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
0
10000
20000
30000
40000
50000
60000
70000
2016-172015-162014-152013-142012-13
Sales ` in Mln
53,674 58,387
63,755 62,819
36,723
0
1000
2000
3000
4000
5000
6000
7000
2016-172015-162014-152013-142012-13
Prot Before Tax ` in Mln
1,858
3,170
6,275 6,278
3,252
0
5000
10000
15000
20000
25000
Mar 17Mar 16Mar 15Mar 14Mar 13
Net Worth ` in Mln
11,070
13,034
17,061 17,973
20,025
Share Capital Reserves and Surplus
0
4000
8000
12000
16000
20000
24000
28000
32000
Mar 17Mar 16Mar 15Mar 14Mar 13
Current Assets ` in Mln
5,637 6,293 6,504 4,542 4,554
15,142
17,725
22,025
18,837 16,702
Inventories Debtors, Cash & Bank Balances, Loans and Advances
Sales by Activities- Apr 2016 - Mar 2017
Health Systems
48.8%
Innovation Services
24.9%
Others
2.5%
Personal Health
23.8%
0
2000
4000
6000
8000
10000
12000
Mar 17Mar 16Mar 15Mar 14Mar 13
Property, Plant & Equipment ` in Mln
10,362 11,010 11,327
5,267
3,503
6,082 6,715 7,390
3,188
977
Accumulated Depreciation Gross Fixed Assets
1
Annual
Report 2016-17
CONTENTS
Board of Directors : 2
Notice of Annual General Meeting : 3
Directors’ Report : 15
Standalone Financial Statements
Independent Auditors’ Report : 46
Balance Sheet as at 31 March 2017 : 52
Statement of Prot and Loss for the year ended 31 March 2017 : 53
Statement of Changes in Equity for the year ended 31 March 2017 : 54
Cash ow 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 Prot and Loss for the year ended 31 March 2017 : 111
Statement of Changes in Equity for the year ended 31 March 2017 : 112
Cash ow 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.
PHILIPS INDIA LIMITED
PHILIPS INDIA LIMITED
2
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.
3
Annual
Report 2016-17
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 nancial year
ended March 31, 2017, including the audited Balance Sheet as at March 31, 2017, the Statement of Prot and Loss for the
year ended on that date and the reports of the Auditors and Directors thereon.
2. To declare dividend for the nancial 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 x 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 modication(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 ratied 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 x 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 le 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 ratication of appointment of Auditors.
SPECIAL BUSINESS:
5. REVISION IN REMUNERATION OF MR. V. RAJA (DIN 00669376)
To consider and if thought t, to pass with or without modication(s), the following resolution as a Special Resolution:
“RESOLVED THAT in partial modication 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 prots in the Company in any nancial year during the term
of Mr. V. Raja’s ofce 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 t, to pass with or without modication(s), the following resolution as a Special Resolution:
“RESOLVED THAT in partial modication 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
PHILIPS INDIA LIMITED
4
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 prots in the Company in any nancial year during the
term of Mr. Rajiv Mathur’s ofce 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 t, to pass with or without modication(s), the following resolution as a Special Resolution:
“RESOLVED THAT in partial modication 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, Whole-
time Director, designated as Director and Chief Financial Ofcer, 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 prots in the Company in any nancial year during
the term of Mr. Hariharan Madhavan’s ofce 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 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.’’
8. APPROVAL OF REMUNERATION OF COST AUDITORS
To consider and if thought t, to pass, with or without modication, 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 nancial 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
Rajiv Mathur
Director and Company Secretary
Place : New Delhi DIN No. 06931798
Date : July 18, 2017
5
Annual
Report 2016-17
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 lled 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
certied 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 notication 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
benecial 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 Computershare Private Limited
Karvy Selenium, Tower-B, Plot no.31-32, Gachibowli, 49 Jatin Das Road, Ist Floor
Financial District, Nanakramguda, Hyderabad-500 032. Kolkata 700 029, West Bengal,
Toll Free no. 18 00 3454 001, Tel. +91 040 67162222 Tel.+91 033 6619 2844
Fax no.+91 04023001153
Email id: einward.ris@karvy.com
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 notied 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
PHILIPS INDIA LIMITED
6
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 certicate(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 rst login. You may also enter a secret question and answer of your choice to retrieve your password
7
Annual
Report 2016-17
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 condential. 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 conrmation, the message ‘Vote cast successfully’ will be displayed.
(x) Once you have conrmed 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 specic
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 conrmation box will be displayed. Click “OK” to conrm else “CANCELto modify. Once you conrm, 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) Initial Password is provided at the bottom of the Attendance Slip in the following format:
USER ID PASSWORD
- -
(ii) 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 prole 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.
PHILIPS INDIA LIMITED
8
15. A person, whose name is recorded in the Register of Members or in the Register of Benecial 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, rst 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)
Revised Remuneration
(as proposed)
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:
14,145,000 ALL Plan Design :
Weightage of
Financials 70%;
• Individual 30%
Financials Weightage
70% split as follows:
9
Annual
Report 2016-17
Particulars Present Remuneration
(prior to the proposed revision)
Revised Remuneration
(as proposed)
Amount (`)Comments Amount (`)Comments
a) Own level i.e.
Health Tech India
(45%)
b) Next Level
Financials - Health
Tech Global (25%)
Combination of
CSG, EBIT and
AWOCA.
a) Own level i.e.
Health Tech India
(45%)
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 benets:
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 benets:
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
benet 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.
PHILIPS INDIA LIMITED
10
Particulars Present Remuneration
(prior to the proposed revision)
Revised Remuneration
(as proposed)
Amount (`)Comments Amount (`)Comments
Company Car Provided as a Lifestyle
benet 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 oater 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
Medical reimbursement - up to a limit
of ` 80,000 (for domiciliary as well as
hospitalization).
MediClaim - Family oater 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 nancial year during the term of ofce of
Mr. V. Raja, as the Vice-Chairman & Managing Director, the Company has no prots or its prots 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 benets 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, nancially 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.
11
Annual
Report 2016-17
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)
Salary ` 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 Benet Plan: ` 428,683
4. Retrial Benet: ` 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 Benet Plan: ` 450,546
4. Retrial Benets: ` 75,846 (as set out in
Part B)
Variable Performance
Linked Bonus
Not exceeding one and half times the Salary,
payable annually, as may be approved by
the Board of Directors or any Committee
thereof.
