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Directors Report of Voltas Ltd.

Mar 31, 2023

Your Directors present their 69^th Annual Report and the Audited Statement of Accounts for the year ended 31 March, 2023.

1. Financial Results

'' in crores
	Consolidated		Standalone
	2022-23	2021-22	2022-23	2021-22
Total Income	9,667	8,124	7,850	7,266
Profit for the year after meeting all expenses but before exceptional items, interest and depreciation	742	870	601	811
Interest	30	26	12	15
Depreciation and amortisation	40	37	36	33
Profit before exceptional items, share of profit/(loss) of joint ventures and associates and tax	672	807	553	763
Exceptional items	(244)	-	975	-
Share of profit/(loss) of joint ventures and associates	(121)	(110)	-	-
Profit before tax	307	697	1,528	763
Tax expenses	171	191	123	180
Profit after tax	136	506	1,405	583
Other comprehensive income (net)	(38)	170	(57)	166
Total comprehensive income	98	676	1,348	749

2. Operations

I n 2022, the domestic economy experienced an overall revival without any Covid restriction. However, due to the geo-political tension between Ukraine and Russia, countries across the globe continued to remain impacted. Supply chain disruptions and strengthening of the Dollar Index resulted in depreciation of local currencies. Increases in Oil and other energy costs have fuelled inflation in developed and developing economies forcing Central Banks across the globe to withdraw accommodative policies by increasing their benchmark rate. The high cost of borrowing will impact future growth across economies.

Given the above challenges, the International Monetary Fund (IMF) has lowered its outlook for the global economy to 2.8%. Nevertheless, India continues to be the fastest growing economy in the world. The Central Bank in India has also taken cognizance of high inflation and has announced increases in its benchmark rate aggregating 250 bps during the year before pausing in the last Monetary Policy meeting in April 2023.

Amidst a demanding environment and various headwinds, the Company has sustained its topline for the year under review largely due to the availability of an un-interrupted season for its Unitary Cooling Products business and the timely execution of project orders.

The Company''s focus on the Inverter sub-category with competitive pricing and a larger number of SKUs yielded positive results. Inverter ACs now account for over 75% of total Split ACs sold, as compared to 63% in the previous year.

The Commercial Refrigeration Products business has registered an excellent growth due to the increased participation of OEMs engaged in the ice-creams, chocolates and beverages Industries and expansion of modern retail stores across the country. With the objective of product portfolio expansion, your Company has entered into a Technology License Agreement with Vestfrost Solutions, Denmark for medical refrigeration products which have a good potential to grow in the future.

In Air Coolers, introduction of SKUs across all product sub-categories and targeted secondary scheme with channel partners resulted in profitable growth for the category alongwith increase in market share over the previous year. Investments in product differentiation which secure long term benefits of value engineering has started delivering the desired result, which will further strengthen the brand recognition in future.

The Company is expanding its production capacity for both, Air-conditioner (to produce 2 million room ACs) and Commercial Referigeration products to cater to the increased demand and balance the supply chain. The capex outflow for the above is expected to be in the range of '' 450-500 crores, to be incurred over the next 18-24 months. The capex will be largely funded through internal accruals. However, other funding options may also be evaluated.

Resumption of commercial activities at an accelerated pace, expansion of retail outlets and focus on retrofit jobs along with high customer retentions enabled the Commercial Air Conditioning (CAC) business achieve growth in turnover and profitability as compared to last year.

A lower carry forward order book position and muted order inflow during the first half of the year under review kept the growth under pressure for the Projects business. However, the order inflow has significantly improved in the latter part of the year. The delay in closure of few critical projects, cost escalations and provisions made due to the unilateral action of the Main Contractors by encashing bank guarantees issued by the Company for 2 overseas projects, including termination of a sub-contract in the UAE, have significantly impacted the performance and profitability of the international business operations. The Company has made a provision of '' 244 crores towards the encahsed bank guarantees amount and other moneys receivable from the Main Contractors and has initiated legal proceedings against the Main Contractors. The said provisions have been reflected as exceptional items in the financial statements.

The Engineering Products and Services comprising Mining & Construction Equipment and Textile Machinery have performed better given the revival in the capital cycle, focus by the Government on the Infrastructure

development along with sector specific production linked incentive scheme announced.

Voltbek, the joint venture company for white goods has, despite being a relative new entrant, achieved a cumulative sales volume in excess of 3.3 million units which is a good milestone, demonstrating the trust in the Voltas-Beko brand and acceptance of the products across the value chain. The efforts of substituting imports by inhouse manufacturing of high value added products, the launch of innovative and customer centric products and the focus on channel expansion by leveraging the strength of the joint venture partners has enabled Voltbek to accelerate its overall performance.

Your Company has achieved a higher turnover compared to the previous year and the consolidated total income from operations was '' 9,667 crores. The consolidated Profit before share of profit/loss from joint ventures and associates and exceptional items was '' 672 crores and consolidated Net Profit after tax was significantly lower at '' 136 crores. Voltas ended the year with an Earnings per Share of '' 4.08 (Face Value per share of '' 1).

The Company''s balance sheet continues to remain strong and healthy. The borrowings are primarily for the overseas operations. The tight control on the working capital with focus on collections in Projects business has improved the overall cash flow and the investments.

3. Reserves

An amount of '' 20 crores was transferred to the General Reserve out of the Profit available for appropriation.

4. Dividend Distribution Policy

I n accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations''), the Board of Directors of the Company has adopted a Dividend Distribution Policy (''Policy'') based on the need to balance the twin objectives of appropriately rewarding the Company''s shareholders with dividend, and of conserving resources to meet its future requirements. The Policy is attached to this Report as Annexure I, and the same is also available on the Company''s website at https://www.voltas.com/imagesX_ ansel_image_collector/DIVIDEND_DISTRIBUTION_ POLICY_1.pdf.

5. Dividend

Based on the Company''s performance and keeping in mind the shareholders'' interest, the Directors recommend a dividend of '' 4.25 per equity share of '' 1 each (425%) for the year 2022-23 (2021-22: 550%). The dividend would result in a cash outflow of around '' 141 crores, reflecting pay out of 10% of the Net Profit and a pay out of 32.69% after excluding the exceptional items (net).

The dividend on equity shares is subject to the Shareholders'' approval at the 69th Annual General Meeting (''AGM'') scheduled to be held on 22 June, 2023. The Register of Members and Share Transfer Books of the Company will remain closed from 10 June, 2023 to 22 June, 2023 (both days inclusive) for the purpose of payment of the dividend for the year ended 31 March, 2023, and the AGM.

6. Finance

Cash management has been a focus for the Company. During the year, the Company invested further capital of '' 122.50 crores into Voltbek to support its accelerated growth plan. The cash and bank balance, including investments, continue to remain robust to support various initiatives including the capex plans for the expansion of production capacities and organic/inorganic growth avenues.

The minimal borrowing in the Company''s balance sheet represents fund-based borrowings for overseas operations leveraging interest and cross currency, with domestic borrowing being largely confined to non-fund-based facilities. The credit rating has been reconfirmed to AA for the long-term and A1 for short-term borrowings of the Company by the Rating Agency, enabling the Company avail banking facilities at competitive rates.

Digital transformation by adoption of digital technology in various processes has made the Company more effective and efficient. Cost optimisation across all functions, along with tight control on working capital, has resulted in generating a cash surplus during the year.

The year under review has seen a gradual withdrawal of accommodative stance extended during pandemic period by the Central Bank by increasing benchmark rate by 250 bps to contain the inflation. The action of the Central Bank has resulted in hardening of yields across maturities, with short term instruments impacted the

most. The Company''s investment policy considers three important principals of investing viz safety, security and liquidity and the investments are prudently monitored by the Investment Committee. As on 31 March, 2023, the Company''s liquid investments (Mutual Funds, Bonds, ICDs and Bank Fixed Deposits) was over '' 2,000 crores.

Strengthening of the Dollar Index, widening of current account deficit and slower economy growth has resulted in the depreciation of the Rupee by close to 10% during the year under review. The Company has a well defind Forex policy, based on which its currency exposure is closely monitored to hedge the forward risk in a more structured and timely manner.

7. Business Restructuring

â¢ Domestic Businesses

As earlier reported, in order to have better emphasis on sustainable and profitable growth with increased focus on B2C and B2B verticals, the Board had in the year 2021-22, approved the proposal for transfer of the domestic business relating to MEP, HVAC and Water projects, Mining and Construction Equipment (M&CE) business and Textile Machinery Division to its 100% wholly-owned subsidiary, Universal MEP Projects & Engineering Services Limited (UMPESL) by slump sale and a Business Transfer Agreement (BTA) was executed on 24 March, 2021 between the Company and UMPESL. The said transfer was subject to certain ''Conditions Precedent'' which have been completed and the transaction has been consummated on 1 August, 2022, being the ''Closing Date''. After taking into consideration the working capital adjustments, the consideration for transfer of aforesaid B2B businesses was '' 1,190 crores which has been received by the Company from UMPESL.

â¢ Overseas Operations

The Company has from time to time made investments in overseas subsidiaries and joint venture companies either directly or through its wholly owned subsidiary - Voltas Netherlands B.V. (VNBV), located in the Netherlands. In order to simplify the entire structure for better control and keeping in mind the future potential for business opportunities in the Middle East and Asia and

in order to have ease for the overseas business operations and considering close proximity and better connect, VNBV has, during the year under review, transferred its entire ownership in the shareholding of the following joint ventures/ subsidiaries : Universal Voltas LLC - 49%; Saudi Ensas Company for Engineering Services WLL (Saudi Ensas) - 8%; Voltas Oman SPC - 100% and Lalbuksh Voltas Engineering Services Trading LLC (Lalvol) - 40%, to its wholly owned subsidiary, Universal MEP Projects Pte Limited (UMPPL), established in the Republic of Singapore, by way of its capital contribution. The legal process for change in the ownership has been completed and the Commercial Registration Certificates of the aforesaid companies have been suitably amended to reflect the name of UMPPL as a shareholder in place of VNBV. VNBV has also approved transfer of its 49% shareholding in Voltas Qatar WLL and the legal process for change in the Commercial Registration Certificate of Voltas Qatar WLL is in progress.

The Board has, at its Meeting held on 26 April, 2023, also approved the proposal for transfer of overseas branch offices of the Company in Dubai, Abu Dhabi, Sharjah in United Arab Emirates (UAE), Doha in Qatar, Bahrain and Singapore to UMPPL, the wholly owned subsidiary of Voltas Netherlands B.V. (VNBV), and a step-down subsidiary of Voltas. The transfer of business operations of Voltas overseas branch offices would be on a slump sale basis through execution of Business Transfer Agreement (BTA) for each branch separately, subject to satisfactory completion of ''Conditions Precedent'', as on the ''Closing Date, including novation of existing contracts of Voltas in favour of UMPPL by the Main Contractors/Clients and such other compliances/procedures necessary or as may be applicable in the respective local jurisdictions.

The Board has also approved transfer of Voltas direct investments in overseas subsidiary companies -Weathermake FZE (100%) in Jebel Ali Free Zone, UAE; Saudi Ensas in Kingdom of Saudi Arabia (92%) and Lalvol in Sultanate of Oman (20%) to UMPPL through execution of Share Purchase Agreement

(SPA) for each company respectively, subject to requisite approvals as may be required.

The ''Closing Date'' for transfer of overseas branch operations and investments in overseas subsidiaries is targeted to be completed by end December 2023 or such other date as may be mutually agreed between Voltas and UMPPL. With the aforesaid internal re-structuring, international operations of the Company, including the Company''s investments in overseas joint ventures/subsidiaries would be housed in a separate wholly owned subsidiary -UMPPL. The consideration for transfer of Voltas overseas branch offices and investments in overseas subsidiaries would be at arm''s length based on an independent valuation, subject to necessary adjustments, if required in accordance with the provisions of BTA and SPA, respectively at the time of Closing.

This internal restructuring would enable the Company focus on the Products businesses and Projects businesses, independent of each other and to expand their respective growths. It woud also provide flexibility to Voltas to expand its Product businesses further in the B2C space.

8. Tata Business Excellence Model (TBEM)

Voltas has launched a digital centralised repository -''Nirantar Privriddhi'' for facilitating knowledge management and sharing of best practices by the Business Excellence and Quality Assurance (QA) team. This portal makes all the quality standards and QA reports available centrally. As part of capturing the voice of customers, CAST survey is initiated for all the consumer businesses.

Voltas also actively participated in TATA Innovista and contributed 5 entries which are currently under evaluation at the group level.

The Company will continue its efforts towards achieving business excellence.

9. IT Initiatives

During the year under review, the Company''s IT team ensured the smooth transitions of all systems and applications in line with the Company''s new organisation structure. Further, to enhance speed, scalability and

system readiness, the IT team resorted to a cloud-first approach for all new developments and implementations. Modernisation of existing applications to make them cloud-ready are in process for the current and future business needs. The Company has migrated Voltas In-Shop Demonstration Applications (VISA) to Amazon Web Services (AWS) for ensuring better performance as part of Cloud first strategy. There was an increased focus on Cyber Security with upgrades and refreshes across applications for improving security and productivity. IT team also used various analytical tools including Power BI (Business Intelligence tool from Microsoft) for CXOs, MIS reporting, customer insight, service insight, and process insights, including consolidating digital assets and is moving towards Data Lake and Customer Data Platforms (CDP) to enhance the overall customer experience. IT solutions have been implemented as part of Industry 4.0 initiatives. PLM (Product Life- cycle Management) solutions, new line management solutions and IoT-enabled equipment for preventive and predictive maintenance are some of the key initatives for Industry 4.0. All these efforts are directed towards creating a future ready, digitally advanced and data driven organisation.

10. Safety Health Environment (SHE)

Voltas commenced its safety cultural transformation journey in 2019 and is currently in the ''Independent'' phase on the Bradley Curve. To ensure consistency across all business units, the Company implemented several measures such as:

â¢ Standardization of SHE management across all the businesses, including review and revision of policy, manuals, risk assessment and procedures.

â¢ Establishment of SHE strategy and SHE goal settings, including training index, number of observations and number of leadership audits.

â¢ I mplementation of business-centric SHE leadership programmes, including mandatory training of senior leaders and their engagement in leadership audits. A total of 343 leadership audits were conducted by 137 senior leaders.

â¢ Conducted dedicated campaigns on road safety with the participation of over 1,500 employees as well as 5S campaigns across all our work locations.

Implemented 5S (Seiri, Seiton, Seiso, Seiketsu, and Shitsuke) in manufacturing units and 2S (Seiri & Seiton) in all project sites.

â¢ Certification, Re-certification and Surveillance of businesses for ISO 9001, ISO 14001 and ISO 45001.

â¢ Creation of 40 model sites across the organisation.

â¢ Digitization of SHE management processes, including QR code-based hazard/observation reporting, contractor safety management platform, vendor management platform, visitor management system and technician tracking app. 758 contractors were registered on Vendor and CSM platform, and around 10,000 technicians were tracked through technician tracking app.

â¢ E-Learning modules including launch of new App ''Disprz'' were introduced to increase SHE awareness among employees.

â¢ Conducted SHE Conclaves for business partners in Kolkata, Chennai, Bhubaneswar, Delhi and Mumbai to strengthen their competencies. A total of 16,000 person-hours of training and awareness was created among 400 contractors and around 600 employees from various businesses.

â¢ Annual Safety Culture Survey was extended to workers, technicians and contractors and there was good response.

â¢ Conducted Industrial Hygiene & Occupational Health Surveys at Manufacturing plants.

11. Sustainability Development

Based on the Tata Ethos of ''Giving back to the Community, Voltas has designed its CSR framework in three verticals (a) Sustainable Livelihood which emphasizes on skilling and employability building for marginalized youth and women (b) Community Development which focuses on issues like quality education, health and water (c) Issues of National Importance which addresses national level issues like disaster response/ mitigation and sanitation.

Affirmative Action is a common thread for all the CSR initiatives of Voltas, and the projects undertaken actively work towards inclusion of SC and ST communities, Women and People with Disabilities (PWD).

Sustainable Livelihood

Skill Development and Employability Enhancement of marginalised youth has been the flagship programme of Voltas. The Company offers courses in Air Conditioning, Plumbing, Electrical, BSFI, Retail, IT enabled services, Tally and Accounting, Nursing assistant and Tailoring, which are industry oriented and relevant to market requirements. These courses have well-designed content, provide hands-on-training in well-equipped laboratories, on-jobtraining in real-life situations, soft skills and safety.

Through 27 Skill Development Centres across 13 States in India, Voltas is creating a shared value which converges the aspirations of the community and the requirements of the Industry to create a larger pool of skilled technicians. Voltas has up to 31 March, 2023 skilled around 39,700 students in various trades and has set a target of skilling up to 45,000 students by 2024-25.

During 2022-23, the Company had appointed KPMG to carry out an impact assessment study of the aforesaid programmes on the lives of the beneficiaries and an executive summary of their findings forms part of the Annual Report on CSR Activities annexed to this Report.

Voltas has received the coveted Appreciation Plaque for its commendable work in the Skill Development and Livelihood category of the FICCI CSR awards in a special event organised at New Delhi on 12 December, 2022.

Community Development

This vertical focusses on Education, Health and Water based on the priority needs of the local communities. The key communities addressed through this vertical are women, children, differently abled persons, farmers, schools and other institutions.

Issues of National Importance

Voltas supports the social issues of national importance, including disaster management. Two major projects pursued under this vertical are:

(i) Integrated Sanitation Project, Waghodia (Gujarat):

The Company initiated this project in 10 villages of the Waghodia District in Gujarat through Coastline Salinity Prevention Cell (CSPC), an independent agency, for enhancing overall sanitation in the villages through Water, Sanitation and Hygiene (WASH) interventions.

(ii) Participatory Ground Water Management and Sustainable Agriculture Project, Beed (Maharashtra):

The Company initiated this project in 6 villages of Beed District of Maharashtra through Action for Food Production (AFPRO), an independent agency, for creation and efficient management of water resources and promoting sustainable farming practices to address or mitigate perennial drought situation in the area.

During 2022-23, the Company had appointed Price Waterhouse Chartered Accountants LLP (PW) to carry out an impact assessment study of the aforesaid projects on the lives of the beneficiaries and an executive summary of their findings forms part of the Annual Report on CSR Activities annexed to this Report.

12. Corporate Social Responsibility (CSR)

Disclosure as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014, in prescribed form (as amended) is enclosed as Annexure II to the Directors'' Report.

During 2022-23, the Company spent '' 14.60 crores towards various CSR activities, in line with the requirements of Section 135 of the Companies Act, 2013 (''Act''). Details of the composition of the CSR Committee and Meeting held during 2022-23 are disclosed in the Corporate Governance Report.

13. Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its subsidiaries for the year 2022-23 are prepared in compliance with the applicable provisions of the Act and as stipulated under Regulation 33 of the Listing Regulations, as well as in accordance with the Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015. The Audited Consolidated Financial Statements, together with the Auditor''s Report thereon, forms part of this Annual Report.

14. Subsidiary/Joint Ventures/Associate Companies

As on 31 March, 2023, the Company had 9 subsidiaries (direct and indirect), 4 joint ventures and 1 associate company.

As per the requirements of Section 129(3) of the Act, a statement containing salient features of the financial statements of subsidiaries, joint ventures and associate companies in prescribed Form No. AOC-1 is attached to the financial statements of the Company. Further, pursuant to Section 136 of the Act, the standalone financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the Company''s website - www.voltas.com.

The Policy for determining material subsidiaries of the Company is also provided on the Company''s website at https://www.voltas.com/images/_ansel_image_ collector/DETERMINING_MATERIAL_SUBSIDIARY_ POLICY_1.pdf

As of 31 March, 2023, the Company did not have any material subsidiary.

Performance of key operating subsidiary and joint venture companies in India are given below:

â¢ Consequent upon consummation of BTA, with effect from 1st August, 2022, Revenue from Operations of Universal MEP Projects & Engineering Services Limited (UMPESL), a wholly owned subsidiary of the Company also include revenue of businesses transferred by Voltas. Further in line with the requirements of the Accounting Standard, the previous year numbers have also been restated. Accordingly, UMPESL has reported turnover of '' 1,767 crores and profit before tax of '' 235 crores in 2022-23, as compared to '' 1,589 crores and '' 184 crores, respectively in the previous year.

â¢ Voltbek Home Appliances Private Limited (Voltbek), the joint venture with Arpelik A.$. for Consumer White Goods has reported a turnover in excess of '' 1,000 crores for 2022-23. However, due to increase in costs on account of inflationary pressures, which were not fully passed onto the market, Voltbek has reported a higher loss in the current financial year as compared to the previous year. The long term prospects remain buoyant and Voltbek has

achieved a cumulative sales volume of over 3.3 million units (upto 2022-23). This is a significant milestone achieved in a short duration of time by Voltbek, despite being a new entrant in the market. There has been steady growth in market share for Refrigerators and Washing Machines during 2022-23 over last year and several initiatives and action plans have been put in place for achieving breakeven. Voltas as one of the main shareholders (49%) has provided full support in terms of its Distribution Reach, Channel Partners network and financial support in the form of capital infusion. Similarly, Arcelik is extending support in terms of product technology and making similar capital infusion. The paid-up capital of Voltbek as on 31 March, 2023 was '' 1,277 crores. During 2022-23, the Company has invested '' 122.50 crores in share capital of Voltbek and the Company''s total investment in Voltbek was '' 625.73 crores.

Except as mentioned above, there have been no material changes in the nature of the business of the subsidiaries, including associates and joint ventures during the financial year 2022-23.

The name of Voltas Water Solutions Private Limited (VWS), an associate of the Company, has been struck-off from the Register of Companies with effect from 26 July, 2022 based on an application made to the Registrar of Companies, Maharashtra, Mumbai. Accordingly, VWS ceased to be an associate of the Company during the year 2022-23.

15. Number of Board Meetings

During 2022-23, seven Board Meetings were held on 12 April, 2022; 5 May, 2022; 2 August, 2022; 1 November, 2022; 6 December, 2022; 9 February, 2023 and 10 March, 2023. All the Board Meetings were held physically and facility of participation at Board Meetings through video conferencing was provided to those Directors who had requested for the same.

16. Policy on Directors''Appointment and Remuneration, including Criteria for Determining Qualifications, Positive Attributes, Independence of a Director

qualifications, positive attributes and independence of an Independent Director, alongside the criteria for Performance Evaluation of individual Directors, the Board as a whole and the Committees. The Company''s Policy on Directors'' appointment and remuneration, and other matters provided in Section 178(3) of the Act is disclosed in the Corporate Governance Report, which is a part of the Annual Report and is also available on https://www.voltas. com/images/_ansel_image_collector/DISCLOSURE_OF_ REMUNERATION_POLICY_FOR_DIRECTORS.pdf

17. Evaluation of Performance of Board, its Committees and Directors

Pursuant to the provisions of the Act and Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Board carried out an evaluation of its performance, Committees and individual Directors. The performance of the Board as a whole, Committees and individual Directors was evaluated by seeking inputs from all Directors based on certain parameters as per the Guidance Note on Board Evaluation issued by SEBI such as: Board structure and composition; Meetings of the Board in terms of frequency, agenda, discussions and dissent, if any, recording of Minutes and dissemination of information; Functions of the Board, including governance and compliance, evaluation of risks, stakeholder value and responsibility, Board and Management, including evaluation of the performance of the Management. The Directors also made their self-assessment on certain parameters - attendance, contribution at meetings and guidance/support extended to the Management. The feedback received from the Directors was discussed and reviewed by the Independent Directors at their separate Annual Meeting held on 21 March, 2023, and also shared with the NRC/ Board. At the separate Annual Meeting of Independent Directors, the performance of Non-Independent Directors, including the Chairman, Board as a whole and various Committees was discussed. The Independent Directors in the said meeting also evaluated the quality, quantity and timeliness of the flow of information between the Management and the Board, that is necessary for the Board to effectively and reasonably perform their duties. They expressed their satisfaction in respect thereof. The performance of the individual Directors, performance and role of the Board/ Committees was also discussed at the Board Meeting held on 26 April, 2023. The performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

18. Statutory Auditors

At the 68th Annual General Meeting (AGM) held on 24 June, 2022, the Members of the Company approved the reappointment of S R B C & Co. LLP (SRBC) as Statutory Auditors as well as Branch Auditors of the Company for a second term of five years from the conclusion of 68th AGM till the conclusion of 73rd AGM of the Company to be held in the year 2027, to examine and audit the accounts of the Company for five consecutive financial years between 2022-23 and 2026-27.

The Auditors'' Report for 2022-23 does not contain any qualifications, reservations or adverse remarks, except for Key Audit Matters.

19. Cost Auditors

The Company has maintained the accounts and cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013. The Board had appointed M/s. Sagar and Associates, Cost Accountants as the Cost Auditors for 2022-23, and they have been reappointed as Cost Auditors of the Company for 2023-24. Approval of the Members is being sought for ratification of their remuneration at the ensuing AGM.

20. Secretarial Auditor

M/s. N. L. Bhatia and Associates, the Practicing Company Secretaries were appointed as Secretarial Auditor to undertake the Secretarial Audit of the Company for the year 2022-23. Their Secretarial Audit Report, in prescribed Form No. MR-3, is annexed to the Directors Report as Annexure IV, and does not contain any qualification, reservation or adverse remarks. M/s. N. L. Bhatia and Associates have been reappointed as the Secretarial Auditor for 2023-24.

21. Audit Committee

made by the Audit Committee from time to time. Details of Audit Committee Meetings held during the year 2022-23 are disclosed in the Corporate Governance Report.

22. Internal Financial Controls

The Internal Financial Controls (IFCs), its adequacy and operating effectiveness is included in the Management Discussion and Analysis, which forms part of the Annual Report. The Auditors Report also includes their reporting on IFCs over Financial Reporting.

23. Reporting of Fraud

No instances of fraud were reported by the Auditors under Section 143(12) of the Companies Act, 2013.

24. Risk Management

Pursuant to Section 134(3)(n) of the Act and Regulation 21 of Listing Regulations, the Company has a Risk Management Committee (RMC) comprising Mr. Zubin Dubash (Chairman), Mr. Debendranath Sarangi and Mr. Arun Kumar Adhikari, all Independent Directors. The Company has formulated a Risk Management Policy to establish an effective and integrated framework for the Risk Management process. During 2022-23, three Meetings were held on 27 June, 2022, 30 September, 2022 and 21 March, 2023, wherein, the top 10 risks and relevant mitigation measures identified for the Company were reviewed and discussed.

During 2022-23, the Company had appointed Ernst & Young (E&Y) to conduct an Enterprise Risk Management (ERM) study for Voltas. This exercise has been completed and as advised by E&Y, the Company had adopted an ERM Standard, ERM Policy and revised RMC Charter. The ERM Policy is to establish a common organisation-wide understanding of ERM and outline desired actions and behaviours from key stakeholders and forms the basis for implementing the Risk Management framework across the Company. The ERM Standard sets out the objects and elements of Risk Management process within the organisation and help to promote the Risk-aware corporate culture. The RMC Charter defines the roles and responsibilities of the Risk Management Committee and other requirements.

25. Particulars of Employees

The information required under Section 197 of the Act, read with Rule 5(1) of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014, are given below:

(a) The ratio of each Director''s remuneration, to the median remuneration of the Company''s employees for 2022-23:

Directors	Ratio to Median Remuneration
Mr. Noel Tata	2.02
Mr. Vinayak Deshpande	0.30
Mr. Debendranath Sarangi	4.55
Mr. Bahram N. Vakil	4.36
Ms. Anjali Bansal	3.87
Mr. Arun Kumar Adhikari	4.37
Mr. Zubin Dubash	4.73
Mr. Saurabh Agrawal	0.24
Executive Director
Mr. Pradeep Bakshi Managing Director & CEO	65.43

Note: Ratio of Remuneration of Directors was computed based on sitting fees paid during 2022-23 and commission paid for 2021-22 in 2022-23. However, in line with the internal guidelines, no commission was paid to Mr. Vinayak Deshpande and Mr. Saurabh Agrawal for 2021-22, as they were in full-time employment with another Group company. They were paid sitting fees only.

