Pre-MBA Internship

ON
Organisational Structure
Training At
Samsung Electronics
India Ltd.

(Department Of Management Studies)

CHRIST UNIVERSITY

Submitted by:
Rushank Joseph
Reg. No.: 1020918

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 1st MBA- I.B

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 Contents

History………………………………………..…………………………….1
Profile of the Products…………………………………..........…..…….......3
Mission/ Vision……………………………………...…….…………..…....9
Objectives……………………………..……………………….………..…12
Strategies………………………………………………………..…….…...13
Values………………………………...……………………………….…...17
Organisation Structure ……………………………………………..……..19
Policies & Procedures………………………………………………....…..21
SWOT Analysis………………………………………………………..….30
Key Result Areas………………………………………………………….31
Significant Factors for Success…………………………………………...32
Product Promotional Measures……………………………..…………….36
Manager Development Process & Training……………………………....41
The Appraisal Process…………………………………………….………42
System followed for purchase of Raw Material…………………….…….43
Financial Highlights……………………………………………………....45
Future Plans…………………………………………………………….....52
Advantages, Drawbacks and Recommendations……………………….…53
Annexure………………………………………………………………….54

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 ACKNOWLEDGEMENT

On completing this project it is my pleasure to thank to acknowledge and extend

my heartfelt gratitude to the following people who made the completion of this
project possible:
My teachers Prof. G. Ramachandran and Prof. Vedanta for their vital
encouragement and support.
Mr. Devender Sharma (G.M- H.R & Admn.), Samsung Electronics India Ltd, for
his invaluable contribution and support and all the employees of Samsung who
helped me in this project.
At last but not the least I would like to thank Christ University Institute. Of
Management, Bangalore for giving me the opportunity to learn and explore various
fields.

Rushank Joseph

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 CERTIFICATE:

This is to certify that Rushank Joseph student of 1st MBA- I.B of Christ University,
Bangalore having Reg. No. 1020918 has undergone his O.S.T with Samsung
Electronics India Ltd. under my guidance.
I am satisfied with his efforts.

G. Ramachandran

(Mentor)

HISTORY

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 The brand SAMSUNG started on March 1, 1938 when Byung-Chull Lee, the
founding chairman of Samsung initiated a business in Korea with a
capital of only 30,000 won. The primary products of what was then Samsung
were dried Korean fish, fruits, and vegetables traded from Beijing and
Manchuria.
The company prospered and Lee made business starting the first South
Korea’s sugar manufacturing facility moved its head office to Seoul in 1947.
In 1954, Lee built the largest woolen mill ever in the country and the
company took on an aspect of a major company.
Samsung diversified into many areas and Lee sought to establish Samsung as
Mr. Byung-Chull Lee an industry leader in a wide range of enterprises.
The company started moving into businesses such as insurance, securities, and
retail.
In the late 1960s, Samsung Group began the electronics industry. It formed several electronics-related
divisions, such as Samsung Electronics Devices Co., Samsung Electro-Mechanics Co., Samsung
Corning Co., and Samsung Semiconductor & Telecommunications Co., and made the facility in Suwon.
Its first product was a black-and-white television set. In 1980, the company started to build
telecommunications devices. Its early products were switchboards. The facility were developed into the
telephone and fax manufacturing systems and became the centre of Samsung's mobile phone
manufacturing. The company grouped them together under Samsung Electronics Co., Ltd. in the 1980s.
In the late 1980s and early 1990s, Samsung Electronics invested heavily in research and development,
investments that were pivotal in pushing the company to the forefront of the global electronics industry.
By the 1980s Samsung was manufacturing, shipping, and selling a wide range of appliances and
electronic products throughout the world.
The 1990s saw Samsung rise as an international corporation. Not only did it acquire a number of
businesses abroad, but also began leading the way in certain electronic components.
Samsung entered India in December 1995 as a 51:49 joint venture with Reasonable Computer Solutions
Pvt Ltd (RCSPL), owned by Venugopal Dhoot of the Videocon group. In 1998, RCSPL diluted its stake
in Samsung to 26% and in November 2002, the Foreign Investment Proposal Board (FIPB) cleared
Samsung's proposal to buy RCSPL's remaining (23%) stake.
With Samsung buying the total stake of RCSPL, it became a wholly-owned subsidiary of its South
Korean parent company. Initially, Samsung launched is operations in North India, and then slowly
expanded its operations.
By January 1998, the company had a presence all over the country. Samsung announced profits of Rs.50
million on a turnover of Rs. 5.40 billion for the calendar year 1998. In 2000, Samsung set up an R&D
center for the manufacture of CTVs at Noida (Uttar Pradesh) with a total investment of US$5 million.
This center became Samsung's regional hub catering to the design requirements in India, Middle East
and South East Asia.
In 2002, Samsung established manufacturing facilities for colour televisions, microwave ovens, washing
machines and air conditioners at Noida, Uttar Pradesh. It also had a presence in consumer electronics,
information technology products, mobile phones and home appliances. Samsung's flagship businesses
were consumer electronics and home appliances, which contributed more than 60% of its revenues.
In November 2007, Samsung commenced the manufacture of Colour televisions and LCD televisions at
its state–of-the-art manufacturing facility at Sriperumbudur, Tamil Nadu. The Company is also
manufacturing fully automatic front loading washing machines at its Sriperumbudur facility. Besides,

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Samsung Electronics India Software Operations (SISO) is one of the eleven Research & Development
centers of Samsung Electronics Co. Ltd., housed in the IT hub of India, Bangalore. With its inception
dating back to February 1996, as a liaison office, today it has grown in magnitude and proportions as a
center of excellence in research and software development encompassing a wide range of technology
domains.
Samsung India is the hub for Samsung's South West Asia Regional operations.

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PROFILE OF THE PRODUCTS

A. Mobile phones

• Touch Phone
• Style Phone
• Multimedia Phone
• Business Phone
• Guru series
• Dual sim Phone
• CDMA Phone
• Mobile Phone Accessories

A. T.V. / Audio / Video

• Television

Samsung TVs offer world-class picture quality, design and energy efficiency.

○ LED TV
Redefine the way we watch television.
○ LCD TV
All the purity of liquid crystal.
○ Plasma TV
Enjoy the Superior cinematic experience.
○ Ultra SlimFit TV
40% slimmer and 20% lighter.
○ Flat TV
Technology and style combine for captivating entertainment.

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 • Blu-ray

Best-in-class picture, sound and wireless streaming, Thrilling High Definition Images, Heart
pounding audio and a blazing fast Wi-Fi connection for a wireless streaming of data from PC
to the player.

• DVD Player
Samsung DVD Players with BD wise and Best Playability
Samsung offers excellence in standard and HD DVD players alike boasting features like
1080p upconversion and Touch of Colour design.

