The Directors'' are pleased to present their 53rd Annual Report and
Audited Accounts for the year ended 31st March 2014
(Rs. in lacs)
Particulars For the year ended
March 31, 2014 March 31, 2013
Sales/ Income from operations
(including excise duty) 310,596 303,650
Other Income 2,795 2,046
Profit/ (Loss) before Interest,
items & Tax 23,946 24,249
Interest (142) (300)
Depreciation (6,383) (6,032)
Profit/ (Loss) before tax 17,421 17,917
Provision for Tax (including
deferred tax and wealth tax) (5,130) (5,142)
Net Profit/ (Loss) for the year 12,291 12,775
Credit/ (Debit) Balance B/F
from previous year 31,171 18,396
Profit available for appropriation 43,462 31,171
Surplus/ (Deficit) carried
to Balance Sheet 43,462 31,171
Performance of the Company
During the year ended March 31, 2014 the revenue from operations
(including excise duty) of the Company, was Rs. 310,596 Lacs as
compared to last year''s revenue from operations of Rs. 303,650 Lacs up
by 2.3%. Profit before tax was Rs. 17,421 Lacs as compared to
corresponding profit of Rs. 17,917 Lacs in the previous year.
No Dividend on equity shares has been recommended by the Board for the
year ended 31st March 2014 considering the future capital investment
plans of the Company.
Management Discussion and Analysis Report (MD&A)
As required under the listing agreement, MD&A is enclosed as Annexure A
and is a part of this Report.
SALES & MARKETING
The slowdown in consumer appliances industry, which started in 2011,
continued in the financial year 2013-14. External factors continue to
remain challenging, commodity inflation continued to be high, the sharp
depreciation of the rupee in June 2013 and incremental costs to meet
tighter energy efficiency norms in Frost Free Refrigerators and Air
Conditioners led to higher consumer prices. Other inflationary
pressures, such as the calibrated increase in diesel prices,
contributed to the Consumer Price Index remaining above the 10% level
for whole of FY2013-14. The above factors impacted consumer demand and
overall negative growth in consumer durable industry.
In this challenging situation, the focus of Sales and Marketing was as
1) Continue to draw consumer insights from structured and informal
research, to plough into product innovation, brand and communication
2) Build on the new products launches and introduction of a wide range
of new finishes in both Frost free and Direct Cool refrigerator
3) Launch of Project Akraman 2.0 ensured improved distribution network
and better product mix. It extended the depth and width of the
distribution across towns by ensuring availability of extensive range
of products across stores, thereby ensuring better margins to the
4) Extension and consolidation of Brand Shops initiatives.
5) E-Commerce - As part of the aggressive digital strategy, company
launched ''W-Store'' (E-commerce site) for online purchase of your
Company products from anywhere at their convenience. The initial
response to this new initiative has been very encouraging. The
Whirlpool website has also been revamped and a mobile version of the
site has been developed so that the same environment and experience can
be created for customers interacting with the brand on their mobile
6) Early this year our new Brand Positioning, ''Whirlpool. Designed to
Delight.'' was unveiled. This is the first step in the journey of
attaining Brand Leadership position in line with our product leadership
strategy. The new Brand positioning revolves around the consumer, which
means that everything we do is centered around the consumer, be it the
way our products are designed or the innovative and intuitive
technology that goes into making our Products more intelligent and the
way we communicate with our consumers.
During financial year 2013-14 the International Business Division
witnessed major challenges in two of our largest export markets. There
was a major business restructuring in Australia resulting in all our
Refrigerator''s export shipments to Australia on hold for several
months. Further one of our big markets i.e. Sri Lanka, went the
protectionist way with increased tariffs and additional duty benefits
for local manufacturers. Due to this, the market structure underwent
fundamental changes with local products dominating and our pricing
becoming uncompetitive. The company is currently formulating its new
strategy to counter these challenges.
Apart from the above company delivered healthy growth in the rest of
the markets, in spite of a soft demand scenario all across emerging
markets. In the neighboring region Bangladesh in particular performed
well. We have started exploring opportunities in new markets like
Myanmar, initial response has been positive. Along with Myanmar, Nepal
and Philippines will provide growth potential for our export business
in future. In Philippines our brand is strong, recently the company has
developed a range of products customized for Philippines which should
generate substantial volume for the company. Our business in Middle
East Africa is moving at a steady pace too. With focused approach these
emerging markets, the export business is expected to grow at a healthy
In the year under review, the consumer service function of the Company
was primarily focused to deliver on the following:
- Deliver best in class service through differentiated service
experience – ''Branded service''
- Evolve partner operation as a direct to home channel
Efforts were put in to drive call center experience through processes
and good governance. With a full fledged ''state-of-the-art'' training
academy the focus was to improve the overall installation experience
and right diagnostics through in house training. ''Governing principle''
balanced score card was introduced as a measure to rate the service
partners on a scale of 1 to 5 on parameters covering service delivery,
process and system. This paid off well as there was a clear migration
of service partners from lower to higher levels and also gave a tool
for the business people to take corrective action.