(b) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in 2022-23:

Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary	% Increase in Remuneration in 2022-23 over 2021-22
Mr. Noel Tata	*
Mr. Pradeep Bakshi	22.20
Mr. Vinayak Deshpande	(41.51)
Mr. Debendranath Sarangi	17.51
Mr. Bahram N. Vakil	(9.50)
Ms. Anjali Bansal	(16.49)
Mr. Arun Kumar Adhikari	12.82

Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary	% Increase in Remuneration in 2022-23 over 2021-22
Mr. Zubin Dubash	(1.00)
Mr. Saurabh Agrawal	(46.81)
Mr. Jitender P. Verma	**
(Chief Financial Officer)
Mr. V. P Malhotra	12.37
(Company Secretary)

* As no commission was paid to Mr. Noel Tata for 2021-22, being in employment with another Group company, the percentage increase in his remuneration is not comparable and hence, not mentioned.

** Since remuneration for 2021-22 is for part of the year, the percentage increase in his remuneration is not comparable and hence, not mentioned.

15.38%

(d) Number of permanent employees on the rolls of the Company:

1,689 employees.

(e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof, and point out if there were any exceptional circumstances for increase in managerial remuneration:

Average percentile increase in salary of employees other than managerial personnel was 8.67%. Average percentile increase in managerial remuneration was 12.11% in 2022-23 over 2021-22.

(f) Affirmation that the remuneration is as per the Remuneration Policy of the Company:

The Company affirms that the remuneration paid was as per the Remuneration policy of the Company.

(g) A statement containing names of top ten employees, in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure in this Report. Further, the Report and the Accounts are being sent to the Members, excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection at the Registered Office of the Company. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary. None of the employees listed in the said Annexure are related to any Director of the Company.

26. Employee Stock Option, Sweat Equity and Equity Shares with Differential Voting Rights

The Company did not issue any Employee Stock Options, Sweat Equity shares and Equity shares with differential voting rights.

27. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Information pursuant to Section 134(3)(m) of the Act relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is given as Annexure III to this Report.

28. Directors and Key Managerial Personnel (KMP)

During the year under review, there has been no change in Directors and KMP of the Company.

In accordance with the provisions of the Act and the Company''s Articles of Association, Mr. Noel Tata and Mr. Saurabh Agrawal retire by rotation and being eligible, offer themselves for re-appointment.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them (if any) for the purpose of attending Meetings of the Board/Committees of the Company.

Mr. Pradeep Bakshi (Managing Director & CEO), Mr. Jitender Pal Verma (Chief Financial Officer) and

Mr. V. P. Malhotra (Head-Taxation, Legal and Company Secretary) are the Key Managerial Personnel (KMPs) of the Company, in line with the requirements of Section 203 of the Act.

Mr. Pradeep Bakshi, Managing Director & CEO of the Company is also the Managing Director of Universal MEP Projects & Engineering Services Limited (UMPESL), a 100% wholly-owned subsidiary of the Company. Mr. Pradeep Bakshi does not draw any remuneration from UMPESL. No other Director is the Managing or Whole-time Director of any subsidiary of the Company.

29. Declaration by Independent Directors

Pursuant to Section 149(7) of the Act, the Company has received declarations from all Independent Directors confirming that they meet the criteria of independence as specified in Section 149(6) of the Act, as amended, read with Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence and that they are independent of the Management. The Board of Directors of the Company have taken on record the declaration and confirmation submitted by the Independent Directors after undertaking due assessment of the veracity of the same.

The Board is of the opinion that the Independent Directors possess the requisite qualifications, experience, expertise and they hold high standards of integrity.

The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the

Act and have also confirmed that their registration with the databank of Independent Directors maintained by the Indian Institute of Corporate Affairs is in compliance with the requirements of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

30. Business Responsibility and Sustainability Report

Pursuant to Regulation 34(2)(f) of Listing Regulations, as amended, the Business Responsibility and Sustainability Report in prescribed format forms part of this Annual Report.

31. Corporate Governance

Pursuant to Schedule V of Listing Regulations, Management Discussion and Analysis, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance forms part of the Annual Report. A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the Board Members and Senior Management Personnel also forms part of the Annual Report. Code of Conduct and various other policies are available on the website of the Company at the link: https://www.voltas.com/about/corporate-governance

32. Details of the Establishment of Vigil Mechanism for Directors and Employees

The Company has adopted a Whistle Blower Policy ("the Policy") as required under Section 177(9) of the Act and Listing Regulations. The Policy provides a mechanism for Directors and employees of the Company to approach the Ethics Counsellor/Chairman of the Audit Committee of the Company in case of any concern. The Whistle Blower Policy can be accessed on the Company''s website at the link: https://www.voltas.com/images/_ansel_image_

collector/WHISTLE_BLOWER_POLICY_1.pdf

34. Particulars of Contracts or Arrangements with Related Parties

During the year under review, the Company did not have any contracts or arrangements with related parties in terms of Section 188(1) of the Act, except the consummation of the Business Transfer Agreement (BTA) earlier executed in March 2021 for transfer of domestic B2B businesses to UMPESL on a slump sale basis, whereby the existing contracts/agreements/arrangements have been assigned/novated by Voltas to UMPESL. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form No. AOC-2 for 2022-23 forms part of this Annual Report as Annexure V.

35. Secretarial Standards

The Company has complied with the provisions of Secretarial Standards on Meetings of the Board of Directors (SS-1) and on General Meetings (SS-2).

36. Details of Significant and Material Orders passed by the Regulators/Courts/Tribunal

No significant and material orders were passed by the Regulators or the Courts or Tribunals impacting the going concern status and Company''s operations in future.

37. Proceeding under Insolvency and Bankruptcy Code, 2016

There are no proceedings, either filed by the Company or against the Company, pending under the Insolvency and Bankruptcy Code, 2016 as amended, before the National Company Law Tribunal or other Courts as on 31 March, 2023.

38. Deposits from Public

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the 31 March, 2023.

39. Directors'' Responsibility Statement

Based on the framework and testing of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external agencies, including audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2022-23. Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, based on the assurance given of the business operations, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) t hey have laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and operating effectively; and

(vi) they have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

40. Annual Return

Pursuant to Sections 92(3) and 134(3)(a) of the Act, the Annual Return for 2022-23 is available on the Company''s website at the link: https://www.voltas.in/file-uploads/ general/Voltas_AnnualReturns_FormMGT-7_2022-23.pdf

41. Disclosure as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a ''Respect for Gender'' Policy on prevention, prohibition and redressal of sexual harassment in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (''POSH Act'') and the Rules there under. As per the requirement of POSH Act, the Company has formed an Internal Committee to address complaints pertaining to sexual harassment at work place. The Company did not receive any complaint during 2022-23.

42. Other Disclosures

During the year, there were no transactions requiring disclosure or reporting in respect of matters relating to:

(a) i ssue of equity shares with differential voting rights as to dividend, voting or otherwise;

(b) i ssue of shares (including sweat equity shares) to employees of the Company under any scheme;

(d) i nstance of one-time settlement with any bank or financial institution.

43. General

The Notes forming part of the Accounts are selfexplanatory or, to the extent necessary, have been dealt with in the preceding paragraphs of the Report.

On behalf of the Board of Directors

Noel Tata

Chairman

Date: 26 April, 2023 Place: Mumbai

Mar 31, 2022

Your Directors present their 68th Annual Report and the Audited Statement of Accounts for the year ended 31 March, 2022.

1. Financial Results

'' in crores
	Consolidated		Standalone
	2021-22	2020-21	2021-22	2020-21
Total Income	8,124	7,745	7,266	6,598
Profit for the year after meeting all expenses but before interest and depreciation	871	830	811	782
Interest	26	26	15	19
Depreciation and amortisation	37	34	33	30
Profit before share of profit/ (loss) of joint ventures and associates and tax	808	770	-	-
Share of profit/(loss) of joint ventures and associates	(111)	(61)	-	-
Profit before tax	697	709	763	733
Tax expenses	191	180	180	163
Profit after tax	506	529	583	570
Other comprehensive income (net)	170	321	166	329
Total comprehensive income	676	850	749	899

2. Operations

By the end of 2020-21, on the lower base of the Covid-19-led pandemic, economists and corporates alike anticipated a robust growth given the visibility of multiple green shoots in forthcoming quarters of 2021-22. However, in April-May 2021, the pandemic re-erupted like a tsunami wave in several countries across the globe. The vaccination rate fairly aided in controlling casualties, however the anticipated growth in recoveries seemed doubtful even in geographies where infections seemed to be contained. Apart from human life, there were signs of extreme social and economic challenges accompanied with lockdowns all across the world.

During the financial year under review, commodity prices saw unabated increase quarter-on-quarter, causing inflationary rates to reach pre-pandemic level. Additionally, the container freight rate saw a sharp escalation amid the global trade disruptions that widened the supply-demand gap owing to the pandemic. Supply disruptions posed another trial in operations across the industry. The pandemic and climate concerns resulted in shortages of key inputs and dampened manufacturing activities in numerous countries. Supply shortages and the rise in commodity prices caused consumer price inflation to increase rapidly across the world economy.

Amidst various mutations of Covid-19 variants, supply-chain and commodity price increase concerns, the global economy face another potentially enormous broad-based supply shock. The Russia-Ukraine conflict, the steady roll-out of sanctions by the West against Russia, and some retaliatory measures by Moscow led to a new era of economic conflict-the implications of which appear to extend well beyond the short-term repercussions of commodity prices and inflation initiated by the surge in oil prices.

The IMF (International Monetary Fund) has downgraded both Global and India GDP projection to 3.6% from 4.4% in 2022, and from 9% to 8.2%, for 2022-23 owing to the spillover impact of war, tightening monetary condition in several countries, and frequent lockdowns in China affecting supply shortages.

Similar to lockdown in Q1 of 2020-21, the peak season of Unitary Cooling Business was affected for a second time in a row in 2021-22, especially for the Room Airconditioners. However, the strength of the brand, Voltas and its enviable distribution network shone through rest of the quarters. Favorable climatic conditions in the North and Central regions, helped the business to make a recovery of the sales lost during the peak season. The Company ended the year with a growth of 16% as compared to the previous

year, the performance being backed by pent-up demand and channel partner eagerness to secure their share of market amidst ongoing fears of supply chain disruptions and price escalation.

Appropriate focus by the Company on the Inverter sub-category with competitive pricing and larger number of SKUs has yielded a favourable outcome - Inverter growth in FY22 was ahead of the previous year and now contributes over 74% of Split ACs sold during entire year, compared to 69% last year.

The Commercial Refrigeration Products business registered a stellar growth due to increase in demand and change in food habits, largely driven by beverages and ice cream products in tier 3 and tier 4 cities and higher participation from OEMs engaged in chocolate, beverages and Ice cream products.

Substantial build-up of Air Cooler inventory with trade, due to lockdowns especially duing the seasonal period continued to impact the performance of the Air Cooler vertical.

With opening up of commercial places and focus on retrofit jobs, the Company''s Commercial Airconditioning (CAC) business reported good growth in turnover along with retention of the customers with attractive after sales offerings.

Unlike the situation in 2020-21, construction activities were allowed providing relatively better access to the project sites, both domestic and international. Albeit, erratic weather conditions and non-availability of required labour kept the growth under pressure during the year under review. Weakened sentiments of delay in announcement of Capex plans by potential clients across the operational geographies, coupled with the Company''s cautious policy and diligent choice of orders translated into subdued but high-quality order booking during the year.

The Engineering Products and Services comprising the Textile Machinery business as well as Mining & Construction Equipment business performed better.

Nevertheless, given the difficult times and circumstances, the Company has sustained its turnover and profitability and grew over previous year. Consolidated total income from operations reported at '' 8,124 crores, as compared to '' 7,745 crores last year achieved growth of 5%. Profit before share of profit/ loss from joint ventures and associates was '' 808 crores (Previous year: '' 770 crores) and consolidated Profit before tax was at '' 697 crores as compared to '' 709 crores last year.

The Company''s balance sheet continues to remain healthy. Minimal borrowings are availed, primarily for the overseas operations. Operational cash flow during the first six months were weak given the context of the lockdown and AC sales lost out in the peak season. However, recovery of product sales in later months and focus on collection in the project business, strengthened the cash flow by end of the year.

There were no material changes and commitments between the end of the financial year to which the financial statements relate, and the date of this Report that affected the financial position of the Company. There was no change in the nature of the Company''s business.

3. Covid-19: impact on Business Operations

Multiple variants of Covid-19 led to an unprecedented health crisis and disrupted economic activities and global trade, severely. The pandemic has been continuously posing new and myriad challenges upon the world economies.

As the world was taken over by the second and the third wave of Covid-19 in 2021-22, the immediate priority at Voltas was to ensure the safety and health of its employees. The second wave was far more severe and resulted in more fatalities. The Company, in consultation with the Tata Group, worked relentlessly to provide support to Covid-19-affected families and reached out to them, wherever possible.

The Company launched extensive Covid-19 vaccination drives across all geographies and ensured that all employees receive both the doses. The Company also arranged vaccines for the family members of its employees.

The second and third waves affected many aspects of the Company''s operations and also brought along several changes in market conditions. This was primarily due to State induced lockdowns that disrupted operations and supply chain partially or even fully in some cases. Voltas, however, continued to focus on running operations safely and efficiently to their best abilities and ensured minimum impact to its customers.

4. Reserves

An amount of '' 20 crores was transferred to the General Reserve out of the Profit available for appropriation.

5. Dividend Distribution Policy

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations''), the Board of Directors of the Company has adopted a Dividend Distribution Policy (''Policy'') based on the need to balance the twin objectives of appropriately rewarding the Company''s shareholders with dividend, and of conserving resources to meet its future requirements. The Policy is attached to this Report as Annexure I, and the same is also available on the Company''s website at https://www.voltas.com/images/_ansel_ image_collector/DIVIDEND_DISTRIBUTION_POLICY_1.pdf.

6. Dividend

Based on the Company''s performance and keeping in mind the shareholders'' interest, the Directors recommend a dividend of '' 5.50 per equity share of '' 1 each (550%) for the year 2021-22 (2020-21: 500%). The dividend would result in a cash outflow of '' 182 crores, reflecting pay out of 31%, in line with the Company''s Dividend Policy.

The dividend on equity shares is subject to the Shareholders'' approval at the 68th Annual General Meeting (''AGM'') scheduled to be held on 24 June, 2022. The Register of Members and Share Transfer Books of the Company will remain closed from 11 June, 2022 to 24 June, 2022 (both days inclusive) for the purpose of payment of the dividend for the year ended 31 March, 2022, and the AGM.

7. Finance

Industry across length and breadth of the globe witnessed steep escalation in input prices, leading to an overall reduction in the margins. Further, supply chain disruptions were also a cause of concern. However, the Company due to its prudent and effective approach managed its financial resources efficiently. On one hand, cash reserves were systematically nurtured to ensure adequate liquidity to ride out potential disruptions and on the other hand, Voltas retained its capacity to fund its future growth ambitions comprehensively.

The minimal borrowing in the Company''s balance sheet represents fund-based borrowings for overseas operations - domestic borrowing being largely confined to non-fund-based facilities. Meanwhile, an external rating agency reconfirmed the credit rating of AA for the long-term and A1 for short-term borrowing for third time in a row. Thus, helping the Company avail banking facilities at competitive rates.

Similar to the industry, the Company''s working was also impacted by the growing commodity prices. The price hike and subsequent lag in pass through of the cost to customers was slowed down by resilient consumer recovery, amidst emerging concerns of the evolving Covid-19 variants. Further, pressure led by Russia-Ukraine war and increase in fuel cost kept the operations under stress. Despite this, a well-established distribution network, relationships with the vendors and planned strategy to procure helped to keep a tight rein on working capital. The tight control on the working capital along with value engineering and various cost saving initiatives helped to contain the impact on margins while also generating cash surplus during the year.

During the year, following the directions by Government''s initiative on Atma Nirbhar Bharat, to reduce import dependencies and to balance supply chain, the Company has made an application in Government-led Production Linked Incentive (PLI) scheme, with a committed investment of '' 100 crores for manufacture of various components, such as heat exchangers, plastic component, and cross flow fans, among others. Further, as a step forward towards self-sustainability, a separate application has been made under the category of AC components for a committed investment of '' 350 crores for manufacturing of inverter compressors for Room Airconditioners, through a separate proposed joint venture company.

I n the Project business, over '' 2,000 crores of new orders were added in the domestic and international markets, providing suitable revenue visibility in the periods ahead. Compared to certain legacy orders, the intrinsic quality of the new orders has improved as a result of additional due diligence, risk identification and mitigation, apart from higher bid margins. The carry-forward order book (including taxes and Letter of Intent, wherever applicable), for domestic projects at '' 3,638 crores comprised orders across Water, HVAC, Rural Electrification and Urban Infra-activities and the international order book of '' 1,722 crores represents MEP work, mainly in the UAE, Qatar and Oman. Better execution of running projects and improved cash collection, reduced the impact of the pandemic and helped the Projects business segment post a growth in turnover and results for the year.

With an eye on sustained profitable growth, while enhancing focus on both B2C and B2B verticals, the Board, had in 2020-21, approved the transfer of its domestic B2B businesses to its wholly-owned subsidiary. Accordingly, B2B business relating to MEP/HVAC and Water projects, Mining and Textiles are proposed to be transferred to a wholly-owned subsidiary of Voltas Limited, Universal MEP Projects & Engineering Services Limited (''UMPESL'') (formerly known as Rohini lndustrial Electricals Limited), by slump sale through a Business Transfer Agreement executed on 24 March, 2021. The proposed transfer of businesses is subject to satisfaction of certain Conditions Precedent to the Closing Date. As consents for novation of some contracts, especially with Government Clients had been delayed, beyond expectations, the Management is targeting consummation of the BTA on or before 30 June, 2022, or such other date as may be mutually agreed between the Company and UMPESL.

Despite uncertainty looming around Covid-induced restrictions, Voltbek , the Joint Venture company for White Goods achieved substantial growth in sales volume of over one million units (all product categories) during the year under review. The manufacturing plant of Voltbek at Sanand also completed its second year of manufacturing activities. After the successful launch of Direct Cool Refrigerator, Voltbek has commenced manufacturing of Frost Free Refrigerators (upto a certain literage). Further, under the back-drop of Make-in-India initiative and to leverage on the potential savings over the high value-added products, Voltbek has also installed a production line for fully-automatic washing machines from its Sanand facility. This initiative of in-house manufacturing shall help the brand to introduce more customer centric products, helping in optimising the working capital and other cost savings associated with it.

The year 2021-22 witnessed bond yields moving range bound during first half of the fiscal year, aided by ample surplus liquidity, regular interventions by RBI and lower than expected market borrowings by the Central Government. Yields hardened substantially in the second half, driven by elevated CPI, strong recovery, sustained global inflation and rise in yields in AEs along with reduced RBI''s intervention. Further, steps taken by RBI towards policy normalisations (introduction of Variable Rate Reverse Repo (VRRR), market sale of securities, buy/sell forex swaps) and higher than expected market borrowings for 2022-23 by Central Government put upward pressure on the yields. The Company''s investment policy considers the three allimportant aspects of safety, security and liquidity, in consonance to which, it currently has investments of over '' 2,300 crores (mutual funds, debentures and bonds).

Exchange rates were fairly volatile during the year under review, led by multiple factors such as oil price increase, the US yield movements, multiple interventions by Central banks of various countries across the globe and towards the end of the year war-related disruption. Voltas has a well defined forex policy, based on which currency exposure was continuously monitored to hedge forward risk in a timely and efficient manner. Earnings from the Company''s overseas projects in the Middle-East, and Mining support activities in Mozambique also serves as a natural hedge against exchange volatility.

Despite all the ramifications of the pandemic, the Company''s total income for 2021-22 at '' 8124 crores was higher than that of the previous year. At the PAT level, the Company was marginally lower than the previous year at '' 506 crores. Voltas ended the year with an Earnings per Share of '' 15.23 (Face Value per share of '' 1).

8. Tata Business Excellence Model (TBEM)

The Tata Business Excellence Model (TBEM) Assessment process has been critical in strengthening the strategic and operational capabilities of Tata companies. Voltas has benefited by adopting the concepts of TBEM for more than two decades.

Based on the outcome of the External TBEM and Data Excellence Assessments, the Company has developed and implemented rigorous action plans to take its business excellence journey forward. This is done by setting a benchmark through the processes with companies within and outside the Tata Group.

Voltas was recognised and conferred by the Tata Business Excellence Group with the ''Top Contributor Award - Tata Best Practices Programme (Maximum Number of Best Practice Sharing Sessions Conducted) 2021'' at the Annual Business Excellence Convention (BEC) 2021 on 14 December, 2021.

The Company organises ''Best Practice Learning Programs/ Missions'' with other Tata companies to learn/share on key areas like Strategic Planning Process, Customer Complaint Management, Salesforce process, and Competitive Intelligence.

Voltas has transformed its Quality Assurance focus and strengthened its Quality approaches by implementing robust processes and developing a Central Quality Assurance structure backed by an online knowledge management repository.

The Company is continuously driving improvement programs through tools like 5S, Kaizen, CIP Projects and Process Simplification and Improvement initiatives at business units and manufacturing plants. The manufacturing plants have improved in 5S levels and have successfully implemented 40 Best Kaizen improvements, achieving results in productivity, space and inventory optimisation, improvement in order execution, on-time delivery, quality, safety, and the environment.

I n 2020-21, the Company had participated in the ''Making Customers Smile'' contest organised by the Customer Centricity and Marketing Team of Tata Sons. ''Creation of Covid Care Facilities'' from Infra Solutions business vertical of the Company was recognised as one of the Top 3 winners. In 2021-22, the Company participated, and ten entries have been selected for the final round. The evaluation process is yet under progress.

To promote a culture of innovation, the Company has participated in Tata Ideas'' monthly eHackathons, covering areas such as reducing water consumption in air coolers, flexible indoor to outdoor AC refrigerant pipe connectors, spare-parts management inventory optimisation, and effective monetisation of IoT-based Remote Monitoring System for chillers. The Company has received innovative ideas for solution implementation.

The Company also participated in Tata InnoVista - a Tata Group level contest to recognise and celebrate innovation. Voltas registered 12 entries in the TATA InnoVista 2022 cycle during the current year and is awaiting the results.

9. iT initiatives

I n the face of repeated waves of the Covid-19 pandemic and multiple lockdowns during 2021, Work-from-Home (WFH) and a hybrid work culture became the new norm. Voltas'' response to these changing needs was quick, and multiple initiatives were launched to provide an enhanced experience to the consumers. The process was further strengthened to enable remote support for a smoother transition with minimal work disruption. The Company made constant improvements to the IT infrastructure and security. Voltas successfully completed the Vulnerability Assessment and Penetration Testing (VAPT), and also enhanced the Web Application Firewall (WAF) and NextGen EDR. In order to ensure seamless connectivity and remote collaboration, the Company introduced IT capacity

and version upgrade initiatives such as expansion of the Storage Area Network (SAN) storage capacity of servers, along with the backup capacity of Data Center and Disaster Recovery (DR) Servers, increasing the internet bandwidth across all offices, upgrading active directory and Simple Mail Transfer Protocol (SMTP) servers. Thereon, providing an advanced solution for fast backup restoration.

Applications and Digital

During the year under review, the Company witnessed various re-organisations in the Products and Infra Solutions businesses. The Company''s IT team ensured configuration of all systems and applications in line with the Company''s new structure. Voltas launched its own E-Commerce portal (www.voltaslounge.com), and new initiatives were undertaken for E-Procurement and Human Capital Management. Various functionalities such as online payment integration, channel partner financing, consumer finance integrations, AMC Renewal Alert, and Organisational Structure restructuring for Universal MEP Projects & Engineering Services Limited (UMPESL) were some of the projects undertaken in Siebel and SAP. With the changing IT dynamics and demands, the Company increased its emphasis and focus on digitalisation. IT Asset Management System, Safety Portal enhancements, Technician Safety App, CRM enhancements were some of the key initiatives on Web. New processes were added using Analytics and Robotic Process Automation (RPA), integrated with cutting-edge third party systems. Analytics platform was extended for new business units and new interfaces were added with banks, partners (like Tata Cliq), and external applications (like Optiexim, Delhivery, among others). Collectively, all the work and developments during the year played a critical role in enhancing further business advantage, customer delight and in securing the digital environment of the organisation.

10. Safety and Health

At Voltas, the belief is that ''Safety is a journey and not a final destination''. The Company embarked this journey on September 2019 with an aim to imbibe ''safety as a culture''. The Company has successfully achieved the milestones set and aim at sustaining the changes in the long term. The Company has extended safety to cover the occupational health, industrial hygiene and environmental aspect, rigorously.

It was the strategic direction of the Board to bring changes in the safety culture, which was incorporated through a five years'' plan - split into a three-phase action plan namely: Immediate Action Plan (September 2019 to March 2020), Intermediate Action Plan (April 2020 to March 2022) and Long-term or Sustainability Action Plans (April 2022 to March 2025). ''Vol-ty'', the Safety mascot, has been used for all Safety-Health-Environment (S-H-E) related communications and has played a key role in the successful implementation of all the phases. The improvement efforts have given tangible results, monitored by 3-tier committees, S-H-E Committee of the Board, a Steering Committee comprising the Corporate Management Group and Corporate SHE Committee.

â¢ The Company ensured 100% sustainable implementation of the Intermediate Action Plan. Safety reviews are conducted through Corporate SHE Committee, Business SHE Committee, and Project SHE Committees.

â¢ In the second phase, the Company reinforced training of the Top Management and Business Unit (BU) Heads. Two sessions were conducted as part of the Business Centric Safety Leadership programme, for the Senior Leadership Team, BU Heads and Project Directors/Project Managers. Regular campaign on ''road safety'' and ''working at height'' was carried out, safety leadership audits were conducted by the Senior Management during site visits, safety specific reward and recognitions have been initiated. The Managing Director and CHRO along with the SHE Head meet the Safety managers on a quarterly basis. Certification audit of ISO 9001, ISO 14001 and ISO 45001 for UMPESL and ISO 14001 and ISO 45001 for Water Business segment was conducted successfully besides the surveillance audit ofInteg rated Management System (IMS) at the Pantnagar and Waghodia plants. The Company launched the safety portal for hazard and incident reporting - through web, mobile app and QR code options, alongside a platform for vendor''s management, contractor safety management software, visitor''s management system and software for UPBG Service technician tracking. Safety model sites have been established in each Region for all businesses. With respect to the trainings conducted, 76% employees have

completed mandatory safety training through the Handy Train App. In order to ensure consistency and resilience of Safety controls, 245 major projects and offices were audited, with a weighted score on the Tata Group Safety Standards compliances. This was in addition to the regular safety inspections and audit of sites, manufacturing units, customer care premises, offices and warehouses. To increase the participation, the Company also organised safety events such as the ''World Environment Day'' and ''National Safety Day'' across all its locations. The event comprised virtual training programmes, various competitions and winners were recognised by the Management. Employees at all levels were recognised and appreciated by the Management for ''Best Safety Performance'' at work.

â¢ Effective implementation of the vendor management process was achieved wherein contractors/ vendors conducted evaluations on ''Safety, Health and Environment'' prior to issue of work order or purchase order. The Company also successfully implemented the Contractor Safety Management (CSM) software wherein contractor information related to safety performance, machines, equipment and tools inspection records are maintained and tracked. To enhance communication and interaction with contractors, Voltas conducted Safety Health and Environment conclave in Kolkata, Chennai and Bhubaneswar, where a total of 304 contractors from various businesses participated.

â¢ The Company has received many appreciation certificates and awards in India and overseas for enhancing the Safety Standards. The Company also achieved the HSE Excellence Gold Award 2021 by Occupational Health Safety & Sustainability Association India (OHSSAI) for Digital Safety Excellence Centre at Beed, under the ''Construction'' category. Various clients like Maharashtra State Electricity Distribution Company Limited have recognised Voltas for the continual improvement and excellent performance in ''Occupational Health, Safety and Environment'' at electrical sites, including appreciation from Tata Projects, UTI Mumbai for demonstration of Best Safety Performance at Customer Air Conditioning services, Safest Contractor (2021-22) from Tata Center,

and appreciation from Duhai Depot Ghaziabad for Best Safety Performance. The Management also recognises and appreciates the best performers in S-H-E at all levels on a monthly/quarterly and annual basis, resulting in enhanced morale and proactive participation by employees in the implementation of long-term action plan to create and sustain safety culture across the organisation.

â¢ Further, amid a competitive environment, the focus is primarily on upgrading the speed, scale, quality and S-H-E aspects beside enhancement of business partners'' capabilities.

