CONTENTS

S.N
o
1.

3.
4.

5.

6.
7.

PREFACE
ACKNOWLEDGEMENT
CERTIFICATE
DECLARATION
PARTICULARS

IntroductionofElectronicIndustry
BriefIntroduction
History
TwoMajorElectronicCompanies
LG
SAMSUNG
Objectivesofthestudy
IntroductionofLG
MissionandvisionofLG
ProductsofLG
Slogan&SymbolofLG
FinancialManagementofLG
FinancialHighlights
IncomeStatement
BalanceSheet
FinancialRatioAnalysis

IntroductionofSamsung
IndustryProfile
History
Mission&VisionofSamsung
BrandValue
StandingPositionofSamsung
FinancialHighlight
SummaryP/LAC
SummaryofBalanceSheet
FinancialRatioAnalysis
ResearchMethodology
MajorFindings

PAGENO

8.
9.
10.

Limitationofthestudy
Conclusion
Bibliography

INTRODUCTIONOFELECTRONICINDUSTRY
IndiaisthefifthlargesteconomyintheworldandhasthesecondlargestGDPamongemerging
economies.Owingtoitslargepopulation,thepotentialconsumerdemandisalmostunlimited
andconsequentlyunderappropriateconditions,stronggrowthperformancecanbeexpected.In
fact,theliberalizationoftheeconomyin1991hasledtorapidgrowth.Theelectronicsindustry,
inparticular,isemergingasoneofthemostimportantindustryintheIndianmarket.
TheelectronicsindustryinIndiadatesbacktotheearly1960s.Electronicswasinitiallyrestricted
tothedevelopmentandmaintenanceoffundamentalcommunicationsystemsincludingradio
broadcasting, telephonic and telegraphic communication, and augmentation of defense
capabilities.Until1984,theelectronicssectorwasprimarilygovernmentowned.Thelate1980s
witnessed a rapid growth of the electronics industry due to sweeping economic changes,
resultingintheliberalizationandglobalizationoftheeconomy.Theeconomictransformation
wasmotivatedbytwocompellingfactorsthedeterminationtoboosteconomicgrowth,andto
acceleratethedevelopmentofexportorientedindustries,liketheelectronicsindustry.
Theelectronicsindustryhasrecordedveryhighgrowthinsubsequentyears.By1991,private
investmentsbothforeignanddomesticwereencouraged.Theeasingofforeigninvestment

norms,allowanceof100percentforeignequity,reductionincustomtariffs,anddelicensingof
severalconsumerelectronicproductsattractedremarkableamountofforeigncollaborationand
investment. The domestic industry also responded favorably to the politic policies of the
government. The opening of the electronics field to private sector enabled entrepreneurs to
establishindustriestomeethithertosuppresseddemand.
Improvements intheelectronics industryhavenotbeenlimitedtoaparticularsegment,but
encompass all its sectors. Strides have been made in the areas of commercial electronics,
software, telecommunications, instrumentation, positioning and networking systems, and
defense.Theresulthasbeenasignificanttradegrowththatbeganinthelate1990s.
Despite commendable achievements in the sphere of electronics, considerable infrastructural
improvementsremainapriority.Water,power,telecommunications,andtransportationsectors
muststillbeaugmentedsothathigheconomicgrowthcanbesustained.

BRIEFINTRODUCTION
Indian electronics companies had majorly benefited from
theeconomicliberalizationpoliciesofthe1980's,including
thelooseningofrestrictionsontechnologyandcomponent
imports,delicensing,foreigninvestment,andreductionof
exciseduties.OutputfromelectronicsplantsinIndiagrew
fromRs1.8billioninFY1970toRs8.1billioninFY1980
andtoRs123billioninFY1992.Mostoftheexpansion
took place in the production ofcomputers and consumer
electronics.IndianProductionofComputerrosefrom7,500
unitsin1985to60,000unitsin1988andtoanestimated
200,000unitsin1992.Duringthisperiod,majoradvances
weremadeinthedomesticcomputerindustrythatledto

moresales.ConsumerelectronicsinIndiaaccountforabout
30%oftotalelectronicsproductionofthecountry.
In1990theelectronicproductionincluded5milliontelevisionsets,6millionradios,5million
taperecorders,5millionelectronicwatches,and140,000videocassetterecorders.TheIndian
engineeringsectorislargeandvariedandprovidedaround12%ofIndia'sexportsinthemid
1990s.Twosubsectors,electronicsandmotorvehicles,arethemostdynamicinallthesectors.
Despitetheglobaleconomicslowdown,growthofIndianelectronicsindustryin2009wasonpar
withthepreviousyearat9.9%,althoughthiswasdecreasedaccordingtothedoubledigitgrowth
achievedin2006and2007.In2010outputgrownby13.6%andinthemediumtolongterm
Indiawillcontinuetoshowstronggrowthdrivenbyalarge,fastgrowingdomesticmarket,
significantforeigninvestmentandanimprovingregulatoryenvironment.Theglobalelectrical
andelectronicsindustryhasvariousadjunctsectors.FewofthemareElectronicComponents,
Computer & Telecommunications, Office Equipments, Consumer Electronics as well as
IndustrialElectronics.

HISTORY
Indian Electronics industry dates back to the early 1960's.
Electronics was one industry initially restricted to the
development and maintenance of fundamental
communication systems including radiobroadcasting,
telephonicandtelegraphiccommunication,andaugmentation
ofdefensecapabilities.Until1984,theelectronicsIndustry
was primarily government owned and then in 1980s
witnessedarapidgrowthoftheelectronicsindustrydueto
sweeping economic changes, resulting in the liberalization
andglobalizationoftheeconomy.

