asset gain / (loss)
(3)
(4)
(4)
637
273
158
(8) Settlements
(9) Acquisition/Business
(84)
(827)
Combination/Divestiture
Plan assets as at end of
281
245
288
5,338
3,471
3,564
the year
Surplus
192
74
91
The above surplus of ` 192 (Previous year - ` 74) has not been recognised in the financial statements in accordance with Ind AS 19 Employee Benefits, since the surplus is not
available to the Company either in form of refunds or as reduction of future contributions.
C. Actual return on
17
22
20
plan assets
D. Reconciliation of
present value of the
obligation and the
fair value of the plan
assets:
(1) Present value of
(566)
(154)
(494)
(111)
(504)
(311)
(265)
(260)
(367)
obligations at end of
the year
(2) Fair value of Plan
281
245
288
assets
Liability recognised in
(285)
(154)
(249)
(111)
(216)
(311)
(265)
(260)
(367)
Balance Sheet
E. Components of
Employer Expense:
(1) Current service cost
97
18
80
48
62
41
92
116
100
(2) Interest cost
36
8
40
24
32
23
19
24
24
(3) Expected return on
(20)
-27
-24
plan assets(estimated)
(4) Curtailments
(5) Past service cost
0
78
(4) Actuarial (gain) / loss
(20)
38
(161)
150
87
9
(28)
31
15
Total expense
93
64
10
222
157
73
83
171
139
recognised in
Statement of Profit
and Loss and OCI
The gratuity and compensated absences expenses have been recognised in “Employee benefits expenses” under note 24 to the Financial Statements.
Annual
Report 2016-17
81
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
28
Amounts in ` Mln
Gratuity and other post-employment benefit plans (As per Ind AS 19 Employee Benefits) (Contd.)
F. Experience
Description
Year ended
31 March
2017
Defined Benefit Obligations
566
Plan Assets
282
Surplus/(Deficit)
(284)
Experience adjustments on Plan assets/
(75)
liabilities (gain) / loss
Adjustments
Gratuity (Funded)
Year ended Year ended Year ended Year ended
31 March
31 March
31 March
31 March
2016
2015
2014
2013
495
504
377
329
245
288
256
203
(250)
(216)
(121)
(126)
(47)
306
65
80
Description
Gratuity (Unfunded)
Year ended Year ended Year ended Year ended Year ended
31 March
31 March
31 March
31 March
31 March
2017
2016
2015
2014
2013
Defined Benefit Obligations
154
111
311
263
264
Plan Assets
Surplus/(Deficit)
(154)
(111)
(311)
(263)
(264)
Experience adjustments on Plan assets/
54
148
(22)
(44)
13
liabilities (gain) / loss
Description
Provident Fund
Year ended Year ended Year ended Year ended Year ended
31 March
31 March
31 March
31 March
31 March
2017
2016
2015
2014
2013
Defined Benefit Obligations
5,145
3,397
3,473
2,649
2,149
Plan Assets
5,337
3,471
3,564
2,671
2,176
Surplus/(Deficit)
192
74
91
22
27
Experience adjustments on Plan assets/
(637)
(273)
(158)
69
(13)
liabilities (gain) / loss
G. Assumptions
Financial Assumptions
Discount factor
Estimated rate of return on plan assets
Salary Increase
Demographic Assumptions
Mortality
Attrition rate
Retirement age
82
Standalone
Gratuity - Funded
Year ended
Year ended
31 March 2017
31 March 2016
7.10%
9.00%
Management, PMS
- 10%,
PIC - 12%
DMC factory 12%,
7.55%
9.00%
Management, PMS
and PIC - 11%,
DMC factory 12%,
IALM (2006-08)
Management -14%,
PMS - 12%,
PIC -9.60%
DMC Factory - 5%
Management and
PIC - 60 years,
Others - 58 years
IALM (2006-08)
Management, PMS
and PIC - 10%,
DMC factory - 5%,
Management and
PIC - 60 years,
Others - 58 years
Compensated absences
Year ended
Year ended
31 March 2017
31 March 2016
7.10%
7.55%
Notes to the Financial Statements for the year ended 31 March 2017
28
Amounts in ` Mln
Gratuity and other post-employment benefit plans (As per Ind AS 19 Employee Benefits) (Contd.)
G.
Sensitivity Analysis
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and expected
salary increase.
The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions
occurring at the end of the reporting period, while holding all other assumptions constant.
Defined benefit obligation
As at 31 March 2017
As at 31 March 2016
Discount rate
a.
Discount rate - 100 basis points
787
663
b.
Discount rate + 100 basis points
661
557
Salary increase rate
H.
29
a.
Rate - 100 basis points
663
558
b.
Rate + 100 basis points
784
660
Within the next 12 months (next annual reporting
period)
58
42
Between 2 and 5 years
241
212
Between 6 and 10 years
301
263
Total expected payments
600
517
Maturity profile of defined benefit obligation
Employees’ Share-based Payments (As per Ind AS 102 Share based Payment):
Certain employees of the company are eligible for stock options granted by the Holding Company (“KPNV”). In conformity
with Ind AS 102 Share based payment, in respect of the grants made on 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.
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.”
Annual
Report 2016-17
83
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
29
Employees’ Share-based Payments (As per Ind AS 102 Share based Payment): (Contd.)
Amounts in ` Mln
(c) Number and weighted average grant-date fair value of Stock Options (EUR)
Grant Date
Weighted average
Outstanding Grants Cancellation Transfer in /
grant-date fair value as at 1 April
(out)
of the share (in Euros)
2016
April 18, 2006
26.28
4,356
April 16, 2007
30.96
April 14, 2008
23.11
July 14, 2008
20.67
April 14, 2009
12.63
April 19, 2010
24.90
4,744
July 19, 2010
24.01
1,080
April 18, 2011
20.90
July 18, 2011
October 17, 2011
January 30, 2012
15.24
5,000
April 23, 2012
14.82
23,034
1,107
-
-
7,083
27
7,110
7,110
3,402
153
3,555
3,555
1,800
1,800
1,800
2,250
2,250
2,250
6,212
3,932
(2,432)
6,212
1,080
1,080
9,114
5,700
(4,164)
10,650
10,650
17.20
2,850
1,350
(1,350)
2,850
2,850
14.52
1,350
1,350
1,350
10,000
15,000
15,000
2,550
25,584
25,584
66,063
Previous Year
(5,463)
Exercise Outstanding Exercisable
as at 31
March 2017
(32)
-
104,394
(5,495)
24,819
(7,946)
77,441
77,441
(13,773)
5,636
30,194
66,063
66,063
(d) Number and weighted average grant-date fair value of Stock Options (USD)
Grant Date
Weighted average
Outstanding Grants Cancellation Transfer in /
grant-date fair value as at 1 April
(out)
of the share (in USD)
2016
April 14, 2008
36.63
306
-
-
-
306
April 14, 2009
33.51
480
-
-
-
-
480
480
786
-
-
-
-
786
786
786
786
Previous Year
1,290
Exercise Outstanding Exercisable
as at 31
March 2017
(504)
306
(e) Number and weighted average grant date fair value of Restricted Shares (EUR)
Grant Date
Weighted average
Outstanding Grants Cancellation Transfer in / Delivered Outstanding
grant-date fair value as at 1 April
(out)
as at 31
of the share (in Euro)
2016
March 2017
October 24, 2014
20.43
708
(708)
-
February 2, 2015
23.89
4,027
(4,027)
-
May 5, 2015
25.32
1,168
(1,168)
-
July 31, 2015
24.59
8,391
(5,594)
2,797
February 1, 2016
24.00
18,586
(6,195)
12,391
April 29, 2016
24.00
-
20,396
20,396
-
364
364
October 28, 2016
Previous Year
32,880
-
-
3,068
-
35,948
13,660
28,145
(2,751)
(1,422)
(4,752)
32,880
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)
84
Standalone
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.
Notes to the Financial Statements for the year ended 31 March 2017
29
Employees’ Share-based Payments (As per Ind AS 102 Share based Payment): (Contd.)
Amounts in ` Mln
(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
April 29, 2016
Weighted
average grant
date fair value
( in Euro)
23.45
30.38
22.92
22.80
20.43
25.19
24.33
24.00
Outstanding
as at 1 April
2016
Previous Year
Grants
Cancellation
Transfer in /
(out)
Delivered
30,837
(30,837)
49,439
1,806
708
61,265
1,549
(6,187)
(1,806)
(708)
(16,584)
-
-
(56,122)
(42,776)
(13,839)
40,775
40,775
73,323
145,604
128,896
Outstanding
as at 31 March
2017
-
-
43,252
44,681
1,549
40,775
130,257
145,604
(h) Method and assumptions for arriving at the Fair Value of Performance Shares
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
-0.45%
2.
Expected dividend yield
3.40%
3.
Expected share price volatility
26%
(i)
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 17,545 (Previous year - 19,110) shares were bought by employees during the year at an average price
of EUR 25.48 (Previous year - EUR 24).
(j)
Expense recognised on account of ”Employee Share-Based Payment” is ` 85 (Previous year - ` 71) and carrying liability
as at 31 March 2017 is ` 414 (Previous year - ` 392).
30
Commitments and contingencies
a. Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for - ` 113 (Previous
year - ` 11).
b. Contingent liabilities
(i) In respect of disputed excise demands - ` 19 (Previous year - ` 19), income tax demands - ` 7,400 (Previous
year - ` 6,268), service tax demands - ` 82 (Previous year - ` 82), VAT- ` 1,125 (Previous year - ` 1,125) and
custom duty ` 62 (Previous year - ` Nil).
The Contingent Liability on account of income tax cases relating to erstwhile lighting business of Philips India
Limited (PIL) is estimated at ` 3,197 (Previous year – ` 2,757) out of common estimated income tax liability of
lighting business and other businesses of Philips India Limited.
As per the MOU (Memorandum of Understanding) dated 31 March 2016 signed between Philips India Limited
and Philips Lighting India Limited at the time of demerger of lighting business, the Income Tax cases upto the
effective date of demerger shall be contested by Philips India Limited and the amount of liability, if any, upon
conclusion of case relating to lighting business shall be payable by Philips Lighting India Limited to Philips India
Limited on the basis of respective segment turnover (agreed as part of MOU) of relevant years
(ii) Claims not acknowledged as debts by the Company - Nil (Previous year - ` 48).
(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.
Annual
Report 2016-17
85
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
31
Related party transactions (As per Ind AS 24 Related Party Disclosures)
Amounts in ` Mln
(a) Names of companies where control exists:
Holding and ultimate holding company
:
Koninklijke Philips N.V (KPNV)
Subsidiary Companies
:
Preethi Kitchen Appliances Private Limited
Philips Home Care Services India Private Ltd
HealthMap Diagnostics Private Limited
Associate Company
:
(b) Other related parties with whom transactions have taken place during the year:
(i)
Fellow Subsidiary Companies
:
As per list given below
Fellow Subsidiary Companies:
Argus Imaging B.V.
Burton Medical Products Corporation
Dameca A/S
Lifeline Systems Company
Lumileds India Private Limited
Philips (China) Investment Company, Ltd.
Philips Aktiebolag
Philips Austria GmbH
Philips BioCell A/S
Philips Consumer Lifestyle B.V.
Philips Digital Mammography Sweden AB
Philips Egypt (Limited Liability Company)
Philips Electronics Australia Limited
Philips Electronics Bangladesh Private Limited
Philips Electronics Hong Kong Limited
Philips Electronics Middle East & Africa B.V.
Philips Electronics NA Corporation
Philips Electronics Nederland B.V.
Philips Electronics North America Corporation
Philips Electronics Singapore Pte Ltd
Philips Electronics UK Limited
Philips Export B.V.
Philips GmbH
Philips Healthcare (Suzhou) Co., Ltd.
Philips Healthcare Informatics, Inc.
Philips Innovative Applications
Philips International B.V.
(ii) Employee Trusts
Philips India Ltd Management Staff Provident Fund Trust
(iii) Key Management Personnel
(1) Executive Directors:
(i) Mr.V. Raja
(ii) Mr.Hariharan Madhavan
(2) Non-Executive Directors:
(i) Mr.S.M.Datta
(ii) Mr.Vikram Mukund Limaye
(iii) Mr.Vivek Gambhir
(iv) Ms.Geetu Gidwani Verma
(3) Company Secretary:
Mr.Rajiv Mathur
86
Standalone
Fellow Subsidiary Companies:
Philips Lanka Solutions (Private) Limited
Philips Lighting B.V.
Philips Lighting India Limited
Philips Medical Systems Nederland B.V.
Philips Medical Systems (Cleveland), Inc.
Philips Medical Systems DMC GmbH
Philips Medical Systems Indústria e Comércio Ltda.
Philips Medical Systems Ltda.
Philips Medical Systems Nederland B.V.
Philips Medical Systems Technologies Ltd.
Philips Medizin Systeme Böblingen GmbH
Philips Nederland B.V.
Philips Oral Healthcare, Inc.
Philips Oy
Philips Polska Sp.z.o.o.
Philips South Africa (Proprietary) Limited
Philips Technologie GmbH
Philips Ultrasound, Inc.
PT. Philips Indonesia
Respironics California, Inc.
Respironics, Inc.
Saeco International Group S.p.A.
Shenzhen Goldway Industrial Inc.
VISICU, Inc.
Volcano Corporation
Volcano Europe, B.V.B.A.
Witt Biomedical Corporation
OUTSTANDINGS
Payable
4
Payable *
Receivable
133
Receivable *
* Figures in brackets indicate that of 1 April 2015
Contributions to Employees’
Benefit Plans
166
-
-
MANAGERIAL REMUNERATION
Mr. A.Krishnakumar
Mr. Hariharan Madhavan
Mr.V. Raja
Mr. Rajiv Mathur
Mr. S.M.Datta
Mr.Vikram Mukund Limaye
Mr.Vivek Gambir
Mrs. Geetu Gidwani Verma
FINANCE
Dividend Paid
Interest income
Interest Expense
Inter corporate deposits given
Inter corporate deposits repaid
Others - Purchase of Investment
-
1,994
-
SALES
Goods
Fixed assets
Services
Reimbursements
DEPUTATION OF PERSONNEL
Charge
Recovery
107
22
PURCHASES
Goods
Fixed assets
Services
Reimbursements
Others
1,336
1,074
17
2
-
-
4
2,436
2
9,532
298
8,481
58
882
177
-
58
2,758
-
-
62
-
367
31
-
6
-
50
-
-
175
7
-
-
-
-
-
30
59
16
2
1
1
1
-
-
-
-
48
551
-
-
-
-
-
Year ended 31 March 2017
Ultimate Subsidiary
Fellow
Associate
Key
Employee
Holding Companies Subsidiary Company Managerial
Trusts
Company
Companies
Personnel
31 Related party transactions (As per Ind AS 24 Related Party Disclosures) (Contd.)
(c) Nature of transactions
27
(9)
99
(42)
-
166
-
-
-
1,243
-
91
84
Ultimate
Holding
Company
36
(34)
(2,469)
-
227
1,670
4,095
3,797
-
-
3
67
1
387
24
-
Subsidiary
Company
2,033
(1,945)
2,008
(1,632)
-
134
134
-
-
-
5
2,443
8,661
601
12,182
59
1,238
100
-
9
-
-
-
-
-
398
-
-
Year ended 31 March 2016
Fellow
Associate
Subsidiary
Company
Companies
-
-
-
-
-
-
27
12
13
16
1
1
1
0
Key
Managerial
Personnel
-
-
-
-
-
54
(46)
-
620
Employee
Trusts
Notes to the Financial Statements for the year ended 31 March 2017
Annual
Report 2016-17
87
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
31
Related party transactions (As per Ind AS 24 Related Party Disclosures) (Contd.)
Relationship / Name of the related party
Description of the nature
of transaction
Amounts in ` Mln
Value of the transactions
Year ended
Year ended
31 March 2017 31 March 2016
(i) Fellow subsidiary Companies:
Philips Medical Systems Nederland B.V.
Purchase of goods
2,861
2,540
Philips Consumer Lifestyle B.V.
Purchase of goods
1,586
3,409
Philips Electronics Singapore Pte Ltd
Purchase of goods
1,707
1,361
Philips Electronics Singapore Pte Ltd
Purchase of fixed assets
33
28
Philips Medical Systems Nederland B.V.
Purchase of fixed assets
8
10
Philips Medical Systems DMC GmbH
Purchase of fixed assets
13
PT. Philips Indonesia
Purchase of fixed assets
10
Philips Electronics Nederland B.V.
Purchase of services
576
881
Philips Consumer Lifestyle B.V.
Reimbursements paid
15
Philips Electronics Nederland B.V.
Reimbursements paid
55
Philips Electronics Bangladesh Private Limited
Reimbursements paid
82
Philips Lighting India Limited
Reimbursements paid
55
Philips Medical Systems Nederland B.V.
Sale of goods
1,993
994
Philips Lighting India Limited
Sale of Fixed Assets
2
Philips Electronics Nederland B.V.
Sale of services
2,378
1,801
Philips Electronics North America Corporation
Sale of services
1,217
Philips Medical Systems Nederland B.V.
Sale of services
1,727
2,050
Philips Healthcare Informatics, Inc.
Sale of services
1,916
Philips Medical Systems Nederland B.V.
Reimbursements received
131
Philips Electronics Bangladesh Private Limited
Reimbursements received
61
Philips Lighting India Limited
Reimbursements received
33
544
Philips South Africa (Proprietary) Limited
Deputation recovery
1
Philips Medical Systems Nederland B.V.
Deputation recovery
1
Philips Polska Sp.z.o.o.
Deputation recovery
1
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 Singapore Pte Ltd
Payable
204
Philips Medical Systems Nederland B.V.
Payable
488
642
Philips Consumer Lifestyle B.V.
Payable
533
Philips Medizin Systeme Böblingen GmbH
Payable
151
Philips Electronics Bangladesh Private Limited
Receivable
87
Philips Consumer Lifestyle B.V.
Receivable
562
Philips Medical Systems Nederland B.V.
Receivable
84
528
Philips Ultrasound, Inc.
Receivable
57
VISICU, Inc.
Receivable
64
Philips Lighting India Limited
Receivable
544
Philips Electronics Nederland B.V.
Receivable
316
(ii) Employee Trusts:
Philips India Ltd Management Staff Provident Fund Trust Contributions
551
620
Philips India Ltd Management Staff Provident Fund Trust Payable
48
54
* represents material transactions of the same type with related parties during the year which comprise more than 10% of
aggregate value of transactions.
Note: Transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions.
Outstanding balances at the year-end are unsecured, interest free and will be settled in cash.
88
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
31
Related party transactions (As per Ind AS 24 Related Party Disclosures) (Contd.)
Compensation of key management personnel of the company
Details
Amounts in ` Mln
Year ended 31 Year ended 31
March 2017
March 2016
Short-term employee benefits
Post-employment benefits*
Total compensation paid to key management personnel
106
64
4
7
110
71
* Key Managerial Personnel who are under the employment of the Company are entitled to post employment benefits and
other long term employee benefits recognised as per Ind AS 19 - “Employee Benefits” in the financial statements. As these
employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above.
32
Significant accounting judgments, estimates and assumptions
The preparation of the company’s standalone financial statements requires management to make judgments, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of assets or liabilities affected in future periods
(i)
Judgments
In the process of applying the company’s accounting policies, management has made the following judgments, which
have the most significant effect on the amounts recognised in the standalone financial statements:
(ii) Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are described below.The company based its assumptions and estimates on parameters available when the
standalone financial statements were prepared. Existing circumstances and assumptions about future developments,
however, may change due to market changes or circumstances arising that are beyond the control of the company. Such
changes are reflected in the assumptions when they occur.
(a) Taxes
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the
amount and timing of future taxable income. Given the wide range of business relationships and the long-term
nature and complexity of existing contractual agreements, differences arising between the actual results and
the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax
income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The
amount of such provisions is based on various factors, such as experience of previous tax audits and differing
interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of
interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective
domicile of the companies.
(b) Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value
of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These include the determination of the
discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its
long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions
are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans
operated in India, the management considers the interest rates of government bonds in currencies consistent
with the currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables
tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases
are based on expected future inflation rates for the respective countries.
Further details about gratuity obligations are given in Note 28.
Annual
Report 2016-17
89
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
32
Significant accounting judgments, estimates and assumptions (Contd.)
(c) Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured
based on quoted prices in active markets, their fair value is measured using valuation techniques including the
DCF model. The inputs to these models are taken from observable markets where possible, but where this is
not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of
inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the
reported fair value of financial instruments. See Note 34 and 35 for further disclosures.
(d) Warranty
33
The Company periodically assesses and provides for the estimated liability on warranty given on sale of its
products based on past performance of such products.
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
Details
USD Currency
As at 31 March 2017 As at 31 March 2016
INR
FC
INR
FC
(in 000s)
(in 000s)
Receivables
Payables
2,691.28 41,500.00 2,683.33 40,500.00
As at 1 April 2015
As at 31 March 2017
INR
FC
INR
FC
(in 000s)
(in 000s)
2,397.83 38,500.00
-
Euro Currency
As at 31 March 2016
INR
FC
(in 000s)
-
(b) Foreign exchange currency exposures not covered by Forward Contracts
Details
As at 31 March 2017 As at 31 March 2016
As at 1 April 2015
As at 31 March 2017
USD Exposure
INR
FC
INR
FC
INR
FC
INR
FC
(in 000s)
(in 000s)
(in 000s)
(in 000s)
Receivables
460.31 7,098.00
1,318.67 19,902.89
1,780.34 28,585.48
766.24 11,058.06
Payables
113.98
1,830.05
211.04 3,045.64
As at 31 March 2016
Euro Exposure
INR
FC
(in 000s)
164.52
2,182.15
105.78
1,403.03
Details
Receivables
Payables
Details
Receivables
Payables
34
90
INR
1.15
INR
0.01
FC
(in 000s)
24.87
FC
(in 000s)
0.25
SGD Exposure
INR
FC
(in 000s)
3.08
62.56
AUD Exposure
INR
FC
(in 000s)
0.11
2.11
INR
3.83
INR
8.56
FC
(in 000s)
84.47
FC
(in 000s)
180.79
INR
(0.41)
INR
0.46
FC
(in 000s)
(43.12)
FC
(in 000s)
5.71
CNY Exposure
INR
FC
(in 000s)
1.76
171.72
GBP Exposure
INR
FC
(in 000s)
-
As at 1 April 2015
INR
FC
(in 000s)
-
As at 1 April 2015
INR
FC
(in 000s)
404.12
6,047.17
336.50
5,035.28
INR
FC
(in 000s)
-
-
INR
FC
(in 000s)
1.38
15.00
0.92
9.99
Financial Instruments -Financial assets and financial liabilities
The accounting classification of each category of financial instrument their carrying amounts and their fair value amounts
are set out below:As at 31 March 2017
Financial Assets
Fair value
Amortised
Total
Total Fair
through
cost
Carrying
Value
Profit or loss
value
Trade Receivables (Non-Current)
1,088
1,088
1,088
Other Financial Assets (Non-Current)
206
206
206
Trade receivables (Current)
4,982
4,982
4,982
Cash and cash equivalents
5,161
5,161
5,161
Other Financial Assets (Current)
914
914
914
Total
12,351
12,351
12,351
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
34
Financial Instruments -Financial assets and financial liabilities (Contd.)