11. Sustainability Development

Giving back to the community lies among Voltas'' top priorities. All its interventions in the form of social development are need-based, sustainable in nature and also caters to the lowest sections of the society. Affirmative Action is a common thread for all the CSR initiatives undertaken by Voltas. The CSR framework has been designed based on the Tata Ethos and priority community need. Time and again, the Company reviews the relevance of the thrust areas defined in the framework, and makes suitable amendments. There are three verticals in the framework: (a) Sustainable Livelihood - deals with skilling and employability building for marginalised youth and women; (b) Community Development - emphasises on issues like quality education, health and water; (c) the third vertical deals with Issues of National Importance like disaster management, affirmative action, and sanitation. Voltas CSR works with an approach to Engage, Equip and Empower. The Company believes in ensuring participation and ownership of the communities, and equips them with necessary knowledge and skills. Thereon, facilitating community empowerment. With every passing year, the Company has strengthened its CSR interventions for optimal impact.

Sustainable Livelihood

Voltas believes that Skill Development and Employability Enhancement are the essential building blocks to empower the marginalised youth. The Company has adopted this as its flagship programme with an objective to promote sustainable livelihood and economic development -through youth employment, education and training.

The Company offers technical courses in Room Air Conditioning (RAC), Central Air Conditioning

(CAC), Plumbing and Electrical. These courses are industry-oriented and relevant to market requirements. They place emphasis on hands-on-training in well-equipped laboratories, on-the-job training in real-life situations, soft skills, customer care and safety. The content of these well-designed courses is developed by experienced Subject Matter Experts from Voltas, leveraging the Company''s domain expertise. In non-technical space, the courses offered include BFSI (Banking, Finanical Services and Insurance), Retail, IT-enabled services, Tally and Accounting, Nursing Assistant and Tailoring. Since 2002, Voltas has trained over 19,000 youth through its technical and non-technical programmes.

Recognition of Prior Learning (RPL) programme helps the existing workforce with skill upgradation and certification. This initiative is positively impacting work efficiency, productivity and income of the existing unskilled and semi-skilled technicians. Over 15,297 existing RAC/CAC technicians have been formally trained and certified under the RPL programme.

Through 28 Skill Development Centres across 13 States in India, the Company is creating a shared value which converges the aspirations of the community and the requirements of the industry, to create a win-win situation for all.

The Company also aims at sharing domain expertise with various stakeholder groups including trainers from ITIs and other private organisations, to help the RAC industry with knowledge and expertise, backed by a rich experience of over six decades.

Community Development

This thrust area essentially focusses on priority community needs like Education, Health and Water.

Voltas supported a Cancer Care Hospital which is being established in Tirupati, in terms of procurement of medical equipment.

Voltas has developed educational facilities for physically-challenged students, like laboratories, IT labs, water filters and more. Nutritional support was provided to tribal children in Maharashtra, and an organisation was supported with vehicles, for providing mid-day meal to children in Uttarakhand.

The Company supported integrated development programme for the Mushar Community - a Dalit community found in the eastern Gangetic plains. They are mostly landless agricultural labourers and among the most marginalised castes in India.

Voltas extended support to an old-age home in Baroda and a zoological society in Jamshedpur which were impacted by the outbreak of Covid-19.

Endeavouring to protect the national heritage, art and culture, Voltas supported a Museum of Art and Photography in Bangalore. This five-storied building will include art galleries, auditorium, library, education centre and research facility, with a strong focus on accessibility.

Book reading needs to be conserved in the digital era. Voltas provided 110 libraries across India with several books on art and culture by extending financial support to Marg Foundation.

Voltas also extended support to the Armed Forces, towards the welfare of the ex-servicemen.

issues of National importance

This thrust area was conceived to ensure that the Company supports the social issues, not only limited to the operational areas but also areas of national importance. The three sub-themes are: (a) Disaster Management (b) Sanitation (c) Affirmative Action for Schedule Caste and Schedule Tribe communities.

The Covid-19 pandemic left the country in desperate need of upgrading medical infrastructure within limited and less timeframes. Voltas made efforts towards resolving these concerns and supported the Government in availing charitable healthcare machinery with oxygen concentrators and Covid-19 relief material.

I nitiating proactive measure towards drought mitigation, Voltas has been implementing Participatory Ground Water Management and Sustainable Agriculture Project in six villages of the Beed district in Maharashtra.

In 2021-22, interventions in the following areas were undertaken by the Company: water resource development, sustainable agriculture, capacity building of farmers, formation and strengthening of local institutions. The interventions benefited around 3200 individuals including small and marginal farmers, women and youth in the project villages.

In order to sensitise and train the community in improving water productivity and to follow regulatory norms about water usage, water level indicators were installed at identified wells, in line with the recharge and discharge areas at 12 strategic locations. A total of 36 training programmes were conducted on integrated pest management and integrated nutrient management for major crops, such as soybean and cotton. Over 1,100 farmers benefited from these trainings. Village Water Committees are established for each project village. Trainings are conducted to strengthen and enable them to act as an apex body for the planning, implementation and monitoring of water and agriculture-related activities in the village.

A total of 586 families were directly benefited from the area treatment under the water conservation initiatives. This will also benefit 557 hectares of land through recharging of dug wells and bore wells, and higher water availability in streams and public percolation tanks. In the long run, this will create increased livelihood opportunities.

Voltas is implementing Integrated Sanitation Project in Waghodia (near Vadodara), in partnership with Tata Trusts for (a) Household Toilets (b) School Sanitation (c) Solid Waste Management (d) Menstrual Hygiene Management. The Project is being implemented in 10 villages around the Voltas Waghodia Plant. It emphasises on community participation and convergence with Government programmes and schemes.

12. Corporate Social Responsibility (CSR)

Disclosure as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014, in prescribed form is enclosed as Annexure II to the Directors'' Report.

During 2021-22, the Company spent '' 12.94 crores towards various CSR activities, in line with the requirements of Section 135 of the Companies Act, 2013 (''Act''). Details of the composition of the CSR Committee and Meetings held during 2021-22 are disclosed in the Corporate Governance Report.

13. consolidated Financial statements

The Consolidated Financial Statements of the Company and its subsidiaries for the year 2021-22 are prepared in compliance with the applicable provisions of the Act and as stipulated under Regulation 33 of the Listing Regulations, as well as in accordance with the Indian Accounting Standards notified under the Companies

(Indian Accounting Standards) Rules, 2015. The Audited Consolidated Financial Statements, together with the Auditor''s Report thereon, forms part of this Annual Report.

14. Subsidiary/Joint Ventures/Associate Companies

As on 31 March, 2022, the Company had 9 subsidiaries (direct and indirect), 5 joint ventures and 1 associate company. During the year under review, two 100% wholly-owned subsidiaries were established: Hi-Volt Enterprises Private Limited in India and Universal MEP Projects Pte. Limited (Universal) in the Republic of Singapore. Universal is a 100% wholly-owned subsidiary of Voltas Netherlands B. V. - a wholly-owned subsidiary of the Company in the Netherlands.

The Policy for determining material subsidiaries of the Company is also provided on the Company''s website at https://www.voltas.com/images/_ansel_image_collector/ DETERMINING_MATERIAL_SUBSIDIARY_POLICY_1.pdf

Presently, the Company does not have any material subsidiary.

Performance of key operating subsidiary and joint venture companies in India are given below:

â¢ Universal MEP Projects & Engineering Services Limited (UMPESL) (formerly known as Rohini Industrial Electricals Limited), a wholly owned subsidiary of the Company, is engaged in the business of rural electrification work and EPC projects related to solar power. UMPESL has reported turnover of '' 397 crores and profit before tax of '' 12 crores in 2021-22 as compared to '' 323 crores and '' 18 crores respectively, in the previous year.

â¢ Voltbek Home Appliances Private Limited (Voltbek), the joint venture with Arcelik A.S. for Consumer

White Goods has reported turnover of '' 944 crores as compared to '' 637 crores in the previous year. Voltbek has achieved a sales volume of over 1 million units (all product categories) in 2021-22. Voltas as one of the main shareholders (49%) has provided funds in the form of capital infusion and similar capital contribution is also made by the foreign JV partner. The paid-up capital of Voltbek as on 31 March, 2022 was '' 1027.01 crores. During 2021-22, the Company invested '' 93.10 crores in the share capital of Voltbek and the Company''s total investment in Voltbek (49% share) was '' 503.23 crores.

Except as mentioned above, there have been no material changes in the nature of the business of the subsidiaries, including associates and joint ventures during 2021-22.

The following companies have ceased to be subsidiary/ associate of the Company:

â¢ The name of Auto Aircon (India) Limited (AAIL), a dormant wholly-owned subsidiary of the Company, has been struck-off from the Register of Companies with effect from 8 September, 2021 based on an application made to the Registrar of Companies, Maharashtra, Pune. Accordingly, AAIL has ceased to be a subsidiary of the Company.

â¢ Due to losses suffered by Terrot GmbH, an associate company in Germany, in the last few years, its Net Worth was fully eroded and was negative. Terrot had therefore undertaken a capital restructuring plan, by implementing reduction of its existing capital to zero and raised new capital by fresh infusion from its existing shareholders. As Voltas did not subscribe to the new capital, it ceased to be a shareholder (20.07% shareholding) with effect from 12 November, 2021. The Company''s investment of '' 1.56 crores in Terrot had been earlier impaired and therefore there was no P&L impact due to reduction of capital of Terrot.

15. Number of Board Meetings

During 2021-22, eleven Board Meetings were held on

15 April, 2021; 26 April, 2021; 12 May, 2021; 19 July, 2021; 6 August, 2021; 20 August, 2021; 11 October, 2021; 29 October, 2021; 20 January, 2022; 11 February, 2022 and

16 March, 2022. Most of the Board Meetings were held through video conferencing.

16. Policy on Directors'' Appointment and Remuneration, including criteria for determining Qualifications, positive attributes, independence of a director

Based on the recommendation of the Nomination and Remuneration Committee (NRC), the Board has adopted the Remuneration Policy for Directors, KMPs and other employees. NRC has formulated the criteria for determining qualifications, positive attributes and independence of an Independent Director, alongside the criteria for Performance Evaluation of individual Directors, the Board as a whole and the Committees. The Company''s Policy on Directors'' appointment and remuneration, and other matters provided in Section 178(3) of the Act is disclosed in the Corporate Governance Report, which is a part of the Annual Report and is also available on https://www.voltas. com/images/_ansel_image_collector/DISCLOSURE_OF_ REMUNERATION_POLICY_FOR_DIRECTORS.pdf

17. Evaluation of performance of Board, its committees and directors

Pursuant to the provisions of the Act and Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Board carried out an evaluation of its performance, Committees and individual Directors. The performance of the Board as a whole, Committees and individual Directors was evaluated by seeking inputs from all Directors based on certain parameters as per the Guidance Note on Board Evaluation issued by SEBI such as: Board structure and composition; Meetings of the Board in terms of frequency, agenda, discussions and dissent, if any, recording of Minutes and dissemination of information; Functions of the Board, including governance and compliance, evaluation of risks, stakeholder value and responsibility, Board and Management, including evaluation of the performance of the Management. The Directors also made their self-assessment of certain parameters - attendance, contribution at meetings and guidance/support extended to the Management. The feedback received from the Directors was discussed and reviewed by the Independent Directors at their separate Annual Meeting held on 15 March, 2022, and also shared with the NRC/Board. At the separate Annual Meeting of Independent Directors, the performance of Non-Independent Directors, including the Chairman, Board as a whole and various Committees was discussed. The Independent Directors in the said meeting also evaluated the quality, quantity and timeliness of the flow of information between the Management and the Board, that is necessary for the Board to effectively and reasonably perform their duties. They expressed their satisfaction in respect thereof. The performance of the individual Directors, performance and role of the Board/ Committees was also discussed at the Board Meeting held on 5 May, 2022. The performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

18. statutory auditors

2021- 22. The Auditors'' Report for 2021-22 does not contain any qualifications, reservations or adverse remarks, except for Key Audit Matters.

Pursuant to the provisions of Section 139 of the Act, read with the Companies (Audit and Auditors) Rules, 2014, and based on the recommendations of the Audit Committee, it is proposed to reappoint SRBC as Statutory Auditors for a second term of five years from the conclusion of 68th AGM till the conclusion of 73rd AGM of the Company to be held in the year 2027, to examine and audit the accounts of the Company for the financial years between

2022- 23 and 2026-27. SRBC have, pursuant to Section 139 of the Act, provided written consent and furnished a certificate regarding their eligibility for re-appointment.

Resolution seeking Members'' approval for the reappointment of SRBC as Statutory Auditors of the Company forms part of the Notice of 68th AGM of the Company.

19. cost auditors

The Company has maintained the accounts and cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013. The Board had appointed M/s. Sagar and Associates, Cost Accountants as the Cost Auditors for 2021-22, and they have been reappointed as Cost Auditors of the Company for 2022-23. Approval of the Members is being sought for ratification of their remuneration at the ensuing AGM.

20. Secretarial Auditor

M/s. N. L. Bhatia and Associates, the Practicing Company Secretaries were appointed as Secretarial Auditor to undertake the Secretarial Audit of the Company for the year 2021-22. Their Secretarial Audit Report, in prescribed Form No. MR-3, is annexed to the Directors Report as Annexure IV, and does not contain any qualification, reservation or adverse remarks. M/s. N. L. Bhatia and Associates have been re-appointed as the Secretarial Auditor for 2022-23.

21. Audit Committee

The Audit Committee comprises Mr. Zubin Dubash (Chairman), Mr. Debendranath Sarangi and Mr. Arun Kumar Adhikari, all Independent Directors, in line with Section 177 of the Act. The Board accepted the recommendations made by the Audit Committee from time to time. Details of Audit Committee Meetings held during the year 2021-22 are disclosed in the Corporate Governance Report.

22. internal Financial Controls

The Internal Financial Controls (IFCs), its adequacy and operating effectiveness is included in the Management Discussion and Analysis, which forms part of this Report. The Auditors Report also includes their reporting on IFCs over Financial Reporting.

23. Reporting of Fraud

No instances of fraud were reported by the Auditors under Section 143(12) of the Companies Act, 2013.

24. Risk Management

Pursuant to Section 134(3)(n) of the Act and Regulation 21 of Listing Regulations, Risk Management Committee was in place, comprising Mr. Zubin Dubash (Chairman), Mr. Debendranath Sarangi and Mr. Arun Kumar Adhikari. The Company has formulated a Risk Management Policy to establish an effective and integrated framework for the Risk Management process. During 2021-22, three Meetings were held on 12 August, 2021, 10 November, 2021 and 19 January, 2022, wherein, the top 10 risks and relevant mitigation measures identified for the Company were reviewed and discussed. The Company has appointed E&Y to carry out an Enterprise Risk Management (ERM) study of Voltas, and their work is in progress.

25. particulars of Employees

The information required under Section 197 of the Act, read with Rule 5(1) of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014, are given below:

(a) The ratio of each Director''s remuneration, to the median remuneration of the Company''s employees for 2021-22:

directors	Ratio to Median Remuneration
Mr. Noel Tata	0.68
Mr. Vinayak Deshpande	0.58
Mr. Debendranath Sarangi	4.47
Mr. Bahram N. Vakil	5.56
Ms. Anjali Bansal	5.34
Mr. Hemant Bhargava (upto 29 September, 2021)	*
Mr. Arun Kumar Adhikari	4.47
Mr. Zubin Dubash	5.51
Mr. Saurabh Agrawal	0.52
Executive Director
Mr. Pradeep Bakshi Managing Director & CEO	61.78

* Since the remuneration of Mr. Hemant Bhargava was only for part of the year, the ratio of his remuneration to median remuneration was not comparable, and hence not stated.

Note: Ratio of Remuneration of Directors was computed based on sitting fees paid during 2021-22 and commission paid for 2020-21 in 2021-22. However, in line with the internal guidelines, no commission was paid to Mr. Noel Tata, Mr. Vinayak Deshpande and Mr. Saurabh Agrawal, as they were in full-time employment with another Tata Company. They were paid sitting fees only.

(b) The percentage increase in remuneration of each director, chief financial officer, chief executive officer, company secretary or Manager, if any, in 2021-22:

directors, chief executive officer, chief financial officer and company secretary	% increase in Remuneration in 2021-22 over 2020-21
Mr. Noel Tata	14.81
Mr. Pradeep Bakshi	25.61
Mr. Vinayak Deshpande	47.22
Mr. Debendranath Sarangi	(11.27)
Mr. Bahram N. Vakil	5.87

directors, chief executive officer, chief financial officer and company secretary	% increase in Remuneration in 2021-22 over 2020-21
Ms. Anjali Bansal	5.43
Mr. Hemant Bhargava (upto 29 September, 2021)	*
Mr. Arun Kumar Adhikari	(11.27)
Mr. Zubin Dubash	40.20
Mr. Saurabh Agrawal	*
Mr. Anil George [Chief Financial Officer (CFO) up to 18 July, 2021]
Mr. Jitender P. Verma (CFO w.e.f. 19 July, 2021)	*
Mr. V. P. Malhotra (Company Secretary)	22.03

* Since the remuneration is for a part of the year, the percentage increase in their remuneration is not comparable and hence, not mentioned.

6.42%

(d) Number of permanent employees on the rolls of the company:

2,576 employees.

Average percentile increase in salary of employees other than managerial personnel was 15.73%. Average percentile increase in managerial remuneration was 10.15% in 2021-22 over 2020-21.

(f) affirmation that the remuneration is as per the Remuneration policy of the company:

The Company affirms that the remuneration paid was as per the Remuneration policy of the Company.

(g) A statement containing names of top ten employees, in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the

Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure in this Report. Further, the Report and the Accounts are being sent to the Members, excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection at the Registered Office of the Company. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary. None of the employees listed in the said Annexure are related to any Director of the Company.

26. Employee stock option, sweat Equity and Equity shares with Differential Voting Rights

The Company did not issue any Employee Stock Options, Sweat Equity shares and Equity shares with differential voting rights.

27. conservation of energy, Technology absorption, Foreign exchange earnings and outgo

Information pursuant to Section 134(3)(m) of the Act relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is given as Annexure III to this Report.

28. directors and Key Managerial personnel

In accordance with the provisions of the Act and the Company''s Articles of Association, Mr. Pradeep Bakshi and Mr. Vinayak Deshpande retire by rotation and being eligible, offer themselves for re-reappointment.

Mr. Hemant Bhargava, representing Life Insurance Corporation of India, had tendered his resignation as a Director of the Company with effect from 29 September, 2021. The Board placed on record their appreciation for valuable contributions made by him during his association with the Company.

Mr. Anil George retired as the Chief Financial Officer and Key Managerial Personnel with effect from 19 July, 2021. The Board placed on record their appreciation for the services rendered by Mr. Anil George during his long tenure with the Company. Consequently, pursuant to the recommendations of the Nomination and Remuneration Committee and the Audit Committee, the Board appointed Mr. Jitender P. Verma as the Chief Financial Officer and Key Managerial Personnel of the Company with effect from 19 July, 2021.

Mr. Pradeep Bakshi, Managing Director & CEO of the Company has also been appointed as the Managing Director of Universal MEP Projects & Engineering Services Limited (UMPESL), a 100% wholly-owned subsidiary of the Company for a period of 5 years with effect from 1 April, 2021. Mr. Pradeep Bakshi does not draw any remuneration from UMPESL. No other Director is the Managing or Whole-time Director of any subsidiary of the Company.

At the Sixty-Seventh AGM of the Company held on 27 August, 2021, the Members had approved the re-appointment of Mr. Arun Kumar Adhikari as an Independent Director for a second term of five years with effect from 8 June, 2022.

Mr. Pradeep Bakshi (Managing Director & CEO), Mr. Jitender P. Verma (Chief Financial Officer) and Mr. V. P. Malhotra (Vice President-Taxation, Legal and Company Secretary) are the Key Managerial Personnel (KMPs) of the Company, in line with the requirements of Section 203 of the Act.

29. Declaration by independent Directors

have taken on record the declaration and confirmation submitted by the Independent Directors after undertaking due assessment of the veracity of the same.

The Board is of the opinion that the Independent Directors possess the requisite qualifications, experience, expertise and they hold high standards of integrity.

The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and have also confirmed that their registration with the databank of Independent Directors maintained by the Indian Institute of Corporate Affairs is in compliance with the requirements of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

30. Business Responsibility Report

Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility Report on initiatives taken from an Environmental, Social and Governance perspective, in prescribed format forms part of this Annual Report.

31. corporate Governance

Pursuant to Schedule V of Listing Regulations, Management Discussion and Analysis, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance forms part of the Annual Report. A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the Board Members and Senior Management personnel also forms part of the Annual Report. Code of Conduct and various other policies are available on the website of the Company at the link: https://www.voltas.com/about/corporate-governance

32. details of the Establishment of Vigil Mechanism for directors and employees

collector/WHISTLE_BLOWER_POLICY_1.pdf

33. Particulars of Loans, Guarantees or investments under Section 186 of the Act during 2021-22

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act, as also given in the Notes to the financial statements are given below:

Name of the Entity	Nature of Transaction	particulars of Loan, Guarantees given or investments made during 2021-22			purpose for which the loans, guarantees and investments are proposed to be utilised
Name of the Entity	Nature of Transaction	Loan/ IcD ('' in crores)	investment ('' in crores)	Guarantee ('' in crores)
TMF Holdings Limited	Subscription of debentures	--	50.00	--	General Corporate Purpose
Voltbek Home Appliances Private Limited #	Subscription of Rights equity shares	--	93.10	--	Strategic investment
Tata Projects Limited	Subscription of Rights equity shares	--	79.99	--	Strategic investment
Hi-Volt Enterprises Private Limited*	Subscription of equity shares	--	0.01	--	Strategic investment
Universal MEP Projects & Engineering Services Limited *	Guarantees to Banks	--	--	700.00	Business Purpose, as a collateral.
Voltas Netherlands B.V. *	Guarantees to Banks	--	--	768.56	Business Purpose, as a collateral.
LIC Housing Finance Limited	Inter Corporate Deposit	40.00	--	--	General Corporate Purpose

* wholly-owned subsidiaries

# Joint-venture company

34. particulars of contracts or arrangements with Related parties

During the year under review, the Company did not have any contracts or arrangements with related parties in terms of Section 188(1) of the Act, except for the proposed transfer of domestic B2B businesses to UMPESL and execution of BTA to that effect. However, as the transaction is not yet consummated, the details of such contracts or arrangements in Form AOC-2 does not form part of the Report, as the same is not applicable for the year under review.

35. secretarial standards

The Company has complied with the provisions of Secretarial Standards on Meetings of the Board of Directors (SS-1) and on General Meetings (SS-2).

36. Details of significant and Material orders passed by the Regulators/courts/Tribunal

No significant and material orders were passed by the Regulators or the Courts or Tribunals impacting the going concern status and Company''s operations in future.

37. proceeding under insolvency and Bankruptcy code, 2016

There are no proceedings, either filed by the Company or against the Company, pending under the Insolvency

and Bankruptcy Code, 2016 as amended, before the National Company Law Tribunal or other Courts as on 31 March, 2022.

38. Deposits from public

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the 31 March, 2022.

39. directors'' Responsibility statement

Based on the framework and testing of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors, including audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2021-22. Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, based on the assurance given of the business operations, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and operating effectively; and

(vi) they have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

40. Annual Return

Pursuant to Sections 92(3) and 134(3)(a) of the Act, the Annual Return (Form MGT-7) is available on the Company''s website at the link: https://www.voltas.com/file-uploads/ general/Voltas_AnnualReturns_FormMGT-7_2021-22.pdf

41. Disclosure as per the Sexual Harassment of Women at Workplace (prevention, prohibition and Redressal) act, 2013

42. General

The Notes forming part of the Accounts are self-explanatory or, to the extent necessary, have been dealt with in the preceding paragraphs of the Report.

On behalf of the Board of Directors Noel Tata

Chairman

Date: 5 May, 2022 Place: Mumbai

Mar 31, 2021

Your Directors present their Sixty-Seventh Annual Report and the Audited Statement of Accounts for the year ended 31 March, 2021.

1. Financial Results				'' in crores
	Consolidated		standalone
	2020-21	2019-20	2020-21	2019-20*
Total Income	7,745	7,889	6,598	7,457
Profit for the year after meeting all expenses but before interest, depreciation and exceptional items	830	917	782	905
Interest	26	21	19	9
Depreciation and amortization	34	32	30	29
Profit before exceptional items	770	864	733	868
Share of Profit/(Loss) of Joint Ventures and Associates	(61)	(69)	-	-
Exceptional items (Net)	-	(51)	-	(55)
Profit before tax	709	744	733	813
Tax expenses	180	223	163	218
Profit after tax	529	521	570	595
Other Comprehensive Income (Net)	321	(190)	329	(210)
Total Comprehensive Income	850	331	899	385

* Pursuant to the Scheme of Merger as approved by the National Company Law Tribunal, Mumbai, on 11 September, 2020, Universal Comfort Products Limited, a wholly owned subsidiary company, has been merged with the Company effective 1 April, 2019 (Appointed Date). Consequently, the effect of the Merger has been considered in the above financial results in accordance with Ind AS 103 - ''Business Combinations'' and the stand-alone financial results for 2019-20 presented above have been restated.

2. Operations

It''s been over a year since COVID-19 was declared a pandemic. While multiple levels of lockdowns have been witnessed across the globe, in India, the earlier sense of a successful disease containment no longer exists. The second wave currently being experienced can be described as a tsunami, with greater severity and impact across sections of the society. Human death toll apart, there are signs of extreme social and economic challenges all across the world. The efficacy of vaccines given multiple mutations of the virus remains a question mark, although they hold out the promise of reducing the severity and frequency of infections. On a positive note, there are however several green shoots of gradual recovery from the pandemic, hopefully leading to a stronger rebound, across the length and breadth of the world.

Along with the twist and turns of the pandemic and political tensions, the year also witnessed significant events - North American markets cheered the results of

US elections, Brexit became a reality, and in the Middle East, the US brokered a deal between key Regional players, paving the path for normalised relations. Before India got stuck with second wave, Q4 showed an upliftment in general business and consumer confidence. Manufacturing and Service PMI (Purchasing Manager''s Index) had picked up, GST collections touched an all-time high, Auto sales achieved double-digit growth and Job markets had shown signs of steady recovery. Meanwhile prices of key commodities such as copper, steel, plastics, etc. have increased by around 70%, while sea freight has grown over 3 times.

The IMF (International Monetary Fund) has projected a stronger recovery in 2021 and 2022 for the global economy compared to their previous forecast, with growth projected to be 6% in 2021 and 4.4% in 2022. Projections for India remains buoyant with projected growth of 12.5% in 2021 and 6.9% in 2022. However, the jury is still out as the impact of the second wave

remains rather indeterminate, amidst already stressed Government resources.

Lockdown in Q1, the peak season of Unitary cooling business affected the growth of the AC industry and the Company. However, the strength of the Voltas brand and its enviable distribution network shone through each of the other Quarters, helping the business post a strong recovery both across top and bottom line. Voltas ended the year with a minimal de-growth of 13% as compared to previous year, the performance being backed by pent up demand and Channel partner eagerness to secure their share of inventory amidst fears of supply chain disruptions and price escalation.

Appropriate focus on the Inverter sub-category with competitive pricing and larger number of SKUs has yielded a favourable outcome - Inverter growth in Q4 was 22.5% ahead of the previous year and now contributes over 77% of Split ACs sold in Q4, compared to 70% for the similar period in the previous year. That apart, Voltas continued to maintain a YTD February 2021 market share of 22% in Inverter ACs. In terms of the overall AC market, Voltas continued to retain its undisputed leadership with a YTD February 2021 market share of 25.6% at multi-brand outlets.

Substantial build-up of Air Cooler inventory with Trade, owing to the lockdown which had disrupted the limited seasonal window available for its sale, impacted the performance of the Air Cooler vertical. However, acceptance of fresh SKU models by the market, exports and achievement of a breakthrough with certain key dealers and increasing billing points helped recovery of lost sales. Based on January 2021 exit numbers, Voltas is now at the number two position, having achieved a market share of 10.6%. At the same time, Channel expansion, together with a healthier model mix and greater B2B account focus, helped deliver a stellar performance in the Commercial Refrigeration vertical. Labour shortage owing to multiple lockdowns and demand reduction impacted project business. Given the overall subdued sentiment, there were hardly any fresh investments from the Private sector, and Project completion has continued to remain in limbo amidst serious liquidity concerns. However, the deemed ''essential services'' tag for project activities in Middle East, ensured the pace of existing work and security from the travails of COVID-19. Unfortunately, the Project business continues to experience a client driven propensity to delay certifications, postpone grant of extension of time (EOTs) although contractually entitled, and a tendency to withhold payment against due receivables.