Theeconomictransformationallovertheworldwasmotivatedbytwocompellingfactorsthe
determinationtoboosteconomicgrowth,andtoacceleratethedevelopmentofexportoriented
industries,liketheelectronicsindustry.By1991inthecountryprivateinvestmentsbothforeign
anddomesticwereencouraged.Theeasingofforeigninvestmentnorms,allowanceof100%
foreign equity, reduction in custom tariffs, and relicensing of several consumer electronic
productshadattractedremarkableamountofforeigncollaborationandinvestment.
ThedomesticElectronicindustryalsorespondedfavorablytothepoliciesofthegovernment.
Theinitiativesoftheelectronicsfieldtoprivatesectorenabledentrepreneurstoestablishthe
industriestomeetdemandinthemarket.ImprovementsintheIndianElectronicsindustryhave
notbeenlimitedtoaparticularsegment,butencompassallitssectors.Thispacemadeinthe
areasofcommercialsoftware,telecommunications,electronics,instrumentation,positioningand
networkingsystems,anddefense.Theresultthereforehasbeenasignificanttradegrowththat
beganinthelate1990's.TheIndianElectronicsIndustryisatextforinvestorswhoconsider
Indiaasapotentialinvestmentopportunity.
Marketcapitalization
TheIndianelectronicsmarketwasatUS$11.5billionin2004,thenthemarketwgrewworldwide
overthenextseveralyears.IndianElectronicsIndustryisexpectedtogrowataCompound
AnnualGrowthRate(CAGR)of23%by2010toreachUS$40billion.Thoughitstotaloutput
willbefarbehindChinaelectronicsmarket,worthUS$271.97billionin2004,Indiapromisesa
better market with the bears watching. Low manufacturing costs in skilled labor and raw
materials,availabilityofengineeringskills,andopportunitytomeetdemandinthepopulous
Indianmarket,aredrivingitselectronicsmarket.
Sizeoftheindustry
Intheyear2005India'selectronicconsumptionwasaround1.8%.Itislikelytotouch5.5%in
2010.AccordingtoastudyconductedbyISAandFrostSullivan,India'ssemiconductormarket
would grow by 2.5 times. The enduser products of semiconductor would include mobile
handsets,desktopandnotebooks,PCs,etc.

Totalcontributiontotheeconomy/sales
Indian electronics industry today stands at US $ 25
billionandisranked26thintheworldintermsofsales
and 29th in the world in terms of production. It is
growingatover25%CAGRandisexpectedtobeworth
US$158billionby2015.Electronicindustryisoneof
the fastest growing industries in the country and is
drivenbygrowthinkeysectorssuchasIT,Consumer
ElectronicsandTelecom.
Thedemandforelectronicsisexpectedtobefuelledbythegrowthof

Telecommunications(250millionsubscribersbythenextfewyears)

PCsandNotebooks(5millioneveryyear)

BroadBandconnectivityreachingruralareas

TopleadingCompanies
VideoProjectors:PhilSystems,KeltronProjectors,Birla3M,SamratVideoVision
ColourTelevision:LGElectronics,Philips,Sony;Sansui,Samsung,BPL,Videocon,Onida,
Aiwa,Akai,Thompson,Panasonic.
Cameras/Camcorders:Sony,Canon,Olympus,Fujifilm,Nikon
Employmentopportunities
According toarecentreportpresented byErnst&Young,the Indiandomesticdemandfor
electronicsproductsisexpectedtoreach$125billionby2014fromthecurrentlevelof$45
billionannually.TheprimarydemanddriversfortheIndianElectronicIndustryaresectorslike
telecom,defence,ITandegovernance,automotive,consumerelectronics,andenergy.Atthese
demandlevels,until India creates its ownelectronics product industry,the imports ofthese

products will create the single largest trade deficit item, which would even be larger than
petroleumproducts.Ontheotherhand,ifthisparticularuniqueopportunityisutilized,itcan
createalargeindustrycateringtodomesticconsumption,whichwillhelpachieveselfreliancein
strategicsectorsliketelecomanddefence,whileleadingtolargeexports.
Latestdevelopments

TheIndianElectronicindustryconstituteslessthan1%oftheglobalmarket.However,
demand for these products are growing rapidly and investments are flowing in to
augmentmanufacturingcapacity.

TodayIndiaremainsamajorimporterofelectronicmaterials,componentsandfinished
equipment amounting worth of $20 billion (Rs84, 000 crore ) in 2007. The country
importselectronicgoodsmainlyfromChina

Inpastfouryears,productionofcomputershasgrownatacompoundedannualgrowth
rate(CAGR)of31%,whichishighestamongthevariouselectronicproductsinIndia.
Andthentheproductionisfollowedbycommunicationandbroadcastequipment(25%),
strategicelectronics(20%)andindustrialelectronics(17%).

TheconsumerelectronicssegmenthasgrownataCAGRof10%inthelastfiveyears
includesawiderangeofproductssuchasDVD,VCD/MP3players,televisionsetsand
microwaveovens.

Thegrowthindemandfortelecomproductshasbeenhigh,withIndiaaddingtwomillion
mobilephoneuserseverymonth,whichservesasoneofthemainreasonsforthegrowth
inproductionofelectronicgoods.Thisgrowthisexpectedtocontinueoverthenext
decade,too.

To attract foreign investment the government has adopted Chinese style Special
EconomicZoneswiththeaimtoprovideislandsofexcellencewheretheinfrastructureis

worldstandard.FifteenyeartaxbreaksgiventoforeigninvestorsandSEZsaretreatedas
foreignterritoriesforthepurposeoftradeoperations,dutiesandtariffs.

India has been a great success story in the IT services industry and the next great
opportunityistocreateourownelectronicsproductindustry,whichwillhelptomoveup
thevaluechainandcreateglobaltechnologybrands.Todaythemarketisatthethreshold
of a decisive phase in our growth where, if the government and entrepreneurs take
concretestepsitcancreatea$100billionelectronicsproductindustryfromIndiainthe
next10years.