As at 31 March 2016
Financial Assets
Fair value
Amortised
through
cost
Profit or loss
Trade Receivables (Non-Current)
1,688
Other Financial Assets (Non-Current)
181
Trade receivables (Current)
6,823
Cash and cash equivalents
5,406
Other Financial Assets (Current)
822
Total
14,920
As at 1 April 2015
Financial Assets
Trade Receivables (Non-Current)
Other Financial Assets (Non-Current)
Trade receivables (Current)
Cash and cash equivalents
Other Financial Assets (Current)
Total
As at 31 March 2017
Financial Liabilities
Borrowings(Non-Current)
Borrowings(Current)
Trade Payables(Current)
Other Financial Liabilities(Current)
Total
As at 31 March 2016
Financial Liabilities
Borrowings(Non-Current)
Borrowings(Current)
Trade Payables(Current)
Other Financial Liabilities(Current)
Total
As at 1 April 2015
Financial Liabilities
Borrowings(Non-Current)
Borrowings(Current)
Trade Payables(Current)
Other Financial Liabilities(Current)
Total
Fair value
through
Profit or loss
-
Amortised
cost
Fair value
through
Profit or loss
-
Amortised
cost
Fair value
through
Profit or loss
-
Amortised
cost
Fair value
through
Profit or loss
-
Amortised
cost
2,064
217
5,332
2,534
2,808
12,955
405
5,061
1,110
6,576
155
5,406
865
6,426
186
287
4,866
981
6,320
Amounts in ` Mln
Total
Carrying
value
1,688
181
6,823
5,406
822
14,920
Total Fair
Value
Total
Carrying
value
2,064
217
5,332
2,534
2,808
12,955
Total Fair
Value
Total
Carrying
value
405
5,061
1,110
6,576
Total Fair
Value
Total
Carrying
value
155
5,406
865
6,426
Total Fair
Value
Total
Carrying
value
186
287
4,866
981
6,320
Total Fair
Value
1,688
181
6,823
5,406
822
14,920
2,064
217
5,332
2,534
2,808
12,955
405
5,061
1,110
6,576
155
5,406
865
6,426
186
287
4,866
981
6,320
Annual
Report 2016-17
91
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
35
Amounts in ` Mln
Fair value hierarchy
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation
technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either
directly or indirectly
Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable
market data
The following table provides the fair value measurement hierarchy of the company’s assets and liabilities.
Quantitative disclosures fair value measurement hierarchy for assets as at 31 March 2017:
Total
Level 1
Level 2
Level 3
Assets carried at cost for which fair value are disclosed
36
Investment property
-
36
-
Quantitative disclosures fair value measurement hierarchy for assets as at 31 March 2016:
Total
Level 1
Level 2
Level 3
Assets carried at cost for which fair value are
disclosed
41
Investment property
-
41
-
Quantitative disclosures fair value measurement hierarchy for assets as at 1 April 2015:
Total
Level 1
Level 2
Level 3
Assets carried at cost for which fair value are disclosed
Investment property
36
41
-
41
-
Financial risk management objectives and policies
The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables.
The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial
assets include loans, trade and other receivables and cash and cash equivalents that are derived directly from its operations.
The Company’s financial risk management is an integral part of how to plan and execute its business strategies.The Company
is exposed to market risk, credit risk and liquidity risk.
The Company’s senior management oversees the management of these risks. The senior professionals working to manage
the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board
of Directors and Audit Committee. This process provides assurance to Company’s senior management that the Company’s
financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified,
measured and managed in accordance with Company policies and Company risk objective.
The Board of Directors reviews and agrees policies for managing each of these risks which are summarized as below:
(a) Market risk
92
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price
risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans
and borrowings, deposits, investments and foreign currency receivables and payables. The sensitivity analyses in the
following sections relate to the position as at March 31 2017.The analyses exclude the impact of movements in market
variables on; the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial
assets and liabilities. The sensitivity of the relevant Profit and Loss item is the effect of the assumed changes in the
respective market risks. This is based on the financial assets and financial liabilities held as of March 31, 2017.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes
in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily
to the Company’s operating activities (when revenue or expense is denominated in a foreign currency).
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum
12-month period for hedges of forecasted sales and purchases.
Foreign currency risk sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in USD and Euro exchange rates, with
all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of
monetary assets and liabilities. The Company’s exposure to foreign currency changes for all other currencies is not
material. 5% represents management’s assessment of reasonably possible change in foreign exchange rate.
Change in
Effect on profit before tax
Effect on total equity
US$ rate
Year ended Year ended 31 Year ended 31
Year ended Year ended 31 Year ended 31
31 March
March 2016
March 2015
31 March
March 2016
March 2015
2017
2017
+ 5%
-2.20
-1.17
-2.03
-2.20
-1.17
-2.03
-5%
2.20
1.17
2.03
2.20
1.17
2.03
Change in
Effect on profit before tax
Effect on profit after tax
Euro rate
Year ended Year ended 31 Year ended 31
Year ended Year ended 31 Year ended 31
31 March
March 2016
March 2015
31 March
March 2016
March 2015
2017
2017
+ 5%
1.92
0.22
0.70
1.92
0.22
0.70
-5%
-1.92
-0.22
-0.70
-1.92
-0.22
-0.70
(b) Credit risk
Credit Risk is the risk that the counter party will not meet its obligation under a financial instrument or customer
contract, leading to a financial loss.The Company is exposed to credit risk from its operating activities (primarily trade
receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other
financial instruments.
(i) Trade receivables
Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures
and control relating to customer credit risk management. Credit quality of a customer is assessed based on an
extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment.
Outstanding customer receivables are regularly monitored and any shipments to major customers are generally
covered by letters of credit or other forms of credit insurance as at Mar 31, 2017.
Our historical experience of collecting receivables is that credit risk is low, as its customers are located in several
juristictionns and industries and operate in largely indipendent markets. Hence, trade receivables are considered
to be a single class of financial assets.
(ii) Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department
in accordance with the Company’s policy. Investment of surplus funds are made in bank deposits.The limits are set
to minimise the consultation of risk and therefore mitigate financial loss through counterparty potential failure
to make payments.
The Company maintains exposure in cash and cash equivalents and term deposits with banks, The Company has
set counter-parties limits based on multiple factors including financial position, credit rating, etc. The Company’s
maximum exposure to credit risk as at 31st March, 2017, 2016 and 1st April, 2015 is the carrying value of each
class of financial assets as illustrated in note 9.
(c) Liquidity risk
Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The
Company’s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due
without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions. The
Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended 31st March,
2017 and 31st March, 2016. Cash flow from operating activities provides the funds to service the financial liabilities
on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an ongoing basis to meet operational needs. Any short term surplus cash generated, over and above the amount required
for working capital management and other operational requirements, is retained as cash and cash equivalents (to the
extent required) and any excess is invested in interest bearing term deposits with appropriate maturities to optimise
the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.
Annual
Report 2016-17
93
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
Maturity profile of financial liabilities
The table below provides the details regarding the remaining contractual maturities of financial liabilities at the reporting
date based on contractual undiscounted payments.
Undiscounted Amount
Carrying
Payable More than 1
Amount within 1 year
years
Total
As at 31 March 2017
Borrowings(Non-Current)
405
405
405
Borrowings(Current)
Trade Payables(Current)
5,061
5,061
5,061
Other Financial Liabilities(Current)
1,110
1,110
1,110
As at 31 March 2016
Borrowings(Non-Current)
155
155
155
Borrowings(Current)
Trade Payables(Current)
5,406
5,406
5,406
Other Financial Liabilities(Current)
865
865
865
As at 1 April 2015
Borrowings(Non-Current)
186
186
186
Borrowings(Current)
287
287
287
Trade Payables(Current)
4,866
4,866
4,866
Other Financial Liabilities(Current)
981
981
981
37
Capital management
For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable
to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard
its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value.
As at 31st March, 2017, the Company has only one class of equity shares and has low debt. Consequent to such capital
structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure,
the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial
plans
For the year
For the year
For the year
ended 31
ended 31
ended 31
March 2017
March 2016
March 2015
Earning Before Interest And Tax
2,771
2,376
2,243
Capital Employed
Return on Capital Employed (ROCE)
38
20,710
18,442
17,564
13%
13%
13%
Dividend paid and proposed
Dividend declared and paid during the year
Dividend paid for the Year ended March 31, 2016 ` 3.00 per share (March 31, 2015
` 3.00 per share)
Dividend distribution tax paid thereon
Proposed Dividend on equity share
Dividend for the Year ended March 31, 2017 ` 3.00 per share (March 31, 2016
` 3.00 per share)
Dividend distribution tax thereon
94
Standalone
For the year
ended 31
March 2017
For the year
ended 31
March 2016
173
173
35
208
35
208
173
173
35
208
35
208
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
39
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 were 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.
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.
* Discontinued operations are excluded from the results of continuing operations and are presented as a single amount
as “profit or loss after tax” from discontinued operations in the Statement of Profit and Loss.
Annual
Report 2016-17
95
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
Break-up of aggregate amounts in respect of revenue and expenses
Discontinuing Operations
along with pre-tax profit or loss of Lighting operations are as follows:
Particulars
Year ended 31 Period ended
March 2017
31 Jan 2016
Revenue from operations (net)
27,556
Cost of raw materials consumed
1,983
Purchase of stock-in-trade
14,880
Changes in inventories of work-in-progress, finished goods and stock-in-trade
211
Employee benefit expense
2,038
Finance cost
7
Depreciation
307
Other expenses
4,697
Exceptional Items*
225
Operating expenses
24,348
Profit / (loss) before tax
3,208
Current tax
(1,244)
Deferred tax
133
Profit / (loss) after tax
2,097
* Relates to restructuring costs - (1) Employee voluntary seperation ` 114 and (2) additional depreciation ` 111
provided for writing down certain plant and equipment no longer in active use.
The carrying amounts of the assets and liabilities
of Lighting operations transferred to the Resulting
Company are as follows:
As at 31
March 2017
As at 31
January 2016
As at 1
April 2015
Total assets
-
9,396
10,029
Total liabilities
-
6,632
6,050
Net assets
-
2,764
3,979
The net cash flows attributable to the Lighting operations is as follows: Year ended 31 Period ended
March 2017
31 Jan 2016
Net cash inflow / (outflow) from operating activities
-
4,030
Net cash inflow / (outflow) from investing activities
-
(196)
Net cash inflow / (outflow) from financing activities
-
(7)
Net cash inflow / (outflow)
-
3,827
The major class of assets and liabilities of the discontinued operations are as under:
Particulars
As at 31
As at 31
March 2017
March 2016
ASSETS:
Non-current assets
Property, plant and equipment
Capital work-in-progress
Financial assets
Current assets
Inventories
Financial assets
Trade receivables
-
96
As at 1
April 2015
-
1,917
67
423
-
2,727
-
3,348
Cash and cash equivalents
-
-
1,171
Current financial assets
-
-
376
Assets classified as discontinued operations
-
-
10,029
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
LIABILITIES:
Non-current liabilities
Long term borrowings
-
-
32
Other long term liabilities
56
Long term provisions
370
Current liabilities
Short term borrowings
-
-
23
Trade payables
40
4,264
Other current liabilities
-
-
718
Short term provisions
-
-
587
Liabilities associated with discontinued operations
-
-
6,050
Earnings per share (EPS)
Calculation of earnings per share
Year ended 31 Year ended 31
March 2017
March 2016
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
2,064
3,966
2,064
1,869
-
2,097
Profit after tax attributable to equity share holders
-Continuing operations
-Discontinued operations
35.88
32.50
Basic and diluted earnings per share (in `)
* The weighted average number of shares takes into account the weighted average effect of changes in treasury share
transactions during the year. There have been no other transactions involving equity shares or potential equity shares
between the reporting date and the date of authorisation of these financial statements.
41
Components of other Comprehensive Income (OCI)
The disaggregation of changes to OCI by each type of reserve in equity is shown below:
Particulars
Re-measurement (gains) / losses on defined benefit plans
42
Year ended 31 Year ended 31
March 2017
March 2016
12
(8)
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 2017
a)
Principal amount remaining unpaid to any supplier as at the end of the year
b)
Interest due on the above amount
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.
As at 31
March 2016
69
39
1
-
-
Annual
Report 2016-17
97
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
43
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.
Disclosure relating to assets given on operating lease:
The company has entered into operating lease arrangements for medical equipments.
-
As at 31
March 2017
a)
-
-
As at 31
March 2016
Total of future minimum lease payments receivable under non-cancellable operating
lease
6
Receivable within 1 year
3
7
Receivable between 1-5 years
3
12
Receivable after 5 years
-
-
19
Total contingent rent recognised as income in the Statement of Profit and Loss for
8
20
the year
Disclosures as required by Indian Accounting standard (Ind As 101) First time adoption of Indian Accounting
Standards
b)
44
These are Company’s first financial statements prepared in accordance with Ind AS.
The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended March
31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in
the preparation of an opening Ind AS balance sheet as at April 1, 2015 (The Company’s date of transition). In preparing its
opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared
in accordance with accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and
other relevant provisions of the Act (Previous GAAP or Indian GAAP). An explanation of how the transition from previous
GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following
tables and notes.
Exemptions applied
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under
Ind AS. The company has applied the following exemptions:
Deemed cost
➤ Freehold land and buildings (properties), other than investment property, were carried in the balance sheet prepared
in accordance with Indian GAAP on the basis of cost less accumulated depreciation. The company has adopted to
continue with the carrying value for all of its PPE as recognised in its previous GAAP financial as deemed cost at the
transition date i.e. 01 April, 2015.
➤ Since there is no change in the functional currency, the company has elected to continue with the carrying value for all
of its investment property as recognised in its Indian GAAP financial as deemed cost at the transition date.
Estimates
The estimates at 1 April 2015 and at 31 March 2016 are consistent with those made for the same dates in accordance with
Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where
application of Indian GAAP did not require estimation:
➤ FVTOCI – unquoted equity shares
➤ FVTOCI – debt securities
➤ Impairment of financial assets based on expected credit loss model
The estimates used by the company to present these amounts in accordance with Ind AS reflect conditions at 1 April 2015,
the date of transition to Ind AS and as of 31 March 2016.
Investments in subsidiaries and associates
98
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
In separate financial statements, a first-time adopter that subsequently measures an investment in a subsidiary or associate
at cost, may measure such investment at cost (determined in accordance with Ind AS 27) or deemed cost (fair value or
previous GAAP carrying amount) in its separate opening Ind AS balance sheet.
Selection of fair value or previous GAAP carrying amount for determining deemed cost can be done for each subsidiary and
associate. The company has measured the investment made in its subsidiary and associate at deemed cost (previous GAAP
carrying amount).
Recognition of financial assets and financial liabilities
IND AS 109 requires certain categories of financial assets and liabilities to be measured at amortized cost using the effective
interest rate method. In accordance with IND AS 109 “effective interest rate” is the rate that exactly discounts estimated
future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying
amount of a financial asset or to the amortized cost of a financial liability.
IND AS 101 requires a first time adopter to apply the above requirement retrospectively i.e. from the date of initial
recognition of the financial asset/ liability. However, a first time adopter may find it impractical to apply the effective interest
method in IND AS 109 retrospectively. If this is the case, the fair value of financial asset or liability at the date of transition
to IND AS is the new gross carrying amount of that financial asset or the new amortized cost of that financial liability.
As it is impractical to apply the effective interest method in IND AS 109 retrospectively, the fair value of security deposits at
the date of transition to IND AS i.e. March 31, 2015 is the new amortized cost of that financial asset.
(a) Reconciliation of equity as at 1 April 2015 (date of transition to Ind AS)
NOTES Previous GAAP
IND As
Adjustments
ASSETS
Non-current assets
Property, Plant and Equipment
1,900
Capital work-in-progress
36
Investment Property
17
Intangible assets
Investment in an associate and a joint venture
1,000
Financial Assets
Investments
Trade Receivables
2,064
Other Financial Assets
(a)
338
(121)
Deferred tax assets (net)
809
Advance income tax (net of provision)
1,742
Other non current assets
(a)
1,083
69
8,988
(52)
Current assets
Inventories
3,777
Financial Assets
Trade receivables
5,331
Cash and cash equivalents
2,534
Other Financial Assets
(a)
2,755
52
Other current assets
860
15,258
52
Assets classified as discontinued
10,029
operations
34,275
Ind AS
1,900
36
17
1,000
2,064
217
809
1,742
1,151
8,936
3,777
5,331
2,534
2,808
860
15,310
10,029
34,275
Annual
Report 2016-17
99
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
EQUITY
Shareholders’ funds
Equity
Other Equity
Equity attributable to equity holders
LIABILITIES
Non-current liabilities
Financial Liabilities
Borrowings
Other non current liabilities
Provisions
Current liabilities
Financial Liabilities
Borrowings
Trade Payables
Other financial liabilities
Other current liabilities
Provision for taxation (net of advances)
Provisions
575
16,486
(e)
(f)
(e)
186
542
471
1,200
(1)
(1)
-
287
4,866
981
2,291
442
889
186
542
472
287
4,866
981
2,291
442
1,097
-
9,964
6,050
Liabilities associated classified as discontinued
operations
34,275
(b) Reconciliation of equity as at 31 March 2016
NOTES
ASSETS
Non-current assets
Property, Plant and Equipment
Capital work-in-progress
Investment Property
Intangible assets
Investment in an associate and a joint venture
Financial Assets
Investments
Trade Receivables
Other Financial Assets
Deferred tax assets (net)
Advance income tax (net of provision)
Other non current assets
575
16,695
17,061
209
209
(a)
(a)
Local GAAP
Total Assets
100
Standalone
(a)
(a)
Adjustments
-
1,688
287
510
1,742
776
(106)
-
-
4,542
37
(69)
-
6,823
5,406
758
1,357
18,887
30,765
1,199
9,756
6,050
-
1,984
78
17
4,797
11,878
Current assets
Inventories
Financial Assets
Trade receivables
Cash and cash equivalents
Other Financial Assets
Other current assets
(208)
(208)
17,270
64
5
69
34,275
Ind AS
1,984
78
17
4,797
1,688
181
510
1,742
812
11,809
4,542
6,823
5,406
822
1,363
18,956
30,765
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
EQUITY
Shareholders’ funds
Equity
Other Equity
Equity attributable to equity holders
LIABILITIES
Non-current liabilities
Financial Liabilities
Borrowings
Other non current liabilities
Provisions
Current liabilities
Financial Liabilities
Borrowings
Trade Payables
Other financial liabilities
Other current liabilities
Provision for taxation (net of advances)
Provisions
Total Liabilities
(b)&(c)
575
17,398
575
17,606
17,973
208
208
155
685
591
1,431
-
-
5,406
865
3,291
891
700
155
685
591
(b)
5,406
865
3,291
891
908
11,361
30,765
(208)
(208)
(c) Reconciliation of total comprehensive income for the year ended 31 March 2016
NOTES
Local GAAP
Adjustments
Continuing Operations
Income
Revenue from operations
35,579
Other income
(a)
536
16
Total revenue
36,015
16
Expenses
Cost of raw materials consumed
1,542
Purchases of stock-in-trade
15,674
Changes in inventories of work-in-progress,
(609)
finished goods and stock-in-trade
Excise duty on sale of goods
63
Employee benefits expense
(c)
9,163
(12)
Depreciation and amortisation expense
469
Finance costs
(c)
112
Other expenses
6,556
17
Total expenses
32,970
5
Profit before exceptional items and tax
3,045
11
from continuing operations
Exceptional items
Profit / (loss) before tax
3,045
11
Profit / (loss) from continuing operations
3,045
11
Tax expense
Current tax
(1,194)
Deferred tax - release / (charge)
(d)
3
5
Profit / (loss) after tax from continuing
operations
1,854
16
Discontinuing Operations
18,181
1,431
11,153
30,765
IND AS
35,479
552
36,031
1,542
15,674
(609)
63
9,151
469
112
6,573
3,056
32,975
3,056
3,056
(1,194)
6
1,869
Annual
Report 2016-17
101
PHILIPS INDIA LIMITED
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
Profit / (loss) from discontinuing
3,208
3,208
operations
Tax expense
Current tax
(1,244)
(1,244)
Deferred tax - release / (charge)
(d)
133
133
Profit / (loss) after tax from discontinuing
operations
2,097
2,097
Profit / (loss) for the year
3,951
16
3,966
Other comprehensive income
Re-measurement gains / (losses) on defined
(h)
benefit plans and Income tax effect on defined
benefit plans
8
8
Total comprehensive income for the
3,951
24
3,974
period
(Profit/ loss + other comprehensive income)
Profit for the year
Attributable to:
Equity holders of the parent
3,951
16
3,966
Non-controlling interests
Total comprehensive income for the year
Attributable to:
Equity holders of the parent
3,951
24
3,974
Non-controlling interests
Earnings per equity share (for continuing
operations)
Basic and diluted earnings per share
32.41
Earnings per equity share (for
discontinuing operations)
Basic and diluted earnings per share
Note: The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes
Footnotes to the reconciliation of equity as at 1 April 2015 and 31 March 2016 and Statement of profit or loss for
the year ended 31 March 2016
a)
Security Deposits
Under Indian GAAP, the security deposits are valued at cost less any provision for security deposits. IND AS requires certain
categories of financial assets and liabilities to be measured at amortized cost using the effective interest rate method.
Security Deposit is a Financial Asset as the lease agreement gives a contractual right to the company to receive cash. Security
Deposit satisfies the contractual cash flow characteristic test as described in (a) above and it also satisfies the business
model test as there is intention of hold to collect contractual cash flows. Thus the security deposits have to be valued at
amortized cost. Accordingly, advance rentals amounting to INR 42 million (31 March 2015: 68 million) have been reduced
from the security deposits as on 01 April, 2015. Advance Rental divided by term has been recognized as an expense in the
books. Rent which will be amortized in the next one year FY 16-17 amounting to INR INR 6 million (31 March 2015: Nil) has
been recognized as prepaid rent short term in books. Residual amounting to INR 36 million ( 31 March 2015: 68 million) has
been classified as prepaid rent long term in opening balance sheet as on 01 April, 2015. Advance Rental expense and security
deposit income amounting to INR 17 million and INR 16 million have been recognised in statement of profit and loss for the
year ending March 31, 2016.
b)
Provisions
Under Indian GAAP, the company has accounted for provisions, including long-term provision, at the undiscounted amount.
In contrast, Ind AS 37 requires that where the effect of time value of money is material, the amount of provision should
be the present value of the expenditures expected to be required to settle the obligation. The discount rate(s) should not
reflect risks for which future cash flow estimates have been adjusted. Ind AS 37 also provides that where discounting is used,
the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognised as
borrowing cost. This led to a decrease in provision on the date of transition by ` 2 and which was adjusted against retained
earnings.
“Under Indian GAAP, proposed dividends including Dividend Distribution Tax are recognised as a liability in the period to
which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognised as a liability in
the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.
102
Standalone
Notes to the Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
In the case of the Company, the declaration of dividend occurs after period end. Therefore, the liability of ` 208 for the
year ended on 31 March 2015 recorded for dividend has been derecognised against retained earnings on 1 April 2015. The
proposed dividend for the year ended on 31 March 2016 of ` 208 recognized under Indian GAAP was reduced from other
payables and with a corresponding impact in the retained earnings.”
c)
Defined benefit liabilities
Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan
on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss.
Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts
included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net
interest on the net defined benefit liability] are recognised immediately in the balance sheet with a corresponding debit or
credit to retained earnings through OCI.Thus the employee benefit cost is reduced by `12 and Remeasurement gains/ losses
on defined benefit plans has been recognized in the OCI net of tax.
d)
Other comprehensive income
Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately.Under Ind AS, specified
items of income, expense, gains or losses are required to be presented in Other Comprehensive Income `8 (net of
tax))
e)
Statement of cash flows
The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.
45
Disclosure on specified Bank Notes
Pursuant to notification of Ministry of Corporate Affairs dated March 30, 2017, disclosure of specified bank notes (SBN) held
and transacted during the period from November 08, 2016 to December 30, 2016 is provided in table below:
Particulars
SBNs
Other
denomination notes
Total
Closing cash in hand as on 08.11.2016
-
-
-
(+)Permitted receipts
-
-
-
(-) Permitted Payments
-
-
-
(-) Amount deposited in Banks
-
-
-
Closing cash in hand as on 30.12.2016
-
-
-
46
The Company has presented segment information in the consolidated financial statements which are presented in the same
financial report. Accordingly, in terms of Paragraph 3 of Ind AS 108 ‘Operating Segments’, no disclosures related to segments
are presented in this standalone financial statements.
47
All amounts are in ` Million, figures in this financial statements below ` 1 million are shown as blank.
48
Figures relating to April 1, 2015 (date of transition) has been regrouped / reclassified wherever necessary to make them
comparable with the current year figures.