Not exceeding one and half times the Salary,
payable annually, as may be approved by
the Board of Directors or any Committee
thereof.
Perquisites Subject to the limits contained in Schedule V
of the Companies Act, 2013. Perquisites shall
be payable as set out in Part A, as applicable.
Mr. Rajiv Mathur shall not be paid sitting
fee for attending meetings of the Board of
Directors of the Company or any Committee
thereof.
Subject to the limits contained in Schedule V
of the Companies Act, 2013. Perquisites shall
be payable as set out in Part A, as applicable.
Mr. Rajiv Mathur shall not be paid sitting fees
for attending meetings of the Board or any
Committee thereof of the Company.
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 ofcial 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 nancial year during the term of ofce
of Mr. Rajiv Mathur, as Whole-time Director and Company Secretary, the Company has no prots or its prots 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 benets 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.
PHILIPS INDIA LIMITED
12
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, nancially 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 Ofcer 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 signicant role in
driving key initiatives like close focus on collection of receivable, cost optimization and other nancial 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 Present Remuneration
(prior to the proposed revision)
Revised Remuneration
(as proposed)
Salary ` 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 Benet Plan: ` 393,788
4. Retrial Benet: ` 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 Benet Plan: ` 413,478
4. Retrial Benet: ` 155,000 (as set out in
Part B)
Variable Performance
Linked Bonus
Not exceeding one and half times the Salary,
payable annually, as may be approved by the
Board of Directors or any Committee thereof.
Not exceeding one and half times the Salary,
payable annually, as may be approved by the
Board of Directors or any Committee thereof.
Perquisites Subject to the limits contained in Schedule V
of the Companies Act, 2013. Perquisites shall
be payable as set out in Part A, as applicable.
Mr. Hariharan Madhavan shall not be paid sitting
fee for attending meetings of the Board of
Directors of the Company or any Committee
thereof.
Subject to the limits contained in Schedule V
of the Companies Act, 2013. Perquisites shall
be payable as set out in Part A, as applicable.
Mr. Hariharan Madhavan shall not be paid sitting
fees for attending meetings of the Board or any
Committee thereof of the Company.
13
Annual
Report 2016-17
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 ofcial 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 nancial year during the term of ofce
of Mr. Hariharan Madhavan, as the Whole-time Director and CFO, the Company has no prots or its prots 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 benets 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, nancially 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 nancial 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 nancial 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
PHILIPS INDIA LIMITED
14
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
15
Annual
Report 2016-17
DIRECTORS’ REPORT
For the nancial 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 nancial year ended March 31, 2017.
1. FINANCIAL PERFORMANCE
1.1 RESULTS
` Million
2016-17 2015-16*
Gross Income 37,408 36,031
Prot before tax from continuing operations 3,252 3,056
Provision for current tax (1,244) (1,194)
Deferred tax–Release/(Charge) 56 7
Prot after tax from continuing operations 2,064 1,869
Prot before tax from discontinued operations - 3,208
Provision for current tax - (1,244)
Deferred Tax- Release/(Charge) - 133
Prot after tax from discontinued operations - 2,097
1.2 SECTORWISE SALES
2016-17 2015-16
Personal Health 8,728 10,954
Health Systems 17,936 15,764
Innovation Services 9,133 8,024
Others 926 425
Total 36,723 35,167
  *Thenancial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 notication 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 nancials using Ind AS for the year ended March 31, 2017, along with comparable gures 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 nancial 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 nancial 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
PHILIPS INDIA LIMITED
16
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 nancial
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 nancial 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 Prot 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
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 protability 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. Signicant 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 protability.
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.
17
Annual
Report 2016-17
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 nancial 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 nancial year leading to overall decline of 14.3% in domestic
appliances category. Air Puriers continued to grow signicantly, driven by strong media campaign during periods of
high levels of air pollution. The Air Purier category grew by over 63% versus previous nancial 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 condence 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 nancial 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 specic 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
protable 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 qualied 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
PHILIPS INDIA LIMITED
18
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 puriers 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 + debrillation) plays a key role in improving
survival rates. This subscriber based workow solution is enabled with the help of a central command center that
ties up Automated External Debrillator (AED) availability, CPR / AED volunteer network for delivering the rst
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 2015-
16). 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 nancial position of the Company occurred between the end of the
nancial year to which the nancial 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 signicant 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 nancial 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 nancial statements of the Company.
Pursuant to the provisions of section 136 of the Act, the consolidated and standalone nancial 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.
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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 nancial 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 certied 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 rst 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
PHILIPS INDIA LIMITED
20
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 nancial 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 notied 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 nancial 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 nancial 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
Audit Committee of the Board is responsible for monitoring and providing an effective supervision of the management`s
nancial 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 nancial statements before submission to the Board
for approval.
The powers of Audit Committee include investigating any activity within its terms of reference as specied by the
21
Annual
Report 2016-17
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 modication 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 nancial condition and results of operations.
As of March 31, 2017, the Audit Committee of your Company comprised of ve members, three of whom are Non-
Executive 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 elds, during the year 2016-
17, 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
certicates, recording dematerialization / rematerialization of shares and related matters.
PHILIPS INDIA LIMITED
22
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
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 qualications, 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 identication of persons who are qualied 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 nancial
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 qualications, 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 dened under the Act) and
executive team members of the Company (as dened 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.
23
Annual
Report 2016-17
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 efciency of operations
and security of our assets. Accounting records are adequate for preparation of nancial statements and other nancial
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 nancial disclosures.
17. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal nancial controls with reference to nancial 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 reected 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 nancial 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 rst. 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 inuencing 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 benets to align with talent market as well as legislation
and drive health and well-being for employees; these included enhanced maternity and child adoption benets, 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 tness 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 benets 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 efcient, scalable and high
quality HR services provider for the India market.
PHILIPS INDIA LIMITED
24
Chakan industrial site for Health Systems has embarked on a lean principles journey and has made signicant 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 signicant 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 nancial 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 nancial
business objectives. The objectives are met by integrating management control into the daily operations, actively working
and monitoring on risk mitigation initiatives identied 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 nancial 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 conrm
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 prot of the Company for the year ended March 31, 2017;
iii. The Directors have taken proper and sufcient 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 nancial controls to be followed by the Company and such internal nancial 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, ratication 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.