MultinationalcorporationsprovidegrowingelectronicsmarkettoIndiaatlowercostsby
manufacturingsemiconductorsinIndia.Indiahasthepotentialtocomeupasthenext
electronicsandhardwaredestinationintheworld.Thechipdesignandothercomplex
componentselectronicdevicecanbeacquiredfromtheIndiancompaniesatlowcost.

Indiaisgrowinguptobeoneofthebiggestmarketsforelectronicinstrumentations.The
consumptionvalueofelectronicequipmentinIndiain2005isestimatedasUS$28.2
billion.ThemainfactorpertainingtothesuccessoftheIndianElectronicsandHardware
Industry is the growth in the market demand. The growth in the manufacturing of
semiconductorservesasthekeydriverintheemergenceofIndiaasoneoftheleaders.
Theadvantagespertainingtothetaxesandduties,theaccesstotechnicalandengineering
expertise,propermanufacturingfacilities,lucrativeinvestmentoffers,etc.

OBJECTIVEOFTHESTUDY

Aninvestorwhowouldliketoberationalandscientificinhisinvestmentactivityhastoevaluate
a lot of information about past performance and the expected future performance of the
companies,industriesandtheeconomyasawholebeforetakingtheinvestmentdecisionand
hence,thepresentstudyattemptstoanalysetheprofitabilitypositionofthesamplecompanies.
Someoftheobjectivesofconductionthestudyareasfollows:
Totakeinvestmentdecisionscautiouslyafterstudyingrisksinvolvedinthesame.
Togainknowledgeofevaluatingintrinsicvalueofafirm.
Toacquirepracticalexposureoffinancialanalysisofanenterprise.
Togetfamiliarityofschemingcomparativeefficiencyofdifferentfirms.
Toanalysetheprofitabilitypositionofthesampletelecomcompanies.

TWOMAJORCOMPARATIVEELECTRONICCOMPANIES

INTRODUCTIONOFLGELECTRONICS
LGElectronicsisoneoftheleadingcompaniesinthefieldofelectronicswithaglobalpresence
inmanycountries..Beforebriefing,Ihavedividedtheintroductionpartintothreemainsub
parts.
1. LGGlobal
2. LGIndia
3. LGPune
Historyofcompany
The company was originally established in 1958 as Gold Star, producing radios, TVs,
refrigerators,washingmachines,andairconditioners.
TheLGGroupwasamergeroftwoKoreancompanies,LuckyandGoldStar,fromwhichthe
abbreviationof LG wasderived.Thecurrent"Life'sgood"sloganisa backronym.Beforethe
corporateNamechangetoLG,householdproductsweresoldunderthe BrandnameofLucky,
whileelectronicproductsweresoldunderthebrandnameofGoldStar.TheGoldStarbrandis
stillperceivedasadiscountbrand.
In1995,GoldStarwasrenamedLGElectronics,andacquiredZenithElectronicsoftheUnited
States.
GlobalOperation
LGElectronicsisplayinganactiveroleintheworldmarketwithitsassertiveglobalbusiness
policy.Asaresult,LGElectronics controls110localsubsidiariesintheworldwitharound
82,000executiveandemployees.

LGGroup
1. LG.PhilipsLCD

2. LGChemical
3. LGTelecom
4. LGPowercom
5. LGTwins
6. LGDacom
Businessareasandmainproducts

Mobilecommunications

(a) CDMAHandsets,
(b) GSMHandsets,
(c) 3GHandsets,
(d) CellularPhones
Digitalappliance
a) AirConditioners,
b) Refrigerators,
c) MicrowaveOvens,
d) WashingMachines,
e) VacuumCleaners,
f) HomeNet,
g) CompressorsforAirConditionersandRefrigerators
Digitaldisplay

a) PlasmaTVs,
b) LCDTVs,
c) MicroDisplayPanelTVs,
d) Monitors,
e) PDPModules,
f) OLEDPanels,
g) USBMemory,
h) FlatPanelComputerMonitors
Digitalmedia
a) HomeTheaterSystems,
b) DVDRecorders,
c) SuperMultiDVDRewriters,
d) CDRW,
e) NotebookPCs,
f) DesktopPCs,
g) PDAs,
h) PDAPhones,
i) MP3Players,

j) NewKaraokeSystems,
k) CarInfotainment

VISION
GlobalTop3by2010
GlobalTop3Electronic/Telecommunicationcompany
GROWTHSTRATEGY
Fastinnovation,Fastgrowth

CORECOMPETENCY
Productleadership,Marketleadership,Peopleleadership
CORPORATECULTURE
Noexcuse,wenotI,Funworkplace
SLOGAN

"Life'sGood"representsLG'sdeterminationtoprovidedelightfullysmartproducts
thatwillmakeyourlifegood.

The LG Electronics Life's Good signature consists of the LG logo, seal, and the
slogan, "Life's Good"set inCharlotte sans typeface curved around theLG symbol.
The curving of the slogan reinforces LG's personality and uniqueness. The
consistent usage of this signature clearly establishes the unique identity of the
company and unifies every division and product from LG Electronics across the
globe.
THESYMBOL
ThesymbolofLGisthefaceoffuture.TheletterLandGinacirclesymbolizesworld,
future,youth,humanity&technology.LGphilosophyisbasedonhumanity.Italsorepresents
LGseffortstokeepcloserelationshipwithourcustomersaroundtheworld.
Thesymbolconsistsoftwoelements.
1. ThelogoinLGgray

2. ThestylizedimageofhumanfaceintheuniqueLGredcolor.

Redcolor representsourfriendlinessandgivesastrongimpressionofLGscommitmentto
deliverthebest.
ThecirclesymbolizesTheGlobe.Thestylizedimageofasmilingfaceinthesymbolconveys
FriendlinessandApproachability.Theoneeyeonthesymbolrepresents Goaloriented,
Focused&Confident.

