1. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 1 Factory briefing Content 1.General 2.Employee information 3.Quality award 4.Production process 5.Factory facilities 6.Environmental 7.Training post

2. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 2 Factory briefing

3. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 3 Factory briefing Royal Philips Electronics have totally around 230,000 employees in more than 60 countries and active in the areas of : Lighting, Consumer electronics, Domestic appliances, Components, Semi-conductors, Medical system and IT services.

4. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 4 Factory briefing Under Consumer Electronics Mainstream division, two factories have been set up in Sha Jing - Shen Zhen. They are, SBI - San Yi Start operation in Jan. 1995 SBI - Good View Start operation in Aug. 1997

5. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 5 Factory briefing SBI Factories

6. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 6 Factory briefing San Yi Good View Site area55.078.0 Factory floor space33.055.0 Dormitory31.331.2 Utility 6.7 7.4 Total floor space71.093.6 Unit : in Kilo Square Meter

7. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 7 Factory briefing

8. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 8 Factory briefing Business nature Product typePortable audio Audio system DVD Speaker driver / box CD - R player Beside Philips brand, we also produce the product for Yamaha and Marantz

9. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 9 Factory briefing

10. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 10 Factory briefing

11. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 11 Factory briefing Total headcount in Hong Kong Audio headquarter : 580 Total headcount in two PRC factories : 7,500

12. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 12 Factory briefing “ Value people as our greatest resource “ is one of Philips company objectives. We understand PEOPLE is an important asset towards success. To execute the objective, we will continuously improve our working environment and provide the appropriate training to the employee.

13. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 13 Factory briefing Training target 11 training days per PRC employee per year Actual 199814 Days 199916 Days 200018 Days

14. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 14 Factory briefing

15. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 15 Factory briefing HK headquarter San YiGood View ISO 9001 Oct., 1991May, 1996Oct., 1998 ISO 14001 Dec., 1997 Dec., 1997Dec., 1998 Quality achievement

16. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 16 Factory briefing Some of latest awards Consumer Electronics Show 2001 Innovations 2001 Design and Engineering honors - audio AJ3950 Stereo CD-clock radio AZ3000 CD sound machine MC-90 CD recordable micro Hi Fi system CDR820 CD recorder with 3CD changer

17. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 17 Factory briefing Some of latest awards ( cont’d ) Industries Forum Design Hannover IF Product design award 2001 in Consumer Electronic category RUSH MP3 player

18. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 18 Factory briefing

19. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 19 Factory briefing Production process Automatic Component Placement Manual insertionSoldering Testing & Alignment Final AssemblyPacking

20. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 20 Factory briefing Installed facilities No. of Daily component ACP machines placement Sequencer17 sets8.1 millions VCD27 sets9.1 millions Radial Lead24 sets2.6 millions SMD31 lines9.6 millions

21. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 21 Factory briefing PCBA area

22. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 22 Factory briefing Installed facilities Automatic soldering machines17 lines Assemblyline Variable Transportation System18 lines Conveyor Belt 32 lines

23. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 23 Factory briefing Final assembly area

24. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 24 Factory briefing

25. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 25 Factory briefing Some of Recreation facilities Tennis court Basketball court

26. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 26 Factory briefing Karaoka roomKaraoka hall

27. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 27 Factory briefing Facilities Local staff canteenDormitory / recreation complex Worker 14 Blocks PRC senior staff 2 Blocks HK / oversea staff 2 Blocks Recreation complex 2 Blocks

28. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 28 Factory briefing HK and oversea Staff dormitory

29. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 29 Factory briefing

30. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 30 Factory briefing Some of our environmental concern Our Green area : 11 % of site area No. of tree : 1,200 ( 45 type ) No of Flower : 5,000 ( 25 type )

31. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 31 Factory briefing Waste water purification system Max. Capacity = 100 tons / day

32. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 32 Factory briefing 7.Training post

33. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 33 Factory briefing Training post offered Testing engineer x 1 Machine processing engineer x 1 Electronics engineerx 2 IT traineex 2

34. PHILIPS CONSUMER ELECTRONICS AUDIO, SOUTH CHINA Feb 2001 34 Factory briefing For more Philips information, pls. visit our WEB site www.philips.com