As per our report of even date attached
For and on behalf of the Board
For S.R. Batliboi & Co LLP
Chairman
Chartered Accountants
Firm registration number: 301003E/E300005
Managing Director
Director & CFO
Manoj Kumar Gupta
Director & Company Secretary
Partner
Membership No.: 83906
Non-Executive Director
Place: New Delhi
Place: New Delhi
Date: July 18, 2017
Date: July 18, 2017
S.M.DATTA
(DIN: 00032812)
V. RAJA
(DIN: 00669376)
HARIHARAN MADHAVAN
(DIN: 07217072)
RAJIV MATHUR
(DIN: 06931798)
GEETU GIDWANI VERMA
(DIN: 00696047)
Annual
Report 2016-17
103
PHILIPS INDIA LIMITED
TEN YEAR REVIEW
PARTICULARS
Amounts in ` Mln
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
(15 M)
2007
2008
2009
2010
28,906
31,356
32,656
37,249
55,793
53,674
58,387
63,755
62,819
36,723
2,456
1,900
1,688
1,451
1,813
1,752
3,096
5,600
6,503
3,252
8.5
6.1
5.2
3.9
3.2
3.3
5.3
8.8
10.4
8.9
2,894
2,106
1,850
1,433
1,854
1,858
3,170
6,275
6,278
3,252
10.0
6.7
5.7
3.8
3.3
3.5
5.4
9.8
10.0
8.9
1,903
1,351
1,175
889
1,338
1,228
2,099
4,235
3,975
2,064
6.6
4.3
3.6
2.4
2.4
2.3
3.6
6.6
6.3
5.6
20.2
15.3
14.6
10.1
13.4
11.1
16.1
24.8
22.1
10.3
27.08
19.71
18.97
15.46
23.26
21.35
36.49
73.63
69.11
35.88
2.0
2.0
2.0
2.0
2.5
2.0
2.0
3.0
3.0
3.0
2,694
2,825
3,463
3,524
3,972
4,280
4,295
3937
2079
2,526
16
442
5
-
1,000
1,000
1,000
1,000
4,797
7,605
240
296
352
363
462
437
496
809
510
572
2,255
2,849
3,608
4,131
5,362
5,637
6,293
6,504
4,542
4,554
11,297
10,072
10,258
11,580
14,069
15,142
17,725
22,025
18,837
16,702
Current liabilities & provisions
6,951
7,493
9,485
10,690
12,585
14,737
15,277
16,578
12,531
11,249
Net current assets
6,601
5,428
4,381
5,021
6,846
6,042
8,741
11,951
10,848
10,007
Net Investment
9,551
8,991
8,201
8,908
12,280
11,759
14,532
17,697
18,234
20,710
703
634
575
575
575
575
575
575
575
575
Other reserves
8,709
8,197
7,476
8,231
9,402
10,495
12,459
16,486
17,398
19,450
Shareholders’ interest (net worth)
9,412
8,831
8,051
8,806
9,977
11,070
13,034
17,061
17,973
20,025
139
160
150
102
2,303
689
1,498
636
261
685
9,551
8,991
8,201
8,908
12,280
11,759
14,532
17,697
18,234
20,710
330
418
482
1,033
1,839
1,933
2,541
3,068
3,002
2,467
2,635
3,019
3,311
4,075
7,174
7,427
8,314
10,169
11,214
9,989
1:99
2:98
2:98
1:99
19:81
6:94
10:90
4:96
1:99
3:97
3,135
3,317
3,775
4,762
5,658
5,617
5,830
5,507
3,283
3,727
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
Property, Plant & Equipments
Investments
Deferred tax assets - net
Inventories
Debtors, loans & advances
and cash & bank balances
Represented by
Equity share capital
Borrowings
Total
General
Exports (F.O.B)
Salaries, bonus & staff welfare
(excluding V.R.S)
Debt : Equity Ratio
Number of employees at year end
104
Standalone
Independent Auditor’s Report
To the Members of Philips India Limited
Report on the Consolidated Ind AS Financial Statements
We have audited the accompanying consolidated Ind AS financial statements of Philips India Limited (hereinafter
referred to as “the Holding Company”), its subsidiaries (the Holding Company and its subsidiaries together referred
to as “the Group”) its associate, comprising of the consolidated Balance Sheet as at March 31, 2017, the consolidated
Statement of Profit and Loss including other comprehensive income, the consolidated Cash Flow Statement, the
consolidated Statement of Changes in Equity for the year then ended, and a summary of significant accounting
policies and other explanatory information (hereinafter referred to as “the consolidated Ind AS 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 Ind AS financial
statements in terms of the requirement of the Companies Act, 2013 (“the Act”) that give a true and fair view
of the consolidated financial position, consolidated financial performance including other comprehensive income,
consolidated cash flows and consolidated statement of changes in equity of the Group including its associate in
accordance with accounting principles generally accepted in India, including the Accounting Standards specified under
Section 133 of the Act, read with the Companies (Indian Accounting Standard) Rules, 2015, as amended.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 of the assets of the Group
and of its associate 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 misstatement, whether due to fraud or
error, which have been used for the purpose of preparation of the consolidated Ind AS financial statements by the
Directors of the Holding Company, as aforesaid.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated Ind AS 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, issued by the Institute
of Chartered Accountants of India, as 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 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 Ind AS 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 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 is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS
financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
consolidated Ind AS 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 consolidated state
of affairs of the Group, its associate as at March 31, 2017, their consolidated profit including other comprehensive
Annual
Report 2016-17
105
PHILIPS INDIA LIMITED
income, their consolidated cash flows and consolidated statement of changes in equity for the year ended on that
date.
Report on Other Legal and Regulatory Requirements
As required by section 143 (3) of the Act, based on our audit on separate financial statements and the other financial
information of 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 purpose of our audit of the aforesaid consolidated Ind AS financial statements;
(b) In our opinion proper books of account as required by law relating to preparation of the aforesaid consolidation
of the financial statements have been kept so far as it appears from our examination of those books;
(c) The consolidated Balance Sheet, consolidated Statement of Profit and Loss including the Statement of Other
Comprehensive Income, the consolidated Cash Flow Statement and consolidated Statement of Changes in
Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of
preparation of the consolidated Ind AS financial statements;
(d) In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Accounting Standards
specified under section 133 of the Act, read with Companies (Indian Accounting Standard) Rules, 2015, as
amended;
(e) On the basis of the written representations received from the directors of the Holding Company as on March
31, 2017 taken on record by the Board of Directors of the Holding Company and the reports of the statutory
auditors who are appointed under Section 139 of the Act, of its subsidiary companies, and associate company
none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section
164 (2) of the Act.
(f)
With respect to the adequacy and the operating effectiveness of the internal financial controls over financial
reporting of the Holding Company and its subsidiary companies and associate company refer to our separate
report in “Annexure 1” to this report;
(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, as noted in the ‘Other matter’ paragraph:
i.
The consolidated Ind AS financial statements disclose the impact of pending litigations on its consolidated
financial position of the Group, – Refer Note 17 and 31to the consolidated Ind AS financial statements;
ii.
The Group and its associate did not have any material foreseeable losses in long-term contracts including
derivative contracts during the year ended March 31, 2017.
iii.
There were no amounts which were required to be transferred to the Investor Education and Protection
Fund by the Holding Company, its subsidiaries and associate incorporated in India during the year ended
March 31, 2017.
iv.
The Holding Company, subsidiaries, its associate incorporated in India, have provided requisite disclosures
in Note 51 to these consolidated Ind AS financial statements as to the holding of Specified Bank Notes
on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the
period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the
management representation of the Holding Company regarding the holding and nature of cash transactions,
including Specified Bank Notes, we report that these disclosures are in accordance with the books of
accounts maintained by the Group including its associate and as produced to us by the Management of the
Holding Company.
Other Matter
(a) The consolidated Ind AS financial statements also include the Group’s share of net loss of INR 55 million for
the year ended March 31, 2017, as considered in the consolidated financial statements, in respect of Healthmap
Diagnostic Private Limited associate whose financial statements, other financial information have not been
106
Consolidated
audited and whose unaudited financial statements, other unaudited financial information have been furnished
to us by management. Our opinion on the consolidated Ind AS financial statements, in so far as it relates to
the amounts and disclosures included in respect of the associate, and our report in terms of sub-sections (3)
of Section 143 of the Act, in so far as it relates to the aforesaid associate, is based solely on such unaudited
financial statements, other unaudited financial information. In our opinion and according to the information
and explanation given to us by the Management, these financial statements other financial information are not
material to the group.
(b) The comparative financial information of the Group including its Associate for the year ended March 31, 2016
and the transition date opening balance sheet as at April 01, 2015 included in these consolidated Ind AS financial
statements, are based on the previously issued consolidated financial statements prepared in accordance with
the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for
the year ended March 31, 2016 and March 31, 2015 dated July 25, 2016 and August 18, 2015 respectively
expressed an unmodified opinion on those consolidated financial statements, as adjusted for the differences in
the accounting principles adopted by the Group on transition to the Ind AS, which have been audited by us.
Our opinion above on the consolidated Ind AS financial statements, and our report on Other Legal and Regulatory
Requirements above, is not modified in respect of the above matters with respect to our reliance on the work done
and the financial statements and other financial information certified by the Management.
For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
______________________________
Per Manoj Kumar Gupta
Partner
Membership Number: 83906
Place of Signature: Gurgaon
Date: July 18, 2017
Annual
Report 2016-17
107
PHILIPS INDIA LIMITED
ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE
CONSOLIDATED FINANCIAL STATEMENTS OF PHILIPS INDIA LIMTED
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 as of and for the year
ended March 31, 2017, we have audited the internal financial controls over financial reporting of Philips India Limited
(hereinafter referred to as the “Holding Company”) and its subsidiary companies and its associate company, which
are companies 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 companies and its associate company
which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls
based on the internal control over financial reporting criteria established by the Holding 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. 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 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, both, issued by Institute
of Chartered Accountants of India, and deemed to be prescribed under section 143(10) of the Act, to the extent
applicable to an audit of internal financial controls. 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 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.
108
Consolidated
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.
Opinion
In our opinion, the Holding Company, its subsidiary companies which are companies incorporated in India, have,
maintained 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 March 31, 2017 except in respect
of Healthmap Diagnostic Private Limited an associate whose financial statements for year ended March 31, 2017 have
not been yet been audited, based on the internal control over financial reporting criteria established by the Holding
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 S.R. Batliboi & CO. LLP Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
______________________________
per Manoj Kumar Gupta
Partner
Membership Number:83906
Place of Signature: Gurgaon
Date: July 18, 2017
Annual
Report 2016-17
109
PHILIPS INDIA LIMITED
Consolidated Balance Sheet as at 31 March 2017
ASSETS
Non-current assets
Property, Plant and Equipment
Capital work-in-progress
Investment Property
Goodwill
Intangible assets
Investment in subsidiaries and associates
Financial Assets
a. Trade Receivables
b. Other Financial Assets
Deferred tax assets (net)
Advance income tax (net of provision)
Other non current assets
Current assets
Inventories
Financial Assets
a. Trade receivables
b. Cash and cash equivalents
c. Other Financial Assets
Other current assets
Assets classified as discontinued operations
TOTAL ASSETS
EQUITY AND LIABILITIES
EQUITY
Equity share capital
Equity attributable to equity holders of the parent
Non-controlling Interest
Total equity
LIABILITIES
Non-current liabilities
Financial Liabilities
Borrowings
Other non-current liabilities
Provisions
Current liabilities
Financial Liabilities
a. Borrowings
b. Trade Payables
c. Other financial liabilities
Other current liabilities
Provision for taxation (net of advances)
Provisions
Amounts in ` Mln
NOTES As at 31 March 2017 As at 31 March 2016
3
3
4
5
5
6
7
8
9
10
11
12
2,939
121
76
1,191
1,221
31
2,467
109
76
1,191
1,832
36
2,436
36
76
1,191
2,443
-
1,088
233
572
2,148
1,688
204
510
1,751
2,066
237
809
1,749
973
14
882
10,593
10,746
5,089
4,407
5,079
5,737
915
1,379
6,916
6,383
822
1,435
5,352
2,557
383
889
18,263
28,856
575
15,232
-
20,645
31,391
575
14,678
15,807
2,619
13,588
10,029
35,890
17,872
-
17,536
15
16
17
18
19
17
414
751
754
191
5,725
1,164
2,951
442
657
1,919
158
685
653
154
5,940
947
3,375
891
716
As per our report of even date attached
For and on behalf of the Board
For S.R. Batliboi & Co LLP
Chairman
Chartered Accountants
Firm registration number: 301003E/E300005
Managing Director
Director & CFO
Manoj Kumar Gupta
Director & Company Secretary
Partner
Membership No.: 83906
Non-Executive Director
Place: New Delhi
Place: New Delhi
Date: July 18, 2017
Date: July 18, 2017
Consolidated
12,273
575
16,961
1,496
11,130
12,023
Liabilities classified as discontinued operations
41
TOTAL EQUITY AND LIABILITIES
28,856
31,391
Basis of preparation, measurement and significant accounting
2
policies
Refer accompanying notes forming part of the Consolidated Financial Statements
110
1,230
5,153
41
13
As at 1 April 2015
681
542
532
402
5,287
1,156
2,358
442
904
1,755
10,549
6,050
35,890
S.M.DATTA
(DIN: 00032812)
V. RAJA
(DIN: 00669376)
HARIHARAN MADHAVAN
(DIN: 07217072)
RAJIV MATHUR
(DIN: 06931798)
GEETU GIDWANI VERMA
(DIN: 00696047)
Consolidated Statement of Profit and Loss for the year ended 31 March 2017
Amounts in ` Mln
CONTINUING OPERATIONS
NOTES Year ended 31 March 2017 Year ended 31 March 2016
Income
Revenue from operations
20
41,941
39,735
Other income
21
898
729
Total Income
42,839
40,464
Expenses
Cost of raw materials consumed
22
4,693
3,816
Purchases of stock-in-trade
23
14,371
15,874
Changes in inventories of work-in-progress, finished
24
(57)
(523)
goods and stock-in-trade
Excise duty on sale of goods
701
595
Employee benefits expense
25
10,546
9,594
Finance costs
26
124
658
Depreciation and amortization expense
27
1,193
1,145
Other expenses
28
8,134
7,299
Total expenses
39,705
38,458
Less : Share in Profit/(Loss) of Associate
(55)
(27)
Profit before tax from continuing operations
3,079
1,979
Tax expense
Current tax
8
(1,244)
(1,194)
Deferred tax - release / (charge)
8
56
7
Profit after tax from continuing operations
1,891
792
Discontinuing Operations
Profit before tax from discontinuing operations
41
3,208
Tax expense
Current tax
(1,244)
Deferred tax - release / (charge)
133
Profit after tax from discontinuing operations
41
2,097
Profit for the year
1,891
2,889
Attributable to:
Equity holders of the parent
1,909
2,891
Non-controlling Interest
(18)
(2)
Total comprehensive income for the year
1,877
2,908
Equity holders of the parent
1,895
2,910
Non-controlling Interest
(18)
(2)
Other comprehensive income
Re-measurement gains / (losses) on defined
(20)
23
benefit plans
Income tax effect on defined benefit plans
6
(4)
Other comprehensive income for the year
(14)
19
Total comprehensive income for the year
1,877
2,908
Earnings per equity share (for continuing operations)
42
32.89
13.77
Basic and diluted earnings per equity share of ` 10
each (in `)
Earnings per equity share (for discontinuing
42
operations)
36.45
Basic and diluted earnings per equity share of ` 10
each (in `)
Basis of preparation, measurement and significant
2
accounting policies
Refer accompanying notes forming part of the Consolidated Financial Statements
As per our report of even date attached
For and on behalf of the Board
For S.R. Batliboi & Co LLP
Chairman
Chartered Accountants
Firm registration number: 301003E/E300005
Managing Director
Director & CFO
Manoj Kumar Gupta
Director & Company Secretary
Partner
Membership No.: 83906
Non-Executive Director
Place: New Delhi
Place: New Delhi
Date: July 18, 2017
Date: July 18, 2017
S.M.DATTA
(DIN: 00032812)
V. RAJA
(DIN: 00669376)
HARIHARAN MADHAVAN
(DIN: 07217072)
RAJIV MATHUR
(DIN: 06931798)
GEETU GIDWANI VERMA
(DIN: 00696047)
Annual
Report 2016-17
111
PHILIPS INDIA LIMITED
Consolidated Statement of Changes in Equity for the year ended 31 March 2017
Amounts in ` Mln
A.
B.
EQUITY SHARE CAPITAL
Equity shares of ` 10 each issued, subscribed and fully paid up
As at 1 April 2015
Changes in equity share capital during the year
As at 31 March 2016
Changes in equity share capital during the year
As at 31 March 2017
Number of shares
57,517,242
57,517,242
57,517,242
Amount
575
575
575
OTHER EQUITY
For the year ended 31 March 2017
Particulars
As at 1 April 2015 (A)
Profit for the year
Non- controlling interest’s share in loss of 2015-16
Share in Profit/(Loss) of Associate
Remeasurement benefit of defined benefit plans
Total Comprehensive Income for the year (B)
Transfer to minority Interest
Reversal of Equity Component of Compulsorily
Convertible Debentures
Transfer as per Scheme of Arrangement for
Demerger
Others
Reductions during the year
Transfer to General Reserve
Dividend (Note 40)
Dividend distribution tax (Note 40)
Present Value of CCD
Total (C)
As at 31 March 2016 (A+B+C)
As at 1 April 2016 (D)
Profit for the year
Non- controlling interest’s share in loss of 2016-17
Share in Profit/(Loss) of Associate
Remeasurement benefit of defined benefit plans
Total Comprehensive Income for the year (E)
Transfer to / (from) minority Interest
Buyback/Capital reduction
Gain on Capital reduction / Buy back
Reductions
Transfer to General Reserve
Dividend (Note 40)
Dividend distribution tax (Note 40)
Total (F)
As at 31 March 2017 (D+E+F)
Securities
Premium*
1,153
-
Equity attributable to equity holders of the parent
Reserves and Surplus
Items of OCI Total
NonCapital Capital Capital General
Equity Retained RemeasureControlling
redemption reserve* Subsidy* reserve* Component of earnings*
ment*
interests
reserve*
Compulsory
Convertible
Debentures*
228
169
9
2,789
3,353
9,260
16,961
2,914
2,914
2
(27)
(27)
19
19
2,887
19 2,906
2
2,783
2,783
(2,783)
(3,353)
(2,047)
(5,400)
5,400
(2,846)
(2,846)
-
-
-
424
-
(9)
-
(872)
1,917
1,917
-
(424)
(173)
(35)
491
595
12,742
12,742
1,964
(9)
(173)
(35)
491
(5,189)
14,678
14,678
1,964
(55)
(14)
1,895
(2,799)
1,666
(173)
(35)
(1,341)
15,232
(9)
(173)
(35)
491
(2,572)
17,297
17,297
1,964
(18)
(55)
(14)
1,877
(3,734)
(173)
(35)
(,3942)
15,232
(228)
(169)
-
-
-
(9)
-
-
-
(1,153)
-
(228)
-
(169)
-
-
-
16,961
2,914
2
(27)
19
2,908
-
-
(1,153)
-
Total
Equity
(1,296)
-
-
-
(3,353)
-
(55)
1,909
(2,799)
19
19
(14)
(14)
1,666
-
-
-
-
-
-
-
-
398
398
2,315
(398)
(173)
(35)
(1,739)
12,912
5
2,617
2,619
2,619
(18)
(18)
2,799
(3,734)
(1,666)
(2,601)
(-)
Refer accompanying notes forming part of the Consolidated Financial Statements
As per our report of even date attached
For and on behalf of the Board
For S.R. Batliboi & Co LLP
Chairman
S.M.DATTA
Chartered Accountants
(DIN: 00032812)
Firm registration number: 301003E/E300005
Managing Director
V. RAJA
(DIN: 00669376)
Director & CFO
HARIHARAN MADHAVAN
(DIN: 07217072)
Manoj Kumar Gupta
Director & Company Secretary
RAJIV MATHUR
Partner
(DIN: 06931798)
Membership No.: 83906
Non-Executive Director
GEETU GIDWANI VERMA
(DIN: 00696047)
Place: New Delhi
Place: New Delhi
Date: July 18, 2017
Date: July 18, 2017
112
Consolidated
Cash Flow Statement for the year ended 31 March 2017
Year ended
31 March 2017
Cash flow from operating activities
Profit before tax (continuing operations)
Profit before tax (discontinuing operations)
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 amortization
Unrealized foreign exchange (gain) and loss (net)
Provision for doubtful trade receivables and loans and advances
Liabilities no longer required written back
Interest on advances, current accounts and deposits
Finance costs
Operating profit before working capital changes
Changes in:
Trade receivables and other loans & advances
Inventories
Trade payables and other liabilities
Cash generated from operations
Income tax paid (net of refunds)
Exceptional items (VRS Payment)
Net Cash Flow from Operating activities
Net Cash Flow from Discontinued activities
Net cash generated from operating and discontinuing activities
Cash flow from investing activities
Purchase of Property, Plant and Equipment
Proceeds from sale of Property, Plant and Equipment
Investment in associate
Interest received
Net Cash flow from Investing Activities
Net Cash flow from Discontinued Activities
Net cash used in investing and discontinuing activities
Cash flow from financing activities
Finance costs
Repayment of shares on Buy Back and Capital reduction
Proceeds / (repayments) of short term borrowings
Dividend paid (including tax thereon)
Cash flow from Financing Activities
Net Cash flow from Discontinued Activities
Net cash used in financing and discontinuing activities
Increase / (Decrease) in cash and cash equivalents (A+B+C)
Amounts in ` Mln
Year ended
31 March 2016
3,133
3,133
(8)
23
1,191
(33)
114
(35)
(644)
124
732
3,865
2,172
(62)
(231)
2,006
3,208
(225)
5,439
19
1,451
(7)
197
(69)
(754)
826
1,663
7,102
(2,355)
(458)
2,331
1,879
5,744
(2,114)
3,630
3,630
(482)
6,620
(1,996)
(260)
334
4,030
4,364
(1,126)
252
(50)
602
(322)
(322)
(1,049)
58
(63)
785
(73)
(196)
(269)
(66)
(3,733)
52
(207)
(3,954)
(3,954)
(646)
(985)
(239)
(207)
(1,424)
(7)
(1,431)
2,664
Annual
Report 2016-17
113
PHILIPS INDIA LIMITED
Cash Flow Statement for the year ended 31 March 2017
Amounts in ` Mln
Year ended
31 March 2017
Year ended
31 March 2016
Cash and cash equivalents - Opening Balance
Cash and cash equivalents (refer note 11(b))
Unpaid dividend
2,293
1,458
11
10
Deposits with Banks
4,079
2,250
TOTAL
6,383
*3,718
1,021
2,293
12
11
Deposits with Banks
4,704
4,079
TOTAL
5,737
6,383
Cash and Cash Equivalents from continuing operations
(646)
(1,163)
-
3,827
(646)
2,664
Cash and cash equivalents - Closing Balance
Cash and cash equivalents (refer note 11(b))
Unpaid dividend
Cash and Cash Equivalents from discontinued operations
Cash and Cash Equivalents from continuing and discontinued
operations
* Includes discontinuing operations (refer Note 41)
The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the
Indian Accounting Standard (IND AS-7) - Statement of Cash Flow.
As per our report of even date attached
For and on behalf of the Board
For S.R. Batliboi & Co LLP
Chairman
Chartered Accountants
Firm registration number: 301003E/E300005
Managing Director
Director & CFO
Manoj Kumar Gupta
Director & Company Secretary
Partner
Membership No.: 83906
Non-Executive Director
Place: New Delhi
Place: New Delhi
Date: July 18, 2017
Date: July 18, 2017
114
Consolidated
S.M.DATTA
(DIN: 00032812)
V. RAJA
(DIN: 00669376)
HARIHARAN MADHAVAN
(DIN: 07217072)
RAJIV MATHUR
(DIN: 06931798)
GEETU GIDWANI VERMA
(DIN: 00696047)
1
CORPORATE INFORMATION
Philips India Limited (the ‘Company’) is a public limited company domiciled in India with its registered office at 3rd Floor,
Tower A, DLF IT Park, 08 Block AF, Major Arterial Road, New Town (Rajarhat) Kolkata - 700156, West Bengal, India. The
Company’s business segments comprise of (a) Personal Health, (b) Health Systems and (c) Innovation Services.The Company
has manufacturing facilities in Pune, Maharashtra and Software Development center in Bangalore. The company sells its
products primarily in India through independent distributors and modern trade. The Financial statements were authorized
by the Board of Directors for issue in accordance with resolution passed on July 18 2017.
