COMPANY PROFILE

LG Electronics India Private. Ltd., a wholly owned

subsidiary LG Electronics, South Korea was
established in January 1997 in India. It is one of the
most formidable brands in consumer electronics,
home appliances, IT hardware and mobile
communications space. In India for a decade, LG
has earned a premium brand positioning and is the
acknowledged trendsetter for the industry.

LGEIL’s manufacturing unit at Greater Noida is one

of the most eco-friendly units among all LG
manufacturing plants in the world. The second
Greenfield facility is located at Ranjangaon; Pune
has the capacity to manufacture GSM Phones,
Colour Televisions, and Air Conditioners, LCD TVs,
washing machine, refrigerators and Optical Disc
Drives. This is India’s first mobile phone
manufacturing unit and also Asia’s largest Optical
Disc Drive manufacturing plant.

LG strives to enhance the customer’s life (and

lifestyle) with intelligent features, intuitive
functionality, and exceptional performance.
Choosing LG is a form of self-expression and self-
satisfaction. Customer will take pride in owning the
amazing and take comfort in knowing he/she made
a smart, informed decision.

The letters “L” and “G” in a circle symbolize the

world, future, youth, humanity, and technology.
Our philosophy is based on Humanity. Also, it
represents LG’s efforts to keep close relationships
with our customers around the world.

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The symbol consists of two elements: the LG logo in
LG Grey and the stylized image of a human face in
the unique LG Red color. Red, the main color,
represents our friendliness, and also gives a strong
impression of LG’s commitment to deliver the best.

LG was founded in 1958 as a Gold star (today

known as LG) in KOREA and since then it has led
the way to an ever-more advanced digital era.
Moving forward into the 21st century, LG continues
to on its path to becoming the finest global
electronics company.

LG works on the philosophy of “Great Company,

Great people” believing that only great people can
create great company. LG strives for greatness and
identified three core capabilities: Product
Leadership, Market Leadership, and People
Leadership—each strength a key part of realizing
our growth strategies for "fast innovation" and
"fast growth". LG Electronics is pursuing the vision
of becoming a true global digital leader, attracting
customers worldwide through its innovative
products and design. The company’s goal is to rank
among the top 3 consumer electronics and
telecommunications companies in the world by
2010. To achieve this, we have embraced the idea
of “Great Company, Great People,” recognizing that
only great people can create a great company.

LG focuses mainly on its core capabilities i.e

product leadership- refers to the ability to develop
creative, top-quality products, using specialized
new technologies. Market leadership- refers to the
ability to achieve top ranking, worldwide, thanks to
a formidable market presence in countries across
the globe & People leadership refers to the market
dominance achieved by selecting and nurturing

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talented team players able to internalize and
execute innovation across the board.

LG brand focuses on four basic elements: VALUES,

INNOVATION, PEOPLE, and PASSION. LG strives to
enhance the customer’s life (and lifestyle) with
intelligent features, intuitive functionality, and
exceptional performance. Choosing LG is a form of
self-expression and self-satisfaction. Our customer
will take pride in owning the amazing and take
comfort in knowing he/she made a smart, informed
decision.

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 HISTORY

LG was established in 1958 as gold star. Since its

founding in 1958, LG Electronics has led the way to
an ever-more advanced digital era. Along the way,
our constantly evolving technological expertise has
lent itself to many new products and applied
technologies. Moving forward into the 21st century,
LG continues to on its path to becoming the finest
global electronics company, bar none.

YEAR ACHIEVMENTS
1956 Gold star established
1959 Produces KOREA first
radio
1962 Produces KOREA first
telephone
1965 Produces KOREA first
refrigerator
1966 Produces KOREA first
black& white TV
1968 Establishes first
overseas branch office
(New York)&
Produces Korea’s first air
conditioner
1977 First color TV produced
1982 Color TV plant

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 established in the US in
Huntsville, Alabama
1984 Sales surpassed 1 trillion
Won
1986 VCR plant established in
Germany
1990 Ireland based technology
established
1993 With the establishment
of Huizhou subsidiary in
China(LGEHZ), marketing
in China took full swing

1995 Company name changed

to LG Electronics
1997 40-inch Plasma TV and
the world’s first IC set
for DTVs developed India
production subsidiary
(LGEIL) established
1998 World’s first 60-inch
Plasma TV developed
2000 LG Information &
Communications merged
The world’s first
Internet-enabled
refrigerator launched
Global sales of
refrigerators reached the
number one position
2002 The first home network
system commercialized
in the global market
2003 The world’s first 76-inch
Plasma TV developed,
CDMA mobile handsets
took the largest share in
the US and world CDMA
market
2005 The world’s slimmest TV
commercialized The
world’s largest 102-inch

