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Notes to Accounts of Whirlpool of India Ltd.

Mar 31, 2015

1. (a) Corporate information

Whirlpool of India Limited (the Company) is a public limited company registered in India under the Companies Act, 1956. Its shares are listed on BSE Ltd. and National Stock Exchange of India Ltd. The Company is a leading manufacturer of home appliances. It is primarily engaged in manufacturing and trading of Refrigerators, Washing Machines, Air Conditioners, Microwave Ovens and small appliances and caters to both domestic and international markets. It also provides services in the area of product development, and procurement services to Whirlpool Corporation, USA and other group companies.

(b) Basis of preparation

The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention, except in case of Land (freehold and leasehold), Building and Plant and Machinery of the Faridabad Refrigeration division for which revaluation was carried out. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year, except for the change in accounting policy explained below.

2. Terms/rights attached to equity shares

The company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. CONTINGENT LIABILITIES

(Rs. in lacs) Particulars 31 March, 31 March, 2015 2014 (a) Claims against the Company not acknowledged as debts: These claims are in respect of various 1,081.70 1,099.78 cases filed by the ex-employees, consumers and trade partners. The legal proceedings are going on and therefore it is not practicable to state the timing of any payment. The management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been recognised in these financial statements.

(b) Others - on account of pending litigations * Excise duty & service tax 2,838.91 2,890.99

* Custom duty 182.14 182.14

* Sales tax/ value added tax assessments 5,593.46 3,956.46

In view of large number of cases, it is not practicable to disclose individual details of all the cases. On the basis of current status of individual case and as per legal advice obtained by the Company, wherever applicable, the Company is confident of winning the above cases and is of view that no provision is required in respect of these litigations. The Company has also submitted bank guarantees with respective government authorities towards some of these pending litigations which have been included in point (d) below.

(c) Letter of Credits with Bank 7,602.70 6,992.89

(d) Bank Guarantees given to 1,547.33 2,885.87 Authorities

e) In the Income-tax assessments for preceding assessment years, the Assessing Officer have made disallowances of various expenses (other than transfer pricing adjustments) amounting to Rs.6,943.91 lacs (Previous Year Rs.142,075.47 lacs) including penalty & other adjustments. The Company's appeals against these orders are pending before the Appellate Authorities. This also includes Income-tax department's appeal against the Company before the Appellate Authorities for certain matters wherein the CIT (Appeals) have ordered in favor of the Company.

On the basis of current status of individual case for respective years and as per legal advice obtained by the Company, wherever applicable, the Company is confident of winning the above cases and is of view that no provision is required in respect of these cases.

f) In the Transfer Pricing Assessment for assessment year(s) 2003-04, 2004-05, 2005-06, 2008-09, 2009-10, 2010-11 and 2011-12 the Income Tax Authorities have made transfer pricing adjustments against various transactions undertaken by the Company. These transfer pricing adjustments have been set-off by the Assessing Officer against accumulated brought forward losses and depreciation allowances of the Company by Rs.7,348.70 lacs (Previous Year Nil) for Assessment Year-2010-11, Rs.21,248.22 lacs (Previous year Rs.12,458.19 lacs) for Assessment Year 2009-10, Rs.10,203.10 lacs (Previous Year Rs.20,332.25 lacs) for Assessment Year 2008-09, Rs.9,734.49 lacs (Previous Year Rs.9,734.49 lacs) for the Assessment year 2005-06, and Rs.3,628.14 lacs (Previous Year Rs.3,628.14 lacs) for Assessment year 2003-04. The Company's objection against the draft assessment order for A.Y 2011-12 for Transfer Pricing adjustment of Rs.294,45.38 lacs (Previous year Nil) is pending before the Dispute Resolution Panel (DRP). The final assessment order passed by the AO giving effect to DRP order confirming Transfer Pricing adjustment of Rs.24,385.15 lacs (previous year Rs.24,385.15 lacs) for the Assessment year 2010-11 has been challenged by the company by preferring an appeal before the ITAT. For Assessment Year - 2009-10 the company also preferred an appeal before the ITAT against the order of the DRP. In respect of Assessment year 2008-09, the Company's appeal against the DRP order confirming Transfer Pricing adjustments suggested by the Transfer Pricing Officer have been decided granting part relief of Rs.16,100.00 lacs in favor of the company and set aside the matter to Transfer Pricing Officer for the balance amount. The Tax Department and the company are in appeal before the Hon'ble High Court against the ITAT order for A.Y 2008-09. Appeal for Assessment year 2005-06 have been decided by the CIT (Appeals) granting relief of Rs.9,327.78 lacs in favor of the company and the company preferred further appeal before the ITAT for the balance amount of Rs.406.71 lacs. The company appeal for Assessment Year 2003-04 for the balance TP adjustment confirmed by the CIT (Appeals) is pending before the ITAT for Rs.1,699.09 lacs (previous year Rs.1,699.99 lacs). The Tax Department also filed appeal before the ITAT for A.Y 2003-04, 2004-05 and 2005-06 amounting Rs.1,929.05 lacs, Rs.7,967.93 lacs and Rs.9,327.78 lacs respectively for relief granted by the CIT (Appeals) on account of Transfer pricing adjustments. Depending on the outcome of the aforementioned cases, assessments for the subsequent periods and up to March 31, 2015 could result into demands/settlements on the similar items, amounts whereof could not be ascertained

The Income Tax Department appeal is pending against the deletion of the penalty of Rs.624.42 lacs for Assessment Year 2003-04 and a corresponding cross appeal by the Company is pending before the ITAT. Penalty imposed by the Income Tax Department for Rs.2.35 lacs (Previous year Nil) for A.Y 2004-05, for Rs.11.20 lacs (Previous year-Nil) for A.Y 2009-10, Rs.148.43 lacs (Previous year Nil) for A.Y 2005-06 which have been challenged by the company by filling appeal(s) before the CIT (Appeals).

An order u/s 201(1)/201(1A) raising tax demand of Rs.10.69 lacs (Previous year-Nil) for A.Y 2010-11 was contested by the Company by preferring an appeal before the CIT-A.

On the basis of current status of above-mentioned individual cases and as per legal advice obtained by the Company, wherever applicable, the Company is confident of winning the above cases and is of view that no provision is required in respect of these litigations.

4. Capital Commitments

Capital work contracted but still under execution (net of advances) is estimated at Rs.765.33 lacs (previous year Rs.2,555.11 lacs).

5. Segment Reporting

a) Primary Segment - Business Segment

The Company's Operations predominantly comprise of only one segment i.e. Home Appliances. In view of the same, separate segmental information is not required to be given as per the requirements of Accounting Standard 17 - Segment Reporting.

b) Secondary Segment - Geographical Segment

The analysis of geographical segment is based on the geographical location of the customers. The Company operates primarily in India and has presence in international markets as well. Its business is accordingly aligned geographically, catering to two markets. The Company has considered domestic and exports markets as geographical segments and accordingly disclosed these as separate segments. The geographical segments considered for disclosure are as follows:

* Sales within India represents sales made to customers located within India.