○ HD DVD Player
Samsung offers excellence in HD DVD player with boasting features like HDMI, 1080p
upconversion, Touch of Coluor design and USB for easy connection and CD-Ripping.
○ Standard DVD Player
Samsung Standard DVD players can play any DVD, regardless of its condition. Its rolling
actuator technology automatically adjust the lens angle so that it can read the information
stored in the disc with 100% accuracy.

• Home Theater

Gives DVDs an upgrade with crystal clear detail and cinema- quality sound.

• Multimedia Player

The Samsung series of MP3 Players were built specifically for the Windows-saavy user,
offering drag-and-drop capabilities. For those who prefer to sync up playlists, an interface
within Windows Media Player was already built-in, ensuring that nearly every PC user in the
world had the software necessary.

A. Camera / Camcorder

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 • Digital Camera

○ Samsung Digital SLR Series

Range of professional Digital Single Lens Reflex cameras.

○ Samsung High-End Series

High zoom digital camera range.
○ Samsung NV Series
True premium digital camera range that represents your values.
○ Samsung i Series
With slim and stunning designs, a text viewer, movies, music and a tour guide function.
○ Samsung S Series
A convenient point and shoot digital camera range, ease to use and has affordable
price.
○ Samsung L Series
Slim, lightweight and advanced features bring a reliable photo world.

• Digital Camcorder

○ DVD Camcorder
Capture the picures straight onto DVD and play them back from your DVD player.

○ Flash Memory Camcorder

shoots for as long as one like with the Samsung flash memory camcorder. Its advanced
integrated image chip efficiently reduces power consumption, enabling longer battery life
and recording time.

A. Home Appliances

• Refrigerator

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 ○ Samsung RM-25DGSH
the 1st four-door refrigerator in the world.

○ The Samsung Frost-Free refrigerator models

have Coolever zone and cool booster technology that provide 3-D cooling to the food and
vegetables thereby maintaining the nutrition. They are also the most energy efficient and
do not need a stabilizer.

• Air Conditioner

○ Split Air Conditioner

designed for larger rooms and halls where a single window AC in ineffective.
Samsung provides with a variety of air conditioners with stylish, sophisticated design,
while paying attention to high performance and health.

○ Window Air Conditioner

Ideal for small rooms or in a room where extra cooling is required for e.g. kitchen
Provides cool, clean, healthy and fresh environment with utmost comfort in the hottest of
weather.
Some special features available in different Samsung window and split ACs include Anti-
Fungus or Bacterial Filters incorporated within the air conditioner that purify the air
thereby leaving the air fresh for people with respiratory problems

• Washing Machine

○ Front Loading
Samsung front loading washing Machines incorporate a host of futuristic innovation
like Ceramic Heater. It provides the convenience of washing clothes with
technologically washing machine that understands washing requirement of different
clothes.
○ Top Loading
Power-packed pure strength combined with the touch of gentle care.

○ Semi Automatic
Samsung Semi Automatic Washing Machines are specially developed for the distinct
Indian conditions. These technologically advanced machines incorporate Double
Storm washing system that removes dirt and dust from clothes, thereby leaving them
clean.

• Microwave Oven
SAMSUNG manufactures variety of microwave ovens with different features and size suitable
for every household.

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 Important attribute includes:
1) Convection Microwave which can be used to cook food which is
crispier from inside as well as outside. It uses a fan and a
heating element to create air flow patterns inside the microwave oven
2) Grill Microwaves which can be used to cook food which is crispier from outside and juicer
from inside.
3) The Samsung Solo which provides uniform heat distribution, multiple power levels and a
host of other features, it is ideal for tasks like defrosting, reheating and cooking.

• Smart Oven
1) Features the optimum mix of fan oven cooking with microwaves to deliver food in record
time.
2) Ideal for baking, roasting, reheating and defrosting meals.
3) Another advanced feature is the built in scanner that reads bar code information from
instant and packaged meals, adjusting cooking time and temperatures according.
4) Microwave -900W, grill -1250W, convection power-2050W

A. PC / Peripherals/ Printer

• Notebook
• Monitor
○ Desktop Monitor
○ Large Format Monitor
○ Network Monitor

• Optical Disc Drive

Samsung offers various Optical Media Solutions:
○ CD ROM Drives
DVD Writer Drive is available in Galf-Height form factors in spped ranging up to 16X
DVD+R Writing, 16XDVD-R Writing, 8X Double Layer DVD+R Writing and 4X Double
Layer DVD-R Writing, 8X DVD+RW Writing and 6X DVD-RW Writing.
○ DVD Writers
Dombo Drive is available in Half-Height form factors in speed ranging up to 52X Writing,
32XRewriting, and 52X Reading. It combines CD-Rom, DV-RW and DVD-Rom Drive into
one mechanism.

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 ○ COMBO Drives
DVD-ROM Drive is avaiable in Half-Height form factors in spped
of 16X.

• Laser Printer / Multifunction

○ Colour Laser Printer

○ Mono Laser Printer

○ Inkjet Fax Machine

MISSION / VISION
A mission statement articulates the philosophy of the company with respect to the business in
specific and society in general. Once the mission statement of the company is finalized and adapted,
it provides a readymade guideline to employees of the organization about its principles, policies and
practices.

While Vision is often referred to as "skyhooks for the soul". In fact, vision is that igniting spark
that can inspire and energise people to do better. The focus of vision is to reach out hungrily for
the future and drag it into the present.

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 The latest trend in many organisations is to apply the "VIP" approach
i.e. "Vision Integrated Performance."

MISSION: Samsung
2010 Management Policies
Accelerate growth through driving competitive advantage & developing new market.

• Market leadership with proactive business management policies

• Develop future growth engine
• Operational excellence on- synergy, speed and efficiency
Declaration of quality

•
Vision- Perfection in quality beyond your imagination.
•
Pledge-
○ Customer Centric
○ Professionalism
○ Quality Workmanship
○ Creating Customers for Life
Management Philosophy

We will devote our human resource and technology to create superior product & services thereby
contributing to better global society.

Spirit of Samsung

One with Customers

Challenge in the World
Creating the Future

VISION: Samsung
Growing to be the best

Samsung India aims to be the 'Best Company' in India. ‘Best Company' in terms of the internal
workplace environment, their manpower, their products as well as their efforts to make the
customers happy through their products and services. Samsung aims to grow in India by contributing
to the Indian economy and making the lives of their consumers simpler, easier and richer through
our superior quality products.

"Our aim is to gain technological leadership in the Indian marketplace even as our goal is to earn the
love and respect of more and more of our Indian consumers."

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Mr. J S Shin
President & CEO
Samsung South West Asia Head Quarters

Vision 2020
As stated in its new motto, Samsung Electronics' vision for the new decade is, "Inspire the World,
Create the Future."
This new vision reflects Samsung Electronics’ commitment to inspiring its communities by
leveraging Samsung's three key strengths: “New Technology,” “Innovative Products,” and “Creative
Solutions.” -- and to promoting new value for Samsung's core networks -- Industry, Partners, and
Employees. Through these efforts, Samsung hopes to contribute to a better world and a richer
experience for all.