Nevertheless, given the difficult times and circumstances, the Company has performed well and has reported a consolidated total income from operations of '' 7,745 crores, a marginal dip of 2% as compared to '' 7,889 crores last year and a consolidated profit before tax of '' 709 crores as compared to '' 744 crores in previous year.

The Company''s Balance Sheet continues to remain healthy with minimal borrowings which are required primarily for the overseas operations. While operational cash flow during the first six months have been weak given the context of the lockdown and AC sales lost out in the peak season, recovery of product sales in later periods amidst focus on collection in the project business, has strengthened the cash flow by end of the year.

There have been no material changes and commitments, that affect the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate, and the date of this Report.

3. COVID-19: impact on Business Operations

The outbreak of COVID-19 pandemic led to an unprecedented health crisis. It severely disrupted economic activities and global trade while weighing on consumer sentiments. The pandemic has suddenly forced a new way of life for the world to adapt. Voltas judiciously analysed and assessed fundamental ways in which the pandemic altered its operations, highlighting new priorities, capabilities, and outlooks.

As the COVID-19 pandemic began to spread around the world from the end of January 2020, Voltas first ensured the safety and health of its employees. The Company actively gathered COVID-19 related information needed to create awareness and implement appropriate safety measures amongst employees.

The risk-intelligent culture, embedded across the Company, helped develop and adopt a multi-pronged strategy. It effectively helped respond to the evolving pandemic situation. Employees and communities'' health and safety continued being the foremost priority. Voltas focussed on running operations safely and efficiently to service its customers. Further, Handy Train, the Company''s mobile application, was extensively used to create awareness about the safety measures and precautions required to combat COVID-19. Voltas prudently adopted ''Work from Home'' (WFH) policy even before the lockdowns were announced. Employees were provided necessary software to facilitate a smoother remote working experience without any technical interruptions. A virtual meeting room software ''Cisco'' was also set up to ensure smooth functioning of all business

functions. Initiatives like awareness programmes related to COVID-19, technical trainings and programmes at the Voltas'' Virtual Campus in collaboration with SkillSoft (a 24*7 learning platform), among others, helped build a culture of continuous learning despite lockdowns.

The pandemic not only affected many aspects of the Company''s operations, but also brought along several changes in market conditions. Voltas'' operations in the manufacturing and project sites witnessed a temporary suspension. The beginning of the lockdown coincided with Room Air Conditioners (RAC) business'' peak season thereby impacting the performance of the Company. However, the sales gradually picked up with the easing of lockdowns. The business operations in the international markets also suffered with various governments imposing restrictions on business activities.

The Company''s Unitary Cooling Products and Domestic Projects Businesses continued partnering the nation during this period - catering essential services in the healthcare and infrastructure sector. Despite challenges, the Project teams were operational across 260 sites. They continued providing customers with operational, maintenance and breakdown support during this difficult time. Factors like the non-availability of requisite skilled labour, restricted access to job sites and mandatory social distancing norms considerably slowed down the pace of Project work at the beginning of the year. The international operations of M&CE continued progressing fairly, but the domestic operations took a hit due to the pandemic. It caused delays in infrastructure projects and restricted running of mining sites. However, easing of lockdowns and Indian Government''s push on infrastructure projects rejuvenated demand for the same.

The Board of Directors proactively took cognisance of the economy''s slowdown and the liquidity crisis. Cross-functional teams were formed to manage supply chain and iron out logistic-related issues. All these efforts were put keeping the constraints imposed by the lockdown in mind to ensure plant operations as planned. Provisions were made for delay in collection of receivables and various cash conservation methods were also adopted. The Company undertook these measures along with cautious plans on the capital expenditure without impacting the long-term strategic plans.

4. Reserves

An amount of '' 20 crores was transferred to the General Reserve out of Profit available for appropriation.

5. Dividend

The Company''s Dividend Policy which is uploaded on the Company''s website, is based on the need to balance the twin objectives of appropriately rewarding its shareholders

with dividend and of conserving resources to meet its future needs. Based on Company''s performance and keeping in mind the shareholders interest in these difficult times, the Directors recommend a higher dividend of '' 5 per equity share of '' 1 each (500%) for the year 2020-21 (2019-20: 400%). The dividend would result in a cash outflow of '' 165.44 crores, reflecting pay out of 29%, well in line with the Company''s Dividend Policy.

The dividend on Equity Shares is subject to the approval of the Shareholders at the Sixty-Seventh Annual General Meeting (AGM) scheduled to be held on 27 August, 2021. The Register of Members and Share Transfer Books of the Company will remain closed from 13 August, 2021 to 27 August, 2021 (both days inclusive) for the purpose of payment of the dividend for the financial year ended 31 March, 2021 and the AGM.

6. Finance

Despite the significant cost and liquidity pressures exerted by the pandemic, the Company continued with a strong balance sheet and negligible borrowing. On one hand, cash reserves were systematically nurtured to ensure adequate liquidity to ride out potential disruptions. On the other hand, Voltas retained its capacity to fund its future growth ambitions comprehensively.

The minimal borrowing in the Company''s balance sheet represents fund-based borrowings for Voltas'' overseas operations; domestic borrowing being largely confined to non-fund-based facilities. Meanwhile, an external rating agency reconfirmed the credit rating of AA for the long-term and A1 for short-term borrowing, thus helping the Company borrow at the most optimum rates.

While day-to-day business decisions such as procurement of orders or extension of credit in the market is based on a firm understanding of the risks entailed, they are equally underlined by the all-important ability to collect cash. That apart, the difficulties of the current environment further emphasized the organizational need to focus on austerity measures, constantly driving synergy, and keeping a tight rein on working capital. These actions resulted in improved margins for the Company while also generating cash surplus during the year.

Notwithstanding the Company''s best efforts, the disruption in sales, owing to the lockdown in the peak season, resulted in higher-than-expected inventory and overall working capital for the Products segment. However, multiple efforts and initiatives taken by the Company for securing the supply chain helped accrue cost savings and gain flexibility to bounce back during the post lockdown period, especially in the later part of

the year. The year also witnessed a steep increase across commodity prices which were partly passed on to end customers. While product margins were protected, the Company, in tandem, ensured appropriate balance vis-a-vis its competitor offerings, successfully holding and increasing its market share. It is worthwhile to note that despite the lockdown-related loss of sales during the peak season in Q1, Voltas contained its de-growth well below the industry level and continues to be the profitable market leader in the Room Air Conditioner category.

In the Project business, over '' 2,800 crores of new orders were added in the domestic and international markets, providing suitable revenue visibility in the periods ahead. Compared to certain legacy orders, the intrinsic quality of new orders have improved as a result of additional due diligence, risk identification and mitigation, not to mention the higher bid margins suggested by an internal Project Review Committee. The carry-forward order book for Domestic projects at '' 4,200 crores comprised orders across Water, HVAC, Rural Electrification and Urban infra-activities. The international order book of '' 2,435 crores represents MEP work, mainly across UAE, Qatar and Oman. However, execution challenges at the beginning of the year, cautious margin recognition policy and conservative provisioning policy owing to the liquidity stress kept the bottom line somewhat subdued. Despite early challenges, better execution of running projects and improved cash collection, especially in the later part of the year, reduced the impact of the pandemic and helped the Projects business segment post reasonable turnover and results for the year.

With an eye on sustained profitable growth, while enhancing focus on both B2C and B2B verticals, the Board, during the year, approved the transfer of its domestic B2B businesses to its wholly owned subsidiary. Accordingly, B2B business relating to MEP/HVAC and Water projects, Mining and Textiles are proposed to be transferred to Universal MEP Projects & Engineering Services Limited (''UMPESL'') (formerly known as Rohini lndustrial Electricals Limited), by slump sale through a Business Transfer Agreement executed on 24 March, 2021. The proposed transfer of businesses is subject to satisfaction of certain Conditions Precedent to the Closing Date and the Management is targeting 30 September, 2021 as the Closing Date or such other date as may be mutually agreed between the Company and UMPESL. As a step towards strengthening the capital structure of the wholly owned subsidiary (UMPESL), the Company made an investment of '' 150 crores by subscribing to the Rights Equity Shares of UMPESL during the year under review.

Meanwhile, the Manufacturing Plant of the Joint Venture company, Voltbek Home Appliances Private Limited (Voltbek) at Sanand completed its first year of operation. Despite various disruptions and multiple limitations on production and supply chain caused by the COVID-19 pandemic, the factory successfully produced high-quality Direct Cool (DC) refrigerators, which were very well accepted in the market and demonstrated significant demand pull from the trade. While the current emphasis is on maximizing production to meet the increasing demand for DC refrigerators, plans have been drawn to also commence manufacture of Frost-free refrigerators over the coming months, followed by Top load fully automatic washing machines. These measures represent a further step towards localization and strengthening the overall supply chain. To facilitate capital expansion and support the longer-term manufacturing strategy, the Company has made further investment of '' 75 crores during the year, thereby increasing its total investment in the joint venture to '' 410 crores. Simultaneously, the Company continued to aggressively leverage its distribution and other synergies to optimize the cost in line with projections and meet its targets.

The year 2020-21 witnessed significant volatility in the interest rates owing to various measures undertaken by the Central Bank to purposefully infuse market liquidity and keep the economy afloat. These, in turn, had an impact on the average yield of the investment portfolio. The Company''s investment policy considers the three all-important aspects of safety, security and liquidity, in consonance to which, it currently has investments of over '' 2,000 crores (mutual funds, debentures and bonds).

Exchange rates were fairly volatile during the year under review, given multiple factors such as US elections, woes of the pandemic and multiple interventions by Central banks of various countries across the globe. Voltas has a well-defined forex policy, based on which currency exposure was continuously monitored to hedge forward risk in a timely and efficient manner. Earnings from the Company''s overseas projects in the Middle East, and Mining support activities in Mozambique also serves as a natural hedge against exchange volatility.

Considering all the ramifications of the pandemic (including a complete washout of peak season in Q1) and the depressed Business environment during the year, it is gratifying to note that the Company''s total income for the full year, at '' 7,745 crores remained more or less in line with that of the previous year. At the PAT level, the Company was marginally ahead of the previous year at '' 529 crores. Total Comprehensive Income was higher at

'' 850 crores, given the positive change in valuation of the Company''s investments. Voltas ended the year with an Earnings per share of '' 15.87 (Face Value per share of '' 1) ahead of the previous year.

7. Tata Business Excellence Model (TBEM)

TATA Business Excellence Model (TBEM) is a framework followed by several TATA group companies to achieve excellence in their business performance. To assess the progress made by various companies in the group, the Tata Business Excellence Group (TBExG) conducts external assessments across Tata companies. TBEM has been conceived to deliver strategic direction and drive business improvements at the Tata group. Voltas has consistently benefited from the adoption of TBEM concepts for over two decades.

The Unitary Products Business Group and Voltas.Beko participated in the Data Maturity External Assessment (DMA) based on the TCS ''DATOM'' framework in January 2021. The objective was to assess the progress made by Voltas in DATA Excellence. The Company''s score was in the 75th percentile on the overall level.

Based on the outcome of the External TBEM and DMA Assessments, the Company developed and implemented comprehensive action plans to take its Business Excellence journey forward. Voltas has benchmarked the processes with the companies within and outside the Tata Group. The Company has developed more than 80 Business Excellence champions, 25 Data Excellence Champions and, 8 Data Maturity Assessors to facilitate seamless progression on the Business Excellence journey.

Voltas has been recognised by the Tata Business Excellence Group for ''Building Business Excellence Champions Capability 2020'' at the BEC virtual session hosted on 12 January, 2021. The recognition was conferred upon Mr. Pradeep Bakshi, MD & CEO, Voltas Limited.

TBExG launched the TATA Competitive Intelligence (TCI) process on 14 August, 2020 with the objective of helping companies in the Group to effectively understand the market and competition through competitive intelligence. The booklet contains eleven best practices followed in the TATA Group, of which, three practices are from Voltas.

1. Voltas: UPBG - Usage of Competitor Information in Multiple Ways

2. Voltas: TMD - Win/Loss Analysis

3. Voltas: TMD - Competitive Intelligence gained through Trade Shows/Symposium

Learning programs/missions were organised at other TATA companies to learn/share on key areas like Customer

Network Management, Quality Management System, HR-Contract Labour Management, Innovation Management, and other areas. Looking into the importance of managing key accounts effectively, KAM (Key Account Management) programs were implemented in Infra Projects and Product Solutions. After successful implementation, the same was initiated in the Textile Machinery Division.

Voltas kicked off the internal Improvement program initiatives at the manufacturing plant of UPBG (Product Solutions segment) at Waghodia. The plant started the 5S program and implemented 1S level successfully and achieved results on productivity, space and, inventory optimisation.

The Company participated and won the ''Making Customers Smile'' contest organised by the TATA Group. The Company participated in Tata Ideas monthly eHackathon on Monetizing Assets and Data Analytics and received innovative ideas for solution implementation. The Company also participated in Tata Innovista, a Tata Group level contest to recognise and celebrate the innovation. During 2020-2021, Voltas registered 9 entries in the TATA Innovista 2021 cycle and is awaiting the results.

8. iT initiatives

The year 2020 brought along unprecedented challenges for everyone. The COVID-19 pandemic has impacted lives and livelihood like none before. With the announcement of the lockdown in India in March 2020, remote work saw a steep rise, making ''Work from Home'' (WFH) the new norm. Voltas, quickly adapted to the changes in the external environment. The Company''s IT team immediately responded to the employees and stakeholders'' changing needs. This also called for enhanced IT Security and VPN to be provided to all employees for enabling WFH setup. Processes were changed to enable remote support and the transition was smooth with minimal disruption to work and zero security incidents.

Right through the year, several other improvements were carried out to support IT Security and Infrastructure. Web Application Firewall (WAF), new VPN client for enhanced security and ease of use, NextGen EDR Solution for all endpoints and servers, Managed File Transfer Solution, New Test Environment for isolation of Test Servers in the Data Centre, and New Advanced Firewall for the Data Centre were some of the many IT Security initiatives undertaken and successfully completed. A lot of IT capacity and version upgrade activities were also completed - New network switches in the Data Centre, New Power9 server for increased performance, increase

in backup capacity of DR Servers and backup servers for all new locations, new servers in the Windows Farm and increased bandwidth of multiple links including DC-DR among others. One of the significant projects under the IT Infra space included the seamless transition of support from the on-site team to TCS ICC. Thus, increasing the support window and adoption of best practices. Applications and Digital:

During the year, the Company also witnessed various re-organisations. Under such circumstances, the Company''s IT team ensured that all the systems and applications were configured perfectly in line with the Company''s new structure.

Many new developments were undertaken and functionalities were added across all the major applications. Franchisee Payout, Invoice Processing Automation, AMC Modules, DSC Consignment Process, Defective Spares Challan Process, Alternate Material STO and Minimum Stock Level Fulfilment were some of the major projects undertaken in Siebel and SAP.

Voltas has also added a number of new applications to its IT landscape for supporting the core business processes. The Company emphasised and focused on digitalisation. Several new applications, processes and modules were added through Web and Mobility, Analytics, Robotic Process Automation (RPA) and Integration with 3rd Party Systems.

Some key initiatives on Web and Mobility entailed Safety Portal, Vendor Assessment Portal, Daily Project Reporting, Discounting Portal and Fiori for PO and Contract approval. Many new processes were also taken up for automation through RPA. Moreover, a few new dashboards and interactive reports were developed on the Company''s Analytics platform. To eradicate manual interactions with 3rd Parties, many new interfaces were established with banks, partners like Tata Cliq and external applications like Delhivery.

Collectively, all the work and development during the year, with regards to IT Security and Infra, has helped Voltas transition to the new requirements.

9. Safety and Health

Voltas has always believed that a positive safety culture plays an imperative role in the Company''s values. Voltas places safety and health of its people at utmost priority. The Board through a S-H-E Committee periodically assesses, amends, and upgrades the requirements of the evolving safety culture. These changes and modifications are executed in alignment with the Company''s

three-phased five years'' plan, namely, the Immediate Action Plan (Phase-I - September 2019 to March 2020), Intermediate Action Plan (Phase-II - April 2020 to March 2022) and Sustainability of Action Plans (Phase-III - April 2022 to March 2025). The success of these changes is critically evaluated and closely monitored by the Company''s 3 tier committees - the S-H-E Board Committee and a Steering Committee comprising the Corporate Management Group and Corporate SHE Committee.

During the first phase, Voltas recognised and trained 47 safety leaders, externally, from each of the businesses. Apart from 100% internal site audits, the Company successfully conducted training and created awareness within a stipulated time.

In the second phase, Voltas further included training reinforcements of the top Management and BU Heads. This training was conducted via quarterly meetings of the safety managers with the Company''s MD & CEO and CHRO, along with SHE Committee Head. Certification audit of ISO:9001, ISO: 14001 and ISO:45001 for the Electrical business (RIEL) and ISO: 14001 and ISO:45001 for Water management business were also successfully conducted. Additionally, surveillance audit of IMS (Integrated Management System) at O&M (Customer Care) and Pantnagar plant was completed. Moving to the Company''s digitisation initiatives, Voltas launched a new safety portal, which integrates hazard and incident reporting, a platform for vendors'' management, and a visitors'' management system, among others.

During the year, Voltas conducted competency-building training for 110 Safety Officers, 123 Service Managers, 900 Service Franchisee (SF) Owners, and 2,426 SF Technicians in UPBG Services. Additionally, 247 participants from UPBG Sales and Marketing teams were externally trained on road safety and defensive driving techniques. After the successful completion of its ''Road Safety'' campaign, the Company also launched ''Working at Height'' campaign for 2020-21. A total of 32 office locations were audited in the second phase and 47 local admin-in-charge were trained internally. Further ensuring consistency and resilience of safety controls, Voltas audited 98 major projects and offices with a weighted score on the Tata Group Safety Standards Compliances. This was done over and above the regular safety inspections and audits of sites, manufacturing units, customer care premises, offices, and warehouses.

The successful and effective implementation of the first two phases of the Company''s five years'' plan helped run its business uninterruptedly, even during the lockdown. Amid the pandemic, a 24*7 helpline was launched to support and counsel the Company''s employees. It promptly introduced a ''Work from Home'' policy, ensuring

employees'' safety. The Company successfully conducted 118 virtual training sessions, creating awareness on COVID-19 precautions to be followed. These sessions witnessed participation of 1,569 employees and 8,269 workers across the organisation.

The improvement of Company''s Safety Standards attracted lot of positive acknowledgement. The Company received several appreciation letters and awards in recognition of its enhanced Safety Standards from various clients including Reliance Industries and West Bengal State Electricity Distribution Company Limited.

10. Sustainability Development

For Voltas, community is family. All its interventions for social good are need-based and sustainable. The Company endeavours to reach out to the most-marginalised ones and those at the bottom of the pyramid. It believes in undertaking affirmative actions for each of its CSR initiatives. With every passing year, it has only strengthened its CSR interventions for optimum impact. The CSR framework has been designed in accordance to the Tata Ethos and adhering to the priority community needs. The Company keenly observes the efficacy and relevance of the thrust areas defined in the framework. Currently, it is carrying out all its activities under the broader gambit of three important verticals -Sustainable Livelihood, Community Development and Issues of National Importance.

Sustainable Livelihood emphasises on skill-development and on making marginalised youth and women employable. Under the Community Development vertical, it undertakes initiatives pertaining to quality education, health and water. Under Issues of National Importance, the Company aims to address national-level concerns such as disaster management, affirmative action, and sanitation. The Company''s CSR department has adopted the 3E principle of Engage, Equip and Empower. This ensures empowerment of the communities by emphasising on their participation and ownership in the development process.

(a) Sustainable Livelihood

The Company acknowledges skilling and employability enhancement as crucial factors in developing self-reliance among community youth and women. In line with this recognition, Voltas has adopted it as its flagship programme. Over the period, the Company has ventured into offering both, technical as well as non-technical courses. The Company upgrades skills of the existing technicians and helps them with certification to boost their

confidence and work opportunities. Recognition of Prior Learning is an effective training initiative that has been undertaken for over three years now. It has positively impacted work efficiency, productivity and income of the existing unskilled as well as semi-skilled technicians. The Company also aims to share domain expertise with various stakeholder groups, including trainers from ITIs and other private organisations. The idea is to help the RAC industry with knowledge and expertise that it has developed over six decades of rich experience. Safety is another crucial area that falls within the Company''s CSR initiative periphery. Safety instructions are imparted under all Voltas''s training-based programmes.

(b) community development

Voltas sees community development as a foundation for improving lives. Under this vertical, the Company focusses on priority and fundamental community issues such as education, health and water. During the year, the Company carried out two projects under ''Education Voltas''which:

(a) Supports brightest students from the most-marginalised communities in nine districts of Kerala for higher education. It is also preparing them for their future careers;

(b) Revolves around the operational area of Voltas in Uttarakhand.

The Company helped in refurbishing Government schools with its focus on water and sanitation. The project, encapsulating quality education in the second phase, started with firming up the infrastructure to make it a well-equipped place for studying. During COVID-19, Voltas provided safety kits to the students who graduated to become RAC technicians. Additionally, the Company also supported a long-term rehabilitative intervention for the pandemic-impacted migrant labourers in Uttar Pradesh. The project was implemented by the Tata Trust and focused on food security, making Government schemes available, providing livelihood opportunities, and policy advocacy. It reached out to 2,100-gram panchayats, 65 blocks and 10 districts of Uttar Pradesh, and positively impacted around 4,00,000 beneficiaries directly.

The three sub-themes under this vertical - Disaster Management, Sanitation and Affirmative Action - for Scheduled Caste and Scheduled Tribe communities talk about intensity of the country''s issues.

Voltas undertook participatory groundwater management at the Beed district of Maharashtra. This initiative was aimed at long-term intervention to address water scarcity in the perennially drought-prone area of Beed. Under phase two of the programme, six needy villages were identified for participatory groundwater management. The programme aimed at improving the lives of people through adoption of integrated approach for water resource management, sustainable agriculture and livelihood enhancement.

This programme, therefore, aims at reducing the impacts of drought by undertaking various water-conservation and recharging measures with people''s participation. The programme is expected to benefit around 13,000 people, covering 3,036 families. Of this, around 40% families fall under SC / ST / NT categories.

During 2020-21, trainings on crop management, included Integrated Pest Management, Integrated Nutrient Management and Watershed Management. 497 farmers benefitted from the training and on-field demonstrations.

The Company installed water level indicators to sensitise and train the community to improve water productivity and follow regulatory norms on water usage. Six orientation trainings on effective operations of Village Water Committee were provided to 171 farmers from the project villages. The Village Water Committee acts as an apex body to plan and implement water and agriculture-related activities in the village and monitor water usage. 486 families directly benefitted from the area treatment for water conservation, covering 632 hectares of land.

Trainings are provided to women Self Help Groups (SHGs) to generate awareness on significance of collective action and effective functioning of SHGs, and assessing viable business opportunities. Fifteen such trainings were provided to 484 participants. Two training sessions were conducted on goat-rearing and poultry, for which, 59 women participated. Under Affirmative Action, Voltas is making an effort to reach out to SC/ST youth through its exclusive programmes. Apart from electrical or plumbing training through a skilling centre at Panvel or stitching and tailoring classes at Bethany, Panvel, these programmes aim at supporting the beneficiaries to be gainfully employed.

Under National Importance, Voltas also initiated an integrated sanitation project in Waghodia, near Vadodara in partnership with the Tata Trust. It mainly had four components: Household Toilets; School Sanitation; Solid Waste Management and Menstrual Hygiene Management.

The project is being implemented in five villages around Voltas'' Waghodia Plant. The project emphasises on community participation and convergence with Government programmes and schemes. Despite the pandemic, the project reached out to 3,644 community members in 2020-21. This long-term project has both hardware activities such as HH toilets and soak-pit construction, and software activities like training and capacity building.

11. Corporate Social Responsibility (CSR)

Disclosure as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 in prescribed form is enclosed as Annexure I to the Directors'' Report.

During the financial year 2020-21, the Company has spent '' 11.71 crores (2% spend requirement was '' 11.50 crores) towards various CSR activities, in line with the requirements of Section 135 of the Companies Act, 2013 (''Act''). Details of composition of CSR Committee and Meetings held during 2020-21 are disclosed in the Corporate Governance Report.

12. Subsidiary/Joint Ventures/Associate Companies

As on 31 March, 2021, the Company has 7 operational subsidiaries, 5 joint ventures and 2 associate companies. As per the requirements of Section 129(3) of the Act, a statement containing salient features of the financial statements of subsidiaries, joint venture and associate companies in prescribed Form No. AOC-1 is attached to the financial statements of the Company. Further, pursuant to Section 136 of the Act, the stand-alone financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company -www.voltas.com

The Policy for determining material subsidiaries of the Company has also been provided on the Company''s website at https://voltas.com/assets/img/sustainability/ corp_gov/pdf/38085.pdf

Performance of key operating subsidiary and joint venture companies in India are given below:

â¢ Universal Comfort Products Limited (UCPL), a wholly owned subsidiary of the Company, engaged in the

business of manufacturing room air conditioners has been merged into Voltas pursuant to an Order passed by the National Company Law Tribunal (NCLT), Mumbai Bench, on 11 September, 2020. The merger became effective on 26 November, 2020, upon filing of the Certified True Copy of the NCLT Order with the Registrar of Companies and UCPL ceased to exist.

â¢ Universal MEP Projects & Engineering Services Limited (UMPESL) (formerly known as Rohini Industrial Electricals Limited), a wholly owned subsidiary of the Company, is engaged in the business of rural electrification work and EPC projects related to solar power. UMPESL has reported turnover of '' 322 crores and profit before tax of '' 18 crores approx. in 2020-21 as compared to '' 451 crores and '' 12 crores approx. respectively, in the previous year.

â¢ The performance of Voltbek Home Appliances Private Limited (Voltbek), the joint venture with Arecelik A.S. for Consumer White Goods was better in terms of sales volumes as compared to 2019-20. Voltbek commenced manufacturing of Direct Cool (DC) Refrigerators from its Sanand factory in Gujarat. Voltbek has plans to commence in-house manufacturing of Frost Free (FF) Refrigerators and Top Load Washing machines from Sanand factory and has targeted to more than double its sales volume in 2021-22. Voltas as one of the main shareholders (49%) has provided funds in the form of capital infusion and similar capital contribution is also made by the foreign JV partner. The paid-up capital of Voltbek as on 31 March, 2021 was '' 837 crores. During 2020-21, the Company invested '' 75 crores in the share capital of Voltbek and the Company''s total investment in Voltbek (49% share) was '' 410 crores approx.

Except as mentioned above, there have been no material changes in the nature of the business of the subsidiaries, including associates and joint ventures during the financial year 2020-21.

13. Number of Board Meetings

During 2020-21, eleven Board Meetings were held on 14 April, 2020; 29 May, 2020; 19 June, 2020; 15 July, 2020; 14 August, 2020; 7 October, 2020; 12 October, 2020; 6 November, 2020; 20 January, 2021; 12 February, 2021 and 16 March, 2021. Most of the Board Meetings were held through Video Conferencing.

14. Policy on Directors'' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director

Based on the recommendation of the Nomination and Remuneration Committee (NRC), the Board has adopted the Remuneration Policy for Directors, KMPs and other Employees. NRC has formulated the criteria for determining qualifications, positive attributes and independence of an Independent Director and also the criteria for Performance Evaluation of individual Directors, the Board as a whole and the Committees. The Company''s policy on Directors'' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which is a part of the Annual Report and is also available on https://voltas.com/assets/img/sustainability/corp_ gov/pdf/98899.pdf

15. Evaluation of performance of Board, its committees and of directors

Pursuant to the provisions of the Act and Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Board has carried out an evaluation of its own performance, Committees and performance of individual Directors. The performance of the Board as a whole, Committees and individual Directors was evaluated by seeking inputs from all Directors based on certain parameters as per the Guidance Note on Board Evaluation issued by SEBI such as: Board structure and composition; Meetings of the Board in terms of frequency, agenda, discussions and dissent, if any, recording of Minutes and dissemination of information; Functions of the Board including governance and compliance, evaluation of risks, stakeholder value and responsibility, Board and Management including evaluation of performance of the management. The Directors also made their own self-assessment of certain parameters - Attendance, Contribution at Meetings and guidance/support extended to the Management. The feedback received from the Directors was discussed and reviewed by the Independent Directors at their annual separate Meeting held on 16 March, 2021 and also shared with the NRC/Board. At the separate annual Meeting of Independent Directors, performance of Non-independent directors, including Chairman, Board as a whole and various Committees was discussed. The Independent Directors in the said Meeting also evaluated the quality, quantity and timeliness of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform their duties and expressed their satisfaction in respect thereof.

