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Notes to Accounts of Voltas Ltd.

Mar 31, 2023

The fair value of the investment properties have been derived using the market comparable approach (market value method / sale comparison technique) based on recent market prices without any significant adjustments being made to the market observable data. The valuation was carried out by an independent registered valuer as defined under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. Accordingly, fair value estimates for investment properties are classified as level 3.

The Company has no restriction on the realisability of its Investment properties and no contractual obligation to construct and develop investment properties.

Footnotes:

8 (a) Under a loan agreement for '' 0.60 crore (fully drawn and outstanding) entered into between Agro Foods Punjab Limited

(AFPL) and the Punjab State Industrial Development (PSIDC), the Company has given an undertaking to PSIDC that it will not dispose off its shares in AFPL till the monies under the said loan agreement between PSIDC and AFPL remain due and payable by AFPL to PSIDC. During 1998-99, the Company had transferred its beneficial rights in the shares of AFPL.

8 (b) For these unquoted investments categorised under Level 3, their respective cost has been considered as an appropriate

estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

8 (c) In respect of the Company''s investment in 2,640 equity shares of Reliance Industries Limited., there is an Injunction Order

passed by the Honourable High Court of Kanpur restraining the transfer of these shares. The share certificates are, however, in the possession of the Company. Pending disposal of the case, dividend and fair value of these shares have not been recognised.

8 (d) Investments at Fair Value Through Other Comprehensive Income (FVTOCI) reflect investment in quoted and unquoted equity

shares. These equity shares are designated as FVTOCI as they are not held for trading purpose and are not in similar line of business as the Company, thus disclosing their fair value change in profit and loss will not reflect the purpose of holding.

8 (e) The Company has conducted its annual impairment assessment of the investment in wholly owned subsidiary Universal

MEP Projects & Engineering Services Limited and obtained a valuation report from an independent registered valuer. The fair value amount has been determined using the value in use method and calculated based on future cashflows for next five years after considering the order book position, current and anticipated economic conditions and trends, estimated future operating results and growth rates. The cash flows beyond five years are extrapolated using a steady growth rate of 5% per annum. Key assumptions for the value in use calculations includes discount rate of 11.74% per annum (PY : 12.49% per annum) applied to arrive at present value of the cash flows. The discount rate represents the weighted average cost of capital adjusted for the risk specific to the Investment and appropriate industrial beta has been applied (based on the comparative companies data) to arrive at the discount rate. Based on the assessment, the investment impairment of '' 32.57 crores has been reversed during the current year.

8 (f) During the previous year, Lakshmi Automatic Loom Works Limited had consolidated the face value of equity shares from

'' 10/- each to face value of '' 100/- each.

8 (g) During the current year, Voltas Water Solutions Private Limited, a dormant joint venture of the Company, had been struck

off from Registrar of Companies records w.e.f. 26 July, 2022 and accordingly investment had been written off by utilising impairment allowance.

8 (h) During the current year, shares of Lakshmi Ring Travellers (Coimbatore) Limited were tendered pursuant to the Buy Back offer

received by the Company.

8 (i) Fair value has been determined basis offer of issuance of equity shares on preferential basis.

8 (j) Fair value has been determined basis right issue offer announced.

(2) Trade receivables has decreased mainly on account of transfer of Domestic Project Business (DPG), Mining and Construction Equipment (M&CE) business and Textile Machinery Division (TMD) business to Universal MEP Projects & Engineering Services Limited (UMPESL) (Refer Note 57).

(3) Trade receivables are non interest bearing and are generally on terms of 7 to 30 days in case of sale of products and in case of long term construction contracts, payment is generally due upon completion of milestone as per terms of contract. In certain contracts, short term advances are received before the performance obligation is satisfied.

(4) The Company applies the expected credit loss (ECL) model for measurement and recognition of impairment losses on trade receivables and contract assets. The Company follows the simplified approach for recognition of impairment allowance on trade receivables and contract assets. The application of the simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment allowance based on lifetime ECLs at each reporting date. ECL impairment loss allowance (or reversal) recognised during the period is recognised in the Statement of Profit and Loss. This amount is reflected under the head ''other expenses'' in the Statement of Profit and Loss.

Terms / Rights attached to equity shares

(a) The Company has one class of equity shares having a par value of '' 1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding and are subject to preferential rights of the Preference Shares (if issued).

(b) A reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period :

Capital Reserve:

Capital Reserve was created from capital surplus on sale of assets and on amalgamation of subsidiary.

Capital Redemption Reserve:

Capital Redemption Reserve is created out of profit available for distribution towards redemption of Preference shares. This reserve can be used for the purpose of issue of Bonus shares.

Securities Premium :

Securities Premium represents the surplus of proceeds received over the face value of shares, at the time of issue of shares. This reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

General Reserve :

General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the General Reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to statement of profit and loss.

Equity instruments fair value through other comprehensive income :

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVTOCI equity investments reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

Retained Earnings :

The balance in the Retained Earnings primarily represents the surplus after payment of dividend and transfer to reserves.

(i) The Board of Directors of Voltas Limited (''Holding Company'') at its meeting held on 12 February, 2021, have approved the transfer of domestic B2B businesses relating to Projects business comprising Mechanical Electrical and Plumbing (MEP)/ Heating, Ventilation and Air-Conditioning (HVAC) and Water projects, Mining and Construction Equipment (M&CE) business and Textile Machinery Division (TMD) business to its wholly owned subsidiary viz. Universal MEP Projects & Engineering Services Limited (''UMPESL'') via slump sale through a Business Transfer Agreement (''BTA''). The BTA transaction has been consummated on 1 August, 2022, being the closing date for the transfer of business for a consideration of '' 1,190 crores and resultant gain on said transaction of '' 1,049.04 crores has been disclosed as an Exceptional Item.

(ii) I n respect of one of the overseas projects, the main contractor had unilaterally terminated the contract with Voltas and also encashed the underlying bank guarantee pursuant to the termination of the main contractor''s contract by their customer. The Company had considered a provision towards outstanding dues and encashed performance guarantee on the said project. The Company has initiated legal proceedings against the main contractor for recovery of the proceeds of bank guarantee and due amounts from them.

44 INCOME TAX

Reconciliation of tax expense and the accounting profit multiplied by India''s domestic tax rate for the year ended 31 March, 2023 and 31 March, 2022

(iv) Provident Fund

Contribution to Provident Fund is made to trusts administered by the Company. In terms of guidance note issued by the Institute of Actuaries of India, the Actuary has provided a valuation of Provident fund liability based on the assumptions listed and determined that there is no shortfall as at 31 March, 2023.

Risk Analysis

The Company is exposed to the following Risks in the defined benefits plans :

Investment Risk: The present value of the defined benefit obligation is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan assets is below this rate, it will create a plan deficit.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by increase in the return on the plan''s debt investments.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary growth risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan''s liability.

The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instrument by valuation

techniques:

(i) Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

(ii) Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable;

(iii) Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

- 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.

The following methods and assumptions were used to estimate the fair values:

- The fair value of quoted equity investment and mutual funds are based on price quotations at the reporting date.

- The fair value of unquoted equity investments are based on Market multiple approach. Market multiple of EV/EBITDA are

considered after applying suitable discounts for size, liquidity and other company specific discounts.

- The Company enters into derivative financial instruments with various counterparties, principally with banks. Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs. The model incorporates various inputs including the credit quality of counter parties, foreign exchange spot and forward rates.

There were no transfers between Level 1 and 2 during the period.

52 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s financial liabilities include borrowings, lease liabilities, trade and other payables. The Company''s financial assets include investments, loans, trade and other receivables, cash and cash equivalents and other bank balances. The Company also holds FVTPL and FVTOCI investments.

The Company is exposed to market risk, credit risk and liquidity risk. The Board of Directors of the Company oversee the management of these financial risks through its Risk Management Committee as per Company''s existing policy.

(i) 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 comprise three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include borrowings, lease liabilities, investments, trade payables and other payables, trade receivables and other receivables, loans and derivative financial instruments.

(a) Interest rate risk

I nterest 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. Interest rate change does not affect the short term borrowing significantly and the Company has very limited long term borrowings, therefore the Company''s exposure to the risk of changes in market interest rates relates primarily to the investment in debt mutual funds.

Given the portfolio of investments in debt mutual funds, the Company has exposure to interest rate risk with respect to returns realised. It is estimated that an increase in 25 bps change in 10 year Government bond yield would result in a loss of approximately '' 4.12 crores (31 March, 2022: '' 4.98 crores) whereas a decrease in 25 bps change in 10 year Government bond yield would result in a profit of approximately '' 4.12 crores (31 March, 2022: '' 4.98 crores). This estimate is based on key assumption with respect to seamless transition of rates across debt instruments in the market and also basis the duration of debt instruments in turn held by mutual funds that the Company has invested in.

(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). Foreign currency risks are managed by utilising foreign exchange forward contracts within the approved policy parameters.

(ii) 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 for trade receivables, contract asset, cash and cash equivalents, investments, other bank balances, loans and other financial assets. The Company only deals with parties which have good credit rating/ worthiness given by external rating agencies or based on Company''s internal assessment.

Credit risk on trade receivables and contract assets are managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed and individual credit limits are defined in accordance with this assessment. Moreover, given the diverse nature of the Company''s businesses, trade receivables and contract assets are spread over a number of customers with no significant concentration of credit risk. No single customer accounted for 10% or more of the trade receivables and contracted assets in any of the years presented.

For trade receivables and contract assets, as a practical expedient, the Company computes credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and contract assets and is adjusted for forward-looking estimates.

For Mutual Fund Investments, counterparty risk are in place to limit the amount of credit exposure to any one counterparty. This, therefore, results in diversification of credit risk for Company''s mutual fund investments.

Credit risk from cash and cash equivalents and balances with banks is managed by the Company''s treasury department in accordance with the Company''s treasury policy.

The Credit risk on mutual fund investments, cash and cash equivalents, and other bank balances are limited as the counterparties are banks and fund houses with high-credit ratings assigned by credit rating agencies.

The carrying value of the financial assets represents the maximum credit exposure. The Company''s maximum exposure to Credit risk is disclosed in Note 50 Financial Instruments. The maximum credit exposure on financial guarantees given by the Company for various financial facilities is disclosed in Note 46 Commitments and Contingencies.

(iii) Liquidity risk management:

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that the funds are available for use as per the requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company consistently generates sufficient cash flows from operations to meet its financial obligations as and when they fall due.

The amount included in Note 46(B) for financial guarantee contracts are the maximum amounts that the Company may be liable to settle under the respective arrangements for the full guaranteed amount if that amount is claimed by the counterparty for the guarantee. Based on the expectations as at the end of reporting period, the Company considers that it is more likely than not that such amount shall not be payable under the respective arrangements. However, this estimate is subject to change depending upon the probability of the counterparty claiming under the guarantee which is a function of the likelihood that the financial receivables held by the counterparty which are guaranteed suffer credit losses.

* Maturity amount of borrowings is including the interest that will be paid on these borrowings.

53 LEASES

Company as a lessee

The Company has lease contracts for its office premises and storage locations with lease term between 1 year to 5 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets.

The Company also has certain leases of office premises and storage locations with lease terms of 12 months or less. The Company applies the ''short-term lease'' recognition exemptions for these leases.

(c) Details of carrying amount of right-of-use assets and movement during the period is disclosed under Note 6 Footnotes:

(a) The maturity analysis of lease liabilities are disclosed in Note 52 (iii) Liquidity Risk Management

(b) The effective interest rate for lease liabilities is 9%, with maturity between 2023-2028.

(c) Expense relating to short-term leases are disclosed under the head rent and clearing charges in other expenses (Refer Note 42).

(d) The Company had total cash flows for leases of '' 9.51 crores on 31 March, 2023 (31 March, 2022 : '' 6.16 crores). Company as a lessor

The Company has entered into operating leases on its investment property portfolio consisting of land and office premises. These leases have lease terms between 1 year to 5 years, The Company has the option under some of its leases to lease the assets for additional periods. An amount of '' 29.27 crores is recognised as lease income in the statement of profit and loss account for the year ended 31 March, 2023 (31 March, 2022: '' 24.70 crores).

(D) Performance obligation

The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at 31 March, 2023 is of '' 701.18 crores (31 March, 2022: '' 2,988.14 crores), out of which, majority is expected to be recognised as revenue within a period of one year.

55 CAPITAL MANAGEMENT :

The capital structure of the Company consists of net debt and total equity of the Company. The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through an optimum mix of debt and equity within the overall capital structure. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

56 OTHER STATUTORY INFORMATION :

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

(ii) The Company does not have any transactions with companies struck off.

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

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

(v) The Company has 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 has 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 has no 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) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.

(ix) The Company is maintaining its books of account in electronic mode and these books of account are accessible in India at all times and the back-up of books of account has been kept in servers physically located in India on a daily basis from the applicability date of the Companies (Accounts) Rules, 2014, i.e. 5 August, 2022 onwards.

57 The Board of Directors of Voltas Limited at its Meeting held on 12 February, 2021, have approved the transfer of domestic B2B businesses relating to Projects business comprising Mechanical Electrical and Plumbing (MEP)/ Heating, Ventilation and AirConditioning (HVAC) and Water projects, Mining and Construction Equipment (M&CE) business and Textile Machinery Division (TMD) business to its wholly owned subsidiary viz. Universal MEP Projects & Engineering Services Limited (''UMPESL'') via slump sale through a Business Transfer Agreement (''BTA''). The BTA transaction has been consummated on 1 August, 2022, being the closing date for the transfer of business for a consideration of '' 1,190 crores and resultant gain on said transaction of ''1,049.04 crores has been disclosed as an Exceptional Item.

58 RESTRUCTURING OF OVERSEAS BUSINESS OPERATIONS :

(i) The Board of Directors of the Company at its Meeting held on 26 April, 2023, approved the proposal for transfer of overseas branch offices of the Company at Dubai, Abu Dhabi, Sharjah in the United Arab Emirates (UAE), Doha in Qatar, Bahrain and Singapore to Universal MEP Projects Pte Limited (UMPPL), Singapore, a wholly-owned subsidiary of Voltas Netherlands B.V., which is a direct 100% wholly-owned subsidiary of Voltas Limited. The transfer would be on slump sale basis through execution of Business Transfer Agreement (BTA) for each branch separately, subject to satisfactory completion of conditions precedent, including novation of existing contracts of Voltas in favour of UMPPL by the Main Contractors/Clients and such other compliances or procedures necessary or applicable in the respective local jurisdictions.