* Sales outside India represents sales made to customers located outside India.

b. Where the Company is the lessor

The Company has given building on lease which is cancellable at option of the Company. The income recognized in the Statement of profit and loss is Rs. 96.00 lacs (previous year Rs. 96.00 lacs).

6. Related Party Transactions

Following are the Related Parties and transactions made with them during the year:

Key Management Mr. Arvind Uppal, Chairman & Managing Director Personnel Mr. Anil Berera, Executive Director & Chief Financial Officer

Mr. Vikas Singhal, Executive Director

Mr. Ravi Kumar Sabharwal, Company Secretary

Parties having Whirlpool Corporation Inc., USA (Ultimate Holding direct or Company), indirect control over Whirlpool Mauritius Limited (Holding Company) the Company

Group Companies/ Whirlpool (China) Investment Co. Ltd., Enterprise where common control Whirlpool Southeast Asia Pte, Whirlpool Europe exists and with S.r.l., Whirlpool Slovakia Spol s.r.o., Whirlpool whom transactions S.A., Whirlpool (Hong Kong) Limited, have taken place during the year. Whirlpool (Australia) Pty. Limited, WFC de Mexico S. de R.L. de C.V.,

Whirlpool Argentina S.A, Whirlpool South Africa (Pty) Limited, Guangdong Whirlpool Electrical Appliances Co. Ltd.,

Whirlpool Microwave Products Development Limited, Beijing Embraco Snowflake Compressor Company Ltd, Whirlpool France S.A.S., Whirlpool Sweden A.B., Whirlpool Bauknecht, Empressa Brasileira, Comercial Acros Whirlpool, S.A. de C.V, Whirlpool Product Development (Shenzhen) Co. Ltd., Whirlpool Asia Pvt Ltd., Whirlpool Peru S.R.L., Whirlpool Poland SA, Whirlpool Chile Ltd, Maytag Sales Inc.

7. Impact due to change in useful life of fixed assets

Pursuant to the requirements of Schedule II to the Companies Act 2013, with effect from April 1, 2014 management has reassessed the useful life of all fixed assets based on detailed technical evaluation. Depreciation for the current year has been provided based on life as prescribed under Schedule II to the Companies Act 2013 except where the useful life estimated by management is lesser than the prescribed life. Consequently, depreciation charge to the statement of profit and loss for the current year ended March 31, 2015, is lower by Rs.1,020.21 lacs. Further, based on transitional provisions provided in Note 7(b) of Schedule II of the Companies Act 2013 the carrying value of fixed assets, where the remaining useful life was nil as at April 1, 2014, amounting to Rs.3,478.49 lacs (net of deferred tax of Rs. 1,791.16 lacs) has been adjusted with retained earnings.

8. Share Based Compensation

Disclosures in accordance with the Guidance Note on Accounting for Employee Share-based Payments issued by Institute of Chartered Accountants of India The Company does not provide any equity-based compensation to its employees. However, the parent company, Whirlpool Corporation, USA has provided various share-based payment schemes to employees.

A. Details of these plans are given below:

i) Employee Stock Options

A stock option gives an employee, the right to purchase shares of Whirlpool Corporation at a fixed price for a specific period of time. The grant price (or strike price) is fixed at the closing price of Whirlpool Corporation common stock on the date of grant. Stock options expire in ten years from the date they are granted and vests in equal annual installments over service periods.

ii) Performance Cash Units

A performance cash unit is a unit valued at $1 (1 performance cash unit = $1), which an employee receives at the end of a specified vesting period. Performance cash units provide cash value at delivery. Performance cash units always have value and are not tied to the price of Whirlpool Corporation stock.

9. Gratuity and other post-employment benefit plans

Gratuity (being administered by a Trust) is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employee completing 5 years of service. The Gratuity plan for the Company is a defined benefit scheme where annual contributions as demanded by the insurer are deposited, to a Gratuity Trust Fund established to provide gratuity benefits. The Trust has taken an Insurance policy, whereby these contributions are transferred to the insurer. The Company makes provision of such gratuity asset/ liability in the books of account on the basis of actuarial valuation carried out by an independent actuary.

The Company also provide certain additional retirement benefits to the employees of the Faridabad Refrigeration Operations where Rs.20,000 is paid to employee on his retirement. This retirement benefit is an unfunded defined benefit scheme. The Company makes provision of such liability on the basis of actuarial valuation carried out by an independent actuary.

The following tables summarises the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans.

10. Previous year figures

Previous year figures have been regrouped/ reclassified, where necessary, to conform to this year's classification.


Mar 31, 2014

1. (a) Corporate information

Whirlpool of India Limited (the Company) is a public limited company registered in India under the Companies Act 1956. Its shares are listed on Bombay Stock Exchange and National Stock Exchange. The Company is a leading manufacturer of home appliances. It is primarily engaged in manufacturing and trading of Refrigerators, Washing Machines, Air Conditioners, Microwave Ovens and small appliances and caters to both domestic and international markets. It also provides services in the area of product development, and procurement services to Whirlpool Corporation, USA and other group companies.

(b) Basis of preparation

The financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) and to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956 read with General Circular 8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs. The financial statements have been prepared under the historical cost convention on an accrual basis, except in case of Land (freehold and leasehold), Building and Plant and Machinery of the Faridabad Refrigeration division for which revaluation is carried out.

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

2. CONTINGENT LIABILITIES

(Rs. in lacs)

Particulars 31 March, 2014 31 March, 2013

(a) Claims against the Company not acknowledged as debts:

These claims are in respect of various cases filed by the ex-employees and 1,099.78 1,027.15 consumers. It has been estimated that the liability arising on the Company should the actions be successful is Rs.1,099.78 lacs (Previous Year Rs. 1,027.15 lacs). The legal proceedings are going on and therefore it is not practicable to state the timing of any payment. The management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in these financial statements.

(b) Others:-

- On account of pending appeals of Excise Duty & Service Tax 2,890.99 3,813.80

- On account of pending appeals of Custom Duty 182.14 264.79

- On account of pending appeals of Sales Tax/ Value Added Tax assessments 3,956.46 3,139.25

(c) Letter of Credits with Bank 6,992.89 4,184.62

(d) Bank Guarantees given to Government Authorities 2,885.87 6,008.00

These cases as mentioned in point (b) above for which the total estimated liability, should the actions be successful, is Rs. 7,029.59 lacs (Previous year Rs. 7,217.84 lacs). The legal proceedings are going on and therefore it is not practicable to state the timing of any payment.

In view of large number of cases, it is not practicable to disclose individual details of all the cases. On the basis of current status of individual case and as per legal advice obtained by the Company, wherever applicable, the Company is confident of winning the above cases and is of view that no provision is required in respect of these cases.

e) In the Income-tax assessments for preceding assessment years, the Assessing Officer have made disallowances of various expenses (other than transfer pricing adjustments) amounting to Rs. 142,075.47 lacs (Previous Year Rs. 9,378.50 lacs). The Company''s appeals against these orders are pending before the Appellate Authorities. This includes Income-tax department''s appeal against the Company before the Appellate Authorities for certain matters wherein the CIT (Appeals) have ordered in favor of the Company.