25
Annual
Report 2016-17
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 rm 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 conrmation 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 nancial
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 qualication, 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 Ofce 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 ofce to a new
location within Kolkata. The present registered ofce 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
PHILIPS INDIA LIMITED
26
Annexure - I
FORM MGT 9
EXTRACT OF ANNUAL RETURN
As on nancial 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 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
vAddress of the Registered ofce
& 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
II PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10% or more of the total turnover of the company are stated as below:
SL
No
Name & Description of main
products/services
NIC Code of the
Product /service
% to total turnover
of the company
1 Diagnostic imaging equipments 2660 30
2Software development 5820 25
3 Domestic appliances 2750 14
III PARTICULARS OF HOLDING , SUBSIDIARY AND ASSOCIATE COMPANIES
Sl
No
Name & Address of the Company CIN/GLN HOLDING/
SUBSIDIARY/
ASSOCIATE
% OF
SHARES
HELD
APPLICABLE
SECTION
1Koninklijke Philips N.V (KPNV)
High Tech Campus 5, 5656 AE
Eindhoven, the Netherlands
N.A Holding 96.13 2(46)
2Preethi Kitchen Appliances Private
Limited.
Unit No. 506, 5th Floor, Boomerang
Chandivali Farm Road, Powai Mumbai
Maharashtra 400072
U36993MH2011PTC213827 Subsidiary 100 2(87)
3 Philips Home Care Services India Private
Limited.
3rd Floor, Tower A, DLF IT Park, 08
Block AF Major Arterial Road, New
Town (Rajarhat) Kolkata West Bengal
700156
U74994WB2016PTC215908 Subsidiary 100 2(87)
4Healthmap Diagnostics Private Limited.
The Annexe, # 98/2, Rustom Bagh Hal
Airport Road Bangalore Karnataka
560017, India
U85110KA2015PTC079665 Associate 35 2(6)
27
Annual
Report 2016-17
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
year i.e. April 1, 2016
No. of Shares held at the end of the year
i.e. March 31, 2017
% change
during the
year
Demat Physical Total % of
Total
Shares
Demat Physical Total % of
Total
Shares
A. Promoters
(1) Indian
a) Individual/HUF - - - - - - - - -
b) Central Govt.or
State Govt.
- - - - - - - - -
c) Bodies Corporates - - - - - - - - -
d) Bank/FI - - - - - - - - -
e) Any other - - - - - - - - -
SUB TOTAL:(A) (1) - - - - - - - - -
(2) Foreign - - - - - -
a) NRI- Individuals - - - - - - - - -
b) Other Individuals - - - - - - - - -
c) Bodies Corp. 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 -
B. PUBLIC
SHAREHOLDING
(1) Institutions
a) Mutual Funds - 3,058 3,058 0.01 - 3,058 3,058 0.01 -
b) Banks/FI 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
- - - - - - - - -
i) Others (specify) NBFC 11 -11 -11 -11 - -
SUB TOTAL (B)(1): 2,357 11,681 14,038 0.02 2,357 11,681 14,038 0.02 -
PHILIPS INDIA LIMITED
28
Category of
Shareholders
No. of Shares held at the beginning of the
year i.e. April 1, 2016
No. of Shares held at the end of the year
i.e. March 31, 2017
% change
during the
year
Demat Physical Total % of
Total
Shares
Demat Physical Total % of
Total
Shares
(2) Non Institutions
a) Bodies corporates
i) Indian 36,629 12,351 48,980 0.09 30,798 11,831 42,629 0.07 -0.01
ii) Overseas - - - - - - - - -
b) Individuals
i) Individual shareholders
holding nominal share
capital upto `2 lakhs
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 -
Foreign National 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 -
C. Shares held by
Custodian for
GDRs & ADRs
- - - - - - - - -
Grand Total (A+B+C) 13,979,566 43,537,676 57,517,242 100.00 973,325 56,543,917 57,517,242 100.00 -
(ii) SHARE HOLDING OF PROMOTERS
Sl
No.
Shareholders Name Shareholding at the beginning of the
year i.e. April 1, 2016
Shareholding at the end of the year
i.e. March 31, 2017
% change
in share
holding
during the
year
No. of
shares
% of total
shares
of the
company
% of shares
pledged
encumbered
to total shares
No. of
shares
% of total
shares
of the
company
% of shares
pledged
encumbered
to total shares
1Koninklijke Philips N.V. 55,290,182 96.13 - 55,290,182 96.13 - -
2Philips Radio B.V. 60 0.00 - 60 0.00 - -
Total 55,290,242 96.13 - 55,290,242 96.13 - -
29
Annual
Report 2016-17
(iii) CHANGE IN PROMOTERS’ SHAREHOLDING (SPECIFY IF THERE IS NO CHANGE)
Sl.
No.
