Whirlpool of India. Directors Report, Whirlpool Reports by Directors
Whirlpool of India.
BSE: 500238|NSE: WHIRLPOOL|ISIN: INE716A01013|SECTOR: Consumer Goods - White Goods
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Directors Report Year End : Mar '14    « Mar 13
Dear Members,
 The Directors'' are pleased to present their 53rd Annual Report and
 Audited Accounts for the year ended 31st March 2014
 Financial Results
                                                       (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, 
 Depreciation, Extraordinary 
 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.
 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
 build capability.
 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
 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
 Remuneration Committee.
 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.
 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 -
 Executive Director
 Mr. Anand Bhatia, Chairman of the Committee has adequate financial and
 accounting knowledge.
 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
 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
 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
 Corporate Governance.
 The Directors confirm that Fixed Assets and Stocks of the Company are
 adequately insured against fire and allied risk.
 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
Source : Dion Global Solutions Limited
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