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Notes to Accounts of Whirlpool of India Ltd.

Mar 31, 2023

Provision and Contigent liabilty

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through Statement
of Profit and loss, trade & other financial liabilities, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of payables, net of directly attributable
transaction costs.

The Company''s financial liabilities include trade and other financial liabilities and derivative financial
instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are
classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This
category also includes derivative financial instruments entered into by the Company that are not designated
as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives,
if any, are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as
such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated
as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognised in OCI. These
gains/ loss are not subsequently transferred to Statement of Profit and Loss. However, the Company may
transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised
in the Statement of Profit and Loss. The Company has not designated any financial liability as at fair value
through profit and loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.

Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial assets which are equity instruments and financial
liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change
in the business model for managing those assets. Changes to the business model are expected to be
infrequent. The Company''s senior Management determines change in the business model as a result of
external or internal changes which are significant to the Company''s operations. Such changes are evident to
external parties. A change in the business model occurs when the Company either begins or ceases to
perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies
the reclassification prospectively from the reclassification date which is the first day of the immediately next
reporting period following the change in business model. The Company does not restate any previously
recognised gains, losses (including impairment gains or losses) or interest.

Initial recognition and subsequent measurement

The Company uses derivative financial instruments, such as forward currency contracts, to hedge its foreign
currency risks. Such derivative financial instruments are initially recognised at fair value on the date on
which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are
carried as financial assets when the fair value is positive and as financial liabilities when the fair value is
negative.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss,
except for the effective portion of cash flow hedges (if any), which is recognised in OCI and later reclassified
to profit or loss when the hedge item affects profit or loss or treated as basis adjustment if a hedged
forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability.

r) Cash and cash equivalents

Cash and cash equivalents in the Balance Sheet comprise cash at bank and in hand and short-term deposits
with an original maturity of three months or less, which are subject to an insignificant risk of changes in
value.

s) Dividend

The Company recognises a liability to make cash distributions to equity holders of the Company when the
distribution is authorised and the distribution is no longer at the discretion of the Company. As per the
corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding
amount is recognised directly in equity.

t) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss attributable to equity holder of the
Company by the weighted average number of equity shares outstanding during the period. The weighted
average number of equity shares outstanding during the period is adjusted for events such as bonus issue,
bonus element in a rights issue, that have changed the number of equity shares outstanding, without a
corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to
equity shareholders of the Company and the weighted average number of shares outstanding during the
period are adjusted for the effects of all dilutive potential equity shares.

III. Changes in accounting policies and disclosures
New and amended standards

The Company applied for the first-time certain standards and amendments, which are effective for annual
periods beginning on or after 1 April 2022.The Ministry of Corporate Affairs has notified Companies (Indian
Accounting Standard) Amendment Rules 2022 dated March 23, 2022, to amend the following Ind AS which
are effective from April 01, 2022.

i. Onerous Contracts - Costs of Fulfilling a Contract - Amendments to Ind AS 37

An onerous contract is a contract in which the unavoidable costs of meeting the obligations under the
contract (i.e., the costs that the company cannot avoid because it has the contract) exceed the economic
benefits expected to be received under it.

The amendments specify that when assessing whether a contract is onerous or loss-making, an entity
needs to include costs that relate directly to a contract to provide goods or services including both
incremental costs (e.g., the costs of direct labour and materials) and an allocation of costs directly
related to contract activities (e.g., depreciation of equipment used to fulfil the contract and costs of
contract management and supervision). General and administrative costs do not relate directly to a
contract and are excluded unless they are explicitly chargeable to the counterparty under the contract.
These amendments had no impact on the financial statements of the company as there were no onerous
contracts entered into by the company within the scope of these amendments that arose during the
period. Reference to the Conceptual Framework - Amendments to Ind AS 103

The amendments replaced the reference to the ICAI''s "Framework for the Preparation and Presentation
of Financial Statements under Indian Accounting Standards" with the reference to the "Conceptual
Framework for Financial Reporting under Indian Accounting Standard" without significantly changing
its requirements.

The amendments also added an exception to the recognition principle of Ind AS 103 Business
Combinations to avoid the issue of potential ''day 2'' gains or losses arising for liabilities and contingent
liabilities that would be within the scope of Ind AS 37 Provisions, Contingent Liabilities and Contingent
Assets or Appendix C, Levies, of Ind AS 37, if incurred separately. The exception requires entities to
apply the criteria in Ind AS 37 or Appendix C, Levies, of Ind AS 37, respectively, instead of the Conceptual
Framework, to determine whether a present obligation exists at the acquisition date.

The amendments also add a new paragraph to IFRS 3 to clarify that contingent assets do not qualify for
recognition at the acquisition date.

In accordance with the transitional provisions, the company applies the amendments prospectively,

i.e., to business combinations occurring after the beginning of the annual reporting period in which it
first applies the amendments (the date of initial application).

These amendments had no impact on the standalone financial statements of the company as there
were no contingent assets, liabilities, or contingent liabilities within the scope of these amendments
that arose during the year.

ii. Property, Plant and Equipment: Proceeds before Intended Use - Amendments to Ind AS 16

The amendments modified paragraph 17(e) of Ind AS 16 to clarify that excess of net sale proceeds of
items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted
from the directly attributable costs considered as part of cost of an item of property, plant, and
equipment.

The amendments are effective for annual reporting periods beginning on or after 1 April 2022. These
amendments had no impact on the standalone financial statements of the company as there were no
sales of such items produced by property, plant and equipment made available for use on or after the
beginning of the earliest period presented.

iii. Ind AS 101 First-time Adoption of Indian Accounting Standards - Subsidiary as a first-time adopter

The amendment permits a subsidiary that elects to apply the exemption in paragraph D16(a) of Ind AS
101 to measure cumulative translation differences for all foreign operations in its financial statements
using the amounts reported by the parent, based on the parent''s date of transition to Ind AS, if no
adjustments were made for consolidation procedures and for the effects of the business combination
in which the parent acquired the subsidiary. This amendment is also available to an associate or joint
venture that uses exemption in paragraph D16(a) of Ind AS 101.

The amendments are effective for annual reporting periods beginning on or after 1 April 2022 but do
not apply to the company as it is not a first-time adopter.

iv. Ind AS 109 Financial Instruments - Fees in the ''10 per cent'' test for derecognition of financial
liabilities

The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or
modified financial liability are substantially different from the terms of the original financial liability.
These fees include only those paid or received between the borrower and the lender, including fees
paid or received by either the borrower or lender on the other''s behalf.

In accordance with the transitional provisions, the company applies the amendment to financial liabilities
that are modified or exchanged on or after the beginning of the annual reporting period in which the
entity first applies the amendment (the date of initial application). These amendments had no impact
on the standalone financial statements of the company as there were no modifications of the company''s
financial instruments during the year.

v. Ind AS 41 Agriculture - Taxation in fair value measurements

The amendment removes the requirement in paragraph 22 of Ind AS 41 that entities exclude cash
flows for taxation when measuring the fair value of assets within the scope of Ind AS 41.

The amendments are effective for annual reporting periods beginning on or after 1 April 2022. The
amendments had no impact on the standalone financial statements of the company as it did not have
assets in scope of IAS 41 as at the reporting date.

Standards notified but not yet effective

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules,
2023 dated 31 March 2023 to amend the following Ind AS which are effective from 01 April 2023.

i. Definition of Accounting Estimates - Amendments to Ind AS 8

The amendments clarify the distinction between changes in accounting estimates and changes in
accounting policies and the correction of errors. It has also been clarified how entities use measurement
techniques and inputs to develop accounting estimates.

The amendments are effective for annual reporting periods beginning on or after 1 April 2023 and
apply to changes in accounting policies and changes in accounting estimates that occur on or after the
start of that period.

The amendments are not expected to have a material impact on the Company''s standalone financial
statements.

ii. Disclosure of Accounting Policies - Amendments to Ind AS 1

The amendments aim to help entities provide accounting policy disclosures that are more useful by
replacing the requirement for entities to disclose their ''significant'' accounting policies with a requirement
to disclose their ''material'' accounting policies and adding guidance on how entities apply the concept of
materiality in making decisions about accounting policy disclosures.

The amendments to Ind AS 1 are applicable for annual periods beginning on or after 1 April 2023.
Consequential amendments have been made in Ind AS 107.

The Company is currently revisiting their accounting policy information disclosures to ensure consistency
with the amended requirements.

iii. Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to
Ind AS 12

The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no
longer applies to transactions that give rise to equal taxable and deductible temporary differences.

The amendments should be applied to transactions that occur on or after the beginning of the earliest
comparative period presented. In addition, at the beginning of the earliest comparative period presented,
a deferred tax asset (provided that sufficient taxable profit is available) and a deferred tax liability
should also be recognised for all deductible and taxable temporary differences associated with leases
and decommissioning obligations. Consequential amendments have been made in Ind AS 101. The
amendments to Ind AS 12 are applicable for annual periods beginning on or after 1 April 2023.

The Company is currently assessing the impact of the amendments.


Mar 31, 2022

Significant accounting judgements, estimates and assumptions

The preparation of the standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future years.

Judgements

In the process of applying the Company''s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the standalone financial statements.

Determining the lease term of contracts with renewal and termination options - Company as a lessee

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.

Revenue from contracts with customers

The Company applied the following judgements that significantly affect the determination of the amount and timing of revenue of contract with customers:

Determining method to estimate variable consideration and assessing the constraint:

Certain contracts for the sale of products include a right to return and volume rebates that give rise to variable consideration. In estimating the variable consideration, the Company is required to use the most appropriate method based on which Company can predict the amount of consideration to which it will be entitled.

The Company determined that the expected value method is the most appropriate method in estimating the variable consideration for the sale of products with rights to return and volume rebates, given the large number of customer contracts that have similar characteristics.

Before including any amount of variable consideration in the transaction price, the Company considers whether the amount of variable consideration is constrained. The Company determined that the estimates of variable consideration are not constrained based on its historical experience, business forecast and the current economic condition. In addition, the uncertainty on the variable consideration will be resolved within a short time frame.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Share-based payments

The Company measures the cost of equity-settled transactions with employees by ultimate holding company using a Black Scholes Options Pricing model to determine the fair value of the liability incurred. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. For equity-settled share-based payment transactions, the liability needs to be remeasured at the end of each reporting period up to the date of settlement, with any changes in fair value recognised in the profit or loss. This requires a reassessment of the estimates used at the end of each reporting period. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 33.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. Further details about gratuity obligations are given in note 32.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See note 40 and 41 for further disclosures.

Product warranties accruals

The provisions for product warranties, on account of goods sold, recorded in the balance sheet on the basis of actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate and failure rates. Due to the complexities involved in the valuation and its long-term nature, a provision for product warranty is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the management considers the interest rates of government bonds in currencies consistent with the currencies of the product warranty provision.

The failure rate is based on actual number of calls received by the Company from customers on account of complaints. Further details about provisions for product warranties are given in note 16.

Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the nature of business differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax audits and different interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the companies.

!. 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 INR 35,000 and Puducherry Washer Operations where INR 30,000 is paid to employee on 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.

*Benefit payments represent undiscounted projected benefit payments for current employees considering their future salary increments and service. These payments have been further adjusted for the expectation of employee continuation with organization.

The average duration of the defined benefit plan obligation at the end of the reporting period is 12.61 years (31 March 2021: 12.58 years).

33. Share-based payments

The Company does not provide any share-based compensation to its employees. However, the ultimate holding 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 based on the closing price of Whirlpool Corporation common stock on the date of grant. Stock options vest in three equal annual instalments and expire in ten years from the date they are granted.