On the basis of current status of individual case for respective years and as per legal advice obtained by the Company, wherever applicable, the Company is confident of winning the above cases and is of view that no provision is required in respect of these cases.

f) In the Transfer Pricing Assessment for assessment year(s) 2003-04, 2004-05, 2005-06, 2008-09, 2009-10 and 2010- 11 the Income Tax Authorities have made transfer pricing adjustments against various transactions undertaken by the Company. These transfer pricing adjustments have been set-off by the Assessing Officer against accumulated brought forward losses and depreciation allowances of the Company by Rs.12,458.19 lacs (Previous year Rs. 12,944.63 lacs) for Assessment Year 2009-10, Rs.20,332.25 lacs (Previous Year Rs. 20,332.25 lacs) for Assessment Year 2008-09, Rs.9,734.49 lacs (Previous Year Rs.9,734.49 lacs) for the Assessment year 2005-06, Nil (Previous year Rs. 7,967.93 lacs) for the Assesment year 2004-05 and Rs.3,628.14 lacs (Previous Year Rs.3,628.14 lacs) for Assessment year 2003- 04. The Company''s objection against the draft assessment order/Transfer pricing for Rs. 24,385.15 lacs (previous year Nil) for the Assessment order 2010-11is pending before the Dispute Resolution Panel (DRP). For Assessment Year 2009-10 the company preferred an appeal before the ITAT against the order of the DRP In respect of Assessment year 2008-09, the Company''s appeal against the DRP order confirming Transfer Pricing adjustments suggested by the Transfer Pricing Officer have been decided granting part relief of Rs.16,100.00 lacs in favor of the company and set aside the matter to Transfer Pricing Officer for the balance amount, but the appeal effect of the same are pending. Appeal for Assessment year 2005-06 have been decided by the CIT (Appeals) granting relief of Rs. 9,327.78 lacs in favor of the company and the company preferred further appeal before the ITAT for the balance amount of Rs.406.71 lacs. The company appeal for Assessment Year 2003-04 for the balance TP adjustment confirmed by the CIT (Appeals) is pending before the ITAT for Rs. 1,699.09 lacs. The Tax Department also filed appeal before the ITAT for A.Y 2003-04, 2004-05 and 2005-06 amounting Rs. 1,929.05 lacs, Rs. 7,967.93 lacs and Rs. 9,327.78 lacs respectively for relief granted by the CIT (Appeals) on account of Transfer pricing adjustments. Depending on the outcome of the aforementioned cases, assessments for the subsequent periods and up to March 31, 2014 could result into demands/ settlements on the similar items, amounts whereof could not be ascertained.

Penalty imposed by Income Tax Authorities aggregating to Nil (Previous Year Rs. 220.28 lacs) in respect of Assessment Year 1998-99 for furnishing inaccurate particulars of income have been deleted by the CIT-A in the current year. The Income Tax Department filed an appeal before the ITAT against the deletion of the penalty of Rs. 624.42 lacs for Assessment Year 2003-04 and a corresponding cross appeal by the Company is pending before the ITAT.

On the basis of current status of above-mentioned individual cases and as per legal advice obtained by the Company, wherever applicable, the Company is confident of winning the above cases and is of view that no provision is required in repect of these cases.

3. Capital Commitments

Capital work contracted but still under execution (net of advances) is estimated at Rs. 2,555.11 lacs (previous year Rs. 1,480.11 lacs).

4. Segment Reporting

a) Primary Segment - Business Segment

The Company''s Operations predominantly comprise of only one segment i.e. Home Appliances. In view of the same, separate segmental information is not required to be given as per the requirements of Accounting Standard 17.

b) Secondary Segment - Geographical Segment

The analysis of geographical segment is based on the geographical location of the customers. The Company operates primarily in India and has presence in international markets as well. Its business is accordingly aligned geographically, catering to two markets. The Company has considered domestic and exports markets as geographical segments and accordingly disclosed these as separate segments. The geographical segments considered for disclosure are as follows:

- Sales within India represents sales made to customers located within India.

- Sales outside India represents sales made to customers located outside India.

5. Related Party Transactions

Following are the Related Parties and transactions made with them during the year:

Key Management Personnel

Mr. Arvind Uppal, Chairman & Managing Director

Mr. Anil Berera, Executive Director & Chief Financial Officer

Mr. Vikas Singhal, Executive Director

Parties having direct or indirect control over the Company

Whirlpool Corporation Inc., USA (Ultimate Holding Company), Whirlpool Mauritius Limited (Holding Company)

Group Companies / Enterprise where common control exists and with whom transactions have taken place during the year.

Whirlpool (China) Investment Co. Ltd.,

Whirlpool Southeast Asia Pte, Whirlpool Europe S.r.l., Whirlpool Slovakia Spol s.r.o., Whirlpool

S.A., Whirlpool (Hong Kong) Limited,

Whirlpool (Australia) Pty. Limited, WFC de Mexico S. de R.L. de C.V.,

Whirlpool Argentina S.A, Whirlpool South Africa (Pty) Limited, Guangdong Whirlpool Electrical

Appliances Co. Ltd.,

Whirlpool Microwave Products Development Limited, Beijing Embraco Snowflake Compressor

Company Ltd, Whirlpool France S.A.S., Whirlpool Sweden A.B., Whirlpool Bauknecht , Empressa

Brasileira, Comercial Acros Whirlpool, S.A. de C.V., Whirlpool Product Development (Shenzhen)

Co. Ltd., Whirlpool Asia Pvt Ltd., Whirlpool Peru S.R.L., Whirlpool Poland SA, Whirlpool Chile Ltd, Maytag Sales Inc.

6. Income Tax

The Company has recognized Rs. 68.99 lacs as on 31st March 2014 as Minimum Alternate Tax (MAT) credit entitlement (Previous Year Rs. 1,721.55 lacs), which represents that portion of the MAT Liability, the credit of which would be available based on the provisions of Section 115 JAA of the Income Tax Act, 1961. The Management based on the future profitability projections and also profit earned during the year is confident that there would be sufficient taxable profit in future which will enable the Company to utilize the above MAT credit entitlement.

7. Share Based Compensation

Disclosures in accordance with the Guidance Note on Accounting for Employee Share-based Payments issued by Institute of Chartered Accountants of India

The Company does not provide any equity-based compensation to its employees. However, the parent company, Whirlpool Corporation, USA has provided various share-based payment schemes to employees.