With exciting new water products introduced in the service channel, the
''direct to home'' channel leveraged the already established service
network. Various ''go to market'' strategies like water testing, product
demonstration and cold calls assisted the category to grow. Existing
Whirlpool homes enabled the service folks to share the product and its
benefit and also forge a long term relationship. This is paying off
through recurring filter business.
The revenue stream is making steady growth with focus on accessories,
power solutions and contract business. This has not only paid off to
Whirlpool through improved business but also allowed the service
partner to mitigate their cost.
HUMAN RESOURCES - Winning through People
In 2013-14 the Human Resource function played a crucial role in
partnering with business to deal with a tough business scenario. The
key focus was to keep the workforce engaged, retain key talent and
To win at the marketplace, we invested heavily on the sales force
capability development. Through the initiative of i-Grow, this
initiative not only resulted in significant improvement in the front
end sales manager''s engagement levels but also sustaining high spirit
of winning in sales force.
Our commitment towards building leaders was evident in designing career
paths for young leaders and supporting it with multiple developmental
initiatives. The Whirlpool Service Academy trained more than 1,200
engineers to enhance their engineering skills.
Our sustained people efforts were recognized by employees as well as by
the external world. The engagement scores improved to 85% and Whirlpool
was also recognized as top 5 Great Place to Work in manufacturing
sector and Best Company on Employer Branding by Great Place to Work
FINANCE AND ACCOUNTS
In 2013-14 the fiscal, Macro Economics environment continue to remain
challenging with high Inflation, decline in GDP growth from 5 points to
4.5 points, significant increase in consumer prices leading to negative
consumer sentiments. As a result, the declining trend continued for the
3rd year in the consumer durables industry.
Against this background, your Company performance has been very
encouraging with 2.5% increase in net income vs. previous year, however
overall cost challenges impacted Profit before tax which declined by
2.8% compared to previous year. We continue to remain one of the most
profitable company in our Industry.
In this highly inflationary and declining demand environment your
Company''s key focus was on introduction of new innovative products in
the market and implementation of strong cost take out programs. The new
product line structure and mix management helped the Company in
maintaining / improving overall Profitability. In this tough operating
environment, effective working capital management helped in higher
generation of Cash for the Company, part of which was utilized Platform
up gradation and other Capex initiatives.
Your Directors intrinsically believe in the philosophy of Corporate
Governance and are committed to it for the effective functioning of the
In accordance with the provisions of the Companies Act, 1956 and the
Article 115 of the Articles of Association of the Company Mr. Anil
Berera and Mr. Anand Bhatia retire by rotation and being eligible offer
themselves for re-appointment.
Mr. Anil Berera is Whole time Director of the company and key
managerial person designated as Executive Director – Finance & Chief
Financial Officer. He is a Bachelor in commerce and Chartered
Accountant with over 30 years of rich working experience in finance,
accounts, treasury, taxation and general management. He joined the
Company in March 2007 as Chief Financial Officer for India Operations
and was promoted as Chief Financial Officer & Vice President (Asia
South). He has held several key positions in finance and accounts in
many organizations including Gillette, Becton Dickinson and
PricewaterhouseCoopers. He is not a Director in any other Company.
Mr. Anand Bhatia is an Independent non Executive Director of the
Company and is an Economics graduate from Cambridge University (U.K).
He has over 30 years of working experience at senior level with
Unilever Plc worldwide. Currently he is a director in (1) EID parry
(India) Limited (2) HGS Private Limited (3) Sowar Private Limited. He
is on your Board since 2001 and is also the Chairman of the Audit
Committee, Nomination and Remuneration Committee and Stakeholders
Relationship Committee. Mr. Anand Bhatia being a non executive
independent director is liable to retire by rotation as of now,
impending notification of Section 149 and other applicable provisions
of the Companies Act, 2013, your Directors are seeking appointment of
Mr. Anand Bhatia as Independent Director for five consecutive years for
a term up to 31st March, 2019.
Ms. Sonu Bhasin was appointed as an Additional Director of the Company
effective from 4th February, 2014, pursuant to the provisions of
Article 107 of the Articles of Association of the Company read with
section 260 of the Companies Act, 1956 (Now Section 161(1) of the
Companies Act, 2013). Ms. Sonu Bhasin holds office up to the date of
the forthcoming Annual General Meeting of the Company and a notice has
been received proposing Ms. Sonu Bhasin as a candidate for the office
of Director of the Company.
Ms. Sonu Bhasin is a B.Sc. from St. Stephen''s College, Delhi University
and an MBA from Faculty of Management Studies, Delhi University. She
has over 27 years of experience working in various Leadership positions
in organizations like Tata group, ING Vysya Bank, Axis Bank, Yes Bank
etc. Currently she is working as Chief Operating Officer with Tata
Capital Limited. She is on your Board from February 2014.
Impending notification of Section 149 and other applicable provisions
of the Companies Act, 2013, your Directors are seeking appointment of
Mr. Sanjiv Verma and Mr. Simon J Scarff as Independent Directors for
five consecutive years for a term up to 31st March, 2019. Details of
the proposal for appointment of Mr. Sanjiv Verma and Mr. Simon J Scarff
are mentioned in the explanatory statement under Section 102 of the
Companies Act, 2013 of the Notice of the 53rd Annual General Meeting.