2
SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation of consolidated financial statements
“These financial statements are the consolidated financial statements of the Group prepared in accordance with
Indian Accounting Standards (‘Ind AS’) notified under section 133 of the Companies Act 2013, read together with
the Companies (Indian Accounting Standards) Rules, 2015. For all periods up to and including the year ended
31st March, 2016, the Group had prepared its financial statements in accordance with accounting standards
notified under the section 133 of the Companies Act 2013, read together with Rule 7 of the Companies
(Accounts) Rules, 2014 (‘Previous GAAP’). Detailed explanation on how the transition from previous GAAP to
Ind AS has affected the Group’s Balance Sheet, financial performance and cash flows is given under separate note.
These consolidated financial statements have been prepared and presented under the historical cost convention,
on the accrual basis of accounting except for certain financial assets and financial liabilities that are measured at
fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting
policies have been applied consistently over all the periods presented in these consolidated financial statements.
Consolidated financial statements are prepared using uniform accounting policies for like transactions and other events
in similar circumstances. The financial statements of the Company and its subsidiaries have been combined on a lineby-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. “
“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 Group’s shareholders. Minority nterest 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. The carrying amount of the investment is adjusted
thereafter for the post acquisition change in the Group’s share of net assets of the associate.
(b) Current / Non Current classification
“Any asset or liability is classified as current if it satisfies any of the following conditions:
i. the asset/liability is expected to be realized/settled in the Group’s normal operating cycle;
ii. the asset is intended for sale or consumption;
iii. the asset/liability is held primarily for the purpose of trading;
iv. the asset/liability is expected to be realized/settled within twelve months after the reporting period;
v. the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting date;
vi. in the case of a liability, the Group does not have an unconditional right to defer settlement of the liability for at
least twelve months after the reporting date.
All other assets and liabilities are classified as non-current.
Annual
Report 2016-17
115
PHILIPS INDIA LIMITED
For the purpose of current/non-current classification of assets and liabilities, the Group has ascertained its normal
operating cycle as twelve months.This is based on the nature of services and the time between the acquisition of assets
or inventories for processing and their realization in cash and cash equivalents.”
2.1 KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires management to make judgments, estimates and assumptions in the application
of accounting policies that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates. Continuous evaluation is done on the estimation and judgments based on historical experience and
other factors, including expectations of future events that are believed to be reasonable. Revisions to accounting estimates
are recognized prospectively.
Information about critical judgments in applying accounting policies, as well as estimates and assumptions that have the most
significant effect to the carrying amounts of assets and liabilities within the next financial year, are included in the following
notes:
● Measurement of defined benefit obligations – Note 33
● Measurement and likelihood of occurrence of provisions and contingencies – Note 17
● Recognition of deferred tax assets – Note 8
2.2 RECENT ACCOUNTING DEVELOPMENTS
Standards issued but not yet effective:
“The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Group’s financial
statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.
“
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules,
2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment.’ The amendments
are applicable to the Group from April 1, 2017.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate
changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes,
suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising
from financing activities, to meet the disclosure requirement. The effect on the financial statements is being evaluated by the
Group.
Amendment to Ind AS 102:
“The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of
cash-settled awards and awards that include a net settlement feature in respect of withholding taxes. It clarifies that the
fair value of cash-settled awards is determined on a basis consistent with that used for equity settled awards. Marketbased performance conditions and non-vesting conditions are reflected in the ‘fair values’, but non-market performance
conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also,
the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified
with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as
such from the date of the modification. Further, the amendment requires the award that include a net settlement feature
in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is
treated as if it was part of an equity settlement. The effect on the financial statements is being evaluated by the Group.
The Group will adopt these amendments, if applicable from their applicability date.”
2.3 A) PROPERTY, PLANT AND EQUIPMENT:
“Under the previous GAAP (Indian GAAP), property, plant and equipment were carried in the balance sheet depreciation
and accumulated impairment losses, if any. The Group has elected to regard the values of Property, plant and equipment
as deemed cost at the date of transition to Ind AS i.e. 1 April 2015. Property, plant and equipment is stated at acquisition
cost net of accumulated depreciation and accumulated impairment losses, if any. Subsequent costs are included in the
asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic
116
Consolidated
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other
repairs and maintenance are charged to the Statement of Profit and Loss during the period in which they are incurred.
Gains or losses arising on retirement or disposal of property,plant and equipment are recognised in the Statement of Profit and Loss.
Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as “Capital
work-in-progress”.”
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 Rs. 5,000 or less are fully depreciated in the year of purchase.
b) Investment Property
The Group has elected to regard the values of Investment Property as deemed cost at the date of transition to Ind AS i.e.
1 April 2015.
c) Capital work in progress and Capital advances:
Cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work in progress. Advances given
towards acquisition of fixed assets outstanding at each Balance Sheet date are disclosed as Other Non-Current Assets.
2.4 INTANGIBLE ASSETS:
The Group has applied principles of Ind AS 38 Intangible Assets retrospectively from date of acquisition and considered the
same as deemed cost in accordance with Ind AS 101 First Time adoption. Intangible assets acquired separately are measured
on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization
and accumulated impairment losses, if any. Internally generated intangibles, excluding capitalised development cost, are not
capitalised and the related expenditure is reflected in statement of Profit and Loss in the period in which the expenditure is
incurred. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its
intended use.
The useful lives of intangible assets are assessed as either finite or indefinite. Finite-life intangible assets are amortised on a
straight- line basis over the period of their expected useful lives. Estimated useful lives by major class of finite-life intangible
assets are as follows:
Computer Software
-
3 years
Non Compete Fees
-
3 years
The amortisation period and the amortisation method for finite-life intangible assets is reviewed at each financial year end
and adjusted prospectively, if appropriate.
“Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or
at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite
life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
For PKAPL, the period of amortization for Brands and distribution network is 8 years which represents the economic useful
life of Brands and distribution network. Goodwill 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. “
2.5 INVESTMENTS IN ASSOCIATE:
“Investments in associate are carried at cost less accumulated impairment losses, if any. Where an indication of impairment
exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On
disposal of investments in associates, the difference between net disposal proceeds and the carrying amounts are recognized
in the Statement of Profit and Loss. Upon first-time adoption of Ind AS, the Group has elected to measure its investments in
associates at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1st April,2015.”
2.6 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
Annual
Report 2016-17
117
PHILIPS INDIA LIMITED
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.
2.7 CASH AND CASH EQUIVALENTS:
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original
maturity of three months or less, which are subject to insignificant risk of changes in value.
2.8 FINANCIAL INSTRUMENTS:
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
i) Financial Assets
“The Group classifies its financial assets in the following measurement categories:
- Those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss)
- Those measured at amortised cost”
Initial Recognition and Measurement:
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through
profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent Measurement:
“For purposes of subsequent measurement financial assets are classified in following categories:
- Debt instruments at fair value through profit and loss (FVTPL)
- Debt instruments at fair value through other comprehensive income (FVTOCI)
- Debt instruments at amortised cost
- Equity instruments”
Where assets are measured at fair value, gains and losses are either recognised entirely in the statement of profit and loss(i.e.
fair value through profit or loss), or recognised in other comprehensive income(i.e. fair value through other comprehensive
income). For investment in debt instruments, this will depend on the business model in which the investment is held. For
investment in equity instruments, this will depend on whether the Group has made an irrevocable election at the time of
initial recognition to account for equity instruments at FVTOCI.
“Debt instruments at amortised cost
A Debt instrument is measured at amortised cost if both the following conditions are met:
a) Business Model Test :The objective is to hold the debt instrument to collect the contractual cash flows (rather than to
sell the instrument prior to its contractual maturity to realize its fair value changes).
b) Cash flow characteristics test: The contractual terms of the debt instrument give rise on specific dates to cash flows
that are solely payments of principal and interest on principal amount outstanding.”
This category is most relevant to the Group. After initial measurement, such financial assets are subsequently measured
at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part of EIR. EIR is the rate that exactly discounts
the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate,
to the gross carrying amount of the financial asset. When calculating the effective interest rate, the Group estimates the
expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected
credit losses. The EIR amortization is included in inance income in profit or loss. The losses arising from impairment are
recognised in the profit or loss. This category generally applies to trade and other receivables.
Debt instruments at fair value through OCI
118
Consolidated
“A Debt instrument is measured at fair value through other comprehensive income if following criteria are met:
a) Business Model Test :The objective of financial instrument is achieved by both collecting contractual cash flows and for
selling financial assets.
b) Cash flow characteristics test: The contractual terms of the debt instrument give rise on specific
dates to cash flows that are solely payments of principal and interest on principal amount outstanding.
Debt instrument included within the FVTOCI category are measured initially as well as at each reporting date at fair
value. Fair value movements are recognised in the other comprehensive income (OCI), except for the recognition of
interest income, impairment gains or losses and foreign exchange gains or losses which are recognised in statement
of profit and loss. On derecognition of asset, cumulative gain or loss previously recognised in OCI is reclassified from
the equity to statement of profit & loss. Interest earned whilst holding FVTOCI financial asset is reported as interest
income using the EIR method.”
“Debt instruments at FVTPL
FVTPL is a residual category for financial instruments. Any financial instrument, which does not meet the criteria for
amortised cost or FVTOCI, is classified as at FVTPL. A gain or loss on a Debt instrument that is subsequently measured
at FVTPL and is not a part of a hedging relationship is recognised in statement of profit or loss and presented net in the
statement of profit and loss within other gains or losses in the period in which it arises. Interest income from these Debt
instruments is included in other income.”
“Equity investments of other entities
All equity investments in scope of IND AS 109 are measured at fair value. Equity instruments which are held for
trading and contingent consideration recognised by an acquirer in a business combination to which IND AS103
applies are classified as at FVTPL. For all other equity instruments, the Group may make an irrevocable election
to present in other comprehensive income all subsequent changes in the fair value. The Group makes such
election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
If the Group decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding
dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to profit and loss, even on sale of
investment. However, the Group may transfer the cumulative gain or loss within equity. Equity instruments included within
the FVTPL category are measured at fair value with all changes recognised in the Profit and loss.”
“Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Group of similar financial assets) is primarily
derecognised (i.e, removed from the Group’s statement of financial position) when: - the rights to receive cash flows
from the asset have expired, or - the Group has transferred its rights to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass through”
arrangement and either; (a) the Group has transferred the rights to receive cash flows from the financial assets or
(b) the Group has retained the contractual right to receive the cash flows of the financial asset, but assumes a
contractual obligation to pay the cash flows to one or more recipients. Where the Group has transferred an
asset, the Group evaluates whether it has transferred substantially all the risks and rewards of the ownership
of the financial assets. In such cases, the financial asset is derecognised.Where the entity has not transferred
substantially all the risks and rewards of the ownership of the financial assets, the financial asset is not derecognised.
Where the Group has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of
the financial asset, the financial asset is derecognised if the Group has not retained control of the financial asset. Where the
Group retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement
in the financial asset.”
“Impairment of financial assets
In accordance with IND AS 109, the Group applies expected credit losses (ECL) model for measurement and
recognition of impairment loss on the following financial asset and credit risk exposure
- Financial assets measured at amortised cost;
- Financial assets measured at fair value through other comprehensive income (FVTOCI);
“The Group follows “simplified approach” for recognition of impairment loss allowance on:
Annual
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PHILIPS INDIA LIMITED
- Trade receivables or contract revenue receivables;
- All lease receivables resulting from the transactions within the scope of IND AS 17
Under the simplified approach, the Group does not track changes in credit risk. Rather, it recognizes impairment loss
allowance based on lifetime ECLs at each reporting date, right from its initial recognition. the Group uses a provision matrix
to determine impairment loss allowance on the portfolio of trade receivables.The provision matrix is based on its historically
observed default rates over the expected life of trade receivable and is adjusted for forward looking estimates. At every
reporting date, the historical observed default rates are updated and changes in the forward looking estimates are analyzed.
For recognition of impairment loss on other financial assets and risk exposure, the Group determines whether there has
been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month
ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in
subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit
risk since initial recognition, then the Group reverts to recognizing impairment loss allowance based on 12- months ECL.”
ii) Financial Liabilities
“Initial recognition and measurement
Financial liabilities are classified at initial recognition as financial liabilities at fair value through profit or loss, loans and
borrowings, and payables, net of directly attributable transaction costs. the Group financial liabilities include loans and
borrowings including bank overdraft, trade payable, trade deposits, retention money, liabilities towards services, sales
incentives and other payables.”
The measurement of financial liabilities depends on their classification, as described below:
“Trade Payables
These amounts represents liabilities for goods and services provided to the Group prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid within 120 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised
initially at fair value and subsequently measured at amortised cost using EIR method.”
“Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities
are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
Gains or losses on liabilities held for trading are recognised in the statement of profit and loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial
date of recognition, and only if the criteria in IND AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/
losses attributable to changes in own credit risk are recognised in OCI. These gains/ loss are not subsequently transferred
to profit and loss. However, the Group may transfer the cumulative gain or loss within equity. All other changes in fair value
of such liability are recognised in the statement of profit or loss. the Group has not designated any financial liability as at fair
value through profit and loss.”
“Loans and borrowings
Borrowings are initially recognised at fair value, net of transaction cost incurred. After initial recognition,
interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method.
Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortization
process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.”
“Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or medication is treated as the derecognition of the original
liability and the recognition of a new liability.The difference in the respective carrying amounts is recognised in the statement
of profit and loss.”
120
Consolidated
“Offsetting of financial instruments
Financials assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently
enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realize the assets
and settle the liabilities simultaneously.”
“Reclassification of financial assets The Group determines classification of financial assets and liabilities on initial
recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments
and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is
a change in the business model for managing those assets. Changes to the business model are expected to be
infrequent. The Group’s senior management determines change in the business model as a result of external or
internal changes which are significant to the Group’s operations. Such changes are evident to external parties.
A change in the business model occurs when the Group either begins or ceases to perform an activity that is significant to
its operations. If the Group reclassifies financial assets, it applies the reclassification prospectively from the reclassification
date which is the first day of the immediately next reporting period following the change in business model.The Group does
not restate any previously recognised gains, losses (including impairment gains or losses) or interest.”
2.9 PROVISIONS & CONTINGENCIES
“Provisions
A provision is recognised when the Group has a present obligation (legal or constructive) as a result of 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. These estimates are reviewed at each reporting date
and adjusted to reflect the current best estimates. If the effect of the time value of money is material, provisions
are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When
discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.”
“Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by
the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a
present obligation that is not recognised because it is not probable that an outflow of resources will be required
to settle the obligation. A contingent liability also arises in extremely rare cases, where there is a liability that
cannot be recognised because it cannot be measured reliably. the Group does not recognize a contingent liability
but discloses its existence in the financial statements unless the probability of outflow of resources is remote.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.”
2.10 REVENUE RECOGNITION
“Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined
terms of payment and excluding taxes or duties collected on behalf of the government. Revenue is recognised to the extent
that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of
when the payment is being made. Amounts disclosed are inclusive of Excise Duty, and net of returns, trade discounts, rebates,
value added taxes and amount collected on behalf of third parties.
a) Sale of goods
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the
goods have passed to the buyer, usually on delivery of the goods and is measured at fair value of consideration
received/receivable, net of returns and allowances, discounts, volume rebates and cash discounts. Revenue
is usually recognised when it is probable that economic benefits associated with the transaction will flow
to the entity, amount of revenue can be measured reliably and entity retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the goods sold.
b) Rendering of Services
Revenue from service related activities is recognised as and when services are rendered and on the basis
of contractual terms with the parties. Revenue from the sale of goods/ equipments is recognised when the
Annual
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121
PHILIPS INDIA LIMITED
significant risks and rewards of ownership of the goods have passed 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.
Income from export incentives such as duty drawback and premium on sale of import licenses,and lease license fee are recognised
on accrual basis. 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.
d) Interest Income Interest income is recorded on a time proportion basis taking into account the amounts invested and
the rate of interest.”
2.11 EMPLOYEE BENEFITS
“Short-term obligations
Liabilities for wages and salaries, including non monetary benefits that are expected to be settled wholly within twelve
months after the end of the period in which the employees render the related service are recognised in respect of employee
service upto the end of the reporting period and are measured at the amount expected to be paid when the liabilities are
settled. the liabilities are presented as current employee benefit obligations in the balance sheet.”
Defined Contribution Plans
Contributions to defined contribution schemes such as employees’ state insurance, labour welfare fund, superannuation
scheme, employee pension scheme etc. are charged as an expense based on the amount of contribution required to be made
as and when services are rendered by the employees. Group’s provident fund contribution, in respect of certain employees,
is made to a government administered fund and charged as an expense to the Statement of Profit and Loss. The above
benefits are classified as Defined Contribution Schemes as the Group has no further defined obligations beyond the monthly
contributions.
Defined Benefit Plans
“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. 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 Group 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.
Any differences between the interest income on plan assets and the return actually achieved, and any changes in the
liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised
immediately in ‘Other comprehensive income’ and subsequently not reclassified to the Statement of Profit and Loss.”
Post-Retirement Medical benefit plan
The Group operates a defined post-retirement medical benefit plan for certain specified employees and is payable upon the
employee satisfying certain conditions.”
2.12 IMPAIRMENT OF NON-FINANCIAL ASSETS
“Assessment for impairment is done at each Balance Sheet date as to whether there is any indication that a non-financial
asset may be impaired. Indefinite life intangibles are subject to a review for impairment annually or more frequently if
events or circumstances indicate that it is necessary. For the purpose of assessing impairment, the smallest identifiable
group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from
other assets or groups of assets is considered as a cash generating unit. Goodwill acquired in a business combination is,
from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the
synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
If any indication of impairment exists, an estimate of the recoverable amount of the individual asset/cash generating unit
is made. Asset/cash generating unit whose carrying value exceeds their recoverable amount are written down to the
122
Consolidated
recoverable amount by recognising the impairment loss as an expense in the Statement of Profit and Loss. The impairment
loss is allocated first to reduce the carrying amount of any goodwill (if any) allocated to the cash generating unit and then to
the other assets of the unit, pro rata based on the carrying amount of each asset in the unit. Recoverable amount is higher
of an asset’s or cash generating unit’s fair value less cost of disposal and its value in use. Value in use is the present value
of estimated future cash flows expected to arise from the continuing use of an asset or cash generating unit and from its
disposal at the end of its useful life. Assessment is also done at each Balance Sheet date as to whether there is any indication
that an impairment loss recognised for an asset in prior accounting periods may no longer exist or may have decreased, basis
the assessment a reversal of an impairment loss for an asset other than goodwill is recognised in the Statement of Profit
and Loss account.”
2.13 INCOME TAXES
“Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the Statement of Profit and
Loss except to the extent it relates to a business combination or to an item which is recognised directly in equity or in other
comprehensive income.“
Current tax
“Current income tax, assets and liabilities are measured at the amount expected to be paid to or recovered from the
taxation authorities in accordance with the Income Tax Act, 1961 and the Income Computation and Disclosure Standards
(ICDS) enacted in India by using tax rates and the tax laws that are enacted at the reporting date.”
Deferred tax
“Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax assets and liabilities are
recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset
to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to
the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.”
2.14 LEASES
“Leases in which a substantial portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments and receipts under such leases are recognised to the Statement of
Profit and Loss on a straight-line basis over the term of the lease unless the lease payments to the lessor
are structured to increase in line with expected general inflation to compensate for the lessor’s expected
inflationary cost increases, in which case the same are recognised as an expense in line with the contractual term.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards
incidental to ownership to the lessee.”
2.15 FOREIGN CURRENCIES
The financial statements are presented in INR, the functional currency of the Group. Items included in the financial statements
of the Group are recorded using the currency of the primary economic environment in which the Group operates (the
‘functional currency’).
Foreign currency transactions are recorded on initial recognition in the functional currency, using the exchange rate prevailing
at the date of transaction.
Measurement of foreign currency items at the balance sheet date
Foreign currency monetary assets and liabilities denominated in foreign currencies are translated at the functional currency
spot rates of exchange at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at
fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.”
Annual
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123
PHILIPS INDIA LIMITED
Exchange differences
Exchange differences arising on settlement or translation of monetary items are recognised as income or
expense in the period in which they arise with the exception of exchange differences on gain or loss arising
on translation of non-monetary items measured at fair value which is treated in line with the recognition of
the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value
gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).
Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/ liability
The premium or discount arising at the inception of forward exchange contract is amortised and recognised as an expense/
income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and
loss in the period in which the exchange rates changes. Any profit or loss arising on cancellation or renewal of such forward
exchange contract is also recognised as income or expense for the period.”
2.16 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS
When the fair values of financials assets and financial liabilities recorded in the Balance Sheet cannot be measured based on
quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow
model, which involve various judgements and assumptions.
2.17 OPERATING SEGMENTS
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision Maker (CODM) of the Group.
2.18 EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders
by the weighted average number of equity shares outstanding during the period. The weighted average number of equity
shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split,
and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a
corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all
potentially dilutive equity shares.
2.19 GOVERNMENT GRANTS
Government grants are recognized when there is reasonable assurance that the grant will be received and all attached
conditions for receiving such grant have been and will be fulfilled. Government grants are recognised in profit or loss on a
systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are
intended to compensate.
For and on behalf of the Board
Chairman
S.M.DATTA
(DIN: 00032812)
Managing Director
V. RAJA
(DIN: 00669376)
Director & CFO
Director & Group Secretary
Place: New Delhi
Date: July 18, 2017
124
Consolidated
Non-Executive Director
HARIHARAN MADHAVAN
(DIN: 07217072)
RAJIV MATHUR
(DIN: 06931798)
GEETU GIDWANI VERMA
(DIN: 00696047)
3
-
Transfer as per Scheme of
Arrangement for Demerger*
38
4
4
113
113
564
(49)
245
368
(22)
(36)
142
284
147
147
As at 31 March 2016
As at 31 March 2017
497
421
427
79
79
244
198
132
824
955
876
519
54
97
113
31
234
109
148
91
208
194
216
7
10
14
6
2
330
255
284
234
121
As at 31 March 2017
121
Net book value
Capital Work in Progress
109
As at 31 March 2016
-
-
-
-
-
-
-
353
-
353
315
36
-
-
38
38
As at 1 April 2015
* Asset Transfer as per Scheme of Arrangement for Demerger is net of Gross assets ` 417 and accumulated depreciation ` 245. Accordingly the wdv of ` 172 has been reduced from the opening deemed cost.
The Company has elected to measure all its Property, Plant and Equipment at the previous GAAP carrying amount i.e.31 March 2015 as its deemed cost (Gross carrying value) on the date of transition to Ind AS i.e.1 April, 2015.
147
As at 1 April 2015
93
33
71
Net book value
33
57
As at 31 March 2017
15
()
248
Disposals
79
34
38
13
(1)
14
-
-
14
-
50
16
34
279
47
232
(31)
(3)
50
216
18
-
16
325
(49)
231
143
(22)
(4)
21
148
Vehicles Plant and
(taken Machinery
on (taken on
finance
finance
lease)
lease)
15
271
271
85
(46)
18
113
-
-
-
113
Office Furniture Vehicles
Equipment
(Owned)
Depreciation
43
43
1,343
(128)
243
1,228
(48)
(22)
422
876
Plant and
Equipment
(given on
operating
lease)
As at 31 March 2016
-
337
96
241
(49)
(4)
162
132
Plant and
Equipment
(Owned)
-
-
15
79
-
-
79
-
-
79
Freehold
Leasehold
Land Improvements
2,939
2,467
2,436
1,116
582
534
534
4,055
(275)
1,329
3,001
(172)
(70)
807
2,436
Total
Amounts in ` Mln
Transfer as per Scheme of
Arrangement for Demerger
Disposals
Depreciation
As at 1 April 2015
-
530
147
As at 31 March 2017
Depreciation and
impairment
96
(2)
Disposals
436
-
(1)
10
427
Buildings
Additions
147
-
Disposals
As at 31 March 2016
-
147
Leasehold
Land
Additions
As at 1 April 2015
Gross carrying value
(Deemed cost)
Particulars
Property, Plant and Equipment
Notes to Consolidated Financial Statements for the year ended 31 March 2017
Annual
Report 2016-17
125
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
4
Amounts in ` Mln
Investment Property
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Deemed Cost
At the beginning of the year
76
76
76
End of the year
76
76
76
-
-
-
76
76
76
Depreciation
End of the year
Net Block
5
1.