(ii) The Board of Directors have also approved transfer of Voltas direct investments in overseas subsidiary companies -Weathermaker FZE (100%), UAE, Saudi Ensas Company for Engineering Services W.L.L., Kingdom of Saudi Arabia (92%) and Lalbuksh Voltas Engineering Services & Trading L.L.C., Sultanate of Oman (20%) to UMPPL through Share Purchase Agreement (SPA) for each Company respectively, subject to requisite approvals as may be required in that behalf.

(iii) Upon consummation of the aforesaid transactions, the international business operations would get housed in the Singapore entity - UMPPL.

59 EVENTS OCCURRING AFTER BALANCE SHEET :

(i) The Board of Directors have proposed dividend of '' 4.25 per share after the balance sheet date which is subject to approval by the shareholders at the annual general meeting.

(ii) The Board of Directors have approved an amount of '' 20.00 crores to be transferred to General Reserve from Retained Earnings after the balance sheet date.

61 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification/ disclosure.

Mar 31, 2022

8 (a) Under a loan agreement for '' 0.60 crore (fully drawn and outstanding) entered into between Agro Foods Punjab Ltd. (AFPL)

and the Punjab State Industrial Development (PSIDC), the Company has given an undertaking to PSIDC that it will not dispose off its shares in AFPL till the monies under the said loan agreement between PSIDC and AFPL remain due and payable by AFPL to PSIDC. During 1998-99, the Company had transferred its beneficial rights in the shares of AFPL.

8 (b) For these unquoted investments categorised under Level 3, their respective cost has been considered as an appropriate

estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

8 (c) In respect of the Company''s investment in 2,640 equity shares of Reliance Industries Ltd., there is an Injunction Order passed

by the Court in Kanpur restraining the transfer of these shares. The share certificates are, however, in the possession of the Company. Pending disposal of the case, dividend and fair value of these shares have not been recognised.

8 (d) Investments at Fair Value Through Other Comprehensive Income (FVTOCI) reflect investment in quoted and unquoted equity

securities. These equity shares are designated as FVTOCI as they are not held for trading purpose and are not in similar line of business as the Company, thus disclosing their fair value change in profit and loss will not reflect the purpose of holding.

8 (e) During the year, on account of corporate actions including the announcement of fresh issue by Terrot GmbH, to which

Company had not made any subscription and accordingly, the Company shareholding has reduced to Nil. Therefore, Terrot GmbH is no longer an associate of the Company.

8 (f) The Company has conducted its annual impairment assessment of the investment in wholly owned subsidiary Universal MEP

Projects & Engineering Services Limited (formerly known as Rohini Industrial Electricals Limited). The recoverable amount has been determined using the value in use method and calculated based on future cashflows for next five years after considering

the order book position, current and anticipated economic conditions and trends, estimated future operating results and growth rates. The cash flows beyond five years are extrapolated using a steady growth rate of 5% per annum. Key assumptions for the value in use calculations includes discount rate of 12.49% per annum (PY : 11.20% per annum) applied to arrive at present value of the cash flows. The discount rate represents the weighted average cost of capital adjusted for the risk specific to the Investment and appropriate industrial beta has been applied (based on the comparative companies data) to arrive at the discount rate.

8 (g) During the curent year, Auto Aircon (India) Limited, a dormant wholly-owned subsidiary of the Company, has been struck off

from Registrar of Companies records w.e.f. 8 September, 2021 and accordingly investment has been written off by utilising impairment allowance.

8 (h) During the year, Tata Projects Limited has split the face value of equity shares from ''100/- each to face value of '' 5/- each.

Further, the Company has received 54,00,000 shares as bonus shares. Additionally, the Company has subsribed to the Rights issue of 29,62,170 equity shares at designated Rights issue price.

(2) Trade receivables has increased mainly on account of higher sales made in the month of March 2022 in unitary cooling for comfort and commercial use segment compared to sales made in comparative month of March 2021.

Capital Reserve :

Capital Reserve was created from capital surplus on sale of assets and on amalgamation of subsidiary.

Capital Redemption Reserve :

Capital Redemption Reserve is created out of profit available for distribution towards redemption of Preference shares. This reserve can be used for the purpose of issue of Bonus shares.

Securities Premium :

Securities Premium represents the surplus of proceeds received over the face value of shares, at the time of issue of shares.This reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

General Reserve :

Equity instruments fair value through other comprehensive income :

Retained Earnings :

The balance in the Retained Earnings primarily represents the surplus after payment of dividend and transfer to reserves.

As per the E-Waste (Management) Rules, 2016, as amended, the Company has an obligation to complete the Extended Producer Responsibility targets, only if it is a participant in the market during a financial year. The obligation for a financial year is measured based on sales made in the preceding 10th year and the Company has fulfilled its obligation for the current financial year. In accordance with Appendix B of Ind AS 37, ''Provisions, Contingent Liabilities and Contingent Assets'', the Company will have an e-waste obligation for future years, only if it participates in the market in those years.

(iv) Provident Fund

Risk Analysis

The Company is exposed to the following Risks in the defined benefits plans :

I nvestment Risk: The present value of the defined benefit obligation is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan assets is below this rate, it will create a plan deficit.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by increase in the return on the plan''s debt investments.

The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instrument by valuation techniques:

(i) Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

(ii) Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable;

(iii) Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

- 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.

The following methods and assumptions were used to estimate the fair values:

- The fair value of quoted equity investment and mutual funds are based on price quotations at the reporting date.

- The fair value of unquoted equity investments are based on Market multiple approach. Market multiple of EV/EBITDA are considered after applying suitable discounts for size, liquidity and other company specific discounts.

There were no transfers between Level 1 and 2 during the period.

|50.| FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

(i) Market risk:

(a) Interest rate risk

I nterest 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. Interest rate change does not affect the short term borrowing significantly, therefore the Company''s exposure to the risk of changes in market interest rates relates primarily to the investment in debt mutual funds.

Given the portfolio of investments in debt mutual funds. the Company has exposure to interest rate risk with respect to returns realised. It is estimated that an increase in 25 bps change in 10 year Govt. bond yield would result in a loss of approximately '' 4.98 crores (31 March, 2021: '' 4.31 crores) whereas a decrease in 25 bps change in 10 year Govt. bond yield would result in a profit of approximately '' 4.98 crores (31 March, 2021: '' 4.31 crores). This estimate is based on key assumption with respect to seamless transition of rates across debt instruments in the market and also basis the duration of debt instruments in turn held by mutual funds that the Company has invested in.

(b) Foreign currency risk

(ii) Credit risk

Credit risk from cash and cash equivalents and balances with banks is managed by the Company''s treasury department in accordance with the Company''s treasury policy.

The carrying value of the financial assets represents the maximum credit exposure. The Company''s maximum exposure to Credit risk is disclosed in Note 48 "Financial Instruments". The maximum credit exposure on financial guarantees given by the Company for various financial facilities is disclosed in Note 44 "Commitments and Contingencies."

(iii) Liquidity risk management:

The amount included in Note 44(B) for financial guarantee contracts are the maximum amounts that the Company may be liable to settle under the respective arrangements for the full guaranteed amount if that amount is claimed by the counterparty for the guarantee. Based on the expectations as at the end of reporting period, the Company considers that it is more likely than not that such amount shall not be payable under the respective arrangements. However, this estimate is subject to change depending upon the probability of the counterparty claiming under the guarantee which is a function of the likelihood that the financial receivables held by the counterparty which are guaranteed suffer credit losses.

* Maturity amount of borrowings is including the interest that will be paid on these borrowings.

51. LEASES Company as a lessee

Footnotes:

(a) The maturity analysis of lease liabilities are disclosed in Note 50 (iii) ''Liquidity Risk Management''

(b) The effective interest rate for lease liabilities is 9%, with maturity between 2022-2027

(c) Expense relating to short-term leases are disclosed under the head rent and clearing charges in other expenses (Refer Note 40)

(d) The Company had total cash flows for leases of '' 6.16 crores as on 31 March, 2022 (31 March, 2021 : '' 4.73 crores)

Company as a lessor

The Company has entered into operating leases on its investment property portfolio consisting of land and office premises. These leases have lease terms between 1 year to 5 years, The Company has the option under some of its leases to lease the assets for additional periods. An amount of '' 24.70 crores is recognised as lease income in the statement of profit and loss account for the year ended 31 March, 2022 (31 March, 2021: '' 32.81 crores).

(D) Performance obligation

The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at 31 March, 2022 is of '' 2,988.14 crores (31 March, 2021: '' 4,363.81 crores), out of which, majority is expected to be recognised as revenue within a period of one year.

Footnote :

Effective 1 April, 2021, the Company has re-organised Commercial Air-conditioner (CAC) and Customer Care business from Segment - B ( Electro - Mechanical Projects and Services ) to Segment - A ( Unitary Cooling Products for Comfort and Commercial use ) to align with business objectives and accordingly, segment information for previous year have been restated.

|53j CAPITAL MANAGEMENT :

The capital structure of the Company consists of net debt and total equity of the Company. The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through an optimum mix of debt and equity within the overall capital structure. The Company''s Risk Management Committee reviews the capital structure of the Company considering the cost of capital and the risks associated with each class of capital.

|54j 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 no 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) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

|55.| The Code on Social Security, 2020 (''Code'') has been notified in the Official Gazette in September 2020 which could impact the contribution by the Company towards certain employment benefits. The effective date from which the changes and rules would become applicable is yet to be notified. Impact of the changes will be assessed and accounted in the relevant period of notification of relevant provisions.

|56.| The Board of Directors of the Company at its meeting held on 12 February, 2021, have approved the transfer of domestic B2B businesses of the Company relating to Projects business comprising Mechanical, Electrical and Plumbing (MEP)/ Heating, Ventilation and Air-Conditioning (HVAC) and Water projects, Mining and Construction Equipment (M&CE) business and Textile Machinery Division (TMD) business to its wholly owned subsidiary viz. Universal MEP Projects & Engineering Services Limited (''UMPESL'') (formerly Rohini Industrial Electricals Limited) by slump sale through a Business Transfer Agreement (''BTA'' ). The Company has executed the BTA on 24 March, 2021 and the transaction is expected to be consummated by such date as mutually agreed between the Company and UMPESL.

|57.| EVENTS OCCURRING AFTER BALANCE SHEET :

(i) The Board of Directors have proposed dividend of '' 5.50 per share after the balance sheet date which is subject to approval by the shareholders at the annual general meeting.

(ii) The Board of Directors have approved an amount of '' 20.00 crores to be transferred to General Reserve from Retained Earnings after the balance sheet date.

|59j Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification/ disclosure.

Mar 31, 2021

Under a loan agreement for '' 0.60 crore (fully drawn and outstanding) entered into between Agro Foods Punjab Limited. (AFPL) and the Punjab State Industrial Development (PSIDC), the Company has given an undertaking to PSIDC that it will not dispose off its shares in AFPL till the monies under the said loan agreement between PSIDC and AFPL remain due and payable by AFPL to PSIDC. During 1998-99, the Company had transferred its beneficial rights in the shares of AFPL.

) For these unquoted investments categorised under Level 3, their respective cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

In respect of the Company''s investment in 2,640 equity shares of Reliance Industries Limited, there is an Injunction Order passed by the Court in Kanpur restraining the transfer of these shares. The share certificates are, however, in the possession of the Company. Pending disposal of the case, dividend and fair value of these shares have not been recognised.

) Investments at Fair Value Through Other Comprehensive Income (FVTOCI) reflect investment in quoted and unquoted equity securities. These equity shares are designated as FVTOCI as they are not held for trading purpose and are not in similar line of business as the Company, thus disclosing their fair value change in profit and loss will not reflect the purpose of holding.

i The Company has created lien against the Mutual Fund of '' 75 crores towards various fund and non-fund based credit facilities availed by the Company.

The Company has conducted its annual impairment assessment of the investment in wholly owned subsidiary Universal MEP Projects & Engineering Services Limited (formerly known as Rohini Industrial Electricals Limited). The recoverable amount has been determined using the value in use method and calculated based on future cashflows for next five years after considering the order book position, current and anticipated economic conditions and trends, estimated future operating results and growth rates. The cash flows beyond five years are extrapolated using a steady growth rate of 5% per annum. Key assumptions for the value in use

calculations includes discount rate of 11.20% per annum (PY 14% per annum) applied to arrive at present value of the cash flows. The discount rate represents the weighted average cost of capital adjusted for the risk specific to the Investment and appropriate industrial beta has been applied (based on the comparative companies data) to arrive at the discount rate.

j) During the current year, the Company has subscribed to the rights issue of 15,00,00,000 equity shares of '' 10 each of Universal MEP Projects & Engineering Services Limited (formerly known as Rohini Industrial Electricals Limited) (''UMPESL'') of '' 150 crores. Further, UMPESL has made early repayment of 0.01% Cumulative Redeemable Preference Shares (''CRPS'') and the difference between carrying value of CRPS as on repayment date of '' 86.10 crores and redemption amount of '' 127 crores amounting to '' 40.79 crores has been adjusted against the investment in equity shares of UMPESL considering return of capital contribution made in earlier period by the Company.

i) During the current year, the Company has subscribed to the rights issue of 5,000 equity shares at the designated rights issue price.

There is no significant movement in trade receivaible balances as compared to 31 March, 2020.

Trade receivables are non interest bearing and are generally on terms of 7 to 30 days in case of sale of products and in case of long term construction contracts, payment is generally due upon completion of milestone as per terms of contract. In certain contracts, short term advances are received before the performance obligation is satisfied.

The Company applies the expected credit loss (ECL) model for measurement and recognition of impairment losses on trade receivables and contract assets. The Company follows the simplified approach for recognition of impairment allowance on trade receivables and contract assets. The application of the simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment allowance based on lifetime ECLs at each reporting date. ECL impairment loss allowance (or reversal) recognised during the period is recognised in the Statement of Profit and Loss. This amount is reflected under the head ''other expenses'' in the Statement of Profit and Loss.

The changes in liabilities arising from financing activities is on account of cash flow changes only except for lease liabilities. For details of change in lease liabilities arising from financing activities refer note 51 (a).

At 31 March, 2021, the Company had available '' 342.96 crores (31 March, 2020: '' 696.96 crores) of undrawn committed borrowing facilities.

The Company has one class of equity shares having a par value of '' 1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding and are subject to preferential rights of the Preference Shares (if issued).

Capital Reserve :

Capital Reserve was created from capital surplus on sale of assets and on amalgamation of subsidiary.

Capital Redemption Reserve :

Capital Redemption Reserve is created out of profit available for distribution towards redemption of Preference shares. This reserve can be used for the purpose of issue of Bonus shares.

Securities Premium :

General Reserve :

Equity instruments fair value through other comprehensive income :

Retained Earnings :

The balance in the Retained Earnings primarily represents the surplus after payment of dividend (including tax on dividend) and transfer to reserves.