Share holding at the beginning
of the year
Cumulative Share holding
during the year
No. of Shares % of total shares
of the company
No of shares % of total shares
of the company
At the beginning of the year 55,290,242 96.13
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)
There was no change in Promoters’ Shareholding
between 01.04.2016 to 31.03.2017
At the end of the year 55,290,242 96.13
iv) 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
PAYAL BHANSHALI
At the beginning of the year 54,700 0.10 54,700 0.10
Bought during the year - - 00.10
Sold during the year - - 00.10
At the end of the year 54,700 0.10 54,700 0.10
VALLABH ROOPCHAND BHANSHALI
At the beginning of the year 27,350 0.05 27,350 0.05
Bought during the year 0-00.00
Sold during the year 0-00.00
At the end of the year 27,350 0.05 27,350 0.05
PUNIT KUMAR
At the beginning of the year 12,000 0.02 12,000 0.02
Bought during the year 4,000 -4,000 0.01
Sold during the year 0-00.00
At the end of the year 16,000 0.03 16,000 0.03
AJAY KUMAR
At the beginning of the year 10,836 0.02 10,836 0.02
Bought during the year 3,208 - 3,208 0.01
Sold during the year 0-00.00
At the end of the year 14,044 0.02 14,044 0.02
SURESH GUPTA
At the beginning of the year 13,600 0.02 13,600 0.02
Bought during the year 00.00 00.00
Sold during the year 0-00.00
At the end of the year 13,600 0.02 13,600 0.02
YOGESH RASIKLAL DOSHI
At the beginning of the year 4,249 0.01 4,249 0.01
Bought during the year 6,537 -6,537 0.01
Sold during the year - 0.00
At the end of the year 10,786 0.02 10,786 0.02
PHILIPS INDIA LIMITED
30
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
AMISH NARENDRA SHAH
At the beginning of the year 10276 0.02 10276 0.02
Bought during the year - - 00.00
Sold during the year - - 00.00
At the end of the year 10276 0.02 10276 0.02
HINA KIRTI DOSHI
At the beginning of the year 10000 0.02 10000 0.02
Bought during the year - - 00.00
Sold during the year - - 00.00
At the end of the year 10000 0.02 10000 0.02
HITESH SHANTILAL MEHTA
At the beginning of the year 10000 0.02 10000 0.02
Bought during the year 00.00 00.00
Sold during the year 0-00.00
At the end of the year 10000 0.02 10000 0.02
SUSHILA NAYYAR
At the beginning of the year 9300 0.02 9300 0.02
Bought during the year 0-00.00
Sold during the year 0-00.00
At the end of the year 9300 0.02 9300 0.02
*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
Cumulative Shareholding
during the year
For each of the Directors and
KMP
No. of Shares % of total
Shares of the
Company
No. of Shares % of total
Shares of the
Company
At the beginning of the year
1V. Raja 6-6-
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
2V. Raja 6-6-
31
Annual
Report 2016-17
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
Indebtness at the beginning of the nancial
year
i) Principal Amount 261 -261
ii) Interest due but not paid - - -
iii) Interest accrued but not due - - -
Total (i+ii+iii) 261 - 261
Change in Indebtedness during the nancial
year
Additions 585 - 585
Reduction (160) -(160)
Net Change 425 - 425
Indebtedness at the end of the nancial year
i) Principal Amount 686 0- 686
ii) Interest due but not paid - - - -
iii) Interest accrued but not due - - - -
Total (i+ii+iii) 686 0 - 686
VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole time director and / or Manager:
(Amounts in ` Million)
Sl.
No
Particulars of Remuneration Name of the MD/WTD/Manager Total Amount
V. Raja Rajiv Mathur Hariharan
Madhavan
1Gross salary
(a) Salary as per provisions contained in section
17(1) of the Income Tax. 1961.
44.90 15.64 25.69 86.23
(b) Value of perquisites u/s 17(2) of the Income tax
Act, 1961
1.18 0.20 0.93 2.30
(c) Prots in lieu of salary under section 17(3) of
the Income Tax Act, 1961
- - -
2Stock option 12.59 - 3.48 16.06
3Sweat Equity - - -
4Commission as % of prot - - - -
5Others, please specify - - - -
Total (A) 58.67 15.84 30.10 104.60
Ceiling as per the Act ` 500.9 Million
PHILIPS INDIA LIMITED
32
B. Remuneration to other directors:
(Amounts in ` Million)
Sl.
No
Particulars of Remuneration Name of the Directors Total
Amount
1 Independent Directors S. M Datta Vivek
Gambhir
Geetu Gidwani
Verma
Vikram
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) 1.36 1.18 1.02 0.98 4.54
2Other 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 ` 50.09 Million
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD
Sl.
No.
Particulars of Remuneration Key Managerial Personnel Total
1 Gross Salary V. Raja Rajiv Mathur Hariharan
Madhavan
Total
(a) Salary as per provisions contained in
section 17(1) of the Income Tax Act, 1961.
Information disclosed in point A above.
(b) Value of perquisites u/s 17(2) of the
Income Tax Act, 1961
(c) Prots in lieu of salary under section
17(3) of the Income Tax Act, 1961
2Stock Option
3Sweat Equity
4 Commission
as % of prot
others, specify
5Others, 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
S .M. DATTA
Place: New Delhi Chairman
Date: July 18, 2017 (DIN: 00032812)
33
Annual
Report 2016-17
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 notied thereunder.
The CSR Policy of your Company is accessible on its website by following the link http://www.philips.co.in/b-
dam/corporate/about-philips-n/investor-relations/india/CSR_policy-signed.pdf
In terms of the mandate of the CSR Committee and being a Healthcare Company, the focus of CSR
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 Certicate 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 prot of the Company for last three nancial 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 nancial year:
(a) Total amount to be spent for the nancial 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 nancial year is detailed below:
PHILIPS INDIA LIMITED
34
S.
No.
CSR project or
activity identied
Program
Sector in which
the project is
covered
Projects or
programme
(1) Local area
or other (2)
Specify the
state and
district where
projects or
programs was
undertaken
Amount outlay
(budget project
or programme
wise)
Amount spent
on the project
or programme
Sub Heads;
(1) Direct
expenditure
on projects or
programmes
(2) Overheads
Cumulative
expenditure
up to the
reporting
period
Amount
spent: Direct
or through
implementing
agency
1Program with
Impact Foundation
India (Dasra) for
Mother and Child
Care - Maternal and
Newborn Health
and Child Health
and Nutrition, with
support provided
by NGOs Sneha,
based at Mumbai
and Mamta, having
centres nation-
wide.
Healthcare and
Medical facilities
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
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.
` 21.66 Million 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 Foundation-
Mobile 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
Healthcare and
Medical facilities
and promotion of
Education
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
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.
` 12.39 Million The amount has
been spent in
partnership with
the NGO, Smile
Foundation, who
has carried out
the activities
forming part of
the Project.
35
Annual
Report 2016-17
S.
No.
CSR project or
activity identied
Program
Sector in which
the project is
covered
Projects or
programme
(1) Local area
or other (2)
Specify the
state and
district where
projects or
programs was
undertaken
Amount outlay
(budget project
or programme
wise)
Amount spent
on the project
or programme
Sub Heads;
(1) Direct
expenditure
on projects or
programmes
(2) Overheads
Cumulative
expenditure
up to the
reporting
period
Amount
spent: Direct
or through
implementing
agency
3Program with
Aishwarya
Foundation –
carrying out
operations for
children below
the poverty line,
suffering from
Congenial Heart
Disease (CHD)
Health and
Medical Facilities
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
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.