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As part of this vision, Samsung has mapped out a specific plan of reaching $400 billion in revenue
and becoming one of the world’s top five brands by 2020. To this end, Samsung has also established
three strategic approaches in its management: “Creativity,” “Partnership,” and “Talent.”

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 OBJECTIVES

Mission, purpose, or standard that can be reasonably achieved within the expected timeframe
and with the available resources. In general, an objective is broad in scope, and may comprise
of several different goals. Objectives are the most basic planning tools underlying all planning
and strategic activities. They serve as the basis for policy and performance appraisals, and act
as glue that binds the entire organization together.

OBJECTIVES: Samsung
➢ Grow core business in India.

➢ Expand the core business outside India.

➢ Maintain market leadership and increase market shares.

➢ Loyalty and commitment to the Customers.

➢ Build alliances with the leading manufacturers in the industries they serve.

➢ Keep investing in People, Systems, Facilities and Distribution Systems with a long
term view.

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 STRATEGIES

"Strategy is the direction and scope of an organisation over the long-term: which achieves
advantage for the organisation through its configuration of resources within a challenging
environment, to meet the needs of markets and to fulfil stakeholder expectations".
In other words, strategy is about:
* Where is the business trying to get to in the long-term (direction)
* Which markets should a business compete in and what kind of activities are involved in such
markets? (markets; scope)
* How can the business perform better than the competition in those markets? (advantage)?
* What resources (skills, assets, finance, relationships, technical competence, facilities) are
required in order to be able to compete? (resources)?
* What external, environmental factors affect the businesses' ability to compete?
(environment)?
* What are the values and expectations of those who have power in and around the business?
(stakeholders)

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STRATEGIES: Samsung

In the fast-paced business of Information Technology, it is imperative to be on the move so that

technology and the market stay within reach. It is not just the tech firms and high-tech products that
need to be abreast of development in the industry. However, when it comes to such products as
mobile phones or LCD television, companies have no other option but to be on their toes. The
market is flooded with products and brands vying for market share, technology keep mutating
constantly and the business environment is extremely volatile, which makes consumers susceptible
to changing tastes and preferences pretty fast.
Samsung’s vision is to become a leader of the digital convergence revolution. To achieve this goal,
the company has transformed its operations, putting digital technology at the core. The underlying
strategy for this vision is the company’s mission to be a “Digital ‘e’ Company.” This vision is
divided into three elements:
• The first being “Digital” Samsung is committed to being a market-driven solutions provider
and leader in the digital convergence marketplace.
• The second, “e” how the company’s entire supply chain, from sales, marketing, and
communications to research, manufacturing and distribution, is conducted electronically
through an elaborate Internet-based network. This “speed and simplicity” model has
increased productivity and ensured that services and products are customer-oriented.
• Lastly, “Company” reflects how Samsung’s core competencies in semiconductors, mobile
communications and consumer electronics technologies enable Samsung Electronics to
create digital solutions for the home, mobile user, and office that enable seamless
communications, facilitate business transactions, provide access to the Internet, and offer
digital entertainment.
The Basic strategies followed at Samsung electronics are
• Enhance brand value.
• Increase top market share products in each country and expand sales of
high-end products.
• Supply aspect (production costs) → Demand aspect (market and earning
opportunities)
• Enhance synergy effect of affiliated companies.
• Introduce innovative processes and implement bench marking among affiliated
companies.
• Conduct joint sales activities.
• Secure high-quality human resources.

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Moreover, Samsung Electronics believes that crises are opportunities for innovation and that
change is about action. It takes a different kind of strategy to navigate tough economic times and
become one the World’s leading companies. Knowing how to lead is one thing. Being able to
sustain that leadership is an entirely different one. So here are the unique ways that help Samsung
lead its way in brand marketing, manufacturing, research and development, and design which
contributes to its Success.

Understanding tomorrow’s Markets and Consumers

When it comes to developing premium home appliances for specific regions, it’s essential to have
detailed data and research on those markets and consumers. The reason Samsung’s front-loading
washers with vibration-reduction technology and French-door refrigerators top their respective
category is a direct result of their robust market- and consumer-focused market-sensing
capabilities. And the insights they gain are helping us lead the way to a more convenient,
comfortable future.

Collaborating For Greater Synergy

Since 2007, they’ve operated an innovative “cell-based” manufacturing system that has doubled
productivity for entire Digital Media & Communications Business product portfolio. These
remarkable gains have been made possible by close collaboration between each department—from
manufacturing and development to marketing and purchasing. And the greater synergy this
collaboration enable is helping Samsung lead the way to a more productive & profitable future.

Thinking outside the Box

The most important principle in any R&D process is thinking outside the box. That’s what
Samsung did when they set out to develop a small but very important component of smart card
information security. In addition to significantly lower fabrication costs, the resulting all digital
solution has the added benefit of easing migration to different platforms, technologies, and
markets. And the ability to step back and challenge the conventional is helping them lead the way
to a more secure digital future.

Arriving First With Speed And Efficiency

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The thing that’s helped Samsung rise above their rivals in the ultra-
competitive LCD panel industry has been its ability to consistently develop
technologies and ship products ahead of the
rest. The cutting-edge R&D capabilities enabled them to seize the first-
mover advantage in a new product category at CES 2009 when they unveiled a ready-for-
production HD LCD TV with edge-lit LED backlighting when others were just showing mockups.
And this ability to consistently be first to market is helping Samsung lead the way to a greener,
more profitable future.

Connecting With Consumer Lifestyles

At the Samsung, visitors can enjoy an engaging and memorable hands-on experience with over
300 of the latest and greatest Samsung products. The staff of “brand ambassadors” strives to
provide exceptional service to each customer while delving deeper into their needs to help them
make the connection with Samsung products that fit their lifestyles. And those lasting impressions
are helping Samsung lead the way to a richer, more enjoyable future.

Making Smart Choices That Grow Markets

One of Samsung’s strategic goals in 2008 was to grow mobile phone market share in emerging
markets. While many of their rivals lost ground in last year’s market downturn, their smart,
focused product line and resource allocation choices enabled them to achieve dramatic gains I both
sales and brand awareness across the country. And those are the kind of choices that are helping
Samsung lead the way in more markets everywhere.

Creating Value That Can’t Be Touched

The inspiration for TV designs comes out of a product development process that includes
extensive research on the user experience, meticulous consideration of each process step, and
countless development and marketing discussions. Their sophisticated “liquid crystal” bezel design
was the fruit of this exhaustive investigative and collaborative process, transforming TVs into
veritable objects of art. And that unique design touch is helping Samsung lead the way in living
rooms around the world

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 VALUES
Values define the group beliefs, and rules that control the management of the company. It
represents the institutional philosophy and the support to the cultural organization. The main
objective of corporative values is to have a framework of reference that inspire and control the
life of our company.