A. Details of these plans are given below:

i) Employee Stock Options

A stock option gives an employee, the right to purchase shares of Whirlpool Corporation at a fixed price for a specific period of time. The grant price (or strike price) is fixed at the closing price of Whirlpool Corporation common stock on the date of grant. Stock options expire in ten years from the date they are granted and vests in equal annual installments over service periods.

ii) Performance Cash Units

A performance cash unit is a unit valued at $1 (1 performance cash unit = $1), which an employee receives at the end of a specified vesting period. Performance cash units provide cash value at delivery. Performance cash units always have value and are not tied to the price of Whirlpool Corporation stock.

8. Gratuity and other post-employment benefit plans

Gratuity (being administered by a Trust) is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employee completing 5 years of service. The Gratuity plan for the Company is a defined benefit scheme where annual contributions as demanded by the insurer are deposited, to a Gratuity Trust Fund established to provide gratuity benefits. The Trust has taken an Insurance policy, whereby these contributions are transferred to the insurer. The Company makes provision of such gratuity asset/ liability in the books of account on the basis of actuarial valuation carried out by an independent actuary.

The Superannuation (pension) plan for the Company is a defined contribution scheme where monthly contribution @ 15% of basic pay (subject to maximum of Rs. 1.00 lacs per annum) for certain employee at manager and above level (at the option of employee) is paid to a Superannuation Trust Fund established to provide pension benefits. The Trust Fund has taken an Insurance policy, whereby these contributions are transferred to the insurer.

The Provident Fund is a defined contribution scheme whereby the Company deposits an amount determined as a fixed percentage of basic pay to the "Statutory Provident Fund". The benefit vests upon commencement of employment.

The Company has also agreed to provide certain additional retirement benefits to the employees of the Faridabad Refrigeration Operations where Rs.20,000 is paid to employee on his retirement. This retirement benefit is an unfunded defined benefit scheme. The Company makes provision of such liability on the basis of actuarial valuation carried out by an independent actuary.

The following tables summarises the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans.

9. On 18th April 2012, there was fire in a distribution warehouse of the Company situated at Zirakhpur, Punjab and on 11th November 2012, there was fire in Pune, Maharashtra wherein finished goods and spares had been destroyed. The inventories were insured and the claim has been settled during the year.

10. Previous year figures

Previous year figures have been regrouped/ reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2013

1. (a) Corporate information

Whirlpool of India Limited (the Company) is a public limited company registered in India under the Companies Act 1956. Its shares are listed on Bombay Stock Exchange and National Stock Exchange. The Company is a leading manufacturer of home appliances. It is primarily engaged in manufacturing and trading of Refrigerators, Washing Machines, Air Conditioners, Microwave Ovens and small appliances and caters to both domestic and international markets. It also provides services in the area of product development, and procurement services to Whirlpool Corporation, USA and other group companies.

(b) Basis of preparation

The financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards as notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of Land (freehold and leasehold), Building and Plant and Machinery of the Refrigeration division for which revaluation is carried out.

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(Rs. in lacs)

Particulars 31 March, 2013 31 March, 2012

2. CONTINGENT LIABILITIES

(a) Claims against the Company not acknowledged as debts: 1027.15 1154.12 These claims are in respect of various cases filed by the ex- employees and consumers. It has been estimated that the liability arising on the Company should the actions be successful is Rs.1,027.15 lacs (Previous Year Rs. 1,154.12 lacs). The legal proceedings are going on and therefore it is not practicable to state the timing of any payment. The management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in these financial statements.

(b) Others:-

- On account of pending appeals of Excise Duty & Service Tax 3,813.80 2,119.36

- On account of pending appeals of Custom Duty 264.79 264.79

- On account of pending appeals of Sales Tax/ Value Added Tax assessments 3,139.25 3,204.62

(c) Letter of Credits with Bank 4,184.62 4,590.40

(d) Bank Guarantees given to Government Authorities 6,008.00 5,404.42

These cases as mentioned in point (b) above for which the total estimated liability, should the actions be successful, is Rs. 7,217.84 lacs (Previous Year Rs. 5,588.77 lacs). The legal proceedings are going on and therefore it is not practicable to state the timing of any payment.

In view of large number of cases, it is not practicable to disclose individual details of all the cases. On the basis of current status of individual case and as per legal advice obtained by the Company, wherever applicable, the Company is confident of winning the above cases and is of view that no provision is required in respect of these cases.

e) In the Income-tax assessments for preceding assessment years, the Assessing Officer have made disallowances of various expenses (other than transfer pricing adjustments) amounting to Rs.9,378.50 lacs (Previous Year Rs.8,306.12 lacs). The Company''s appeals against these orders are pending before the Appellate Authorities. This includes Income- tax department''s appeal against the Company before the Appellate Authorities for certain matters wherein the CIT (Appeals) have ordered in favor of the Company.

On the basis of current status of individual case for respective years and as per legal advice obtained by the Company, wherever applicable, the Company is confident of winning the above cases and is of view that no provision is required in respect of these cases.

f) In the Transfer Pricing Assessment for assessment year(s) 2003-04, 2004-05, 2005-06, 2008-09 and 2009-10 the Income Tax Authorities have made transfer pricing adjustments against the various transactions undertaken by the company. These transfer pricing adjustments have been set off by the Assessing Officer against accumulated brought forward losses and depreciation allowances of the company by Rs.12,944.63 lacs (Previous Year Nil) for Assessment Year 2009-10, Rs.20,332.25 lacs (Previous Year Rs.19,871.43 lacs) for Assessment Year - 2008-09, Rs.9,734.49 lacs (Previous Year Rs.9,734.49 lacs) for the Assessment Year 2005-06, Rs.Nil (Previous Year Rs.7,967.93 lacs) for Assessment Year 2004-05 and Rs.3,628.14 lacs (Previous Year Rs. 3,628.14 lacs) for the Assessment year 2003-04. The company''s appeal for the Assessment Year 2009-10 is pending before Dispute Resolution Panel (DRP), in respect of Assestment Year 2008-09, the Company is in appeal before ITAT against the order of the Transfer Pricing Officer including effect to the DRP''s order for the same year. Appeal for Assessment Year - 2005-06 is pending before the Commissioner of Income Tax and appeal for Assessment year 2003-04 is pending before the Income Tax Appellate Tribunal. Depending on the outcome of the aforementioned cases, assessments for the subsequent periods and upto March 31, 2013 could result into demands/settlements on the similar items, amounts whereof could not be ascertained.

Income Tax Authorities have imposed penalty aggregating to Rs.220.28 lacs (Previous Year Rs.Nil) in respect of assessment year 1998-99 for furnishing inaccurate particulars of income. The Company has filed appeal against the said penalty order before CIT (Appeals). During the earlier year a similar penalty was levied by Income Tax Authorities for the Assessment Year 2003-04 and for which the Commissioner of Income Tax- Appeals has deleted a penalty of Rs.624.42 lacs out of penalty aggregating to Rs.638.61lacs imposed by Income Tax Authorities for the financial year 2012-13. The Income Tax Department has filed further appeal before the ITAT and a corresponding cross appeal has also been filed by the Company before the ITAT.