The performance of the individual Directors, performance and role of the Board/ Committees was also discussed at the Board Meeting held on 12 May, 2021. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

16. Statutory Auditors

At the 63rd Annual General Meeting (AGM) held on 28 August, 2017, the Members had approved the appointment of S R B C & Co. LLP (SRBC) as Statutory Auditors as well as Branch Auditors of the Company, to examine and audit the accounts of the Company for five consecutive financial years between 2017-18 and 2021-22. The Auditors'' Report for the financial year 2020-21 does not contain any qualification, reservation or adverse remarks, except for Key Audit Matters.

17. Cost Auditors

The Company has maintained the accounts and cost records as specified by Central Government under Section 148(1) of the Companies Act, 2013. The Board had appointed M/s. Sagar and Associates, Cost Accountants as the Cost Auditors for the financial year 2020-21 and they have been reappointed as Cost Auditors of the Company for the financial year 2021-22. Approval of the Members is being sought for ratification of their remuneration at the ensuing AGM.

18. Secretarial Auditor

M/s. N. L. Bhatia and Associates, the Practicing Company Secretaries were appointed as Secretarial Auditor to undertake Secretarial Audit of the Company for the year 2020-21. Their Secretarial Audit Report, in prescribed Form No. MR-3, is annexed to the Directors Report as Annexure III, and does not contain any qualification, reservation or adverse remarks. M/s. N. L. Bhatia and Associates have been re-appointed as the Secretarial Auditor for the financial year 2021-22.

19. Audit Committee

The Audit Committee comprise Mr. Zubin Dubash (Chairman), Mr. Debendranath Sarangi and Mr. Arun Kumar Adhikari, all Independent Directors, in line with the requirements of Section 177 of the Act. The Board has accepted the recommendations made by the Audit Committee from time to time. Details of Audit Committee Meetings held during the year 2020-21 have been disclosed in the Corporate Governance Report.

20. internal Financial Controls

The Internal Financial Controls (IFCs) and its adequacy and operating effectiveness is included in the Management Discussion and Analysis, which forms part of this Report.

21. Risk Management

Pursuant to Section 134(3)(n) of the Act and Regulation 21 of Listing Regulations, Risk Management Committee is in place comprising Mr. Zubin Dubash (Chairman), Mr. Debendranath Sarangi and Mr. Arun Kumar Adhikari. The Company has formulated a Risk Management Policy to establish an effective and integrated framework for the risk management process. During 2020-21, two Meetings were held on 12 November, 2020 and 23 February, 2021 wherein, the top 10 risks identified for the Company and various mitigation measures in respect thereof were reviewed and discussed.

22. particulars of Employees

The information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

(a) The ratio of the remuneration of each Director to the median remuneration of the employees of the company for the financial year:

directors Ratio to median

remuneration

Mr. Noel Tata 0.63

Mr. Vinayak Deshpande 0.42

Mr. Debendranath Sarangi 5.36

Mr. Bahram N. Vakil 5.59

Ms. Anjali Bansal 5.39

Mr. Hemant Bhargava 2.26

Mr. Arun Kumar Adhikari 5.36

Mr. Zubin Dubash 4.18

Mr. Saurabh Agrawal *

(w.e.f. 21 January, 2021)

executive directors

Mr. Pradeep Bakshi 52.34

Managing Director & CEO

Mr. Anil George *

Deputy Managing Director & CFO (ceased to be Deputy Managing Director upon completion of his term on 31 August, 2020, however, continued as the CFO)

* Since the remuneration of these Directors is only for part of the year, the ratio of their remuneration to median remuneration is not comparable and hence not stated.

* Since the remuneration is for part of the year, the percentage increase in their remuneration is not comparable and hence not sated.

(4.69%)

(d) Number of permanent employees on the rolls of company:

2,617 employees.

Note: Ratio of Remuneration of Directors is computed based on Sitting fees and Commission paid during 2020-21. However, in line with the internal guidelines, no commission is paid to Mr. Noel Tata, Mr. Vinayak Deshpande and Mr. Saurabh Agrawal as they are in full time employment with another Tata company. They are paid Sitting fees only.

(b) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive officer, company secretary or Manager, if any, in the financial year:

directors, chief executive % increase in

officer, chief financial remuneration

officer and company in the

secretary financial year

Mr. Noel Tata 5.88

Mr. Pradeep Bakshi (14.47)

Mr. Anil George *

(up to 31-8-2020)

Mr. Vinayak Deshpande 33.33

Mr. Debendranath Sarangi 36.83

Mr. Bahram N. Vakil 44.76

Ms. Anjali Bansal 68.81

Mr. Hemant Bhargava >100

Mr. Arun Kumar Adhikari 79.92

Mr. Zubin Dubash *

Mr. Saurabh Agrawal *

(w.e.f. 21 January, 2021)

Mr. V. P. Malhotra (18.22)

(Company Secretary)

justification thereof and point out if there are any exceptional circumstance for increase in managerial remuneration:

As part of austerity measure due to COVID-19 pandemic, there was no salary increase across all employees of the organisation, including the managerial personnel. On the contrary, senior leadership team took a salary reduction in 2020-21.

(f) Affirmation that the remuneration is as per the Remuneration policy of the company:

The Company affirms that the remuneration paid is as per the Remuneration policy of the Company.

(g) A statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure forming part of this Report. Further, the Report and the Accounts are being sent to the Members excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection at the Registered Office of the Company. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary. None of the employees listed in the said Annexure are related to any Director of the Company.

23. employee stock option

The Company has not issued any Employee Stock Options.

24. conservation of energy, technology absorption, foreign exchange earnings and outgo

Information pursuant to Section 134(3)(m) of the Act, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is given as Annexure II to this Report.

25. directors and Key Managerial personnel

In accordance with the provisions of the Act and the Company''s Articles of Association, Mr. Noel Tata retires by rotation and being eligible, offer himself for reappointment. Mr. Anil George ceased to be Deputy Managing Director of the Company upon completion of his term on 31 August, 2020. However, in view of request made, he continued to serve as the Chief Financial Officer of the Company. The Company has identified his successor who is expected to join by June 2021.

On the recommendation of NRC, the Board had appointed Mr. Saurabh Agrawal as an Additional Director (Non-Executive, Non-Independent) of the Company with effect from 21 January, 2021. In accordance with the provisions of Section 161(1) of the Act, Mr. Saurabh Agrawal holds office up to the date of the forthcoming AGM and is eligible for appointment as a Director of the Company. Notice under Section 160 of the Act has been received from a Member proposing the appointment of Mr. Saurabh Agrawal as Director of the Company. The Resolution seeking approval of the Members for appointment of Mr. Saurabh Agrawal as a Director, including his brief profile forms part of the Notice of the 67th AGM of the Company.

The Members had at the 63rd AGM held on 28 August, 2017 appointed Mr. Arun Kumar Adhikari as an Independent Director of the Company to hold office for five consecutive years from 8 June, 2017 up to 7 June, 2022. Pursuant to the provisions of the Act and based on the recommendation of NRC, the Board recommends, the re-appointment of Mr. Arun Kumar Adhikari for a second term of five consecutive years from 8 June, 2022 to 7 June, 2027. The approval of the Members through a Special Resolution is being sought at this AGM and forms part of the Notice.

Mr. Pradeep Kumar Bakshi, Managing Director & CEO of the Company has also been appointed as the Managing Director of Universal MEP Projects & Engineering Services Limited for a period of 5 years with effect from 1 April, 2021.

None of the other Directors is the Managing or Whole-time Director of any subsidiary of the Company.

Mr. Pradeep Kumar Bakshi (Managing Director & CEO), Mr. Anil George (Chief Financial Officer) and Mr. V. P. Malhotra (Vice President-Taxation, Legal and Company Secretary) are the Key Managerial Personnel (KMPs) of the Company, in line with the requirements of Section 203 of the Act.

26. Declaration by Independent Directors

Pursuant to Section 149(7) of the Act, the Company has received declarations from all Independent Directors confirming that they meet the criteria of independence as specified in Section 149(6) of the Act, as amended, read with Rules framed thereunder and Regulation 16(1 )(b) of Listing Regulations. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence and that they are independent of the Management.

The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and have also confirmed their registration with the databank of Independent Directors maintained by the Indian Institute of Corporate Affairs in compliance with the requirements of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

27. Corporate Governance

28. Details of establishment of vigil mechanism for Directors and employees

The Company had adopted a Whistle Blower Policy ("the Policy") as required under Section 177(9) of the Act and Listing Regulations. The Policy provides a mechanism for Directors and employees of the Company to approach the Ethics Counsellor/Chairman of the Audit Committee of the Company in case of any concern. The Whistle Blower Policy can be accessed on the Company''s website at the link: https://www.voltas.com/assets/img/sustainability/ corp_gov/pdf/43085.pdf

29. Particulars of loans, guarantees or investments under Section 186 of the Act during 2020-21

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for

which the loan or guarantee or security is proposed to be utilised by the recipient are provided in the standalone financial statements (Please Refer to Notes 8,9,18 and 44 of the standalone financial statements).

30. Particulars of contracts or arrangements with related parties

31. secretarial standards

The Company has complied with the provisions of Secretarial Standards on Meetings of the Board of Directors (SS-1) and on General Meetings (SS-2).

32. Directors'' Responsibility statement

Based on the framework and testing of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors, including audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2020-21. Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, based on the assurance given of the business operations, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and operating effectively; and

(vi) they have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

33. Annual Return

Pursuant to Sections 92(3) and 134(3)(a) of the Act, the Annual Return (Form MGT-7) is available on the Company''s website at the link: https://www.voltas.com/ assets/financial_pdf/annoucements/31527.pdf

34. disclosure as per the sexual Harassment of Women at Workplace (prevention, prohibition and Redressal) act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a ''Respect for Gender'' Policy on prevention, prohibition and redressal of sexual harassment in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (''POSH Act'') and the Rules there under. As per the requirement of POSH Act, the Company has formed an Internal Committee to address complaints pertaining to sexual harassment at work place. During 2020-21, one pending complaint of 2019-20 was resolved and settled amicably. The Company did not receive any new complaints in 2020-21.

35. General

The Notes forming part of the Accounts are self-explanatory or to the extent necessary, have been dealt with in the preceding paragraphs of the Report.

On behalf of the Board of Directors Date: 12 May, 2021 Noel Tata

Place: Mumbai Chairman

Mar 31, 2019

REPORT OF THE BOARD OF DIRECTORS

To The Members

The Directors present their Sixty-Fifth Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2019.

1. Financial Results

Rs. in Crores

	consolidated		standalone
	2018-19	2017-18	2018-19	2017-18
Total Income Profit for the year after meeting all expenses but before interest,	7,310	6,602	6,956	6,069
depreciation and exceptional items	798	836	648	714
Interest	33	12	23	8
Depreciation and amortization	24	24	20	19
Profit before share of profit/(loss) of Joint Venture and Associates and exceptional items	741	800	605	687
Share of profit/(loss) of Joint Venture and Associates	(52)	4	â	â
Exceptional items (Net)	(12)	1	26	(4)
Profit before tax	677	805	631	683
Tax expenses	163	227	166	182
Profit after tax	514	578	465	501
Other Comprehensive Income (Net)	(24)	163	(36)	158
Total Comprehensive Income	490	741	429	659

2. Reserves

An amount of Rs. 20 crores was transferred to the General Reserve out of Profit available for appropriation.

3. dividend

The Companyâs Dividend Policy which is uploaded on the Companyâs website, is based on the need to balance the twin objectives of appropriately rewarding its shareholders with dividend and of conserving resources to meet its future needs. Based on Companyâs performance, the Directors recommend dividend of Rs. 4 per equity share of Rs. 1 each (400%) for the year 2018-19 aggregating Rs. 132.35 crores (2017-18: 400%). The Dividend Distribution Tax is Rs. 27.21 crores, which would get reduced to the extent of dividend received by the Company from its subsidiary companies. The dividend pay-out is in accordance with the Companyâs Dividend Policy.

4. Operations

During 2018, world growth was estimated at around 3%, lower than growth rate for the previous years. In recent months, geo-political events such as trade tensions, sanctions, etc. have further affected global growth. In India also, there was a slowdown in the economy across 2018-19 due to the declining growth of private consumption, a tepid increase in fixed investment, and muted exports. However, India continues to be the fastest growing major economy and is expected to largely maintain the trajectory.

During 2018-19, the Company reported consolidated total income of Rs. 7,310 crores, with income from operations of Rs. 7,085 crores and profit after tax of Rs. 514 crores.

Unitary cooling products Business Group (UpBG)

The year 2018-19 was very challenging with the AC industry recording a de-growth of 3%. The segment performance was muted due to erratic summer conditions and a soft festive season. With higher inventory in the channel as well as with manufacturers, the pressure on prices and thus on margins continued to be high. Increasing input costs and depreciated rupee, added to the industryâs woes.

Despite a challenging and competitive environment, Voltas continued to be the undisputed Market Leader with sales of over 1.2 million units and increased its market share (across Multi-Brand outlets) to 23.7% from 22.1% in the same period last year. The Company is focussed on expanding its reach across cities by appointing Distributors, Dealers and opening Brand Shops. The brand shops house the latest consumer durable products including ACs, Air Coolers, Commercial Refrigeration Products from Voltas as well as White Goods such as Refrigerators, Washing Machines, Microwaves/Ovens and Dishwashers from Voltas Beko.

Voltas has also acquired land admeasuring 65 acres approx. near Tirupati for manufacture and assembly of air conditioners and other related cooling products. Continuing its thrust on Research and Development, Voltas aims to create technologically advanced products which are expected to start rolling out from the later half of 2020. The chosen location provides dual benefits of superior market access and cost effective connectivity via road and port. The proposed factory will cater primarily to the South and West markets. The Company plans to invest over Rs. 500 crores in phases, while simultaneously creating local employment opportunities in the region.

Air Coolers faced a more difficult year given their very seasonal nature. Nonetheless, based on a recent independent retail audit, Voltas is now the No. 2 player in the Air Cooler category having sold around 1.3 lakhs Fresh Air Coolers during 2018-19.

Despite headwinds of the current year, longer term industry prospects will be driven by the increasing consumer confidence, higher disposable incomes, lower penetration, better availability of power and many other positive factors. The Companyâs thrust on introducing energy efficient products and expanding its enviable distribution network will enable the business to further improve its position.

Domestic projects Group (DpG)

With its strategic focus on procuring and executing Government backed projects, the Domestic Projects business continued its steady performance during 2018-19. The majority of orders came from the electrification sector and infrastructure space along with reasonable assurance of cash. The recent investment announcements in infrastructure (Metros, Airports), smart cities, cleaner water, healthcare and educational institutions is expected to increase opportunities. During the year, the Company has set up a manufacturing plant for higher tonnage cooling products such as VRF (Variable Refrigerant Flow) products and Chillers in Waghodia, Gujarat.

International Operations Business Group (iOBG)

During 2018-19, the Company has continued to selectively and cautiously pick and choose projects that are commercially viable, in a risk mitigated manner. It is gratifying to note that the Division was recognised with a number of external awards, including the District Cooling Company of the Year, the Facilities Management Company of the Year and MEP Contractor of the Year. As an adjunct to MEP, the business is also focussing on booking orders for Facility Management and Water Management solutions. Meanwhile, the Expo 2020 in UAE has given rise to certain project opportunities and the Company has also extended its reach to a new geography, having secured an order in Bahrain. It also appears that the hitherto deeper concerns on Qatar due to political issues are beginning to abate.

Engineering products and Services - Textile Machinery Division (TMD) and Mining and Construction Equipment Division (M&CE)

The Textile Machinery business faced pressure on margins due to the declining yarn prices and the withdrawal of certain specific spinning based State policies apart from the generic issues of credit disbursement affecting capital expenditure. Timely focus on the after-sales business helped compensate. In the Mining and Construction Equipment business, Mozambique operations contributed a significant share to the Divisionâs performance. Mining activity in India however remains tepid, as the re-auctioned mines are yet to commence operations. Meanwhile, the Government announcements on increasing spend on road infrastructure (Bharatmala project) augurs well over the medium term for the sale of Crushing and Screening equipment.

5. Finance

The year 2018-19 was challenging for the Company as the AC industry faced headwinds due to weak summer and soft festive season. Most of the Industry players, including Voltas were saddled with additional inventory, leading to higher working capital.

The year witnessed volatile interest rates impacting debt instruments, particularly during the first three quarters as a result of mark-to-market valuation. The Company is re-engineering its portfolio to reduce market driven volatility.

As part of its commitment, the Company has invested Rs. 118 crores during 2018-19 in the share capital of the Consumer Durable JV - Voltbek Home Appliances Private Limited. This alongside the accumulation of inventory and capex investments in the Waghodia facility, led to a reduction in the overall cash position. Notwithstanding, the liquidity position remains strong with overall cash of â1,868 crores as on 31st March, 2019.

6. Tata Business Excellence Model

Tata Business Excellence Model has been used as a successful initiative by the Tata Group to drive Business Excellence across companies. In order to assess the progress made by various companies, the Group conducts external assessments bringing together more than 300 Assessors and 30 Mentors from across 60 Tata companies.

During 2018-19, the Company participated in the formal assessment. It is a matter of pride that the Company was adjudged at a higher maturity level of âEmerging Industry Leaderâ score band, a significant improvement over the last assessment.

Based on the Assessment, the Company has developed a comprehensive action plan to take its Business Excellence journey even more strongly forward in the years ahead. Voltas has also developed many Business Excellence champions to facilitate a seamless journey, nine of whom were also External assessors at the Tata Group level.

Innovation is one of the key determinants of long term value creation and is a continual quest at the Tata Group. Tata companies are supported in their efforts to achieve world-class standards in all aspects of operations through group level processes and systems that encourage innovation. During 2018-19, the Company successfully participated in Tata Innovista with company innovations being assessed by panel of Subject Matter Experts from within and outside the Tata Group.

7. IT Initiatives

âBusiness Readyâ was the focus of Voltas IT this year, ensuring secure, seamless and timely adoption of technology across platforms. SAP ECC, Payroll and HCM were rolled out for Voltbek as per the planned schedule along with Siebel CRM. Additionally, all the Modules of SAP were deployed for the new Waghodia factory as also Costing and Profitability (COPA) modules at Weathermaker Limited in UAE. Two major capabilities were simultaneously added - the E Way Bill system and E Merge (a solution for financial consolidation for JVs and subsidiaries), apart from a number of additional solutions to facilitate operational efficiency across different businesses. Ensuring appropriate focus in the IT Infrastructure and Security space, many Data Centre Servers and Network equipment were upgraded.

Digitization is an important part of forward strategy and the Company firmed up plans across Mobility, Analytics and RPA (Robotic Process Automation). For example, in Analytics, MIS Dashboard was developed on the Power BI platform and in RPA, the Service Registration process was automated through a Bot.

8. Safety and Health

Safety is a priority and of prime importance at Voltas. While a Board Committee comprising 3 Directors reviews Safety performance, a Steering Committee comprising the Corporate Management Group periodically reviews the implementation of various initiatives.

In order to ensure consistency and resilience of Safety controls, 89 major projects were audited, with a weighted score on the Tata Group Safety Standards compliances. This was in addition to the regular Safety inspections and audit of sites, Customer care premises, offices and warehouses. Training was an area of focus - Awareness training was stepped up to cover approx. 2,27,000 personnel, an increase of 13% over last year. At the same time, 100% Induction training is ensured for all personnel at project sites.

Internal Auditors certification program (ISO 14001 and ISO 45001) covered 135 personnel across business units together with Behaviour Based Safety and First Aid (CPR certification) programs. Unfortunately, during 2018-19, there were two fatal incidents at project sites. A serious note has been taken along with appropriate internal action and measures to prevent recurrence.

The Company has improved the communication channels to capture S-H-E related observations through creation of a âWhatsAppâ group of Safety practitioners. The improved communication mechanisms have helped increase workmen engagement in Safety meetings and trainings at project sites, apart from an increase in the reporting of Safety observations, Lost Time Injury (LTI) incidents and Near Misses from the project sites.

The Company has received appreciation letters and awards in recognition of enhancing the Safety standards. Clients like Reliance Industries, have recognised Voltas for achieving 5 million safe man hours without LTI at DAICEC project in BKC, Mumbai. Bihar Urban Infrastructure Development Corporation Limited also appreciated Voltas for achieving 2.5 million safe man hours without LTI.

9. Sustainable Development

The Company through its CSR initiatives, strives to engage with the segment at the bottom of the pyramid and build capabilities in youth and women to ensure sustainable livelihood. It also focusses on education, health, water and disaster relief for communities through its other CSR verticals. The CSR interventions are strategic long-term projects with end-to-end intervention based on community participation and ownership. The need-based projects bring in all the crucial stakeholders together through better community participation, for sustainable development outcomes.

(a) Sustainable Livelihood

Sustainable livelihood, the flagship program of Voltas, has 37 partnership Skill Training Centres across India. The Skill Training Centres create pools of trained Room AC (RAC) and Central AC technicians and ensures end-to-end intervention including identification of deserving candidates, theoretical training, practical, periodic assessments, On-the-Job training, certification, placement, and post placement support. Over 80% youth engaged through Voltasâ sustainable livelihood program, are now gainfully employed.

Besides training freshers for RAC and HVAC, the Company recognized the need to upgrade the skills of the existing technicians in the space and get them certified through a program called Recognition of Prior Learning (RPL). The Company trained 1180 existing technicians under RAC and HVAC RPL, across 16 locations in the country. The Company also offered non-technical courses like Business Correspondent and Business Facilitator (BCBF), Retail, and Sewing and Tailoring to over 249 students across centres.

(b) Community Development

To enhance the quality of human capital, the Companyâs educational interventions focusses on five crucial aspects such as Quality Education; Teacherâs Training and Capacity Building; English Proficiency through digital medium; Inculcating Reading habits in primary school children; and Career Guidance and Counselling for Youth. Over 10,100 children were directly impacted by the quality education intervention. The educational projects which aim at sustainable outcomes, emphasises on stakeholder participation. Under Teachers Training, in partnership with Muktangan, Voltas reached out to over 284 teachers from government-run schools.

The community project in Dadra is an integrated rural development project with focus on water, health and sanitation. The project is also an affirmative action initiative for tribal communities living in and around the Companyâs Dadra plant. Voltas has successfully constructed 200 toilets with active participation from villagers and the Gram Panchayat. Under the water for irrigation project, the Company has formed water user groups, conducted agricultural training, and built 10 Bore-wells and 10 Poly-Ponds with farmersâ participation.

There are three sub-themes under this vertical, namely Disaster Management, Affirmative Action (for inclusion of socio-economically weaker sections in the development process) and Sanitation.

As part of Disaster Management, an intervention was initiated to address water scarcity in the perennially drought prone area of Marathwada in Maharashtra. The initiative which aimed at Participatory Ground Water Management, undertook area treatment plan in five villages of Osmanabad and Latur districts. Voltas also built capacities of over 250 farmers from the two districts to understand hydro-geological state of the villages, measures for sustainable and safe drinking water, and appropriate agricultural activities and practices.

Under Affirmative Action, the Company continues to extend nutritional and educational support to Kathkari children from a school near Panvel. Additionally, Voltas also introduced two more initiatives: Stitching and Tailoring skill training program for tribal women and Nursing course. The Company created an Income-generation and Empowerment Centre called Sabala which helps the trained tribal women with linkages to generate tailoring business on a sustainable basis. Out of the CSR Budget of 2018-19, over 24% was spent towards Affirmative Action.

In 2018-19, the exclusive skill training program in Electrical and Plumbing for Scheduled Caste / Scheduled Tribe youth in Raigad, Thane and Palghar District were further strengthened with better outreach strategies. Value additions in the program included industry experts coming on board for guidance and better placement opportunities. At present, 254 youth have been trained, 184 youth are placed with appropriate organizations, and 56 youth who are currently undergoing training, will be up for placement in 2019-20.

10. Corporate Social Responsibility (CSR)

Disclosure as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 in prescribed form is enclosed as Annexure I to the Directorsâ Report.

During the financial year 2018-19, the Company has spent Rs. 10.15 crores towards various CSR activities, in line with the requirements of Section 135 of the Companies Act, 2013. Details of composition of CSR Committee and Meetings held during 2018-19 are disclosed in the Corporate Governance Report.

11. Subsidiary/Joint Ventures/Associate Companies

The Company has 9 subsidiaries, 5 joint ventures and 2 associate companies.

As per the requirement of Section 129(3) of the Act, a statement containing salient features of the financial statements of subsidiaries, joint venture and associate companies in prescribed Form No. AOC-1 is attached to the financial statements of the Company. Further, pursuant to Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company - www.voltas.com.

The Policy for determining material subsidiaries of the Company has also been provided on the Companyâs website at https://voltas.com/assets/img/sustainability/corp_gov/ pdf/38085.pdf

Performance of key operating subsidiary and joint venture companies in India are given below:

- Universal Comfort Products Limited (UCPL), a wholly owned subsidiary of the Company, engaged in the business of manufacturing air conditioners, reported turnover of Rs. 925 crores and net profit of Rs. 48 crores for the year ended 31st March, 2019. UCPL has recommended dividend of 175% (Rs. 48.37 crores), same as last year.

- Rohini Industrial Electricals Limited (RIEL), a wholly owned subsidiary of the Company, is engaged in the business of undertaking rural electrification projects. RIEL has turned around with a significantly higher turnover of Rs. 543 crores and net profit of Rs. 43 crores in 2018-19 as compared to Rs. 173 crores and Rs. 0.15 crore respectively, in the previous year. RIEL had good order book position of over Rs. 800 crores per year ended 31st March, 2019.

- As earlier reported, Voltas and Ardutch B.V. (a subsidiary of Argelik A.S. and part of the Kog Group - Turkeyâs largest industrial and services group) have established a joint venture company in India in the name of Voltbek Home Appliances Private Limited (Voltbek) for white goods under the brand name Voltas.Beko. Voltbek launched its range of frost free refrigerators, washing machines, microwave ovens and dishwashers on 13th September, 2018. The product launch was backed by an extensive advertising campaign which showcased the unique Store Fresh technology of its refrigerators and the Stain Removing function of its washing machines. Voltbek is setting up its manufacturing plant at Sanand, Gujarat which is expected to commence production in the second half of 2019, with Direct Cool Refrigerators specifically designed for the Indian market. In order to provide financial assistance, funds have been infused in the share capital of Voltbek in equal proportion by the JV partners. The paid-up capital of Voltbek as on 31st March, 2019 was Rs. 402 crores approx. During 2018-19, the Company invested Rs. 118 crores in the share capital of Voltbek and the Companyâs total investment upto 31st March, 2019 was Rs. 197 crores approx.

There have been no material changes in the nature of the business of the subsidiaries, including associates and joint ventures during the financial year 2018-19.

12. Number of Board Meetings

During 2018-19, nine Board Meetings were held on 18th April, 2018; 17th May, 2018; 10th August, 2018; 20th August, 2018; 27th September, 2018; 6th November, 2018; 10th January, 2019; 14th February, 2019 and 27th March, 2019.

13. policy on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director

14. Evaluation of performance of Board, its Committees and of Directors

The performance of the Board as a whole, Committees and individual directors was evaluated by seeking inputs from all Directors based on certain parameters as per the Guidance Note on Board Evaluation issued by SEBI on 5th January, 2017, such as: Board structure and composition; Meetings of the Board in terms of frequency, agenda, discussions and dissent, if any, recording of Minutes and dissemination of information; Functions of the Board including governance and compliance, evaluation of risks, stakeholder value and responsibility, Board and Management including evaluation of performance of the management. The Directors also made a self-assessment of certain parameters - Attendance, Contribution at Meetings and guidance/support extended to the Management. The feedback received from the Directors was discussed and reviewed by the Independent Directors at their annual separate Meeting held on 27th March, 2019 and also shared with the NRC/Board. At the separate annual Meeting of Independent Directors, performance of Non-independent directors, including Chairman, Board as a whole and various Committees was discussed. The Independent Directors in the said Meeting also evaluated the quality, quantity and timeliness of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform their duties and expressed their satisfaction in respect thereof. The performance of the individual Directors, performance and role of the Board/Committees was also discussed at the Board Meeting held on 9th May, 2019. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

15. Statutory Auditors

At the 63rd Annual General Meeting (AGM) held on 28th August, 2017, the Members had approved the appointment of S R B C & CO LLP (SRBC) as Statutory Auditors as well as Branch Auditors of the Company, to examine and audit the accounts of the Company for five consecutive financial years between 2017-18 and 2021-22. Ratification of appointment of Statutory Auditors at every AGM is no more a legal requirement. The Auditorsâ Report for the financial year 2018-19 does not contain any qualification, reservation or adverse remarks.