VISION
Samsung believes that living by strong values is the key to good business. At Samsung, a rigorous
code of conduct and these core values are at the heart of every decision they make.

People
Quite simply, a company is its people. Samsung is dedicated to giving its people a wealth of
opportunities to reach their full potential.

Excellence
Everything done at Samsung is driven by an unyielding passion for excellence—and an unfaltering
commitment to develop the best products and services on the market.

Change
In today’s fast-paced global economy, change is constant and innovation is critical to a company’s
survival. As the company has done for 70 years, they set sights on the future, anticipating market
needs and demands so they can steer the company toward long-term success.

Integrity
Operating in an ethical way is the foundation of business. Everything done is guided by a moral
compass that ensures fairness, respect for all stakeholders and complete transparency.

Co-prosperity
A business cannot be successful unless it creates prosperity and opportunity for others. Samsung is
dedicated to being a socially and environmentally responsible corporate citizen in every community
where they operate around the globe.

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 ORGANISATION STRUCTURE

An organizational structure is a mainly hierarchical concept of subordination of entities that

collaborate and contribute to serve one common aim.
Organizations are a variant of clustered entities. An organization can be structured in many
different ways and styles, depending on their objectives and ambience. The structure of an
organization will determine the modes in which it operates and performs.
Organizational structure allows the expressed allocation of responsibilities for different functions
and processes to different entities such as the branch, department, workgroup and individual.
Individuals in an organizational structure are normally hired under time-limited work contracts
or work orders, or under permanent employment contracts or program orders.

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ORGANISATION STRUCTURE

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 POLICIES AND PROCEDURES

Policies are principles, rules, and guidelines formulated or adopted by an organization to reach
its long-term goals. They are designed to influence and determine all major decisions and
actions, and all activities take place within the boundaries set by them. Procedures are the
specific methods employed to express policies in action in day-to-day operations of the
organization. Together, policies and procedures ensure that a point of view held by the
governing body of an organization is translated into steps that result in an outcome compatible
with that view.
They are a vital part of business management because they prevent each employee from having
to reinvent the wheel and they provide a standard against which individual performance can be
judged.

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POLICIES: Samsung…

Global Code of Conduct

A. We respect dignity and diversity of individuals.

Principle1. We comply with laws and ethical standards.

• The Company will respect the human rights of all employees and will not discriminate
against on the basis of race, color, creed, national origin, gender, age, citizenship, religion,
regional background, physical disability, marital status, or any other characteristics protected
by law.

• The Company will not employ underage persons, as commonly defined by international
standards and relevant national laws.

• The Company will determine conditions of employment and compensation for personnel in a
fair and non-discriminatory manner, taking into consideration relevant international standards
and national, local or state laws, with the laws of host jurisdiction prevailing.

• The Company will ensure that working hours of personnel will be in accordance with the
specific nature of their duties and comply with national, state and local laws.

• The Company will ensure that management will not (i) engage in abusive behavior; (ii)
encourage or condone conduct that violates the Company’s Code of Conduct, policies or
procedures; or (iii) impose non-work-related duties upon employees.

A. We compete in accordance with laws and business ethics

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 • The Company will compete freely and fairly at all its business sites
around the world, abiding by relevant international standards and
national, state and local laws, with the laws of the host jurisdiction
prevailing.

• The Company will not abuse a dominant market position nor use coercion to cause inclusion
of unwanted items in any sales transactions (tying).

• The Company will not enter into price fixing, bid collusion, market collusion or reduced
production agreements with competitors, and will not discuss with competitors prices, bids,
customers, sales territories and conditions including price confirmation.

• The Company will not permit the acceptance of money, goods, entertainment and/or share
offers of stock from customers or external interested parties, nor allow any improper
activities that violate laws and fair trade principles.

• The Company shall not illegally obtain or use competitor’s trade secrets or confidential
information.

• The Company shall not demand, or use coercion to obtain any advantage detrimental to the
interest of customer or partner companies.

A. We maintain transparency of accounts with accurate recording of transactions.

• The Company will accurately record and manage all transactions in compliance with
international standards and national accounting regulations, and will be subject to accounting
audits by outside parties at regular intervals.

• The Company will make every effort to refrain from entering into a business relationship
with customers of uncertain identity, and will not participate nor cooperate with illegal, false,
or irregular transactions.

A. We do not get involved in politics and maintain neutrality.

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 • Employees shall not attribute their personal political opinions and
conduct to the Company, or cause such opinions or conduct to be
attributed to the Company.

• The Company’s resources, including financial resources, manpower, and facilities shall not
be used to further political goals.

• The Company will refrain from illegal donations and improper dealings with governments,
and will respect related national, state and local laws of the host
jurisdiction.

A. We protect information on individuals and business partners

• The Company and its employees will abide by the national, state and local laws relating to
protection of the privacy of its employees’ personal and confidential information.

• The Company will obtain, through normal business processes, information relating to
individuals, corporate customers, or business partners and will use such information for
business purpose only. The Company will ensure that the means for obtaining such
information and its use comply with national, state and local laws. The Company will not
disclose such information to third parties.

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A. We

Principle2. We maintain a clean organizational culture

make a strict distinction between public and private affairs in our duties

• The Company will not permit any illicit activity for the pursuit of personal gain, such as
irregular treatment of expenses, using one’s position for private gain, or the embezzlement of
corporate assets.

• The Company will not permit any activity that utilizes proprietary information of the
Company for private gain, for example insider trading, irrespective of whether or not this
activity was conducted by an employee directly or indirectly via third parties.

• All business decisions must be made and all business activities must be conducted, in the best
interests of the Company. Employees should avoid any action which may involve, or may
appear to involve, a conflict of interest with the Company. No employees may have any
financial or other business relationships with suppliers, customers or competitors that might
impair, or even appear to impair the independence of any judgment they may need to make in
the best interests of the Company.

A. We protect and respect intellectual properties of the Company and others

• The Company will ensure that its employees will not disclose the intellectual property of
individuals, corporate customers and business partners to third parties without the owner’s
prior consent.

• The Company will ensure that any proprietary information acquired through its business
activities shall be recorded and safely kept and managed as intellectual property.

• The Company will respect the intellectual property rights of third parties, such as patents,
copyrights and trademarks, and shall not intentionally infringe or improperly use such
intellectual property.

• The Company will ensure that due attention is paid to the security of its intellectual property
during the course of telephone or other communication with external parties, and in the
management of various data storage facilities.

A. We create a sound organizational atmosphere

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 • The Company has zero tolerance for any type of behavior that may
offend or cause unpleasantness to other employees. Such behavior
includes, but is not limited to sexual harassment, as well as all other
forms of harassment, physical assault, or any personal request or
conduct that conflicts with national, state or local law, or the Company’s policies and
procedures.