On the basis of current status of above-mentioned individual cases and as per legal advice obtained by the Company, wherever applicable, the Company is confident of winning the above cases and is of view that no provision is required in respect of these cases.

3. Capital Commitments

Capital work contracted but still under execution (net of advances) is estimated at Rs 1,480.11 lacs (previous year Rs. 1,905.49 lacs).

4. Segment Reporting

a) Primary Segment - Business Segment

The Company''s Operations predominantly comprise of only one segment i.e. Home Appliances. In view of the same, separate segmental information is not required to be given as per the requirements of Accounting Standard 17.

b) Secondary Segment - Geographical Segment

The analysis of geographical segment is based on the geographical location of the customers. The Company operates primarily in India and has presence in international markets as well. Its business is accordingly aligned geographically, catering to two markets. The Company has considered domestic and exports markets as geographical segments and accordingly disclosed these as separate segments. The geographical segments considered for disclosure are as follows:

- Sales within India represents sales made to customers located within India.

- Sales outside India represents sales made to customers located outside India.

5. Income Tax

The Company has recognized Rs. 1,721.55 lacs as on 31st March 2013 as Minimum Alternate Tax (MAT) credit entitlement (Previous Year Rs. 2,890.26 lacs), which represents that portion of the MAT Liability, the credit of which would be available based on the provisions of Section 115 JAA of the Income Tax Act, 1961. The Management based on the future profitability projections and also profit earned during the year is confident that there would be sufficient taxable profit in future which will enable the Company to utilize the above MAT credit entitlement.

6. Share Based Compensation

Disclosures in accordance with the Guidance Note on Accounting for Employee Share-based Payments issued by Institute of Chartered Accountants of India

The Company does not provide any equity-based compensation to its employees. However, the parent company, Whirlpool Corporation, USA has provided various share-based payment schemes to employees.

A. Details of these plans are given below:

i) Employee Stock Options

A stock option gives an employee, the right to purchase shares of Whirlpool Corporation at a fixed price for a specific period of time. The grant price (or strike price) is fixed at the closing price of Whirlpool Corporation common stock on the date of grant. Stock options expire in ten years from the date they are granted and vests in equal annual installments over service periods.

ii) Performance Cash Units

A performance cash unit is a unit valued at $1 (1 performance cash unit = $1), which an employee receives at the end of a specified vesting period. Performance cash units provide cash value at delivery. Performance cash units always have value and are not tied to the price of Whirlpool Corporation stock.

7. Gratuity and other post-employment benefit plans

Gratuity (being administered by a Trust) is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employee completing 5 years of service. The Gratuity plan for the Company is a defined benefit scheme where annual contributions as demanded by the insurer are deposited, to a Gratuity Trust Fund established to provide gratuity benefits. The Trust has taken an Insurance policy, whereby these contributions are transferred to the insurer. The Company makes provision of such gratuity asset/ liability in the books of account on the basis of actuarial valuation carried out by an independent actuary.

The Superannuation (pension) plan for the Company is a defined contribution scheme where monthly contribution @ 15% of basic pay for certain employee at manager and above level (at the option of employee) is paid to a Superannuation Trust Fund established to provide pension benefits. The Trust Fund has taken an Insurance policy, whereby these contributions are transferred to the insurer.

The Provident Fund is a defined contribution scheme whereby the Company deposits an amount determined as a fixed percentage of basic pay to the "Statutory Provident Fund". The benefit vests upon commencement of employment.

The Company has also agreed to provide certain additional retirement benefits to the employees of the Faridabad Refrigeration Operations where Rs.20,000 is paid to employee on his retirement. This retirement benefit is an unfunded defined benefit scheme. The Company makes provision of such liability on the basis of actuarial valuation carried out by an independent actuary.

The following tables summarises the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

8. On 18 th April 2012, there was fire in a distribution warehouse of the Company situated at Zirakhpur, Punjab and on 11th November 2012 there was a fire in Pune, Maharashtra wherein finished goods and spares of Rs. 651.01 lacs has been estimated to be destroyed. The inventory was fully insured and the management expects that the entire loss of inventory is fully recoverable from the insurer.

9. Previous year figures

Previous year figures have been regrouped/ reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2012

1. (a) Corporate information

Whirlpool of India Limited (the Company) is a public limited company registered in India under Companies Act 1956. Its shares are listed on Bombay Stock Exchange and National Stock Exchange. The Company is a leading manufacturer of home appliances. It is primarily engaged in manufacturing and trading of Refrigerators, Washing Machines, Air Conditioners, Microwave Ovens and small appliances and caters to both domestic and international markets. It also provides services in the area of product development and procurement services to Whirlpool Corporation, USA and other group companies.

(b) Basis of preparation

The financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards as notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of Land (freehold and leasehold), Building and Plant and Machinery of the Refrigeration division for which revaluation is carried out.

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year, except for the change in accounting policy explained below.

(a) Terms/rights attached to equity shares

The company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(b) Terms/rights of redemption of 10% Redeemable Non-Convertible Cumulative Preference Shares

During the year 2005-06, the Company has issued 1,52,342,500 10% Redeemable Non-Convertible Cumulative Preference Shares of Rs 10 each to Whirlpool Canada Holding Co. , a subsidiary of Whirlpool Corporation Inc., USA, the ultimate holding Company. These Preference Shares were redeemable at par at the earliest of the following events:

(i) at the end of 20 years from the date of allotment; i.e. June 20, 2005 for 108,850,000 Preference Shares and August 9, 2005 for 43,492,500 Preference Shares

(ii) at any time after the expiry of 30 days from the date on which the Company gives subscribers a notice of its intention to redeem the shares; or

(iii) within 30 days from the date on which the subscriber gives the Company a notice of its intention to have the shares redeemed.

10% redeemable non convertible cumulative preference share are fully owned by Whirlpool Canada Holding Co and is entitled to vote only on resolutions placed before the Company which directly affects the rights attached to the preference shares as set out in section 87 of the Companies Act, 1956. 10% redeemable non convertible cumulative preference share carry cumulative dividend at the rate of 10% per annum. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

During the year the Company has redeemed 53,850,000 (Previous Year 98,492,500) numbers of Preference Shares at par based on the notice received from the subscriber i.e. Whirlpool Canada Holding Co., giving its intention to have the share redeemed. Such Preference Shares were redeemed by the Company in three tranches, 53,850,000 Preference Shares on July 6, 2011, 55,000,000 Preference Shares on November 2, 2010 and 43,492,500 Preference Shares on July 22, 2010. The total amount of Preference Share Capital redeemed by the Company during the current year aggregates to Rs 5,385 Lacs (Previous Year Rs 9,849.25 Lacs). Consequently thereto, an amount of Rs 5,385 Lacs (Previous Year Rs 9849.25 Lacs) has also been transferred to Capital Redemption Reserve Account.