II. Restricted Stock Units (RSU) & Performance Stock Units (PSU)

a. Performance - These are the units of stock granted to employee at nil exercise price. It converts one for one shares of Whirlpool Corporation at the end of the vesting period of three years.

b. Time based - These are the units of stock granted to employee at nil exercise price. It converts one for one shares of Whirlpool Corporation at the end of the vesting period in the following manner: -

i) One third of the option vests after one year, another one third vests after two years and final one third will vests after three years.

ii) Vesting for one half option after two years and rest after four years.

The expense recognised for employee services received during the year is shown in the following table:

34. Commitments and contingenciesa. Leases

Operating lease commitments - Company as lessor

The Company has entered into operating lease for a specific area of its building located at Faridabad. The lease is renewable with mutual consent of both the parties. The income recognised in the Statement of profit and loss under the head "Other Income" is INR 120 lacs (31 March 2021: INR 141 lacs).

b. Commitments

Capital work contracted but still under execution (net of advances) is estimated at INR 6,125 lacs (31 March 2021: INR 2,135 lacs).

a) For AY 2004-05 to 2005-06, the assessing officer made additions of INR 10,368 lacs (31 March 2021: INR 10,368 lacs) on account of Transfer Pricing adjustment for differences between the arm''s length price and prices charged/ received by the Company from associated enterprises. During the year, the Company received a revised draft assessment order for AY 2004-05 giving effect to ITAT order / TPO Order with respect to TP Adjustment (reduction of ~INR 7335 lacs) on AMP expense earlier granted by ITAT / TPO. The AO has continued with the TP adjustment of ~INR 633 lacs on erroneous interpretation of original TPO Order. The Company filed objections with DRP (Dispute Resolution Panel) against the revised draft assessment order. The Company further received a final assessment order subsequent to the balance sheet date. As per the assessment order, the DRP has directed the TPO to pass a speaking order for the Transfer Pricing Adjustment on account of shortfall in profit margin / ALP being allocated for general function undertaken by the company on behalf of its associated enterprises. In the final assessment order passed by the AO / TPO, the TPO did not pass the speaking order as directed by the DRP and continued with the additions as per its earlier order which was passed at the time of giving effect to the ITAT order. The Company is in the process of filing necessary appeals before the ITAT on the grounds of unjustified TP adjustments with regard to short fall in profit margin / ALP attributed to the alleged general functions performed by the Company on behalf of its associated enterprises.

b) For AY 2008-09 to 2018-19, Transfer Pricing (TP) adjustments were made by Transfer Pricing Officer/ Assessing Officer amounting to INR 138,790 lacs (31 March 2021: INR 154,187 lacs) on account of alleged excess expenditure on Advertisement, Marketing and Sales Promotion (AMP) expenses incurred by the Company for promotion of ''Whirlpool'' brand owned by the holding company. During the FY 2021 -22, the Company has received a revised draft assessment order giving effect to ITAT / TPO Order with respect to AMP expenses for AY 2011-12. In the order, the TPO has deleted protective adjustment of ~ INR (32,329) lacs as directed by the ITAT. However, the AO continued with the revised TP adjustment of ~ INR 29,445 lacs proposed by the TPO. The Company has filed objections with DRP (Dispute Resolution Panel) against the revised draft assessment order. The Company has received DRP order subsequent to the balance sheet date. As per the order, the DRP did not grant any relief on the ground that the Special Leave Petition (SLP) of the Revenue against the order of the Hon''ble ITAT (Income Tax Appellate Tribunal) is still pending before the Hon''ble Supreme Court of India and hence, held that the draft assessment order passed by the AO was in conformity in the order of the ITAT / HC. The final assessment order giving effect to the DRP order is awaited subsequent to which the Company shall file necessary appeals before the ITAT.

For AY 2015-16, the Company has received a revised assessment order giving effect to ITAT Order. In the order, the TPO did not pass a speaking order with regard to TP adjustment on account of AMP expenses (~INR 6,900 lacs) deleted by the ITAT. The Company has filed an appeal with the CIT(Appeals) against the revised assessment order.

For AY 2017-18, the Company has received original draft assessment order (AO) with TP adjustment on account of AMP expenses of ~INR 11,579 lacs. The Company has filed objections with DRP (Dispute Resolution Panel) against the original draft assessment order. The Company further received a final assessment order subsequent to the balance sheet date. As per the assessment order, the DRP did not grant relief on TP adjustment made by the TPO on account of AMP expenses. The DRP confirmed the additions as per the draft assessment order suggested by the AO. The DRP order is yet to be received by the Company. The Company is in the process of filing necessary appeals before the ITAT on grounds of unjustified adjustments with regard to AMP.

For AY 2018-19, the Company has received original draft assessment order (AO) with TP adjustment on account of AMP expenses of ~INR 16,931 lacs. The Company has filed objections with DRP (Dispute Resolution Panel) against the original draft assessment order. The DRP in its order subsequent to the balance sheet date did not grant any relief on any of the grounds of objections. The Company is awaiting for the final assessment order to be passed consequent to the DRP order and accordingly, the Company shall file necessary appeal before the ITAT.

c) For AY 2011-12, the AO did not allow claims of enhanced research and development (R&D) expense deduction of ~INR 2,196 lacs ignoring the direction of the ITAT which is based on the legal position clarified by the jurisdictional Hon''ble High Court (HC). The Company has filed objections with DRP (Dispute Resolution Panel) against the revised draft assessment order. The DRP order received by the Company subsequent to the balance sheet date did not grant any relief on the disallowances R & D Expenditure as per the draft assessment order. The Company on receipt of the final assessment order, shall file necessary appeal before the ITAT.

d) For AY 2015-16, the AO in the appeal effect order has allowed relief with respect to Daughter Marriage Fund (DMF) adjustment of ~INR 35 lacs and research and development expense of ~INR 8 lacs. However, in the computation of income the said relief allowed in the order, was not being reflected in the computation of income. Accordingly, the Company shall file necessary rectification application before the AO requesting rectification of the apparent mistakes in the order of the Ld AO.

e) For AY 2017-18, the AO has made a disallowance of ~INR 151 lacs (Non-TP adjustments) in the relevant assessment year. The Company has filed objections with DRP (Dispute Resolution Panel) against the original draft assessment order. The DRP final assessment order received by the Company subsequent to the balance sheet date did not grant any relief on the disallowances of various expenses as per the draft assessment order. The Company on receipt of the final assessment order, shall file necessary appeal before the ITAT.

f) For AY 2018-19, the AO has made a disallowance of ~INR 1,827 lacs (~ INR 1,690 lacs with respect to enhanced research and development expense) (Non-TP adjustments) in the relevant assessment years. The company has filed objections with DRP (Dispute Resolution Panel) against the original draft assessment order. The DRP did not grant any relief on the disallowances of R & D expenditure as per the final assessment order received by the company subsequent to the balance sheet date. The Company on receipt of the final assessment order, shall file necessary appeal before the ITAT.

g) In the Income-tax assessments for preceding assessment years, the Assessing Officer has made disallowances of various expenses. These matters pertain to AY 1994-95 to 2018-19.

All of the above mentioned matters are pending with various judicial/appellate authorities including Dispute Resolution Panel, CIT(Appeals), Income Tax Appellate Tribunal, High court and Supreme court. For some of the matters, judicial/appellate authorities have decided the cases in favor of the Company. However, these are being contested again by the Revenue.

The Company believes that it has merit in these cases and it is only possible, but not probable, that these cases may be decided against the Company. Hence, these have been disclosed as contingent liability and no provision for any liability has been deemed necessary in the financial statements.

IV. Government of India - Ministry of Environment, Forest and Climate Change amended the E-Waste (Management) Rules 2016 and issued E-Waste (Management) Amendment Rules, 2018 ("E-waste Rules"). As per the E-Waste Rules, Companies dealing in certain categories of products as specified therein are required to undertake specific activities to channelize a specified quantity of E-Waste.

Based on the estimates made by the management in accordance with the relevant provisions of the E-Waste rules, the Company was required to channelize 39,811 MT (31 March 2021: 27,212 MT).

The Ministry of Environment, Forest and Climate Change has vide Office Memorandum dated 02 December, 2021, reduced the targets for financial year 2021 -22 and accordingly the revised target to be achieved in the financial year was 31,849 MT.

Further, the said office memorandum also allowed a 10% shortfall to be carried forward to next financial year. Accordingly, the Company has channelized 24,332 MT (31 March 2021: 27,225 MT) during the year and accrued the cost for 7,517 MT which required to be channelized in next financial year.

d. Financial guarantees

Bank Guarantees given to Government Authorities for various tax litigations amounts to INR 902 lacs (31 March 2021: INR 954 lacs).

Terms and conditions of transactions with related parties

All the above mentioned transactions with the related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

There have been no guarantees provided or received for any related party receivables or payables other than the letter of comfort which has been given by the ultimate holding company, Whirlpool Corporation, to respective banks against bank overdraft, cash credit, letter of credit etc. facilities provided to the Company.

36. Segment information

The Company''s operations predominantly comprise of only one segment i.e. Home Appliances. The management also reviews and measures the operating results taking the whole business as one segment and accordingly, makes decision about resource allocation. In view of the same, separate segmental information is not required to be given as per the requirements of Ind AS 108 on "Operating Segments".

Non-current operating assets

The Company has common non-current operating assets for domestic as well as overseas market. Hence, separate figures for these assets are not required to be furnished.

38. Hedging activities and derivatives

Derivatives not designated as hedging instruments

The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as hedge instrument and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally for the following period:

- From one to five months in case of vendor payments

39. Fair values

The management assessed that cash and cash equivalents, trade receivables, loans, other receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The loss allowance on the financial assets are disclosed in note 5 as at 31 March 2022: INR 206 lacs (31 March 2021: INR 156 lacs) provided in the books on account of uncertainty of recoverability for the amount.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

Security Deposits disclosed under other financial assets are evaluated by the Company based on parameters such as interest rates, risk factors, risk characteristics and individual creditworthiness of the counterparty. Based on this evaluation, allowance are taken into account for the expected credit losses of these security deposits.

41. Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise trade and other financial liability. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks and also ensure that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s

policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

A. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include deposits and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at 31 March 2022 and 31 March 2021.

The analysis exclude the impact of movements in market variables on the carrying values of gratuity, other postretirement obligations and provisions.

The sensitivity of the relevant profit and loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of 31 March 2022 and 31 March 2021.

a. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the overdraft, letter of credit, cash credit etc. facilities provided by the respective banks to the Company carrying variable interest rates.

Since, the Company has not availed any long-term credit facilities, therefore there is no need for the Company to enter into hedge contract to mitigate the possible exposure risk.

b. Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum period of five month for hedges of forecasted purchases and a maximum period of three year period for hedges of forecasted cash inflow relating to senior notes (including interest).

When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions, the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD and Euro exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities.

The Company''s exposure to foreign currency changes for all other currencies is not material.

c. Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase and manufacture of various electronic parts which consist of copper element and therefore require a continuous supply of the same. However, due to the non-significant movement in the prices of the copper, the Company has not entered into any forward contracts for commodity hedging purpose.

B. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

a. Trade receivables

Customer credit risk is managed subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and balances of customers are not covered by letters of credit or other forms of credit insurance.

An impairment analysis is performed at each quarter end on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 8. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

b. Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved banks and within limits assigned to each bank by the ultimate holding company.

The Company''s maximum exposure to credit risk for the components of the balance sheet at 31 March 2022, 31 March 2021 is the carrying amounts as illustrated in note 9 except for financial guarantees. The Company''s maximum exposure relating to financial guarantees is noted in note 34.

Liquidity risk

The Company monitors its risk of a shortage of funds through fund management exercise at regular intervals.

The table below summarises the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments except otherwise stated.

42. Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if any. To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and take necessary actions to maintain the requisite capital structure.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2022 and 31 March 2021.