The Company has recognised an impairment provision of '' Nil (31 March, 2020: '' 2.16 crores) towards investment in Olayan Voltas Contracting Company, a Joint Venture (JV) of the Company and '' Nil (31 March, 2020: '' 1.56 crores) towards investment in Terrot GmbH, an associate company considering losses incurred by respective entities.

During the previous year, the Company has announced a Voluntary Retirement Scheme (''the scheme'') for all permanent employees of the Company in the general cadre category and accordingly, the related impact of the scheme of '' 51.19 crores was disclosed as an exceptional item.

During the previous year, the Company exercised the option of lower tax rate under section 115BAA of Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Act, 2019 to pay corporate tax at reduced rate effective 1 April, 2019. The change in tax rate has resulted in a reversal of deferred tax assets of '' 32.92 crores on account of remeasurement of deferred tax balances as at 31 March, 2019 and was recognised in the financial statements for the year ended 31 March, 2020.

As per the E-Waste (Management) Rules, 2016, as amended, the Company has an obligation to complete the Extended Producer Responsibility targets, only if it is a participant in the market during a financial year. The obligation for a financial year is measured based on sales made in the preceding 10th year and the Company has fulfilled its obligation for the current financial year. In accordance with Appendix B of Ind AS 37, ''Provisions, Contingent Liabilities and Contingent Assets, the Company will have an e-waste obligation for future years, only if it participates in the market in those years.

EMPLOYEE BENEFITS

The Company has defined benefit Gratuity, Post retirement medical benefits, Pension plans and Trust managed Provident fund plan as given below:

Gratuity

Every employee who has completed five years of services, is entitled to Gratuity benefits. The Gratuity plan for Indian employees is governed by the Payment of Gratuity Act, 1972. The Gratuity plan provides lumpsum payments to vested employees at retirement, death while in employment, or termination of employment being an amount equivalent to 15 days salary for each completed year of service. The Company also provides similar Gratuity benefits to overseas employee. The Gratuity plan for Indian employees is funded and for overseas employees is unfunded. The gratuity plan pertaining to employees of Universal Comfort Products Limited (''UCPL'') which has been amalgamated with the Company from 1 April, 2019 was unfunded in FY 2019-20.

Post Retirement Medical Benefits (PRMB)

PRMB scheme is eligible for all those employees who are above management staff grade and have joined on or before 31 December, 2015. The scheme is non-funded.

Pension plans

Pension plan benefit are provided to past Executive Directors and their specified relatives after completion of the services with the Company or Tata Group. The scheme is non- funded.

Provident Fund

Risk Analysis

The Company is exposed to the following Risks in the defined benefits plans :

Investment risk: The present value of the defined benefit obligation is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan assets is below this rate, it will create a plan deficit.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by increase in the return on the plan''s debt investments.

The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instrument by valuation

techniques:

(i) Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

(ii) Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable;

(iii) Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

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.

The following methods and assumptions were used to estimate the fair values:

- The fair value of quoted equity investment and mutual funds are based on price quotations at the reporting date.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s financial liabilities include borrowings, trade and other payables. The Company''s financial assets include loans, trade and other receivables, cash and cash equivalents and other bank balances. The Company also holds FVTPL and FVTOCI investments.

(i) 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 comprise three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include borrowings, investments, trade payables and other payables, trade receivables and other receivables, loans and derivative financial instruments.

(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. Interest rate change does not affect the short term borrowing significantly, therefore the Company''s exposure to the risk of changes in market interest rates relates primarily to the investment in debt mutual funds.

Given the portfolio of investments in debt mutual funds. the Company has exposure to interest rate risk with respect to returns realised. It is estimated that an increase in 25 bps change in 10 year Govt. bond yield would result in a loss of approximately '' 4.31 crores (31 March, 2020: '' 3.53 crores) whereas a decrease in 25 bps change in 10 year Govt. bond yield would result in a profit of approximately '' 4.31 crores 31 March, 2020: '' 3.53 crores). This estimate is based on key assumption with respect to seamless transition of rates across debt instruments in the market and also basis the duration of debt instruments in turn held by mutual funds that the Company has invested in.

(b) Foreign currency risk

Credit risk from cash and cash equivalents and balances with banks is managed by the Company''s treasury department in accordance with the Company''s treasury policy.

The carrying value of the financial assets represents the maximum credit exposure. The Company''s maximum exposure to Credit risk is disclosed in Note 48 "Financial Instrumentsâ. The maximum credit exposure on financial guarantees given by the Company for various financial facilities is disclosed in Note 44 "Commitments and Contingenciesâ

* Maturity amount of borrowings is including the interest that will be paid on these borrowings.

LEASES

Company as a lessee

The Company has lease contracts for its office premises and storage locations with lease term between 1 year to 6 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets.

The Company also has certain leases of office premises and storage locations with lease terms of 12 months or less. The Company applies the ''shortterm lease'' recognition exemptions for these leases.

Details of carrying amount of right-of-use assets and movement during the period is disclosed under Note 6

Footnotes :

(a) The maturity analysis of lease liabilities are disclosed in Note 50 (iii) ''Liquidity Risk Management''

(b) The effective interest rate for lease liabilities is 9%, with maturity between 2020-2027

(c) Expense relating to short-term leases are disclosed under the head rent and clearing charges in other expenses (Refer Note 40)

(d) The Company had total cash flows for leases of '' 4.73 crores on 31 March, 2021 (31 March, 2020 : '' 4.93 crores)

Company as a lessor

The Company has entered into operating leases on its investment property portfolio consisting of land and office premises. These leases have lease terms between 1 year to 6 years, The Company has the option under some of its leases to lease the assets for additional periods. An amount of '' 32.81 crores is recognised as lease income in the statement of profit and loss account for the year ended 31 March, 2021 (31 March, 2020: '' 38.65 crores).

(D) Performance obligation

The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at 31 March, 2021 is of '' 4,363.81 crores (31 March, 2020: '' 5,205.06 crores), out of which, majority is expected to be recognised as revenue within a period of one year.

CAPITAL MANAGEMENT

The capital structure of the Company consists of net debt and total equity of the Company. The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through an optimum mix of debt and equity within the overall capital structure. The Company''s Risk Management Committee reviews the capital structure of the Company considering the cost of capital and the risks associated with each class of capital.

IMPACT OF COVID-19

The Company has considered the possible impact of COVID-19 pandemic on its operations, liquidity position and recoverability of its asset balances at 31 March, 2021 based on the internal and external information upto the date of approval of these financial statements. The impact of COVID-19 may be different from that estimated as at the date of approval of these financial statements and management will continue to monitor any material changes arising due to the impact of this pandemic on financial and operational performance of the Company and take necessary measures to address the situation.

AMALGAMATION OF UNIVERSAL COMFORT PRODUCTS LIMITED (WHOLLY OWNED SUBSIDIARY COMPANY)

(a) Pursuant to the Scheme of merger by absorption (''the Scheme)'' of erstwhile Universal Comfort Products Limited with the Company under Sections 230 to 232 of the Companies Act, 2013 sanctioned by National Company Law Tribunal, Mumbai on 11 September, 2020 all assets and liabilities of Universal Comfort Products Limited were transferred and vested in the Company with appointed date of 1 April, 2019.

(b) The amalgamation has been accounted in the books of account of the Company in accordance with Ind AS 103 ''Business Combination'' read with Appendix C to Ind AS 103 specified under Section 133 of the Act, read with the Companies (Accounting Standards) Amendment Rules, 2016. Accordingly, the accounting treatment has been given as follows:

(i) The assets, liabilities and reserves of Universal Comfort Products Limited have been incorporated in the financial statements at the carrying values.

(ii) The balance of the retained earnings and general reserve appearing in the financial statements of Universal Comfort Products Limited have been aggregated with corresponding balance appearing in the financial statements of the Company.

(iii) Inter-Company balances and transactions have been eliminated and resultant adjustment of '' 11.85 crores (net of deferred tax of '' 6.23 crores) has been adjusted in retained earnings.

(iv) 2,76,42,000 equity share of '' 10 each fully paid in Universal Comfort Products Limited, held as investment by the Company stands cancelled and the difference between book value of investments and face value of such shares amounting to '' 10.69 crores has been adjusted to capital reserve of the Company.

i. The Code on Social Security, 2020 (''Code'') has been notified in the Official Gazette in September 2020 which could impact the contribution by the Company towards certain employment benefits. The effective date from which the changes and rules would become applicable is yet to be notified. Impact of the changes will be assessed and accounted in the relevant period of notification of relevant provisions.

''. The Board of Directors of the Company at its meeting held on 12 February, 2021, have approved the transfer of domestic B2B businesses of the Company relating to Projects business comprising Mechanical, Electrical and Plumbing (MEP)/ Heating, Ventilation and Air-Conditioning (HVAC) and Water projects, Mining and Construction Equipment (M&CE) business and Textile Machinery Division (TMD) business to its wholly owned subsidiary viz. Universal MEP Projects & Engineering Services Limited (''UMPESL'') (formerly Rohini Industrial Electricals Limited) by slump sale through a Business Transfer Agreement (''BTA'' ). The Company has executed the BTA on 24 March, 2021 and the transaction is expected to be consummated by end of September 2021 or such other date as may be mutually agreed between the Company and UMPESL. t. EVENTS OCCURRING AFTER BALANCE SHEET

(i) The Directors have recommended final dividend of '' 165.44 crores at '' 5.00 per share on equity shares which is subject to the approval of shareholders. This dividend payable has not been recognised as a liability.

(ii) Further, an amount of '' 20.00 crores is proposed to be transferred to General Reserve which is approved in the Board Meeting held subsequent to the year end and thus has not been recognised as transferred during the year.

c Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification/ disclosure.

(v) The financial information in the financial statements in respect of prior period have been restated as if business combination had occurred from the beginning of the preceding period in the financial statements irrespective of actual date of combination in accordance with Ind AS 103.

Mar 31, 2019

1. CORPORATE INFORMATION

Voltas Limited (the âCompanyâ) is a public limited company domiciled in India. The address of its registered office is Voltas House âAâ, Dr. Babasaheb Ambedkar Road, Chinchpokli, Mumbai 400033.

The Company belongs to the Tata Group of companies and was established in the year 1954. The Company is engaged in the field of air conditioning, refrigeration, in the business of electro - mechanical projects as an EPC contractor both in domestic and international geographies (Middle East and Singapore), and also in the business of engineering product services for mining, water management and treatment, construction equipments and textile industry.

The financial statements for the year ended 31st March, 2019 were approved by the Board of Directors and authorised for issue on 9th May, 2019.

The fair value of the investment properties have been derived using the market comparable approach (market value method / sale comparison technique) based on recent market prices without any significant adjustments being made to the market observable data. The valuation was carried out by an independent valuer registered with the authority which governs the valuers in India. Accordingly, fair value estimates for investment properties are classified as level 3.

The Company has no restriction on the realisability of its Investment properties and no contractual obligation to purchase, construct and develop investment properties.

2 (a) Under a loan agreement for Rs. 0.60 crore (fully drawn and outstanding) entered into between Agro Foods Punjab Ltd. (AFPL) and the Punjab State Industrial Development, the Company has given an undertaking to PSIDC that it will not dispose off its shares in AFPL till the monies under the said loan agreement between PSIDC and AFPL remain due and payable by AFPL to PSIDC. During 1998-99, the Company had transferred its beneficial rights in the shares of AFPL.

2 (b) For these unquoted investments categorised under Level 3, their respective cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

2 (c) In respect of the Companyâs investment in 2,640 equity shares of Reliance Industries Ltd., there is an Injunction Order passed by the Court in Kanpur restraining the transfer of these shares. The share certificates are, however, in the possession of the Company. Pending disposal of the case, dividend on these shares has not been recognised.

2 (d) The Company had invested in 0.01% cumulative redeemable preference shares (âCRPSâ) of Rohini Industrial Electricals Limited (subsidiary), aggregating Rs.127 crores (Rs. 25 crores in 2011-12, Rs. 37 crores in 2012-13 and Rs. 65 crores in 2016-17), for a period of 7 years. The investment was accounted at amortised cost and the difference between the Investment and the amortised cost amounting to Rs. 54.69 crores was included as Investment in Equity instrument in subsidiary. During the year, the subsidiary modified a portion of CRPS which were due for redemption on 29th March, 2019 and 1st October, 2020 amounting Rs. 25 crores and Rs. 37 crores respectively and extended the repayment for a further period of 7 years from respective due dates. Accordingly, the difference between the original amortised cost and revised amortised cost amounting to Rs. 27.75 crores for the portion of CRPS which are extended is included as Investment in Equity instrument in subsidiary.

2 (e) Investments at Fair Value Through Other Comprehensive Income (FVTOCI) reflect investment in quoted and unquoted equity securities. These equity shares are designated as FVTOCI as they are not held for trading purpose and are not in similar line of business as the Company, thus disclosing their fair value change in profit and loss will not reflect the purpose of holding.

(3) Contract assets are initially recognised for revenue earned from electro mechanical projects contracts as receipt of consideration that is conditional on successful completion of project milestone. Upon completion of milestone and acceptance/certification by the customer, the amounts recognised as contract assets are reclassified to trade receivables. There is no significant variance in the contract assets balances as compared to 1st April, 2018.

(4) As the Company has adopted modified retrospective approach, no reclassification have been made for contract assets as at 31st March, 2018 and the corresponding balances as at 31st March, 2018 are shown under âOther current assetsâ as âAmount due from customers under construction contractsâ.

(5) At 31st March, 2019, trade receivable have increased on account of increased business operations as compared to March, 2018.

(6) Trade receivables are non interest bearing and are generally on terms of 7 to 30 days credit in case of sale of products and in case of long term construction contracts, payment is generally due upon completion of milestone as per terms of contract. In certain contracts, short term advances are received before the performance obligation is satisfied.

(7) The Company applies the expected credit loss (ECL) model for measurement and recognition of impairment losses on trade receivables and contract assets. The Company follows the simplified approach for recognition of impairment allowance on trade receivables and contract assets. The application of the simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment allowance based on lifetime ECLs at each reporting date. ECL impairment loss allowance (or reversal) recognized during the period is recognized in the Statement of Profit and Loss. This amount is reflected under the head âother expensesâ in the Statement of Profit and Loss.

Terms / Rights attached to equity shares

(a) The Company has one class of equity shares having a par value of Re.1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding and are subject to preferential rights of the Preference Shares (if issued).

(b) A reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period :

(d) As per the records of the Company, no calls remained unpaid by the Directors and Officers of the Company as on 31st March, 2019 (31st March, 2018 : Nil).

Footnotes : Nature and purpose of reserves Capital Reserve :

Capital Reserve was created from capital surplus on sale of assets and on amalgamation of subsidiary.