As per the records of the company, including its register of shareholders/members and other declaration received from the shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

(c) Shares held by holding company , ultimate holding company, Subsidiaries of the holding company, associates of the holding company, subsidiaries of the ultimate holding company and/or associates of the ultimate holding company

Provision is recognized on actuarial basis for expected warranty claims on products sold. It is expected that most of this cost will be paid over the warranty period as per warranty terms. Assumptions used to calculate the provision for warranties were based on current and previous year sales level and the failure trend in respect of defectives.

In view of large number of cases, it is not practicable to disclose individual details. Above provisions are affected by numerous uncertainties and management has taken all efforts to make a best estimate. Timing of economic benefit outflow will depend upon timing of decision of cases

Notes:-

a. Revaluations

The Company originally revalued its Fixed Assets of the Refrigerator Division based on valuation report of the independent valuer during the financial year 1992-93. Net additions to Fixed Assets on account of such revalution was Rs.11,362.28 lacs. In the financial year 1995-96, the Company again revalued the fixed assets of the Refrigerator Division and reversed the revaluation reserve created in the financial year 1992-93. Additions to revaluation reserve (over historical cost) during the financial year 1995-96 were as follows:

Depreciation includes Rs. 39.62 lacs (Previous Year Rs. 39.62 lacs), being deprecation on revalued Fixed Assets, which has been recouped from the Revaluation Reserve.

b. Grant

Additions to Gross Block of Plant and Machinery are after deducting grant received amounting to Rs. 25.31 lacs (Previous Year Rs. 9.18 lacs)

c. Plant & Machinery includes moulds lying with the third parties amounting to Rs. 6601.47 lacs (Previous Year Rs. 10,990.47 lacs) with a net book value of Rs. 2865.92 lacs. (Previous Year Rs. 3,140.89 lacs).

# Excise duty on sales amounting to Rs. 19,253.94 lacs (Previous Year Rs. 19,632.41 lacs) has been reduced from sales in Profit and Loss account and excise duty on reduction in stock amounting to Rs. 604.83 lacs (Previous Year Rs. 948.26 lacs on account of increase in stock) has been considered as expense in note 22 of the financial statements.

(Rs. in lacs)

Particulars 31 March, 31 March,

1. CONTINGENT LIABILITIES

(a) Claims against the Company not acknowledged as debts: 1,154.12 1,247.52

These claims are in respect of various cases filed by the ex- employees and consumers. It has been estimated that the liability arising on the Company should the actions be successful is Rs. 1,154.12 lacs (Previous Year Rs. 1,247.52 lacs). The legal proceedings are going on and therefore it is not practicable to state the timing of any payment. The management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in these financial statements.

(b) Others:-

- On account of pending appeals of Excise Duty & Service Tax 2,119.36 3,586.46

- On account of pending appeals of Custom Duty 264.79 305.63

- On account of pending appeals of Sales Tax/ Value Added

Tax assessments 3,204.62 1,650.85

(c) Letter of Credits with Bank 4,590.40 4,701.34

(d) Bank Guarantees given to Government Authorities 5,404.42 4,581.08

These cases as mentioned in point (b) above for which the total estimated liability, should the actions be successful, is Rs. 5,588.77 lacs (Previous year Rs. 5,542.94 lacs). The legal proceedings are going on and therefore it is not practicable to state the timing of any payment.

In view of large number of cases, it is not practicable to disclose individual details of all the cases. On the basis of current status of individual case and as per legal advice obtained by the Company, wherever applicable, the Company is confident of winning the above cases and is of view that no provision is required in respect of these cases.

e) In the Income-tax assessments for preceding assessment years, the Assessing Officer have made disallowances of various expenses (other than transfer pricing adjustments) amounting to Rs. 8,306.12 lacs (Previous Year Rs. 9,383.33 lacs). The Company's appeals against these orders are pending before the Appellate Authorities. This includes Income- tax department's appeal against the Company before the Appellate Authorities for certain matters wherein the CIT (Appeals) have ordered in favor of the Company.

f) In the Transfer Pricing Assessment for assessment year(s) 2003-04, 2004-05, 2005-06 and 2008-09, the Income Tax Authorities have made transfer pricing adjustments against the various transactions undertaken by the company. Accordingly, said transfer pricing adjustments have been set off by the Assessing Officer against the accumulated brought forward losses and depreciation allowances of the company by Rs. 19,871.43 lacs (Previous Year Nil) for Assessment Year 2008-09, Rs. 9734.49 lacs (Previous Year 9,734.49 lacs) for the Assessment year 2005-06, Rs. 7,967.93 lacs (Previous Year Rs. 7,967.93 lacs) for the Assessment year 2004-05 and Rs. 3,628.14 lacs (Previous Year Rs. 3,628.14 lacs) for the Assessment year 2003-04. The companies appeal for Assessment Year - 2008-09 is pending before the Dispute Resolution Panel (DRP), the appeal(s) for Assessment Year - 2004-05 and 2005-06 are pending before the Commissioner of Income Tax and the appeal for Assessment Year - 2003-04 is pending before the Income Tax Appellate Tribunal. Depending on the outcome of the aforementioned cases, assessments for the subsequent periods upto March 31, 2012 could result into demands/settlements on the similar items, amounts whereof could not be ascertained.

Income Tax Authorities have imposed penalty aggregating to Rs. 638.61 lacs (Previous Year Rs. 638.61 lacs) in respect of assessment year 2003-04 for furnishing inaccurate particulars of income. The Company has filed appeal against the said penalty order before CIT(A).

2. Capital Commitments

Capital work contracted but still under execution (net of advances) is estimated at Rs. 1,905.49 lacs (previous year Rs. 1,108.82 lacs).

3. Segment Reporting

a) Primary Segment - Business Segment

The Company's Operations predominantly comprise of only one segment i.e. Home Appliances. In view of the same, separate segmental information is not required to be given as per the requirements of Accounting Standard 17.

b) Secondary Segment - Geographical Segment

The analysis of geographical segment is based on the geographical location of the customers. The Company operates primarily in India and have presence in international markets as well. Its business is accordingly aligned geographically, catering to two markets. The Company has considered domestic and exports markets as geographical segments and accordingly disclosed these as separate segments. The geographical segments considered for disclosure are as follows:

- Sales within India represents sales made to customers located within India.

- Sales outside India represents sales made to customers located outside India.

Fixed Assets as per Geographical Locations

The Company has common fixed assets, other assets and liabilities for domestic as well as overseas market. Hence, separate figures for assets and liabilities have not been furnished.

The balance written back amounts to Rs. NIL lacs (previous year Rs. 775.22 lacs) which comprises of balances of Whirlpool Corporation.

4. Income Tax

The Company has recognized Rs. 2,890.26 lacs as on 31st March 2012 as Minimum Alternate Tax (MAT) credit entitlement (Previous Year Rs. 5,029.68 lacs), which represents that portion of the MAT Liability, the credit of which would be available based on the provisions of Section 115 JAA of the Income Tax Act, 1961. The Management based on the future profitability projections and also profit earned during the year is confident that there would be sufficient taxable profit in future which will enable the Company to utilize the above MAT credit entitlement.