The “Investment Property” consists of Freehold and Leasehold Land held by the Company and located in the states
of Maharashtra, Gujarat ,Goa and Tamilnadu. The Fair Value Heirarchy disclosures for Investment properties have been
provided in note 37.
2.
The Company has obtained independent valuation for its investment property as at March 31, 2017 and has reviewed
the fair valuation based on best evidence of fair value determined using replacement cost of an asset of equivalent utility,
depreciation and obsolescence. Fair market value is the amount expressed in terms of money that may reasonably be
expected to be exchanged between a willing buyer and a willing seller, with equity or both. The valuation assumes that
Company shall continue to operate and run the assets to have economic utility. The fair value is on ‘as is where’ basis.
Intangible assets
Particulars
Goodwill
Brands Distribution Software
Non
Network
Compete
Fees
Total
Deemed Cost
As at 1 April 2015
1,191
1,498
945
-
-
3,634
Additions
-
-
-
-
-
-
Disposals and adjustments
-
-
-
-
-
-
Transfer as per Scheme of Arrangement for
Demerger
-
-
-
-
-
-
1,191
1,498
945
-
-
3634
Additions
-
-
-
-
-
-
Disposals and adjustments
-
-
-
-
-
-
1,191
1,498
945
-
-
3634
As at 31 March 2016
As at 31 March 2017
Amortization and impairment
-
As at 1 April 2015
-
-
-
-
-
-
Amortization for the year
-
375
236
-
-
611
Disposals and adjustments
-
-
-
-
-
-
Transfer as per Scheme of Arrangement for
Demerger
-
-
-
-
-
-
As at 31 March 2016
-
375
236
-
-
611
Amortization for the year
-
375
236
-
-
611
Disposals and adjustments
-
-
-
-
-
As at 31 March 2017
-
750
472
-
-
1,222
As at 1 April 2015
1,191
1,498
945
-
-
3,634
As at 31 March 2016
1,191
1,123
709
-
-
3,023
As at 31 March 2017
1,191
748
473
-
-
2,412
Net book value
Based on expected cash flows, no impairment provision has been made during the current year and previous year
126
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
6
Amounts in ` Mln
Investment in subsidiaries and associates
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Unquoted Investments
Investment in equity instruments
11,300,000 (31 March 2016 - 6,300,000; 1 April 2015 - Nil) equity
shares of ` 10/- each fully paid up in Healthmap Diagnostics Private
Limited - an associate
^includes share of post - investment loss of ` 55 (previous year ` 27).
Non-Current
31^
36^
-
31
36
-
31
36
-
7(a) Non-current Financial assets - Trade Receivables
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Trade receivables
1,088
1,688
2,066
Total
1,088
1,688
2,066
Break up for security details and more than six months overdue
Particulars
Secured, considered good**
As at 31
March 2017
As at 31
March 2016
1,055
As at 1
April 2015
1,688
2,066
Unsecured, considered good
33
-
-
Doubtful
18
22
18
-
-
-
1,106
1,710
2,084
(18)
(22)
(18)
1,088
1,688
2,066
Other Debts
Provision for bad and doubtful debts
Doubtful
7(b) Non-current financial assets - others
Loans (Unsecured considered good unless otherwise stated)
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Security Deposits
- Considered good
Bank Deposits (due to mature after 12 months from reporting date)
228
198
231
5
6
6
233
204
237
Annual
Report 2016-17
127
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
8
Amounts in ` Mln
Deferred Tax Assets (Net)
A. Components of Income Tax Expense
(i) Tax expense recognised in Statement of Profit and Loss
Year ended 31 Year ended 31
March 2017
March 2016
Current Tax
- Continuing operations
1,244
1,194
-
1,244
1,244
2,438
56
7
-
133
56
140
- Discontinued Operations
Total (a)
Deferred tax charge / (release)
Relating to origination and reversal of temporary differences (continuing operations)
Relating to origination and reversal of temporary differences (discontinued operations)
Total (b)
(ii) Tax on Other Comprehensive Income
Year ended 31 Year ended 31
March 2017
March 2016
Deferred tax
- (Gain) / Loss on measurement of net defined benefit plans
6
(4)
Total
6
(4)
B.
Reconciliation of Tax expense and the accounting profit for the year is as under:
Particulars
Year ended 31 Year ended 31
Mar 2017
Mar 2016
3,079
Profit/ (Loss) before tax from continuing operations
Income tax calculated @
Computed tax expense
1,979
-
3,208
34.608%
34.608%
1,124
2,169
Profit/ (Loss) before tax from discontinued operations
Differences due to:
- Expenses not deductible for tax purposes
49
8
- Others
15
121
Income tax charged to Statement of Profit and Loss at effective tax rate of 37.91%
(Previous year - 44.08%)
1,188
2,298
Income tax expense reported in statement of Profit and loss
1,188
1,187
Income tax expense attributable to discontinuing operations
-
1,111
C.
Components of Deferred Tax Assets (net) are as follows:
Particulars
Balance Sheet
As at 31
As at 31
March 2017 March 2016
Recognized in Statement
of profit and loss
As at 1 April For year ended For year ended 31
2015
31 Mar 2017
Mar 2016
- Provision for employee benefits
243
215
310
28
(95)
- Doubtful trade receivables and
advances
112
106
115
6
(9)
- Difference between book and tax
depreciation
359
319
203
40
116
- Other timing differences
- Assets given on finance lease
228
232
530
(4)
(298)
(370)
(362)
(349)
(8)
(13)
-
-
-
-
434
572
510
809
62
135
Deferred tax expense/(income)
Transfer as a part of demerger
Net deferred tax assets/(liabilities)
128
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
8
Amounts in ` Mln
Deferred Tax Assets (Net) (Contd.)
D. Reconciliation Deferred Tax Assets / (Liabilities) - Net
Particulars
As at 31
March 2017
Opening balance as of 1 April
Tax income/(expense) during the period recognized in profit and loss
510
809
56
139
6
(4)
-
(434)
572
510
Tax income/(expense) during the period recognized in OCI
Discontinued operations
Closing balance as at 31 March
9
As at 31
March 2016
Other non-current assets
(Unsecured, considered good unless otherwise stated)
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Advance Rentals
40
39
70
Capital Advances
29
33
46
CENVAT credit receivable
370
334
606
VAT credit receivable
125
125
156
Deposits against legal cases
345
287
284
56
56
56
8
8
12
-
-
4
54
54
54
-
-
(4)
(54)
(54)
(54)
973
882
1,230
Special additional duty receivables and drawback claims
Balances with customs and port trust
Considered doubtful
Deposits against legal cases
Claims receivables
Less: Provision for doubtful other loans and advances
Deposits against legal cases
Claims receivables
10
Inventories (at lower of cost and net realisable value whichever is lower)
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
807
643
760
1,016
950
540
Finished Goods (includes goods-in-transit ` 207 (31 March 2016 ` 106,
1 April 2015 ` 45)
495
374
305
Stock-in-Trade (goods purchased for resale) (includes goods-in-transit
` 165 (31 March 2016 ` 414, 1 April 2015 ` 460)
2,825
3,102
2,802
Raw materials (includes goods-in-transit ` 79 (31 March 2016 ` 15, 1
April 2015 ` 334)
Work in Progress
Stores and Spares
10
20
-
5,153
5,089
4,407
Annual
Report 2016-17
129
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
11
Amounts in ` Mln
(a) Current assets - Trade Receivables
Particulars
Trade receivables
Receivables from an associate (Note 36)
Receivables from other related parties (Note 36)
Total
As at 31
March 2017
4,512
As at 31
March 2016
As at 1
April 2015
5,319
1,307
6
9
-
561
1,588
4,045
5,079
6,916
5,352
Break-up for security details
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Secured, considered good **
273
459
411
Unsecured, considered good
4,806
6,457
4,941
166
209
123
5,245
7,125
5,475
(166)
(209)
(123)
5,079
6,916
5,352
Doubtful
Provision for bad and doubtful debts
Unsecured, considered good
Doubtful
No trade or other receivable are due from directors or other officers of the company either severally or jointly with any
other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director
is a partner, a director or a member. Trade receivables other than finance lease receivables are non-interest bearing.
** Additional disclosure relating to finance lease receivables:
Secured trade receivables includes finance lease receivables amounting to ` 672 (31 March 2016 - ` 698, 1 April 2015 ` 716) relating to medical equipment 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 ` 907 (31 March 2016 - ` 941, 1 April 2015
` 929) which includes unearned interest of ` 235 (31 March 2016 ` 243, 1 April 2015 ` 213). The maturity profile of finance
lease obligation is as follows:
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Minimum lease payments
Receivable within 1 year
214
231
238
Receivable between 1-5 years
599
638
634
94
72
57
907
941
929
Receivable within 1 year
136
152
164
Receivable between 1-5 years
450
480
499
86
66
53
Total
672
698
716
Unearned interest
235
243
213
Receivable after 5 years
Total
Present value
Receivable after 5 years
130
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
11
Amounts in ` Mln
(b) Cash and cash equivalents
Particulars
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
Balances with banks:
– On current accounts
– Deposits with original maturity of less than three months
Cheques/ drafts on hand
Cash on hand
407
1,086
137
5,213
4,079
2,261
104
253
147
1
1
2
5,725
5,419
2,547
-
953
-
Other Bank Balances
Unpaid dividend accounts
11
12
11
10
5,737
6,383
2,557
(c) Current financial assets - Others
Particulars
Dues from fellow subsidiary companies (Note 32)
As at 31
March 2017
As at 31
March 2016
As at 1
April 2015
577
544
98
306
244
261
83
60
38
(83)
(60)
(38)
32
34
24
915
822
383
Security Deposits
- Considered good
- Considered doubtful
Less: Provision for doubtful deposits
Interest accrued on deposits with banks
12
Other current assets
(Unsecured, considered good unless otherwise stated)
Particulars
Unbilled revenue
As at 31
March 2017
153
As at 31
March 2016
As at 1
April 2015
238
142
18
6
-
204
241
270
Advance to related party
86
21
-
CENVAT credit receivable
472
575
99
12
8
23
170
67
72
16
10
68
Prepaid expenses
181
152
168
Claims receivables
45
94
34
Advances to employees
22
23
13
6
4
22
(6)
(4)
(22)
1,379
1,435
889
Advance Rentals
Advance to suppliers
VAT credit receivable
Special additional duty receivables and drawback claims
Balances with customs and port trust
Considered doubtful
Advance to suppliers
Less: Provision for doubtful other loans and advances
Advance to suppliers
Annual
Report 2016-17
131
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
13
Amounts in ` Mln
Equity Share Capital
As at 31 March 2017
Authorised
As at 31 March 2016
As at 1 April 2015
No. of shares
Amount
No. of shares
Amount
No. of shares
Amount
Equity shares of ` 10 each
92,000,000
920
92,000,000
920
92,000,000
920
Non-convertible
cumulative
preference shares of ` 10 each
20,000,000
200
20,000,000
200
20,000,000
200
112,000,000
1,120
112,000,000
1,120
112,000,000
1,120
Issued, subscribed and paid-up No. of shares
Amount
No. of shares
Amount
No. of shares
Amount
Equity shares of ` 10 each
57,517,242
575
57,517,242
575
57,517,242
575
Total
57,517,242
575
57,517,242
575
57,517,242
575
Total
(i)
Reconciliation of the number of equity shares outstanding
As at 31 March 2017
At the beginning and at the end of
the reporting period
As at 31 March 2016
As at 1 April 2015
No. of shares
Amount
No. of shares
Amount
No. of shares
Amount
57,517,242
575
57,517,242
575
57,517,242
575
(ii) Rights, preferences and restrictions attached to the equity shares
The Company has only one class of equity shares having a par value of ` 10/- per share (March 31, 2016 : ` 10/- per share)
(April 1, 2015: ` 10/- per share). Each holder of equity shares is entitled to one vote per share. The dividend proposed
by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets
of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of
equity shares held by the shareholders.
(iii) Shares held by holding and the ultimate holding company
As at 31 March 2017
Koninklijke Philips N.V (KPNV)
As at 31 March 2016
As at 1 April 2015
No. of shares
Amount
No. of shares
Amount
No. of shares
Amount
55,290,182
553
55,290,182
553
55,290,182
553
(iv) Details of shareholders holding more than 5% shares of the company
As at 31 March 2017
No. of shares % holding
Koninklijke Philips N.V (KPNV)
132
Consolidated
55,290,182
96.13
As at 31 March 2016
As at 1 April 2015
No. of shares
% holding
No. of shares
% holding
55,290,182
96.13
55,290,182
96.13
Notes to Consolidated Financial Statements for the year ended 31 March 2017
14
Amounts in ` Mln
Other Equity
Capital Reserve
As at the beginning of the year
Less: Transfer as per Scheme of Arrangement
for Demerger
As at the end of the year
Capital Redemption Reserve
As at the beginning of the year
Less: Transfer as per Scheme of Arrangement
for Demerger
As at the end of the year
Securities premium account
As at the beginning of the year
Less: Transfer as per Scheme of Arrangement
for Demerger
As at the end of the year
General reserve
As at the beginning of the year
Less: Transfer as per Scheme of Arrangement
for Demerger
Add:Transfer from Statement of Profit and Loss
Less: Demerged Company’s share of demerger
expenses
As at the end of the year
Other reserves
Capital subsidy
Equity Component of Compulsorily
Convertible Debentures
Reversal of Equity Component of
Compulsorily Convertible Debentures
Retained Earnings
As at the beginning of the year
Add: Profit for the year
Transfer to / (from) non-controlling Interest
Add: Gain on Capital reduction / Buy back*
Less: Reduction during the year
Dividend
Dividend distribution tax
Transfer to General reserve
Goodwill prior year’s amortisation reversal
due to adoption of Ind AS
Present Value of CCD
Reversal of CCD
Unwinding of discount
Total
As at 31 March 2017
-
169
-
-
228
-
-
As at 1 April 2015
169
169
-
-
As at 31 March 2016
228
228
1,153
-
-
1,153
-
169
1,153
-
-
1,917
-
2,789
1,215
2,789
-
398
424
-
-
2,315
81
-
1,917
-
3,353
-
3,353
12,761
1,895
(2,799)
1,666
9,260
2,906
2,783
4,126
3,064
173
35
398
173
35
424
510
-
491
2,047
-
1,556
4
12,917
15,232
228
-
3,353
-
12,761
14,678
1,153
2,789
9
3,353
9,260
16,961
* Represents difference between issue price ` 105.00 and buy back price ` 69.50 of 46,956,522 equity shares held by KPNV.
The disaggregation of changes in OCI by each type of reserves in equity is disclosed in note 43.
A. Summary of Other Equity
Particulars
As at 31
As ar 31
As at 1
March 2017
March 2016
April 2015
Capital Reserve
169
Capital Redemption Reserve
228
Securities premium account
1,153
General Reserve
2,315
1,917
2,789
Other Reserves
9
Equity Component of compulsorily Convertible Debentures
3,353
Retained Earnings
12,917
12,761
9,260
Total Other Equity
15,232
14,678
16,961
Annual
Report 2016-17
133
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
14
Amounts in ` Mln
Other Equity (Contd.)
B.
Description of nature and purpose of each reserve
Securities Premium account
Security premium account is created when shares were issued at premium.The Company may issue fully paid-up bonus
shares to its members out of the security premium reserve account, and company can use this reserve for buy-back of
shares. However, these reserves were transferred as a part of scheme of Arrangement for demerger.
Capital Redemption reserve
Capital Redemption reserve was created for but back of shares. The company may issue fully paid-up bonus shares
to its members out of Capital Redemption reserve.However, these reserves were transferred as a part of scheme of
Arrangement for demerger.
Capital Reserve
Capital Reserve was created as a result of amalgamation of various legal entities in earlier years. The same has been
transferred as a part of scheme of Arrangement for demerger.
General Reserve and Retained Earnings
These represent the accumulated profit the company has. These are free reserves for the company. The company can
declare dividend or retain it for future use.
Other Reserves
15
Other reserves pertain to capital subsidy.
Non-current financial liabilities - Borrowings
As at 31
March 2017
As at 31
March 2016
414
Long Term maturities of finance lease obligations (secured)
Compulsorily convertible debentures *
As at 1
April 2015
158
190
-
-
491
414
158
681
The finance lease obligations are secured by underlying assets (leased vehicles and IT devices) [refer note 3]. The legal title
of the vehicles and IT devices 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 ` 830 (Previous Year - ` 324) which includes interest of ` 131 (Previous Year
- ` 58) The maturity profile of finance lease obligations is as follows:
Payable within 1 year
Payable between 1-5 years
Total minimum lease payments
Less: Interest
Present value of minimum lease
payments
As at 31 March 2017
Minimum
Present
Lease
value
payments
336
285
494
414
830
699
131
699
699
As at 31 March 2016
Minimum
Present
Lease
value
payments
141
108
183
158
324
266
58
266
266
As at 1 April 2015
Minimum
Present
Lease
value
payments
143
110
221
190
364
300
64
300
300
* 46,956,522 Compulsorily convertible debentures (‘CCD’) were allotted to Koninklijke Philips Electronics N.V, (the ultimate
holding company), on April 07, 2011 carrying an interest rate of 10% per annum. The face value of these debentures was `
115 aggregating to ` 5,400. The CCD’s 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 a premium of ` 105.The CCD’s have been converted into Equity shares on March
31, 2016.
16
Other non-current liabilities
Income received in advance
Employee related payables
Security deposits
134
Consolidated
As at 31 March 2017
536
209
6
751
As at 31 March 2016
409
270
6
685
As at 1 April 2015
451
84
7
542
Notes to Consolidated Financial Statements for the year ended 31 March 2017
17
Amounts in ` Mln
Provisions
Long-term
Short-term
As at 31
As at 31
March 2017 March 2016
As at 1
As at 31
As at 31
April 2015 March 2017 March 2016
As at 1
April 2015
Provision for employee benefits
Gratuity (refer note 29)
439
366
264
28
13
23
Compensated absences (refer note 29)
255
252
225
34
23
23
Post-employment medical benefits
-
-
-
18
19
23
Retention and performance pay (refer
note 17.1)
-
-
13
-
91
95
60
35
30
247
237
215
-
-
-
330
333
491
Others
Warranty (refer note 17.1)
Legal and regulatory (refer note 17.1)
-
-
-
-
-
36
754
653
532
657
716
904
Personnel Miscellaneous
related
risks
Total
Miscellaneous risks (refer note 17.1)
Additional disclosure relating to provisions:
17.1 Movement in provisions:
Class of provisions
Opening balance
Add: Accruals
Less: Utilisation
Warranty
Legal and
regulatory
271
333
91
-
695
(245)
(491)
(108)
(36)
(880)
(206)
(524)
(129)
(34)
(893)
-
478
23
169
(496)
(29)
(172)
(484)
(23)
(152)
(2)
446
-
260
-
706
(178)
-
(648)
(470)
Less: Write back
Less: Transfer as per Scheme of Arrangement
for Demerger
Closing balance
670
(697)
(661)
(445)
-
(173)
-
(618)
-
26
-
-
26
-
(18)
-
(12)
(30)
-
(56)
-
-
(56)
-
-
-
-
(169)
(11)
(24)
(204)
-
-
-
-
-
303
330
-
-
633
(271)
(333)
(91)
-
(695)
(245)
(491)
(108)
(36)
(880)
Figures given in (brackets) relate to previous years as applicable.
Annual
Report 2016-17
135
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
17.2 Nature of provisions:
(a) Warranty
The Company provides for the estimated liability on warranty given on sale of its products based on past
performance of such products. The provision represents the expected cost of warranty and free of charge
services and it is expected that the expenditure will be incurred over the warranty 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
(d) Miscellaneous risks
18
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.
The Company has created provisions following the accounting concept of conservatism towards possible outflow
of resources in respect of other claims against the Company.
Current Financial Liabilities
As at 31
March 2017
(a) Borrowings
Loans repayable on demand
From banks
Bank overdraft (unsecured)
Other facilities from Bank of America (Unsecured)
(b) Trade Payables
Dues to Micro, Small and Medium Enterprises (refer note 45 )
Dues to others
Dues to related parties
(c) Other financial liabilities
Current maturities of finance lease obligations (refer note 15)
Interest accrued but not paid
Unpaid dividend
Book overdraft
Other payables:
Interest accrued but not due
Payables for purchase of fixed assets (other than micro and small
enterprises)
Employee related payables
Security deposits
19
As at 31
March 2016
Amounts in ` Mln
As at 1
April 2015
191
191
6
148
154
302
100
402
69
4,268
1,388
5,725
39
3,769
2,132
5,940
91
3,186
2,010
5,287
285
12
12
8
108
11
63
36
91
110
10
37
121
59
798
13
1,164
655
19
947
806
13
1,156
Other current liabilities
As at 31
March 2017
Income received in advance
851
As at 31
March 2016
714
Other payables:
Advances received from customers
Statutory dues
136
Consolidated
As at 1
April 2015
609
-
1,379
1,744
1,209
721
917
540
2,951
3,375
2,358
Notes to Consolidated Financial Statements for the year ended 31 March 2017
20
Revenue from operations
Amounts in ` Mln
Year ended
Year ended
31 March 2017 31 March 2016
Sale of products (Including excise duty)
26,445
26,473
Sale of services
15,220
12,911
Other operating revenues
Revenue from operations (net)
276
351
41,941
39,735
Breakup of other operating revenues
Liabilities no longer required written back
Finance income - leases
Miscellaneous
21
69
261
52
21
276
351
Other income
391
261
Surplus on disposal of fixed assets
12
-
Interest income on defined benefit plan
20
27
Interest income on security deposits
24
16
Other non-operating income
28
30
423
395
898
729
Interest income (other than on investments)
Government grants
22
26
198
Cost of raw materials consumed *
Inventory of raw materials at the beginning of the year
Add: Purchases
628
428
4,793
4,016
728
628
4,693
3,816
14,371
15,874
Finished goods
268
279
Work-in-Progress
950
540
Stock-in-trade (goods purchased for resale)
2,692
2,568
Total
3,910
3,387
Less: Inventory of raw materials at the end of the year
Cost of raw materials consumed
* represents Medical equipment components
23
Purchases of stock-in-trade (goods purchased for resale)
24
Changes in inventories of finished goods, stock-in-trade and work-in-progress
Stock at the beginning of the year
Stock at the end of the year
288
268
Work-in-Progress
1,016
950
Stock-in-trade (goods purchased for resale)
2,663
2,692
3,967
3,910
(57)
(523)
9,444
8,532
Contribution to provident and other funds
338
315
Defined benefit plan expense
124
179
Finished goods
Changes in inventories of finished goods, stock-in-trade and work-in-progress
25
Employee benefits expense
Salaries, wages and bonus
Expense on Employee Stock Option Schemes
Staff welfare expenses
85
71
555
497
10,546
9,594
Annual
Report 2016-17
137
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
Year ended
Year ended
31 March 2017 31 March 2016
26
27
28
Finance costs
Interest on Finance Lease
Net interest on the net defined benefit liability
Other interest expense
Total interest expense
Unwinding of discount and effect of changes in discount rate on provisions
Total finance costs
Depreciation and amortization expense
Depreciation of tangible fixed assets (refer note 3)
Amortisation of intangible assets
Other expenses
Power and fuel
Packing, freight and transport
Rent
Repairs to buildings
Repairs to machinery
Insurance
Rates and taxes
Travelling and conveyance
Legal and professional
Publicity
IT and Communication
Provision for doubtful trade receivables and loans and advances
Warranty
Net loss on foreign currency transaction and translation
Miscellaneous
68
48
7
587
64
6
123
657
1
124
1
658
582
611
1,193
534
611
1,145
139
877
760
128
16
102
28
1,109
398
1,211
1,090
113
478
293
1,392
8,134
158
507
588
249
12
94
74
1,038
326
2,021
615
138
490
57
932
7,299
(a) Legal and professional includes payments to auditors as given below:
As Auditor - statutory audit fees ` 5.0 (Previous year - ` 12.9), tax audit fees ` 1.5 (Previous year - ` 2); In other
capacity - taxation matters ` 0.3 (Previous year - ` 0.3), certification ` 0.2 (Previous year - ` 1.1) and reimbursement
of expenses ` 0.5 (Previous year - ` 1).