` 2.12 Million The expenses on
the surgeries for
children suffering
from CHD
were incurred in
partnership with
Aishwarya Trust,
NGO.
4Program with
Mamta- Community
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)
Healthcare and
Medical facilities
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
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.
` 10.38 Million 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
Healthcare and
Medical facilities
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
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.
` 24.55 Million The expenses
on this campaign
have been spent
directly by the
Company.
PHILIPS INDIA LIMITED
36
S.
No.
CSR project or
activity identied
Program
Sector in which
the project is
covered
Projects or
programme
(1) Local area
or other (2)
Specify the
state and
district where
projects or
programs was
undertaken
Amount outlay
(budget project
or programme
wise)
Amount spent
on the project
or programme
Sub Heads;
(1) Direct
expenditure
on projects or
programmes
(2) Overheads
Cumulative
expenditure
up to the
reporting
period
Amount
spent: Direct
or through
implementing
agency
6 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 bio-
diversity.
Employees of the
Company were
also encouraged
to participate
and turned up in
good numbers at
both Delhi and
Bangalore
` 4.2 Million for
period April 1,
2016 to March
31, 2017
The expenses
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.
` 1.38 Million The expenses
were incurred
by the Company
in partnership
with Sankalp Taru
Foundation.
7 Campaign for
eradication of
avoidable blindness
in partnership with
Dr. Shroffs Charity
Eye Hospital
Healthcare and
Medical facilities
The programmes
were undertaken
in the following
cities, through the
branches of Dr.
Shroffs Charity
Eye Hospital:
Gurgaon, Delhi,
various districts
of UP and
Rajasthan
` 2.2 Million for
period April 1,
2016 to March
31, 2017
2.06 Million was
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.
` 2.19 Million The payments
were made to Dr.
Shroffs Charity
Eye Hospital,
who carried out
the activities
on behalf of the
Company.
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.
37
Annual
Report 2016-17
6. In case the company has failed to spend the two per cent of the average net prot of the last three nancial 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 Rajiv Mathur
Non- Executive Director Director and Company Secretary
Chairman, CSR Committee Member, CSR Committee
(DIN: 06527810) (DIN: 06931798)
Date : July 18, 2017
Place : New Delhi
PHILIPS INDIA LIMITED
38
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. Steps taken or impact on conservation of energy
a) Installation of energy efcient Variable Refrigerant Volume (VRV) system for maintaining controlled environment at the
shop oor.
b) Insulation of shop oor building to reduce heat loss on the VRV system.
c) Motion / Occupancy sensors installed at ofce and conference rooms.
d) Identication of lighting circuits with adequate visuals to ensure focused lighting utilization.
e) Various initiatives were made by Company to maintain Unity Power Factor.
2. 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 benets 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. Benets derived as a result of above efforts:
Some of the products/ solutions developed by your Company, utilizing its R&D capabilities are as below:
i) Heart Safe City is a subscriber based workow solution enabled with the help of a central command center that ties up
Automated External Debrillator (AED) availability, CPR/AED volunteer network for delivering the rst 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.
3. Future plan of action
i) Continue to engage in design & development of new generation Cath Labs, mobile surgery and diagnostic X-ray
equipment segment.
4. 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 inows (on cash basis) in foreign exchange was `11132.72 Million and total outows (on cash basis)
in foreign exchange was ` 15129.49 Million.
39
Annual
Report 2016-17
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
Amount
paid as
advances, if
any
Value of
Transactions
during the
year ended
March 31,
2017
(` Millions)
Philips
Medical
Systems
Nederland
B.V.
Fellow
Subsidiary
Company
Purchase of
goods
Yearly Based on Transfer
Pricing guidelines
Not Applicable,
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Not Applicable 2,861
Philips
Electronics
Nederland
B.V.
Fellow
Subsidiary
Company
Sale of Services Yearly Based on Transfer
Pricing guidelines
Not Applicable,
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Not Applicable 2,378
Philips
Medical
Systems
Nederland
B.V.
Fellow
Subsidiary
Company
Sale of goods Yearly Based on Transfer
Pricing guidelines
Not Applicable,
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Not Applicable 1,993
PHILIPS INDIA LIMITED
40
Name(s) of
the related
party and
nature of
relationship
Nature of
contracts/
arrangements/
transactions
Duration of
the contracts /
arrangements/
transactions
Salient
terms of the
contracts or
arrangements
or transactions
including the
value, if any
Date(s) of
approval by
the Board, if
any
Amount
paid as
advances, if
any
Value of
Transactions
during the
year ended
March 31,
2017
(` Millions)
Philips
Healthcare
Informatics,
Inc.
Fellow
Subsidiary
Company
Sale of Services Yearly Based on Transfer
Pricing guidelines
Not Applicable,
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Not Applicable 1,916
Philips
Medical
Systems
Nederland
B.V.
Fellow
Subsidiary
Company
Sale of Services Yearly Based on Transfer
Pricing guidelines
Not Applicable,
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Not Applicable 1,727
Philips
Electronics
Singapore Pte
Ltd.
Fellow
Subsidiary
Company
Purchase of
goods
Yearly Based on Transfer
Pricing guidelines
Not Applicable,
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Not Applicable 1,707
Philips
Consumer
Lifestyle B.V.
Fellow
Subsidiary
Company
Purchase of
goods
Yearly Based on Transfer
Pricing guidelines
Not Applicable,
since the
contract was
entered into in
the ordinary
course of
business and
on arm`s
length basis
Not Applicable 1,586
# 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 nancial 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
41
Annual
Report 2016-17
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 nancial 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 verication of the Company’s books, papers, minute books, forms and returns led and other records maintained by
the Company and also the information provided by the Company, its ofcers 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 nancial 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 led and other records maintained by the Company for the
nancial 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;
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 Benets) 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 Benet 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
43
Annual
Report 2016-17
Based on my examination and verication 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 Ofce 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 nancial year under review;
(l) Reconstitution of the Statutory Committees, if required;
(m) Declaration and Payment of Dividend;
(n) Borrowings and Registration, Modication 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 Prot 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 clarications on the agenda items before
the meeting and for meaningful participation at the meeting.
PHILIPS INDIA LIMITED
44
(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 nes 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 Ofcers.
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 ofce 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.