43. The management has made an assessment of the impact of COVID-19 on the Company''s operations, financial performance and position as at and for the year ended 31 March 2022 and has concluded that there is no impact which is required to be recognised in the financial statements. Accordingly, no adjustments have been made to the financial statements

44. During the financial year 2020-21, Inventories of INR 1,392 lacs (including GST) were destroyed on account of fire incident in Banur, Zirakpur warehouse of the Company. These assets were fully insured and the Company had filed the claim of INR 1,242 lacs in the last year and the process of sale of damaged goods was initiated. During the financial year 2021-22, the Company has received proceeds from sale of scrap of INR 71 lacs and INR 1,058 lacs as full and final settlement for the insurance claim filled by the Company. Accordingly, the Company has charged the balance amount receivable to the Statement of profit and loss.

46. Other Statutory Information

(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company do not have any transactions with Companies struck off.

(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

(vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(vii) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(viii) No borrowings from banks or financial institution has been availed by the Company on the basis of security of current assets.

47. The Company has appointed independent consultants for conducting a transfer pricing study to determine whether the international transactions with associate enterprises and specified domestic transactions were undertaken at "arm''s length basis". Adjustments, if any arising from the transfer pricing study shall be accounted for as and when the study is completed. The management confirms that all international transactions with associate enterprises and specified domestic transactions are undertaken at negotiated contracted prices on usual commercial terms. Transfer pricing certificate under Section 92E for the year ending 31 March 2021 has been obtained and there are no adverse comments requiring adjustments in these accounts.

48. During the year, Board of Directors on 27 September 2021 approved acquisition of additional shareholding of 38.25% in Elica PB Whirlpool Kitchen Appliances Private Limited (formerly known as Elica PB India Private Limited) for a consideration of INR 42,484 Lacs taking its total shareholding in Elica Whirlpool to 87.25%. Upon the acquisition of above shareholding on 29 September 2021, Elica PB Whirlpool Kitchen Appliances Private Limited has become a subsidiary of the Company.

Accordingly, the Company has incurred expenditure of INR 211 lacs in respect of acquisition of investment and the same has been transferred to Statement the Profit or loss account under head exceptional items.


Mar 31, 2021

30. Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company (after adjusting for interest on the convertible preference shares) by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

31. Significant accounting judgements, estimates and assumptions

The preparation of the standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgements

In the process of applying the Company''s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the standalone financial statements.

Determining the lease term of contracts with renewal and termination options - Company as a lessee

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.

Revenue from contracts with customers

The Company applied the following judgements that significantly affect the determination of the amount and timing of revenue of contract with customers:

Determining method to estimate variable consideration and assessing the constraint:

Certain contracts for the sale of products include a right to return and volume rebates that give rise to variable consideration. In estimating the variable consideration, the Company is required to use the most appropriate method based on which Company can predict the amount of consideration to which it will be entitled.

The Company determined that the expected value method is the most appropriate method in estimating the variable consideration for the sale of products with rights to return and volume rebates, given the large number of customer contracts that have similar characteristics.

Before including any amount of variable consideration in the transaction price, the Company considers whether the amount of variable consideration is constrained. The Company determined that the estimates of variable consideration are not constrained based on its historical experience, business forecast and the current economic condition. In addition, the uncertainty on the variable consideration will be resolved within a short time frame.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Share-based payments

The Company measures the cost of equity-settled transactions with employees by ultimate holding company using a Black Scholes Options Pricing model to determine the fair value of the liability incurred. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. For equity-settled share-based payment transactions, the liability needs to be remeasured at the end of each reporting period up to the date of settlement, with any changes in fair value recognised in the profit or loss. This requires a reassessment of the estimates used at the end of each reporting period. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 33.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. Further details about gratuity obligations are given in note 32.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See note 40 and 41 for further disclosures.

Product warranties accruals

The provisions for product warranties, on account of goods sold, recorded in the balance sheet on the basis of actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate and failure rates. Due to the complexities involved in the valuation and its long-term nature, a provision for product warranty is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the management considers the interest rates of government bonds in currencies consistent with the currencies of the product warranty provision.

The failure rate is based on actual number of calls received by the Company from customers on account of complaints. Further details about provisions for product warranties are given in note 16.

Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the nature of business differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax audits and different interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the companies.

32. 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 INR 35,000 is paid to employee on 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 summarise the components of net benefit expense recognised in the statement of profit or loss and the net funded status and amounts recognised in the balance sheet for the respective plans:

33. Share-based payments

The Company does not provide any share-based compensation to its employees. However, the ultimate holding 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 based on the closing price of Whirlpool Corporation common stock on the date of grant. Stock options vest in three equal annual installments and expire in ten years from the date they are granted.

II. Restricted Stock Units (RSU) & Performance Stock Units (PSU)

a. Performance - These are the units of stock granted to employee at nil exercise price. It converts one for one shares of Whirlpool Corporation at the end of the vesting period of three years.

b. Time based - These are the units of stock granted to employee at nil exercise price. It converts one for one shares of Whirlpool Corporation at the end of the vesting period in the following manner:-

i) One third of the option vests after one year, another one third vests after two years and final one third will vests after three years.

ii) Vesting for one half option after two years and rest after four years.

34. Commitments and contingencies

a. Leases

Operating lease commitments - Company as lessor

The Company has entered into operating lease for a specific area of its building located at Faridabad.The lease is renewable with mutual consent of both the parties. The income recognised in the Statement of profit and loss under the head "Other Income" is INR 141 lacs (31 March 2020: INR 96 lacs).

b. Commitments

Capital work contracted but still under execution (net of advances) is estimated at INR 2,135 lacs (31 March 2020: INR 2,250 lacs).

a) For AY 2004-05 to 2005-06, the assessing officer made additions of INR Nil (31 March 2020 : INR 17,703 Lacs) on account of Transfer Pricing adjustment for differences between the arm''s length price and prices charged/ received by the Company from associated enterprises. During FY 2020-21, the transfer pricing officer in its order has accepted the contention of the Company and as per the direction of the ITAT has computed NIL transfer pricing adjustments. However, the TPO made an apparent error in applying the direction and propose an adjustment of INR 633 Lacs. The Company is in the process of filing necessary applications to get the transfer pricing adjustment corrected.

For AY 2008-09 to 2017-18, Transfer Pricing (TP) adjustments were made by Transfer Pricing Officer/ Assessing Officer amounting to INR 154,187 lacs (31 March 2020: INR 113,555 lacs) on account of alleged excess expenditure on Advertisement, Marketing and Sales Promotion (AMP) expenses incurred by the Company for promotion of ''Whirlpool'' brand owned by the holding company. During the FY 2020-21, the Company has received revised TPO order(s) for AY 2009-10 to AY 2014-15 with increase in TP adjustment for AY 2011-12 (INR 29,445 Lacs) and AY 2012-13 (INR 25,636 Lacs). The revised TPO orders for AY 2009-10, 2010-11,2012-13, 2013-14 and 2014-15 was challenged by the Company by filing a Writ petition before the Hon''ble Delhi High Court. The Hon''ble Delhi High Court granted stay on the operations of the Orders pending the outcome of the decision of the Special Leave Petition filed by the Tax Department with Hon''ble Supreme Court. For AY 2011 -12, the TPO has made the addition erroneously. The Company has filed a rectification application before the TPO to get the necessary correction done. The Tax Department has challenged the order of the Hon''ble High Court for AY 2008-09 by filing Special Leave Petition (SLP) before the Hon''ble Supreme Court, Accordingly, the final consequence of TP adjustments involved for AY 2008-09 to AY 2016-17 on account of AMP expenses adjustments will depend on the acceptance/outcome of the pending SLP of Tax Department for A.Y 2008-09. During the FY 2020-21, the company had also received a final assessment order for AY 2016-17 with TP adjustments of INR 6,152 Lacs and Non TP adjustments of INR 697 Lacs and for AY 2017-18 with transfer pricing adjustment of INR 11,579 lacs, for AY 2016-17, the company has filed an appeal before the Income Tax Appellate Tribunal (ITAT) and for AY 201718, draft assessment order is awaited from Assessing officer.

b) In the Income-tax assessments for preceding assessment years, the Assessing Officer has made disallowances of various expenses. These matters pertain to AY 1994-95 to 2016-17.

All of the above mentioned matters are pending with various judicial/appellate authorities including Dispute Resolution Panel, CIT(Appeals), Income Tax Appellate Tribunal , High court and Supreme court. For some of the matters, judicial/appellate authorities have decided the cases in favor of the Company. However, these are being contested again by the Department of Income tax.

The Company believes that it has merit in these cases and it is only possible, but not probable, that these cases may be decided against the Company. Hence, these have been disclosed as contingent liability and no provision for any liability has been deemed necessary in the financial statements.

IV. Government of India - Ministry of Environment, Forest and Climate Change amended the E-Waste (Management) Rules 2016 and issued E-Waste (Management) Amendment Rules, 2018 ("E-waste Rules"). As per the E-Waste Rules, Companies dealing in certain categories of products as specified therein are required to undertake specific activities to channelize a specified quantity of E-Waste.

Based on the estimates made by the management in accordance with the relevant provisions of the E-Waste rules, the Company was required to channelize 27,212 MT (31 March 2020 : 24,600 MT) of E-waste out of which 27,225 MT (31 March 2020 : 24,609 MT) has been channelised during the year.

d. Financial guarantees

Bank Guarantees given to Government Authorities for various tax litigations amounts to INR 954 lacs (31 March 2020: INR 1,296 lacs).

36. Segment information

The Company''s operations predominantly comprise of only one segment i.e. Home Appliances. The management also reviews and measures the operating results taking the whole business as one segment and accordingly, makes decision about resource allocation. In view of the same, separate segmental information is not required to be given as per the requirements of Ind AS 108 on "Operating Segments".

38. Hedging activities and derivativesDerivatives not designated as hedging instruments

The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as hedge instrument and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally for the following period:

a. From one to five months in case of vendor payments

b. From one to three years in case of investment in senior notes (including interest).

39. Fair values

The management assessed that cash and cash equivalents, trade receivables, loans, other receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The loss allowance on the financial assets are disclosed in note 5 as at 31 March 2021: INR 156 lacs (31 March 2020: INR 19 lacs) provided in the books on account of uncertainty of recoverability for the amount.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

Security Deposits disclosed under loans are evaluated by the Company based on parameters such as interest rates, risk factors, risk characteristics and individual creditworthiness of the counterparty. Based on this evaluation, allowance are taken into account for the expected credit losses of these security deposits.

41. Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise trade and other financial liability. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks and also ensure that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

A. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include deposits and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at 31 March 2021 and 31 March 2020.

The analysis exclude the impact of movements in market variables on the carrying values of gratuity, other postretirement obligations and provisions.

The sensitivity of the relevant profit and loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of 31 March 2021 and 31 March 2020.

a. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the overdraft, letter of credit, cash credit etc. facilities provided by the respective banks to the Company carrying variable interest rates.

Since, the Company has not availed any long-term credit facilities, therefore there is no need for the Company to enter into hedge contract to mitigate the possible exposure risk.

b. Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum period of three month for hedges of forecasted purchases and a maximum period of three year period for hedges of forecasted cash inflow relating to senior notes (including interest).

When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions, the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD and Euro exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities.

The Company''s exposure to foreign currency changes for all other currencies is not material.

c. Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase and manufacture of various electronic parts which consist of copper element and therefore require a continuous supply of the same. However, due to the non-significant movement in the prices of the copper, the Company has not entered into any forward contracts for commodity hedging purpose.

B. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

a. Trade receivables

Customer credit risk is managed subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and balances of customers are not covered by letters of credit or other forms of credit insurance.