(b) Miscellaneous include - (i) undepreciated value of fixed assets written off / provided for - ` 23 (Previous year - ` Nil,
(ii) handling charges - ` 64 (Previous year - ` 200), (iii) royalty - ` 169 (Previous year - ` 187), (iv) commission - `
166 (Previous year - ` 123), (v) donation - ` NIL (Previous year - ` Nil) and (vi) Corporate Social Responsibility
expenditure - Gross amount required to be spent ` 99 (Previous year - ` 68), amount spent towards various schemes
as prescribed under Section 135 of the Companies Act, 2013 ` 75 (Previous year - ` 33).
Details of CSR Expenditure:
a)
b)
Gross amount required to be spent by the group during the year
Amount spent during the year ending on 31 March, 2017:
i)
For Purposes mentioned below:
In Cash
Yet to be paid in Cash
ii) On purposes other than (i) above
In Cash
Yet to be paid in Cash
138
Consolidated
Year ended
Year ended
31 March 2017 31 March 2016
99
68
75
24
33
35
-
-
Notes to Consolidated Financial Statements for the year ended 31 March 2017
29
Gratuity and other post-employment benefit plans (As per Ind AS 19 Employee Benefits)
Amounts in ` Mln
The Company has a defined gratuity benefit plan which is governed by Payment of Gratuity Act, 1972. Under the Act, an
employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends
on the member’s length of service and salary at the retirement age. The Company covers a part of the liability towards
employees’ gratuity by way of contributing to a registered trust. Plan assets comprise of contribution to Group Gratuity
Scheme 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. The following table summarizes the components of net benefit expense
recognized in the statement of profit and loss and the amounts recognized in the balance sheet.
Statement of Profit and Loss
Net employee benefit expense (recognized in Employee Cost)
Particulars
Gratuity
Year ended 31 Year ended 31
March 2017
March 2016
Current service cost
Past service cost
125
128
-
78
48
64
(22)
(27)
Curtailment Cost
-
-
Settlement cost
-
-
20
(12)
171
231
Interest cost on benefit obligation
Expected return on plan assets
Net actuarial (gain)/ loss recognised in the year
Expenses recognized in the statement of profit & loss and Other Comprehensive Income
Changes in the present value of the defined benefit obligation are as follows:
Particulars
Gratuity
Year ended 31
March 2017
Funded Unfunded
Compensated absences
Year ended
31 March 2016
Year ended
31 March 2015
Funded Unfunded
Funded Unfunded
Provident Fund
Year
Year
Year
Year
Year
Year
ended
ended
ended
ended
ended
ended
31 March 31 March 31 March 31 March 31 March 31 March
2017
2016
2015
2017
2016
2015
A. Present value
of obligations as at
beginning of the year
543
111
550
311
406
263
278
383
313
3,397
3,473
(1) Current service cost
106
18
90
48
68
41
99
124
104
448
241
227
40
8
44
24
35
23
20
25
25
323
11
269
(42)
(19)
(44)
(37)
(52)
(20)
(81)
(108)
(75)
(411)
(335)
(312)
(2) Interest cost
(3) Benefits settled
2,649
-
-
-
-
-
-
-
-
-
-
-
(5) Actuarial (gain) / loss
(20)
38
(48)
150
93
9
(26)
24
19
-
-
(6) Actuarial (gain) /
loss due to Interest rate
guarantee
-
-
-
-
-
-
-
-
-
562
244
90
(7) Employees’
contribution
-
-
-
-
-
-
-
-
-
636
349
311
(8) Acquisition/Business
Combination/Divestiture
-
(3)
(130)
(385)
-
(5)
(2)
(173)
(4)
(781)
-
(9) Change in reserves
-
-
-
-
-
-
-
-
-
-
-
(10) Transfer in
-
-
-
-
-
-
-
-
-
195
239
(11) Past service cost
-
-
78
-
-
-
-
-
-
627
153
540
111
550
311
288
275
382
(4) Settlements
Present value of
obligations as at end of
the year
190
5,145
3,397
3,473
Annual
Report 2016-17
139
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
29
Amounts in ` Mln
Gratuity and other post-employment benefit plans (As per Ind AS 19 Employee Benefits) (Contd.)
Changes in the defined benefit obligation and fair value of plan assets as at 31March 2017:
Change in the fair value of plan assets are as follows:
Particulars
Year ended 31
March 2017
Funded Unfunded
B. Change in Plan
Assets
Plan assets as at
beginning of the year
(1) Expected return on
plan assets
(2) Contributions
(3) Benefits settled
(4) Employer and
Employee contribution
(5) Transfer in
(6) Benefit payments
(7) Asset gain / (loss)
(8) Settlements
(9) Acquisition/Business
Combination/Divestiture
Plan assets as at end of
the year
Surplus
Gratuity
Year ended
31 March 2016
Year ended
31 March 2015
Compensated absences
Provident Fund
Year
Year
Year
Year
Year
Year
ended
ended
ended
ended
ended
ended
31 March 31 March 31 March 31 March 31 March 31 March
2017
2016
2015
2017
2016
2015
Funded Unfunded
Funded Unfunded
273
-
312
-
273
-
-
-
-
3,473
3,564
2,671
22
-
29
-
26
-
-
-
-
365
11
271
83
(62)
-
-
65
(44)
-
-
68
(52)
-
-
-
-
-
1,084
590
537
-
-
(5)
(84)
-
(3)
-
-
-
-
-
190
(411)
637
-
195
(335)
273
(827)
239
(312)
158
-
313
273
-
312
-
-
-
-
5,338
3,471
3,564
-
-
192
74
91
(3)
-
-
The above surplus of ` 192 (Previous year - ` 74) has not been recognised in the financial statements in accordance witth IND AS19, Employee Benefits, since the surplus is
not available to the Company either in form of refunds or as reduction of future contributions.
C. Actual return on
19
24
23
plan assets
D. Reconciliation of
present value of the
obligation and the
fair value of the plan
assets:
(1) Present value of
(627)
(154)
(541)
(111)
(551)
(311)
(288)
(276)
(366)
(5,145)
obligations at end of
the year
(2) Fair value of Plan
313
273
312
5,337
assets
Liability recognised in
(314)
(154)
(268)
(111)
(239)
(311)
(288)
(276)
(366)
192
Balance Sheet
E. Components of
Employer Expense:
(1) Current service cost
106
18
90
48
68
41
99
124
100
(2) Interest cost
40
8
43
24
35
23
20
26
25
(3) Expected return on
(22)
(29)
(26)
plan assets(estimated)
(4) Curtailments
(5) Past service cost
78
(4) Actuarial (gain) / loss
(17)
38
(173)
150
96
9
(26)
25
15
Total expense
107
64
10
222
173
73
93
175
140
recognised in
Statement of Profit
and Loss
The gratuity and compensated absences expenses have been recognised in “Employee benefits expenses” under note 24 to the Financial Statements.
140
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
29
Amounts in ` Mln
Gratuity and other post-employment benefit plans (As per Ind AS 19 Employee Benefits) (Contd.)
F. Experience Adjustments
Description
Gratuity (Funded)
Year ended
31 March
2017
Defined Benefit Obligations
Plan Assets
Surplus/(Deficit)
Experience adjustments on Plan assets/
liabilities (gain) / loss
682
Year ended
31 March
2015
541
550
Year ended
31 March
2013
406
368
345
273
312
273
220
(268)
(238)
(133)
(148)
(75)
(59)
316
78
89
Gratuity (Unfunded)
Year ended
31 March
2017
154
Year ended
31 March
2016
Year ended
31 March
2015
111
(154)
Experience adjustments on Plan assets/
liabilities (gain) / loss
Year ended
31 March
2014
Year ended
31 March
2013
311
263
264
-
-
-
(111)
(311)
(263)
(264)
148
(22)
(44)
13
Plan Assets
Surplus/(Deficit)
Year ended
31 March
2014
(231)
Description
Defined Benefit Obligations
Year ended
31 March
2016
Description
Provident Fund
Year ended
31 March
2017
Year ended
31 March
2016
Year ended
31 March
2015
Year ended
31 March
2014
Year ended
31 March
2013
Defined Benefit Obligations
5,145
3,413
3,489
2,649
2,149
Plan Assets
5,337
3,471
3,564
2,671
2,176
192
58
75
22
27
(637)
(273)
(158)
69
(13)
Surplus/(Deficit)
Experience adjustments on Plan assets/
liabilities (gain) / loss
G. Assumptions
Gratuity - Funded
Year ended 31
March 2017
Year ended 31
March 2016
Compensated absences
Year ended 31
March 2017
Year ended 31
March 2016
Financial Assumptions
Discount factor
PIL 7.1% , PKAPL
7.1% and Home
Care 7.1%
PIL 7.55% and
PKAPL 7.7%
Estimated rate of return on plan assets
9% and PKAPL 9%
PIL 9.0% and
PKAPL 8.75%
Salary Increase
Management, PMS
- 10%,
PIC - 12%
DMC factory 12%,
PKAPL- 12%
Home Care -10%
Management, PMS
and PIC - 11%,
DMC factory 12%,
PKAPL- 12%
7.10%
7.55%
Annual
Report 2016-17
141
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
29
Amounts in ` Mln
Gratuity and other post-employment benefit plans (As per Ind AS 19 Employee Benefits) (Contd.)
G. Assumptions
Demographic Assumptions
Mortality
Attrition rate
Retirement age
G.
Gratuity - Funded
Year ended 31
Year ended 31
March 2017
March 2016
IALM (2006-08)
Management -14%,
PMS - 12%,
PIC -9.60%
DMC Factory - 5%
PKAPL CG- 12%
PKAPL Staff-20%
PKAPL Workers-8%
Home Care - 10%
Management and
PIC - 60 years,
Others - 58 years
PKAPL- 58 years
Home Care- 60
years
Compensated absences
Year ended 31
Year ended 31
March 2017
March 2016
IALM (2006-08)
Management, PMS
and PIC - 10%,
DMC factory - 5%,
PKAPL CG- 12%
PKAPL Staff-20%
PKAPL Workers-8%
Management and
PIC - 60 years,
Others - 58 years
PKAPL- 58 years
Sensitivity Analysis
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and expected
salary increase.
The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions
occurring at the end of the reporting period, while holding all other assumptions constant.
Defined benefit obligation
H.
30
Discount rate
a.
Discount rate - 100 basis points
b. Discount rate + 100 basis points
Salary increase rate
a.
Rate - 100 basis points
b. Rate + 100 basis points
Maturity profile of defined benefit obligation
Within the next 12 months (next annual reporting period)
Between 1 and 5 years
Between 5 and 10 years
Total expected payments
As at
31 March 2017
853
717
718
850
63
262
325
650
Employees’ Share-based Payments (As per Ind AS 102 Share based Payment):
Certain employees of the company are eligible for stock options granted by the Holding Company (“KPNV”). In conformity
with Ind AS 102 ‘Share based Payment’ 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
142
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
30
Amounts in ` Mln
Employees’ Share-based Payments (As per Ind AS 102 Share based Payment): (Contd.)
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.
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.”
(c) Number and weighted average grant-date fair value of Stock Options (EUR)
Grant Date
Weighted average
Outstanding Grants Cancellation Transfer in /
grant-date fair value as at 1 April
(out)
of the share (in Euros)
2016
April 18, 2006
26.28
4,356
1,107
-
-
April 16, 2007
30.96
7,083
27
7,110
7,110
April 14, 2008
23.11
3,402
153
3,555
3,555
July 14, 2008
20.67
1,800
1,800
1,800
April 14, 2009
12.63
2,250
2,250
2,250
April 19, 2010
24.90
4,744
6,212
6,212
July 19, 2010
24.01
1,080
April 18, 2011
20.90
9,114
5,700
July 18, 2011
17.20
2,850
1,350
October 17, 2011
14.52
1,350
January 30, 2012
15.24
5,000
April 23, 2012
14.82
(32)
3,932
(2,432)
1,080
1,080
(4,164)
10,650
10,650
(1,350)
2,850
2,850
10,000
23,034
66,063
Previous Year
(5,463)
Exercise Outstanding Exercisable
as at 31
March 2017
2,550
-
104,394
1,350
1,350
15,000
15,000
25,584
25,584
(5,495)
24,819
(7,946)
77,441
77,441
(13,773)
5,636
30,194
66,063
66,063
(d) Number and weighted average grant-date fair value of Stock Options (USD)
Grant Date
Weighted average
Outstanding Grants Cancellation Transfer in /
grant-date fair value as at 1 April
(out)
of the share (in USD)
2016
April 14, 2008
36.63
April 14, 2009
33.51
Previous Year
306
-
Exercise Outstanding Exercisable
as at 31
March 2017
-
-
306
306
480
-
-
-
-
480
480
786
-
-
-
-
786
786
1,290
-
(504)
786
786
(e) Number and weighted average grant date fair value of Restricted Shares (EUR)
Grant Date
Weighted average
grant-date fair value
of the share (in Euro)
Outstanding
as at 1 April
2016
Grants
Cancellation
Transfer in /
(out)
Delivered
Outstanding
as at 31
March 2017
October 24, 2014
20.43
708
(708)
-
February 2, 2015
23.89
4,027
(4,027)
-
May 5, 2015
25.32
1,168
(1,168)
-
July 31, 2015
24.59
8,391
(5,594)
2,797
February 1, 2016
24.00
18,586
(6,195)
12,391
April 29, 2016
24.00
20,396
20,396
October 28, 2016
364
32,880
-
-
3,068
364
-
35,948
Previous Year
13,660
28,145
(2,751)
(1,422)
(4,752)
32,880
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.
Annual
Report 2016-17
143
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
30
Employees’ Share-based Payments (As per Ind AS 102 Share based Payment): (Contd.)
(f) Method and assumptions for arriving at the Fair Value of Restricted Shares
Amounts in ` Mln
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
April 29, 2016
Previous Year
Weighted average
Outstanding
grant date fair value
as at 1 April
(in Euro)
2016
23.45
30,837
30.38
22.92
49,439
22.80
1,806
20.43
708
25.19
61,265
24.33
1,549
24.00
145,604
128,896
Grants
Cancellation
(30,837)
40,775
40,775
73,323
Transfer in /
(out)
Delivered
(6,187)
(1,806)
(708)
(16,584)
-
-
(56,122)
(42,776)
(13,839)
-
-
Outstanding
as at 31
March 2017
43,252
44,681
1,549
40,775
130,257
145,604
(h) Method and assumptions for arriving at the Fair Value of Performance Shares
(i)
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
-0.45%
2. Expected dividend yield
3.40%
3. Expected share price volatility
26%
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 17,545 (Previous year -19,110) shares were bought by employees during the year at an average price
of EUR 25.48 (Previous year - EUR 24).
(j)
Expense recognised on account of “Employee Share-Based Payment” is ` 85 (Previous year - ` 71) and carrying liability
as at 31 March 2017 is ` 414 (Previous year - ` 392).
31 Commitments and contingencies
a. Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for - ` 152 (Previous
year - ` 74).
b. Contingent liabilities
(i) In respect of disputed excise demands - ` 19 (Previous year - ` 19), income tax demands - ` 7,400 (Previous year
- ` 6,268), service tax demands - ` 82 (Previous year - ` 82), VAT- ` 1,125 (Previous year- ` 1,125) and Custom
Duty- ` 62 (Previous Year- ` Nil)
The Contingent Liability on account of income tax cases relating to erstwhile lighting business of Philips India
Limited (PIL) is estimated at ` 3,197 (Previous year – ` 2,757) out of common estimated income tax liability of
lighting business and other businesses of Philips India Limited. As per the MOU (Memorandum of Understanding)
dated 31 March 2016 signed between Philips India Limited and Philips Lighting India Limited at the time of
demerger of lighting business, the Income Tax cases upto the effective date of demerger shall be contested by
Philips India Limited and the amount of liability, if any, upon conclusion of case relating to lighting business shall
be payable by Philips Lighting India Limited to Philips India Limited on the basis of respective segment turnover
(agreed as part of MOU) of relevant years.
(ii) Claims not acknowledged as debts by the Company - ` 1 (Previous year - ` 48).
(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.
144
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
32
Amounts in ` Mln
Related party transactions (As per Ind AS 24 Related Party Disclosures)
(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 Lanka Solutions (Private) Limited
Burton Medical Products Corporation
Philips Lighting B.V.
Dameca A/S
Philips Lighting India Limited
Lifeline Systems Company
Philips Electronics Malaysia Pte Limited
Lumileds India Private Limited
PHILIPS MEDICAL SYST NEDERLAND B.V.
Philips (China) Investment Company, Ltd.
Philips Medical Systems (Cleveland), Inc.
Philips Aktiebolag
Philips Medical Systems DMC GmbH
Philips Austria GmbH
Philips Medical Systems Indústria e Comércio Ltda.
Philips BioCell A/S
Philips Medical Systems Ltda.
Philips Consumer Lifestyle B.V.
Philips Medical Systems Nederland B.V.
Philips Consumer Life Style , Korea
Philips Medical Systems Technologies Ltd.
Philips Digital Mammography Sweden AB
Philips Medizin Systeme Böblingen GmbH
Philips Egypt (Limited Liability Company)
Philips Nederland B.V.
Philips Electronics Australia Limited
Philips Oral Healthcare, Inc.
Philips Electronics Bangladesh Private Limited
Philips Oy
Philips Electronics Hong Kong Limited
Philips Polska Sp.z.o.o.
Philips Electronics Middle East & Africa B.V.
Philips South Africa (Proprietary) Limited
Philips Electronics NA Corporation
Philips Technologie GmbH
Philips Electronics Nederland B.V.
Philips Ultrasound, Inc.
Philips Electronics North America Corporation
PT. Philips Indonesia
Philips Electronics Singapore Pte Ltd
Respironics California, Inc.
Philips Electronics UK Limited
Respironics, Inc.
Philips Export B.V.
Saeco International Group S.p.A.
Philips Do Brasil Ltda, Brazil
Shenzhen Goldway Industrial Inc.
Philips GmbH
VISICU, Inc.
Philips Healthcare (Suzhou) Co., Ltd.
Volcano Corporation
Philips Healthcare Informatics, Inc.
Volcano Europe, B.V.B.A.
Philips Innovative Applications
Witt Biomedical Corporation
Philips International B.V.
(ii) Employee Trusts
Philips India Ltd Management Staff Provident Fund Trust
(iii) Key Management Personnel
(1) Executive Directors:
(i) Mr.Hariharan Madhavan - Philips India Limited
(ii) Mr.V. Raja - Philips India Limited
(iii) Mr. Rajiv Mathur - Philips India Limited and Preethi Kitchen Appliances Private Limited
(iv) Mr.Priyank Agarwal - Director,Philips Home Care Services India Private Limited w.e.f. 25 May 2016
(v) Mr.Angarai Dorairjan Aditya Ratnam - Director, Philips Home Care Services India Private Limited w.e.f.
25 May 2016
(vi) Mr.Madapusi Raghavan Srinivas Prasad - Additional Director, Philips Home Care Services India Private
Limited w.e.f. 06 Sept 2016
(2) Non-Executive Directors:
(i) Mr.S.M.Datta - Non-Executive Independent Director, Philips India Limited
(ii) Mr.Vikram Mukund Limaye - Non-Executive Independent Director,Philips India Limited (Ceased to be
a Director w.e.f June 11, 2017)
(iii) Mr.Vivek Gambhir - Non-Executive Independent Director, Philips India Limited
(iv) Ms.Geetu Gidwani Verma -Non-Executive Independent Director, Philips India Limited
(v) Mr. A.D.A. Ratnam - Non-Executive Director, Preethi Kitchen Appliances Private Limited and Philips
Home Care Services India Private Limited
(vi) Mr. Rajiv Mathur - Non-Executive Director, Preethi Kitchen Appliances Private Limited
(3) Company Secretary:
(i) Mr.Rajiv Mathur - Philips India Limited
(ii) Mr. Nishant Nayan - Preethi Kitchen Appliances Private Limited
Annual
Report 2016-17
145
32
146
Consolidated
PURCHASES
Goods
Fixed assets
Services
Reimbursements
Others
SALES
Goods
Fixed assets
Services
Reimbursements
DEPUTATION OF PERSONNEL
Charge
Recovery
MANAGERIAL REMUNERATION
Mr.A.Krishnakumar
Mr.Hariharan Madhavan
Mr.V. Raja
Mr.Rajiv Mathur
Mr.S.M.Datta
Mr.Vikram Mukund Limaye
Mr.Vivek Gambir
Mrs.Geetu Gidwani Verma
FINANCE
Dividend Paid
Interest income
Interest Expense
Inter corporate deposits given
Inter corporate deposits repaid
Debenture interest expenses
Others - Purchase of Investment
Face value of equity shares on conversion
of compulsorily convertible debentures
Securities premium on conversion of
compulsorily convertible debentures
Compulsorily convertible debentures
Debentures interest payable
Face value of equity shares on buy back
and capital reduction
Securities premium on buy back and
capital reduction
Contributions to Employees’ Benefit
Plans
OUTSTANDINGS
Payable
Payable *
Receivable
Receivable *
* Figures in brackets indicate that of 1 April 2015
8,481
59
883
177
2,575
2
9,532
298
4
2
-
-
1,336
1,074
1,994
166
-
470
3,263
4
133
6
-
-
-
50
-
-
-
175
7
-
-
-
-
-
-
-
-
-
-
-
30
59
16
2
1
1
1
Year ended 31 March 2017
Fellow
Associate
Key
Subsidiary
Company
Managerial
Companies
Personnel
113
22
Ultimate
Holding
Company
-
48
46
(20)
99
(42)
-
551
-
4,931
166
540
469
-
-
1,252
-
91
84
-
-
-
-
-
-
-
-
Ultimate
Holding
Company
-
Employee
Trusts
Related party transactions (As per Ind AS 24 Related Party Disclosures) (Contd.)
(c) Nature of transactions
2,033
(1,945)
2,033
(1,642)
-
-
-
1
134
134
-
-
5
2,596
8,662
601
12,182
59
1,238
100
-
9
-
-
-
-
63
-
-
398
-
-
-
-
-
-
-
-
-
-
27
12
13
16
1
1
1
-
Year ended 31 March 2016
Fellow
Associate
Key
Subsidiary
Company
Managerial
Companies
Personnel
-
-
-
-
-
-
-
54
(46)
-
620
Employee
Trusts
Amounts in ` Mln
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
Notes to Consolidated Financial Statements for the year ended 31 March 2017
32
Related party transactions (As per Ind AS 24 Related Party Disclosures) (Contd.)
Relationship / Name of the related party
Description of the nature
of transaction
Amounts in ` Mln
Value of the transactions
Year ended
Year ended
31 March
31 March
2017*
2016
(i) Fellow subsidiary Companies:
Philips Medical Systems Nederland B.V.
Purchase of goods
2,861
2,540
Philips Consumer Lifestyle B.V.
Purchase of goods
2,148
3,409
Philips Electronics Singapore Pte Ltd
Purchase of goods
1,707
1,361
Philips Electronics Singapore Pte Ltd
Purchase of fixed assets
33
28
Philips Medical Systems Nederland B.V.
Purchase of fixed assets
8
10
Philips Medical Systems DMC GmbH
Purchase of fixed assets
13
PT. Philips Indonesia
Purchase of fixed assets
10
Philips Electronics Nederland B.V.
Purchase of services
576
881
Philips Consumer Lifestyle B.V.
Reimbursements paid
15
Philips Electronics Nederland B.V.
Reimbursements paid
55
Philips Electronics Bangladesh Private Limited
Reimbursements paid
82
Philips Lighting India Limited
Reimbursements paid
55
Philips Medical Systems Nederland B.V.
Sale of goods
1,993
994
Philips Electronics Hong Kong Limited
Sale of goods
248
Philips Lighting India Limited
Sale of Fixed Assets
2
Philips Electronics Nederland B.V.
Sale of services
2,378
1,801
Philips Electronics North America Corporation
Sale of services
1,217
Philips Medical Systems Nederland B.V.
Sale of services
1,727
2,050
Philips Healthcare Informatics, Inc.
Sale of services
1,916
Philips Medical Systems Nederland B.V.
Reimbursements received
131
Philips Electronics Bangladesh Private Limited
Reimbursements received
61
Philips Lighting India Limited
Reimbursements received
33
544
Philips South Africa (Proprietary) Limited
Deputation recovery
1
Philips Medical Systems Nederland B.V.
Deputation recovery
1
Philips Polska Sp.z.o.o.
Deputation recovery
1
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 Singapore Pte Ltd
Payable
204
Philips Medical Systems Nederland B.V.