Capital Redemption Reserve :

Capital Redemption Reserve is created out of profit available for distribution towards redemption of Preference shares. This reserve can be used for the purpose of issue of Bonus shares.

Securities Premium :

General Reserve :

Equity instruments fair value through other comprehensive income :

Retained Earnings :

The balance in the Retained Earnings primarily represents the surplus after payment of dividend (including tax on dividend) and transfer to reserves.

(1) The outstanding balances of the contract liabilities as at 31st March, 2018 were higher on account of higher advance received from electro mechanical projects, the revenue for which was recognised during the year on execution of projects.

(2) As the Company has adopted modified retrospective approach, no reclassification have been made for contract liabilities as at 31st March, 2018 and the corresponding balances as at 31st March, 2018 are shown under âOther current liabilitiesâ as âAdvances received from customersâ âUnexpired service contractsâ and âBilling in excess of contract revenueâ.

Footnotes :

(I) Borrowings are secured against assignment of Contract dues on overseas projects and lien on Term deposits.

(ii) Term loans are repayable within a period of 90 days.

(iii) Term loans from banks carry an average interest rate of 4.40% (31st March, 2018 : 4.40% to 6.50%)

(iv) Working capital loans from banks are repayable on demand.

(v) Working capital loans from banks carry an average interest rate of 3.00% to 6.50% (31st March, 2018 : 8.75%).

(a) Sales for the year ended 31st March, 2019 is net of Goods and Service Tax (GST). However, sales for the previous year is gross of Excise Duty.

(b) Sales, net of GST / Excise Duty for year ended 31st March, 2019 has increased by 15.34%, in comparison to the previous year.

(i) The Company has conducted its annual impairment assessment of Investment in its wholly owned subsidiary Rohini Industrial Electricals Limited (RIEL). The operations of RIEL have revived owing to the new electrification projects received under the various government electrification schemes and executed in the last two years. The subsidiary has turned profitable due to these new projects. As on 31st March, 2019, the subsidiary has an order book of more than Rs. 830 crores. Further, considering the impetus by Government on the rural electrification schemes, the Company is confident that they would be able to achieve sustainable profitability in the future. The Company has obtained a fair valuation report from an independent valuar basis the financial projections approved by Management. Basis such valuation report, the Management is confident of recovering the value of the investment. Accordingly, Management has reversed 50% of impairment provision recorded earlier resulting in a net investment value of Rs. 148.65 crores as at 31st March, 2019.

(ii) The Company has recognised an impairment provision of Rs. 6.35 crores (31st March, 2018 : Rs. 5.98 crores) towards investment in Olayan Voltas Contracting Company, a Joint Venture (JV) of the Company, considering the losses incurred by the JV.

(iii) The Company has recognised an impairment provision of Rs. 0.65 crore towards investment in Auto Aircon (India) Limited on account of diminution in value of investment.

The Company has defined benefit Gratuity, Post retirement medical benefits, Pension plans and Trust managed Provident fund plan as given below:

(i) Gratuity

(ii) Post retirement medical benefits

Benefits under these plan are payable for actual domiciliary treatment/hospitalisation for employees and their specified relatives. The scheme is non-funded.

(iii) Pension plans

Pension plan benefit are provided to past Executive Directors and their specified relatives after completion of the services with the Company or Tata Group. The scheme is non- funded.

(a) The following table summaries the components of net benefits expenses recognised in Statement of Profit and Loss, Other Comprehensive Income and the funded status and amount recognised in the Balance Sheet for the respective plans:

Risk Analysis

The Company is exposed to the following Risks in the defined benefits plans :

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by increase in the return on the planâs debt investments.

Salary growth risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants.

The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instrument by valuation techniques:

(i) Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

(ii) Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable;

(iii) Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

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.

The following methods and assumption were used to estimate fair values:

- The fair value of quoted equity investment and mutual funds are based on price quotations at the reporting date.

There were no transfers between Level 1 and 2 during the period.

8. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Companyâs financial liabilities comprise borrowings, trade and other payables. The Companyâs financial assets include loans, trade and other receivables, cash and cash equivalents and other bank balances. The Company also holds FVTPL and FVTOCI investments.

(i) 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 comprise three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include Borrowings, Investments, Trade payables, Trade receivables, Other financial assets, Other financial liabilities, Loans and Derivative financial instruments.

(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. Interest rate change does not affect significantly short term borrowing, therefore the Companyâs exposure to the risk of changes in market interest rates relates primarily to the investment in debt mutual funds.

Given the portfolio of investments in debt mutual funds, etc. the Company has exposure to interest rate risk with respect to returns realised. It is estimated that an increase in 25 bps change in 10 year Government bond yield would result in a loss of approximately Rs. 3.14 crores (31st March, 2018: Rs. 4.66 crores) whereas a decrease in 25 bps change in 10 year Government bond yield would result in a profit of approximately Rs. 3.14 crores (31st March, 2018: Rs. 4.66 crores). This estimate is based on key assumption with respect to seamless transition of rates across debt instrument in the market and also basis the duration of debt instruments in turn held by mutual funds that the Company has invested in.

(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 Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a foreign currency). Foreign currency risks are managed within the approved policy parameters utilising foreign exchange forward contracts.

The Companyâs listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Companyâs Board of Directors reviews and approves all equity investment decisions.

(ii) 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 for trade receivables, contract assets, cash and cash equivalents, investments, other bank balances, loans and other financial assets. The Company only deals with parties which have good credit rating/ worthiness given by external rating agencies or based on Companyâs internal assessment.

Credit risk on trade receivables and contract assets are managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed and individual credit limits are defined in accordance with this assessment. Moreover, given the diverse nature of the Companyâs businesses, trade receivables are spread over a number of customers with no significant concentration of credit risk. No single customer accounted for 10% or more of the trade receivables in any of the years presented.

Credit risk from cash and cash equivalents and balances with banks is managed by the Companyâs treasury department in accordance with the Companyâs treasury policy.

The carrying value of the financial assets represents the maximum credit exposure. The Companyâs maximum exposure to Credit risk is disclosed in Note 45 âFinancial Instrumentsâ. The maximum credit exposure on financial guarantees given by the Company for various financial facilities is disclosed in Note 41 âCommitments and Contingencies.â

(iii) Liquidity risk management

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that the funds are available for use as per the requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company consistently generated sufficient cash flows from operations to meet its financial obligations as and when they fall due.

The amount included in Note 41(B) for financial guarantee contracts are the maximum amounts the Company could be forced to settle under respective arrangements for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee. Based on expectations at the end of the reporting period, the Company considers that it is more likely than not that such amount will not be payable under the arrangement. However, this estimate is subject to change depending on the probability of the counterparty claiming under the guarantee which is a function of the likelihood that the financial receivables held by the counterparty which are guaranteed suffer credit losses.

9. OPERATING LEASE : COMPANY AS A LESSEE

The Company has entered into operating lease agreements for its office premises and storage locations with lease term between 1 year to 30 years. The Company has the option under some of its leases to lease the assets for additional periods. There are no exceptional/restrictive covenants in the lease agreements. Lease rental expenses debited to Statement of Profit and Loss is Rs. 42.75 crores (31st March, 2018 : Rs. 38.96 crores)

Operating Lease : Company as a Lessor

The Company has entered into operating leases on its investment property portfolio consisting of land and office premises. These leases have lease terms between 1 year to 9 years. The Company has the option under some of its leases to lease the assets for additional periods. An amount of Rs. 39.56 crores (31st March, 2018: Rs. 37.55 crores) is recognised as lease income in the Statement of Profit and Loss account for the year ended 31st March, 2019.

(D) Perfomance obligation

The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at 31 March, 2019 is of Rs. 3,631.32 crores, out of which, majority is expected to be recognised as revenue within a period of one year.

10. CAPITAL MANAGEMENT

The capital structure of the Company consists of net debt and total equity of the Company. The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through an optimum mix of debt and equity within the overall capital structure. The Companyâs Risk Management Committee reviews the capital structure of the Company considering the cost of capital and the risks associated with each class of capital.

11. EVENTS OCCURRING AFTER BALANCE SHEET:

(i) The Directors have recommended final dividend of Rs. 132.35 crores at Rs. 4.00 per share on equity shares which is subject to the approval of shareholders at the ensuing Annual General Meeting. This dividend and tax thereon has not been recognised as a liability.

(ii) Further, an amount of Rs. 20.00 crores is proposed to be transferred to General Reserve which is approved in the Board Meeting held subsequent to the year end and thus has not been recognised as transferred during the year.

(iii) The Company has announced a scheme of voluntary retirement (âschemeâ) for all permanent employees in the general cadre category on 16th April, 2019. The scheme has been approved by the Board of Directors. As the scheme was announced subsequent to the balance sheet date, no adjustment has been made in the financial statements.

12. Previous yearâs figures have been regrouped / reclassified wherever necessary to correspond with the current yearâs classification/ disclosure.

Mar 31, 2018

1. CORPORATE INFORMATION

Voltas Limited (the âCompanyâ) is a public limited company and is incorporated in India. The address of its registered office is Voltas House âAâ, Dr. Babasaheb Ambedkar Road, Chinchpokli, Mumbai-400033.

The Company belongs to the Tata Group of companies and was established in the year 1954. The Company is engaged in the field of air conditioning, refrigeration, in the business of electro-mechanical projects as an EPC contractor both in domestic and international geographies (Middle East and Singapore), and also in the business of engineering product services for mining, water management and treatment, construction equipments and textile industry.

The financial statements for the year ended 31st March, 2018 were approved by the Board of Directors and authorised for issue on 17th May, 2018.

2A. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

In the application of the Companyâs accounting policies, which are described in Note 2, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Key sources of estimation uncertainty

The following are 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 amount of assets and liabilities within the next financial year:

Construction contracts

Cost to complete

The Companyâs Management estimates the costs to complete for each project for the purpose of revenue recognition and recognition of anticipated losses on projects, if any. In the process of calculating the cost to complete, Management conducts regular and systematic reviews of actual results and future projections with comparison against budget. This process requires monitoring controls including financial and operational controls and identifying major risks facing the Company and developing and implementing initiatives to manage those risks. The Companyâs Management is confident that the costs to complete the project are fairly estimated.

Percentage of completion

Managementâs estimate of the percentage of completion on each project for the purpose of revenue recognition is through conducting some weight analysis to assess the actual quantity of the work for each activity performed during the reporting period and estimate any future costs for comparison against the initial project budget. This process requires monitoring of financial and operational controls. Management is of the opinion that the percentage of completion of the projects is fairly estimated.

As required by Ind AS 11 in applying the percentage of completion on its long-term projects, the Company is required to recognize any anticipated losses on it contracts. In light of the above, Management is of the opinion that based on the current facts, future losses on contract has been adequately provided for.

Contract variations and claims

Contract variations and claims are recognized as revenue to the extent that it is probable that they will result in revenue which can be reliably measured and it is probable that the economic benefits associated will flow to the Company. This requires exercise of judgement by Management based on prior experience, application of contract terms, manner and terms of settlement and relationship with the customers, etc.

Impairment of financial assets

The Companyâs Management reviews periodically items classified as receivables to assess whether a provision for impairment should be recorded in the Statement of Profit or Loss. Management estimates the amount and timing of future cash flows when determining the level of provisions required. Such estimates are necessarily based on assumptions about several factors involving varying degrees of judgement and uncertainty.

The Company reviews its carrying value of investments annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.

Fair value measurement of financial instruments

Some of the Companyâs assets are measured at fair value for financial reporting purposes. The Management determines the appropriate valuation techniques and inputs for fair value measurements. In estimating the fair value of an asset, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages third party qualified valuers to perform the valuation. The Management works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model.

Information about valuation techniques and inputs used in determining the fair value of various assets is disclosed in Note 42. Litigations

From time to time, the Company is subject to legal proceedings the ultimate outcome of each being always subject to many uncertainties inherent in litigation. A provision for litigation is made when it is considered probable that a payment will be made and the amount of the loss can be reasonably estimated. Significant judgement is made when evaluating, among other factors, the probability of unfavourable outcome and the ability to make a reasonable estimate of the amount of potential loss. Litigation provisions are reviewed at each Balance Sheet date and revisions made for the changes in facts and circumstances.

Defined benefit plans

The cost of the defined benefit plans and the present value of the defined benefit obligation are based on actuarial valuation using the projected unit credit method. 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. All assumptions are reviewed at each Balance Sheet date.

Useful lives of property, plant and equipment and intangible assets

The Company has estimated useful life of each class of assets based on the nature of assets, the estimated usage of the asset, the operating condition of the asset, past history of replacement, anticipated technological changes, etc. The Company reviews the useful life of property, plant and equipment and intangible assets as at the end of each reporting period. This reassessment may result in change in depreciation and amortisation expense in future periods.

Warranty provisions (trade guarantees)

The Company gives warranties for its products, undertaking to repair or replace the product that fail to perform satisfactory during the warranty period. Provision made at the year-end represents the amount of expected cost of meeting such obligations of rectification / replacement which is based on the historical warranty claim information as well as recent trends that might suggest that past cost information may differ from future claims. Factors that could impact the estimated claim information include the success of the Companyâs productivity and quality initiatives.

2B. RECENT ACCOUNTING PRONOUNCEMENTS:

Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Companyâs 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 Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

Ind AS 115 - Revenue from Contracts with Customers

Ind AS 115 - Revenue from Contracts with Customers notified on 28th March, 2018 is effective from 1st April, 2018 and will supersede all current revenue recognition requirements. While an initial assessment of the standard does not indicate a significant impact, except for the disclosure requirements, a reliable estimate of the impact can be concluded only upon completion of the ongoing evaluation process.

Amendments to Ind AS 112 - Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in Ind AS 112

The amendments clarify that the disclosure requirements in Ind AS 112, other than those in paragraphs B10-B16, apply to an entityâs interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale.

The requirements of the amendment have no impact on the financial statements as there are no subsidiary, joint venture or an associate that has been classified as held for sale.

Amendments to Ind AS 12 - Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact.

These amendments are effective for annual periods beginning on or after 1st April 2018. These amendments are not expected to have any impact on the Company as the Company has no deductible temporary differences or assets that are in the scope of the amendments.

Transfers of Investment Property â Amendments to Ind AS 40

The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in managementâs intentions for the use of a property does not provide evidence of a change in use.

Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with Ind AS 8 is only permitted if it is possible without the use of hindsight.

The amendments are effective for annual periods beginning on or after 1st April 2018. The Company will apply amendments when they become effective. However, since Companyâs current practice is in line with the clarifications issued, the Company does not expect any effect on its financial statements.

Ind AS 28 Investments in Associates and Joint Ventures - Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice

The amendments clarify that:

- An entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss.

- If an entity, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associateâs or joint ventureâs interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognised; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent.