An impairment analysis is performed at each quarter end on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 8. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

b. Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved banks and within limits assigned to each bank by the ultimate holding company.

The Company''s maximum exposure to credit risk for the components of the balance sheet at 31 March 2021,31 March 2020 is the carrying amounts as illustrated in note 9 except for financial guarantees. The Company''s maximum exposure relating to financial guarantees is noted in note 34.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if any. To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and take necessary actions to maintain the requisite capital structure.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2021 and 31 March 2020.

43. The management has made an assessment of the impact of COVID-19 on the Company''s operations, financial performance and position as at and for the year ended 31 March 2021 and has concluded that there is no impact which is required to be recognised in the financial statements. Accordingly, no adjustments have been made to the financial statements.

44. During the year, inventories of INR 1,392 lacs (including GST) were destroyed on account of fire incident in Banur, Zirakpur warehouse of the Company. These assets were fully insured and the Company had filed the claim of INR 1,242 Lakhs and the process of sale of damaged goods has been initiated. The Company basis the submissions made with the Insurance Company is assured that the entire value of loss will be recovered through the insurance claim and has accordingly recorded the claim so filed as insurance claim receivable.

45. Following are the reclassifications made in the previous year figures to make them comparable/ better presentation with the current year figures.


Mar 31, 2019

1. Corporate information

Whirlpool of India Limited (“the Company”) is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 1956 as replaced by the Companies Act, 2013, applicable in India. Its shares are listed on Bombay Stock Exchange and National Stock Exchange and has its principal place of business located at Plot No. 40, Sector-44, Gurugram, Haryana - 122002.

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, built in and Small appliances and caters to both domestic and international markets. The Company also provides services in the area of product development and procurement services to Whirlpool Corporation, USA and other group companies.

The standalone financial statements were authorised for issue in accordance with a resolution of the directors on 24 May 2019.

(*includes additions to fixed assets for research & development activities amounting to INR 769 lacs (31 March 2018: INR 493 lacs))

(**includes depreciation pertaining to research & development activities amounting to INR 301 lacs (31 March 2018: INR 184 lacs)

a. Plant and equipment includes moulds lying with the third parties amounting to INR 31,724 lacs (31 March 2018: INR 28,610 lacs) with a net book value of INR 11,825 lacs (31 March 2018: INR 9,851 lacs)

c. Assets under construction

Capital work in progress (CWIP) as at 31 March 2019 comprises expenditure for the plant and building in the course of construction. These expenditures relates to the various projects undertaken for new models and modification to the existing models of the Company. Total amount of CWIP is INR 4,333 lacs (31 March 2018: INR 3,305 lacs).

*In year 2017, the Company had purchased 4 senior notes of USD 5 million each amounting to USD 20 million, issued by the Ultimate Holding Company i.e. Whirlpool Corporation, on 30 November 2016. These securities have a maturity period of three years from the date of issue with one year lock-in.

**During the previous year, the Company has purchased 10 senior notes of USD 5 million each amounting to USD 50 million, issued by Whirlpool S.A. Brazil on 14 September 2017. These securities have a maturity period of three years from the date of issue with one year lock-in.

Derivative instruments at fair value through profit or loss reflect the positive change in fair value of those foreign exchange forward contracts that are not designated in hedge relationships, but are, nevertheless, intended to reduce the level of foreign currency risk for expected return on investments.

No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies in which any director is a partner, a director or a member.

Trade receivables are non-interest bearing and are generally on terms of 0 to 135 days. For terms and conditions relating to related party receivables, refer note 35.

*The Company can utilise these balances only toward settlement of the respective unpaid dividend.

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.

At 31 March 2019, the Company had available INR 65,356 lacs (31 March 2018: INR 54,896 lacs) of undrawn borrowing facilities (covering overdraft, cash credit, letter of credit etc.).

Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of INR 10 per share. Each holder of equity shares is entitled to one vote per share. The dividend, if declared, are paid in Indian rupees. The dividend, if any, 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.

The ultimate holding company provides various share-based payment schemes to the employees of the Company including key management personnel. The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees as a part of their remuneration. Refer note 33 for further details.

The ultimate holding company gives performance based cash incentives to certain employees including key management personnel during the year. The incentive reserve is used to recognise the value of payments provided to employees as a part of their remuneration.

Terms and conditions of the above financial liabilities:

Trade payables are non-interest bearing and are normally settled as per agreed credit terms Other payables are non-interest bearing and have an average term varying from 0 to 180 days For explanations on the Company’s credit risk management processes, refer note 41.

Provision for product warranties

Provision for warranties 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 ranging from 1 to 10 years. Assumptions used to calculate the provision for warranties were based on current and previous year sales level and the failure trend in respect of defective products.

Provisions for litigations

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 in litigation which is highly uncertain based on past experience of the management in other litigations. Hence, it is not possible to determine the exact period of outflow, if any, of funds for these litigations. Therefore, provision has been recorded at the gross value of liabilities.

Government grant has been received for the purchase of certain items of property, plant and equipment. There are no unfulfilled conditions or contingencies attached to these grants.

Goods and Service Tax (GST) was effective from 1 July 2017, consequently excise duty, value added tax (VAT), service tax etc. were replaced with GST. Until 30 June 2017, ‘Sale of products’ includes the amount of excise duty recovered on sales amounting to INR 15,392 lacs .The Company collects GST on behalf of the Government and not included in ‘Sale of products’, and therefore revenue from ‘Sale of products’ for the year ended 31 March 2019 is not comparable with that of the previous year.

2.1 Disaggregated revenue information

Set out below is the disaggregation of the Company’s revenue from contracts with customers:

Government grant has been received for the purchase of certain assets of plant and equipment in the prior years. There are no unfulfilled conditions or contingencies attached to these grants.

Fair value gain on financial instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting and embedded derivatives.

3. Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company (after adjusting for interest on the convertible preference shares) by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

4. Significant accounting judgements, estimates and assumptions

The preparation of the standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgements

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the standalone financial statements.

Revenue from contracts with customers

The Company applied the following judgements that significantly affect the determination of the amount and timing of revenue of contract with customers:

Determining method to estimate variable consideration and assessing the constraint:

Certain contracts for the sale of products include a right to return and volume rebates that give rise to variable consideration. In estimating the variable consideration, the Company is required to use the most appropriate method based on which Company can predict the amount of consideration to which it will be entitled.

The Company determined that the expected value method is the most appropriate method in estimating the variable consideration for the sale of products with rights of return and volume rebates, given the large number of customer contracts that have similar characterstics.

Before including any amount of variable consideration in the transaction price, the Company considers whether the amount of variable consideration is constrained. The Company determined that the estimates of variable consideration are not constrained based on its historical experience, business forecast and the current economic condition. In addition, the uncertainty on the variable consideration will be resolved within a short time frame.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Share-based payments

The Company measures the cost of equity-settled transactions with employees by ultimate holding company using a Black Scholes Options Pricing model to determine the fair value of the liability incurred. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. For equity-settled share-based payment transactions, the liability needs to be remeasured at the end of each reporting period up to the date of settlement, with any changes in fair value recognised in the profit or loss. This requires a reassessment of the estimates used at the end of each reporting period. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 33.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated, the management considers the interest rates of government bonds in currencies consistent with the currencies of the postemployment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. Further details about gratuity obligations are given in note 32.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See note 40 and 41 for further disclosures.

Product warranties accruals

The provisions for product warranties, on account of goods sold, recorded in the balance sheet on the basis of actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate and failure rates. Due to the complexities involved in the valuation and its long-term nature, a provision for product warranty is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the management considers the interest rates of government bonds in currencies consistent with the currencies of the product warranty provision.

The failure rate is based on actual number of calls received by the Company from customers on account of complaints. Further details about provisions for product warranties are given in note 16.

5. 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 INR 35,000 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 summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

The average duration of the defined benefit plan obligation at the end of the reporting period is 13.47 years (31 March 2018: 13.54 years).

6. Share-based payments

The Company does not provide any share-based compensation to its employees. However, the ultimate holding 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 based on the closing price of Whirlpool Corporation common stock on the date of grant. Stock options vest in three equal annual installments and expire in ten years from the date they are granted.

II. Restricted Stock Units (RSU) & Performance Stock Units (PSU)

a. Performance - These are the units of stock granted to employee at nil exercise price. It converts one for one shares of Whirlpool Corporation at the end of the vesting period of three years.

b. Time based - These are the units of stock granted to employee at nil exercise price. It converts one for one shares of Whirlpool Corporation at the end of the vesting period. One third of the option vests after one year, another one third vests after two years and final one third will vests after three years.

There were cancellations in employee stock options and restricted stock units (RSU) and performance stock units (PSU). Refer below movement for details.

Movements during the year

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements during the year:

‘The weighted average share price at the date of exercise of these options was $ 142.29 (31 March 2018: $ 180.06)

The weighted average remaining contractual life for the share options outstanding as at 31 March 2019 was 5.96 years (31 March 2018:6.62 years).

The weighted average fair value of options granted during the year was $ Nil (31 March 2018: $35.47).

The range of exercise prices for options outstanding at the end of the year was $ 71.03 to $ 213.23 (31 March 2018: $31.82 to $213.23).

The following tables list the inputs to the models used for the options granted during the year ended 31 March 2019 and 31 March 2018, respectively:

For year ended 31 March 2019:

No options have been granted during the year.

The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.

7. Commitments and contingencies

a. Leases

i. Operating lease commitments

- Company as lessee

Lease rent agreement are for computer hardware devices, licenses and software’s, vehicles, offices, godowns and warehouses. There are no subleases and there are no restrictions imposed by lease arrangements. Leases are renewable on mutual consent of both the parties.

The Company has paid INR 7,415 lacs (31 March 2018: INR 7,256 lacs) during the year towards minimum lease payment.

ii. Operating lease commitments - Company as lessor

The Company has entered into operating lease for a specific area of its building located at Faridabad (having net book value of INR 11 lacs as at 31 March 2019 and INR 13 lacs as at 31 March 2018). The lease is renewable with mutual consent of both the parties. The income recognised in the Statement of profit and loss under the head “Other Income” is INR 96 lacs (31 March 2018: INR 96 lacs).

b. Commitments

Capital work contracted but still under execution (net of advances) is estimated at INR 5,452 lacs (31 March 2018: INR 4,231 lacs).

a) For AY 2003-04 to 2005-06, the assessing officer made additions amounting to INR 17,703 lacs (31 March 2018: INR 21,331 lacs) on account of transfer pricing adjustment for differences between the arm’s length price and prices charged/received by the Company from associated enterprises. During the year, the Company has received a favorable order from appellate authority for AY 2003-04 giving a relief for an amount of INR 3,628 lacs.

For AY 2008-09 to 2015-16, Transfer Pricing Adjustments were made by the Transfer Pricing Officer/ Assessing Officer amounting to INR 107,001 lacs (31 March 2018: INR 100,021 lacs)on account of alleged excess expenditure on Advertisement, Marketing and Sales Promotion (AMP) expenses incurred by the Company for promotion of ‘Whirlpool’ brand owned by the holding company. During the FY 2018-19, the company has received appellate order (s) for AY 2009-10 to AY 2014-15,from Hon’ble ITAT setting aside the order(s) of the Assessing Officer / Transfer Pricing officer. The appellate orders are based on the order of Hon’ble High Court for AY 2008-09 where it was held that there was no international transaction between the company and its Associates Enterprises and consequently, no transfer pricing adjustment is called for. However, the Tax Department has challenged the order of the Hon’ble High Court for A.Y 2008-09 by filling Special Leave Petition (SLP) before the Hon’ble Supreme Court, Accordingly, the final consequence of TP adjustments involved for all A.Y. 2008-09 to AY 2014-15 on account of AMP expenses adjustments will depend on the acceptance /outcome of the pending SLP of Tax Department for A.Y 2008-09.

b) In the Income-tax assessments for preceding assessment years, the Assessing Officer has made disallowances of various expenses. These matters pertain toAY 1994-95 to 2015-16.