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 Plasma TV developed
2006 Launched the LG Shine,
steam washing machine
and interactive TV
refrigerator &Launched
the world's largest Full
HD 102-inch Plasma TV
2007 high-definition disc
player and drive
Launches 120Hz Full HD
LCD TV Demonstrated
the world-first MIMO 4G-
Enabled technologies
with 3G LTE Won
contract for GSMA's 3G
campaign

2008 Introduces new global

brand identity: "Stylish
design and smart
technology, in products
that fit our consumer's
lives."
2009 Introduces its LCD
master piece LG scarlet
and ultra mobile
projector and touch
screen phones
2010 Introduces LG arena
innovative 3D with Dolby
enhanced sound

LG is continuously working on new innovations and

bringing new technology to our life. Still till date

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 ORGANISATIONAL STRUCTURE

LG Electronics operates under an advanced

corporate governance structure that comprises a
professional administrator and a Board of Directors.
This structure helps us deploy more transparent,
value-creating management activities that help
increase corporate and shareholder value.

LG Electronics' Board of Directors maintains

independence from its management and major
shareholders. Currently, the Board has a total of
seven directors, four of whom are outside directors.
To ensure that external directors are appointed
fairly and independently, the "External Director
Recommendation Committee," comprised of one in-
house director and one external director, nominates
external directors following close examination of
their qualifications. These outside directors are
then voted on at the next shareholders' meeting.

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Outside directors are always well-qualified
individuals with professional knowledge and
experience in key areas. Their main role is to carry
out checks and balance functions, as well as
monitor the Company's overall management
activities. They also act as objective advisors to the
Company. Since 2005, LG Electronics has given the
board members an opportunity to actively
participate in the Company's management activities
by offering an “On-The-Spot Management Program”
that allows members to visit Company business
venues, both locally and abroad. The Company also
encourages participation in outside director
training programs hosted by the Korean Directors
Association

BOARD OF DIRECTORS

1. INTERNAL DIRECTORS

• Yong Nam ( CEO, LG electronics)

• David Jung ( Executive Vice president)
• Yu Sig Kang( Vice chairman)

2. EXTERNAL DIRECTORS

• Sang Hee Kim (Lawyer)

• In Ki joo(Professor)
• Kyu Min Lee(Advisor)
• Jong Nam Joo(Professor)

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India’s organizational structure:

Y V Verma (CEO, LG India)

Amitabh tiwari (marketing& sales head)

V Ramachandran (strategy department head)

Rohit Pandit (business head of home

entertainment)

Sudhin mathur (head of mobile

communication)

Moon B Shin (managing director)

Organizational flow chart

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 Y V Verma
(CEO)

Moon B Shin
(Managing
Director)

Amit Tiwari Rohit Pandit Sudhin Mathur

(Marketing& (Business (Mobile and
sales head) entertainment communicatio
head) n head)

PRODUCTS

LG produced a large number of consumer durable

products with stylish design and new technology

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which made our life easy. LG strives to enhance the
customer’s life (and lifestyle) with intelligent
features, intuitive functionality, and exceptional
performance. LG products have sleek design and
latest technology with many new features. The
products are:

 Mobile phones
 LCD televisions
 Washing machine
 Air conditioners
 Refrigerators
 Vacuum cleaner
 Microwave ovens
 Dish washer
 CRT monitors
 Ultra mobile projector

MOBILES

A mobile phone is an electronic devise used for

long-range voice and data communications. Mobile

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phone features include the telephone, text
messaging, email, gaming and Internet. A mobile
phone allows its user to make and receive
telephone calls to and from the public telephone
network which includes other mobiles and fixed line
phones across the world. It does this by connecting
to a cellular network owned by a mobile network
operator. A key feature of the cellular network is
that it enables seamless telephone calls even when
the user is moving around wide areas via a process
known as handoff or handover.

LG has made mobile phones environmentally

friendly by replacing harmful materials with healthy
substitutes, at the same time increasing energy
efficiency and recyclability. The simple LG mobile
consist of :

 EMI shield can

 Halogen free PCB
 PVC free cable
 Nickel prohibited body
 LCD display screen

LG Electronics is the world's third largest handset

maker. LG said it expects a significant increase in
mobile phone sales this year 2010, while 20 new
smart phones present and aims to become one of
the leading manufacturers in the sector by 2012. LG
mobile devices are made for GSM networks as well
as for CDMA networks worldwide. LG phones are
available also in unlocked versions that can be used
on any GSM network worldwide and not just for a
specific carrier's network.