The amendments should be applied retrospectively and are effective from 1st April 2018. These amendments are not applicable to the Company.

Appendix B to 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 non-monetary 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 recognised 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 1st April, 2018. However, the Company does not expect any significant effect on its financial statements.

The Company applies the expected credit loss (ECL) model for measurement and recognition of impairment losses on trade receivables. The Company follows the simplified approach for recognition of impairment loss allowance on trade receivables. The application of the simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date. ECL impairment loss allowance (or reversal) recognized during the period is recognized in the Statement of Profit and Loss. This amount is reflected under the head âother expensesâ in the Statement of Profit and Loss.

Capital Redemption Reserve :

Capital Redemption Reserve is created out of profit available for distribution towards redemption of Preference shares. This reserve can be used for the purpose of issue of Bonus shares.

Securities Premium :

Securities Premium represents the surplus of proceeds received over the face value of shares, at the time of issue of shares. General Reserve :

Retained Earnings :

The balance in Retained Earnings primarily represents the surplus after payment of dividend (including tax on dividend) and transfer to reserves.

(i) Borrowings are secured against assignment of Property, Plant & Equipment, Inventory, Book debts, Contract dues and lien on Term deposits.

(ii) Term loans are repayable within a period of 90 days.

(iii) Term loans from banks carry an average interest rate of 4.40% to 6.50% (31st March, 2017 : 4.40% to 6.50%)

(i_v) Working capital loans from banks carry an average interest rate of 8.75% (31st March, 2017 : 8.75%).

(ii) As per the E-Waste (Management) Rules, 2016, as amended, (âthe Rulesâ) issued by Ministry of Environment, Forest and Climate Change (MoEF & CC) Government of India, the Company has a commitment to complete the Extended Producer Responsibility (EPR) targets, calculated based on sales made in the preceding 10th year, through channelization of e-waste to an authorised dismantler/recycler. The Company has fulfilled its commitment for the financial year 2017-18. The Company expects further clarifications to evolve overtime, particularly with respect to the various mechanism of fulfilling the environmental obligation. The cost of obligation, if any, for the preceding nine year sales can be estimated, once appropriate clarifications are received from the Ministry.

Financial Guarantee

The Company has issued financial guarantees to banks on behalf of and in respect of credit facilities availed by its subsidiary and joint venture companies

3. Employee Benefits

The Company has defined benefit Gratuity, Post retirement medical benefits, Pension plans and Trust managed Provident fund plan as given below:

(i) Gratuity

(ii) Post retirement medical benefits

Benefits under these plan are payable for actual domiciliary treatment/hospitalisation for employees and their specified relatives. The scheme is non-funded.

(iii) Pension plans

Pension plan benefit are provided to Executive Directors and their specified relatives after completion of the services with the Company or Tata Group. The scheme is non- funded.

(a) The following table summaries the components of net benefits expenses recognised in statement of profit or loss, other comprehensive income and the funded status and amount recognised in the balance sheet for the respective plans:

Risk Analysis

The Company is exposed to the following Risks in the defined benefits plans :

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by increase in the return on the planâs debt investments.

The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instrument by valuation techniques:

(i) Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

(ii) Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable;

(iii) Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

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. The following methods and assumptions were used to estimate the fair values:

- The fair value of quoted equity investment and mutual funds are based on price quotations at the reporting date.

- The fair value of redeemable preference shares are based on observable price of securities based on transactions undertaken recently.

There were no transfers between Level 1 and 2 during the period.

4. Financial risk management objectives and policies

(i) 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 comprise three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments.

(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. Interest rate change does not affect significantly short term borrowing, therefore the Companyâs exposure to the risk of changes in market interest rates relates primarily to the investment in debt mutual funds.

Given the portfolio of investments in debt mutual funds, etc. the Company has exposure to interest rate risk with respect to returns realised. It is estimated that a 25 bps change in 10 year Govt. bond yield would result in a profit and loss impact of approximately Rs.4.66 crores (31-3-2017: Rs.4.19 crores). This estimate is based on key assumption with respect to seamless transition of rates across debt instrument in the market and also basis the duration of debt instruments in turn held by mutual funds that the Company has invested in.

(b) Foreign currency risk

As at the end of the reporting period, the carrying amounts of the material foreign currency denominated monetary assets and liabilities are as follows:

Foreign currency sensitivity

The following tables demonstrate the sensitivity of outstanding foreign currency denominated monetary items to a reasonably possible change in exchange rates, with all other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of financial assets and liabilities:

(ii) 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 for trade receivables, cash and cash equivalents, investments, other bank balances, loans and other financial assets. The Company only deals with parties which have good credit rating/ worthiness given by external rating agencies or based on Companyâs internal assessment.

Credit risk on receivables is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed and individual credit limits are defined in accordance with this assessment. Moreover, given the diverse nature of the Companyâs businesses, trade receivables are spread over a number of customers with no significant concentration of credit risk. No single customer accounted for 10% or more of the trade receivables in any of the years presented.

For trade receivables, as a practical expedient, the Company computes credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates.

Credit risk from cash and cash equivalents and balances with banks is managed by the Companyâs treasury department in accordance with the Companyâs treasury policy.

The carrying value of the financial assets represents the maximum credit exposure. The Companyâs maximum exposure to Credit risk is disclosed in Note 42 âFinancial Instrumentsâ. The maximum credit exposure on financial guarantees given by the Company for various financial facilities is disclosed in Note 38 âCommitments and Contingencies.â

(iii) Liquidity risk management:

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that the funds are available for use as per the requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company consistently generated sufficient cash flows from operations to meet its financial obligations as and when they fall due.

Maturities of financial liabilities: The table below summarises the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payments.

5. Operating Lease : Company as a Lessee

The Company has entered into operating lease agreements for its office premises and storage locations. There are no exceptional/ restrictive covenants in the lease agreements. Lease rental expenses debited to Statement of Profit and Loss is Rs.38.96 crores (31-3-2017 : Rs.34.57 crores)

Operating Lease : Company as a Lessor

The Company has entered into operating lease agreements. An amount of Rs.37.55 crores (31-3-2017: Rs.39.09 crores) is recognised as lease income in the statement of profit & loss account for the year ended 31st March, 2018. All lease are cancellable, thus there are no future minimum rentals receivable under non-cancellable operating leases.

6. Capital Management

The capital structure of the Company consists of net debt and total equity of the Company. The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through an optimum mix of debt and equity within the overall capital structure. The Companyâs Risk Management Committee reviews the capital structure of the Company considering the cost of capital and the risks associated with each class of capital.

7. Events occurring after Balance Sheet:

(i) The Directors have recommended final dividend of Rs.132.35 crores at Rs.4 per share on equity shares which is subject to the approval of shareholders at the ensuing Annual General Meeting. This dividend and tax thereon has not been recognised as a liability.

(ii) Further, an amount of Rs.20.00 crores is proposed to be transferred to General Reserve which is approved in the Board Meeting held subsequent to the year end and thus has not been recognised as transferred during the year.

8. Previous yearâs figures have been regrouped / reclassified wherever necessary to correspond with the current yearâs classification/ disclosure.

Mar 31, 2017

(a) Fair value of equity investments through Other Comprehensive Income (OCI)

Under previous GAAP, current investments were measured at lower of cost or fair value and long-term investments (quoted and unquoted) were measured at cost less diminution in the value which is other than temporary. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of investments in mutual funds were recognized in Statement of Profit and Loss and that of investments in equity (which is strategic in nature as not held for trading) were recognized in equity. Consequently, the gain on sale of such investments previously recognized in Statement of Profit and Loss is now recognized in OCI and such realized gain is transferred to retained earnings.

(b) Allowance for bad and doubtful debts based on Expected Credit Loss (ECL)

Under previous GAAP, the allowance for bad and doubtful debts were accounted based on incurred loss model. Whereas, under Ind AS, this provision is created based on Expected Credit Loss Model (ECL). Consequently, Rs. 3,678.52 lakhs as at 1st April, 2015 has been recognized as additional allowance with a charge to transition reserves. Also, Rs.460.52 lakhs during the year ended 31st March, 2016 has been recognized as a reversal of allowance.

Under Ind AS, remeasurements of defined benefit plans i.e. actuarial gains and losses and the return on plan assets excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of the Statement of Profit and Loss. Under the previous GAAP, these remeasurements were accounted in the Statement of Profit and Loss for the year. As a result of this change, the profit before tax for the year ended 31st March, 2016 increased by '' 255.32 lakhs. There is no impact on the total equity as 31st March. 2016.

(d) Investment in preference shares of a subsidiary

Under previous GAAP, 0.01% cumulative redeemable preference shares subscribed were classified as part of investment in preference shares. However, under Ind AS, preference shares are discounted and the difference between face value and discounted value is classified as an investment in subsidiary as in substance it is a debt instrument. The resultant interest income is recognized in the Statement of Profit and Loss. The effect of this change is increase in total equity of Rs.390 lakhs as at 31st March, 2016 ('' Nil as at 1st April, 2015), and increase in profit before tax as well as net profit of Rs.389.55 lakhs for the year ended 31st March, 2016.

(e) Income on financial guarantees provided

Under Ind AS financial guarantee income is recognized in Statement of Profit and Loss based on fair value measurement. Accordingly, Rs.48 lakhs as at 31st March, 2016 (Nil as at 1st April, 2015) has been increased in the cost of investments. The effect of this change is an increase in total equity of Rs.48 lakhs as at 31st March, 2016 (Nil as at 1st April, 2015), increase in profit before tax and net profit of Rs.48 lakhs for the year ended 31st March, 2016.

(f) Tax adjustments

Tax adjustments include deferred tax impact on account of differences between previous GAAP and Ind AS. These adjustments have resulted in decrease in net profit by Rs.328 lakhs for the year ended 31st March, 2016.

(g) Reversal of Proposed Dividend and transfer to General Reserve

Under the previous GAAP, transfer to General Reserves and dividends proposed by the Board of Directors after the Balance Sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the General Meeting. This has resulted in an increase in other equity by Rs.10,354.37 lakhs as at 31st March, 2016 (Rs. 8,960.52 lakhs as at 1st April, 2015).

(h) Reclassification in cash flow statement

- Cash flow from rental income of investment properties have been reclassified from operating activities to investing activities in line with requirements of Ind AS.

- Cash in hand balance as at 31st March, 2016 under the previous GAAP included closing balance of imprest advance with the employees, which have been treated as other current assets under Ind AS.

1A. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company''s accounting policies, which are described in Note 2, Management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Key sources of estimation uncertainty

Construction contracts

Cost to complete

The Company''s Management estimates the costs to complete for each project for the purpose of revenue recognition and recognition of anticipated losses on projects, if any. In the process of calculating the cost to complete, Management conducts regular and systematic reviews of actual results and future projections with comparison against budget. This process requires monitoring controls including financial and operational controls and identifying major risks facing the Company and developing and implementing initiatives to manage those risks. The Company''s Management is confident that the costs to complete the project are fairly estimated.

Percentage of completion

Management''s estimate of the percentage of completion on each project for the purpose of revenue recognition is through conducting some weight analysis to assess the actual quantity of the work for each activity performed during the reporting period and estimate any future costs for comparison against the initial project budget. This process requires monitoring of financial and operational controls. Management is of the opinion that the percentage of completion of the projects is fairly estimated.

Contract variations and claims

Contract variations and claims are recognized as revenue to the extent that it is probable that they will result in revenue which can be reliably measured and it is probable that the economic benefits associated with flow to the Company. This requires exercise of judgement by Management based on prior experience, application of contract terms, manner and terms of settlement and relationship with the customers, etc.

Impairment of financial assets

The Company''s Management reviews periodically items classified as receivables to assess whether a provision for impairment should be recorded in the Statement of Profit or Loss. Management estimates the amount and timing of future cash flows when determining the level of provisions required. Such estimates are necessarily based on assumptions about several factors involving varying degrees of judgement and uncertainty.

Some of the Company''s assets are measured at fair value for financial reporting purposes. The Management determines the appropriate valuation techniques and inputs for fair value measurements. In estimating the fair value of an asset, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages third party qualified valuers to perform the valuation. The Management works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model.

Information about valuation techniques and inputs used in determining the fair value of various assets is disclosed in Note 42. Valuation of deferred tax assets

The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. The Policy for the same has been explained in Note 2(m).

Litigations

From time to time, the Company is subject to legal proceedings the ultimate outcome of each being always subject to many uncertainties inherent in litigation. A provision for litigation is made when it is considered probable that a payment will be made and the amount of the loss can be reasonably estimated. Significant judgement is made when evaluating, among other factors, the probability of unfavorable outcome and the ability to make a reasonable estimate of the amount of potential loss. Litigation provisions are reviewed at each Balance Sheet date and revisions made for the changes in facts and circumstances.

Defined benefit plans

Useful lives of property, plant and equipment and intangible assets

Warranty provisions (trade gurantees)

The Company gives warranties for its products, undertaking to repair or replace the product that fail to perform satisfactory during the warranty period. Provision made at the year-end represents the amount of expected cost of meeting such obligations of rectification / replacement which is based on the historical warranty claim information as well as recent trends that might suggest that past cost information may differ from future claims. The assumptions made in current year are consistent with those in prior year. Factors that could impact the estimated claim information include the success of the Company''s productivity and quality initiatives.

1B. RECENT ACCOUNTING PRONOUNCEMENTS

Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ''Statement of cash flows'' and Ind AS 102, ''Share-based payment.'' These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ''Statement of Cash Flows'' and IFRS 2, ''Share-based payment,'' respectively. The amendments are applicable from 1st April, 2017.

Amendment to Ind AS 7

The amendment to Ind AS 7 requires the entities 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, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated. Amendment to Ind AS 102

The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.

It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting conditions are reflected in the ''fair values'', but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that includes a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement.

The requirements of the amendment have no impact on the financial statements as the standard is not applicable to the Company.

2 (a) Under a loan agreement for Rs.60 lakhs (fully drawn and outstanding) entered into between Agro Foods Punjab Ltd. (AFPL) and the Punjab State Industrial Development Corporation Ltd. (PSIDC), the Company has given an undertaking to PSIDC that it will not dispose off its shares in AFPL till the monies under the said loan agreement between PSIDC and AFPL remain due and payable by AFPL to PSIDC. During 1998-99, the Company had transferred its beneficial rights in the shares of AFPL.

2 (b) For these unquoted investments categorized under Level 3, their respective cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

2 (c) In respect of the Company''s investment in 2,640 equity shares of Reliance Industries Ltd., there is an Injunction Order passed by the Court in Kanpur restraining the transfer of these shares. The share certificates are, however, in the possession of the Company. Pending disposal of the case, dividend on these shares has not been recognized.