During the current year, the Company has received favorable order from appellate authorities amounting to INR 5,236 lacs for AY 2008-09. Further, for AY 2010-11 and 2011-12, ITAT has set aside and remanded back to the assessing officer for issuance of fresh assessment order.

All of the above mentioned matters are pending with various judicial/appellate authorities including DRP, CIT(A), ITAT, High court and Supreme court. For some of the matters, judicial/appellate authorities have decided the cases in favor of the Company. However, these are being contested again by the Department of Income tax.

The Company believes that it has merit in these cases and it is only possible, but not probable, that these cases may be decided against the Company. Hence, these have been disclosed as contingent liability and no provision for any liability has been deemed necessary in the financial statements.

III. During the previous year, the Government of India - Ministry of Environment, Forest and Climate Change amended the E-Waste (Management) Rules 2016 and issued E-Waste (Management) Amendment Rules, 2018 (“E-waste Rules”). As per the E-Waste Rules, Companies dealing in certain categories of products as specified therein are required to undertake specific activities to channelize a specified quantity of E-Waste. Presently the impact of non compliance with the requirements of these rules is not ascertainable since the necessary guidelines from Central Pollution Control Board (CPCB) are awaited.

The obligation to channelize E-Waste is applicable to the Company w.e.f 1 October 2017. Based on the estimates made by the management in accordance with the relevant provisions of the E-Waste rules, the Companywas required to channelize 12,403MT (31 March 2018 : 3,140 MT) of E-waste out of which 12,497 MT (31 March 2018 : 2,340 MT) has been channelised during the year by the Company.

IV. The Hon’ble Supreme Court of India (“SC”) by their order dated February 28, 2019, in the case of Surya Roshani Limited & others v/s EPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Subsequently, a review petition against this decision has been filed and is pending before the SC for disposal. Based on the legal opinion, pending decision on the subject review petition and directions from the EPFO, the management has a view that the applicability of the decision is prospective and accordingly, the Company after analyzing all the allowances in the pay structure has implemented the judgement prospectively from March 2019. The impact for the past period, will depend upon the outcome of subject review petition and directions from the EPFO and hence has been disclosed as a Contingent liability in the financial statements. The impact of the same is not ascertainable.

d. Financial guarantees

Bank Guarantees given to Government Authorities for various tax litigations amounts to INR 1,382 lacs (31 March 2018: INR 1,275 lacs).

* Exclusive of reinstatement due to exchange fluctuation.

** The ultimate holding company has given the guarantee against the investment.

#The amount does not include the cost incurred by the Company at time of acquisition of shares which has been reported in the total investment amount in the financial statements.

Terms and conditions of transactions with related parties

All the above mentioned transactions with the related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

There have been no guarantees provided or received for any related party receivables or payables other than the letter of comfort which has been given by the ultimate holding company, Whirlpool Corporation ,to respective banks against bank overdraft, cash credit, letter of credit etc. facilities provided to the Company.

The amounts disclosed above are the amounts recognised as an expense during the reporting period related to key management personnel.

8. Segment information

The Company’s operations predominantly comprise of only one segment i.e. Home Appliances. The management also reviews and measures the operating results taking the whole business as one segment and accordingly, makes decision about resource allocation. In view of the same, separate segmental information is not required to be given as per the requirements of Ind AS 108 on “Operating Segments”.

Non-current operating assets

The Company has common non-current operating assets for domestic as well as overseas market. Hence, separate figures for these assets are not required to be furnished.

9. Hedging activities and derivatives Derivatives not designated as hedging instruments

The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as hedge instrument and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally for the following period:

a. From one to three months in case of vendor payments

b. From one to three years in case of investment in senior notes (including interest).

10. Fair values

The management assessed that cash and cash equivalents, trade receivables, loans,other receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The loss allowance on the financial assets as at 31 March 2019: INR 136 lacs (31 March 2018:INR 155lacs) provided in the books on account of uncertainty of recoverability for the amount.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

a. Security Deposits disclosed under loans are evaluated by the Company based on parameters such as interest rates, risk factors, risk characteristics and individual creditworthiness of the counterparty. Based on this evaluation, allowances are taken into account for the expected credit losses of these security deposits.

11. Financial risk management objectives and policies

The Company’s principal financial liabilities, other than derivatives, comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations and to provide guarantees to support its operations. The Company’s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks and also ensure that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

A. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include deposits and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at 31 March 2019 and 31 March 2018.

The analysis exclude the impact of movements in market variables on the carrying values of gratuity, other postretirement obligations and provisions.

The sensitivity of the relevant profit and loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of 31 March 2019 and 31 March 2018.

a. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the overdraft, letter of credit, cash credit etc. facilities provided by the respective banks to the Company carrying variable interest rates.

Since, the Company has not availed any long term credit facilities, therefore there is no need for the Company to enter into hedge contract to mitigate the possible exposure risk.

b. Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency).

The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum period of three month for hedges of forecasted purchases and a maximum period of three year period for hedges of forecasted cash inflow relating to senior notes (including interest).

When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions, the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD and Euro exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities.

The Company’s exposure to foreign currency changes for all other currencies is not material.

c. Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase and manufacture of various electronic parts which consist of copper element and therefore require a continuous supply of the same. However, due to the non-significant movement in the prices of the copper, the Company has not entered into any forward contracts for commodity hedging purpose.

B. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

a. Trade receivables

Customer credit risk is managed subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and balances of customers are not covered by letters of credit or other forms of credit insurance.

An impairment analysis is performed at each quarter end on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 8. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

b. Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved banks and within limits assigned to each bank by the ultimate holding Company.

The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2019, 31 March 2018 is the carrying amounts as illustrated in note 9 except for financial guarantees. The Company’s maximum exposure relating to financial guarantees is noted in note 34.

Liquidity risk

The Company monitors its risk of a shortage of funds through fund management exercise at regular intervals.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

12. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if any. To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and take necessary actions to maintain the requisite capital structure.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2019 and 31 March 2018.

13. Standards issued but not effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

Ind AS 116 Leases

“Ind AS 116 Leases has been notified during the current year and it replaces Ind AS 17 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after 1 April 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees - leases of ‘low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.”

The Company intends to adopt these standards when they become effective from 1 April 2019 and currently, the Company is in process of assessing the impact for the same.


Mar 31, 2018

33. Share-based payments

The Company does not provide any share-based compensation to its employees. However, the ultimate holding 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 based on the closing price of Whirlpool Corporation common stock on the date of grant. Stock options vest in three equal annual installments and expire in ten years from the date they are granted.

II. Restricted Stock Units (RSU) & Performance Stock Units (PSU)

a. Performance - These are the units of stock granted to employee at nil exercise price. It converts one for one shares of Whirlpool Corporation at the end of the vesting period of three years.

b. Time based- These are the units of stock granted to employee at nil exercise price. It converts one for one shares of Whirlpool Corporation at the end of the vesting period. One third of the option vests after one year, another one third vests after two years and final one third will vests after three years.

The expense recognized for employee services received during the year is shown in the following table:

There were cancellations in employee stock options and restricted stock units (RSU) and performance stock units (PSU). Refer below movement for details.

Movements during the year

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements during the year:

''The weighted average share price at the date of exercise of these options was $ 180.06 (31 March 2017: $ 182.35)

The weighted average remaining contractual life for the share options outstanding as at 31 March 2018 was 6.62 years (31 March 2017: 7.14 years).

The weighted average fair value of options granted during the year was $ 35.47 (31 March 2017: $38.67).

The range of exercise prices for options outstanding at the end of the year was $ 31.82 to $ 213.23 (31 March 2017: $31.82 to $213.23).

The following tables list the inputs to the models used for the options granted during the year ended 31 March 2018 and 31 March 2017, respectively:

The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.

34. Commitments and contingencies

a. Leases

i. Operating lease commitments - Company as lessee

Lease rent agreement are for computer hardware devices, licenses and software’s, vehicles, offices, god owns and warehouses. There are no subleases and there are no restrictions imposed by lease arrangements. Leases are renewable on mutual consent of both the parties.

The Company has paid INR 7,256 lacs (31 March 2017: INR 6,375 lacs) during the year towards minimum lease payment.

ii. Operating lease commitments - Company as less or

The Company has entered into operating lease for a specific area of its building located at Faridabad (having net book value of INR 13 lacs as at 31 March 2018 and INR 15 lacs as at 31 March 2017). The lease is renewable with mutual consent of both the parties. The income recognized in the Statement of profit and loss under the head “Other Income” is INR 96 lacs (31 March 2017: INR 120 lacs).

b. Commitments

Capital work contracted but still under execution (net of advances) is estimated at INR 4,231 lacs (31 March 2017: INR 2,109 lacs).

a) For AY 2003-04 to 2005-06, the assessing officer made disallowances amounting to INR 21,331 lacs (31 March 2017: INR 21,331 lacs) on account of transfer pricing adjustment for differences between the arm’s length price and prices charged/received by the Company from associated enterprises. Further, subsequent to the year end, the Company has also received a favorable order from appellate authority for AY 2003-04 giving a relief for an amount of INR 3,628 lacs.

For AY 2008-09 to 2014-15, Transfer Pricing Adjustments were made by the Transfer Pricing Officer / Assessing Officer amounting to INR 100,021 lacs (31 March 2017: INR 121,338 lacs) on account of alleged excess expenditure on Advertisement, Marketing and Sales Promotion (AMP) expenses incurred by the Company for promotion of ‘Whirlpool’ brand owned by the holding company.

b) In the Income-tax assessments for preceding assessment years, the Assessing Officer has made disallowances of various expenses. These matters pertain to AY 1994-95 to 2011-12.

All of the above mentioned matters are pending with various judicial/appellate authorities including DRP, CIT(A), ITAT, High court and Supreme court. For some of the matters, judicial/appellate authorities have decided the cases in favor of the Company. However, these are being contested again by the Department of Income tax.

The Company believes that it has merit in these cases and it is only possible, but not probable, that these cases may be decided against the Company. Hence, these have been disclosed as contingent liability and no provision for any liability has been deemed necessary in the financial statements.

III. During the current year, the Government of India - Ministry of Environment, Forest and Climate Change has amended the E-Waste (Management) Rules 2016 and issued E-Waste (Management) Amendment Rules, 2018 (“E-waste Rules”). As per the E-Waste Rules, companies dealing in certain categories of products as specified therein are required to undertake specific activities to channelize a specified quantity of E-Waste. Presently the impact of non compliance with the requirements of these rules is not ascertainable since the necessary guidelines from Central Pollution Control Board (CPCB) are awaited.

The obligation to channelize E-Waste is applicable to the Company w.e.f 1 October 2017. Based on the estimates made by the management in accordance with the relevant provisions of the E-Waste rules, the Company was required to channelize 3,140 MT of E-waste out of which 2,340 MT has been channelized during the year by the Company. The Management believes that there will be no material impact on the financial statement due to above.

d. Financial guarantees

Bank Guarantees given to Government Authorities for various tax litigations amounts to INR 1,275 lacs (31 March 2017: INR 1,466 lacs).