The slogan of LG is Lifes Good. It expresses Brands Value, Promises, Benefits,

Personality.

FINANCIALINFORMATION

ThissectionprovidesinformationonLGElectronics'financialresults.

Ourperformanceresultsfrom2009tothepresentdayareavailabletoviewanddownloadfor
bothparentandconsolidatedbases.
The financial results are reported in accordance with the International Financial Reporting
Standards as adopted by the Republic of Korea. (Korean IFRS).
Forpastdata,pleasevisitFinancialStatements.

FinancialHighlights
Parent
FinancialHighlights

Consolidated

2011

2012

2013

2011

2012

2013

KRWbn

KRWbn

KRWbn

KRWbn

KRWbn

KRWbn

Sales

28,097

25,427

28,079

57,740

55,123

58,140

OperatingProfit(Loss)

264

46

214

332

1,217

1,285

NetProfit(Loss)

278

352

189

479

103

223

TotalAssets

24,199

23,832

24,971

35,519

34,766

35,528

TotalLiabilities

13,704

13,809

15,138

22,363

22,060

22,839

TotalShareholder'sEquity

10,495

10,023

9,833

13,156

12,706

12,689

IncomeStatement

Parent
IncomeStatement

2011

Consolidated
2012

2013

2011

2012

2013

KRWbn KRWbn KRWbn KRWbn KRWbn KRWbn

Sales

28,097

25,427

28,079

57,740

55,123

58,140

Costofgoodssold

23,053

19,986

22,650

45,151

42,252

44,721

Grossprofit

5,044

5,411

5,429

12,589

12,870

13,420

SG&A

5,308

5,395

5,643

12,258

11,654

12,135

Operatingincome(Loss)

264

46

214

332

1,217

1,285

Nonoperationgincome(Loss)

138

286

33

803

668

708

Netprofit(Loss)beforetax

402

240

247

472

549

577

Tax

124

113

58

446

354

Netprofit(Loss)

278

352

189

479

103

223

2012

2013

BalanceSheet
BalanceSheet

Parent
2011

Consolidated
2012

2013

2011

KRWbn

KRWbn

KRWbn

KRWbn

KRWbn

KRWbn

Assets

24,199

23,832

24,971

35,519

34,766

35,528

CurrentAssets

8,150

7,548

7,853

17,280

16,308

16,325

Cash and cash equivalents 1,364

1,114

1,298

2,781

2,185

2,645

Accounts

4,693

4,697

7,339

7,333

7,117

receivable 5,077

Inventory

886

922

917

5,322

5,075

4,839

Other

823

819

941

1,838

1,716

1,724

NoncurrentAssets

16,046

16,282

16,282

18,240

18,458

19,203

Investment

7,965

7,950

8,006

4,252

4,183

4,330

PP&E

5,191

5,437

6,045

9,593

9,889

10,342

962

1,086

1,168

1,222

1,364

Intangible

assets 916

Other

1,974

1,933

1,145

3,226

3,163

3,168

Liabilities

13,704

13,809

15,138

22,363

22,060

22,839

payable 3,854

3,996

4,327

5,751

5,627

5,691

Debt

5,826

5,264

5,942

9,680

8,638

9,211

Other

4,025

4,549

4,869

6,932

7,795

7,937

Equity

10,495

10,023

9,833

13,156

12,706

12,689

Accounts

FinancialRatios
FinancialRatios

Parent

Consolidated

2011
Operating

Net

Profit

2011

2012

2013

0.2%

0.8%

0.6%

2.2%

2.2%

Margin 1.0%

1.4%

0.7%

0.8%

0.2%

0.4%

ROA

1.2%

1.5%

0.8%

na

0.3%

0.6%

ROE

2.7%

3.4%

1.9%

na

0.8%

1.8%

Liabilities to Equity Ratio 130.6%

137.8%

154.0%

170.0%

173.6%

180.0%

Debt to Equity Ratio 55.5%

52.5%

60.4%

73.6%

68.0%

72.6%

NetDebttoEquityRatio

42.5%

41.4%

47.2%

52.4%

50.8%

51.7%

Growth 3.9%

9.5%

10.4%

na

4.5%

5.5%

Growth nm

nm

nm

na

266.9%

5.6%

Growth nm

nm

nm

nm

nm

nm

TotalAssetsTurnover

1.2

1.1

1.2

na

1.6

1.7

Sales

2013

Margin 0.9%

Profit

2012

Operating

Net

Proft

Profit

1)NetDebt=Debt(/Cashandcashequivalents+Shorttermfinancialinstruments)

INTRODUCTIONOFSAMSUNG
INTRODUCTION

BeforetheliberalizationoftheIndianeconomy,onlyafewcompanieslikeKelvinator,Godrej,
Alwyn,andVoltaswerethemajorplayersintheconsumerdurablesmarket,accountingforno
less than 90% of the market. Then, after the liberalization, foreign players like LG, Sony,
Samsung,Whirlpool,Daewoo,andAiwacameintothepicture.
Today, these players control the major share of the consumer durables market. Consumer
durablesmarketisexpectedtogrowat1015%in20072008.Itisgrowingveryfastbecauseof
riseinlivingstandards,easyaccesstoconsumerfinance,andwiderangeofchoice,asmany