2 (d) Redeemable preference shares were issued to Rohini Industrial Electricals Limited (RIEL) in 2016-17 Rs. 6,500 lakhs, in 2012-13 Rs.3,700 lakhs and in 2011-12 Rs.2,500 lakhs for a period of 7 years, respectively and are cumulative with dividend of 0.01%. This investment is accounted at amortized cost and the difference between the investment value and the amortised cost is treated as additional capital contribution and included in value of equity investment in Rohini.

2 (e) During 2016-17, the Company has participated in buy-back offer from Lakshmi Machine Works Ltd and sold 20328 shares for a total consideration of Rs. 902.33 lakhs. The Company has received dividend of Rs. 8.13 lakhs (2015-16 : Rs.8.13 lakhs) on the shares sold during the year. During 2015-16, the Company has sold its shareholding in Rujuvalika Investments Limited and Industrial Estates Private Limited for consideration aggregating Rs.1,204.16 lakhs.

3(a) Equity Shares: The Company has one class of equity shares having a par value of Re.1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding and are subject to preferential rights of the Preference shares (if issued).

Footnotes : Nature and purpose of reserves

Capital Reserve:

Capital Reserve was created from capital surplus on sale of assets and on amalgamation of subsidiary.

Capital Redemption Reserves:

Capital Redemption Reserve is created out of profit available for distribution towards redemption of Preference shares. This reserve can be used for the purpose of issue of Bonus shares.

Securities Premium:

Securities Premium represents the surplus of proceeds received over the face value of shares, at the time of issue of shares.

General Reserve:

Retained Earnings:

The balance in the Retained Earnings primarily represents the surplus after payment of dividend (including tax on dividend) and transfer to reserves.

(d) Except for matters included in the estimate above, the Company is unable to reasonably estimate a range of possible loss for certain proceedings or disputes, including where:

(i) plaintiffs / parties have not claimed an amount of money damages, unless Management can otherwise determine an appropriate amount;

(ii) the proceedings are in early stages;

(iii) there is uncertainty as to the outcome of pending appeals, matters under arbitration or negotiations;

(iv) there are significant factual issues to be resolved; and / or there are legal issues presented

Based on currently available information, the outcomes of the above matters will not have a materially adverse effect on the Company''s financial statements, though the outcomes could be material to the Company''s operating results for any particular period, depending, in part, upon the operating results for such period. Accordingly, an estimate of the timings of cash flows, if any, in respect of the above is not available.

4. Employee Benefit Plans

(a) In accordance with Indian Law or based on Gratuity Scheme, the Company provides for the lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 days salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. Certain overseas branch of the Company also provide for retirement benefit plan in accordance with the local laws.

(b) The most recent acturial valuation of plan assets and the present values of the defined benefit obligations were carried out as at 31st March, 2017. The present value of the defined benefit obligation and the related current service costs and past service cost, are measured using the projected unit credit method.

(c) These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

B. Financial value measurements:

This note provides information about how the Group determines fair values of various financial assets and financial liabilities. that are measured at fair value on a recurring basis.

Some of the Company''s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique (s) and inputs used).

Footnotes:

(1) These investments in equity investments are not held for trading, Instead, they are held for medium or long-term strategic purpose. Upon the application of Ind AS 109, the Company has chosen to designate these investments in equity instruments as at FVTOCI as the Directors believe that this provides a more meaningful presentation for medium or long-term strategic investments, than reflecting changes in fair value immediately in profit or loss.

(2) There were no transfers between Level 1 and 2 during the period.

(3) The carrying amount of financial assets and financial liabilities measured at amortized cost in the financial statements are a reasonable approximation of their fair value since the Company does not anticipate that the carrying amount would be significantly different from the value of that would eventually be received or settled.

5. Finance Risk Management Objectives

The Company''s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company''s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables. The Company is exposed to Credit risk, Liquidity risk and Market risk. The Board of Directors (''Board'') oversee the Management of these financial risks through its Risk Management Committee. The Risk Management Policy of the Company formulated by the Risk Management Committee and approved by the Board, states the Company''s approach to address uncertainties in its endeavour to achieve its stated and implicit objectives. It prescribes the roles and responsibilities of the Company''s Management, the structure for managing risks and the framework for Risk Management. The framework seeks to identify, assess and mitigate financial risks in order to minimize potential adverse effects on the Company''s financial performance. The following disclosures summarize the Company''s exposure to financial risks and information regarding use of derivatives employed to manage exposures to such risks. Quantitative sensitivity analysis have been provided to reflect the impact of reasonably possible changes in market rates on the financial results, cash flows and financial position of the Company.

(i) Credit risk management:

Credit risk refers to the risk of a financial loss arising from a counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default, the risk of deterioration of creditworthiness as well as concentration of risks.

The major exposure to credit risk at the reporting date is primarily from trade receivables. Trade receivables (typically unsecured) consists of a large number of customers, spread across diverse industries and geographical areas. Credit risk is controlled by analysing credit limits and creditworthiness on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. For trade receivables, as a practical expedient, the Company computes credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates.

The concentration of credit risk is limited due to the fact that the customer base is large. There is no customer representing more than 5% of the total balance of trade receivables. More than 75% of the trade receivables are concentrated in India. The credit risk on liquid funds, bank balances, deposits with banks and derivative financial instruments is limited because the counterparties are banks and fund houses with high credit-ratings assigned by credit-rating agencies.

In addition, the Company is exposed to credit risk in relation to financial guarantees given to banks. For details refer Note 38B - Contingent liabilities.

(ii) Liquidity risk management:

Liquidity risk refers to the risk that the Company cannot meets its financial obligations. The objective of the liquidity risk management is to maintain sufficient liquidity and ensure that the funds are available for use as per the requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company consistently generated sufficient cash flows from operations to meet its financial obligations as and when they fall due.

Maturities of financial liabilities:

The table below analyze the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities:

The amounts disclosed in the table are the contractual undiscounted cash flows. Balance due within 12 months is equal to their carrying balances as the impact of discounting is not significant.

(iii) 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 risks: currency risk, interest rate risk and other price risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments.

(a) Foreign currency risk:

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilizing forward foreign exchange contracts.

The carrying amounts of the Company''s foreign currency denominated monetary assets and monetary liabilities including overseas branches at the end of the reporting period are as follows.

The line-items in the Balance Sheet that include the above hedging instruments are "Other financial assets" and "Other financial liabilities".

At 31st March, 2017, the aggregate amount of losses under forward foreign exchange contracts relating to the exposure on these anticipated future transactions is Rs.163.60 lakhs (As at 31-3-2016: Rs.Nil; As at 1-4-2015: Rs.Nil).

The Company has entered into contracts to purchase raw materials from overseas suppliers. The Company mainly enters into forward foreign exchange contracts (for terms not exceeding 6 months) to hedge the exchange rate risk arising from these purchases.

Foreign currency sensitivity analysis:

The Company is mainly exposed to the currency of USD, GBP and EUR.

The following table details the Company''s sensitivity to a 5% increase and decrease in the INR against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to Key Management Personnel and represents Management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only material outstanding foreign currency denominated monetary items and adjusts their translation at the year end for a 5% change in foreign currency rates.

(b) Interest rate risk:

Interest rate risk is the risk that changes in interest rates will affect the Company''s income or value of its holdings of financial instruments. The Company''s exposure to interest rate risk relates to its bank loan and bank balances. Management believes that risk related to variation in interest rate on the bank loan and bank balances is very minimal.

(c) Other price risk:

The Company is exposed to other price risks arising from quoted equity investments. Some of the Company''s equity investments are held for strategic rather than trading purposes.

Exposure:

The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the Balance Sheet as fair value through OCI. (Refer Note 7)

Sensitivity:

The table below summarizes the impact of increases/decreases of the index on the Company''s equity and OCI for the year. The analysis is based on the assumption that the equity index had increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s equity instruments moved in line with the index.

There is no market price readily available for unquoted investments. The fair values of these investments are determined based on the valuations obtained from independent valuer and such fair values are dependent on various factors which affect such fair values.

6. Capital Management

The Company''s objective for capital management is to maximize shareholder value, safeguard business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met mainly through equity and operating cash flows generated. The Company is not subject to any externally imposed capital requirements.

7. Events occurring after Balance Sheet:

i) The Directors have recommended final dividend of Rs.11,580.97 lakhs at Rs.3.50/- per share on equity shares which is subject to the approval of shareholders in the ensuing Annual General Meeting. This dividend and the tax thereon has not been recognized as a liability.

ii) Further, the amount of Rs.5,000 lakhs is proposed to be transferred to General Reserve which is approved in the Board Meeting subsequent to the year end and thus has not been recognized as transferred during the year.

Mar 31, 2014

1. NATURE OF BUSINESS

Voltas Limited, a premier Air-Conditioning and Engineering company was established intheyear1954.lt is aTata Group company in the field of air conditioning, refrigeration, in the business of electro-mechanical projects as an EPC contractor both in domestic and international geographies (Middle East and Singapore), and also in the business of engineering product services for mining, water management and treatment, construction equipments and textile industry.

2. (a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 2132.26 Lakhs

(31-3-2013: Rs. 2257.46 Lakhs). [Tangible assets : Rs. 1975.16 Lakhs (31-3-2013: Rs. 2230.73 Lakhs) and Intangible assets of Rs. 157.10 Lakhs (31-3-2013: Rs. 26.73 Lakhs)]. Advance paid against such contracts: Rs. 61.95 Lakhs (31-3-2013: Rs. 90.85 Lakhs).

(b) On account of Other Commitments :

(i) Foreign currency exposures (Refer note 30)

(ii) Minimum future lease rental payable (Refer note 31)

3. Contingent liabilities not provided for

(a) Guarantees on behalf of other companies :

Limits Rs. 26989.72 Lakhs (31-3-2013: Rs. 22829.48 Lakhs) against which amount outstanding was Rs. 16589.98 Lakhs (31-3-2013: Rs. 14995.39 Lakhs).

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

In respect of various matters aggregating Rs. 21470.41 Lakhs (31-3-2013: Rs. 23592.38 Lakhs), net of tax Rs. 14172.62 Lakhs (31-3-2013: Rs. 15937.83 Lakhs) against which a provision has been made for contingencies Rs. 1125 Lakhs (31-3-2013: Rs. 1125 Lakhs). In respect of a contingent liability of Rs. 1889.93 Lakhs (31-3-2013: Rs. 1841.62 Lakhs), the Company has a right to recover from third party.

(d) Income tax demands :

In respect of matters decided in Company''s favour by appellate authorities where the department is in further appeal Rs. 1568.42 Lakhs (31-3-2013: Rs. 1115.73 Lakhs).

In respect of matters decided against the Company and where Company has appealed amounted to Rs. 1564.04 Lakhs ( 31-3-2013: Rs. 2017.97 Lakhs).

(e) Staf demands under adjudication : Amount indeterminate.

(f) Liquidated damages, except to the extent provided, for delay in delivery of goods / execution of projects : Amount indeterminate.

4. In respect of guarantees aggregating Rs. 141156.74 Lakhs (31-3-2013:Rs. 137745.05 Lakhs) issued by Banks at the request of the Company in favour of third parties, the Company has given security by way of hypothecation of a part of tangible movable assets, trade receivables and inventories.

5. Derivative Instruments

The Company has entered into the following derivative instruments:

(a) Forward Exchange Contracts (being derivative instruments), which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.

6. Assets under Operating Leases

(a) The Company has taken on operating lease certain assets. The total lease rent paid on the same amounts to Rs. 4119.33 Lakhs (2012-13: Rs. 4636.82 Lakhs).

(c) The Company has given on operating lease certain assets. The total lease rent received on the same amounts to Rs. 3197.19 Lakhs (2012-13: Rs. 3332.49 Lakhs) and is included under Other Income.

7. Employee benefits expenses

(a) The Company makes contribution towards provident funds, defined benefit retirement plans, and towards superannuation fund.These funds are administered by the trustees appointed by the Company. Under the schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefits.

(b) The Company makes annual contributions to Gratuity Funds, which are funded defined benefit plans for qualifying employees. The schemes provide for lumpsum payment to vested employees at retirement, death while in employment, or on termination of employment as per the Company''s Gratuity Scheme. Vesting occurs upon completion of 5 years of service.

The Company is also providing post retirement medical benefits to qualifying employees.

The most recent actuarial valuations of plan assets and the present values of the defined benefit obligations were carried out as at 31st March, 2014. The present value of the defined benefit obligation and the related current service cost and past service cost, are measured using the projected unit credit method.

The following tables set out the the position of and the amounts recognised in the Company''s financial statements as at 31 st March, 2014 for Defined Benefit / Contribution Plans :

8. Segmental Reporting

Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standard (AS-17) on Segment Reporting, notified under the Companies (Accounting Standards) Rules, 2006.

9. Related Party Disclosures

(a) List of Related Parties and Relationships

Party Relation

A. Simto Investment Company Ltd. (upto 31-8-2012) Subsidiary Auto Aircon (India) Ltd .

Voltas Netherlands B.V.

Lalbuksh Voltas Engineering Services &Trading LLC.

Voice Antilles N.V. (upto 14-9-2012)

Weathermaker Ltd.

Saudi Ensas Company for Engineering Services W.L.L.

Rohini Industrial Electricals Ltd.

Universal Comfort Products Ltd.

Voltas Oman L.L.C.

Agro Foods Punjab Ltd. (Under liquidation)

Westerwork Engineers Ltd. (Under liquidation)

B. Brihat Trading Private Ltd. Associate Voltas Material Handling Private Ltd. (w.e.f. 1 -5-2011 and upto 2-11-2012)

C. Universal Voltas L.L.C. JointVenture Naba Diganta Water Management Ltd.

Olayan Voltas Contracting Company Ltd. (w.e.f. 8-2-2012) Universal Weathermaker Factory L.L.C. Voltas Qatar W.L.L. (w.e.f. 2-4-2012) AVCO Marine S.a.S. (Under liquidation) Agrotech Industries Ltd. (Under closure)

D. Tata Sons Ltd. Promoter holding together with its

subsidiary more than 20%

E. Mr. Sanjay Johri - Managing Director Key Management Personnel

10. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

Mar 31, 2013

1. NATURE OF BUSINESS

Voltas Limited, a premier Air-Conditioning and Engineering company was established in the year 1954. It is a Tata Group company in the field of air conditioning, refrigeration, in the business of electro-mechanical projects as an EPC contractor both in domestic and international geographies (Middle East and Singapore), and also in the business of engineering product services for mining, water management and treatment, construction equipments and textile industry.