35. Related party transactions

Following are the Related Parties and transactions entered with related parties for the relevant financial year:

Key Management Personnel 1. Mr. Arvind Uppal, Chairman & Executive Director (Till 31 December

2017) and Chairman & Non Executive Director (w.e.f. 1 Janurary 2018)

2. Mr. Sunil D’Souza, Managing Director

3. Mr. Anil Berera, Executive Director & Chief Financial Officer

4. Mr. Vikas Singhal, Executive Director (Till 2 February 2018)

5. Mr. Ravi Kumar Sabharwal, Company Secretary (Till 30 May 2016)

6. Mr. AHV Narayan Reddy, Executive Director (w.e.f. 2 February 2018)

__7._Mrs.Roopali Singh, Company Secretary (w.e.f. 3 February 2017)_

8. Mr. Sanjiv Verma, Independent Director

9. Mr. Simon J. Scarff, Independent Director (Till 2 February 2018)

10. Mr. Anand Bhatia, Independent Director

__11. Mrs. Sonu Bhasin, Independent Director_

Parties having direct or indirect control 1. Whirlpool Corporation (Ultimate Holding Company)

over the Company__2._Whirlpool Mauritius Limited (Holding Company)_

Group Companies / Enterprise where 1. Whirlpool Technologia

common control exists and with whom 2. Whirlpool S.A.

transactions have taken place during the 3. Whirlpool Southeast Asia Pte

year. 4. Whirlpool (Hong Kong) Limited

5. Whirlpool (China) Investment Co. Ltd.

6. Guangdong Whirlpool Electrical Appliances Co. Ltd.

7. Whirlpool Product Development (Shenzhen) Co. Ltd

8. Whirlpool (Australia) Pty. Limited

9. Whirlpool Asia LLP

10. Whirlpool Europe S.R.L.

11. Whirlpool Poland SA

12. Whirlpool South Africa (Pty) Limited

13. Beijing Embraco Snowflake Compressor Company Ltd

14. Indesit Company SpA

15. Whirlpool EMEA SpA

16. Whirlpool Maroc s.a.r.l

17. Whirlpool Taiwan Ltd.

18. Whirlpool Slovakia SpolSro

19. Whirlpool Properties Inc.

20. Whirlpool Microwave Products Development Limited

21. Whirlpool France S.A.S.

22. Kitchen Aid Europa Inc.

_123. | Indesit Company Polska Sp.z.oo._

* Exclusive of reinstatement due to exchange fluctuation.

** The ultimate holding company has given the guarantee against the investment.

# Amount is below the round off norm adopted by the Company.

Terms and conditions of transactions with related parties

All the above mentioned transactions with the related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

There have been no guarantees provided or received for any related party receivables or payables other than the letter of comfort which has been given by the ultimate holding company, Whirlpool Corporation, to respective banks against bank overdraft, cash credit, letter of credit etc. facilities provided to the Company.

36. Segment information

The Company’s operations predominantly comprise of only one segment i.e. Home Appliances. The management also reviews and measures the operating results taking the whole business as one segment and accordingly, makes decision about resource allocation. In view of the same, separate segmental information is not required to be given as per the requirements of Ind AS 108 on “Operating Segments”.

The revenue information above is based on the locations of the customers.

Non-current operating assets

The Company has common non-current operating assets for domestic as well as overseas market. Hence, separate figures for these assets are not required to be furnished.

38. Hedging activities and derivatives Derivatives not designated as hedging instruments

The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as hedge instrument and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally for the following period:

a. From one to three months in case of vendor payments

b. From one to three years in case of investment in senior notes (including interest).

39. Fair values

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments, other than those with carrying amount that are reasonable approximations of fair values:

The management assessed that cash and cash equivalents, trade receivables, other receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The loss allowance on the financial assets as at 31 March 2018: INR 155 lacs (31 March 2017:INR 134 lacs) provided in the books on account of uncertainty of recoverability for the amount.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

a. Security Deposits disclosed under loans are evaluated by the Company based on parameters such as interest rates, risk factors, risk characteristics and individual creditworthiness of the counterparty. Based on this evaluation, allowances are taken into account for the expected credit losses of these security deposits.

40. Fair values hierarchy

The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities.

The Company’s principal financial liabilities, other than derivatives, comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations and to provide guarantees to support its operations. The Company’s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks and also ensure that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below:

A. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include deposits and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at 31 March 2018 and 31 March 2017.

The analysis exclude the impact of movements in market variables on the carrying values of gratuity, other postretirement obligations and provisions.

The sensitivity of the relevant profit and loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of 31 March 2018 and 31 March 2017.

a. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the overdraft, letter of credit, cash credit etc. facilities provided by the respective banks to the Company carrying variable interest rates.

Since, the Company has not availed any long-term credit facilities, therefore there is no need for the Company to enter into hedge contract to mitigate the possible exposure risk.

b. Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency).

The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum period of three month for hedges of forecasted purchases and a maximum period of three year period for hedges of forecasted cash inflow relating to senior notes (including interest).

When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions, the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD and Euro exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities.

The Company’s exposure to foreign currency changes for all other currencies is not material.

c. Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase and manufacture of various electronic parts which consist of copper element and therefore require a continuous supply of the same. However, due to the non-significant movement in the prices of the copper, the Company has not entered into any forward contracts for commodity hedging purpose.

B. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

a. Trade receivables

Customer credit risk is managed subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and balances of customers are not covered by letters of credit or other forms of credit insurance.

An impairment analysis is performed at each quarter end on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 8. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

b. Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved banks and within limits assigned to each bank by the ultimate holding Company.

The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2018, 31 March 2017 is the carrying amounts as illustrated in note 9 except for financial guarantees. The Company’s maximum exposure relating to financial guarantees is noted in note 34.

Liquidity risk

The Company monitors its risk of a shortage of funds through fund management exercise at regular intervals.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

42. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if any. To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and take necessary actions to maintain the requisite capital structure.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.

43. Standards issued but not effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and has amended the following standards:

Ind AS 115 Revenue from Contracts with Customers

Ind AS 115 was notified on 28 March 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The new revenue standard will supersede all current revenue recognition requirements under Ind AS. This new standard requires revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions of the Company. Ind AS 115 is effective for the Company in the first quarter of fiscal 2019 using either one of two methods: (i) retrospectively to each prior reporting period presented in accordance with Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors, with the option to elect certain practical expedients as defined within Ind AS 115 (the full retrospective method); or (ii) retrospectively with the cumulative effect of initially applying Ind AS 115 recognized at the date of initial application (1 April 2018) and providing certain additional disclosures as defined in Ind AS 115 (the modified retrospective method).

The Company continues to evaluate the available transition methods and its contractual arrangements. The ultimate impact on revenue resulting from the application of Ind AS 115 will be subject to assessments that are dependent on many variables, including, but not limited to, the terms of the contractual arrangements. The Company’s considerations also include, but are not limited to, the comparability of its financial statements and the comparability within its industry from application of the new standard to its contractual arrangements. The Company is still in the process to implement Ind AS 115 related to the recognition of revenue from contracts with customers and it continues to evaluate the changes to accounting system and processes, and additional disclosure requirements that may be necessary.

Upon adoption the Company expects there to be a change in the manner that variable consideration in certain revenue arrangements is recognized from the current practice of recognizing such revenue as the services are performed and the variable consideration is earned to estimating the achievability of the variable conditions when the Company begins delivering services and recognizing that amount over the contractual period. The Company also expects a change in the manner that it recognizes certain incremental and fulfillment costs from expensing them as incurred to deferring and recognizing them over the contractual period. A reliable estimate of the quantitative impact of Ind AS 115 on the financial statements will only be possible once the implementation project has been completed.

Ind AS 21 Foreign Currency Transactions and Advance Consideration

The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or nonmonetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration.

Entities may apply the Appendix requirements on a fully retrospective basis. Alternatively, an entity may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognized on or after:

(i) The beginning of the reporting period in which the entity first applies the Appendix, or

(ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the Appendix.

The Appendix is effective for annual periods beginning on or after 1 April 2018. However, since the Company’s current practice is in line with the Interpretation, the Company does not expect any effect on its financial statements.


Mar 31, 2017

1. Significant accounting judgments, estimates and assumptions

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Share-based payments

The Company measures the cost of equity-settled transactions with employees by ultimate holding Company using a Black Scholes Options Pricing model to determine the fair value of the liability incurred. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. For equity-settled share-based payment transactions, the liability needs to be premeasured at the end of each reporting period up to the date of settlement, with any changes in fair value recognized in the profit or loss. This requires a reassessment of the estimates used at the end of each reporting period. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 34.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. Further details about gratuity obligations are given in note 33.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See note 40 and 41 for further disclosures.

Product warranties accruals

The provisions for product warranties, on account of goods sold, recorded in the balance sheet on the basis of actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate and failure rates. Due to the complexities involved in the valuation and its long-term nature, a provision for product warranty is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the management considers the interest rates of government bonds in currencies consistent with the currencies of the product warranty provision.

The failure rate is based on actual number of calls received by the Company from customers on account of complaints. Further details about provisions for product warranties are given in note 15.

2. 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 INR 35,000 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 summaries the components of net benefit expense recognized in the statement of profit or loss and the funded status and amounts recognized in the balance sheet for the respective plans:

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

The following payments are expected contributions to the defined benefit plan in future years:

The average duration of the defined benefit plan obligation at the end of the reporting period is 13.22 years (31 March 2016: 13.51 years).

3. Share-based payments

The Company does not provide any share-based compensation to its employees. However, the ultimate holding 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 based on the closing price of Whirlpool Corporation common stock on the date of grant. Stock options vest in three equal annual installments and expire in ten years from the date they are granted.

II. Restricted Stock Units (RSU)& Performance Stock Units (PSU)

a. Performance - These are the units of stock granted to employee at nil exercise price. It converts one for one shares of Whirlpool Corporation at the end of the vesting period of three years.

b. Time based - These are the units of stock granted to employee at nil exercise price. It converts one for one shares of Whirlpool Corporation at the end of the vesting period. One third of the option vests after one year, another one third vests after two years and final one third will vests after three years.

The expense recognized for employee services received during the year is shown in the following table:

Movements during the year

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements during the year:

1 The weighted average share price at the date of exercise of these options was $ 182.35 (31 March 2016: $ 165.65)

The weighted average remaining contractual life for the share options outstanding as at 31 March 2017 was 7.14 years (31 March 2016:7.42 years).

The weighted average fair value of options granted during the year was $ 38.67 (31 March 2016: $40.34).

The range of exercise prices for options outstanding at the end of the year was $ 31.82 to $ 213.23 (31 March 2016: $31.82 to $213.23).

The following tables list the inputs to the models used for the options granted during the year ended 31 March 2017 and 31 March 2016, respectively:

The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.

4. Commitments and contingencies

a. Leases

i. Operating lease commitments - Company as lessee

Lease rent agreement for computer hardware devices, licenses and software’s, vehicles, offices, god owns and warehouses. There are no subleases and there are no restrictions imposed by lease arrangements. Leases are renewable on mutual consent of both the parties.

ii. Operating lease commitments - Company as less or

The Company has entered into operating lease for a specific area of its building located at Faridabad Plant (having net book value of INR 15 lacs as at 31 March 2017 and INR 17 lacs as at 31 March 2016). The lease is renewable with mutual consent of both the parties. The income recognized in the Statement of profit and loss is INR 120 lacs (31 March 2016: INR 72 lacs).

b. Commitments

Capital work contracted but still under execution (net of advances) is estimated at INR 2,109 lacs (31 March 2016: INR 880 lacs,

1 April 2015: INR 765 lacs).

a) For AY 2003-04 to 2005-06, the assessing officer made disallowances amounting to INR 21,331 lacs (31 March 2016: INR 21,331 lacs, 1 April 2015: INR 21,331 lacs) on account of transfer pricing adjustment for differences between the arm’s length price and prices charged/received by the Company from associated enterprises.