45
Annual
Report 2016-17
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 verication was done on the random test basis to ensure that correct facts are
reected in secretarial records. I believe that the processes and practices I have followed, provide a reasonable basis for my
opinion.
3. I have not veried the correctness and appropriateness of nancial 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 verication 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 efcacy 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
PHILIPS INDIA LIMITED
46 Standalone
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 nancial statements of Philips India Limited (“the Company”), which
comprise the Balance Sheet as at March 31, 2017, the Statement of Prot 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 signicant 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 nancial statements that give a true and fair view of
the nancial position, nancial performance including other comprehensive income, cash ows and changes in equity
of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting
Standards (Ind AS) specied 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 nancial
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 nancial 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 nancial 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 nancial statements in accordance with the Standards on Auditing, issued by the Institute
of Chartered Accountants of India, as specied 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
nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the nancial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the Ind AS nancial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal nancial control relevant to the Company’s preparation of the Ind
AS nancial 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 nancial statements. We believe that the audit evidence we have obtained is sufcient and
appropriate to provide a basis for our audit opinion on the Ind AS nancial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the Ind AS nancial
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 prot including other comprehensive income, its cash ows and the changes in equity for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. 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 specied in paragraphs 3 and 4 of the Order.
47
Annual
Report 2016-17
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 Prot 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 nancial statements comply with the Accounting Standards specied
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 disqualied 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 nancial controls over nancial 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 nancial position in its Ind AS
nancial statements – Refer Note 30 and 16 to the Ind AS nancial 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 nancial 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 nancial statements, are based on the
previously issued statutory nancial 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 unmodied opinion on those standalone nancial
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
PHILIPS INDIA LIMITED
48 Standalone
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
xed assets.
(b) All xed assets have not been physically veried by the management during the year but there is a regular programme
of verication 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 verication
(c) According to the information and explanations given by the management, the title deeds of immovable properties
included in property, plant and equipment/ xed assets are held in the name of the company.
(ii) The inventory has been physically veried by the management during the year. In our opinion, the frequency of verication
is reasonable. For stocks lying with third parties at the year end, written conrmations have been obtained. No material
discrepancies were noticed on such physical verication.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured
to companies, rms, 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 specied 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
Nature of dues 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
Service tax, Finance
Act, 1994
Service tax including interest and
Penalty where applicable
16.16 2014-15 Appellate authority
upto Commissioner
(Appeals)
161.48 2004-2005 to
2013-14
Tribunal
Central Sales Tax Act,
1956 and Individual
State Sales Tax Act
Sales Tax including Interest and
penalty where applicable
1,115.32 1986-87 to
2016-17
Appellate authority
upto Commissioner
(Appeals)
276.57 1986-87 to
2014-2015
Tribunal
49
Annual
Report 2016-17
Name of the
statute
Nature of dues Amount (Rs.
in million)
Period to
which the
amount
relates
Forum where
dispute is pending
6.53 1998-1999 to
2006-2007
High Court
Income Tax Act , 1961 Income tax disallowances and
transfer pricing additions Including
interest and Penalty where applicable
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 A.Y.2006-2007
to 2010-11
Tribunal
196.79 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 nancial 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 nancial 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 nancial 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
PHILIPS INDIA LIMITED
50 Standalone
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 nancial controls over nancial reporting of Philips India Limited (“the Company”) as
of March 31, 2017 in conjunction with our audit of the standalone nancial 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 nancial controls based on the
internal control over nancial 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 nancial controls that were operating effectively for ensuring the orderly and
efcient 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 nancial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal nancial controls over nancial 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 specied under section
143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal nancial 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 nancial controls over nancial 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 nancial
controls system over nancial reporting and their operating effectiveness. Our audit of internal nancial controls
over nancial reporting included obtaining an understanding of internal nancial controls over nancial 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 nancial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit
opinion on the internal nancial controls system over nancial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company’s internal nancial control over nancial reporting is a process designed to provide reasonable assurance
regarding the reliability of nancial reporting and the preparation of nancial statements for external purposes
in accordance with generally accepted accounting principles. A company’s internal nancial control over nancial
reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of nancial 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 nancial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal nancial controls over nancial reporting, including the possibility of
collusion or improper management override of controls, material misstatements due to error or fraud may occur
51
Annual
Report 2016-17
and not be detected. Also, projections of any evaluation of the internal nancial controls over nancial reporting
to future periods are subject to the risk that the internal nancial control over nancial 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 nancial controls system over nancial
reporting and such internal nancial controls over nancial reporting were operating effectively as at March 31, 2017,
based on the internal control over nancial 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
PHILIPS INDIA LIMITED
52 Standalone
Balance Sheet as at 31 March 2017
Amounts in ` Mln
NOTES As at
31 March 2017
As at
31 March 2016
As at
1 April 2015
ASSETS
Non-current assets
Property, Plant and Equipment 2 2,403 1,984 1,900
Capital work-in-progress 2 106 78 36
