samsung india electronics ltd Management discussions

SAMSUNG INDIA ELECTRONICS PRIVATE LIMITED ANNUAL REPORT 2009-2010 MANAGEMENT DISCUSSION AND ANALYSIS PERFORMANCE: Your Directors are pleased to inform that your Company clocked an increase of 49.68% in its Sales and other Income for the year ended 31st March, 2010 as compared to the previous year. The Profit before tax increased by 236.20% during the period under review as compared to the same period last year. In spite of operating in an economy that was recovering from the slowdown , your Company put up a strong performance on the strength of continuous product innovation, sustained brand building and innovative advertising programs. Your Company not only consolidated its leadership in several categories but also created new markets to drive its growth. Your Company had the privilege of being the first Company to launch Full High Definition LED TVs in the Indian market. In fact, based on its aggressive advertising and product displays at multi brand dealer counters, the Company succeeded in creating a strong initial interest in LED TVs. Your Company could also sustain the momentum for its LCD TV category by launching new models and retained its leadership in the LCD category with a market share of 34.5% for the calendar year 2009. The Company also grew its Flat TV sales by 16% and ended the calendar year 2009 with a 24.2% volume market share, thereby retaining its No.2 Position in the Indian market. Your Company gave a strong boost to its mobile business by launching innovative new touch screen models, thereby establishing its leadership in the touch screen segment with an over 30% market share in this segment. Particularly successful in its touch screen series were its flagship models Samsung Star and its Corby series of messaging phones. Your Company launched innovative products like the Worlds First Solar powered mobile phone Solar Guru (Guru E1107) in the Indian market as well as created a new segment in the Indian market by launching its first Outdoor phone , Samsung Marine. Your Company launched over 40 mobile phones across the entry level Guru series, the multimedia segment, the business phone category as well as the touch screen segments in the Indian market during the calendar year 2009. Based on its differentiated product portfolio, channel expansion and innovative advertising, your Company consolidated its position as the No. 2 Player in the Mobile market in India. Your Company doubled its Mobile Volumes in the calendar year 2009 and ended the year with a 14.9 value market share and a 12.8 volume market share. Your Company achieved a strong growth in Home Appliances in the calendar year 2009 through new product innovations. The Company launched its new, most energy efficient, 5 Star rated Freshtech Ultima range of frost free refrigerators, differentiated on account of its Cool Pack feature. The Cool Pack feature, earlier available only in the Freezer section, was introduced in the Refrigerator section also. The Cool Pack feature was developed by the Companys R& D team in India and Samsung has applied for a patent on this technology in India. The Company made strong gains in the AC business by launching its new star rated, bio sleeplus air conditioner range, comprising of 18 Split AC and 7 Window AC models, differentiated on account of the unique Biosleep and Comfort Care features incorporated in the range. Your Company also commenced Split AC manufacturing at Chennai (November 2009) and Noida (February 2010), each having a capacity of 0.6 million units per annum. Your Company also introduced Indias first Washing machines with floral designs, in its Fully Automatic Top loading machine range along with the introduction of new high capacity models in 10.5 and 8.5 Kgs segment. The Top loading washing machines boast of revolutionary features such as Diamond drum and Mist Shower technology that reduces the amount of water used by around 20% while increasing the washing performance. Your Company ended the calendar year 2009 with a 20.6% market share in the fully automatic segment and 17.5% market share in the overall washing machine segment. The IT sector continued to feel the impact of the economic downturn and your Company succeeded in dealing with this slowdown through its range expansion in the netbook/notebook segment; launch of its flagship series of LCD monitors - its feature rich Samsung Lavender Series and strengthened its Business to Business and government sales for Printers. Your Company garnered a Volume market share of 21.9% and value market share of 25.7% in LCD Monitors for the first Quarter of the Year 2010 and attained the No.1 Slot in the unbundled LCD Monitor category. Your Company broke new ground in terms of its Corporate Social responsibility by instituting the First ever Tagore Literature Awards 2009 along with Sahitya Akademi under the aegis of Samsung Hope Project. With its theme of Building new bridges of Hope, the Samsung Hope Project supports projects in the areas of culture, education and social welfare. The Tagore Literature Awards 2009 awarded the best of literary contributions in 8 Indian languages - Bengali, Bodo. Gujarati, Hindi, Kannada, Kashmiri, Punjabi and Telugu. The winners of the First Tagore Literature Awards have been chosen across different literary genres of essays, poetry, biography/autobiography etc. for the period 2005-08 across 8 Indian languages. The felicitation function was held in January 10 and was graced by Her Excellency Ms Kim Yoon-ok , the First Lady of the Republic of Korea along with leading Indian luminaries from the field of art, literature and culture. The Awards seek to recognize the best literary contributions by writers in 24 Indian languages over three years. As part of the Hope Project, your Company organized the 3rd Samsung International Womens Film Festival in association with INKO centre, Chennai in March 2010. The festival showcased 175 films from 53 countries and helped build bridges of culture across nations and languages. Your Company has also set up two Smile Twin e-Learning Program (STeP) centers in association with Smile Foundation at Noida and Sriperumbudur, Chennai. Set up under the aegis of the Samsung Hope Project, the e-learning center is a re-affirmation of the Companys commitment to contributing to Indian society. The STePs are primarily designed to offer job oriented skills to youth from the less privileged sections of the society living in urban slums and peripheral rural areas. Under the program, training is imparted to these youth in basic computers and retail sales management skills along with proficiency in spoken and written English. During the calendar year 2009, your Company won over 75 Product Awards across its IT, Consumer Electronics and Telecom sectors. Your Directors are hopeful that your Company shall continue to make rapid strides towards its goal of becoming a Top Electronics Company in the Indian market.