For AY 2008-09 to 2012-13, Transfer Pricing Adjustments were made by the Transfer Pricing Officer / Assessing Officer amounting to INR 121,338 lacs (31 March 2016: INR 69,659 lacs, 1 April 2015: INR 87,107 lacs) on account of alleged excess expenditure on Advertisement, Marketing and Sales Promotion (AMP) expenses incurred by the Company for promotion of ‘Whirlpool’ Brand owned by the parent company.

b) In the Income-tax assessments for preceding assessment years, the Assessing Officer have made disallowances of various expenses. These matters pertains to AY 1994-95 to 2011-12.

All of the above mentioned matters are pending with various judicial/appellate authorities including DRP, CIT(A), ITAT, High court and Supreme court. For some of the matters, judicial/appellate authorities have decided the cases in favor of the Company. However, these are being contested again by the Department of Income tax.

The Company believes that it has merit in these cases and it is only possible, but not probable, that these cases may be decided against the Company. Hence, these have been disclosed as contingent liability and no provision for any liability has been deemed necessary in the financial statements.

d. Financial guarantees

Bank Guarantees given to Government Authorities for various tax litigations amounts to INR 1,466 lacs (31 March 2016: INR 1,665 lacs, 1 April 2015: INR 1,547 lacs).

5. Related party transactions

Following are the Related Parties and transactions entered with related parties for the relevant financial year:

Key Management Personnel 1. Mr. Arvind Uppal, Chairman

2. Mr. Sunil D’Souza, Managing Director (w.e.f. 22 June, 2015)

3. Mr. Anil Berera, Executive Director & Chief Financial Officer

4. Mr. Vikas Singhal, Executive Director

5. Mr. Ravi Kumar Sabharwal, Company Secretary (Till 30 May, 2016)

6. Mrs. Roopali Singh (w.e.f. 3 February, 2017)

7. Mr. SanjivVerma, Independent Director

8. Mr. Simon J. Scarff, Independent Director

9. Mr. Anand Bhatia, Independent Director

10. Mrs. Sonu Bhasin, Independent Director

Parties having direct or indirect control over the Company 1. Whirlpool Corporation (Ultimate Holding Company)

2. Whirlpool Mauritius Limited (Holding Company)

Group Companies / Enterprise where common control 1. WFC de Mexico S. de R.L. de C.V exists and with whom transactions have taken place 2. ComercialAcros Whirlpool, S.A. de C.V. dunng the year. 3. Whirlpool Technologia

4. Whirlpool S.A.

5. Whirlpool Southeast Asia Pte

6. Whirlpool (Hong Kong) Limited

7. Whirlpool Greater China Inc.

8. Whirlpool (China) Investment Co. Ltd.

9. Guangdong Whirlpool Electrical Appliances Co. Ltd.

10. Whirlpool Product Development (Shenzhen) Co. Ltd

11. Whirlpool (Australia) Pty. Limited

12. Whirlpool Asia LLP

13. Whirlpool Asia Private Limited

14. Whirlpool Europe S.R.L.

15. Whirlpool Poland SA

16. Whirlpool South Africa (Pty) Limited

17. Beijing Embraco Snowflake Compressor Company Ltd

18. Indesit Company SPA

19. Whirlpool EMEA SPA

20. Whirlpool Maroc S.a.r.l

21. Whirlpool Taiwan Ltd.

22. Whirlpool Slovakia SpolSro

23. Whirlpool UK Appliances Limited

24. Whirlpool Properties Inc.

25. Whirlpool Microwave Products Development Limited

26. Whirlpool France S.A.S.

27. Bauknecht Hausgerate GmbH

28. Kitchen Aid Europa Inc.

* Exclusive of reinstatement due to exchange fluctuation.

# Amount is below the round off norm adopted by the Company.

Terms and conditions of transactions with related parties

All the above mentioned transactions with the related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

There have been no guarantees provided or received for any related party receivables or payables other than the letter of comfort which has been given by the ultimate holding company, Whirlpool Corporation, to respective banks against bank overdraft, cash credit, letter of credit etc. facilities provided to the Company.

The amounts disclosed above are the amounts recognized as an expense during the reporting period related to key management personnel.

6. Segment information

The Company’s operations predominantly comprise of only one segment i.e. Home Appliances. The management also reviews and measures the operating results taking the whole business as one segment and accordingly, makes decision about resource allocation. In view of the same, separate segmental information is not required to be given as per the requirements of Ind AS 108 on “Operating Segments”.

7. Hedging activities and derivatives Derivatives not designated as hedging instruments

The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as hedge instrument and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally for the following period:

a. From one to three month sin case of vendor payments

b. From one to three years in case of investment in senior notes (including interest).

40. Fair values

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments, other than those with carrying amount that are reasonable approximations of fair values:

The management assessed that cash and cash equivalents, trade receivables, other receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The loss allowance on the financial assets as at 31 March 2017: INR 134 lacs (31 March 2016:INR 140 lacs, 1 April 2015: INR 157 lacs) provided in the books on account of uncertainty of recoverability for the amount.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

a. Security Deposits disclosed under loans are evaluated by the Company based on parameters such as interest rates, risk factors, risk characteristics and individual creditworthiness of the counterparty. Based on this evaluation, allowances are taken into account for the expected credit losses of these security deposits.

8. Financial risk management objectives and policies

The Company’s principal financial liabilities, other than derivatives, comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations and to provide guarantees to support its operations. The Company’s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks and also ensure that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below:

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include deposits and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at 31 March 2017 and 31 March 2016.

The analysis exclude the impact of movements in market variables on the carrying values of gratuity, other post-retirement obligations and provisions.

The sensitivity of the relevant profit and loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of 31 March 2017 and 31 March 2016.

a. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the overdraft, letter of credit, cash credit etc. facilities provided by the respective banks to the Company carrying variable interest rates.

Since, the Company has not availed any long-term credit facilities, therefore there is no need for the Company to enter into hedge contract to mitigate the possible exposure risk.

b. Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency).

The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum period of three month for hedges of forecasted purchases and a maximum period of three year period for hedges of forecasted cash inflow relating to senior notes (including interest).

When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions, the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD and Euro exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities.

The Company’s exposure to foreign currency changes for all other currencies is not material.

c. Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase and manufacture of various electronic parts which consist of copper element and therefore require a continuous supply of the same. However, due to the non-significant movement in the prices of the copper, the Company has not entered into any forward contracts for commodity hedging purpose.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

a. Trade receivables

Customer credit risk is managed subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit insurance.

An impairment analysis is performed at each quarter end on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 8. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

b. Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved banks and within limits assigned to each bank by the ultimate holding Company.

The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2017, 31 March 2016 and 1 April 2015 is the carrying amounts as illustrated in note 8 except for financial guarantees. The Company’s maximum exposure relating to financial guarantees is noted in note 35.

Liquidity risk

The Company monitors its risk of a shortage of funds through fund management exercise at regular intervals.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

9. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if any. To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and take necessary actions to maintain the requisite capital structure.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2017 and 31 March 2016.

10. First-time adoption of Ind AS

These financial statements, for the year ended 31 March 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2017, together with the comparative period data as at and for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1 April 2015, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2015 and the financial statements as at and for the year ended 31 March 2016.

Exemptions applied

Ind AS 101 (First-time Adoption of Indian Accounting Standards) allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

a. Use of previous GAAP values as deemed cost

The Company has elected to consider previous GAAP values of its property, plant and equipment and intangible assets as its deemed cost on the date of transition to Ind AS.

b. Share based payments reserve

Ind AS 102 (Share based payments) has not been applied to equity instruments in share based payment transactions that vested before 1 April 2015.

a. Measurement of Financial assets

Interest free security deposits paid were carried at nominal cost under IGAAP. On application of Ind AS 109, all such financial assets are now being measured at amortized cost using effective rate of interest. At the date of transition to Ind AS, difference between the amortized cost and Indian GAAP carrying amount has been transferred to prepaid rent amounting to INR 293 lacs, except the amount pertaining prior to 1 April 2015 which has been recognized in retained earnings, net of deferred taxes. Further for the year ending 31 March 2016, the Company has recognized prepaid rent amounting to INR 2 lacs, interest income under the head other income amounting to INR 77 lacs as the unwinding effect of such remeasurement and has also recognized expenses amounting to INR 85 lacs towards amortization of prepaid expenditure.

b. Share based compensation

Under Indian GAAP, the Company was not required to account for share based compensation received by its employees from the ultimate holding company i.e. Whirlpool Corporation. However, Ind AS 102 requires the Indian subsidiary company to recognize the cost of share based payments to its employees from the ultimate holding company. Accordingly, cost of vested shared payments amounting to INR 1,163 lacs has been accounted for as ‘share-based payment reserve’ as on the transition date with corresponding debit to the retained earnings. Further, INR 928 lacs has been accounted as employee stock option expense in the statement of profit and loss for the year ending 31 March 2016.

c. Leases

As per the provisions of AS 19, lease rentals were accounted for on a straight line basis for certain premises obtained on lease having an escalation clause in the lease agreement. However, as per Ind AS 17, straight lining of lease rental is not required in case lese rent escalation reflects expected inflation cost. The Company has determined that escalation rates in the existing agreements of leased premises are broadly in line with the inflation rates. Hence, lease equalization reserve as on the date of transition amounting to INR 132 lacs has been reversed with a corresponding credit to retained earnings. Further, for the year ended 31 March 2016, impact of straight lining of lease rentals amounting to INR 81 lacs has also been reversed in the statement of profit and loss.

d. Provisions

Under Indian GAAP, provisions, including long-term provision are accounted at the undiscounted amount. In contrast, Ind AS 37 requires that where the effect of time value of money is material, the amount of provision should be recognized at the present value of the expenditure expected to settle the obligation. Accordingly, provision for warranty costs has been reduced by INR 933 lacs at the date of transition with a corresponding net of tax adjustment against the retained earnings. Similarly, provision for warranty costs recognized during the year ended 31 March 2016 has also been reduced by INR 358 lacs. Further, interest expense of INR 431lacs representing unwinding of discount due to passage of time has been recorded during the year ended 31 March 2016.

e. Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity. On the date of transition, the net impact on deferred tax liabilities is of INR 775 lacs (31 March 2016: INR 624 lacs).

f. Government grant

As per the provisions of AS 20, grants received against fixed assets were accounted as a deduction from the gross value of the related asset. However, as per Ind AS 20, grant received against fixed assets is required to be recognized in the profit and loss on a systematic basis over the useful life of the assets. Accordingly, net book value fixed assets has been increased by INR 484 lacs (i.e. value of grant net of depreciation till date) on the date of transition with a corresponding credit to the deferred grant as a separate line item in the balance sheet. Also, grant received during the year ended 31 March 2016 amounting to INR 348 lacs has also been accounted for in the similar manner. Further, for the year ending 31 March2016, depreciation charge and amortization of deferred grant amounting to INR 38 lacs have been recognized in the statement of profit and loss.

g. Sale of goods

Under Indian GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is presented on the face of statement of profit and loss as a separate line item. Thus, sale of goods under Ind AS has increased by INR 36,770 lacs with a corresponding increase in other expense. This has no resulting impact on the equity.

h. Cash Discount

Under Indian GAAP, cash discount amounting to INR 4,818 lacs was recognized as part of other expenses in the financial statements. However, the same has been reclassified as part of trade discounts under Ind AS which is netted off from revenue from operations for the year ending 31 March 2016.This has no resulting impact on the equity.

i. Defined benefit liabilities

Under Indian GAAP, the entire expense amount of post-employment defined benefit plan, including actuarial gains and losses, is charged to statement of profit or loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognized immediately in the balance sheet through Other Comprehensive Income (OCI). Thus, the employee benefit cost recognized in the statement of profit and loss is reduced by INR 475 lacs with a corresponding (net of tax) charge in the OCI.