foreignplayerswereenteringinthemarketwiththeincreaseinincomelevels,easyavailability
offinance,increaseinconsumerawareness,andintroductionofnewmodels,thedemandfor
consumerdurableshasincreasedsignificantly.Productslikewashingmachines,airconditioners,
microwaveovens,colortelevisions(CTV)werenolongerconsideredluxuryitems.However,
therewerestillveryfewplayersincategorieslikevacuumcleaners,anddishwashersConsumer
durablessectorischaracterizedbytheemergenceofMNCs,exchangeoffers,discounts,and
intensecompetition.ThemarketshareofMNCsinconsumerdurablessectoris65%.MNC's
major target is the growing middle class of India. MNCs offer superior technology to the
ConsumerswhereastheIndiancompaniescompeteonthebasisoffirmgraspofthelocalmarket,
their wellacknowledged brands, and hold over wide distribution network. However, the
penetration
LeveloftheconsumerdurablesisstilllowinIndia.
IndianConsumerdurablesmarketusedtobedominatedbyfewdomesticplayerslikeGodrej,
Voltas,AllwynandKelvinator.Butpostliberalizationmanyforeigncompanieshaveenteredinto
IndianmarketdethroningtheIndianplayersanddominatingIndianmarketthemajorcategories
beingCTV,REFRIGRATOR,MICROWAVEOVENandWASHINGMACHINES.

INDUSTRYPROFILE
TheConsumerDurablesindustryconsistsofdurablegoodsandappliancesfordomesticusesuch
astelevisions,refrigerators,airconditionersandwashingmachines.Instrumentssuchascell
phonesandkitchenapplianceslikemicrowaveovenswerealsoincludedinthiscategory.The
sectorhasbeenwitnessingsignificantgrowthinrecentyears,helpedbyseveraldriverssuchas
theemergingretailboom,realestateandhousingdemand,greaterdisposableincomeandan
overallincreaseinthelevelofaffluenceofasignificantsectionofthepopulation.Theindustryis
representedbymajorinternationalandlocalplayerssuchasBPL,Videocon,Voltas,BlueStar,
MIRCElectronics,Titan,Whirlpool,etc.

The consumer durables industry can be broadly classified into two segments: Consumer
ElectronicsandConsumerAppliances.ConsumerAppliancescanbefurthercategorizedinto
BrownGoodsandWhiteGoods.Thekeyproductlinesundereachsegmentwereasfollows.
IndustrySize,Growth,Trends
TheconsumerdurablesmarketinIndiawasestimatedtobearoundUS$5billionin200708.
Morethan7millionunitsofconsumerdurableapplianceshavebeensoldintheyear200607
withcolourtelevisions(CTV)formingthebulkofthesaleswith30percentshareofvolumes.
CTV,refrigeratorsandAirconditionerstogetherconstitutemorethan60percentofthesalesin
termsofthenumberofunitssold.
Intherefrigeratorsmarket,thefrostfreecategoryhasgrownby8.3percentwhiledirectcool
segmenthasgrownby9percent.CompanieslikeLG,WhirlpoolandSamsunghaveregistered
doubledigitgrowthinthedirectcoolrefrigeratormarket.
Inthecaseofwashingmachines,thesemiautomaticcategorywithahigherbaseandfully
automaticcategorieshavegrownby4percentto526,000unitsandby8percentto229,000
units,respectively.Intheairconditionerssegment,thesalesofwindowACshavegrownby32
percentandthatofsplitACsby97percent.
Sincethepenetrationintheurbanareasfortheseproductsisalreadyquitehigh,themarketsfor
bothCTVandrefrigeratorswereshiftingtothesemiurbanandruralareas.Thegrowthacross
productcategoriesindifferentsegmentsisassessedinthefollowingsections.
ConsumerElectronics
TheCTVproductionwas15.10millionunitsin200708andisexpectedtogrowbyatleast25
percent.Atthedisaggregatedlevel,conventionalCTVvolumeshavebeenfallingwhileflatTVs
have grown strongly. Market sources indicate that most CTV majors have phased out
conventionalTVsandhavebeeninsteadfocusingmoreonflatTVs.TheflatsegmentofCTVs
nowaccountforover60percentofthetotaldomesticTVproductionandislikelytobearound

65 per cent in 200708.Highend products such as liquid crystal display (LCD)and plasma
displayCTVgrewby400percentand150per

COMPANYPROFILEOFSAMSUNGELECTRONICS
Samsung Electronics Co., Ltd.is a South Koreanmultinational electronicscompany
headquarteredinSuwon,SouthKorea.[2]ItistheflagshipsubsidiaryoftheSamsungGroupand
theworld's largest information technology companyby revenues since 2009.[3]Samsung
Electronicshasassemblyplantsandsalesnetworksin61countriesandemploysaround221,000
people.[4]

SamsungElectronicsistheworld'slargestmobilephonemakerby2011unitsalesand world's
secondlargestsemiconductorchipmakerby2011revenues(afterIntelCorporation).Ithasbeen
theworld's largesttelevisionmanufacturersince2006andtheworld's largestmakerofLCD
panelsforeightconsecutiveyears.[5]Ithasthelargestmarketshareworldwideinmemorychips.
The company was the world's largest vendor ofsmart phonesin 2011.[7]Samsunghas also