Investment Property 3 17 17 17
Intangible assets 4 - - -
Investment in subsidiaries and associates 5 7,605 4,797 1,000
Financial Assets 6
a. Trade Receivables 1,088 1,688 2,064
b. Other Financial Assets 206 181 217
Deferred tax assets (net) 7 572 510 809
Advance Income tax (net of provision) 2,142 1,742 1,742
Other non current assets 8 901 812 1,151
15,040 11,809 8,936
Current assets
Inventories 9 4,554 4,542 3,777
Financial Assets 10
a. Trade receivables 4,982 6,823 5,331
b. Cash and cash equivalents 5,161 5,406 2,534
c. Other Financial Assets 914 822 2808
Other current assets 11 1,308 1,363 860
16,919 18,956 15,310
Assets classied as discontinued operations 39 - -10,029
TOTAL ASSETS 31,959 30,765 34,275
EQUITY AND LIABILITIES
EQUITY
Equity share capital 12 575 575 575
Other Equity 13 19,450 17,606 16,695
Equity attributable to equity shareholders 20,025 18,181 17,270
LIABILITIES
Non-current liabilities 14
Financial Liabilities
Borrowings 405 155 186
Other non-current liabilities 15 752 685 542
Provisions 16 651 591 471
1,808 1,431 1,199
Current liabilities
Financial Liabilities 17
a. Borrowings --287
b. Trade Payables 5,061 5,406 4,866
c. Other nancial liabilities 1,110 865 981
Other current liabilities 18 2,871 3,291 2,291
Provision for taxation (Net of Advances) 442 891 442
Provisions 16 642 700 889
10,126 11,153 9,756
Liabilities classied as discontinued operations 39 - -6,050
TOTAL EQUITY AND LIABILITIES 31,959 30,765 34,275
Basis of preparation, measurement and signicant
accounting policies
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 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
53
Annual
Report 2016-17
Statement of Prot 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 19 36,989 35,479
Other income 20 419 552
Total Income 37,408 36,031
Expenses
Cost of raw materials consumed 21 2,175 1,542
Purchases of stock-in-trade 22 13,969 15,674
Changes in inventories of work-in-progress, nished
goods and stock-in-trade
23 (18) (609)
Excise duty on sale of goods 86 63
Employee benets expense 24 9,989 9,151
Finance costs 25 113 112
Depreciation and amortization expense 26 507 469
Other expenses 27 7,335 6,573
Total expenses 34,156 32,975
Prot before tax from continuing operations 3,252 3,056
Tax expense
Current tax 7 (1,244) (1,194)
Deferred tax - release / (charge) 7 56 7
Prot after tax from continuing operations 2,064 1,869
Discontinuing Operations
Prot before tax from discontinuing operations 39 - 3,208
Tax expense
Current Tax -(1,244)
Deferred tax - release / (charge) -133
Prot after tax from discontinuing operations -2,097
Prot for the year (A) 2,064 3,966
Other comprehensive income
Re-measurement gains / (losses) on dened
benet plans
(18) 12
Income tax effect on dened benet plans 6(4)
Other comprehensive income for the year (B) (12) 8
Total comprehensive income for the year (A+B) 2,052 3,974
Earnings per equity share (for continuing operations) 40
Basic and diluted earnings per equity share of ` 10
each (in `)
35.88 32.50
Earnings per equity share (for discontinuing operations) 40
Basic and diluted earnings per equity share of ` 10
each (in `)
-36.45
Basis of preparation, measurement and signicant
accounting policies
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 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
PHILIPS INDIA LIMITED
54 Standalone
Statement of Changes in Equity for the year ended 31 March 2017
Amounts in ` Mln
A. EQUITY SHARE CAPITAL
Equity shares of ` 10 each issued, subscribed and fully paid up Number of shares Amount
As at 1 April 2015 57,517,242 575
Changes in equity share capital during the year - -
As at 31 March 2016 57,517,242 575
Changes in equity share capital during the year - -
As at 31 March 2017 57,517,242 575
B. OTHER EQUITY
For the year ended 31 March 2017
Particulars
Reserves and Surplus Items of OCI Total
Securities
Premium*
Capital
redemption
reserve*
Capital
reserve*
Capital
Subsidy*
General
reserve*
Retained
earnings*
Remeasure-
ment*
As at 1 April 2015 (A) 1,153 228 169 9 2,789 12,347 - 16,695
Prot for the year - ----3,966 -3,966
Remeasurement benet of dened benet
plans
- ---- 8 8
Total Comprehensive Income for
the year (B)
- ----3,966 8 3,974
Transfer as per Scheme of Arrangement
for Demerger
(1,153) (228) (169) -(1,296) - - (2,846)
Others - - - (9) - - - (9)
Reductions during the year
Transfer to General Reserve - - - - 424 (424) - -
Dividend (Note 38) - - - - - (173) -(173)
Dividend distribution tax (Note 38) - - - - - (35) -(35)
Total (C) - - - - 424 (632) - (208)
As at 31 March 2016 (A+B+C) - - - - 1,917 15,681 8 17,606
As at 1 April 2016 (D) - - - - 1,917 15,681 8 17,606
Prot for the year - ----2,064 -2,064
Remeasurement benet of dened benet
plans
- - - - - - (12) (12)
Total Comprehensive Income for
the year (E)
- - - - - 2,064 (12) 2,052
Reductions during the year
Transfer to General Reserve 398 (398) -
Dividend (Note 38) - ----(173) -(173)
Dividend distribution tax (Note 38) - ----(35) -(35)
Total (F) 398 (606) - (208)
As at 31 March 2017 (D+E+F) - - - - 2,315 17,139 (4) 19,450
* Refer Note 13
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 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
55
Annual
Report 2016-17
Cash Flow Statement for the year ended 31 March 2017
Amounts in ` Mln
Year ended
31 March 2017
Year ended
31 March 2016
Cash ow from operating activities
Prot before tax (continuing operations) 3,252 3,056
Prot before tax (discontinuing operations) -3,208
Exceptional items -225
Net prot before tax and exceptional items 3,252 6,489
Adjusted for
(Prot) / loss on disposal of xed assets (12) -
Write off and other adjustment of xed assets 23 -
Depreciation and amortization 507 775
Unrealized foreign exchange (gain) and loss (net) (32) (8)
Provision for doubtful trade receivables and loans and advances 113 197
Liabilities no longer required written back (26) (31)
Interest on advances, current accounts and deposits (598) (749)
Finance costs 113 88 54 238
Operating prot before working capital changes 3,340 6,727
Changes in:
Trade receivables and other loans & advances 2,220 (2,306)
Inventories (12) (542)
Trade payables and other liabilities (426) 2,179
1,782 (669)
Cash generated from operations 5,122 6,058
Income tax paid (net of refunds) (2,117) (1,994)
Exceptional items (VRS Payment) -(260)
Net Cash Flow from Operating activities-continuing operations 3,005 (226)
Net Cash Flow from operating activities-discontinued operations -4,030
Net cash generated from operating and discontinuing activities 3,005 3,804
Cash ow from investing activities
Purchase of Property, Plant and Equipment (986) (991)
Proceeds from sale of Property, Plant and Equipment 249 52
Investment in associate (50) (63)
Investment in subsidiaries (2,758) (3,734)
Interest received 557 780
Net Cash ow from Investing Activities-continuing operations (2,988) (3,760)
Net Cash ow from Investing Activities-discontinued operations -(196)
Net cash used in investing and discontinuing activities (2,988) (3,956)
Cash ow from nancing activities
Finance costs (55) (78)
Proceeds / (repayments) of short term borrowings -(287)
Dividend paid (including tax thereon) (207) (207)
Cash ow from Financing Activities-continuing operations (262) (565)
Net Cash ow from Financing Activities-discontinued operations -(7)
Net cash used in nancing and discontinuing activities (262) (572)
Increase / (Decrease) in cash and cash equivalents (A+B+C) (245) (724)
PHILIPS INDIA LIMITED
56 Standalone
Year ended
31 March 2017
Year ended
31 March 2016
Cash and cash equivalents - Opening Balance
Cash and cash equivalents [refer note 10 (b)] 1,316 1,435
Inter corporate deposits -2,425
Unpaid dividend 11 10
Deposits with Banks 4,079 2,260
TOTAL 5,406 *6,130
Cash and cash equivalents - Closing Balance
Cash and cash equivalents [refer note 10 (b)] 445 1,316
Unpaid dividend 12 11
Deposits with Banks 4,704 4,079
TOTAL 5,161 5,406
Cash and Cash Equivalent from continuing operations (245) (4,551)
Cash and Cash Equivalent from discontinued operations - 3,827
Cash and Cash Equivalent from continuing and discontinued
operations
* Includes discontinuing operations (refer Note 39)
(245) (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
Cash Flow Statement for the year ended 31 March 2017 (Contd.)