• The Company will endeavor to maintain and develop a mutually cooperative relationship
between management and employees, based on law, business ethics and mutual respect.

A. We maintain the dignity of Samsung Electronics in our external activities.

• During the term of employment at the Company, an employee is not permitted to

simultaneously maintain employment with a third party or otherwise be engaged in outside
business activities when such employment or activities prevent the employee from fully
performing work, including overtime assignments, for which he or she is employed, unless
otherwise agreed by prior consent.

• The Company requires that employees obtain the Company’s prior approval before
disclosing the Company’s confidential proprietary information to third parties.

• The Company will not allow its officers and employees, while in office, to act as members of
boards of companies with conflicts of interest or participate in competitive business
activities.

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A. We

Principle3. We respect customers, shareholders and employees

put priority on customer satisfaction in management activities

• The Company will endeavor to reflect and give priority to the requirements and
recommendations of customers for the improvement of product design, distribution, and
service.

• The Company will make every effort to engage with its customers in a polite and equitable
manner based on its belief that “Samsung Electronics exists because of its customers”.

• The Company will respect the customer’s right to choose by refraining from exaggerated
advertisements or coercive sales techniques, which could mislead customers with regard to
the quality, function and specifications of product or service.

A. We pursue management focused on shareholder value

• The Company will actively pursue increases in investment return for shareholders by
maximizing profits through transparent and sound management.

• The Company will honor its responsibility to shareholders and interested parties
by announcing major financial and corporate information in good faith and in a
timely fashion.
• The Company, in accordance with applicable law, will accept and sincerely
consider legitimate petitions from external shareholders.

A. We endeavor to improve our employees’ quality of life

• The Company will offer equal opportunities to all employees and treat them
justly based on their ability and achievement.

• The Company will support continuous learning and employee development.

• The Company will provide a working environment in which personal initiative

and creativity are encouraged.

32
 Principle 4. We care for the environment, health, and safety

A. We pursue environment friendly management

• The Company will make every effort to comply with international environmental standards,
national, state and local laws and regulations relating to the environment and internal
environmental regulations within all of its global business operations.

• The Company will actively attempt to minimize the generation of harmful materials, utilize
resources efficiently and recycle waste products for the benefit of the environment.

• The Company will do its best to conduct environmental improvement activities throughout
the whole process of product development, production, distribution, sales and disposal.

A. We value the health and safety of human beings

• The Company will comply with international standards, related laws and regulations, and
internal regulations governing the health and safety of its employees by providing safety
education and training at regular intervals.

• The Company will consider to the health and safety of customers in all business activities
including product development, production, distribution, sales and disposal.

• The Company will clearly inform customers regarding the safe usage and operation of its
products or services.

• The Company will endeavor to deal promptly with the discovery of any fault in a product,
which could pose a threat to the safety of customers.

• The Company will make every effort to identify and eliminate any safety hazard found at any
of its business sites, and will maintain a clean and safe environment.

33
 Principle 5. We are a socially responsible corporate citizen
A. W

e sincerely execute our basic responsibilities as a corporate citizen

• The Company will endeavor to create stable employment and to faithfully fulfill its
tax and other legal obligations.

• Employees are encouraged to ethically and conscientiously carry out their job duties and
responsibilities. By doing so, employees will assist the Company in establishing itself as a
responsible and trustworthy corporate citizen.

• Employees are encouraged to endeavor to build trust within the local community by fulfilling
their duties and responsibilities.

A. We respect the social and cultural values of local communities and practice coexistence

• The Company will respect the laws, culture, values and beliefs of the local communities in
which it operates, and shall contribute to the improvement of the quality of life of local
residents.

• The Company, as a global corporate citizen, will contribute to promote and support public-
interest activities such as academic advancement, art, culture and sports.

• The Company will actively participate in social services such as volunteer activities and
disaster relief.

A. We build up relationships of co-existence and co-prosperity with business partners

• The Company will acknowledge its business partners as strategic partners based on mutual
trust, and will pursue the shared value of customer satisfaction.

• The Company will select business partners in accordance with business objectives by
applying fair standards without discrimination.

• The Company will make efforts to support the growth of business partners’ competitiveness
and development.

34
 SWOT ANALYSIS
SWOT analysis is a strategic planning method used to evaluate the
Strengths, Weaknesses, Opportunities, and Threats involved to a business organisation. It
involves specifying the objective of the organisation and identifying the internal and external
factors that are favorable and unfavorable to achieve that objective.

• Strengths: attributes of the person or company that are helpful to achieving the
objective(s).
• Weaknesses: attributes of the person or company that are harmful to achieving the
objective(s).
• Opportunities: external conditions that are helpful to achieving the objective(s).
• Threats: external conditions which could do damage to the objective(s).
Identification of SWOTs are essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs.
SWOT: Samsung…

KEY RESULT AREAS

“Key Result Areas” or KRAs refer to general areas of outputs or outcomes for which the
department’s role is responsible.

35
 Importance of KRAs.
• Set goals and objectives
• Prioritize their activities, and therefore improve their time/work management
• Make value-added decisions
• Clarify roles of department or individual
• Focus on results rather than activities
• Align their roles to the organization’s business or strategic plan
• Communicate their role’s purposes to others
Key result areas (KRAs) capture about 80% of the department’s work role. The remainders are
usually devoted to areas of shared responsibility.

1.Great Work Place 1. Advertisement 1. Audit 1.Manufacturing

a.Motivational Trip 2. Sales 2. P & L Statement 2. Quality Check
b.Home Visit 3. Customer Care 3. Balance Sheet 3. Manufacturing
c.GWP Magazine 4. Spare Parts 4. Financial Analysis- 4. Purchase of
2. Harmonious Employee Relations debt- equity ratio Raw Material
a.Manage Contract Labour 5 . Inventory
b.Disciplin Control
c.Counselling Trouble Makers
3. Effective Grievances Handling
a.Handel issues like staff, production, salary
4.Smooth H.R operations
a.Performance Appraisal
b.Training & Quality Circle
c.Wages & Salary

SIGNIFICANT FACTORS FOR SUCCESS

Samsung India is recognised as a leading brand of high tech Consumer Electronics and Home
Appliance Products in the country. Samsung faced the following hurdles in India when it entered
the market in 1995:
• Low recognition of Samsung Brand among Indian
Consumers
• Tough competition from local and MNC brands
• Value and price sensitive Indian consumers.
• High import duty

Factors for Success

36
• Innovative promotion and advertising initiatives

To establish trust and confidence among Indian consumers, Samsung did

active promotion and advertising by taking the following initiatives.

○ Samsung India associated itself with the ruling passion of the Indian mass consciousness:
Cricket. Samsung launched the Team Samsung campaign with the stars of the Indian
cricket team, which caught the imagination of an entire nation.