16. Cost Auditors

The Company has maintained the accounts and cost records as specified by Central Government under Section 148(1) of the Companies Act, 2013. The Board had appointed M/s. Sagar and Associates, Cost Accountants as the Cost Auditors for the financial year 2018-19. M/s. Sagar and Associates, Cost Accountants, have been re-appointed as Cost Auditors of the Company for the financial year 2019-20 and approval of the Members is being sought for ratification of their remuneration at the ensuing AGM.

17. Secretarial Auditor

M/s. N. L. Bhatia and Associates, the Practicing Company Secretaries were appointed as Secretarial Auditor to undertake Secretarial Audit of the Company for the year 2018-19. Their Secretarial Audit Report, in prescribed Form No. MR-3, is annexed to the Directors Report as Annexure IV, and does not contain any qualification, reservation or adverse remarks. M/s. N. L. Bhatia and Associates have been re-appointed as the Secretarial Auditor for the financial year 2019-20.

18. Audit Committee

The Audit Committee presently comprise Mr. Nani Javeri (Chairman), Mr. Debendranath Sarangi and Mr. Arun Kumar Adhikari, all Independent Directors, in line with the requirements of Section 177 of the Act. Mr. Arun Kumar Adhikari was appointed member of Audit Committee with effect from 6th November, 2018. Mr. R. N. Mukhija ceased to be member of Audit Committee upon his retirement on 4th February, 2019. The Board has accepted the recommendations made by the Audit Committee from time to time. Details of Audit Committee Meetings held during the year 2018-19 have been disclosed in the Corporate Governance Report.

19. Internal Financial Controls

The Internal Financial Controls (IFCs) and its adequacy and operating effectiveness is included in the Management Discussion and Analysis. The Auditors Report also includes their reporting on IFCs over Financial Reporting.

20. Risk Management

Pursuant to Section 134(3)(n) of the Act and Regulation 21 of Listing Regulations, Risk Management Committee is in place comprising Mr. Nani Javeri (Chairman), Mr. Debendranath Sarangi and Mr. Arun Kumar Adhikari. Mr. Arun Kumar Adhikari was appointed member of Risk Management Committee with effect from 6th November, 2018. Mr. R. N. Mukhija ceased to be member of the Committee upon his retirement on 4th February, 2019. The Company has formulated a Risk Management Policy to establish an effective and integrated framework for the risk management process. During 2018-19, two meetings were held on 9th August, 2018 and 13th February, 2019 where, the top 10 risks identified for the Company and various mitigation measures in respect thereof were reviewed and discussed.

21. particulars of Employees

The information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

(a) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year:

Directors	Ratio to median remuneration
Mr. Noel N. Tata	0.64
Mr. Nani Javeri	7.59
Mr. R. N. Mukhija (upto 4.2.2019)	*
Mr. Vinayak Deshpande	0.42
Mr. Debendranath Sarangi	4.95
Mr. Bahram N. Vakil	5.67
Ms. Anjali Bansal	5.23
Mr. Hemant Bhargava	1.82
Mr. Arun Kumar Adhikari	2.22
Executive Directors
Mr. Pradeep Bakshi, Managing Director & CEO	63.54
Mr. Anil George, Deputy Managing Director	56.28

* Since the remuneration of Mr. R. N. Mukhija is only for part of the year, the ratio of his remuneration to median remuneration is not comparable and hence not stated.

Note: Ratio of Remuneration of Directors is computed based on Sitting fees and Commission paid during 2018-19.

(b) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary	% increase in remuneration in the financial year
Mr. Noel N. Tata	*
Mr. Pradeep Bakshi	*
Mr. Anil George	*
Mr. Nani Javeri	20
Mr. R. N. Mukhija	*
Mr. Vinayak Deshpande	*
Mr. Debendranath Sarangi	2
Mr. Bahram N. Vakil	18
Ms. Anjali Bansal	24
Mr. Hemant Bhargava	*
Mr. Arun Kumar Adhikari	*
Mr. Abhijit Gajendragadkar (CFO) - KMP	_*
Mr. V. P. Malhotra (Company Secretary) - KMP	22

* Since the remuneration of Mr. R. N. Mukhija is for part of the year 2018-19, the percentage increase in his remuneration is not comparable and hence not stated. Similarly, remuneration of Mr. Pradeep Bakshi, Mr. Anil George, Mr. Hemant Bhargava, Mr. Arun Adhikari and Mr. Abhijit Gajendragadkar is not comparable as it was for part of the year in 2017-18. In line with internal Group guidelines, no commission was paid for 2017-18 to Mr. Noel N. Tata and Mr. Vinayak Deshpande as they are in full time employment with another Tata company. Their remuneration is therefore not comparable with the previous year and hence, not stated.

(d) Number of permanent employees on the rolls of Company: 2,898.

(e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstance for increase Sin managerial remuneration:

Average increase in remuneration is 12.94% for Employees other than Managerial Personnel. The remuneration of Managerial Personnel (Managing Director and Deputy Managing Director) is not comparable as they were for part of the year in 2017-18.

(f) Affirmation that the remuneration is as per the Remuneration policy of the Company:

The Company affirms that the remuneration paid is as per the Remuneration policy of the Company.

(g) A statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure forming part of this Report. Further, the Report and the Accounts are being sent to the members excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection at the Registered Office of the Company. Any Member interested in obtaining a copy of the same may write to the Company Secretary. None of the employees listed in the said Annexure are related to any Director of the Company.

22. Employee Stock Option

The Company has not issued any Employee Stock Options.

23. Conservation of energy, technology absorption, foreign exchange earnings and outgo

Information pursuant to Section 134(3)(m) of the Act, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is given as Annexure II to this Report.

24. Directors and Key Managerial personnel

In accordance with the provisions of the Act and the Companyâs Articles of Association, Mr. Noel N. Tata and Mr. Hemant Bhargava retire by rotation and being eligible, offer themselves for re-appointment.

Mr. R. N. Mukhija retired as the Independent Director of the Company upon expiry of his term on 4th February, 2019. The Directors place on record their sincere appreciation of the valuable guidance and support given by Mr. R. N. Mukhija during his tenure as Independent Director of the Company.

The Members had at the 60th AGM held on 1st September, 2014 appointed Mr. Nani Javeri, Mr. Debendranath Sarangi and Mr. Bahram N. Vakil as Independent Directors for a term of 5 years up to 31st August, 2019, respectively. At the 61st AGM, Ms. Anjali Bansal was appointed as Independent Director for a term of 5 years, upto 8th March, 2020. In line with the Governance Guidelines formulated for Tata companies, which has been adopted by the Company, Mr. Nani Javeri holds office upto 31st August, 2019.

Mr. Zubin S. Dubash is proposed to be appointed as an Independent Director for a term of 5 years with effect from 9th August, 2019 and the approval of the shareholders is being sought at the ensuing AGM. Attention of the Members is drawn to Resolution No. 6 of the AGM Notice and its related Explanatory Statement.

Taking into consideration the skills, knowledge, valuable contribution and performance evaluation, and based on the recommendation of NRC, it is proposed to continue to avail the services of Mr. Debendranath Sarangi, Mr. Bahram N. Vakil and Ms. Anjali Bansal for second term of5 years. Notices under Section 160 of the Act have been received from a member proposing reappointment of Mr. Debendranath Sarangi, Mr. Bahram N. Vakil and Ms. Anjali Bansal as Independent Directors. The Special Resolutions seeking approval of the members for reappointment of Mr. Debendranath Sarangi, Mr. Bahram N. Vakil and Ms. Anjali Bansal as Independent Directors, including their brief profile form part of the Notice of the 65th AGM of the Company. Attention of the Members is drawn to Resolution Nos. 7 to 9 of the AGM Notice and its related Explanatory Statements.

Mr. Pradeep Bakshi (Managing Director & CEO), Mr. Anil George (Deputy Managing Director), Mr. Abhijit Gajendragadkar (Chief Financial Officer) and Mr. V. P. Malhotra (Company Secretary) are the Key Managerial Personnel (KMPs) of the Company, in line with the requirements of Section 203 of the Act.

25. Declaration by Independent Directors

Pursuant to Section 149(7) of the Act, the Company has received declarations from all Independent Directors confirming that they meet the criteria of independence as specified in Section 149(6) of the Act, as amended, read with Rules framed thereunder and Regulation 16(1 )(b) of Listing Regulations. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence and that they are independent of the Management.

The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

26. Corporate Governance

Pursuant to Schedule V of Listing Regulations, Management Discussion and Analysis, Corporate Governance Report and Auditorsâ Certificate regarding compliance of conditions of Corporate Governance forms part of the Annual Report. A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the Board Members and Senior Management personnel also forms part of the Annual Report.

27. Details of establishment of vigil mechanism for Directors and employees

The Company had adopted a Whistle Blower Policy (âthe Policyâ) as required under Section 177(9) of the Act and Listing Regulations. The Policy has been formulated with a view to provide a mechanism for Directors and employees of the Company to approach the Ethics Counsellor/Chairman of the Audit Committee of the Company in case of any concern. During 2018-19, no complaints were received under the Whistle Blower Policy. The Whistle Blower Policy can be accessed on the Companyâs website at the link: https://voltas.com/assets/img/sustainability/corp_gov/ pdf/21782.pdf

28. particulars of loans, guarantees or investments under Section 186 of the Act during 2018-19

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statements (Please Refer to Notes 7, 8, 17 and 41 of the standalone financial statements).

29. particulars of contracts or arrangements with related parties

During the year under review, the Company did not have any contracts or arrangements with related parties in terms of Section 188(1) of the Act.

Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act along with the justification for entering into such contracts or arrangements in Form AOC-2 does not form part of the Report, as the same is not applicable.

30. Secretarial Standards

The Company has complied with the provisions of Secretarial Standards on Meetings of the Board of Directors (SS-1) and on General Meetings (SS-2).

31. SEBI (prohibition of Insider Trading) Regulations, 2015

SEBI has by its notification dated 31st December, 2018 amended the Prohibition of Insider Trading Regulations, whereby listed companies have been advised to formulate certain additional Policies and Procedures. These amendments have become effective from 1st April, 2019. Accordingly, the Company has adopted a revised Code of Conduct for Prevention of Insider Trading and Code of Corporate Disclosure Practices and formulated the Policy for determination of legitimate purpose and Policy for inquiry in case of leak of Unpublished Price Sensitive Information (UPSI). The terms of reference (Charters) of Board Audit Committee, Nomination and Remuneration Committee, Risk Management Committee and Shareholdersâ Relationship Committee have been suitably revised to comply with the requirements of SEBI Prohibition of Insider Trading and Listing Regulations, 2015.

32. Directorsâ Responsibility Statement

Based on the framework and testing of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors, including audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the financial year 2018-19. Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

33. Extract of the Annual Return

The extract of Annual Return in prescribed Form No. MGT-9 is enclosed as Annexure III to Directorsâ Report and is also placed on the website of the Company www.voltas.com.

34. Disclosure as per the Sexual Harassment of Women at Workplace (prevention, prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a âRespect for Genderâ Policy on prevention, prohibition and redressal of sexual harassment in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. Pursuant to this Act, the Company has complied with the provisions relating to the constitution of Internal Complaints Committee. The Company had not received any written complaints on sexual harassment during the financial year 2018-19.

35. General

The Notes forming part of the Accounts are self-explanatory or to the extent necessary, have been dealt with in the preceding paragraphs of the Report.

On behalf of the Board of Directors

Noel N. Tata

Chairman

Mumbai, 9th May, 2019

Mar 31, 2018

To The Members

The Directors present their Sixty-Fourth Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2018.

1. Financial Results

Rs. in crores

	Consolidated		Standalone
	2017-18	2016-17	2017-18	2016-17
Total Income	6,602	6,307	6,069	5,740
Profit for the year after meeting all expenses but before interest, depreciation and exceptional items	836	778	722	685
Interest	12	16	8	10
Depreciation and amortization	24	24	19	18
Profit before exceptional items	800	738	695	657
Share of Profit/(Loss) of Joint Venture and Associates	4	(19)	â	â
Exceptional items (Net)	1	1	(4)	(6)
Profit before tax	805	720	691	651
Tax expenses	227	200	182	165
Profit after tax	578	520	509	486
Other Comprehensive Income (Net)	163	81	158	87
Total Comprehensive Income	741	601	667	573

2. Reserves

An amount of Rs.20 crores was transferred to the General Reserve out of Profit available for appropriation.

3. Dividend

4. Operations

There appears to be a sense of greater optimism across many parts of the world. According to a latest IMF (International Monetary Fund) report, global growth is expected to rise 3.9% in 2018. Growth drivers include a notable rebound in global trade, an investment recovery in advanced economies, continued strong growth in Asia, a sizable upswing in emerging Europe and signs of recovery in several commodity exporting economies. These supported by strong momentum, favourable market sentiment, accommodative financial conditions and the domestic cum international repercussions of an expansionary fiscal policy in the United States, is expected to push the recovery. However, the headwinds of a possible escalation of a trade war between U.S.A and China loom large. On the back of Americaâs sanctions on Iran and OPEC (Organisation of the Petroleum Exporting Countries) moves, oil prices have been steadily climbing up with implications for oil consuming countries like India. The threat of inflationary pressures in the US economy remain.

India has recorded the highest growth rate amongst the emerging economies of BRICS (Brazil, Russia, India, China and South Africa). The Government is committed to addressing deterrents and roadblocks to growth with progressive policy reforms such as the implementation of the Goods and Services Tax (GST), the Insolvency and Bankruptcy Code (IBC), recapitalization package to improve the financial health of public sector banks, schemes targeted at Power for All and so on. As a result of these measures, the economy is showing signs of growth although the inflationary impact of factors such as the recent increases in oil prices and depreciation of the Indian currency need to be watched.

During the year, Voltas achieved a total income of Rs.6,602 crores, Income from operations of Rs.6,380 crores and profit after tax of Rs.578 crores.

Unitary Cooling Products Business Group (UPBG)

Despite intense competition and aggressive pricing, Voltas continued to remain No. 1 in ACs and improved its market share to 22.1% at Multi-Brand Outlets.

Voltas UPBG closed the year with turnover of Rs.3,225 crores. The strategy of continued focus on Inverters, Fixed-Speed Split ACs as well as Window ACs has enabled UPBG to address customer needs for different products. In particular, the business is seeing a growth in Inverter AC demand from Quarter 3 (2017-18) onwards. The product range in Inverter ACs has been significantly enhanced to cater to this industry shift and Voltas has the widest range of Inverter ACs in the market.

Voltas sold over 2 lakh Fresh Air Coolers, a growth of around 38%. UPBG is improving market penetration through an expanded product range, a good value proposition supported by better features, competitive pricing, and deeper distribution network. Commercial Refrigeration business also grew with an enhanced portfolio of new products such as combo-coolers (chest freezer cum cooler) and varying capacities for existing categories in response to evolving customer needs.

Domestic Projects Group (DPG)

The decision to focus on Government projects/ externally funded investments has helped the domestic projects business to remain sufficiently protected against the impact of low investment in private sector. With the Government pushing the growth agenda, opportunities are increasing in electrical distribution, water treatment and Smart City development. Besides, DPGâs core area of HVAC projects has benefited with projects in large buildings and in tunnel ventilation for Metro transportation. Meanwhile, the business continues to pursue various internal efficiency improvement initiatives, which augur well for maintaining the margins. The Companyâs wholly owned subsidiary - Rohini Industrial Electricals Limited (RIEL) has registered a profit in 2017-18 through efficient execution of rural electrification projects.

International Operations Business Group (IOBG)

Focus of IOBG has been on effective execution of on-going projects together with settlement and financial closure of older projects. These initiatives have helped to improve the profit margins.

Broad based pick-up in economic growth is expected across the Gulf Cooperation Council (GCC) countries in 2018. Going forward, the Company will continue its existing approach of booking new orders in a risk mitigated manner. At the same time, IOBG is conscious of the continued embargo in Qatar and is selective in booking orders in the Region.

Engineering Products Group (EPG) - Textile Machinery Division (TMD) and Mining & Construction Equipment (M&CE)

Impact of demonetization and GST implementation has been severe on the Domestic Textile Industry leading to further slowdown in new capacity formation. Profitability of spinning mills was also under pressure during the year due to subdued prices for yarn and a steep increase in raw cotton prices. Banks are also reticent to lend to the textile sector. Despite these conditions, TMD focused on providing value added services and delivered profits.

In M&CE, Mozambique operations continue to drive the performance. On the domestic front, the year was challenging with slowdown in mining related activity. However, a gradual recovery appears to be on the horizon. The Governmentâs impetus on road development has been encouraging and orders in the Crushing & Screening Equipment sector have started emerging. M&CE remains focused on adding new principals and customers as well as new equipments.

5. Finance

Environmental headwinds continued in 2017-18 with GST changing business dynamics. However, efficient financial planning has ensured robustness of the Companyâs Balance Sheet with low debt and a comfortable cash position. The overall cash position including cash and bank balances and liquid investments improved to Rs.2,227 crores as compared to Rs.2,089 crores in the previous year while borrowings, at a consolidated level (specific to overseas projects), continues to be lower at Rs.142 crores, down from Rs.171 crores last year. Effective execution of ongoing projects, settlement and financial closure of older projects led to improvements in margins. Collection of receivables and realization of money remains a top priority across businesses.

Overall, the cash surplus continues to be deployed in suitably lower risk short term debt growth mutual funds to maximize earnings from the investment portfolio. In line with longer term road map for utilizing the surplus cash for scaling up and growing the business, the Company has invested in a new Joint Venture company Voltbek Home Appliances Private Limited (Voltbek) for Consumer Durable Products during 2017-18.

6. Tata Business Excellence Model (TBEM)

During 2017-18, the Company focused on addressing the key areas of improvements identified in the external assessment held in the previous financial year. Based on the outcome of the last TBEM External Assessment, the Company has implemented comprehensive action plans to take its Business Excellence journey forward. These action plans have contributed to improved processes resulting in higher customer satisfaction and improved market share. To assess the Business Excellence journey over last 2 years, the Company plans to participate in TBEM External Assessment during 2018.

Over the period, the Company has developed more than 50 Business Excellence champions to facilitate a seamless Business Excellence journey. 13 of these champions have contributed to external assessments of other Tata group companies with 5 assessors being recognised at the Annual Tata Group Business Excellence Convention 2017 for specific achievements.

During 2017-18, the Company participated in Tata Innovista with 13 innovations across various business teams. Each innovation is assessed by a panel of Subject Matter Experts from within the Tata Group.

7. IT Initiatives

The year 2017 saw a major reform in the Indirect Tax structure of India. In July 2017, GST was implemented across India and all businesses, big and small, had to change their systems to comply to the new framework. Having anticipated and started preparations much in advance, the transition to GST was smooth without any business disruptions.

Firewalls for all locations of Voltas were upgraded and redundancy incorporated in the Architecture. Security was also strengthened around authorization and network access for users. Application Security and Authorization was also an area of focus and SAP Access Violation Management (AVM) was implemented for all SAP users.

On the business front, Extended Warranty System and Mobile Application for Technicians in UPBG, Multiple Analytics based reports for DPG, New Customer Relationship Management (CRM) system for both DPG and TMD, Centralized Attendance System and Bank Payment Automation for IOBG and multiple utility applications for all employees were undertaken.

One of the key projects was SAP implementation for the new VoltBek JV. The plan and business blue print was completed in collaboration with the Argelik team of Turkey (the joint venture partner) and the project is well under way and will be ready to Go Live in sync with the planned Product launch.

8. Environment and Safety

Safety continues to remain a priority at Voltas. While a Board Committee comprising 3 Directors, including the Managing Director reviews the Safety, Health and Environment (S-H-E) performance, a Steering Committee comprising Corporate Management Group and other key members periodically monitors the Safety performance and oversees the implementation of various initiatives. In an attempt to take the current Safety practices to the next level, the Company has used the behavioural safety approach to increase awareness.

In order to ensure consistency and resilience of its Safety controls, 61 major projects were audited, with a weighted score on the Tata Group Safety Standards compliances. This was in addition to the regular Safety inspections and audit of sites, Customer Care premises and offices.

The Companyâs manufacturing facilities, certified as ISO 14001 and OHSAS 18001 undergo Internal as well as External audits and the systems and processes are continuously fine-tuned every year. Unfortunately, during 2017-18, there was one fatal incident at RIEL project, caused due to collapse of a concrete pole during erection.

The Company seeks to ensure Zero Fatality. Accordingly, a focused approach in training was developed and the Company has achieved the following in 2017-18:

- Awareness - Across multiple programs, 2,00,546 personnel were Safety trained as compared to 1,69,162 in previous year.

- Certification program with NIST institute on Tata Safety standards - 23 personnel have been certified in the current year.

- 100% Induction training is ensured for all personnel at project sites.

- Increase in number of Near Miss instances reported in 2017-18 by 3 times as compared to last year due to better awareness.

Besides the formal trainings conducted, the Company is also aligning itself with digital platforms. Progress on the earlier created Online portal âSAFETY@VOLTASâ that captures S-H-E observations and ensures timely implementation of action plans, has been satisfactory, resulting in reduction of unsafe and adverse work conditions. A WhatsApp group of Safety practitioners has also been started so as to effectively share timely information and updates.

The Company has received numerous appreciation letters and awards in recognition of its contribution towards improving the Safety standards.

Sustainable Development

Engage, Equip and Empower, is the way chosen by Voltas to bring the marginalized segment into a stream of Sustainable Development. Voltas CSR interventions emphasize on peopleâs participation, bringing in ownership and fostering social capital. Sustainability is the pre-cursor to all Voltas CSR Projects. The Company has identified CSR projects which are need-based and which focus on building capability of various key stakeholders to ensure perpetual community action.

Sustainable Livelihood

Sustainable Livelihood which is the flagship program of Voltas, has over 25 Skill Training Centres under its umbrella. The Skill Training Centres, which are being pursued in partnership with 13 reputed organizations are making both technical and non-technical courses available to community youth and women. Besides offering training in the domain area of Refrigeration and Air-conditioning, the Company has also initiated other technical trainings like Electrical and Plumbing. The non-technical courses like Tally & Accounts, Advance Tailoring and Stitching, IT Help Desk, etc. are also attracting girls from under privileged communities. In FY 2017-18, over 2,900 youth were trained in aggregate, under Technical and Non-technical courses and around 80% youth are now gainfully employed.

Voltas had initiated a notable project in 2016-17 named ââRecognition of Prior Learningââ (RPL). The RPL program that aims at formally training and upgrading knowledge of existing technicians from the Refrigeration and Air-conditioning Industry, has certified and trained 1400 existing technicians from across 19 locations in the country. Taking the initiative forward in FY 2017-18, the Company also piloted its first batch of RPL for technicians working in the space of Central Air-Conditioning.

9. Community Development

The vertical which essentially intervenes in the key community issues like Education, Health and Water, has also achieved many milestones by reaching out to over 20,000 people in FY 2017-18. To enhance the quality of human capital, the Companyâs educational interventions are focusing on 5 crucial aspects like Quality Education, Teacherâs Training and Capacity Building, English proficiency, Inculcating Reading habits in primary school children and Career Guidance and counselling for Youth. Over 7,500 Children are directly impacted by the quality education intervention. Under Teachers Training, in partnership with Muktangan, Voltas could reach out to over 650 teachers. Voltas is particularly focusing a lot on Community teachersâ training as a way to ensure quality education for more and more children.

A community project in Dadra has successfully completed 200 toilets with an active participation from villagers and Gram Panchayat. Under water for irrigation project, the Company has formed water user groups. Hydro-geological investigation has been done to find out 10 apt sites for borewell installation.

National Importance

There are 3 sub-themes under its aegis, namely Disaster Management, Affirmative Action (for inclusion of socio-economically weaker sections in the process of development) and Sanitation.

As part of Disaster Management, an intervention was initiated two years ago to address water scarcity in the perennially drought prone area of Marathwada in Maharashtra. The initiative which began with water distribution as an immediate answer to the need of villages, carried out an action research project called Participatory Ground Water Management to understand hydro-geological state of the villages and measures for sustainable and safe drinking water.

Under Affirmative Action, the Company continues to extend nutritional and educational support to Kathkari children from a school near Panvel. In addition to the said support, Voltas also introduced two more initiatives: Stitching and Tailoring skill training program for tribal women and Nursing course. The training program was further strengthened and 28 tribal girls were trained and 50% are gainfully employed.

Voltas also initiated an exclusive skill training program in electrical and plumbing for Schedule Caste/ Schedule Tribe youth in Raigad and Thane District. 210 young boys have been trained and 121 are placed with appropriate organizations.

10. Corporate Social Responsibility (CSR)

Disclosure as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 in prescribed form is enclosed as Annexure I to the Directorsâ Report.

During the financial year 2017-18, the Company has spent Rs.9.14 crores towards various CSR activities, in line with the requirements of Section 135 of the Companies Act, 2013 (âActâ).

11. Subsidiary/Joint Ventures/Associate Companies

The Company has 9 subsidiaries, 5 joint ventures and 2 associate companies.

As per the requirement of Section 129(3) of the Act, a statement containing salient features of the financial statements of subsidiaries, joint venture and associate companies in prescribed Form No. AOC-1 is attached to the financial statements of the Company. Further, pursuant to Section 136 of the Act, the financial statements of the Company, including consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company www.voltas.com.

There have been no material changes in the nature of the business of the subsidiaries including associates and joint ventures during the financial year 2017-18.

During the year under review, the Company had transferred its entire 49% shareholding in Universal Weathermaker Factory L.L.C (UWF), Abu Dhabi, UAE and accordingly UWF ceased to be a joint venture company as on 31st March, 2018.

12. Number of Board Meetings

During 2017-18, eleven Board Meetings were held on 19th April, 2017; 23rd May, 2017; 8th June, 2017; 10th July, 2017; 2nd August, 2017; 27th September, 2017; 16th October, 2017; 8th November, 2017; 10th January, 2018; 7th February, 2018 and 15th March, 2018.

13. Policy on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director

14. Evaluation of Performance of Board, its Committees and of Directors

The performance of the Board as a whole, Committees and individual Directors was evaluated by seeking inputs from all Directors based on certain parameters such as: Degree of fulfilment of key responsibilities; Board structure and composition; Establishment and delineation of responsibilities to various Committees; Effectiveness of Board processes, information and functioning; Board culture and dynamics and Quality of relationship between the Board and the Management. The Directors also made a self-assessment of certain parameters - Attendance, Contribution at Meetings and guidance/support extended to the Management. The feedback received from the Directors was discussed and reviewed by the Independent Directors at their annual separate Meeting held on 15th March, 2018 and also shared with the NRC/Board. At the separate annual Meeting of Independent Directors, performance of Non-independent Directors, including Chairman, Board as a whole and various Committees was discussed. The performance of the individual Directors, including Independent Directors, performance and role of the Board/Committees was also discussed at the Board Meeting held on 17th May, 2018.

15. Statutory Auditors

At the 63rd Annual General Meeting (AGM) held on 28th August, 2017, the Members had approved the appointment of S R B C & Co. LLP (SRBC) as Statutory Auditors as well as Branch Auditors of the Company, to examine and audit the accounts of the Company for five consecutive financial years between 2017-18 and 2021-22, subject to ratification of their appointment at every subsequent AGM, if required under the Act. The Ministry of Law and Justice has through the Companies (Amendment) Act, 2017, notified certain amendments to the Companies Act, 2013 which would come in force from different dates as may be notified from time to time. The provisions relating to the requirement of seeking approval of the Members for ratification of appointment of Statutory Auditors at every AGM has been omitted with effect from 7th May, 2018, and is no more a legal requirement. Accordingly, the Notice convening the ensuing AGM does not include any Resolution for ratification of appointment of SRBC as the Statutory Auditors of the Company. The Auditorsâ Report for FY 2017-18 does not contain any qualification, reservation or adverse remarks.