Amounts in ` Mln
57
Annual
Report 2016-17
CORPORATE INFORMATION
Philips India Limited (the ‘Company’) is a public limited company domiciled in India with its registered ofce 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 nancial statements
These nancial statements are the separate nancial statements of the Company (also called standalone nancial
statements) prepared in accordance with Indian Accounting Standards (‘Ind AS’) notied 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 nancial statements
in accordance with Accounting Standards notied 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, nancial performance and cash ows is given
under Note 43.
These nancial statements have been prepared and presented under the historical cost convention, on the accrual
basis of accounting except for certain nancial assets and nancial 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 nancial statements.
(b) Current / Non Current classication
Any asset or liability is classied as current if it satises 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 classied as non-current.
For the purpose of current/non-current classication 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 nancial 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
signicant effect to the carrying amounts of assets and liabilities within the next nancial year, are included in the following
notes:
Measurement of dened benet 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 nancial
statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.
Notes to the Financial Statements for the year ended 31 March 2017
PHILIPS INDIA LIMITED
58 Standalone
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 ows’ 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 nancial statements to evaluate
changes in liabilities arising from nancing activities, including both changes arising from cash ows and non-cash changes,
suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising
from nancing activities, to meet the disclosure requirement. The effect on the nancial statements is being evaluated by the
Company.
Amendment to Ind AS 102:
The amendment to Ind AS 102 provides specic guidance to measurement of cash-settled awards, modication of cash-
settled awards and awards that include a net settlement feature in respect of withholding taxes. It claries that the
fair value of cash-settled awards is determined on a basis consistent with that used for equity settled awards. Market-
based performance conditions and non-vesting conditions are reected in the ‘fair values’, but non-market performance
conditions and service vesting conditions are reected in the estimate of the number of awards expected to vest. Also,
the amendment claries that if the terms and conditions of a cash-settled share-based payment transaction are modied
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 modication. 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 nancial 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 benets associated with the item will ow to the Company
and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of
Prot 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
Prot 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 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 xed 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 reected in statement of Prot 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.
Notes to the Financial Statements for the year ended 31 March 2017
59
Annual
Report 2016-17
The useful lives of intangible assets are assessed as either nite or indenite. 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 nite-life intangible
assets are as follows:
Computer Software - 3 years
Non Compete Fees - 3 years
The amortisation period and the amortisation method for nite-life intangible assets is reviewed at each nancial year end
and adjusted prospectively, if appropriate.
Intangible assets with indenite useful lives are not amortised, but are tested for impairment annually, either individually or
at the cash-generating unit level. The assessment of indenite life is reviewed annually to determine whether the indenite
life continues to be supportable. If not, the change in useful life from indenite to nite 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 Prot and Loss.
Upon rst-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 specic identication
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 insignicant risk of changes in value.
1.9 Financial Instruments:
A nancial instrument is any contract that gives rise to a nancial asset of one entity and a nancial liability or equity
instrument of another entity.
i) Financial Assets
The Company classies its nancial assets in the following measurement categories:
- Those to be measured subsequently at fair value (either through other comprehensive income, or through prot
or loss)
- Those measured at amortised cost”
Initial Recognition and Measurement:
All nancial assets are recognised initially at fair value plus, in the case of nancial assets not recorded at fair value
through prot or loss, transaction costs that are attributable to the acquisition of the nancial asset.
Subsequent Measurement:
For purposes of subsequent measurement nancial assets are classied in following categories:
- Debt instruments at fair value through prot 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 prot
and loss(i.e. fair value through prot 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.
Notes to the Financial Statements for the year ended 31 March 2017
PHILIPS INDIA LIMITED
60 Standalone
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 ows (rather
than to sell the instrument prior to its contractual maturity to realize its fair value changes).
b) Cash ow characteristics test : The contractual terms of the debt instrument give rise on specic dates to
cash ows that are solely payments of principal and interest on principal amount outstanding.
This category is most relevant to the Company. After initial measurement, such nancial 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 nancial instrument or a
shorter period, where appropriate, to the gross carrying amount of the nancial asset. When calculating the effective
interest rate, the Company estimates the expected cash ows by considering all the contractual terms of the nancial
instrument but does not consider the expected credit losses. The EIR amortization is included in inance income in
prot or loss. The losses arising from impairment are recognised in the prot 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 nancial instrument is achieved by both collecting contractual cash
ows and for selling nancial assets.
b) Cash ow characteristics test : The contractual terms of the debt instrument give rise on specic dates to
cash ows 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 prot and loss. On derecognition of asset, cumulative gain or loss previously recognised in OCI is reclassied from
the equity to statement of prot & loss. Interest earned whilst holding FVTOCI nancial asset is reported as interest
income using the EIR method.
Debt instruments at FVTPL
FVTPL is a residual category for nancial instruments. Any nancial instrument, which does not meet the criteria for
amortised cost or FVTOCI, is classied 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 prot or loss and presented net in
the statement of prot 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
classied 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 classication 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 prot and loss, even
on sale of investment. However