Mr. Sanjiv Verma (holding DIN 00079498) is an engineering graduate from
IIT. He has over 23 years of experience working in various leadership
positions. At present he is the CEO of Embrace Innovations. His
previous assignments have included CEO of Davita India, and prior to
that General Manager South East Asia and Managing Director of Baxter
Healthcare. His strengths lie in strategic thinking and tactical skills
for business growth and profitability. His leadership skills include
analytical abilities and people management in multinational and
multicultural environment. He has experience of the ''not for profit''
sector as founder trustee of an NGO in chronic healthcare. He has been
on your board since 2009, and is also a member of the Audit committee,
Corporate Social Responsibility Committee and Nomination and
Mr. Simon J Scarff is an Independent Non Executive Director of the
company. He worked for over 23 years with Smithkline in various
capacities and had last served as Non Executive Director & Chairman of
GlaxoSmithKline Consumer Healthcare Limited up to 30th April 2013. In
1999 he was awarded the prestigious honour of the Officer of the Order
of the British Empire by Her Majesty, The Queen of England. He is on
the Board of your Company since 2001 and is also a member of the Audit
Committee and Nomination & Remuneration Committee.
None of the directors proposed for appointment or re-appointment are
holding any shares/ convertible instruments of the Company.
The Audit Committee has recommended to the Board, the re-appointment of
M/s S. R. Batliboi & Co. LLP, the present Auditors of the Company as
statutory auditors of the Company from the conclusion of the
forthcoming Annual General Meeting till the conclusion of 56th Annual
General Meeting to be held in the year 2017, subject to ratification of
their appointment at the subsequent Annual General Meetings and the
necessary resolution for their re-appointment as statutory auditors is
placed before the shareholders at the 53rd Annual General Meeting.
As at 31st March 2014, no Fixed Deposits was held by the Company.
LISTING OF SHARES
Company''s equity shares are listed at Bombay Stock Exchange Ltd. and
National Stock Exchange Ltd.
The Audit Committee held four (4) meetings during the year. The Members
of the Audit Committee are:- Mr. Anand Bhatia, Chairman - Independent
Director Mr. Simon J. Scarff, Member - Independent Director Mr. Sanjiv
Verma, Member - Independent Director Mr. Anil Berera, Member -
Mr. Anand Bhatia, Chairman of the Committee has adequate financial and
The Chief Financial Officer, Internal Auditor and the Statutory
Auditors of the Company are permanent invitees to the meetings of the
Audit Committee. It is a practice of the Committee to extend an
invitation to the Managing Director and Cost Auditor to attend the
meeting as and when required.
Mr. Ravi Sabharwal, Company Secretary, is Secretary of the Audit
DIRECTORS'' RESPONSIBILITY STATEMENT
The Directors confirm that:
(i) In the preparation of the annual accounts, the applicable
accounting standards have been followed, along with proper explanation
relating to material departures;
(ii) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit or
loss of the company for that period;
(iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
(iv) The Directors have prepared the annual accounts on a going concern
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of the provisions of Section 205C of the Companies Act, 1956,
during the financial year there was no unclaimed amount required to be
transferred to the Investor Education and Protection Fund established
by Central Government.
A Certificate from the Statutory Auditors regarding compliance of the
conditions of Corporate Governance as per the requirement of Clause 49
of the Listing Agreement with the Stock Exchanges is enclosed as part
of Corporate Governance Report.
The Board of Directors support the concept of Corporate Governance and
having regard to transparency, accountability and rationale behind the
decisions have made proper disclosures separately under the heading
The Directors confirm that Fixed Assets and Stocks of the Company are
adequately insured against fire and allied risk.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS & OUTGO
In accordance with the requirements of Section 217 (1) (e) of the
Companies Act, 1956 read with the Companies (Disclosure of
particulars in the report of the Board of Directors) Rules, 1988,
statement showing particulars with respect to Conservation of Energy,
Technology Absorption and Foreign Exchange Earnings and Outgo are
annexed hereto (Annexure B) and form part of this report.
As required by the provisions of Section 217 (2-A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of employees are set out in
the Annexure C to this Report. However, as per the provisions of
Section 219 (1) (b) (iv) of the Companies Act, 1956, the Directors''
Report is being sent to all members of the Company excluding the
aforesaid information. Any member interested in obtaining such
particulars may write to the Company Secretary either at the registered
office or Corporate Office of the Company.
The Company''s growth has been achieved by continued support from all
its stakeholders. The Company''s partners, different Stakeholders,
Customers, Suppliers, Employees, Investors, Community Members, Banks &
Financial Institutions have been instrumental in the Company''s success.
Your Directors wish to place on record their sincere thanks to these
partners. The Directors'' would also like to express their appreciation
to various agencies of Central & State Government for their continued
For and on behalf of the Board of Directors
Place of signature : Gurgaon Anil Berera Arvind Uppal
Date : May 19, 2014 [Executive Director & [Chairman &
Chief Financial Officer] Managing
DIN 00306485 DIN 00104992