[6]

establishedaprominentpositioninthetabletcomputermarket,withthereleaseoftheAndroid
poweredSamsungGalaxyTab.
SAMSUNGHISTORY
1969to2000
Samsung Electric Industries was established as a subsidiary ofSamsung Groupin 1969
inSuwon,SouthKorea.[9]Itsearlyproductswereelectronicandelectricalappliancesincluding
televisions,calculators,refrigerators,airconditionersandwashingmachines.In1970,Samsung
Groupestablishedanothersubsidiary,SamsungNEC,jointlywithJapan'sNECCorporationto
manufacturehome appliancesandaudiovisual devices. In 1974, the group expanded into
thesemiconductorbusiness by acquiring Korea Semiconductor, one of the first chipmaking
facilitiesinthecountryatthetime.TheacquisitionofKoreaTelecommunications,anelectronic
switchingsystemproducer,wascompletedatthestartofthenextdecadein1980.
By 1981, Samsung Electric Industries had manufactured over 10 millionblackandwhite
televisions. In February 1983, Samsung's founder,Lee Byungchull, made an announcement
laterdubbedthe"Tokyodeclaration,"inwhichhedeclaredthatSamsungintendedtobecome
aDRAM(dynamicrandomaccessmemory)vendor.Oneyearlater,Samsungbecamethethird
companyintheworldtodevelopa64kbDRAM.In1988,SamsungElectricIndustriesmerged
withSamsungSemiconductor&CommunicationstoformSamsungElectronics.
SamsungElectronicslauncheditsfirstmobilephonein1988,intheSouthKoreanmarket.Sales
wereinitiallypoorandbytheearly1990sMotorolaheldamarketshareofover60percentinthe
country'smobilephonemarketcomparedtojust10percentforSamsung. [10]Samsung'smobile

phonedivisionalsostruggledwithpoorqualityandinferiorproductsuntilthemid1990sand
exitfromthesectorwasafrequenttopicofdiscussionwithinthecompany.
Samsung Electronics acquired a 40 percent stake in AST Research, a United Statesbased
personalcomputermaker,forUS$378millioninFebruary1995.
In1996,thecompanydevisedaplantosponsormajorsportingevents,resultinginitbecoming
anofficialsponsorforthe1998WinterOlympicsheldinNagano,Japan.[12]
InDecember1998SamsungElectronicsagreedtosellitspowerdevicedivisiontoFairchild
SemiconductorCorporationforUS$455million.
2000to2010

TheSamsungdisplayatthe2008InternationaleFunkausstellunginBerlin
Forfourconsecutiveyears,from2000to2003,Samsungpostednetearningshigherthanfive
percent;thiswasatatimewhen16outofthe30topSouthKoreancompaniesceasedoperating
inthewakeoftheunprecedentedcrisis.[14][15]
In2005,SamsungElectronicssurpassedJapaneserival,Sony,forthefirsttimetobecomethe
world'stwentiethlargestandmostpopularconsumerbrand,asmeasuredbyInterbrand.
In 2007, Samsung Electronics became the world's secondlargestmobilephonemaker,
overtakingMotorolaforthefirsttime.In2009,SamsungachievedtotalrevenuesofUS$117.4

billion,overtakingHewlettPackardtobecometheworld'slargesttechnologycompanymeasured
bysales.
In2009and2010,theUSandEUfinedthecompany,togetherwitheightothermemorychip
makers, for its part in a pricefixing scheme that occurred between 1999 and 2010. Other
companies fined includedInfineon Technologies,Elpida MemoryandMicron Technology.In
December 2010, the EU grantedimmunityto Samsung Electronics for acting as
aninformantduringtheinvestigation(LGDisplay,AUOptronics,ChimeiInnoLux,Chunghwa
PictureTubesandHannStarDisplaywereimplicatedasresultofthecompany'sintelligence).
2010topresent
Despiteconsistentgrowth,Samsung,alongwithitschairmanLeeKunhee,hasdevelopeda
reputationforinsecurityregardingitsfinancialstabilityandthepotentialforfuturecrisesto
arise.AfterreturningfromatemporaryretirementperiodinMarch2010,Kunheestatedthat
"SamsungElectronics'futureisnotguaranteedbecausemostofourflagshipproductswillbe
obsoletein10yearsfromnow."
Samsunghasemphasizedinnovationinitsmanagementstrategysincetheearly2000sandit
againhighlightedinnovationaspartofcorestrategieswhenitannouncedtheVision2020in
whichthecompanysetanambitiousgoalofreaching$400billioninannualrevenueswithinten
years.Inordertocementitsleadershipintheareasofmemorychipandtelevisionproduction,
the company has invested aggressively in research and development. The company has 24
researchanddevelopmentcentersaroundtheworld.
In April 2011, Samsung Electronics sold itsHDDcommercial operations toSeagate
Technologyfor approximately US$1.4 billion. The payment was composed of 45.2 million
Seagate shares (9.6 percent of shares), worth US$687.5 million, and a cash sum for the
remainder.
Inthefirstquarterof2012,thecompanybecamethehighestsellingmobilephonecompany
when it overtook Nokia, selling 93.5 million units compared to Nokia's 82.7 million units.

SamsungalsobecamethelargestsmartphonevendorasaresultofstrongsalesofitsGalaxySII
andGalaxyNotedevices.

OurVision
Samsungisguidedbyasingularvision:toleadthedigitalconvergencemovement.
Webelievethatthroughtechnologyinnovationtoday,wewillfindthesolutionsweneedto
addressthechallengesoftomorrow.Fromtechnologycomesopportunityforbusinessestogrow,
forcitizensinemergingmarketstoprosperbytappingintothedigitaleconomy,andforpeople
toinventnewpossibilities.
Itsouraimtodevelopinnovativetechnologiesandefficientprocessesthatcreatenewmarkets,
enrichpeopleslivesandcontinuetomakeSamsungatrustedmarketleader
OurMission
EverythingwedoatSamsungisguidedbyourmission:tobethebestdigitalCompany.

Samsunggrewintoaglobalcorporationbyfacingchallengesdirectly.Intheyearsahead,our
dedicatedpeoplewillcontinuetoembracemanychallengesandcomeupwithcreativeideasto
developproductsandservicesthatleadintheirmarkets.Theiringenuitywillcontinuetochart
Samsungscourseasaprofitable,responsibleglobalcorporation.