○ Samsung sponsors the Indian contingent to the Olympics and the Asian Games. It also
ran training programmes for deserving Indian athletes under the Olympic Ratna banner.
Samsung has also helped bring to India, for the first time, the Olympic torch relay.
Samsung also brings every year to India - the World Cyber Games, which is regarded as
the Olympics of the Cyber World

○ Samsung also launched a series of innovative below-the-line activities. In mobile phones,

Samsung tied up with noted painter Satish Gujral for his paintings to be available as
downloads on Samsung mobile phones. Product placement, was done in movies and
popular television serials like ‘Jassi’ where Samsung products were set in lifestyle
environments. For Microwaves, Samsung ran a Kitchen-on-Wheels programme where
mobile kitchens with microwave ovens went to various localities demonstrating the
advantages of microwave cooking.

○ Branded its products as superior technology and environment friendly ones. The
Samsung refrigerators and ACs incorporate a revolutionary new technology called Silver
Nano Health System that ensures freshness and bacteria free environment. It launched

the “Bio” range of products. In microwave ovens, features like the bio-ceramic coating
and 3D shower waves keep in mind the health conscious public of today.

○ Launched a special marketing campaign for Flat TVs including a focused advertising
campaign ‘Duniya Hai Gol, TV Flat’ and attractive exchange offers. As a result, flat-
screen TVs make up over 50 per cent of Samsung’s TV sales compared to an industry
average of 17 per cent.

• Launching the best in design and technology in India

To differentiate its products from the competition, Samsung followed a deliberate strategy of
bringing in the world’s best design and technologies to India from its parent. It launched its
products in India around the same time as the global launch of products.

37
 ○ Samsung pioneered the introduction of several world first
features in its mobile phones like the first Dual Screen Phone, the
first 65K TFT / LCD Colour Phone, the first Phones with
Polyphonic Ringtones, the first phones with rotating lens camera and the first gender
concept phones.

○ In IT products, Samsung introduced the thinnest and lightest Note PCs in the world, the
world’s smallest MP3 players and India’s first 17" TFT-LCD TV-Monitor that comes
with the unique ‘wise-link’ Samsung technology where various digital gadgets can be
connected directly to the Display. It also launched the world’s smallest Digital multi
function device that scans, prints and copies at the same time.

○ Samsung was the first to introduce the following in India at the same time as the global
launch: DLP televisions. Fuzzy logic based washing machines, Silver Nano
Refrigerators, flat screen TVs and microwave ovens.

○ Samsung has won over 150 awards in India for its technology and design based products.

• Customised products for Indian Consumers

Samsung understands the local cultural sensibilities to customise its products according to the
Indian market.

○ Samsung phones support five Indian languages - Hindi, Marathi, Bangla, Punjabi and
Tamil. The phones supports phone menu, fonts and SMS in these five languages.
Samsung is the first company in the world to introduce a Bangla menu.

○ It has set up a “usability lab” at the Indian Institute of Technology in New Delhi to
customise Samsung products to meet the specific needs of Indian consumers. This
industry-institute partnership is helping Samsung to study and analyse consumer response
in aspects of product design, including aesthetics, ergonomics and interface.

38
 ○ Through its research done on consumer preferences in India,
Samsung has concluded that Indian consumers want more
soundoriented products. Thus, the Samsung televisions of India
have a higher sound capacity than their foreign counterparts.

○ For the semi-automatic segment of Samsung washing machines, Samsung has introduced
for the first time in India a feature called Super Dry. It is present in three of Samsung’s
semi automatic models and dries the clothes better than the rest.

○ Samsung washing machines have an additional menu that takes care of the local Indian
wardrobes. They also have a ‘memory re-start’ that takes care of the frequent power
failures in India.

• Manufacturing Plant and Localisation

Samsung India set up manufacturing facilities for colour TVs in 1997; for microwave ovens in
1999; for washing machines in 2001 and for Air-conditioners in 2002 at Noida in the state of
Uttar Pradesh. The Samsung India Digital Media facility (CTV and Colour Monitors) is the most
productive of all Samsung digital media factories globally. It received ISO 9002, within eleven
months of commencing production. With the latest manufacturing equipment like Auto Insertion
Machines, Automatic Module Conveyor, High temperature Testing, Reliability test, precision
measurements of Colour television (CTVs), the Samsung CTV facility is fully geared for high
speed, high volume and very high quality production. ELCINA, the apex body in India of
Electronics manufacturers, has given a special award to Samsung for “significant contribution to
the development and growth of India’s Electronics Hardware and IT industry.”

• Research and Development Potential

Samsung has set up two R&D centres in India, at Bangalore and Noida. Both the R&D centres
are involved in cutting edge research and development.

○ The Noida centre is involved in the business of developing embedded software for
Samsung Electronics Corporation in a variety of areas related to Digital TV and other
Multimedia technologies. The centre has successfully completed more than a hundred

○ projects in collaboration with Samsung Headquarters Visual Display and Digital Media
divisions. Its engineers continuously strive to improve performance and introduce
innovative features to make the end products more efficient and user friendly. It designs
and implements some of the critical software components for products such as next
generation CRT and Projection TVs, Plasma and LCD TVs, DLP TVs, Digital TV Set
Top Boxes, DVD Players, MP3 players, PDAs, 2D/3D Graphics Engines, Video editing

39
 and playback, Multimedia applications etc.

○ The Bangalore operation is involved in the business of developing

software for Samsung Electronics Corporation technology
solutions in a variety of different areas. It is known for the expertise that it possesses in
certain key technology domains. Its contributions have been in very key knowledge based
areas of new and evolving technologies like 3G, UMTS, CDMA2000, Multimedia, Home
Networking, Digital Media, System LSI, Network Protocols, Wireless terminals to
mention some. The centre boasts of a highly talented and motivated work force who have
been constantly enriching their knowledge and skills

• Corporate Social Responsibility

Samsung has also made its mark as a company with a conscience and an organisation with social
responsibilities. In 2004, Samsung won the Golden Peacock Special Commendation for
Corporate Social Responsibility. This award was given by the Institute of Directors and the
World Council for Corporate Governance. Samsung runs the Digital Hope programme,
supporting organisations that promote the use of technology to improve the lives of youth,
empower them and help bridge the ‘digital divide’. Organisations supported by this programme
include Development Alternatives and the National Centre for Promotion of Employment of
Disabled People (NCPEDP).

PRODUCT PROMOTIONAL MEASURES

From being a virtually unknown entity in the Year 1995, brand Samsung today enjoys an awareness
level of over 65% and a positive opinion of over 80% in the country today (source: BAS 2007). The
introduction of World First, Wow, leading technology products in the Indian market coupled with
the Company’s efforts to customise products for the Indian consumers, have contributed to the
success of the brand in the Indian market.
Technology Leadership, Product design and innovative marketing have all contributed to making
Samsung a household name in the Indian market. The Company has carried out over 170 Dream
Home Road Shows - a four day exhibition of its new products and technologies - in the metros and
smaller markets to create consumer awareness.