16. Cost Auditors

The Board had appointed M/s. Sagar and Associates, Cost Accountants as the Cost Auditors for the financial year 2017-18. M/s. Sagar and Associates, Cost Accountants, have been re-appointed as Cost Auditors of the Company for the financial year 2018-19 and approval of the Members is being sought for ratification of their remuneration.

17. Secretarial Auditor

M/s. N. L. Bhatia and Associates, the Practicing Company Secretaries were appointed as Secretarial Auditor to undertake Secretarial Audit of the Company for the year 2017-18. Their Secretarial Audit Report, in prescribed Form No. MR-3, is annexed to the Directors Report as Annexure V, and does not contain any qualification, reservation or adverse remarks. M/s. N. L. Bhatia and Associates have been re-appointed as the Secretarial Auditor for the financial year 2018-19.

18. Audit Committee

The Audit Committee comprise Mr. Nani Javeri (Chairman), Mr. R. N. Mukhija and Mr. Debendranath Sarangi, all Independent Directors, in line with the requirements of Section 177 of the Act. The Board has accepted the recommendations made by the Audit Committee from time to time.

19. Internal Financial Controls

The Internal Financial Controls (IFCs) and its adequacy and operating effectiveness is included in the Management Discussion and Analysis, which forms part of this Report. The Auditors Report also includes their reporting on IFCs over Financial Reporting.

20. Risk Management

Pursuant to Section 134(3)(n) of the Act and Regulation 21 of Listing Regulations, Risk Management Committee is in place comprising Mr. Nani Javeri (Chairman), Mr. R. N. Mukhija and Mr. Debendranath Sarangi. The Company has formulated a detailed Risk Management Policy to establish an effective and integrated framework for the risk management process. During 2017-18, two meetings were held on 5th July, 2017 and 10th January, 2018 where, the top 10 risks were identified for the Company and various mitigation measures in respect thereof were reviewed and discussed.

21. Particulars of Employees

The information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

(a) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year:

Directors	Ratio to median remuneration
Mr. Ishaat Hussain (upto 28.8.2017)	*
Mr. Noel N. Tata	4.73
Mr. Pradeep Bakshi (w.e.f. 1.9.2017)	*
Mr. Anil George (w.e.f. 1.9.2017)	*
Mr. Nani Javeri	6.38
Mr. R. N. Mukhija	5.19
Mr. Vinayak Deshpande	3.25
Mr. Debendranath Sarangi	4.90
Mr. Bahram N. Vakil	4.89
Ms. Anjali Bansal	4.29
Mr. Hemant Bhargava (w.e.f. 23.5.2017)	_*
Mr. Arun Kumar Adhikari (w.e.f. 8.6.2017)	_*
Managing Director	Ratio to median remuneration
Mr. Sanjay Johri (upto 9.2.2018)	*
Mr. Pradeep Bakshi (w.e.f 10.2.2018)	*

* Since the remuneration of these Directors is only for part of the year, the ratio of their remuneration to median remuneration is not comparable and hence not stated.

Note: Ratio of Remuneration of Directors is computed based on Sitting fees and Commission paid during 2017-18.

(b) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary	% increase in remuneration in the financial year
Mr. Ishaat Hussain (upto 28.8.2017)	*
Mr. Noel N. Tata	33
Mr. Pradeep Bakshi (w.e.f. 1.9.2017)	*
Mr. Anil George (w.e.f. 1.9.2017)	*
Mr. Nani Javeri	16
Mr. R. N. Mukhija	29
Mr. Vinayak Deshpande	45
Mr. Debendranath Sarangi	55
Mr. Bahram N. Vakil	31
Ms. Anjali Bansal	64
Mr. Hemant Bhargava (w.e.f. 23.5.2017)	_*

Mr. Arun Kumar Adhikari (w.e.f. 8.6.2017)	_*
Mr. Sanjay Johri (Managing Director upto 9.2.2018)	_*
Mr. Anil George (CFO upto 31.8.2017) - KMP	_*
Mr. Abhijit Gajendragadkar (CFO w.e.f. 1.9.2017) - KMP	_*
Mr. V. P. Malhotra (Company Secretary) - KMP	57

* Since the remuneration of Directors / KMPs in 2017-18 is for part of the year, the percentage increase in their remuneration is not comparable and hence not sated.

(d) Number of permanent employees on the rolls of Company: 2,613 employees.

(e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstance for increase in managerial remuneration:

Average increase in remuneration is 8.30% for Employees other than Managerial Personnel and for Managerial Personnel (MD), it is not comparable. In 2016-17, there was one MD and in 2017-18, there were two MDs, for part of the year, respectively.

(f) Affirmation that the remuneration is as per the Remuneration policy of the Company:

The Company affirms that the remuneration paid is as per the Remuneration policy of the Company.

(g) A statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure forming part of this Report. Further, the Report and the Accounts are being sent to the members excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

22. Employee Stock Option

The Company has not issued any Employee Stock Options.

23. Conservation of energy, technology absorption, foreign exchange earnings and outgo

Information pursuant to Section 134(3)(m) of the Act, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is given as Annexure II to this Report.

24. Directors and Key Managerial Personnel

In accordance with the provisions of the Act and the Companyâs Articles of Association, Mr. Vinayak Deshpande retires by rotation and being eligible, offers himself for re-appointment.

Mr. Ishaat Hussain retired as the Chairman and Director of the Company at the 63rd AGM of the Company held on 28th August, 2017. Mr. Sanjay Johri ceased to be Managing Director of the Company with effect from 10th February, 2018 upon expiry of his term of appointment. The Directors place on record their sincere appreciation of the valuable guidance and support given by Mr. Ishaat Hussain during his long tenure as Chairman of the Company. The Board also placed on record their sincere gratitude and appreciation of the valuable services rendered by Mr. Johri, to take the Company to greater heights.

Mr. Noel N. Tata was appointed as the Chairman of the Company with effect from 1st September, 2017 and Mr. Abhijit Gajendragadkar was appointed as Chief Financial Officer and Key Managerial Personnel (KMP) of the Company with effect from 1st September, 2017. Based on the recommendation of NRC, the Board had appointed Mr. Pradeep Bakshi and Mr. Anil George as Additional Directors and Executive Directors of the Company with effect from 1st September, 2017 for a period of 3 years, subject to approval of Members at the ensuing AGM. Subsequently, based on the recommendation of NRC, the Board had, at its Meeting held on 16th October, 2017, appointed Mr. Pradeep Bakshi as Managing Director (Designate) with effect from 16th October, 2017 and as Managing Director & Chief Executive Officer (CEO) with effect from 10th February, 2018 for the period upto 31st August, 2020. Mr. Anil George was appointed as Deputy Managing Director (Designate) with effect from 16th October, 2017 and as Deputy Managing Director with effect from 10th February, 2018 for the period upto 31st August, 2020.

In accordance with the provisions of Section 161(1) of the Act, Mr. Pradeep Bakshi and Mr. Anil George hold office up to the date of the forthcoming AGM and are eligible for appointment as Directors of the Company. Notices under Section 160 of the Act have been received from a Member proposing their appointment as Directors of the Company. The Resolutions seeking approval of the Members for appointment of Mr. Pradeep Bakshi as a Director and as Executive Director/Managing Director & CEO and Mr. Anil George as a Director and Executive Director/Deputy Managing Director of the Company, including their brief profile forms part of the Notice of the 64th AGM of the Company.

None of the Directors is the Managing or Whole-time Director of any subsidiary of the Company.

Mr. Pradeep Bakshi (Managing Director), Mr. Anil George (Deputy Managing Director), Mr. Abhijit Gajendragadkar (Chief Financial Officer) and Mr. V. P Malhotra (Company Secretary) are the Key Managerial Personnel (KMPs) of the Company, in line with the requirements of Section 203 of the Act.

25. Declaration by Independent Directors

26. Corporate Governance

27. Details of establishment of vigil mechanism for Directors and employees

The Company had adopted a Whistle Blower Policy (âthe Policyâ) as required under Section 177(9) of the Act and Listing Regulations. The Policy has been formulated with a view to provide a mechanism for Directors and employees of the Company to approach the Ethics Counsellor/Chairman of the Audit Committee of the Company in case of any concern. During 2017-18, no complaints were received under the Whistle Blower Policy. The Whistle Blower Policy can be accessed on the Companyâs website at the link: http://www.voltas.com/WBP.pdf

28. Particulars of loans, guarantees or investments under Section 186 of the Act during 2017-18

29. Particulars of contracts or arrangements with related parties

All related party transactions during 2017-18 were in the ordinary course of business and satisfied the test of armâs length. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in prescribed Form No. AOC-2 as Annexure III to this Report.

30. Secretarial Standards

The Company has complied with the provisions of Secretarial Standards on Meetings of the Board of Directors (SS-1) and on General Meetings (SS-2).

31. Directorsâ Responsibility Statement

Based on the framework and testing of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors, including audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the financial year 2017-18. Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(vi) they have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

32. Extract of the Annual Return

Pursuant to Sections 92(3) and 134(3)(a) of the Act, read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return in prescribed Form No. MGT-9 is given as Annexure IV to this Report.

33. Disclosure as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a âRespect for Genderâ Policy on prevention, prohibition and redressal of sexual harassment in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Company had not received any written complaints on sexual harassment during the financial year 2017-18.

34. General

The Notes forming part of the Accounts are self-explanatory or to the extent necessary, have been dealt with in the preceding paragraphs of the Report.

On behalf of the Board of Directors

Noel N. Tata

Chairman

Mumbai, 17th May, 2018

Mar 31, 2017

The Directors present their Sixty-Third Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2017.

1. Financial Results

Rs. in crores

	Standalone		Consolidated
	2016-17	2015-16	2016-17	2015-16
Sales and Services	5,425	5,151	6,033	5,720
Profit for the year after meeting all expenses but before interest, depreciation and exceptional items	685	494	778	570
Interest	10	8	16	16
Depreciation and amortization	18	19	24	26
Profit before exceptional items	657	467	738	528
Share of Profit/(Loss) of Joint Venture and Associates	â	â	(19)	6
Exceptional items (Net)	(6)	21	1	29
Profit before tax	651	488	720	563
Tax expenses	165	139	209	170
Profit after tax	486	349	511	393
Other Comprehensive Income (Net)	87	(24)	82	(14)
Total Comprehensive Income	573	325	593	379

2. Reserves

An amount of Rs.50 crores was transferred to the General Reserve out of Profit available for appropriation.

3. Dividend

The Company''s Dividend Policy, which is disclosed on the Company''s website is based on the need to balance the twin objectives of appropriately rewarding its shareholders with dividend and of conserving resources to meet its future needs. Based on Company''s better performance, the Directors recommend higher dividend of Rs.3.50 per equity share of Rs.1 each (350%) for the year 2016-17 (2015-16: 260%).

4. Operations

We live in an increasingly unpredictable world - the aftermath of the US Presidential elections, Brexit and many socio economic tensions dominate newspaper headlines across the World. The new US administration led pronouncements, the tepid economic recovery or the lack of it, fragile movements in oil prices, commodity swings and the debt overhang in China have further sharpened the ambiguities. Some green shoots were visible in the US, although economies dependent on crude oil continue to remain under pressure. The Middle East Countries, more relevant to Voltas, given its areas of operations, continue to grapple with the new normal of lower crude oil prices amidst political uncertainty, especially in Qatar. Their fiscal position remains tight and the related issues including longer payment periods, certification delays, increase in the number of commercial disputes, etc., continue to affect industry at large.

On the domestic front, supported by a better monsoon in 2016-17, sentiments have improved and select economic indicators like inflation, interest rates, etc., indicate a level of positivity. At the same time, the Government continues to demonstrate serious intent to fast forward the reform agenda as evinced by more recent developments (GST, demonetization, infrastructure spending, rural electrification, etc., to mention a few). Nevertheless, capacity utilization levels remain subdued, Index of Industrial Production (IIP) for capital goods is largely negative, private sector spending continues to be muted. The Indian economy is widely anticipated to grow at 6.5%-7%, after considering the temporary negative consumption shock induced by cash shortages and payment disruptions owing to demonetization.

At Voltas, the Consolidated Sales and Services was higher by 5%, at Rs.6,033 crores as compared to Rs.5,720 crores in the corresponding period last year largely contributed by Unitary Cooling Products business. Profit before tax was higher by 28%, at Rs.720 crores as compared to Rs.563 crores last year. Net Profit for the period was also higher at Rs.511 crores as compared to Rs.393 crores last year. Earnings per Share improved to Rs.15.38 as compared to Rs.11.70 last year (Face Value per share Rs.1). Other Comprehensive Income recognized as per Ind-AS mainly includes notional mark-to-market gains on movement in market share price of certain strategic long term equity investments and other gains and losses. Accordingly, Total Comprehensive Income was Rs.593 crores as compared to Rs.379 crores last year. The figures for previous period have been regrouped/restated wherever necessary in line with Ind-AS requirements.

The Cooling Products Industry continues to be largely weather dependent with demand especially for AC''s being closely linked to temperature movements. While the summer months in 2015-16 were interrupted by intermittent rains, in 2016-17, the onset of sustained hot weather was brisk with exceptionally high temperatures being recorded in certain parts of the country. Accordingly, given the weather led spurt in consumer demand, the AC industry witnessed a significant growth in volumes, also assisted by the benefit of a low base. Overall, the Room AC industry had an exceptional year reporting a secondary volume growth of 31% as compared to 12% last year. Ably supported by better quality cum range of products, wider distribution, appropriately timed advertisements, promotions and sensible pricing, the Company''s Unitary Cooling Products business, fought intense competition from Global and Indian brands to sustain its leadership position throughout the year with an increased market share of 21.4% as compared to 21.1% last year. The year also saw the brand reaching the landmark figure of selling 1 million Room Air Conditioners in one year, a milestone for the entire Industry.

In the Domestic Projects business, there has been an increase in enquiry levels and order finalization mainly on account of public sector spending. The Company had strategically pursued domestic projects involving public spending and externally funded investments, as a sensible way of mitigating the credit risks associated with the private sector. Accordingly, the Company had focused on areas such as urban infrastructure, rural electrification and water. The current order backlog of Rs.2,558 crores (as compared to Rs.2,025 crores, last year) consequently reflects higher quality and a better assurance of financial recovery. However, the pace of execution on certain carry-forward projects has unfortunately been slower than expected owing to various delays. Nevertheless, on account of several internal initiatives including timely business efficiency improvement programs, there has been an improvement in margins and savings in costs.

With the international oil prices hovering around $ 50 per barrel, the GCC Governments have responded by launching austerity drives targeted at reducing public spending. The consequential impact on liquidity with client led progress deferrals and certification/payment delays continues. With an internal task force focused on optimum closure of legacy projects, the Company has accelerated settlement and commercial closure of completed projects, barring a couple of projects under arbitration. As far as Sidra is concerned, the complicated arbitration between the Main Contractor and Qatar Foundation is likely to be long-drawn. With the inflow of suitably risk mitigated orders in more recent times and the order backlog of Rs.1,763 crores (compared to Rs.1,889 crores, last year), the Company is confident of better performance by International Projects business.

The challenges in the Mining and Textile Industries in India are well known. Accordingly, the Engineering Products business has recorded lower Revenue and Profit as compared to last year. EBIT margins for this segment tend to swing depending on the contribution of equipment sales in the overall revenue mix -compared to last year, equipment sales have been lower in the current period.

In Textile Machinery business, the Company has been witness to a huge surge in price of cotton, not followed through in relative price of yarn. This has led to margin pressures across spinning mills, with many deciding to opt for partial shut-downs. At the same time, the withdrawal of TUF for Spinning and difficulties in obtaining bank finance has delayed investments. While visibility of subsidy driven orders, especially in States offering special incentives is not clear, there is some improvement in the Post Spinning side of Textile Machinery business.

On the Mining front, Mozambique operations continue to drive the performance. Addition of more machinery in the scope of maintenance services continues to enhance the performance of Mining & Construction Equipment business. However, on account of the steep depreciation in Mozambique currency (Meticals), some loss in Forex had to be accounted during the year. Meanwhile, the Mining business in India remains sluggish with lower equipment sale as compared to last year. However, over the course of the spending continues to be muted. The Indian economy is widely anticipated to grow at 6.5%-7%, after considering the temporary negative consumption shock induced by cash shortages and payment disruptions owing to demonetization.

On the Mining front, Mozambique operations continue to drive the performance. Addition of more machinery in the scope of maintenance services continues to enhance the performance of Mining & Construction Equipment business. However, on account of the steep depreciation in Mozambique currency (Meticals), some loss in Forex had to be accounted during the year. Meanwhile, the Mining business in India remains sluggish with lower equipment sale as compared to last year. However, over the course of the year, the business has witnessed increased traction in the Road Construction Sector with a large order for crushing and screening equipment along with increased sale of parts.

5. Finance

Despite environmental headwinds, diligent financial planning has ensured the continued robustness of the Company''s Balance Sheet, with low debt, lower working capital and a comfortable cash position. The overall cash position including cash and bank balances and liquid investments has reached a new high of Rs.2,089 crores as compared to Rs.1,690 crores in the previous year. Borrowings, at a consolidated level, specific to overseas projects have reduced to Rs.171 crores from Rs.271 crores last year.

Much credit for the comfortable liquidity position goes to the Products business given their high ROCE cash and carry model with limited credit. However, emphasis on collection of outstandings and realization of money remains a top priority across businesses. As mentioned earlier, with settlements and financial closure of completed projects, the Projects businesses have also ensured suitable improvement in cash from operations. Overall, the cash surplus has been deployed in suitably lower risk Debt mutual funds. During the year, the portfolio has been sensibly churned in favour of growth options of short and medium term funds to maximize earning from the investment portfolio. Meanwhile, there is an increased focus on developing a longer-term roadmap for utilizing the surplus cash for scaling up and growing the business.

6. Tata Business Excellence Model (TBEM)

TBEM Assessment process brings nearly 300 Assessors and 25 Mentors from about 60 Tata group companies face to face with thousands of executives who manage the group''s stakeholder processes. It seeks to celebrate successes and highlights the opportunities ahead for each company. It is an immense opportunity to take stock of the approaches, practices, tools and results with which we collectively represent brand Tata. Through this TBEM introspection, the Company benefits from the key insights and observations generated from the assessment team''s outside-in perspectives. More importantly, it ensures discovery of Best Practices and deployment to other parts of the group thereby multiplying value and benefits.

During 2016-17, the Company participated in the external assessment based on TBEM. As part of the Assessment process, senior executives from other Tata group companies assessed the Company''s key processes at Corporate as well at Business Units. During the last couple of years, the Company had focused on the findings of the previous TBEM Assessments and strengthened the operational processes further. The efforts taken by the Company to move forward in business excellence have been acknowledged by adjudging the Company at higher maturity level of "Good Performance" score band, as compared to the last assessment.

Based on the outcome of the recent Assessment, the Company is in the process of developing and implementing comprehensive action plans to take its Business Excellence journey forward. In order to effectively execute these action plans, the Company would continue to benchmark the processes with other companies within and outside the Tata Group. The Company has developed 50 Business Excellence champions to facilitate in seamlessly proceeding with Business Excellence journey. Ten of these champions have contributed to External Assessments of other Tata group companies with achievements of four assessors being recognized at the Annual Tata Group Business Excellence Convention. Further, the Company has initiated various continual improvement projects with an objective of improving operational efficiencies in certain key areas critical to Business Units. These projects were finalized, after discussion with the Senior Management team, and were executed through cross functional teams.

Innovation is one of the key determinants of long term value creation. It is a continual quest at the Tata group and Tata companies are supported in their efforts to achieve world-class standards in all aspects of operations through group-level processes and systems that encourage innovation. During 2016-17, the Company also participated in Tata Innovista, a Tata group level contest to recognise and celebrate the ''successes'' and ''struggles'' of innovation. As part of Innovista, each innovation is assessed by a panel of Subject Matter Experts from within and outside the Tata group. From over 2,000 applications across multiple companies, one of the teams from Voltas has won the Western Regional round.

7. IT Initiatives

All companies across all Industries are witnessing the advent and penetration of Digital trends and technologies into their partner, customer and competitor landscapes. The current social and business environments demand that every business be aware of and adopt Digital technologies that build the right capabilities to handle new threats and gain business advantage. Given this changed reality, the Company recognized the need for digitization and finalized its Digital Strategy early in the year.

Many initiatives were undertaken in-line with this strategy at Voltas. E-Catalogue Portal for Spares Management, Outstanding E-Portal, MRP for Product Sales, Call Monitoring and Preventive Maintenance features on Mobile with location based services and Claim Management for Bank Guarantee were some of the applications rolled out for the Domestic Projects business. Realizing the growing rise in Online purchases, the Unitary Cooling Products business integrated with Tata Cliq and finance companies for AC sales. Bar-Code system was implemented in Commercial Refrigeration plant in Pantnagar to track WIP and inventory real-time. The Company rolled out SAP across all major overseas JVs and subsidiaries to establish common business processes in Voltas managed entities. The implementation of SAP at Weathermaker, a wholly-owned subsidiary in UAE, included integration with the Engineering Software Camduct and Barcode for tracking WIP and enabling online dispatch. The Company also implemented the Boardvantage solution for participants of Board/Committee Meetings. With this, the Board/Committee Meetings of Voltas are now paperless.

One of the key projects supported by IT was Remote Monitoring of Chillers for Domestic Projects business. The solution leverages upcoming technologies like IoT, Cloud and Analytics to deliver a platform which helps the Company better serve customers through predictive maintenance by continuous monitoring of equipment. Voltas IT also played a key role in GST preparedness and is well positioned to handle all requirements of GST.

To ensure high availability, performance and security of the overall IT System, multiple enhancements were done on the IT Infrastructure front. These included adoption of the solutions for Network Access Control and secure Wi-Fi including change in IP Schema redesign at all locations, further enhancement of Data Backup processes for both the Data Centre and Disaster Recovery Centre with tools like Tivoli and Avamar, etc.

8. Environment and Safety

Safety is a priority and of prime importance at Voltas. The Company continues to address matters related to Safety, Health and Environment (S-H-E) through various initiatives. A Board Committee comprising 3 Directors, including the Managing Director reviews the S-H-E performance. A Steering Committee comprising Corporate Management Group and other key members periodically reviews Safety performance and oversees implementation of various initiatives.

In order to ensure consistency and resilience of its Safety controls, 51 major projects were audited, with a weighted score on the Tata Group Safety Standards compliances. This was in addition to the regular Safety inspections and audit of sites, Customer care premises and offices.

The Company''s manufacturing facilities, certified as ISO 14001 and OHSAS 18001 undergo Internal as well as External audits and the systems and processes are continuously fine-tuned every year. Unfortunately, there was one fatal incident at DMRC project in June 2016, caused due to collapse of a metallic structure.

The Company''s goal continues to be, to achieve Zero Fatality. Voltas believes that to attain this goal, Safety Awareness is of prime importance. Accordingly, a focused approach in training was developed and the Company has achieved the following in 2016-17:

- Awareness - 1,69,162 personnel were Safety trained as compared to 81,508 in previous year (multiple trainings).

- 3 day IOSH (UK) certification program -120 personnel have been certified in the current year.

- 100% Induction training is ensured for all personnel at project sites.

- Increase in number of Safety observations reported in 2016-17 by 70% as compared to last year.

The Company has improved the communication channels to capture S-H-E related observations, in keeping with the vision of Driving Value through Smart Engineering. An Online portal "SAFETY@VOLTAS" has been launched for capturing S-H-E observations and ensuring timely implementation of action plans to close such observations, resulting in reduction of unsafe and adverse work conditions. To ensure uniform communication and understanding about Safety practices and knowledge sharing, the communication system has been improvised through creation of a WhatsApp group of Safety practitioners. Sharing of the Loss Time Injury (LTI) incidents and High Potential (HIPO) Near miss cases are done regularly, in addition to sharing Safety messages through SMS and emails. The improved communication mechanisms have helped increase workmen engagement in Safety meetings and trainings at project sites, apart from an increase in the reporting of Safety observations, LTI incidents and Near misses from the project sites.

National Safety week, Road Safety week and Fire Service day were celebrated across the locations and saw healthy participation of employees and subcontractor''s staff across various sites. Safety recognition awards have also been instituted at project sites and manufacturing locations. The Company has received numerous appreciation letters and awards in recognition of the contribution towards improving the Safety standards, from: AL Futtaim Carillion, Oman for its Kempinski Project; TCS Indore; Tata Motors Pune; Tata Steel Kalinganagar; to being honored as the Best Safety Contractor and Safety Officer at Dhirubhai Ambani International Convention & Exhibition Centre project in BKC Mumbai, LULU Grand Hyatt project in Cochin, VIVA Bahriya project in Qatar, and IIM Udaipur. CMRL project, Chennai has also won the World Safety Organisation award, in addition to the British Safety Council''s International Safety Award with Merit.

The Company believes that incidents and risk to health and environmental impact are preventable through continuous involvement of all stakeholders to create Zero Harm, Zero Illness, Zero Waste and a Zero Defect work environment.

Sustainable Development

With a firm commitment to Sustainable Development, the Company has adopted an approach of Engage, Equip and Empower for all its CSR interventions under three key thrust areas namely Sustainable Livelihood, Community Development and National Importance.

Sustainable Livelihood

Sustainable Livelihood is the flagship program of Voltas. Under this thrust, there is a lot of emphasis on building employability amongst marginalized youth. To take its commitment forward, Voltas has commenced 18 Skill training centers in partnership with Tata Strive and six other reputed organizations like GMR Foundation, ICICI Foundation, Tech Mahindra Foundation, Bosco Boys and Joseph Cardijn Technical School across 15 locations in the country. Out of the 18 Skill Training Centers, 2 are Voltas Centers of Excellence at Thane and Jamshedpur. The training centers offer technical and non-technical courses. Currently, Refrigeration and Air-conditioning (RAC) and Heating, Ventilation and Air-conditioning (HVAC) are the 2 skill trainings being offered under Technical training. For Non-technical training, Tally and Accounts, Hospitality, IT enabled services, Health attendant, Stitching and Tailoring are some of the courses offered.

The Company along with its partners ensures an end-to-end intervention comprising theoretical and practical training, ''On the Job'' Training, Certification and Placement support. The key objective of this intervention is to build employability and promote sustainable livelihood. Through these training centers, the Company has created a pool of over 2,500 well trained and certified technicians in 2016-17.

In 2016-17, Voltas also initiated a noteworthy project named ''Recognition of Prior Learning'' (RPL). The RPL program aims at formally training and upgrading knowledge of existing technicians in the space of Refrigeration and Air-conditioning, who were never formally trained. The technicians on completing the training go through Technical knowledge, Soft skills, and Customer care and Safety education. After rigorous assessments, they are formally certified by Electronic Sector Skill Council. This initiative not only equips the technicians with apt theoretical knowledge and improved productivity, but certifies them as trained technicians to access better opportunities /emoluments. The Company has started this program for 1,400 existing technicians from across 19 locations in the country. So far, 846 technicians have been trained.

9. Community Development

Under this thrust area, Voltas focuses on addressing priority issues expressed by the surrounding communities around the Company''s key locations, Dadra, Thane, Pantnagar and Chinchpokli. The key issues spelt out by the communities are Education, Water, Health and Sanitation and Employability.

Community project in partnership with Action For Food Production (AFPRO) has successfully completed 115 Household toilets at Dadra with an active participation from Villagers and Gram Panchayat. Under water for irrigation project, the Company has formed water user groups. Hydro-geological investigation has been done to find out 10 sites suitable for bore-well installation. Pipeline survey is under progress. 3 Mega health camps were organized in 2016-17 and around 450 families from across 9 hamlets participated in the same.

In the space of Education, the Company is striving to work for children from marginalized section, with focus on 3 key aspects namely, capacity building of teachers to ensure quality Education, access to libraries and instilling quality reading practices, and teaching English to vernacular medium students from rural areas with the help of specially designed English course through Digital boards. In 2016-17, under quality education, 80 teachers from across 7 districts have been trained and about 184 children from BMC School have been supported. The library project has been of great help for over 2,500 students from 8 BMC and Zilla Parishad Schools. The 9 libraries established in the Government Schools have not only helped the children from marginalized sections with an access to informative and thought-provoking books, but has inculcated a penchant for reading. The Company is reaching out to 7,295 students from 153 Zilla Parishad Schools in Thane District through its E-Teach English program. This innovative program is also engaging all the important village level stakeholders in the program including School Teachers, Parent-teachers'' Associations, Village youth and Gram Panchayat to make it a sustainable initiative.