BRANDVALUE
AtSamsung,wefollowasimplebusinessphilosophy:todevoteourtalentandtechnologyto
creatingsuperiorproductsandservicesthatcontributetoabetterglobalsociety.
Everyday,ourpeoplebringthisphilosophytolife.Ourleaderssearchforthebrightesttalent
fromaroundtheworld,andgivethemtheresourcestheyneedtobethebestatwhattheydo.The
resultisthatallofourproductsfrommemorychipsthathelpbusinessesstorevitalknowledge
tomobilephonesthatconnectpeopleacrosscontinentshavethepowertoenrichlives.And
thatswhatmakingabetterglobalsocietyisallabout.
OurValues
Webelievethatlivingbystrongvaluesisthekeytogoodbusiness.AtSamsung,arigorouscode
ofconductandthesecorevaluesareattheheartofeverydecisionwemake.

People
Quitesimply,acompanyisitspeople.AtSamsung,werededicatedtogivingourpeoplea
wealthofopportunitiestoreachtheirfullpotential.

Excellence
Everything we do at Samsung is driven by an unyielding passion for excellenceand an
unfalteringcommitmenttodevelopthebestproductsandservicesonthemarket.

Change
In todays fastpaced global economy, change is constant and innovation is critical to a
companyssurvival.Aswehavedonefor70years,wesetoursightsonthefuture,anticipating
marketneedsanddemandssowecansteerourcompanytowardlongtermsuccess.

Integrity
Operatinginanethicalwayisthefoundationofourbusiness.Everythingwedoisguidedbya
moralcompassthatensuresfairness,respectforallstakeholdersandcompletetransparency.

Coprosperity
Abusinesscannotbesuccessfulunlessitcreatesprosperityandopportunityforothers.Samsung
is dedicated to being a socially and environmentally responsible corporate citizen in every
communitywhereweoperatearoundtheglobe.
STANDINGPOSITIONOFTHECOMPANY

SamsungIndiaaimstobetheBestCompanyinIndiabytheYear2011.BestCompanyin
termsofboththeinternalworkplaceenvironmentaswellastheexternalcontextinwhichthe
Companyoperates.SamsungaimstogrowinIndiabycontributingtotheIndianeconomyand
makingthelivesofitsconsumerssimpler,easierandricherthroughitssuperiorqualityproducts.
OuraimistogaintechnologicalleadershipintheIndianmarketplaceevenasourgoalistoearn
theloveandrespectofmoreandmoreofourIndianconsumers.Mr.S.H.Oh,President&CEO
SamsungSouthWestAsiaRegionalHeadquarters.

FINANCIALHIGHLIGHTS
Annual

1. SummaryP/L
1.SummaryP/L

20112013

Revenue

20112013

20112013

2011

2012

2013

165,002

201,104

228,693

2011

2012

2013

Grossprofit

52,857

74,452

90,996

OperatingProfit

15,644

29,049

36,785

ProfitbeforeIncomeTax

17,192

29,915

38,364

NetProfit

13,759

23,845

30,475

*'09~figuresareKIFRSbased

2.Segment/Regionalinformation
(1)Revenuebysegment

20112013
*SegmentrevenueincludesIntersegmentrevenue.
(2)Operatingprofitbysegment

20112013
* Segment operation profit includes Intersegment revenue operation profit.
*SegmentinformationBefore'11:IM=(Former)Telecom,CE=(Former)DM+DA.

(3)RegionalportionofRevenue

20112013
3.SummaryB/S

2011

2012

2013

TotalAssets

155,631

181,072

214,075

CurrentAssets

71,502

87,269

110,760

Cash&cashequivalents

26,878

37,448

54,496

Trade&otherreceivables

21,882

23,861

24,989

Inventories

15,717

17,747

19,135

84,129

93,803

103,315

PP&E

62,044

68,485

75,496

TotalLiabilities

53,786

59,591

64,059

CurrentLiabilities

44,319

46,933

51,315

10,277

9,489

8,437

NoncurrentAssets

Trade&otherpayables

2011

2012

2013

Accountspayables&others

16,057

16,895

20,541

TotalBorrowings

14,647

14,895

11,161

101,845

121,480

150,016

898

898

898

Totalshareholders'equity
CapitalStock

*Cash&cashequivalents=Cash+Cashequivalents+Shorttermfinancialinstruments+Short
term
availableforsalesecurities
* Total borrowings: Shortterm borrowings + Current potion of longterm Borrowings,
Lontermborrowings,etc.
4.SummaryCashflowStatement

20112013

2011

2012

2013

Cashatbeginningoftheperiod

22.48

26.88

37.45

Cashflowfromoperations

22.92

37.97

46.71

Cashflowfrominvesting

21.62

24.85

25.19

Cashflowfromfinance

3.11

1.86

4.14

Netincrease/decreaseincash

4.40

10.57

17.05

Cashatendoftheperiod

26.88

37.45

54.50

Netcash

12.23

22.55

43.34

5.FinancialRatios

2011

2012

2013

ROA

9.5%

14.2%

15.4%

ROE

14.4%

21.4%

22.4%

Debt/EBITDA

0.50

0.34

0.21

EBITDA/InterestExpenses
*

Debt=

2011

2012

2013

45

76

120

borrowings

total

*EBITDA=OperatingProfit+Depreciation

2011

2012

2013

NetMargin(%)

8.3%

11.9%

13.3%

AssetTurnover

1.14

1.19

1.16

FinancialLeverage

1.52

1.51

1.46

Currentratio(%)

161%

186%

216%

Liability/Equity(%)

53%

49%

43%

Debt/Equity(%)

14%

12%

7%

Netdebt/Equity(%)

12%

19%

29%

RESEARCHMETHODOLOGY
RESEARCHDESIGN
UniverseoftheStudy
The present study adopts an analytical and descriptive research design. The data of the
samplecompanies(foraperiodofthreeyearsfrom2011to2013)hasbeencollectedfrom
theannualreportsandthebalancesheetpublishedbythecompaniesandthewebsitesofthe
companies.