2.(a) In the previous year, due to significant upward revision in estimated cost of a major project in Qatar, Sidra Medical and Research Centre, the Company accounted for the estimated costs on the project in accordance with the requirement of Accounting Standard (AS) 7. During the current year, the Main Contractor has instructed a revised schedule of completion, expected to end on 31st March, 2014, including additional time for Testing and Commissioning. The cost to come for the extended duration of the project along with the possible enhancement of revenue from variations have been estimated based on current technical data. In view of continuing uncertainties in the process of approval of variations and the complex nature of the project, additional net cost overruns of Rs. 9555.08 Lakhs have been accounted for, while the Company continues to pursue its entitlements vigorously.

3. (a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 2257.46 Lakhs (31-3-2012: Rs. 4748.18 Lakhs) [Tangible assets : Rs. 2230.73 Lakhs (31-3-2012: Rs. 4690.28 Lakhs) and Intangible assets of Rs. 26.73 Lakhs (31-3-2012: Rs. 57.90 Lakhs)]. Advance paid against such contracts: Rs. 90.85 Lakhs (31-3-2012: Rs. 666.72 Lakhs).

(b) On account of Other Commitments :

(i) Foreign currency exposures (refer note 30)

(ii) Minimum future lease rental payable (refer note 31)

4. Contingent liabilities not provided for

(a) Guarantees on behalf of other companies :

Limits Rs. 22829.48 Lakhs (31-3-2012 : Rs. 22639.29 Lakhs) against which amount outstanding was Rs. 14995.39 Lakhs (31-3-2012 : Rs. 14621.44 Lakhs).

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

In respect of various matters aggregating Rs. 23592.38 Lakhs (31-3-2012: Rs. 26898.56 Lakhs), net of tax Rs. 15937.83 Lakhs (31-3-2012: Rs. 18171.32 Lakhs) against which a provision has been made for contingencies Rs. 1125 Lakhs (31-3-2012: Rs. 1125 Lakhs). In respect of a contingent liability of Rs. Nil (31-3-2012: Rs. 5086.36 Lakhs), the Company has a right to recover the same from a third party.

(c) Contractual matters under arbitration : Amount indeterminate.

(d) Income tax demands :

In respect of matters decided in Company''s favour by appellate authorities where the department is in further appeal Rs. 1115.73 Lakhs (31-3-2012: Rs. 1350.36 Lakhs).

In respect of matters decided against the Company and where Company has appealed amounted to Rs. 2017.97 Lakhs (31-3-2012: Rs. 517.51 Lakhs) and in respect of others Rs. Nil (31-3-2012: Rs. 941.03 Lakhs).

(e) Staff demands under adjudication : Amount indeterminate.

(f) Liquidated damages, except to the extent provided, for delay in delivery of goods : Amount indeterminate.

5. In respect of guarantees aggregating Rs. 137745.05 Lakhs (31-3-2012: Rs. 147616.29 Lakhs) issued by Banks at the request of the Company in favour of third parties, the Company has given security by way of hypothecation of a part of tangible movable assets, trade receivables and inventories.

6. Derivative Instruments

The Company has entered into the following derivative instruments :

(a) Forward Exchange Contracts (being derivative instruments), which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.

The following are the outstanding Forward Exchange Contracts entered into by the Company :

7. Assets under Operating Leases

(a) The Company has taken on operating lease certain assets. The total lease rent paid on the same amounts to Rs. 4636.82 Lakhs (2011-12: Rs. 5226.26 Lakhs).

(i) The minimum future lease rentals payable in respect of non-cancellable leases are as under:

(b) The Company has given on operating lease certain assets. The total lease rent received on the same amounts to Rs. 3332.49 Lakhs (2011-12: Rs. 3595.29 Lakhs) is included under Other Income.

(i) The minimum future lease rentals receivable in respect of non-cancellable leases are as under:

(ii) The Original Cost, Depreciation for the year and Written Down Value are Rs. 2940.22 Lakhs, Rs. 24.82 Lakhs and Rs. 2425.07 Lakhs (2011-12: Rs. 1415.66 Lakhs, Rs. 27.76 Lakhs and Rs. 938.69 Lakhs), respectively.

8. Remittance in foreign currencies for dividends

The Company has not remitted any amount in foreign currencies on account of dividends during the year and does not have information as to the extent to which remittances, if any, in foreign currencies on account of dividends have been made by / on behalf of non-resident shareholders. The particulars of dividends paid to non-resident shareholders which were declared during the year, are as under :

9. Employee benefits expenses

(a) The Company makes contribution towards provident funds, defined benefit retirement plans, and towards superannuation fund. These funds are administered by the trustees appointed by the Company. Under the schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefits.

(b) The Company makes annual contributions to Gratuity Funds, which are funded defined benefit plans for qualifying employees. The schemes provide for lumpsum payment to vested employees at retirement, death while in employment, or on termination of employment as per the Company''s Gratuity Scheme. Vesting occurs upon completion of 5 years of service.

The Company is also providing post retirement medical benefits to qualifying employees.

The most recent actuarial valuations of plan assets and the present values of the defined benefit obligations were carried out as at 31st March, 2013. The present value of the defined benefit obligation and the related current service cost and past service cost, are measured using the projected unit credit method.

The following tables set out the funded status and the amounts recognised in the Company''s financial statements as at 31st March, 2013 for the Defined Benefit Plans :

10. Segmental Reporting

Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standards (AS-17) on Segment Reporting as notified under the Companies (Accounting Standards) Rules, 2006.

11. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current yearss classification/disclosure.

Mar 31, 2012

1. (a) Equity Shares: The Company has one class of equity shares having a par value of Rs. 1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding and are subject to preferential rights of the Preference shares (if issued).

2. Investments (contd.)

Footnotes :

2 (a) Under a loan agreement for Rs. 60 Lakhs (fully drawn and outstanding) entered into between Agro Foods Punjab Ltd. (AFPL) and the Punjab State Industrial Development Corporation Ltd. (PSIDC), the Company has given an undertaking to PSIDC that it will not dispose off its shares in AFPL till the monies under the said loan agreement between PSIDC and AFPL remain due and payable by AFPL to PSIDC. During 1998-99, the Company had transferred its beneficial rights in the shares of AFPL.

2 (b) In respect of the Company's investment in 2,640 equity shares of Reliance Industries Ltd., there is an Injunction Order passed by the Court in Kanpur restraining the transfer of these shares. The share certificates are, however, in the possession of the Company. Pending disposal of the case, dividend on these shares has not been recognised.

abortive engineering/rework. An extensive Techno Commercial review was carried out to assess the costs incurred/ to be incurred till completion of the project, and as per the requirements of Accounting Standard (AS) 7, the Company has accounted for the estimated costs on this project. However, uncertainties exist on variations to be claimed and costs to come till the completion of the project due to the complex nature of the 'design and build' project, changes in the designs still being made by the Client and delay in the completion of an evolving world-class hospital facility.

3. (a) Estimated amount of contracts remaining to be executed on capital account and not provided for: Rs. 4748.18 Lakhs.

(31-3-2011: Rs. 3511.10 Lakhs). Advance paid against such contracts: Rs. 666.72 Lakhs (31-3-2011: Rs. 233.99 Lakhs).

(b) On account of Other Commitments : (i) Foreign currency exposures (refer note 30)

(ii) Minimum future lease rental payable (refer note 31)

4. Contingent liabilities not provided for

(a) Guarantees on behalf of other companies :

Limits Rs. 22639.29 Lakhs (31-3-2011: Rs. 22024.65 Lakhs) against which amount outstanding was Rs. 14621.44 Lakhs (31-3-2011 : Rs. 10435.87 Lakhs).

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

In respect of various matters aggregating Rs. 26898.56 Lakhs (31-3-2011 : Rs. 25691.90 Lakhs), net of tax Rs. 18171.32 Lakhs (31-3-2011 : Rs. 17157.05 Lakhs) against which a provision has been made for contingencies Rs. 1125 Lakhs (31-3-2011 : Rs. 1125 Lakhs). In respect of a contingent liability of Rs. 5086.36 Lakhs (31-3-2011 : Rs. 4928.10 Lakhs), the Company has a right to recover the same from a third party.

2010-11

Rs. in Lakhs Rs. in Lakhs

Taxes, Cess and Duties (other than income tax) 18396.58 17260.62

Contractual matters in the course of business 4347.31 4615.31

Real Estate Disputes and Demands 3519.76 3519.76

Ex-employees matters 248.63 248.63

Others 386.28 47.58

26898.56 25691.90

(c) Contractual matters under arbitration : Amount indeterminate.

(d) Income tax demands :

In respect of matters decided in Company's favour by appellate authorities where the department is in further appeal Rs. 1350.36 Lakhs (31-3-2011 : Rs. 1055.04 Lakhs).

In respect of matters decided against the Company and where Company has appealed amounted to Rs. 517.51 Lakhs (31-3-2011 : Rs. Nil) and in respect of others Rs. 941.03 Lakhs (31-3-2011 : Rs. Nil).

(e) Staff demands under adjudication : Amount indeterminate.

(f) Liquidated damages, except to the extent provided, for delay in delivery of goods : Amount indeterminate.

5. In respect of guarantees aggregating Rs. 147616.29 Lakhs (31-3-2011 : Rs.140683.39 Lakhs) issued by Banks at the request of the Company in favour of third parties, the Company has given security by way of hypothecation of a part of tangible movable assets, book debts and stocks.

6. Derivative Instruments

The Company has entered into the following derivative instruments :

(a) Forward Exchange Contracts (being derivative instruments), which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.

7. Remittance in foreign currencies for dividends

The Company has not remitted any amount in foreign currencies on account of dividends during the year and does not have information as to the extent to which remittances, if any, in foreign currencies on account of dividends have been made by / on behalf of non-resident shareholders. The particulars of dividends paid to non-resident shareholders which were declared during the year, are as under :

8. Employee benefits expenses

(a) The Company makes contribution towards provident funds, defined benefit retirement plans, and towards superannuation fund. These funds are administered by the trustees appointed by the Company. Under the schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefits.

(b) The Company makes annual contributions to Gratuity Funds, which are funded defined benefit plans for qualifying employees. The schemes provide for lumpsum payment to vested employees at retirement, death while in employment, or on termination of employment as per the Company's Gratuity Scheme. Vesting occurs upon completion of 5 years of service.

The Company is also providing post retirement medical benefits to qualifying employees.

The most recent actuarial valuations of plan assets and the present values of the defined benefit obligations were carried out as at 31st March, 2012. The present value of the defined benefit obligation and the related current service cost and past service cost, are measured using the projected unit credit method.

The following tables set out the funded status and the amounts recognised in the Company's financial statements as at 31st March, 2012 for the Defined Benefit Plans :

9. Segmental Reporting

Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standards (AS-17) on Segment Reporting as notified under the Companies (Accounting Standards) Rules, 2006.

Mar 31, 2011

1. SHARE CAPITAL

Equity Share Capital includes :

(a) 9,76,61,300 shares of Rs 1 each allotted as fully paid bonus shares by capitalising Rs 80.82 Lakhs out of the Securities Premium Account, Rs 100 Lakhs from Capital Reserve and Rs 795.79 Lakhs out of General Reserve.

(b) 1,77,29,040 shares of Rs 1 each allotted to the erstwhile shareholders of Tata-Merlin & Gerin Ltd. (TMG), The National Electrical Industries Ltd. (NEI), Volrho Ltd., Wandleside National Conductors Ltd. (WNC) and Hyderabad Allwyn Ltd. (HAL) consequent upon the amalgamation of these companies with the Company.

(c) 11,97,84,000 shares of Rs 1 each allotted to the holders of Convertible Part RsA' of Rs 60 of the 14% Secured Redeemable Partly Convertible Debentures 1992-99 on compulsory conversion thereof into equity shares.

2. INVESTMENTS

(a) Under a loan agreement for Rs 60 Lakhs (fully drawn and outstanding) entered into between Agro Foods Punjab Limited (AFPL) and the Punjab State Industrial Development Corporation Limited (PSIDC), the Company has given an undertaking to PSIDC that it will not dispose of its shares in AFPL till the monies under the said loan agreement between PSIDC and AFPL remain due and payable by AFPL to PSIDC. During 1998-99, the Company had transferred its benefcial rights in the shares of AFPL.

(b) In respect of the Company's investment in 2,640 equity shares of Reliance Industries Limited, there is an Injunction Order passed by the Court in Kanpur restraining the transfer of these shares. The share certificates are, however, in the possession of the Company. Pending disposal of the case, dividend on these shares has not been recognised.

Note :

Loans and Advances shown in (a) and (b) above to subsidiaries fall under the category of "Loans and Advances" in nature of Loans in terms of Clause 32 of the Listing Agreement. There is no repayment schedule and no interest is payable.

3. CURRENT LIABILITIES AND PROVISIONS

(a) According to information available with the Management, on the basis of the intimations received from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006, the Company has the following amounts due to Micro and Small Enterprises under the said Act.

The provision for Trade Guarantee is expected to be utilised for warranty expenses / settlement of claims within a period of 1 to 10 years depending on the contractual obligation.

Note : Figures in brackets are of the previous year.

4. SALES AND SERVICES

With regard to long term Construction Contracts undertaken, the amount of net revenue recognised is Rs 239094.45 Lakhs (2009-10 : Rs 243858.40 Lakhs).

5. COST OF SALES, SERVICES AND EXPENSES

(i) (a) The Company makes contribution towards provident funds, defned benefit retirement plans, and towards superannuation fund, a defned contribution retirement plan for qualifying employees. These funds are administered by the trustees appointed by the Company. Under the schemes, the Company is required to contribute a specifiedpercentage of salary to the retirement benefit schemes to fund the benefits.

(b) The Company makes annual contributions to Gratuity Funds, which are funded defned benefit plans for qualifying employees. The schemes provide for lumpsum payment to vested employees at retirement, death while in employment or on termination of employment as per the Company's Gratuity Scheme. Vesting occurs upon completion of 5 years of service.

The Company is also providing post retirement medical benefits to qualifying employees.

The most recent actuarial valuations of plan assets and the present values of the defned benefit obligations were carried out as at 31st March, 2011. The present value of the defned benefit obligation and the related current service cost and past service cost are measured using the Projected Unit Credit Method.

The following tables set out the funded status and the amounts recognised in the Company's financial statements as at 31st March, 2011 for the Defned benefit Plans other than Provident Fund. According to the Management, the Actuary has opined that actuarial valuation cannot be applied to reliably measure provident fund liabilities in the absences of guidance from the Actuarial Society of India. Accordingly, the Company is currently not in a position to provide other related disclosures as required by AS 15 read with the Accounting Standards Board Guidance. However, having regard to the position of the Fund, the shortfall, if any, between the earnings guaranteed by the statute and the actual earnings of the Fund is provided for by the Company and contributed to the Fund.