Payable
488
642
Philips Consumer Lifestyle B.V.
Payable
533
Philips Medizin Systeme Böblingen GmbH
Payable
151
Philips Electronics Bangladesh Private Limited
Receivable
87
Philips Medical Systems Nederland B.V.
Receivable
84
528
Philips Ultrasound, Inc.
Receivable
57
VISICU, Inc.
Receivable
64
Philips Lighting India Limited
Receivable
544
Philips Electronics Nederland B.V.
Receivable
316
(ii) Employee Trusts:
Philips India Ltd Management Staff Provident Fund Trust Contributions
551
620
Philips India Ltd Management Staff Provident Fund Trust Payable
48
54
* represents material transactions of the same type with related parties during the year which comprise more than 10% of
aggregate value of transactions.
Note: Transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions.
Outstanding balances at the year-end are unsecured, interest free and will be settled in cash.
Annual
Report 2016-17
147
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
32
Related party transactions (As per Ind AS 24 Related Party Disclosures) (Contd.)
Compensation of key management personnel of the company
Details
Amounts in ` Mln
Year ended 31 Year ended 31
March 2017
March 2016
Short-term employee benefits
Post-employment benefits*
Total compensation paid to key management personnel
106
64
4
7
110
71
* Key Managerial Personnel who are under the employment of the Company are entitled to post employment benefits and
other long term employee benefits recognised as per Ind AS 19 - “Employee Benefits” in the financial statements. As these
employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above.
33
Significant accounting judgments, estimates and assumptions
The preparation of the company’s consolidated financial statements requires management to make judgments, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of assets or liabilities affected in future periods
(i)
Judgments
In the process of applying the company’s accounting policies, management has made the following judgments, which
have the most significant effect on the amounts recognised in the consolidated financial statements:
(ii) Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are described below.The company based its assumptions and estimates on parameters available when the
consolidated financial statements were prepared. Existing circumstances and assumptions about future developments,
however, may change due to market changes or circumstances arising that are beyond the control of the company. Such
changes are reflected in the assumptions when they occur.
(a) Taxes
148
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the
amount and timing of future taxable income. Given the wide range of business relationships and the long-term
nature and complexity of existing contractual agreements, differences arising between the actual results and
the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax
income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The
amount of such provisions is based on various factors, such as experience of previous tax audits and differing
interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of
interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective
domicile of the companies.
(b) Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value
of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These include the determination of the
discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its
long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions
are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans
operated in India, the management considers the interest rates of government bonds in currencies consistent
with the currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables
tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases
are based on expected future inflation rates for the respective countries.
Further details about gratuity obligations are given in Note 29.
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
33 Significant accounting judgments, estimates and assumptions (Contd.)
(c) Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured
based on quoted prices in active markets, their fair value is measured using valuation techniques including the
DCF model. The inputs to these models are taken from observable markets where possible, but where this is
not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of
inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the
reported fair value of financial instruments. See Note 46 and 47 for further disclosures.
(d) Warranty
34
The Company periodically assesses and provides for the estimated liability on warranty given on sale of its
products based on past performance of such products.
Segment Information (As per Ind AS 109 Operating Segments)
Description
Year ended
31 March
2017
Year ended
31 March
2016
Description
31 March
2017
31 March
2016
a.Personal Health
7,971
9,383
b.Innovation services
2,112
2,473
c.Health Systems
9,521
9,976
(A) PRIMARY SEGMENT
INFORMATION:
OTHER INFORMATION
(1) SEGMENT REVENUE
(12) SEGMENT ASSETS
13,697
15,304
9,166
8,098
c.Health Systems
18,153
16,138
d.Other unallocable
TOTAL
41,016
39,540
TOTAL
a.Personal Health
b.Innovation services
9,252
9,559
28,856
31,391
(2) INTER SEGMENT REVENUE
-
-
a.Personal Health
-
-
b.Innovation services
-
-
a.Personal Health
2,369
1,316
c.Health Systems
-
-
b.Innovation services
2,578
1,934
c.Health Systems
6,436
6,561
d.Other unallocable
1,664
3,708
13,047
13,519
a.Personal Health
244
206
b.Innovation services
608
279
c.Health Systems
255
144
233
243
-
124
1,340
996
TOTAL
(3) OTHER UNALLOCABLE
INCOME
REVENUE FROM OPERATIONS
(NET) (1+3)
-
-
925
195
41,941
39,735
17
319
904
789
1,993
1,508
(13) SEGMENT LIABILITIES
TOTAL
(4) SEGMENT RESULT
(14) CAPITAL EXPENDITURE
a.Personal Health
b.Innovation services
c.Health Systems
TOTAL
2,914
2,616
d.Other unallocable
(5) FINANCE COST
(124)
(658)
e.Discontinued Operations
343
48
3,133
2,006
(6) OTHER UNALLOCABLE
EXPENDITURE NET OF
INCOME
(7) PROFIT BEFORE
TOTAL
EXCEPTIONAL ITEMS AND TAX
(4+5+6)
Annual
Report 2016-17
149
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
34
Segment Information (As per Ind AS 109 Operating Segments) (Contd.)
Description
Year ended
31 March
2017
Year ended
31 March
2016
(8) EXCEPTIONAL ITEMS
a.Personal Health
b.Innovation services
c.Health Systems
d.Other unallocable
TOTAL
(9) PROFIT BEFORE TAX FROM
CONTINUING OPERATIONS
3,133
2,006
(9) PROFIT BEFORE TAX FROM
DISCONTINUED OPERATIONS
TOTAL PROFIT
(10) (a) TAX EXPENSE Continuing Operations
a.Current tax
b.Deferred tax - release / (charge)
TOTAL
(b) TAX EXPENSE - Discontinuing Operations
a.Current tax
b.Deferred tax - release / (charge)
TOTAL
(11) PROFIT FOR THE
YEAR FROM CONTINUING
OPERATIONS
(12) PROFIT FOR THE YEAR
FROM DISCONTINUED
OPERATIONS
-
3,208
3,133
5,214
(1,244)
56
(1,188)
(1,194)
7
(1,187)
1,945
(1,244)
133
(1,111)
819
-
2,097
Year ended
31 March
2017
Year ended
31 March
2016
27,441
14,500
41,941
28,463
11,272
39,735
Year ended
31 March
2017
Year ended
31 March
2016
1,340
1,340
996
996
Description
Amounts in ` Mln
31 March
2017
31 March
2016
(731)
(204)
(112)
(146)
(1,193)
(896)
(172)
(103)
(143)
(418)
(1,732)
(8)
(4)
(9)
(86)
(35)
(93)
d.Other unallocable
-
-
e.Discontinued Operations
-
(56)
(103)
(188)
31 March
2017
31 March
2016
25,569
3,287
28,856
29,820
1,571
31,391
(15) DEPRECIATION AND
AMORTISATION EXPENSE
a.Personal Health
b.Innovation services
c.Health Systems
d.Other unallocable
e.Discontinued Operations
TOTAL
(16) NON-CASH EXPENSES
OTHER THAN DEPRECIATION
AND AMORTISATION EXPENSE
a.Personal Health
b.Innovation services
c.Health Systems
TOTAL
(B) SECONDARY SEGMENT INFORMATION:
Description
REVENUE
a. Within India
b. Outside India
TOTAL
Description
CAPITAL EXPENDITURE
a. Within India
b. Outside India
TOTAL
Description
ASSETS
a. Within India
b. Outside India
TOTAL
The secondary segment revenue and assets in the geographical segments considered for disclosure are as
follows:
150
(1)
Revenue and assets within India.
(2)
Revenue and assets outside India.
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
33
Amounts in ` Mln
Significant accounting judgments, estimates and assumptions (Contd.)
(C) OTHER DISCLOSURES:
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. Personal Health
Domestic Appliances, Health and Wellness
products and Personal care products
b. Innovation services
Development of embedded software, Philips
Design
c. Health Systems
Medical electronics equipments
Reconciliations to amounts reflected in the financial statements
Reconciliation of profit
Year ended
31 March
2017
Year ended
31 March
2016
Segment profit
2,914
2,616
Finance cost
(124)
(658)
Other unallocable expenditure net of unallocable income
Tax expense
Profit after tax from continuing operations
343
48
(1,188)
(1,187)
1,945
819
-
2,097
1,945
2,916
Profit after tax from discontinued operations
Profit for the year
Reconciliation of assets
Particulars
As at 31
March 2017
As at 31
March 2016
Segment operating assets
28,856
31,391
Total Assets
28,856
31,391
Reconciliation of liabilities
Particulars
As at 31
March 2017
As at 31
March 2016
Segment operating liabilities
13,047
13,519
Total liabilities
13,047
13,519
Annual
Report 2016-17
151
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
35
Amounts in ` Mln
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
Details
USD Currency
As at 31 March 2017
INR
INR
As at 31 March 2017
As at 31 March 2015
FC
(in 000s)
INR
INR
FC
(in 000s)
As at 31 March 2016
FC
(in 000s)
INR
As at 31 March 2015
FC
(in 000s)
INR
FC
(in 000s)
-
-
-
-
-
-
-
-
-
-
-
2,691.28 41,500.00
2,683.33
40,500.00
2,438.83
39,181.24
-
-
-
-
-
-
Receivables
Payables
FC
(in 000s)
-
Euro Currency
As at 31 March 2016
(b) Foreign exchange currency exposures not covered by Forward Contracts
Details
As at 31 March 2017
As at 31 March 2016
As at 31 March 2017
As at 31 March 2015
As at 31 March 2016
USD Exposure
INR
Receivables
FC
(in 000s)
FC
(in 000s)
INR
766.24 11,058.06
250.82
3,326.71
404.12
6,047.17
211.04
105.78
1,403.03
336.50
5,035.28
20,276.89
1,790.34
28,751.48
-
-
28.00
420.00
132.98
2,128.05
FC
(in 000s)
INR
3,045.64
SGD Exposure
FC
(in 000s)
INR
FC
(in 000s)
INR
FC
(in 000s)
CNY Exposure
FC
(in 000s)
INR
INR
FC
(in 000s)
FC
(in 000s)
INR
FC
(in 000s)
INR
FC
(in 000s)
-
-
-
-
-
-
-
-
-
-
-
-
1.15
24.87
3.08
69.56
3.83
84.47
(0.41)
(43.12)
1.76
171.72
-
-
Receivables
Details
AUD Exposure
INR
FC
(in 000s)
INR
GBP Exposure
FC
(in 000s)
INR
INR
FC
(in 000s)
FC
(in 000s)
INR
FC
(in 000s)
INR
FC
(in 000s)
-
-
-
-
-
-
-
-
-
-
1.38
15.00
0.01
0.25
0.11
2.11
8.56
180.79
0.46
5.71
-
-
0.92
9.99
Receivables
Details
CHF Exposure
INR
36
INR
1,343.67
INR
Payables
FC
(in 000s)
7,098.00
Details
Payables
INR
460.31
Payables
As at 31 March 2015
Euro Exposure
FC
(in 000s)
INR
FC
(in 000s)
INR
FC
(in 000s)
Receivables
-
-
-
-
-
-
Payables
-
-
-
2.00
-
-
Financial Instruments -Financial assets and financial liabilities
The accounting classification of each category of financial instrument their carrying amounts and their fair value amounts
are set out below:As at 31 March 2017
Financial Assets
152
Fair value
through
Profit or loss
Amortised
cost
Total
Carrying
value
Total Fair
Value
Trade Receivables (Non-Current)
-
1,088
1,088
1,088
Other Financial Assets (Non-Current)
-
233
233
233
Trade receivables (Current)
-
5,079
5,079
5,079
Cash and cash equivalents
-
5,737
5,737
5,737
Other Financial Assets (Current)
-
915
915
915
Total
-
13,052
13,052
13,052
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
36
Amounts in ` Mln
Financial Instruments -Financial assets and financial liabilities (Contd.)
As at 31 March 2016
Financial Assets
Amounts in ` Mln
Fair value
through
Profit or loss
-
Amortised
cost
Total
Carrying
value
1,688
204
6,916
6,383
822
16,013
Total Fair
Value
Fair value
through
Profit or loss
-
Amortised
cost
Total
Carrying
value
2,066
237
5,352
2,557
383
10,595
Total Fair
Value
Fair value
through
Profit or loss
-
Amortised
cost
Total
Carrying
value
414
191
5,725
1,164
7,494
Total Fair
Value
Fair value
through
Profit or loss
-
Amortised
cost
Total
Carrying
value
158
154
5,940
947
7,199
Total Fair
Value
Fair value
through
Profit or loss
Amortised
cost
Total
Carrying
value
Total Fair
Value
Borrowings(Non-Current)
Borrowings(Current)
-
681
681
681
-
402
402
402
Trade Payables(Current)
-
5,287
5,287
5,287
Other Financial Liabilities(Current)
-
1,156
1,156
1,156
Total
-
7,526
7,526
7,526
Trade Receivables (Non-Current)
Other Financial Assets (Non-Current)
Trade receivables (Current)
Cash and cash equivalents
Other Financial Assets (Current)
Total
1,688
204
6,916
6,383
822
16,013
1,688
204
6,916
6,383
822
16,013
As at 1 April 2015
Financial Assets
Trade Receivables (Non-Current)
Other Financial Assets (Non-Current)
Trade receivables (Current)
Cash and cash equivalents
Other Financial Assets (Current)
Total
2,066
237
5,352
2,557
383
10,595
2,066
237
5,352
2,557
383
10,595
As at 31 March 2017
Financial Liabilities
Borrowings(Non-Current)
Borrowings(Current)
Trade Payables(Current)
Other Financial Liabilities(Current)
Total
414
191
5,725
1,164
7,494
414
191
5,725
1,164
7,494
As at 31 March 2016
Financial Liabilities
Borrowings(Non-Current)
Borrowings(Current)
Trade Payables(Current)
Other Financial Liabilities(Current)
Total
158
154
5,940
947
7,199
158
154
5,940
947
7,199
As at 1 April 2015
Financial Liabilities
Annual
Report 2016-17
153
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
37
Amounts in ` Mln
Fair value hierarchy
The Company uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either
directly or indirectly
Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable
market data
The following table provides the fair value measurement hierarchy of the company’s assets and liabilities.
Quantitative disclosures fair value measurement hierarchy for assets as at 31 March 2017:
Total
Level 1
Level 2
Level 3
Assets carried at cost for which fair value are
disclosed
138
Investment property
-
138
-
Quantitative disclosures fair value measurement hierarchy for assets as at 31 March 2016:
Total
Level 1
Level 2
Level 3
Assets carried at cost for which fair value are
disclosed
143
Investment property
-
143
-
Quantitative disclosures fair value measurement hierarchy for assets as at 1 April 2015:
Total
Level 1
Level 2
Level 3
Assets carried at cost for which fair value are
disclosed
Investment property
38
143
-
143
-
Financial risk management objectives and policies
The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables.
The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial
assets include loans, trade and other receivables and cash and cash equivalents that are derived directly from its operations.
The Company’s financial risk management is an integral part of how to plan and execute its business strategies.The Company
is exposed to market risk, credit risk and liquidity risk.
The Company’s senior management oversees the management of these risks. The senior professionals working to manage
the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board
of Directors and Audit Committee. This process provides assurance to Company’s senior management that the Company’s
financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified,
measured and managed in accordance with Company policies and Company risk objective.
The Board of Directors reviews and agrees policies for managing each of these risks which are summarized as below:
(a) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price
risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans
and borrowings, deposits, investments and foreign currency receivables and payables. The sensitivity analyses in the
following sections relate to the position as at March 31 2017.The analyses exclude the impact of movements in market
variables on; the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial
assets and liabilities. The sensitivity of the relevant Profit and Loss item is the effect of the assumed changes in the
respective market risks. This is based on the financial assets and financial liabilities held as of March 31, 2017.
154
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
38 Financial risk management objectives and policies (Contd.)
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes
in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily
to the Company’s operating activities (when revenue or expense is denominated in a foreign currency).
The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum
12-month period for hedges of forecasted sales and purchases.
Foreign currency risk sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in USD and Euro exchange rates, with
all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of
monetary assets and liabilities. The Company’s exposure to foreign currency changes for all other currencies is not
material. 5% represents management’s assessment of reasonably possible change in foreign exchange rate.
Change in US$ rate
Effect on profit before tax
Year ended
31 March
2017
Year ended
31 March
2016
Effect on total equity
Year ended
31 March
2015
Year ended
31 March
2017
Year ended
31 March
2016
Year ended
31 March
2015
+ 5%
-2.20
-1.17
-2.03
-2.20
-1.17
-2.03
-5%
2.20
1.17
2.03
2.20
1.17
2.03
Change in Euro rate
Effect on profit before tax
Year ended
31 March
2017
Year ended
31 March
2016
Effect on profit after tax
Year ended
31 March
2015
Year ended
31 March
2017
Year ended
31 March
2016
Year ended
31 March
2015
+ 5%
1.92
0.22
0.70
1.92
0.22
0.70
-5%
-1.92
-0.22
-0.70
-1.92
-0.22
-0.70
(b) Credit risk
Credit Risk is the risk that the counter party will not meet its obligation under a financial instrument or customer
contract, leading to a financial loss.The Company is exposed to credit risk from its operating activities (primarily trade
receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other
financial instruments.
(i)
Trade receivables
Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures
and control relating to customer credit risk management. Credit quality of a customer is assessed based on an
extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment.
Outstanding customer receivables are regularly monitored and any shipments to major customers are generally
covered by letters of credit or other forms of credit insurance as at Mar 31, 2017.
Our historical experience of collecting receivables is that credit risk is low, as its customers are located in several
juristictionns and industries and operate in largely indipendent markets. Hence, trade receivables are considered
to be a single class of financial assets.
(ii) Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in
accordance with the Company’s policy.Investment of surplus funds are made in bank deposits.The limits are set to minimise
the consultation of risk and therefore mitigate financial loss through counterparty potential failure to make payments.
The Company maintains exposure in cash and cash equivalents and term deposits with banks, The Company has
set counter-parties limits based on multiple factors including financial position, credit rating, etc. The Company’s
maximum exposure to credit risk as at 31 March, 2016 and 1 April, 2015 is the carrying value of each class of
financial assets as illustrated in note 9.”
(c) Liquidity risk
Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The
Company’s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due
without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions. The
Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended 31st March,
Annual
Report 2016-17
155
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
38
Amounts in ` Mln
Financial risk management objectives and policies (Contd.)
2017 and 31st March, 2016. Cash flow from operating activities provides the funds to service the financial liabilities
on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an ongoing basis to meet operational needs. Any short term surplus cash generated, over and above the amount required
for working capital management and other operational requirements, is retained as cash and cash equivalents (to the
extent required) and any excess is invested in interest bearing term deposits with appropriate maturities to optimise
the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.
Maturity profile of financial liabilities
The table below provides the details regarding the remaining contractual maturities of financial liabilities at the reporting
date based on contractual undiscounted payments.
Undiscounted Amount
Carrying
Payable
More than
Amount within 1 year
1 years
Total
As at 31 March 2017
Borrowings(Non-Current)
414
414
414
Borrowings(Current)
191
191
191
Trade Payables(Current)
5,725
5,725
5,725
Other Financial Liabilities(Current)
1,164
1,164
1,164
As at 31 March 2016
Borrowings(Non-Current)
158
158
158
Borrowings(Current)
154
154
154
Trade Payables(Current)
154
154
154
Other Financial Liabilities(Current)
5,940
5,940
5,940
As at 1 April 2015
Borrowings(Non-Current)
681
681
681
Borrowings(Current)
402
402
402
Trade Payables(Current)
5,287
5,287
5,287
Other Financial Liabilities(Current)
1,156
1,156
1,156
39
Capital management
For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable
to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its
ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. As at
31st March, 2017, the Company has only one class of equity shares and has low debt. Consequent to such capital structure,
there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company
allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans
For the year ended
For the year ended
For the year ended
31 March 2017
31 March 2016
31 March 2015
Earning Before Interest And Tax
2,570
2,072
1,829
Capital Employed
16,508
15,255
18,327
Return on Capital Employed (ROCE)
16%
14%
10%
40
Dividend Paid And Proposed
Dividend declared and paid during the year
Dividend paid for the year ended March 31, 2016 ` 3/- per share (March 31,
2015 : ` 3/- per share)
Dividend Tax thereon
Proposed Dividend on equity shares:
Dividend for the year ended March 31, 2017 ` 3/- per share (March 31, 2016:
` 3/- per share)
Dividend Tax thereon
156
Consolidated
For the year ended
31 March 2017
For the year ended
31 March 2016
173
173
35
208
35
208
173
173
35
208
35
208
Notes to Consolidated Financial Statements for the year ended 31 March 2017
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 were 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.
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.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount
as “profit or loss after tax” from discontinued operations in the Statement of Profit and Loss.
41
Break-up of aggregate amounts in respect of revenue and expenses along Discontinuing Operations
with pre-tax profit or loss of Lighting operations are as follows:
Particulars
Year ended 31 Period ended
March 2017
31 Jan 2016
Revenue from operations (net)
27,556
Cost of raw materials consumed
1,983
Purchase of stock-in-trade
14,880
Changes in inventories of work-in-progress, finished goods and stock-in-trade
211
Employee benefit expense
2,038
Finance cost
7
Depreciation
307
Other expenses
4,697
Exceptional items*
225
Operating expenses
24,348
Profit / (loss) before tax
3,208
Current tax
(1,244)
Deferred tax
133
Profit / (loss) after tax
2,097
* Relates to restructuring costs - (1) Employee voluntary seperation ` 114 and (2) additional depreciation ` 111 provided
for writing down certain plant and equipment no longer in active use.
Annual
Report 2016-17
157
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
41
Amounts in ` Mln
Discontinuing Operations - Demerger: (Contd.)
The carrying amounts of the assets and liabilities of Lighting
operations transferred to the Resulting Company are as
follows:
As at 31
March 2017
As at 31
January 2016
As at 1
April 2015
Total assets
-
9,396
10,029
Total liabilities
-
6,632
6,050
Net assets
-
2,764
3,979
The net cash flows attributable to the Lighting operations is as follows:
Year ended 31 Period ended
March 2017
31 Jan 2016
Net cash inflow / (outflow) from operating activities
-
4,030
Net cash inflow / (outflow) from investing activities
-
(196)
Net cash inflow / (outflow) from financing activities
-
(7)
Net cash inflow / (outflow)
-
3,827
The major class of assets and liabilities of the discontinued operations are as under:
Particulars
As at 31
March 2017
As at 31
January 2016
As at 1
April 2015
ASSETS:
Non-current assets
Property, plant and equipment
-
-
1,917
Capital work-in-progress
-
-
67
Financial assets
-
-
423
-
-
2,727
Trade receivables
-
-
3,348
Cash and cash equivalents
-
-
1,171
Current financial assets
-
-
376
Assets classified as discontinued operations
-
-
10,029
Long term borrowings
-
-
32
Other long term liabilities
-
-
56
Long term provisions
-
-
370
Short term borrowings
-
-
23
Trade payables
-
-
4,264
Other current liabilities
-
-
718
Short term provisions
-
-
587
Liabilities associated with discontinued operations
-
-
6,050
Current assets
Inventories
Financial assets
LIABILITIES:
Non-current liabilities
Current liabilities
158
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
42
Amounts in ` Mln
Earnings per share (EPS)
Calculation of earnings per share
Year ended 31 Year ended 31
March 2017
March 2016
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
1,891
2,889
1,891
792
-
2,097
32.89
13.77
Profit after tax attributable to equity share holders
-Continuing operations
-Discontinued operations
Basic and diluted earnings per share (in `)
* The weighted average number of shares takes into account the weighted average effect of changes in treasury share
transactions during the year. There have been no other transactions involving Equity shares or potential Equity shares
between the reporting date and the date of authorisation of these financial statements.
43
Components of other Comprehensive Income (OCI)
The disaggregation of changes to OCI by each type of reserve in equity is shown below:
Particulars
Re-measurement gains / (losses) on defined benefit plans
44
Year ended 31 Year ended 31
March 2017
March 2016
(14)
19
Investment in an Associate
“The group has 35% interest in Healthmap Diagnostics Private Limited which is engaged in the business of providing
diagnostic, clinical and healthcare services which includes operating and managing in house healthcare facilities such as
diagnostic, radiology and imaging centers. The company is formed persuant to Shareholder’s agreement dated April 06, 2015
between Manipal Health Enterprises Private Limited and Philips India Limited for development, operation and maintainance of
radiology imaging diagnostic centers in selected medical college/ district hospitals under Public Private Partnership (PPP) basis.