40
To display Samsung products in a more lifestyle ambience and to communicate the product benefits
in a more interactive manner, Samsung India has set up a widespread network of Samsung Digital
Plazas all over the country.

The Samsung Brand shop network complements the over 8500 retail points for Samsung products
located across the length and breadth of the country. Samsung plans to continue enhancing its
penetration levels in the country to reach out to more and more Indian consumers.

41
Innovative promotion and advertising initiatives

To establish trust and confidence among Indian consumers, Samsung did active promotion and
advertising by taking the following initiatives.

• Samsung launched a series of innovative below-the-line activities. In mobile phones,

Samsung tied up with noted painter Satish Gujral for his paintings to be available as
downloads on Samsung mobile phones. Product placement, was done in movies and popular
television serials like ‘Jassi’ where Samsung products were set in lifestyle environments. For
Microwaves, Samsung ran a Kitchen-on-Wheels programme where mobile kitchens with
microwave ovens went to various localities demonstrating the advantages of microwave
cooking.
• Branded its products as superior technology and environment friendly ones. The Samsung
refrigerators and ACs incorporate a revolutionary new technology called Silver Nano Health
System that ensures freshness and bacteria free environment. It launched the “Bio” range of
products. In microwave ovens, features like the bio-ceramic coating and 3D shower waves
keep in mind the health conscious public of today.

• Launched a special marketing campaign for Flat TVs including a focused advertising
campaign ‘Duniya Hai Gol, TV Flat’ and attractive exchange offers. As a result, flat-screen
TVs make up over 50 per cent of Samsung’s TV sales compared to an industry average of 17
per cent.

• Samsung India associated itself with the ruling passion of the Indian mass consciousness:
Cricket. Samsung launched the Team Samsung campaign with the stars of the Indian cricket
team, which caught the imagination of an entire nation. In 2004, Samsung also brought to
India what was possibly the biggest cricketing spectacle of this decade, the historic India vs.
Pakistan cricket series - ‘The Samsung Cup’.

42
 Team Samsung India

• Not confining itself to cricket, Samsung brings every year to India - the World Cyber Games,
which is regarded as the Olympics of the Cyber world.

Samsung Presenting WCG 2008

• Samsung sponsors the Indian contingent to the Olympics and the Asian Games. It also ran
training programmes for deserving Indian athletes under the Olympic Ratna banner. Samsung
has also helped bring to India, for the first time, the Olympic torch relay.
Samsung India's association with the Indian Olympic Association commenced with the 1998
Bangkok Asian Games and ever since the Company has supported the Indian Contingent to
the Y2000 Sydney Olympics, Y2002 Busan Asian Games, the Y2004 Athens Olympics and
the 2008 Beijing Olympics.

43
 Patterned on the Olympic Solidarity Fund, the Samsung Scholarship
Programme supported the training expenses of these players for a
period of one year, between October 2007 and September 2008. The
company has also announced its support for the Olympic Movement
over the next eight years, till the 2016 Olympic Games.

Athletes at the Olympic Ratna Awards

• Recently, Samsung India Electronics Pvt. Ltd. signed an MoU with the Indian Olympic
Association to become the Sponsor of the Indian Contingent to the 16th Asian Games being
held at Guangzhou, China between November 12-27, 2010. In addition to supporting the
Indian Contingent to the Asian Games, Samsung will also be providing Scholarships to ten
top ranking players across individual sporting disciplines to support their training expenses.

• In March 2008, In sync with its thrust on introducing innovative products, Samsung
Telecommunications India (STI), appointed actor Aamir Khan as its brand ambassador for
Samsung mobile phones, which is reflected in its new, spunky, tagline – ‘next is what?‘
being used in all its communication material for mobiles.

44
 AAmir Khan as Samsung Mobile Brand Ambassador

• In October 2008, Samsung announced the appointment of Olympic Gold Medalist Abhinav
Bindra as Brand Ambassador for its Consumer Electronics business in India.

45
Abhinav Bindra as Samsung India (CE) Brand Ambassador

46
The manager’s are given training on the basis of evaluation of the gap between their present job
or the future job which will be appointed to them.

The gap shows the difference between the actual performance and the required performance.

The training can be either a personality development training or technical.

47
The appraisal process happens at the end of every year where the performance of the employees
is evaluated on the basis of the MBO’s given to them.

The grading is done on the scale of 1-5. People who get 1 are rewarded where as people with a
score of 4 are given a warning. But people who score 5 are asked to leave the organization.

48
49
Purchasing Ethics Charter
“We, the purchasers of the Samsung Electronics, realize and accept our critical role in enhancing
values for our customers.
In this important endeavor, we will conduct all dealings with our
suppliers with honesty and integrity for mutual growth and
prosperity. We will also understand and comply with law,
regulation, and codes governing the conduct of our business.”

Purchasing Emblem
Samsung Electronics and Suppliers will cooperate to make the best performance
toward the Global Top Tier on the basis of "Win-Win" ideology of co-existense and
co-prosperity between Samsung Electronics and our valued Suppliers.

50
 Financial Highlights
Samsung Electronics achieved an historic, record breaking sales record in 2008 of KRW 121.3
trillion on a consolidated basis, up 23.1% from the previous year. Despite the continued drop in
memory chip prices and sagging semiconductor sales, the sales growth can be attributed to the
expanded market dominance of major projects such as TVs, mobile phones and LCDs. Operating
profits and net income recorded KRW 6 trillion and KRW 5.5 trillion, respectively, with EBITDA
coming in at KRW 16.1 trillion.

Sales, Operating Profit, Net Income, and EBITDA

(Unit: KRW trillion)

2006 2007 2008

Sales 85.8 98.5 121.3

Operating Profit 9.1 9.0 6.0
Net Income 7.9 7.4 5.5
EBITDA 16.0 17.5 16.1

* Net income figures represent the net income of the holding company.

Performance by Business

Samsung Electronics operates Digital Media, Telecommunications, Semiconductor and LCD

businesses. The reorganization in May 2008 integrated our related Home Appliance business sectors
into a Digital Media business division and the PC and MP3 businesses were merged into an
Telecommunications business division. The January 2009 reorganization, again, integrated the
Digital Media and Telecommunications business divisions into a DMC business unit and the
Semiconductor and LCD business divisions into a DS business unit.

51
 Sales by Business Division

(Unit: KRW trillion)

(Unit: KRW trillion)

The Digital Media business division realized a KRW 11.7 trillion sales growth over the previous
year thanks to the increased TV sales in the European and North American markets. The
Telecommunications business division also generated a KRW 7.9 trillion sales growth year over
year, boosted by the booming premium product sales and low-priced product mix strategies. The
Semiconductor business division sales were relatively stable in the system LSI and storage sectors.
However, the oversupply in the memory markets and economic recession left the overall sales
unchanged from 2008. The LCD business division also achieved a KRW 4.5 trillion growth in sales
from the previous year thanks to the expanded sales of high value-added large-sized panels for TVs.