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13
 MOBILE MANUFACTURING
PROCESS

Raw materials:

 Glass
 Various types of metals such as aluminum,
gold, chromium, copper etc.
 Plastics
 Chemicals such as crude oil natural gas etc.
 Wires
 Software
 Screws
 Battery- using metals

Plastics are used for making the mobile body for

making the body we use chemicals such as crude oil
and natural gas. The copper is used to make circuit
board. LCD screen is made with crystals layered
between glass or plastic. Batteries are made using
two different metals known as electrodes. Circuit is
made using plastic and fiberglass and then gold
plated. Software is used to design interface and
how the mobile is operated.

Manufacturing process:

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1. Concept & Design: All cell phones
manufacturers start the process in the
conceptual phase. Several sketches and wire
frames are created using different designs,
features, and interface options, such as keypad
only and touch screen. These sketches also
determine the phone's weight, scale, size and
portability. Because the goal of most phones is
to be compact and portable, this phase is the
most intensive. During this process, a team
decides what designs will become prototypes.
Once a list is determined, several prototypes
are created. These models are usually non-
functional and only for visual purposes.
Prototypes are constructed from plastic,
Styrofoam and other re-usable materials. Once
a final design is created, the concept is pushed
to engineers, who decide what electronics are
necessary.

2. Manufacturing: Once the design is finalised

and the parts are identified some of them are
created on-site, while others are bought from
different companies. The parts of a mobile
phone include the hard case, battery, volume
control, keypad, headset socket and Bluetooth
enabler. These are the parts that make up
most mobile phones; they also include a
microchip called a Subscriber Identity Module
(SIM) card. The individual parts of a cell phone
each go through a manufacturing process. The
circuit board is shaped using plastics and
fibreglass and is then gold plated. The circuits
and wires of the circuit board are soldered,
glued and coated. The LCD is made with liquid
crystals layered between glass or plastic.
Batteries are made of two different metals
called electrodes. Electrolytes touch each
electrode and when activated, power the

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 batteries.
Each piece of the cell phone is created
separately. First, the casing for the phone is
made. Most cell phones use a simple plastic
that is created using a process known as
injection moulding. Once the casing is created,
the printed circuit board is made and loaded
with the necessary software/operating system.
The circuit board is then placed in the casing,
using a series of eyeglass screws. Next, the
other components of the phone are added:
screen, keypad, antenna, microphone and
speaker.

3. Testing: Once a mobile phone is put together,

it goes through Quality Assurance (QA) testing
before being packaged and sent out to
distributors. During QA testing, each mobile
phone is tested to ensure quality and
functionality by testing the signal, battery
power, texting, photo, video, volume and other
functions. Once a mobile phone goes through
QA testing, it is either sent back for correction
or sent out for buyers.

4. Packaging & transportation:

The transportation process and packaging of
cell phones is harmful to the environment as
well. Transporting cell phones for distribution
requires the use of fossil fuels for energy,
which can contribute to global climate change.
In addition, excessive packaging contributes to
the waste that we produce. Finally, the
necessary documentation for the phone is
produced and sent to be packaged with the
phone. Once all of these components are
verified, the phone is packaged and shipped to
retail outlets.

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5. Usage: You can extend the use of your cell
phone and prevent waste by using the phone
from your service provider instead of
purchasing another phone. Additionally, your
cell phone will last a long time if you take good
care of it by protecting it from damage.

Product flow diagram

Blue prints Prototype is made Casing of mobile

is designed acc to blue print phone is done acc to
and using plastic such prototype by the
sketched as Styrofoam process called inject
ion molding

LCD screen is attached

After casing the circuit
which is made with liquid
is placed at its place
crystals of glass and
using eyelid screws
plastic

Other components such as Once the mobile is

keypad, speaker, camera lens, assembled it is send
headset socket, Bluetooth for testing and
enabler is placed under the Quality Assurance
main mobile casing

The quality and

If something is wrong functionality of mobile
during testing then it is phone is tested such as
send back for correction. battery, camera, keypad,
photo,video

Packaging and
transportation to
retailers and
distributors

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 Customers and
users

Product Value Chain

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FINANCIAL INFORMATION

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FINANCIAL HIGHLIGHTS

Financial 2003 2004 2005 2006 2007 2008 2009

Highlights KRW bn KRW bn KRW bn KRW bn KRW bn KRW bn KRW bn

Sales 20,177 24,659 23,774 23,171 23,502 27,638 30,513

Operating 1,062 1,250 915 535 565 1,227 1,615
Profit
Net Profit 663 1,546 703 239 1,222 483 2,052
Total Assets 11,277 13,235 14,036 13,230 14,336 17,338 21,577
Total 7,773 8,218 7,874 7,295 7,127 8,931 11,417
Liabilities
Total 3,505 5,017 6,162 5,935 7,209 8,407 10,160
Shareholder
's Equity
ROE 20.4% 36.3% 12.6% 3.9% 18.6% 6.2% 22.1%
EBITDA 1,680 1,917 1,726 1,242 1,254 1,910 2,246
Capex 830 1,274 1,322 821 628 645 940