The Group’s interest in Healthmap Diagnostics Private Limited is accounted for using the equity method in the consolidated
financial statements. The following table illustrates the summarised financial information of the Group’s investment in
Healthmap Diagnostics Private Limited:”
Particulars
As at 31
As at 31
March 2017
March 2016
Current assets
78
64
Non-current assets
591
454
Current liabilities
Non-current liabilities
Equity
Proportion of the Group’s ownership
Carrying amount of the investment
Particulars
Revenue
Cost of raw material and components consumed
Depreciation & amortization
Finance cost
Employee benefit
Other expense
Profit before tax
Income tax expense
Profit for the year
Total comprehensive income for the year
Group’s share of profit for the year
(112)
(468)
89
35%
31
(51)
(365)
102
35%
36
For the year
ended 31
March 2017
145
24
87
55
38
97
(156)
1
(156)
(156)
(55)
For the year
ended 31
March 2016
26
4
28
18
13
40
(77)
1
(77)
(77)
(27)
Annual
Report 2016-17
159
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
45
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 2017
46
a)
Principal amount remaining unpaid to any supplier as at the end of the year
b)
Interest due on the above amount
As at 31
March 2016
153
1
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.
-
-
Disclosure relating to assets given on operating lease: The company has entered into operating lease arrangements
for medical equipments.
As at 31
March 2017
a)
b)
47
123
As at 31
March 2016
Total of future minimum lease payments receivable under non-cancellable operating
lease
6
Receivable within 1 year
3
7
Receivable between 1-5 years
3
12
Receivable after 5 years
-
-
Total contingent rent recognised as income in the Statement of Profit and Loss for
the year
8
20
19
Disclosures as required by Indian Accounting standard (IND As 101) first time adoption of indian accounting
standards
These are Group’s first financial statements prepared in accordance with Ind AS.
The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended March
31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in
the preparation of an opening Ind AS balance sheet as at April 1, 2015 (The Group’s date of transition). In preparing its
opening Ind AS balance sheet, the Group has adjusted the amounts reported previously in financial statements prepared
in accordance with accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and
other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous
GAAP to Ind AS has affected the Group’s financial position, financial performance and cash flows is set out in the following
tables and notes.
Exemptions applied
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under
Ind AS. The company has applied the following exemptions:
Deemed cost
160
➤
Freehold land and buildings (properties), other than investment property, were carried in the balance sheet prepared in
accordance with Indian GAAP on the basis of cost less accumulated depreciation. The Group has adopted to continue
with the carrying value for all of its PPE as recognised in its previous GAAP financial as deemed cost at the transition
date i.e. 01 April, 2015.
➤
Since there is no change in the functional currency, the Group has elected to continue with the carrying value for all
of its investment property as recognised in its Indian GAAP financial as deemed cost at the transition date.
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
Estimates
The estimates at 1 April 2015 and at 31 March 2016 are consistent with those made for the same dates in accordance with
Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where
application of Indian GAAP did not require estimation:
➤ FVTOCI – unquoted equity shares
➤ FVTOCI – debt securities
➤ Impairment of financial assets based on expected credit loss model
The estimates used by the Group to present these amounts in accordance with Ind AS reflect conditions at 1 April 2015, the
date of transition to Ind AS and as of 31 March 2016.
Recognition of financial assets and financial liabilities
IND AS 109 requires certain categories of financial assets and liabilities to be measured at amortized cost using the effective
interest rate method. In accordance with IND AS 109 “effective interest rate” is the rate that exactly discounts estimated
future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying
amount of a financial asset or to the amortized cost of a financial liability.
IND AS 101 requires a first time adopter to apply the above requirement retrospectively i.e. from the date of initial
recognition of the financial asset/ liability. However, a first time adopter may find it impractical to apply the effective interest
method in IND AS 109 retrospectively. If this is the case, the fair value of financial asset or liability at the date of transition
to IND AS is the new gross carrying amount of that financial asset or the new amortized cost of that financial liability.
As it is impractical to apply the effective interest method in IND AS 109 retrospectively, the fair value of security deposits at
the date of transition to IND AS i.e. April 1, 2015 is the new amortized cost of that financial asset.
(a) Reconciliation of equity as at 1 April 2015 (date of transition to Ind AS)
NOTES
ASSETS
Non-current assets
Property, Plant and Equipment
Capital work-in-progress
Investment Property
Goodwill
Other intangible assets
Investment in subsidiaries and associates
Financial Assets
Investments
Trade Receivables
Other Financial Assets
Deferred tax assets (net)
Advance income tax
Other non current assets
(f)
(a)
(a)
Local GAAP
2,436
36
76
681
2,443
510
-
2,066
360
809
1,749
1,160
(123)
-
Assets classified as discontinued operations
4,407
(a)
IND As
2,436
36
76
1,191
2,443
-
-
11,816
Current assets
Inventories
Financial Assets
Trade receivables
Cash and cash equivalents
Other Financial Assets
Other current assets
IND As
adjustments
70
457
-
5,352
2,557
330
889
13,535
10,029
35,380
53
53
2,066
237
809
1,749
1,230
12,273
4,407
5,352
2,557
383
889
13,588
10,029
35,890
510
Annual
Report 2016-17
161
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
EQUITY
Shareholders’ funds
Equity
Other Equity
Equity attributable to equity holders
LIABILITIES
Non-current liabilities
Financial Liabilities
Borrowings
Other non current liabilities
Provisions
Current liabilities
Financial Liabilities
Borrowings
Trade Payables
Other financial liabilities
Other current liabilities
Provision for taxation (net of advances)
Provisions
575
(b),(c) &
(g)
(g)
(b)
(b)
-
575
5,630
5,630
16,961
11,906
681
542
532
6,667
(4,909)
(3)
(4,912)
-
402
5,287
1,156
2,358
442
904
11,331
5,590
542
535
402
5,287
1,156
2,358
442
1,112
-
10,757
6,050
35,380
Liabilities classified as discontinued operations
(208)
(208)
17,536
1,755
10,549
6,050
35,890
510
(b) Reconciliation of equity as at 31 March 2016
NOTES
ASSETS
Non-current assets
Property, Plant and Equipment
Capital work-in-progress
Investment Property
Goodwill
Other Intangible assets
Investment in subsidiaries and associates
Financial Assets
Trade Receivables
Other Financial Assets
Deferred tax assets (net)
Advance income tax
Other non current assets
(f)
(a)
(a)
Local GAAP
2,467
109
76
511
1,832
36
680
-
1,688
313
510
1,751
843
(109)
-
10,136
Current assets
Inventories
Financial Assets
Trade receivables
Cash and cash equivalents
Other Financial Assets
Other current assets
Total Assets
162
Consolidated
5,089
(a)
(a)
IND As
adjustments
39
610
-
6,916
6,383
758
1,429
20,575
30,711
64
6
70
680
IND As
2,467
109
76
1,191
1,832
36
1,688
204
510
1,751
882
10,746
5,089
6,916
6,383
822
1,435
20,645
31,391
Notes to Consolidated Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
EQUITY
Shareholders’ funds
Equity
Other Equity
575
(b) & (c)
& (f)
Equity attributable to equity holders
LIABILITIES
Non-current liabilities
Financial Liabilities
Borrowings
Other non current liabilities
Provisions
Current liabilities
Financial Liabilities
Borrowings
Trade Payables
Other financial liabilities
Other current liabilities
Provision for taxation (net of advances)
Provisions
Total Liabilities
-
575
889
889
17,297
16,983
158
685
653
1,496
-
-
154
5,940
947
3,375
442
1,165
16,408
158
685
653
(b)
154
5,940
947
3,375
442
1,374
12,232
30,711
(209)
(209)
680
(c) Reconciliation of total comprehensive income for the year ended 31 March 2016
IND As
NOTES
Local GAAP
adjustments
Continuing Operations
Income
Revenue from operations
39,735
Other income
(a)
711
18
Total revenue
40,446
18
Expenses
Cost of raw materials consumed
3,816
Purchases of stock-in-trade
15,874
Changes in inventories of work-in-progress,
(523)
finished goods and stock-in-trade
Excise duty on sale of goods
595
Employee benefits expense
(c)
9,617
(23)
Finance costs
658
Depreciation and amortisation expense
1,315
(170)
Other expenses
(a)
7,280
19
Total expenses
38,632
(174)
1,814
192
Less : Share in profit /loss of Associate
(27)
Profit from continuing operations
1,787
192
Exceptional items
Profit / (loss) before tax
1,787
192
Profit / (loss) from continuing operations
1,787
192
Tax expense
Current tax
(1,194)
Deferred tax - release / (charge)
(d)
2
5
Profit / (loss) after tax from continuing
operations
595
197
17,872
1,496
12,023
31,391
IND As
39,735
729
40,464
3,816
15,874
(523)
595
9,594
658
1,145
7,299
1,979
38,458
2,006
(27)
1,979
1,979
(1,194)
7
Annual
792
Report 2016-17
163
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
Discontinuing 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
Other comprehensive income
Re-measurement gains / (losses) on defined
benefit plans and Income tax effect on defined
benefit plans
Total comprehensive income for the
period
Profit / (loss) + other comprehensive income)
Profit for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Total comprehensive income for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Earnings per equity share (for continuing
operations)
Basic and diluted earnings per share
Earnings
per
equity
share
(for
discontinuing operations)
Basic and diluted earnings per share
Amounts in ` Mln
(d)
3,208
-
3,208
(1,244)
133
2,097
-
(1,244)
133
2,692
197
2,889
-
19
19
2,692
216
2,908
2,692
197
2,889
2,692
216
2,908
2,097
13.77
Footnotes to the reconciliation of equity as at 1 April 2015 and 31 March 2016 and profit or loss for the year
ended 31 March 2016
a)
b)
Security Deposits
Under Indian GAAP, the security deposits are valued at cost less any provision for security deposits. IND AS requires
certain categories of financial assets and liabilities to be measured at amortized cost using the effective interest rate
method. Security Deposit is a Financial Asset as the lease agreement gives a contractual right to the Group to receive
cash. Security Deposit satisfies the contractual cash flow characteristic test as described in (a) above and it also satisfies
the business model test as there is intention of hold to collect contractual cash flows. Thus the security deposits
have to be valued at amortized cost. Accordingly, advance rentals amounting to INR 109 million (31 March 2015: 123
million) have been reduced from the security deposits as on 01 April, 2015. Advance Rental divided by term has been
recognized as an expense in the books. Rent which will be amortized in the next one year FY 16-17 amounting to INR
6 million (31 March 2015: Nil) has been recognized as prepaid rent short term in books. Residual amounting to INR
39 million ( 31 March 2015: 70 million) has been classified as prepaid rent long term in opening balance sheet as on 01
April, 2015. Advance Rental expense and security deposit income amounting to INR 19 million and INR 18 million have
been recognised in statement of profit and loss for the year ending March 31, 2016.
Provisions
Under Indian GAAP, the Group has accounted for provisions, including long-term provision, at the undiscounted
amount. In contrast, Ind AS 37 requires that where the effect of time value of money is material, the amount of provision
should be the present value of the expenditures expected to be required to settle the obligation. The discount rate(s)
should not reflect risks for which future cash flow estimates have been adjusted. Ind AS 37 also provides that where
discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This
increase is recognised as borrowing cost. This led to a decrease in provision on the date of transition by ` 3 and which
was adjusted against retained earnings.
164
Under Indian GAAP, proposed dividends including Dividend Distribution Tax are recognised as a liability in the period
to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognised as a
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
liability in the period in which it is declared by the Group (usually when approved by shareholders in a general meeting)
or paid.
c)
In the case of the Group, the declaration of dividend occurs after period end. Therefore, the liability of ` 208 for the
year ended on 31 March 2015 recorded for dividend has been derecognised against retained earnings on 1 April 2015.
The proposed dividend for the year ended on 31 March 2016 of ` 208 recognized under Indian GAAP was reduced
from other payables and with a corresponding impact in the retained earnings.
Defined benefit liabilities
Both under Indian GAAP and Ind AS, the Group recognised costs related to its post-employment defined benefit plan
on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or
loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts
included in net interest on the net defined benefit liability] are recognised immediately in the balance sheet with a
corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost is reduced by ` 23
and Remeasurement gains/ losses on defined benefit plans has been recognized in the OCI net of tax.
d)
e)
f)
g)
Other comprehensive income
Under Indian GAAP, the Group has not presented other comprehensive income (OCI) separately.Under Ind AS,
specified items of income, expense, gains or losses are required to be presented in Other Comprehensive Income
` 19 (net of tax))
Statement of cash flows
The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.
Goodwill
Goodwill was amortised over 8 years under previous Indian GAAP. Under IND AS, in accordance with IND AS 103,
Business Combinations, the group has elected to apply the IND AS for the business combinations retrospectively
from acquisition date i.e., February 21, 2011. Accordingly, goodwill has been reinstated at its original fairvalue and the
amortized value of ` 680 (April 1, 2015 - ` 510) was recorded to equity. The goodwill amortised in profit and loss for
the year 2015-16 is ` 170.
Compulsorily convertible Debentures (CCDs)
The Group has issued CCDs, which carried interest at rate of 10%. Under Indian GAAP, the CCDs were classified as
borrowings.
48
Under IND As, CCDs are separated into liability and equity components based on the terms of the contract. Interest
on liability component is recognised using the effective interest method. Thus the value of CCDs is reduced by
` Nil (April 1, 2015: ` 4,909) with a corresponding increase in Other equity representing the equity component
embedded in CCDs.
Buyback of equity shares
The Board of Directors of the PKAPL, in their meeting held on May 24, 2016, approved a proposal to buy back equity shares
of the PKAPL, subject to approval by the PKAPL’s shareholders, for an aggregate amount not exceeding 25% of the paid up
share capital and free reserves as at March 31, 2016 and at a price not exceeding ` 79.50 per equity share. The plan involved
the purchase of such shares from Koninklijke Philips N.V. (KPNV) pursuant to Article 11 of the Articles of Association,
subject to consent of the equity and preference shareholders and in accordance with the provisions of sections 68, 69 and
70 of the Companies Act, 2013 read with rule 17 of the Companies (Share Capital and Debentures) Rules, 2014 and any
other applicable provisions, if any, of the Companies Act, 1956 and/ or Companies Act, 2013 (to the extent applicable). The
shares bought back under this plan were required to be extinguished in accordance with the provisions above mentioned
provisions.
The PKAPL’s shareholders approved the buyback plan on June 02, 2016, and the same was ended on June 14, 2016.
Under this plan, the Company bought back and extinguished 11,874,213 equity shares for an aggregate purchase price of `
944, valuing each equity share at ` 79.50.
49
Capital Reduction
The Board of Directors of the PKAPL, in their meeting held on May 24, 2016, approved a proposal for reducing the capital of
the PKAPL, pursuant to Article 10 of the Articles of Association of the PKAPL and pursuant to the provisions of Sections 100
Annual
Report 2016-17
165
PHILIPS INDIA LIMITED
Notes to Consolidated Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
to 104 and other applicable provisions, if any, of the Companies Act, 1956 and other applicable provisions of the Companies
Act, 1956 and/ or Companies Act, 2013 (to the extent applicable), and subject to the approval of the shareholders by a
special resolution; sanction of the Hon’ble High Court of Judicature at Bombay and any other statutory authorities, as the
case may be.
The proposal was approved for reducing the paid up equity share capital of PKAPL by reduction of the equity shares held
by Koninklijke Philips N.V. (KPNV) post the buy back of equity shares by PKAPL becoming effective, at a consideration of `
79.50 per equity share of ` 10 each so cancelled and extinguished.
The Shareholders approved the proposal on July 21, 2017 and the Hon’ble Mumbai High Court had accorded its approval
for the reduction of capital, in the hearing in the matter held on September 29, 2016.
Pursuant to the order, the share capital of PKAPL was reduced to the extent of the shares held by Koninklijke Philips N.V.
i.e. 35,082,309 equity shares. Pursuant to the reduction of KPNV’s shares, PKAPL remitted to KPNV an aggregate amount
of ` 2,789 @ ` 79.50 per share, which includes a premium of ` 69.50 per share. Due to the above transaction, there was a
gain of `1,667 which is shown as a part of retained earnings.
50
Statutory Group Information
I.
A.
a)
For March 31, 2017
The Company, its subsidiaries (jointly referred to as the ‘Group’ herein under) and its associate considered in these
consolidated financial statements are:
Subsidiaries
Name of the Companies
Country of Incorporation % voting power held as at
31st March, 2017
India
100
India
100
a. Preethi Kitchen Appliances Private Limited
b. Philips Homecare Services India Private Limited
b) Associate
Name of the Company
Country of Incorporation % voting power held as at
31st March, 2017
Healthmap Diagnostics Private Limited
India
35
B. Share of the parent company and subsidiary in Net Assets and Share in Profit or Loss, Share in other
Comprehensive Income is as follows:
b)
Net Assets
Share in Profit or Loss
Share in other
Comprehensive income
Share in total
Comprehensive income
(Total Assets - Total Liabilities)
As % of
consolidated
net assets
Amount
As % of
consolidated
profit or loss
Amount
As % of
consolidated
profit or loss
Amount
As % of
consolidated
profit or loss
Amount
127%
20,025
109%
2,064
86%
(12)
109%
2,052
21%
3,355
(3%)
(64)
29%
(4)
(4%)
(68)
Philips Homecare
Services India Private
Limited
-
10
(3%)
(52)
(14%)
2
(3%)
(50)
Total eliminations
(48%)
(7,580)
(3%)
(58)
-
-
(3%)
(58)
Total
100%
15,810
100%
1,890
100%
(14)
100%
1,876
Parent Company
Philips India Limited
Subsidiary
Preethi Kitchen
Appliances Private
Limited
166
Consolidated
Notes to Consolidated Financial Statements for the year ended 31 March 2017
Amounts in ` Mln
For March 31, 2016
The Company, its subsidiary (jointly referred to as the ‘Group’ herein under) and its associate considered
in these consolidated financial statements are:
a) Subsidiaries
Name of the Companies
Country of Incorporation % voting power held as at
31st March, 2016
Preethi Kitchen Appliances Private Limited
India
51.2%
b) Associate
Name of the Company
Country of Incorporation % voting power held as at
31st March, 2016
Healthmap Diagnostics Private Limited
India
35
II.
A)
B.
Share of the parent company and subsidiary in Net Assets and Share in Profit or Loss, Share in other
Comprehensive Income is as follows:
b)
Net Assets
Share in Profit or Loss
(Total Assets - Total Liabilities)
As % of
Amount
consolidated
net assets
Parent Company
Philips India Limited
Subsidiary
Preethi Kitchen
Appliances Private
Limited
Total eliminations
Total
51
Share in other
Comprehensive income
Share in total
Comprehensive income
As % of
consolidated
profit or loss
Amount
As % of
consolidated
profit or loss
Amount
As % of
consolidated
profit or loss
Amount
121%
18,181
137%
3,966
42%
8
137%
3,974
30%
4,458
(36%)
(1,045)
58%
11
(36%)
(1,034)
(51%)
100%
(7,650)
14,989
(1%)
100%
(32)
2,889
100%
0
19
(1%)
100%
(32)
2,908
Disclosure on specified Bank Notes
Pursuant to notification of Ministry of Corporate Affairs dated March 30, 2017, disclosure of specified bank notes (SBN) held
and transacted during the period from November 08, 2016 to December 30, 2016 is provided in table below:
Particulars
Closing cash in hand as on 08.11.2016
(+)Permitted receipts
(-) Permitted Payments
(-) Amount deposited in Banks
Closing cash in hand as on 30.12.2016
SBNs
Other denomination notes
1
18
19
-
Total
1
18
19
-
52
All amounts are in ` Million, figures in this financial statements below ` 1 million are shown as blank.
53
Figures relating to April 1, 2015 (date of transition) has been regrouped / reclassified wherever necessary to make them
comparable with the current year figures.
As per our report of even date attached
For and on behalf of the Board
For S.R. Batliboi & Co LLP
Chairman
Chartered Accountants
Firm registration number: 301003E/E300005
Managing Director
Director & CFO
Manoj Kumar Gupta
Director & Company Secretary
Partner
Membership No.: 83906
Non-Executive Director
Place: New Delhi
Place: New Delhi
Date: July 18, 2017
Date: July 18, 2017
S.M.DATTA
(DIN: 00032812)
V. RAJA
(DIN: 00669376)
HARIHARAN MADHAVAN
(DIN: 07217072)
RAJIV MATHUR
(DIN: 06931798)
GEETU GIDWANI VERMA
(DIN: 00696047)
Annual
Report 2016-17
167
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)
1.
Sl. No. : 1
2.
Name of the subsidiary: Preethi Kitchen Appliances Private Limited
3.
The date since when subsidiary was acquired: April 7, 2011
4.
Reporting period for the subsidiary concerned, if different from the holding company’s reporting period: Same as Holding Company
5.
Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries. NA
6.
Share capital: ` 952 Million
7.
Reserves & surplus: ` 2,403 Million
8.
Total assets: ` 4,499 Million
9.
Total Liabilities: ` 4,499 Million
10.
Investments: NIL
11.
Turnover: ` 5,880 Million
12.
Profit/(Loss) before taxation: ` (68) Million
13.
Provision for taxation: NIL
14.
Profit/(Loss) after taxation: ` (68) Million
15.
Proposed Dividend: NIL
16.
% of shareholding: 100%
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
Sl. No. : 2
Name of the subsidiary: Philips Home Care Services India Private Limited
The date since when subsidiary was acquired: May 25, 2016
Reporting period for the subsidiary concerned, if different from the holding company’s reporting period: May 25, 2016 to March 31, 2017
Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries. NA
Share capital: ` 60.50 Million
Reserves & surplus: ` (50.18) Million
Total assets: ` 56.47 Million
Total Liabilities: ` 56.47 Million
Investments: NIL
Turnover: ` 9.18 Million
Profit/(Loss) before taxation: ` (50.18) Million
Provision for taxation: NIL
Profit/(Loss) after taxation: ` (50.18) Million
Proposed Dividend: NIL
% of shareholding: 100%
Names of subsidiaries which are yet to commence operations: NA
Names of subsidiaries which have been liquidated or sold during the year: During the year your Company did not liquidate or sell any of its subsidiary
Companies
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: March 31, 2017
II.
Date on which the Associate or Joint Venture was associated or acquired: April 6, 2015
II.
Shares of Associate / Joint Ventures held by the company on the year end
a)
Number of shares:11,300,000
b)
Amount of Investment in Associates/Joint Venture: ` 113 Million
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.
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 2016-17 have been incorporated in line with Indian Accounting Standard (Ind AS)
28 - Investments in Associates and Joint Ventures, issued by the Ministry of Corporate Affairs (MCA).
5.
Net worth attributable to shareholding as per latest audited Balance Sheet: ` 89.19 Million
6.
Profit/(Loss) for the year: ` (156.18) Million
I.
Considered in Consolidation:
II.
Not Considered in Consolidation
Names of associates or joint ventures which are yet to commence operations: NA
Names of associates or joint ventures which have been liquidated or sold during the year: During the year your Company did not liquidate or sell any of its
Joint Venture Company
Place: New Delhi
Date: July 18, 2017
168
Consolidated
Chairman
Managing Director
Director and CFO
Director and Company Secretary
Non-Executive Director
For and on behalf of the Board
S. M. Datta
(DIN: 0032812)
V. Raja
(DIN: 00669376)
Hariharan Madhavan
(DIN:07217072)
Rajiv Mathur
(DIN: 06931798)
Geetu Gidwani Verma
(DIN: 00696047)
Registered Office
Philips India Limited
3rd Floor, Tower A, DLF IT Park, 08 Block AF,
Major Arterial Road, New Town (Rajarhat) Kolkata,
West Bengal- 700156.
Tel.: 91-33-4402 4000, Fax : 91-33-4402 4004
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
8th 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
3rd Floor, Tower A, DLF IT Park, 08 Block AF,
Major Arterial Road, New Town (Rajarhat) Kolkata,
West Bengal- 700156.
Tel.: 91-33-4402 4000, Fax : 91-33-4402 4004
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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