Consolidated Balance Sheet

December 31, 2008, 2007 and 2006

(In millions of Korean won)

2008 2007 2006

Assets

Current Assets
Cash and Cash Equivalents ￦ 8,814,638 ￦ 5,831,989 ￦4,222,027
Short-Term Financial Instruments 3,591,337 5,061,898 3,504,614

52
 Short-term available-for-sale
982,067 922,833 2,058,781
securities
Trade accounts and notes receivable,

net of allowance for doubtful 12,043,979 11,125,132 9,089,452

accounts
Other accounts and notes receivable,

net of allowance for doubtful 1,558,279 989,143 972,426

accounts
Inventories 9,492,607 7,968,803 6,753,445
Short-term financing receivables, net 6,266,512 5,575,006 4,586,972
Short-term deferred income tax assets 2,135,068 1,537,946 1,469,973
Prepaid expenses and other current
4,084,069 2,888,264 2,331,215
assets
Total Current Assets 48,968,556 41,901,014 34,988,905

Property, plant and equipment,

including revaluations, net of 42,496,311 37,380,644 33,784,615
accumulated depreciation

Long-term available-for-sale
2,618,262 3,712,322 2,557,004
securities
Long-term held-to-maturity securities 334,460 147,287 197,680
Equity-method investments 4,356,862 3,782,413 3,393,617
Deferred income tax assets 379,087 266,280 353,027
Intangible assets, net of accumulated
787,249 704,627 658,385
amortization
Long-term financing receivables,

net of allowance for doubtful 3,704,792 3,799,955 3,806,535

accounts
Long-term deposits and other assets 1,655,071 1,680,594 1,626,438
Total assets ￦ 105,300,650 ￦ 93,375,136 ￦ 81,366,206

53
 (In millions of Korean won)
2008 2007 2006

Liabilities and Equity

Current Liabilities
Trade accounts and notes payable ￦ 5,587,137 ￦ 6,037,864 ￦ 4,578,915
Short-term borrowings 9,026,630 8,453,099 7,360,778
Current maturities of long-term debts 2,263,380 1,987,148 2,771,866
Other accounts and notes payable 5,114,567 3,861,661 3,609,419
Accrued expenses 7,907,197 6,777,936 5,011,755
Income taxes payable 675,553 1,343,941 1,263,088
Other current liabilities 1,632,606 1,334,327 927,050
Total current liabilities 32,207,070 29,795,976 25,522,871

Long-term debts 5,773,957 3,843,728 4,210,669

Foreign currency notes and bonds 390,693 228,658 133,797
Long-term accrued expenses 177,774 43,005 276,019
Long-term advances received - - 341,438
Accrued severance benefits 850,233 739,936 721,205
Deferred income tax liabilities 1,486,287 1,465,555 1,182,262
Other long-term liabilities 1,490,682 1,286,370 1,038,078
Total liabilities 42,376,696 37,403,228 33,426,339

Commitments and contingencies

Equity
Capital stock

54
 Preferred stock ￦ 119,467 ￦ 119,467 ￦ 119,467
Common stock 778,047 778,047 778,047
Capital surplus 6,588,861 6,574,995 6,364,604
Capital adjustments
Treasury stock (8,910,135) (9,157,492) (7,520,023)
Others
Accumulated other comprehensive
3,808,076 1,875,385 -
income
Retained earnings 55,419,571 51,065,174 44,463,683
Total Shareholders’ equity 58,117,009 51,665,687 45,264,411
Minority interests 4,806,945 4,306,221 2,675,456
Total equity 62,923,954 55,971,908 47,939,867
Total liabilities & equity ￦105,300,650 ￦ 93,375,136 ￦ 81,366,206

Consolidated Statement of Income

Years ended December 31, 2008, 2007 and 2006

(In millions of Korean won)

2008 2007 2006

Sales ￦121,294,319 ￦ 98,507,817 ￦ 85,425,626

Cost of Sales 89,762,355 70,880,912 59,652,262
Gross Profit 31,531,964 27,626,905 25,773,364
Selling, general and administrative
25,500,101 18,653,619 16,765,553
expenses
Operating profit 6,031,863 8,973,286 9,007,811

Non-operating income
Interest and dividend income 639,439 483,604 396,742
Foreign exchange gains 7,238,637 1,831,629 1,333,220

55
 Gain on foreign currency translation 444,663 127,891 214,686
Gain on valuation of equity method
214,686 652,500 551,057
investments
Reversal of impairment losses on
- - 92,211
investments
Others 1,454,307 1,049,315 822,300
10,824,270 4,144,939 3,410,216

Non-operating expenses
Interest expense 670,271 590,515 294,449
Foreign exchange losses 7,597,640 1,849,002 1,257,270
Loss on foreign currency translation 933,940 116,231 109,494
Loss on valuation of equity method
209,357 274,874 31,396
investments
Impairment losses on investments - - 14,499
Others 867,150 654,730 883,273
10,278,358 3,485,352 2,590,381

6,577,775 9,632,873 9,827,646

Net income before income tax
Income tax 687,561 1,709,892 1,633,987
Net Income ￦ 5,890,214 ￦ 7,922,981 ￦ 8,193,659

56
 Future Plans

• Samsung plans to create an aspirational digital lifestyle for the average Indian consumer with the
introduction of innovative digital products, that represent the absolute high end of technology
and design.

• The company also plans to revolutionise retail in the country by launching a massive retail roll-out of its
exclusive outlets - Digitall World, Digitall Homes and Digitall Plaza. The company believes that with an
increasing footprint of Samsung Digitall Worlds and Samsung Digitall Homes, Indian consumers today
can experience the finest in technology in a world class environment.

• The company also plans to set up 600 technology retail counters to bring technology closer to the
consumers, allowing them to touch, feel and experience the same.

• Samsung is also investing in setting up the Samsung Marketing Academy to train sales personnel to
engage in lifestyle selling. The emphasis is clearly on providing customers a richer and more informed
buying experience.

57
 Advantages, Drawbacks and Recommendations:

Advantages:

Tall organisation structure helps in easy flow of command.

Authority and responsibility can be delegated easily as it is a simple structure.

Chances of romours is less as the organisational structure is staight.

Disadvantages:
Flow of command is time consuming which can lead to delay in decision making.

The company does not give much of importance to the rural market.

Recommendations:

The company should reduce the hierarchial level so that the flow of command is faster.

Authority to take dicisions should be also given at lower level also so that quick decision making can
be done for day to day operations.

The company should try and concentrate on the rural market as well.

58
 Annexure

1. Certificate from the Company.

2. Reviews of the MBA’s working
3. Format of Manpower report and MBO’s

59