5. Share Based Compensation

Disclosures in accordance with the Guidance Note on Accounting for Employee Share-based Payments issued by Institute of Chartered Accountants of India

The Company does not provide any equity-based compensation to its employees. However, the parent company, Whirlpool Corporation, USA has provided various share-based payment schemes to employees.

A. Details of these plans are given below:

i) Employee Stock Options

A stock option gives an employee, the right to purchase shares of Whirlpool Corporation at a fixed price for a specific period of time. The grant price (or strike price) is fixed at the closing price of Whirlpool Corporation common stock on the date of grant. Stock options expire in ten years from the date they are granted and vests in equal annual installments over service periods.

ii) Performance Cash Units

A performance cash unit is a unit valued at $1 (1 performance cash unit = $1), which employee receive at the end of a specified vesting period. Performance cash units provide cash value at delivery. Performance cash units always have value and are not tied to the price of Whirlpool Corporation stock.

# Includes options granted on February 14, 2011.

Weighted average fair value of the options outstanding is $ 28.59 per option (Previous Year $ 27.74). The weighted average share price in current year was $ 78.16 per option (Previous year $ 85.47).

Risk free interest rates is the interest rate applicable for maturity equal to the expected life of the options based on the interest rates on Treasury Bills (Treasury Yield Curve Rates of US Treasury Bonds). Expected volatility is measured using annualized standard deviation of stock price movement. Stock price is based on the closing price of the stock, so above mentioned stock prices are taken from US stock exchange where the holding company is listed.

The employees' compensation expense for Stock options during the period ended 31 March, 2012 amounts to Nil (Previous year Nil).

6. Hedged and Un-hedged Foreign Currency Exposure

Particulars of Un-hedged foreign currency exposure as at the Balance Sheet date

7. Gratuity and other post-employment benefit plans

Gratuity (being administered by a Trust) is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employee completing 5 years of service. The Gratuity plan for the Company is a defined benefit scheme where annual contributions as demanded by the insurer are deposited, to a Gratuity Trust Fund established to provide gratuity benefits. The Trust has taken an Insurance policy, whereby these contributions are transferred to the insurer. The Company makes provision of such gratuity asset/ liability in the books of account on the basis of actuarial valuation carried out by an independent actuary.

The Superannuation (pension) plan for the Company is a defined contribution scheme where monthly contribution @ 15% of basic pay for certain employee at manager and above level (at the option of employee) is paid to a Superannuation Trust Fund established to provide pension benefits. The Trust Fund has taken an Insurance policy, whereby these contributions are transferred to the insurer.

The Provident Fund is a defined contribution scheme whereby the Company deposits an amount determined as a fixed percentage of basic pay to the "Statutory Provident Fund". The benefit vests upon commencement of employment.

The Company has also agreed to provide certain additional retirement benefits to the employees of the Faridabad Refrigeration Operations where Rs. 20,000 is paid to employee on his retirement. This retirement benefit is unfunded defined benefit scheme. The Company makes provision of such liability on the basis of actuarial valuation carried out by an independent actuary.

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

* Includes expenses reclassified as research expenses of Rs. 11.85 lacs (previous year Nil).

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The Company expects to contribute Rs. 701.31 lacs (previous year 171.16 lacs) to gratuity in the next year.

Disclosure of the amount required by paragraph 120(n) of AS-15 need not be given as the Company has adopted the standard from financial year 2007-08.

8. Subsequent to the year end, on 18 April 2012, there was fire in a distribution warehouse of the Company situated at Zirakhpur, Haryana wherein finished goods, spares and office equipments of Rs.700 lacs has been estimated to be destroyed. The inventory was fully insured and the management expects that the entire loss of inventory is fully recoverable from the insurer and accordingly these financial statements have not been adjusted to give effect to this event.

9. Previous year figures

Till the year ended March 31, 2011, the Company was using pre-revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended March 31, 2012, the Revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified previous year figures to confirm to this year's classification.


Mar 31, 2011

A. NATURE OF OPERATIONS

Whirlpool of India Limited is a leading manufacturer of home appliances. It is primarily engaged in manufacturing and trading of Refrigerators, Washing Machines, Air Conditioners, Microwave Ovens and small appliances and caters to both domestic and international markets. It also provides services in the area of product development, information technology, accounting and procurement services to Whirlpool Corporation, USA and other group companies.

1. CONTINGENT LIABILITIES

(Rs. in lacs)

Particulars As at As at March 31, 2011 March 31, 2010

(a) Claims against the Company not acknowledged 1,247.52 1,487.51 as debts These claims are in respect of various cases filed by the ex-employees and consumers. It has been estimated that the liability arising on the Company should the actions be successful is Rs. 1,247.52 lacs (Previous Year Rs. 1,487.51 lacs). The legal proceedings are going on and therefore it is not practicable to state the timing of any payment. The management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in these financial statements.

(b) Others:-

- On account of pending appeals of Excise Duty &

Service Tax 3,586.46 1,479.83

- On account of pending appeals of Custom Duty 305.63 256.02

- On account of pending appeals of Sales Tax assessments 1,650.85 1,554.57

These cases as mentioned in point (b) above for which the total estimated liability, should the actions be successful, is Rs. 5,542.94 lacs (Previous year Rs. 3,290.42 lacs). The legal proceedings are going on and therefore it is not practicable to state the timing of any payment.

In view of large number of cases, it is not practicable to disclose individual details of all the cases. On the basis of current status of individual case and as per legal advice obtained by the Company, wherever applicable, the Company is confident of winning the above cases and is of view that no provision is required in respect of these cases.

(c) During the Income-tax assessments of various years, the Assessing Officers have made certain disallowances of Rs. 9,383.33 lacs (Previous Year Rs. 10,938.47 lacs), other than transfer pricing adjustments over the past few years. The Companys appeals against these orders are pending before the CIT Appeals/Appellate Authorities. The Income-tax department has also appealed against the Company before the Appellate Authorities for certain matters wherein the CIT Appeals have ordered in favour of the Company.

The Income Tax Authorities (Transfer Pricing Officers) have reduced the loss by Rs. 9,734.49 lacs (Previous Year Rs. 9,734.49 lacs) for the Assessment year 2005-06, Rs. 7,967.93 lacs (Previous Year Rs. 7,967.93 lacs) for the Assessment year 2004-05 and Rs. 3,628.14 lacs (Previous Year Rs. 1,699.09 lacs) for the Assessment year 2003-04 on account of transfer pricing adjustments. The Company has gone into appeal with Income Tax Appellate Tribunal against the aforesaid adjustments which have been adjusted against the brought forward losses from earlier years. Depending on the outcome of the afore-mentioned cases, assessments for the subsequent periods to March 31, 2011 could include demands/ settlements on the similar items, amounts whereof could not be ascertained.

During the year the Income Tax Authorities have imposed penalty aggregating to Rs. 638.61 lacs in respect of assessment year 2003-04 for furnishing inaccurate particulars of income. The Company has appealed against the penalty order to CIT(A).