(a) The Actuarial calculations used to estimate defned benefit commitments and expenses are based on the above assumptions which if changed would afect the defned benefit commitment's size, the funding requirement and expenses.

(c) The details of the Company's Defned benefit Plans for its employees given above arecertifiedby the actuary and relied upon by the auditors.

(d) Expected contribution of Rs 589.25 Lakhs (2009-10: Rs 784.65 Lakhs) to Defned benefits (other than Provident Fund) for the next year.

(e) The Company has recognised the following amounts in the profit and Loss Account under the head Company's Contribution to Provident Fund and Other Funds :

6. Derivative Instruments :

The Company has entered into the following derivative instruments :

(a) Forward Exchange Contracts (being a derivative instrument), which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.

7. Estimated amount of contracts remaining to be executed on capital account and not provided for : Rs 3511.10 Lakhs (31-3-2010 : Rs 1208.10 Lakhs). Advance paid against such contracts : Rs 233.99 Lakhs (31-3-2010 : Rs 642.02 Lakhs).

8. Contingent liabilities not provided for :

(a) Guarantees on behalf of other companies :

Limits Rs 22024.65 Lakhs (31-3-2010: Rs 7599.18 Lakhs) against which amount outstanding was Rs 10435.87 Lakhs (31-3-2010: Rs 5648.60 Lakhs) against which a provision has been made for contingencies Rs Nil (31-3-2010: Rs Nil ).

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

In respect of various matters aggregating Rs 25691.90 Lakhs (31-3-2010: Rs 25139.01 Lakhs), net of tax Rs 17157.05 Lakhs (31-3-2010: Rs 16594.26 Lakhs) against which a provision has been made for contingencies Rs 1125 Lakhs (31-3-2010: Rs 1125 Lakhs). In respect of a contingent liability of Rs 4928.10 Lakhs (31-3-2010: Rs 4513.74 Lakhs), the Company has a right to recover the same from a third party.

(c) Income tax demands :

In respect of matters decided in Company's favour by Appellate Authorities where the Department is in further appeal - Rs 1055.04 Lakhs (31-3-2010 : Rs 1295.63 Lakhs).

(d) Staf demands under adjudication : Amount indeterminate.

(e) Liquidated damages, except to the extent provided, for delay in delivery of goods : Amount indeterminate.

9. In respect of guarantees aggregating Rs 140683.39 Lakhs (31-3-2010 : Rs 87905.05 Lakhs) issued by Banks at the request of the Company in favour of third parties, the Company has given security by way of hypothecation of a part of tangible movable assets, book debts and stocks.

10. In respect of certain property transactions, conveyance deed are pending, as under:

(a) In terms of agreement dated 30th September, 1998, Company's Refrigerators manufacturing facility at Nandalur was transferred on a running business / going concern basis to Electrolux Voltas Limited (EVL) on the close of the business hours on 31st March, 1999. In respect of land for the Nandalur Plant, Deed of Conveyance is pending completion.

(b) The Company had accounted in 1999-2000, the profit on transfer of development rights of Rs 734.12 Lakhs in respect of property at Lalbaug, Mumbai for which agreement for assignment was executed and clearance from the Income Tax Department under Section 269 UC of the Income Tax Act, 1961 was received but for which conveyance formalities are pending completion.

(c) The Company had accounted in 2003-04, the profit on transfer of development rights of Rs 1735.95 Lakhs in respect of property at Thane and Rs 2145.53 Lakhs in respect of property at Pune for which agreements were executed and consideration received but for which conveyance formalities are pending completion.

(d) The Company had accounted in 2004-05, the profit on transfer of development rights of Rs 505.53 Lakhs in respect of property at Thane for which agreement was executed and consideration received but for which conveyance formalities are pending completion.

(e) The Company had accounted in 2006-07, the profit on transfer of development rights in respect of Upvan land and Henkel Switchgear Limited approach land at Thane for which agreements were executed and consideration received (Rs 2070 Lakhs and Rs 223.40 Lakhs, respectively) but for which conveyance formalities are pending completion.

(f) The Company had accounted in 2007-08, the profit on transfer of development rights in respect of land adjoining Simtools at Thane for which an Agreement was executed and consideration received (Rs 919.96 Lakhs) but for which conveyance formalities are pending completion.

(g) The Company had accounted in 2009-10, the profit on transfer of development rights in respect of Nala land at Thane for which an Agreement was executed and consideration received Rs 238.18 Lakhs but for which conveyance formalities are pending completion.

11. Remittance in foreign currencies for dividends:

The Company has not remitted any amount in foreign currencies on account of dividends during the year and does not have information as to the extent to which remittances, if any, in foreign currencies on account of dividends have been made by / on behalf of non-resident shareholders. The particulars of dividends paid to non-resident shareholders which were declared during the year, are as under :

Notes:

(i) As per the Industrial Policy declared in July 1991 and as amended in April 1993, no licenses are required for the products manufactured by the Company.

(ii) Installed capacities are ascertifiedby the Management and relied upon by the Auditors. These are alternative and not cumulative and as such production is not strictly comparable with the same.

(iii) Production includes for captive consumption.

* As the accounting year of these companies ends on 31st December, 2010, the fgures are as of that date.

Notes : (i) Lalbuksh Voltas Engineering Services & Trading L.L.C. ceased to be a joint venture company on acquisition of additional 11% shareholding on 31-3-2011. (ii) Figures in the brackets are of the previous year.

12. Segmental Reporting:

Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standards (AS-17) on Segment Reporting as notifed under the Companies (Accounting Standards) Rules, 2006.

13. Discontinuing Operations

The Board of Directors of the Company has, at its Meeting held on 19th March, 2011, approved the proposal for formation of a joint venture with KION Group, Germany for the Materials Handling (MH) business, which forms part of the Engineering Products and Services segment of the Company. The transfer of MH business is subject to fulfllment/satisfaction of certain conditions precedent to closing of the transaction. Subsequent to close of the financial year, the Company has on 1st May, 2011, upon satisfaction/deferral of the precedent conditions, which were agreed to by the concerned partners, transferred the MH business to an afliate of KION group.

On the efective date of the Scheme of Arrangement, all identifed tangible assets, including current assets, liabilities, movable assets (excluding immovable assets), intangible assets, business contracts, certain employees, etc. of the MH business would be transferred to JVC.

14. Figures for the previous year have been regrouped, wherever necessary.

Mar 31, 2010

1. SHARE CAPITAL

Equity Share Capital includes :

(a) 9,76,61,300 shares of Re.1 each allotted as fully paid bonus shares by capitalising Rs.80.82 Lakhs out of the Securities Premium Account, Rs.100 Lakhs from Capital Reserve and Rs.795.79 Lakhs out of General Reserve.

(b) 1,77,29,040 shares of Re.1 each allotted to the erstwhile shareholders of Tata-Merlin & Gerin Ltd. (TMG), The National Electrical Industries Ltd. (NEI), Volrho Ltd., Wandleside National Conductors Ltd. (WNC) and Hyderabad Allwyn Ltd. (HAL) consequent upon the amalgamation of these companies with the Company.

(c) 11,97,84,000 shares of Re.1 each allotted to the holders of Convertible Part `A of Rs.60 of the 14% Secured Redeemable Partly Convertible Debentures 1992-99 on compulsory conversion thereof into equity shares.

2. INVESTMENTS

(a) Under a loan agreement for Rs.60 Lakhs (fully drawn and outstanding) entered into between Agro Foods Punjab Limited (AFPL) and the Punjab State Industrial Development Corporation Limited (PSIDC), the Company has given an undertaking to PSIDC that it will not dispose off its shares in AFPL till the monies under the said loan agreement between PSIDC and AFPL remain due and payable by AFPL to PSIDC. During 1998-99, the Company had transferred its beneficial rights in the shares of AFPL.

(b) In respect of the Companys investment in 2640 equity shares of Reliance Industries Limited, there is an Injunction Order passed by the Court in Kanpur restraining the transfer of these shares. The share certificates are, however, in the possession of the Company. Pending disposal of the case, dividend on these shares has not been recognised.

3. SALES AND SERVICES

With regard to long term Construction Contracts undertaken, the amount of net revenue recognised is Rs.243858.40 Lakhs (2008-09: Rs.212332.80 Lakhs).

4. COST OF SALES, SERVICES AND EXPENSES

(i) Opening and Closing Stock - In - Trade excludes WIP for Long Term Contracts Rs.476378.73 Lakhs (1-4-2008 : Rs.268742.82 Lakhs) and Rs 593388.31 Lakhs (31-3-2009 : Rs.476378.73 Lakhs), respectively.

(ii) (a) The Company makes contribution towards provident funds, a defned beneft retirement plan, and towards superannuation fund, a defned contribution retirement plan for qualifying employees. These funds are administered by the trustees appointed by the Company. Under the schemes, the Company is required to contribute a specifed percentage of salary to the retirement beneft schemes to fund the benefts.

(b) The Company makes annual contribution to Gratuity Funds, which are funded defned beneft plans for qualifying employees. The scheme provides for lumpsum payment to vested employees at retirement, death while in employment or on termination of employment as per the Companys Gratuity Scheme. Vesting occurs upon completion of 5 years of service. The Company is also providing post retirement medical benefts to qualifying employees.

The most recent actuarial valuations of plan assets and the present values of the defned beneft obligations were carried out as at 31st March, 2010. The present value of the defned beneft obligation and the related current service cost and past service cost are measured using the Projected Unit Credit Method.

The following tables set out the funded status and amounts recognised in the Companys fnancial statements as at 31st March, 2010 for the Defned Beneft Plans other than Provident Fund. According to the Management, the Actuary has opined that actuarial valuation cannot be applied to reliably measure provident fund liabilities in the absence of guidance from the Actuarial Society of India. Accordingly, the Company is currently not in a position to provide other related disclosures as required by AS 15 read with the Accounting Standards Board Guidance. However, having regard to the position of the Fund, the shortfall if any, between the guaranteed by the statute and actual earnings of the Fund is provided for by the Company and contributed to the Fund.

(a) The Actuarial calculations used to estimate defned beneft commitments and expenses are based on the above assumptions which if changed would afect the defned beneft commitments size, the funding requirement and expenses.

(b) The estimates of future salary increases, considered in the Actuarial valuation, take account of infation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(d) The details of the Companys Defned beneft plans for its employees are given above which is certifed by the actuary and relied upon by the auditors.

(e) Expected contribution of Rs.784.65 Lakhs (2008-09 : Rs. 782 Lakhs) to Defned Benefts (other than Provident Fund) for the next year.

(f) The Company has recognised the following amounts in the Proft and Loss Account under the head Companys Contribution to Provident Fund and Other Funds :

5. Derivative Instruments :

The Company has entered into the following derivative instruments :

(a) Forward Exchange Contracts (being a derivative instrument), which are not intended for trading or speculative purposes, but for hedge purposes, to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.

6. Estimated amount of contracts remaining to be executed on capital account and not provided for : Rs.1208.10 Lakhs (31-3-2009 : Rs.1544.54 Lakhs). Advance paid against such contracts : Rs.642.02 Lakhs (31-3-2009 : Rs.706.25 Lakhs).

7. Contingent liabilities not provided for :

(a) Guarantees on behalf of other companies :

Limits Rs.7599.18 Lakhs (31-3-2009 : Rs.4692.93 Lakhs) against which amount outstanding was Rs.5648.60 Lakhs (31-3-2009 : Rs.2076.26 Lakhs) against which a provision has been made for contingencies Rs. Nil (31-3-2009 : Rs.583.59 Lakhs).

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

In respect of various matters aggregating Rs.25139.01 Lakhs (31-3-2009 : Rs.22615.80 Lakhs), net of tax Rs.16594.26 Lakhs (31-3-2009 : Rs.14928.69 Lakhs) against which a provision has been made for contingencies Rs.1125 Lakhs (31-3-2009 : Rs.1125 Lakhs). In respect of a contingent liability of Rs.4502.84 Lakhs (31-3-2009 : Rs.4502.84 Lakhs) the Company has a right to recover the same from a third party.

(c) Income tax demands :

In respect of matters decided in Companys favour by Appellate Authorities where the Department is in further appeal - Rs.1295.63 Lakhs (31-3-2009 : Rs.350.06 Lakhs).

(d) Staf demands under adjudication : Amount indeterminate.

(e) Liquidated damages, except to the extent provided, for delay in delivery of goods : Amount indeterminate.

8. In respect of guarantees aggregating Rs. 87905.05 Lakhs (31-3-2009 : Rs. 88991.07 Lakhs) issued by Banks at the request of the Company in favour of third parties, the Company has given security by way of hypothecation of a part of tangible movable assets, book debts and stocks.

9. Amounts paid by the Company to Directors as remuneration for services rendered in any capacity (See Schedule ÃO for Computation of Net Proft in accordance with Sections 198 and 309 of the Companies Act, 1956):

10. In respect of certain property transactions, conveyance deed are pending, as under:

(a) In terms of agreement dated 30th September, 1998, Companys Refrigerators manufacturing facility at Nandalur was transferred on a running business / going concern basis to Electrolux Voltas Limited (EVL) on the close of the business hours on 31st March, 1999. In respect of land for the Nandalur Plant, Deed of Conveyance is pending completion.

(b) The Company had accounted in 1999-2000, the proft on transfer of development rights of Rs.734.12 Lakhs in respect of property at Lalbaug, Mumbai for which agreement for assignment was executed and clearance from the Income Tax Department under Section 269 UC of the Income Tax Act, 1961 was received but for which conveyance formalities are pending completion.

(c) The Company had accounted in 2003-04, the proft on transfer of development rights of Rs.1735.95 Lakhs in respect of property at Thane and Rs.2145.53 Lakhs in respect of property at Pune for which agreements were executed and consideration received but for which conveyance formalities are pending completion.

(d) The Company had accounted in 2004-05, the proft on transfer of development rights of Rs.505.53 Lakhs in respect of property at Thane for which agreement was executed and consideration received but for which conveyance formalities are pending completion.

(e) The Company had accounted in 2006-07, the proft on transfer of development rights in respect of Upvan land and Henkel Switchgear Limited approach land at Thane for which agreements were executed and consideration received (Rs. 2070 Lakhs and Rs.223.40 Lakhs, respectively) but for which conveyance formalities are pending completion.

(f) The Company had accounted in 2007-08, the proft on transfer of development rights in respect of land adjoining Simtools at Thane for which an Agreement was executed and consideration received (Rs.919.96 Lakhs) but for which conveyance formalities are pending completion.

(g) The Company has accounted in 2009-10 the proft on transfer of development rights in respect of Nala land at Thane for which an Agreement was executed and consideration received Rs.238.18 Lakhs but for which conveyance formalities are pending completion.

11. Figures for the previous year have been regrouped, wherever necessary.

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