INCOME STATEMENTS

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 2003 2004 2005 2006 2007 2008 2009
Income
Statement KRW KRW KRW KRW KRW KRW KRW
bn bn bn bn bn bn bn
Sales 20,177 24,659 23,774 23,171 23,502 27,638 30,513
Domestic 4,794 5,089 5,509 5,947 6,520 6,445 6,665
Exports 15,383 19,573 18,265 17,223 16,982 21,193 23,848

Cost of Sales 15,351 18,736 17,664 17,727 18,340 20,822 23,418

Gross Profit 4,826 5,923 6,111 5,443 5,162 6,816 7,095
SG&A 3,764 4,674 5,196 4,908 4,598 5,589 5,480
Operating 1,062 1,250 915 535 565 1,227 1,615
Profit
Non-Operating 1,123 1,610 1,134 754 1,863 2,670 3,492
Income
Non-Operating 1,349 999 1,307 1,027 941 3,382 2,591
Expenses
Recurring 837 1,860 741 262 1,487 515 2,516
Profit
Extraordinary - - - - - - -
Gains - - - - - - -
Extraordinary
Losses
Income before 837 1,860 741 262 1,487 515 2,516
Income Taxes

Tax 174 314 39 23 265 32 464

Net Profit 663 1,546 703 239 1,222 483 2,052

BALANCE SHEETS

Balance Sheet 2003 2004 2005 2006 2007 2008 2009

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 KRW KRW KRW KRW KRW KRW KRW
bn bn bn bn bn bn bn
Current Assets 3,773 4,111 3,985 3,160 2,827 4,518 7,446

Quick Assets 2,269 2,436 2,577 2,057 1,882 3,617 6,679

Inventories 1,504 1,675 1,408 1,104 945 901 767

Fixed Assets 7.505 9,124 10,051 10,070 11,509 12,820 14,131

Investment 3,546 4,859 5,481 5,351 7,074 8,638 10,039

Assets 3,123 3,630 4,150 4,256 4,037 3,711 3,644
Tangible Assets 836 635 420 462 398 471 448
Intangible
Assets
Total Assets 11,27713,235 14,036 13,230 14,336 17,338 21,577

Current 5,091 4,959 5,208 4,901 4,588 5,942 8,013

Liabilities 2,682 3,259 2,666 2,394 2,539 2,989 3,404
Fixed Liabilities
Total Liabilities 7,773 8,218 7,874 7,295 7,127 8,931 11,417

Paid in Capital 784 784 800 809 809 809 809

Capital Surplus 1,892 1,908 2,107 2,220 2,559 2,652 2,669
Retained 766 2,064 2,511 2,422 3,787 4,117 6,065
Earnings 63 261 744 484 54 829 617
Capital
Adjustment

Total 3,505 5,017 6,162 5,935 7,209 8,407 10,160

Shareholder's
Equity
Total Liabilities 11,27713,235 14,036 13,230 14,336 17,338 21,577
and
Shareholder's
Equity

FINANCIAL PERFORMANCE:

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 FINANCIAL INFORMATION

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OBSERVATIONS

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LG Electronics is pursuing the vision of becoming a
true global digital leader, attracting customers
worldwide through its innovative products and
design. The company’s goal is to rank among the
top 3 consumer electronics and telecommunications
companies in the world by 2010. To achieve this, we
have embraced the idea of “Great Company, Great
People,” recognizing that only great people can
create a great company.

LG strives for greatness in what we've identified as

our three core capabilities: Product Leadership,
Market Leadership, and People Leadership—each
strength a key part of realizing our growth
strategies for "fast innovation" and "fast growth".

LG Electronics is the world's third largest handset

maker. LG said it expects a significant increase in
mobile phone sales this year 2010, while 20 new
smart phones present and aims to become one of
the leading manufacturers in the sector by 2012.
Interestingly, while many smart phone makers are
trying to diversify their software platforms and
create handsets, they have decided to continue
using the original operating systems for the
foreseeable future so as to provide for custom-
tailored devices. The company hasn't ruled out
others, but expects the original operating system
to be its primary platform for the vast majority of
its models. This strategy is an official one, designed
to improve both companies' shares in their
respective domains of the wider mobile market.

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