AfinitesamplesizeoffourcompanieslistedontheNationalStockExchange(NSE)has
beenselectedforthepurposeofthestudy.TheyareLG&SAMSUNG.
ThevariablesusedintheanalysisofthedataareDebtEquityRatio(DER),LongTermDebt
EquityRatio,CurrentRatio,FixedAssetsandEarningPerShare(EPS).Whileinterpreting
theresults,thestatisticaltoolofonewayAnalysisofVariance(ANOVA)hasbeenused.
SampleoftheStudy
Sampling Technique: The study is done with special reference to private sector
Electronicscompanies.Thereasonbeingthatthedataorthefinancialstatements are
readilyavailableforthem.Apartfromthis,privatesectorcompanieshaveshownbest
performance in the previous year so it is interesting to know the best performing
company out the selected sample companies. Thus, the technique of Convenience
Samplingisbeingadoptedforthestudy.Theelectionofsamplecompaniesismadeon
thebasisofmarketcapitalization.
SampleSize:TwoPrivateSectorcompaniesarechosenassamplesizeforthestudyon
accountofhavingthehighestmarketcapitalization.
DataCollection
Financial statements are the raw data collected from various websites such as
www.capitaline.com,www.kotaksecurities.comandothercompanywebsites.
TimePeriodoftheStudy
ThestudyhasbeenconductedduringFeb2013toMar2011.
ToolsusedforAnalysis

 RatioAnalysis:Ratioshavebeencalculatedforthepastthreeyearsforthepurposeof
analysis.Ratios beingdesignedarenamedas: DebtEquityRatio(DER),LongTerm
DebtEquityRatio,CurrentRatio,FixedAssetRatioandEarningPerShare(EPS).
AnalysisofVariance(ANOVA):Thestatisticaltoolthatisusedfortestinghypothesisis
onewayAnalysisofVariance(ANOVA).
2.4.1

FinancialAnalysis

Thesectionofstudyembodiesthecalculationandanalysisofselectedvariablestakeninto
reflection for the study purpose. The ratios are being calculated by the aid of raw data
availableontheconcernedwebsite.TherawdataencompassesYearlyResultsandBalance
Sheetofthesamplecompanies.Aftercalculationofratios,analysisofindividualratiois
being done. The statistical tool used for analysis is OneWay Analysis of Variance
(ANOVA).AnalysisisperformedbyusingsoftwareknownasMicrosoftExcel.
Theratiosbeingcalculatedforthepurposeofanalysisoffinancialperformanceare:
DebtEquityRatio(DER).
LongTermDebtEquityRatio.
CurrentRatio.
FixedAssetRatio.
EarningsPerShare(EPS).

MAJORFINDINGS
TheaverageDebtEquityRatioofSamsungissignificantlyhigherthanthatofLG.
AverageLongTermDebtEquityRatioofSamsungissignificantlyhigherthanthat
ofAIRTELLG.
TheaverageCurrentRatioofSamsungissignificantlyhigherthanthatofLG.
TheaverageFixedAssetRatioofLGissignificantlyhigherthanthatofSamsung.
TheaverageEPSofLGissignificantlyhigherthanthatofSamsung.Hencemaking
Samsungisoneofthemostefficientcompanyinthetermsofgeneratingearnings.

LIMITATIOINSOFTHESTUDY
Thestudyhasfollowinglimitations:
Thestudyhaslackofcontactwithcompanypersonnelactedashindranceinthestudy.
Thestudyisbasedonthelimitedknowledge&informationprovidedbythewebsites
andsoftwareavailableoninternet.
Thesizeofthesampleistoosmalllookingtothenatureofthestudyandduetotome
andmoneyconstraintsrelativelysmallersamplewaschosen.
Thebasisofselectionofsampleforthestudywasvague.Randomlyindividualswere
pickeduptoprovidetheirresponses.
There are only five parameters taken for study however there are certain other
parametersonthebasisofwhichaccurateinferencecanbedrawn.
The ratings given are on the basis of data available on internet however the future
efficiencyofthelowperformingcompanycanbebetter.

CONCLUSION
ThepresentstudyisthefundamentalanalysisoftheelectronicscompaniesinIndia.Fromthe
interest of investors the study gives good analysis on the basis of which the individual
investorcangetideaonwhichcompanytoinvestmoreorratherrelyonitinfuturetoget
maximum returns. The parameters selected for the analysis proves to be useful for the
investortodrawsomeconclusionoutofthesamplecompanies.Howeverallthetwosample
companiesarehavingsomeuniquestrengthsonthebasisofwhichtheycanexpandtheir
businessinfutureandhencewecannotsaythataparticularcompanyisbestintheindustry.
Moreovertheparameterstakenarelimitedfortheanalysiswhiletheactualinformationofthe
companycomesoutwhenthewholesetofparametersaretakenforanalysispurpose.Hence
wecansaythatthepresentstudygivestheoverviewofthestandingsofthemajorelectronic
companiesinIndiaonthebasisofcertainpredeterminedparameters.

BIBLIOGRAPHY
Informationhasbeensourcedfromnamely,books,newspapers,journals,industryportals,
government agencies, industry news, developments and through access to database. The
followingarethelistofwebsitesthatwerebeingusedforthedatacollectionduringresearch
study.
http://www.capitaline.com/
http://www.wikipedia.org/
http://www.oecd.org/
http://www.legalserviceindia.com/
http://www.dot.gov.in/
http://www.economictimes.indiatimes.com/

 http://www.ibef.org/
http://www.domainb.com/
http://www.perry4law.wordpress.com/
http://www.indianembassy.org/
http://www.financialexpress.com
http://www.pib.nic.in/
http://www.search.epnet.com/
http://www.scribd.com/
http://www.samsung.com/
http://www.lgelectronics.in/