j. Depreciation of property, plant and equipment

Subsequent to the transition date, the Company has changed the depreciation method for the assets categorized as ‘Plant and Equipment used for production’ from straight line to MUOP method. The management believes that the depreciation accounting under MUOP method reflects the best expected pattern for the consumption of future economic benefits embodied in these assets. This has resulted in an increase in the depreciation expense by INR 787 lacs for the year ended 31 March 2016.

k. Revaluation reserve

In earlier years, the Company carried out a revaluation of a part of its fixed assets which resulted in an upward valuation of fixed assets amount. As per the requirements of IGAAP, a revaluation reserve amounting to INR 1,269 lacs was lying under the head ‘reserves and surplus’ as on the date of the transition. Under Ind AS, the Company has adopted cost model approach for the measurement of the cost of the fixed assets. Accordingly, revaluation reserve of INR 1,269 lacs has been transferred to retained earnings as on the date of the transition. This has no resulting impact on the equity.

l. Cash incentive reserve

Under Indian GAAP, the Company was not required to account for cash incentive received by its employees from the ultimate holding company i.e. Whirlpool Corporation. However, as per the concept of deemed equity under Ind AS, the Indian subsidiary company requires to recognize the cost of cash incentives to its employees from the ultimate holding company with a corresponding credit to cash incentive reserve under the head other equity. Accordingly, INR 82 lacs has been accounted as cash incentives expense in the statement of profit and loss for the year ending 31 March 2016.

m. Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

n. Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

11. During the previous year, finished goods, spare parts and fixed assets of INR 1,491 lacs were destroyed on account of flood in Chennai. These assets were fully insured and the Company had recovered INR 941 lacs as a part settlement of the Insurance claim and sale of damaged goods. The Company had also estimated a deduction of INR 80 lacs which was charged off to the statement of profit and loss and recorded an insurance claim receivable of INR 470 lacs. These were recorded as exceptional items in the financial statements. Further, during the current year, the Company has received an amount of INR 464 lacs through full and final settlement from the insurer and sale of damaged goods. The balance amount of INR 6 has been recorded as loss in the financial statements.

Also, during the current year a fire broke out in the paint shop of the Faridabad Plant of the Company which resulted in the damage of the part of the fixed assets lying at the location. The Company is in the process of filing the insurance claim for such loss and has filed an interim claim of INR 54 lacs till 31 March 2017. The Company expects that the entire value of fixed assets lost will be recovered through the insurance claim and has accordingly recorded the claim so filed as insurance claim receivable.

12. During the current year, the Company had a vacancy in the office of Company Secretary with effect from 30 May 2016 which was filled up in the month of February 2017. This resulted in delay as per the relevant provisions of the Companies Act, 2013, which requires the filling-up of such vacancy within a period of six months from the date of vacancy. The management has already initiated necessary actions in this regard with the regulatory authority.

13. Standards issued not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and has amended the following standard:

Amendments to Ind AS 7, Statement of Cash Flows

The amendments to Ins AS 7 requires an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. On initial application of the amendment, entities are not required to provide comparative information for preceding periods. These amendments are effective for annual periods beginning on or after 1 April 2017.

Amendments to Ind AS 102, Share-based payments

The MCA has issued amendments to Ind AS 102 that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction, the classification of a share-based payment transaction with net settlement features for withholding tax obligations, an accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled. The amendments are effective for annual periods beginning on or after 1 April 2017. The said amendment will not be applicable to the Company due to the fact that, no cash settled shared based transactions exist.


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.


Mar 31, 2010

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, 2010 March 31, 2009

(a) Claims against the Company not acknowledged 1,487.51 1505.58 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.1487.51 lacs (Previous Year Rs.1505.58 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 fi nancial statements.

(b) Others:-

- On account of pending appeals of Excise Duty 1479.83 941.77

- On account of pending appeals of Custom Duty 256.02 228.59

- On account of pending appeals of sales tax assessments 1,554.57 1,754.20

These cases as mentioned in point (b) above for which the total estimated liability, should the actions be successful, is Rs.3,290.12lacs (Previous year Rs. 2,924.56 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 confi dent 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 Offi cers have made certain disallowances of Rs.10,938.47 lacs (Previous Year Rs.5,107.34 lacs), other than transfer pricing adjustments over the past few years. The Company’s 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 Offi cers) have reduced the loss by Rs.9,734.49 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.1,699.09 lacs (previous year Rs.3,628.14 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, 2010 could include demands/settlements on the similar items, amounts whereof could not be ascertained.

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. The Company had issued 1,523,42,500 (Previous Year 15,23,42,500) 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. The dividend is payable cumulatively only in the year in which the Company will have distributable profi ts as per the provision of Companies Act, 1956. During the year, the Company has appropriated Rs.7,223.64 lacs towards dividend on preference share capital and Rs.1,227.51 lacs towards dividend tax thereon for the period ended March 31, 2010 (including arrears of dividend), of which preference share dividend of Rs.4,176.79 lacs and dividend tax thereon of Rs.709.85 lacs has been paid during the current year and the balance amount of preference share dividend of Rs.3,046.85 lacs and dividend tax thereon of Rs.517.66 lacs has been disclosed in Schedule ‘L’ to the fi nancial statements.

3. Capital work contracted but still under execution (net of advances) is estimated at Rs 1,064.67 lacs (previous year Rs. 264.03 lacs).

4. Segment Reporting

Information pertaining to Secondary Segment

Fixed Assets as per Geographical Locations

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

5. The Company had taken a loan amounting to US$ 10 million from Whirlpool Corporation, USA in the year April 2007, payable after three years. The Company had also entered into a ‘Cross Currency and Interest Rate Swap’ agreement with a bank for repayment of principal and interest whereby bank agreed to charge a fi xed rate on the principal amount in exchange for variable interest (LIBOR plus 45 basis points) and for repayment of principal to Whirlpool Corporation at the time of repayment of the loan. In the previous year, the Company had accounted for the ‘Cross Currency and Interest Rate Swap’ agreement on the basis of principles of hedge accounting and accounted the net loss of Rs.250.92 lacs on restatement of loan and mark-to-market valuation of derivative in ‘Hedge Reserve Account’.

During the current year, Company has pre-paid the loan to Whirlpool Corporation, and has also foreclosed the ‘Cross Currency and Interest Rate Swap’ agreement with the bank. Consequently, the balance in ‘Hedge Reserve Account’ of Rs.250.92 lacs has been adjusted with the corresponding loan liability in the current year.

6. The company has accounted for deferred tax assets (net) amounting to Rs.1,147.57 lacs (Previous Year Rs. 7,325.27 lacs), including deferred tax assets on unabsorbed depreciation, till March 31, 2010. The Company is confi dent that subsequent realisation of the deferred tax assets created is virtually certain in the near future based on existing business model and future plans as enumerated below:

The Company had established state of art Design and Technology centre at Pune and Pondicherry in earlier years. This centre operates as an end to end solution provider to Whirlpool Corporation and other group companies across the globe. The Company has confi rmed service agreement from Whirlpool Corporation for a period ending on December 31, 2010. As per the existing agreement Whirlpool Corporation has also agreed to purchase the said services from the Company at least at similar level for an additional two year term ending on December 31, 2012. The consideration charged by the Company for rendering the services is based on a cost plus mark-up on cost of services provided. The total remaining value of services to be provided under the current agreement is Rs.4,178 lacs [including mark-up]and the minimum value of services to be provided by the Company in the years 2011 and 2012 at current level will be approximately Rs.10,350 lacs [including mark-up] [converted at exchange rate as at March 31, 2010]. In addition to the above, the Company also has confi rmed service agreements for various services including information technology support, international procurement support, human resource services, etc with other group companies for a period ending on December 31, 2010. The total remaining value of services [including mark-up] to be provided under the current agreement is Rs.918 lacs [converted at exchange rate as at March 31, 2010].

The Company has developed various new products through product innovation and technological improvements for export markets. As per the Global Procurement Policy of Whirlpool Corporation, the Company has received confi rmed sales order for the calendar 2010 to supply home appliances produced at its manufacturing facilities to various group companies in Australia, Latin America and Europe. The total remaining value of sales orders to be executed by the Company is Rs.12,400 lacs [converted at exchange rate as at March 31, 2010]. The Company has sold the goods at a cost plus gross margin basis for part of these sales orders till March 31, 2010 and expects to earn a similar gross margin on executing the balance.

The Company has also earned profi ts subsequent to the current fi nancial year end which are suffi cient to absorb the remaining amount of deferred tax assets.

The Company is confi dent that the above measures and confi rmed service and sales orders will result in further increase in the market share of the Company with corresponding profi tability and that the subsequent realisation of deferred tax assets recognized is virtually certain.

8. Related Party Transactions

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

Key Management Personnel

Mr. Arvind Uppal, Managing Director Mr Mahesh Krishna, Executive Director (upto 25th July 2008), Mr Vikas Singhal (w.e.f 25th July 2008 till 31st March 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 Corp. Whirlpool China Investment Co. Limited, Whirlpool Greater China, Whirlpool CHC, Whirlpool South East Asia PTE, Whirlpool Europe s.r.l., Whirlpool Thailand Limited, Whirlpool India Holdings Limited, Whirlpool Slovakia Spol. Sro, Whirlpool Greater China Inc, Whirlpool Home Appliance (Shanghai), Whirlpool S.A., Whirlpool (Hong Kong) Limited, Whirlpool Colombia, Whirlpool Australia Pty Limited, Whirlpool Mexico S.A. de C.V, Whirlpool Morocco Srl, Whirlpool Argentina, Whirlpool South Africa (Pty) Limited, Whirlpool Home Appliance (Shanghai) International Trading Co. Limited, Guangdong Whirlpool Electrical Products Co. Limited, Whirlpool Microwave Products Development Limited, Beijing Embraco Industrias Acros, Whirlpool France S.A.S., Whirlpool Sweden A.B., Whirlpool Canada Holding Co., Whirlpool Poland, Multibras SA., Whirlpool Bauknecht Hausgeräte GmbH, WHIRLPOOL d.o.o. Beograd, Beijing Embracco Snowflake, Empressa Brasileira, Comercial Acros Whirlpool, Whirlpool Product Development (Shenzhen) Co. Ltd,

9. Income Tax

The Company has recognized Rs.4,177.75 lacs as on 31st March 2010 as Minimum Alternate Tax (MAT) credit entitlement (Previous Year Rs 539.12 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 profi tability projections and also profi t earned during the year is confi dent that there would be suffi cient taxable profi t in future which will enable the Company to utilize the above MAT credit entitlement.

10. 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 fi xed price for a specifi c period of time. The grant price (or strike price) is fi xed 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 specifi ed 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.

11. 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 benefi t vests on the employee completing 5 years of service. The Gratuity plan for the Company is a defi ned benefi t scheme where annual contributions as demanded by the insurer are deposited, to a Gratuity Trust Fund established to provide gratuity benefi ts. 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 defi ned 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 benefi ts. The Trust Fund has taken an Insurance policy, whereby these contributions are transferred to the insurer. The Provident Fund is a defi ned contribution scheme whereby the Company deposits an amount determined as a fi xed percentage of basic pay to the “Statutory Provident Fund”. The benefi t vests upon commencement of employment. The Company has also agreed to provide certain additional retirement benefi ts to the employees of the Faridabad Refrigeration Operations where Rs.20,000 is paid to employee on his retirement. Additional retirement benefi t is unfunded defi ned benefi t 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 benefi t expense recognized in the profi t and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

12. Excise duty on sales amounting to Rs. 13,620.46 lacs (previous year Rs. 16,066.45 lacs) has been reduced from sales in Profit and Loss account and excise duty on increase in stock amounting to Rs.638.01 lacs has been considered as expense in current year and excise duty on decrease in stock of Rs.616.13 lacs is considered as an income in the previous year in ‘Schedule Q’ of the fi nancial statements.

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

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