The Company has recognized deferred tax assets considering that there would not be any adjustments to returned losses on account of the above cases. The management, based on expert opinion, believes that the Company has good chances of success.

2. During the year 2005-06, the Company had issued 1,523,42,500 10% Redeemable Non- Convertible Cumulative Preference Shares of Rs. 10 each, fully paid up, to Whirlpool Canada Holding Co., a subsidiary of Whirlpool Corporation Inc., USA, the ultimate holding company. These Preference Shares were redeemable at par at the earliest of the following events:

(i) at the end of 20 years from the date of allotment i.e June 20, 2005 for 108,850,000 shares and August 9, 2005 for 43,492,500 shares;

(ii) at any time after the expiry of 30 days from the date on which the Company gives subscribers a notice of its intention to redeem the shares; or

(iii) within 30 days from the date on which the subscriber gives the Company a notice of its intention to have the shares redeemed.

During the current year the Company has redeemed 98,492,500 (Previous Year Nil) Preference Shares at par based on a notice received from the subscriber i.e. Whirlpool Canada Holding Co, giving its intention to have the shares redeemed. Such Preference Shares were redeemed by the Company in two tranches, 43,492,500 Preference Shares on July 22, 2010 and 55,000,000 Preference Shares on November 2, 2010. The total amount of Preference Share Capital redeemed by the Company during the current year aggregates to Rs. 9,849.25 lacs (Previous Year Nil). Consequently thereto, an amount of Rs. 9,849.25 lacs has also been transferred to Capital Redemption Reserve Account.

3. Capital work contracted but still under execution (net of advances) is estimated at Rs. 1,108.82 lacs (Previous Year Rs. 1,064.67 lacs).

4. Segment Reporting

Information pertaining to Secondary Segment

Fixed Assets as per Geographical Locations

The Company has common fixed assets, other assets and liabilities for domestic as well as overseas market. Hence, separate figures for assets and liabilities have not been furnished.

5. Related Party Transactions

Following are the Related Parties and transactions made with them during the year:

Key Management Personnel

Mr. Arvind Uppal, Chairman & Managing Director Mr. Vikas Singhal (w.e.f July 25, 2008 till March 31, 2010) Mr.Syed Shazad Akhtar (w.e.f May 17, 2010)

Parties having direct or indirect control over the Company

Whirlpool Corporation Inc., USA (Holding Company), Whirlpool Mauritius Limited

Group Companies / Enterprise where common control exists and with whom transactions have taken place during the year.

Maytag Sales Inc., Whirlpool (China) Investment Co. Ltd., Whirlpool Greater China Inc., Whirlpool Southeast Asia Pte, Whirlpool Europe S.r.l., Whirlpool (Thailand) Limited, Whirlpool India Holdings Limited, Whirlpool Slovakia Spol s.r.o., Whirlpool Home Appliance (Shanghai) Co., Ltd., Whirlpool S.A., Whirlpool (Hong Kong) Limited, Whirlpool Colombia S.A., Whirlpool (Australia) Pty. Limited, WFC de Mexico S. de R.L. de C.V., Whirlpool Maroc S. àr.l. Whirlpool Argentina S.A, Whirlpool South Africa (Pty) Limited, Guangdong Whirlpool Electrical Appliances Co. Ltd., Whirlpool Microwave Products Development Limited, Beijing Embraco Snowflake Compressor Company Ltd, Whirlpool France S.A.S., Whirlpool Sweden A.B., Whirlpool Canada Holding Co., Whirlpool Polska S.A., Bauknecht Hausgeräte GmbH, Whirlpool d.o.o. Beograd, Empressa Brasileira,Comercial Acros Whirlpool, S.A. de C.V., Whirlpool Product Development (Shenzhen) Co. Ltd., Whirlpool Asia Pvt Ltd., Whirlpool SSC Ltd. and Whirlpool Peru S.R.L.

6. Income Tax

The Company has recognized Rs. 5,029.68 lacs as on March 31, 2011 as Minimum Alternate Tax (MAT) credit entitlement (Previous Year Rs. 4,177.75 lacs), which represents that portion of the MAT Liability, the credit of which would be available based on the provisions of Section 115 JAA of the Income Tax Act, 1961. The Management based on the future profitability projections and also profit earned during the year is confident that there would be sufficient taxable profit in future which will enable the Company to utilize the above MAT credit entitlement.

7. Share Based Compensation

Disclosures in accordance with the Guidance Note on Accounting for Employee Share-based Payments issued by Institute of Chartered Accountants of India

The Company does not provide any equity-based compensation to its employees. However, the parent company, Whirlpool Corporation, USA has provided various share-based payment schemes to employees.

A. Details of these plans are given below:

i) Employee Stock Options

A stock option gives an employee, the right to purchase shares of Whirlpool at a fixed price for a specific period of time. The grant price (or strike price) is fixed at the closing price of Whirlpool common stock on the date of grant. Stock options expire in ten years from the date they are granted and vests in equal annual installments over service periods.

ii) Performance Cash Units

A performance cash unit is a unit valued at $1 (1 performance cash unit = $1), which employee receive at the end of a specified vesting period. Performance cash units provide cash value at delivery. Performance cash units always have value and are not tied to the price of Whirlpool stock.

8. Gratuity and other post-employment benefit plans

Gratuity (being administered by a Trust) is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/ resignation. The benefit vests on the employee completing 5 years of service. The Gratuity plan for the Company is a defined benefit scheme where annual contributions as demanded by the insurer are deposited, to a Gratuity Trust Fund established to provide gratuity benefits. The Trust has taken an Insurance policy, whereby these contributions are transferred to the insurer. The Company makes provision of such gratuity asset/ liability in the books of account on the basis of actuarial valuation carried out by an independent actuary.

The Superannuation (pension) plan for the Company is a defined contribution scheme where monthly contribution @ 15% of basic pay for certain employee at manager and above level (at the option of employee) is paid to a Superannuation Trust Fund established to provide pension benefits. The Trust Fund has taken an Insurance policy, whereby these contributions are transferred to the insurer.

The Provident Fund is a defined contribution scheme whereby the Company deposits an amount determined as a fixed percentage of basic pay to the "Statutory Provident Fund". The benefit vests upon commencement of employment.

The Company has also agreed to provide certain additional retirement benefits to the employees of the Faridabad Refrigeration Operations where Rs.20,000 is paid to employee on his retirement. Additional retirement benefit is unfunded defined benefit scheme. The Company makes provision of such liability on the basis of actuarial valuation carried out by an independent actuary.

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

9. Excise duty on sales amounting to Rs. 19,632.41 lacs (Previous Year Rs. 13,620.46 lacs) has been reduced from sales in Profit and Loss account and excise duty on increase in stock amounting to Rs. 948.26 lacs (Previous Year Rs. 638.01 lacs) has been considered as expense in Schedule Q of the financial statements.

10. Previous year figures have been regrouped/ rearranged wherever considered necessary.

 
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