The Company also supported a project to control Pediatric Tuberculosis. 3,000 vulnerable children from 9 cities across the country have undergone a TB test for early detection and treatment.

National Importance

Under this thrust, Voltas is focusing on the three sub-themes - Disaster Management, Affirmative Action for inclusion of socio-economically weaker sections in the process of development and Sanitation.

Subsequent to addressing immediate need for safe drinking water through water supply in the perennially drought affected area of Osmanabad and Latur, in 2015-16, the Company had in 2016-17, started its long-term intervention called Participatory Ground Water Management for sustainable water in 5 villages. A Hydro-geological study was undertaken to identify appropriate soil and water conservation measures and area treatment plan. Some of the key outcomes of the intervention are, deeper understanding of the ground water management, increased knowledge of area treatment, de-silting of public percolation tank and deepening of 3 wells. The excavated silt used by 10 farmers, has led to better soil quality and fertility and 15 farmer clubs have been established. Over 3,400 farmers have insured their crops and paid premium of '' 62.46 lakhs. Entitlements to different development schemes were received by 31 needy families including Grass cutting machine, farm pond, pipes, Water lifting devices, etc.

Swachh Bharat Abhiyaan - Under Sanitation (Swachh), Voltas in partnership with Sulabh International, refurbished 4 Public Toilet Complexes in Mumbai and Thane. Each Toilet Complex takes care of a footfall of an average 20,000 users per month. The Company also initiated a pilot project on solid waste management in ''E'' Ward of Mumbai. 7 sites comprising big residential complex, hospital, Police settlement have been selected to work on the theme of Zero waste. At Masina Hospital, which is one of the sites, waste segregation and management workshop has been done and composting pits have been built.

Affirmative Action

The Company continues to extend nutritional and educational support to Kathkari tribal children from a school near Panvel. In addition, Voltas also introduced two more initiatives.

- Basic and Advanced Stitching and Tailoring skill training program for tribal women.

- Nursing course. 18 tribal women have completed the skill training program.

10. Corporate Social Responsibility

Disclosure as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 in prescribed form is enclosed as Annexure 1 to the Directors'' Report.

During 2016-17, the Company has spent Rs. 8.45 crores towards various CSR activities.

11. Subsidiary/Joint Ventures/Associate Companies

The Company has 9 subsidiaries, 4 joint ventures and 3 associate companies.

As per the requirement of Section 129(3) of the Companies Act, 2013 ("Act"), a statement containing salient features of the financial statements of subsidiaries, joint venture and associate companies in prescribed Form AOC-1 is attached to the financial statements of the Company. Further, pursuant to Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company - www.voltas.com.

There have been no material changes in the nature of the business of the subsidiaries including associates and joint ventures during the financial year 2016-17.

During 2016-17, the local joint venture partner -Sovereign International Company WLL (Sovereign) transferred their entire 51% shareholding in Voltas Qatar WLL (VQ), a joint venture company to a local Qatari national. As a sequel, the two nominees of Sovereign on the Board of VQ also resigned. The Board of VQ comprises four Directors, all nominated by the Company. As Voltas controls the composition of the Board of Directors, VQ is a subsidiary of the Company. Revised Memorandum of Association of VQ, incorporating the aforesaid changes in shareholding/ Directors has been registered with the local authorities in September 2016.

The Company has on 23rd May, 2017 entered into a Joint Venture arrangement with Argelik A.S., a company incorporated in Istanbul, Turkey, for establishing a Joint Venture Company (JVC), to tap the fast growing Consumer Durables market in India. The proposed JVC to be incorporated in the name ''VoltBek Home Appliances Private Limited'' would be engaged in the business of refrigerators, washing machines, microwaves and other white goods/domestic appliances in India. Argelik A.S. is part of the Kog group which is Turkey''s largest Industrial and Services group, in terms of revenue, exports, taxes, number of employees and market capitalization. The proposed JVC will leverage the strong brand presence and wide sales and distribution network of Voltas which is the market leader for residential room air conditioners in India, with over 20% market share. Argelik A.S. would bring to the JVC its strong R&D and manufacturing prowess, in addition to a wide product range and global sourcing capabilities. Beko, the global brand of Argelik A.S. has been the fastest growing home appliances brand in Europe for the past 7 years. The proposed JVC would market its products under the brand ''Voltas-Beko''

12. Number of Board Meetings

During 2016-17, eight Board Meetings were held on 26th April, 2016; 17th May, 2016; 2nd August, 2016; 27th September, 2016; 16th November, 2016; 9th January, 2017; 14th February, 2017 and 22nd March, 2017.

13. Policy on Directors'' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director

Based on the recommendation of the Nomination and Remuneration Committee (NRC), the Board has adopted the Remuneration Policy for Directors, KMP and other Employees. NRC has formulated the criteria for determining qualifications, positive attributes and independence of an Independent Director and also the criteria for Performance evaluation of individual Directors, the Board as a whole and the Committees. Evaluation of Directors was done by the NRC at its meeting held on 22nd March, 2017.

14. Evaluation of Performance of Board, its Committees and of Directors

The performance of the Board as a whole, Committees and individual Directors was evaluated by seeking inputs from all Directors based on certain parameters such as: Degree of fulfillment of key responsibilities; Board structure and composition; Establishment and delineation of responsibilities to various Committees; Effectiveness of Board processes, information and functioning; Board culture and dynamics and Quality of relationship between the Board and the Management. The Directors also made a self-assessment of certain parameters - Attendance, Contribution at Meetings and guidance/support extended to the Management. The feedback received from the Directors was discussed and reviewed by the Independent Directors at their annual separate Meeting and also shared with the NRC/Board. At the separate Meeting of Independent Directors, performance of Non-independent directors, including Chairman, Board as a whole was discussed. The performance of the individual Directors, including Independent Directors, performance and role of the Board/Committees was also discussed at the Board Meeting.

15. Statutory Auditors

The Members had at the 60th Annual General Meeting (AGM) held on 1st September, 2014, approved the appointment of Deloitte Haskins and Sells LLP (DHS) as Statutory Auditors as well as Branch Auditors of the Company to audit the accounts of the Company for three consecutive financial years between 2014-15 and 2016-17, from the conclusion of the 60th Annual General Meeting (AGM) till the conclusion of 63^rd AGM of the Company to be held in the year 2017, subject to ratification at every AGM. At the last AGM, the Members had ratified their appointment for the financial year 2016-17. DHS has done the Statutory audit of the financial statements of the Company for 2016-17 and their Report does not contain any qualification, reservation or adverse remarks.

Pursuant to the provisions of Section 139 of the Act, read with the Companies (Audit and Auditors) Rules, 2014, it is proposed to appoint S R B C & Co. LLP (SRBC) as Statutory Auditors for a term of five years from the conclusion of 63rd AGM till the conclusion of 68th AGM of the Company to be held in the year 2022, to examine and audit the accounts of the Company for financial years between 2017-18 and 2021-22, (subject to ratification of their appointment at every subsequent AGM, if so required under the Act). SRBC have, pursuant to Section 139 of the Act, furnished a certificate regarding their eligibility of appointment.

Resolution seeking approval of Members for appointment of SRBC as Statutory Auditors of the Company forms part of the Notice of AGM of the Company.

16. Cost Auditors

The Board had appointed M/s. Sagar and Associates, Cost Accountants as the Cost Auditors for the financial year 2016-17. M/s. Sagar and Associates, Cost Accountants, have been appointed as Cost Auditors of the Company for the financial year 2017-18 and approval of the Members is being sought for ratification of their remuneration.

17. Secretarial Auditor

M/s. N L Bhatia and Associates, Practicing Company Secretaries were appointed as Secretarial Auditor to undertake Secretarial Audit of the Company for the financial year 2016-17. Their Secretarial Audit Report, in prescribed Form No. MR-3, is annexed to the Directors Report as Annexure V, and does not contain any qualification, reservation or adverse remarks.

18. Audit Committee

The Audit Committee comprises Mr. Nani Javeri (Chairman), Mr. R. N. Mukhija and Mr. Debendranath Sarangi, all Independent Directors, in line with the requirements of Section 177 of the Act. The Board has accepted the recommendations made by the Audit Committee from time to time.

19. Internal Financial Controls

20. Risk Management

Pursuant to Section 134(3)(n) of the Act and Regulation 21 of Listing Regulations, Risk Management Committee is in place comprising Mr. Nani Javeri (Chairman), Mr. R. N. Mukhija and Mr. Debendranath Sarangi. During 2016-17, two Meetings of Risk Management Committee were held on 25th April, 2016 and 10th January, 2017 whereat, the top 10 risks identified for the Company and various mitigation measures in respect thereof were reviewed and discussed.

21. Particular of employees

The information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

(a) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Non-Executive Directors	Ratio to median remuneration
Mr. Ishaat Hussain	4.61
Mr. Noel N. Tata	3.67
Mr. Nani Javeri	5.68
Mr. R. N. Mukhija	4.14
Mr. Vinayak Deshpande	2.31
Mr. Debendranath Sarangi	3.25
Mr. Bahram N. Vakil	3.86
Ms. Anjali Bansal	2.69
Ms. Usha Sanqwan (upto 27.9.2016)*	â
Managing Director	Ratio to median remuneration
Mr. Sanjay Johri	59.98

* Since this information is for part of the year, the same is not comparable.

(b) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary	% increase in remuneration in the financial year
Mr. Ishaat Hussain	1
Mr. Noel N. Tata	10
Mr. Nani Javeri	12
Mr. R. N. Mukhija	7

Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary	% increase in remuneration in the financial year
Mr. Vinayak Deshpande	â
Mr. Debendranath Sarangi	47
Mr. Bahram N. Vakil	*
Ms. Anjali Bansal	*
Ms. Usha Sangwan (upto 27.9.2016)	*
Mr. Sanjay Johri (Managing Director)	17
Mr. Anil George (Chief Financial Officer)	17
Mr. V. P. Malhotra (Company Secretary)	â

* Details are not given as the same are not comparable with previous year.

(d) Number of permanent employees on the rolls of Company:

2,555 employees.

(e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstance for increase in managerial remuneration:

Average increase in remuneration is 3.74% for Employees other than Managerial Personnel and 17% for Managerial Personnel (MD).

(f) Affirmation that the remuneration is as per the Remuneration policy of the Company:

The Company affirms that the remuneration paid is as per the Remuneration policy of the Company.

(g) A statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure forming part of this Report. Further, the Report and the Accounts are being sent to the members excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

22. Employee Stock Option

The Company has not issued any Employee Stock Options.

23. Conservation of energy, technology absorption, foreign exchange earnings and outgo

Information pursuant to Section 134(3)(m) of the Act relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is given as Annexure II to this Report.

24. Directors and Key Managerial Personnel

In accordance with the provisions of the Act and the Company''s Articles of Association, Mr. Ishaat Hussain retires by rotation and does not seek re-election in view of his retirement on 2nd September, 2017, as per the retirement age policy for Directors adopted by the Board. Mr. Ishaat Hussain is a Director of the Company since 26th April, 1999 and the Chairman of the Board of Directors since 27th January, 2000.

Ms. Usha Sangwan, a Director on Voltas Board, representing Life Insurance Corporation of India (LIC) had resigned and ceased to be a Director of the Company with effect from 27th September, 2016. The Directors place on record their sincere appreciation of the valuable guidance and support given by Ms. Usha Sangwan during her tenure on the Board.

Mr. Hemant Bhargava was appointed as an Additional Director, representing LIC, with effect from 23rd May, 2017. Mr. Arun Kumar Adhikari was appointed as an Additional Director and Independent Director with effect from 8th June, 2017 for a term of five years, subject to approval of shareholders at the forthcoming AGM. In accordance with the provisions of Section 161(1) of the Act, Mr. Hemant Bhargava and Mr. Arun Kumar Adhikari hold office upto the date of the forthcoming AGM and are eligible for appointment as Directors of the Company. Notices under Section 160 of the Act have been received from members proposing the appointment of Mr. Hemant Bhargava and Mr. Arun Kumar Adhikari, respectively as Directors of the Company. The Resolutions seeking approval of the Members for appointment of Mr. Hemant Bhargava as a Director and Mr. Arun Kumar Adhikari as an Independent Director, including a brief profile of these Directors form part of the Notice of the 63rd AGM of the Company.

None of the Directors is the Managing or Whole-time Director of any subsidiary of the Company.

Based on the recommendation of the Nomination and Remuneration Committee, the Board has also at its Meeting held on 8th June, 2017, appointed Mr. Anil George and Mr. Pradeep Bakshi as Additional Directors and Executive Directors with effect from 1st September, 2017.

Mr. Anil George, a qualified Chartered Accountant, joined Voltas in July 2010 as Executive Vice President, Corporate Affairs and CFO (designate). He was appointed as the CFO of the Company in May 2011 and promoted as President (Corporate Affairs) & CFO in August 2013. He is entrusted with additional responsibilities of Textile Machinery business, Ethics, Information Technology, Property matters and Corporate Communication.

Mr. Pradeep Bakshi is a Science graduate from Delhi University and holds Post Graduate Diploma in Management. He has worked with various reputed Multinational and Indian companies in the Consumer Appliances domain before joining Voltas in November 2001. Mr. Pradeep Bakshi grew to the position of President & Chief Operating Officer - Unitary Products Business Group (UPBG) in August 2013 and took additional responsibility of Mining & Construction Equipment business with effect from 1st April, 2014.

Mr. Sanjay Johri (Managing Director), Mr. Anil George (Chief Financial Officer) and Mr. V. P. Malhotra (Company Secretary) are the Key Managerial Personnel (KMPs) of the Company, in line with the requirements of Section 203 of the Act.

25. Declaration by Independent Directors

26. Corporate Governance

Pursuant to Schedule V of the Listing Regulations, Management Discussion and Analysis, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance form part of the Annual Report. A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the Board Members and Senior Management personnel also forms part of the Annual Report.

27. Details of establishment of vigil mechanism for directors and employees

The Company had adopted a Whistle Blower Policy ("the Policy") as required under Section 177(9) of the Act and Listing Regulations. The Policy has been formulated with a view to provide a mechanism for directors and employees of the Company to approach the Ethics Counsellor/Chairman of the Audit Committee of the Company in case of any concern. The Whistle Blower Policy can be accessed on the Company''s website at the link: http://www.voltas.com/WBP.pdf

28. Particulars of loans, guarantees or investments under Section 186 during 2016-17

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statements (Please refer to Notes 7, 8, 16 and 38 of the standalone financial statements).

29. Particulars of contracts or arrangements with related parties

All related party transactions during 2016-17 were in the ordinary course of business and satisfied the test of arm''s length. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in prescribed Form No. AOC-2 as Annexure III to this Report.

30. Directors'' Responsibility Statement

Based on the framework and testing of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors, including audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2016-17. Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(vi) they have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

31. Extract of the Annual Return

32. Disclosure as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a ''Respect for Gender'' Policy on prevention, prohibition and redressal of sexual harassment in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Company had during 2016-17, received 3 written complaints on sexual harassment which were investigated and appropriate actions were initiated.

33. General

The Notes forming part of the Accounts are self-explanatory or to the extent necessary, have been dealt with in the preceding paragraphs of the Report.

On behalf of the Board of Directors

Ishaat Hussain

Chairman

Mumbai, 8th June, 2017

Mar 31, 2014

To the Members

The Directors present their Sixtieth Annual Report and the Audited Statement of Accounts for the year ended 31st March 2014.

FINANCIAL RESULTS

Rs.in Crores

Standalone Consolidated

2013-14 2012-13 2013-14 2012-13

2. Revenue from Operations (Gross) 5188 5618 5303* 5584*

Profit for the year after meeting all expenses but before interest, depreciation and exceptional items 295 283 366 329

Interest 16 27 23 33

Depreciation and amortization 19 22 25 28

Profit before exceptional items 260 234 318 268

Exceptional items (Net) (3) 8 22 12

Profit before tax 257 242 340 280

Provision for taxation 76 62 94 73

Profit after tax 181 180 246 207

Minority Interest and Share of (Profit)/Loss of Associate Â Â (1) 1

Profit after Minority Interest and Share of (Profit)/Loss of Associate 181 180 245 208

Adding thereto:

- Balance brought forward from the previous year 257 159 353 225

- Foreign Exchange Translation Difference Â Â 9 (3)

- Credit on Dividend Distribution Tax 4 Â 4 Â

- Reserves and Surplus transferred on divestment of a subsidiary Â Â Â 8

Profit available for appropriations 442 339 611 438 Appropriations:

- General Reserve 20 20 30 22

- Proposed Dividend 61 53 61 53

- Dividend Distribution Tax 10 9 10 9

- Legal and Special Reserve Â Â 1 1 Leaving a balance to be carried forward 351 257 509 353

* Consolidated turnover is after eliminating inter-company purchase/sales transactions.

DIVIDEND

3. The Company''s dividend policy is based on the need to balance the twin objectives of appropriately rewarding its shareholders with dividend and of conserving resources to meet its future needs. The Directors recommend a dividend of Rs. 1.85 per equity share of Rs. 1 each (185%) for the year 2013-14, including a special Diamond Jubilee dividend of 25% (2012-13: 160%), based on the Company''s performance.

OPERATIONS

4. The year gone by was a mixed one, with continued sluggishness in the Indian economy, impacting the topline, ofset by the Company''s better margins and profitability. With the long-anticipated economic recovery being further delayed, the Index of Industrial Production (IIP) continued to tread in the negatives. For a major part of the year the Indian Rupee, after plunging to new lows, remained in the Sixties to the US Dollar amid excessive volatility. Despite a change of guard at the Reserve Bank of India, there was little respite in terms of interest rates and infation. For the projects business in particular, new investments were few and far between, with some reliable sources reporting that capital outlays lingered at the decade''s lowest levels. The pace of execution also posed challenges, leading to both time and cost overruns that contributed to margin dilution in projects. On the other hand, despite the early onset of monsoons as well as dampened consumer sentiment, the Room AC business (Primary Market) reported growth of 6.5% as against industry-wide AC sales de-growth of around 8%, as per internal estimates. In the Secondary Market, the growth was 19% as against industry growth of 11% as per GFK-Nielsen. The Company''s performance in the overall depressed environment demonstrated its resilience. While Consolidated Sales and Income from Operations was Rs. 5303 crores, as compared to Rs. 5584 crores in the previous year, the profit after Tax & Minority Interest was higher at Rs. 245 crores as against Rs. 208 crores last year.

5. As a direct outcome of adverse macro-economic conditions in India, the Domestic Projects business continued to face headwinds, principally the slow pace of execution and delayed payments, putting a strain on working capital and cash flows. However, due to tight control on costs and various measures taken to improve the margins, the overall profitability improved during 2013-14. The Company has consciously placed emphasis on shoring up its domestic project management skills and has initiated a business efciency improvement program using external consultants.

6. While it was a subdued year for the Water business and Rohini Industrial Electricals Limited (RIEL), their integration under Domestic Projects Group (DPG) has been completed. However, RIEL continued to sufer losses on its low-margin ''legacy'' orders, resulting in a further write-down of Rs. 20 crores in the value of the Company''s investment. Nevertheless, the Company reached a settlement with the erstwhile Promoters, leading to purchase of the residual equity shares of RIEL (16.33% shareholding), thereby making it a 100% subsidiary of the Company.

7. The International projects business, like much of the construction industry in the Middle East, continued to grapple with cost-overruns. The Management conducts periodic techno-commercial reviews across projects and in line with the requirements of AS-7, reckons the cost overruns, if any, required for completion of the projects. Revenues from claims are accounted based on their certification. Execution of some on-going overseas projects was delayed, which resulted in further extension of the completion dates and caused certain contractual disputes. Consequently, there were cost overruns which have been accounted for during 2013-14 and claims for additional revenue and extension of time have been raised. Due to significant upward revision in the total estimated costs to complete a major project in Qatar, the Sidra Medical and Research Centre Hospital (Onerous contract), the Company had in the previous years accounted for the cost overruns in accordance with AS-7. Though the Sidra project is over 93% complete, additional costs to come have been estimated for the revised completion date along with possible enhancement of revenue from variations/claims. At the same time, there continue to be uncertainties in the process of approval of variations and complexities in the nature of the project, putting stress on the cash flows of the project. The final completion schedule and other terms are yet to be finalized between the Main Contractor and the end Customer and could revise the Company''s current cost estimates and entitlements. Nevertheless, the Company is pursuing its entitlements vigorously.

8. Overall, as part of a conscious emphasis to reduce capital employed, the Projects businesses have sustained their focus on pursuing commercial entitlements and closing existing projects. The forward strategy is to remain selective in the choice of new Project undertakings, with due consideration of risk-related parameters. Any push for new orders will largely focus on identified areas of opportunity. The year under review saw some success in the form of good orders being won, both overseas and in India. The consolidated order book for the Electro-Mechanical Projects business was Rs. 3612 crores, per end March 2014, yielding healthy visibility for the

coming year. The Company continues to deal objectively with the challenges faced and has framed an appropriate business strategy to seize future growth opportunities.

9. Despite various hurdles, the Engineering Products business had an eventful year marked by exceptional performance. The Mining & Construction Equipment business continued to face several policy constraints, with mining activities still frozen in some States. As a consequence of global consolidation in the mining industry, the Company had transferred dealership rights for certain products which resulted in an exceptional income of Rs.17 crores. The transfer also brought about a one-time reversal of certain cost provisions earlier made in compliance with conservative accounting practices, thereby resulting in an improvement in the bottom line. Meanwhile, operations largely continued to build on existing client relationships, while focusing on greener pastures overseas. The ongoing Mozambique venture remains lucrative, providing a natural hedge against difficulties faced in India.

10. The revised and restructured Textile Upgradation Fund (TUF) scheme is yet to have the desired impact in boosting the demand and reviving the fortunes of the Textile industry. The prevailing uncertainties and subdued investment climate, coupled with Rupee devaluation and volatility, weakened sentiments and led to postponement of equipment orders. However, there was some respite in cotton and yarn pricing, boosting exports of textiles from India and helping the industry show signs of revival. Meanwhile, the Textile Machinery business continued to ramp up capabilities in its post-spinning segment by adding principals and products. Overall, the Textile Machinery business was able to sustain its performance and strengthen its offerings.

11. The Company''s Unitary Cooling business sustained its hard-won leadership position and its performance was commendable, given the background of unfavorable climate and poor consumer sentiment. Responding to the increased demand in tier 2 and tier 3 towns, as well as the rise in rural demand driven by good monsoons, the business enhanced its penetration, with the number of touch points now exceeding 6500 outlets. The success is also owed to conscious brand development and communication initiatives, which are based on extensive market research. Along with substantial growth in both volume and market share of Room ACs, the business enjoyed the benefits of better traction in Commercial Refrigeration products through sizable OEM orders. Overall, the performance of the business exceeded expectations and ended the year with a substantial improvement vis-a-vis last year in all financial parameters.

FINANCE

12. The Indian economic environment remained lackluster for most part of the year, with key indicators showing a declining trend. From a solid 7 - 8 percent annual increase in gross domestic product (GDP) in recent years, growth slowed down to about 5 percent by the end of the year. Inflation rates also remained high, due to the inability to contain supply side issues and boost production. There has been some respite in the Current Account Deficit, which moderated from a high of 4.7% of GDP in 2012-13 to just 1.7% in 2013-14. The Central bank has maintained high interest rates and tight liquidity conditions with a strong determination to lower inflation.

13. Having realized the critical importance of cash in these difficult times, the Domestic businesses have responded with renewed strategies for cash conservation, despite several challenges. The Unitary Cooling business continues to fare well primarily due to tight control on working capital.

14. The International Projects business continued to remain in the grip of recession, marked by widespread delays in settlements and release of payments. In response, project- specific task forces have been constituted, with clear roles and responsibilities directed towards faster completion and quick settlement of commercial entitlements. The drive towards speedy closure of projects has yielded some results, but there is still much to be done. Some on-going projects like the Sidra hospital at Qatar and other large projects in UAE, continue to impact the cash flows of the Company.

15. Overall, the cash situation has been appropriately managed with a satisfactory liquidity position largely comprising investments in Liquid and Liquid Plus Mutual Funds of Rs. 643 crores (2012-13: Rs. 318 crores). Borrowings specific to overseas projects have also been contained at a level of Rs. 193 crores as compared to Rs. 212 crores last year. The Management continues to focus on cash flow, including inventories and receivables. Furthermore, the surplus funds remain invested in low-risk Debt Mutual Funds and are periodically monitored by the Investment Committee of the Board so as to maximize returns with minimal risk.

TATA BUSINESS EXCELLENCE MODEL (TBEM)

16. The Management has decided to participate in the Tata Group level TBEM External Assessment at the Company level during the financial year 2014-15. Accordingly, the Company has focused on standardizing critical processes to harness various synergies between the Business Units.

17. The Company participated in the Tata Innovista program, a group-level initiative to promote innovation, through six Innovation projects related to either process/product improvements or enhancement of customer experience. Three of these projects were selected for regional rounds, with one project making it through to the final round. The Company also took part in ''Deep Dive Collaborative Benchmarking'' studies conducted by Tata Quality Management Services and two of its processes were selected as ''best practices'' across the Tata Group.

18. To further facilitate its quest for Business Excellence (BE), the Company continues to develop a pool of BE Champions and TBEM assessors. There are over 90 BE Champions, of whom, more than 30 are certified to participate in Tata Group level TBEM External Assessments. The contributions of the Voltas External Assessors won appreciation at the Group level Business Excellence Convention in December 2013, with two assessors being recognized as ''Star Assessors''.

IT INITIATIVES

19. The Company''s IT function focused on critical stakeholders, viz. customers and vendors and undertook major initiatives in Unitary Products Business Group (UPBG) and the Domestic Projects Group (DPG).

20. In order to provide better customer service, UPBG implemented Siebel, a leading software solution in the Customer Relationship Management (CRM) space. This will help closer monitoring of operations and facilitate faster and better service to UPBG customers. Phase I of this project has been successfully completed with service functionality rolled out to all UPBG''s branches and service partners. Phase II of this project is under implementation and would be completed during 2014-15.

21. At the same time, to shorten the bill processing cycle for vendors, DGP has outsourced its Accounts Payable process. Some of the key benefits are faster invoice processing and access to real-time information on the status of Vendor invoices through a self-service portal.

22. Recognizing the critical need for Knowledge Management, the International Operations Business Group has launched a Portal capturing both tacit and explicit knowledge of its workforce. The portal serves as a platform through which employees can collaborate and share knowledge.

23. Many improvements were carried out to ensure a robust and secure IT infrastructure. Compliance and security remain important considerations for Voltas. IT has consequently partnered with all Business Units to help stabilize their Governance & Risk Compliance (GRC) implementation and has been regularly delivering improvements in the Company- wide SAP Access and Authorization environment.

COMMUNITY DEVELOPMENT

24. The Company actively pursued its core commitment to serving its communities, with a focus on empowering under-privileged young job-seekers through ''Employability'' initiatives, designed to impart opportunity. The Company thus, provides training to less fortunate youth in Air Conditioning and Refrigeration. Its long-standing association with Joseph Cardijn Technical School and Bosco Boys Home (Mumbai) and GMR Varalakshmi Foundation (at 5 centers in diferent locations) are expressions of the Company''s Corporate Sustainability mission to create a talent pool, serving Specific targeted markets. Two initiatives are also in the pipeline for partnering with Indian Hotels to start similar training centers with ITI Lonavala and ITI Chindwara.

25. Similarly, in partnership with ICICI Academy of Skills, the Company has extended support in establishing a Central Air Conditioning Centre at Coimbatore. This Centre will provide vocational training to 120 youth per year across Tamil Nadu, Kerala, Karnataka and Andhra Pradesh.

26. The Company has simultaneously embedded Afirmative Action in its HR policy and in other business activities. Voltas also supports the education of the children of the Kathkari tribe in partnership with local institutions, by providing mid-day meals, books and stationery as well as funding after-school coaching activities.

27. The Company continued with its volunteering initiatives as a means for employees to personally make societal contributions, allowing them to engage together with a shared purpose. More than 200 volunteers signed on for the Tata Sustainability Group''s newly-launched initiative, Tata Engage and have contributed their time for volunteering. Some innovative drives also took shape, such as ''Safety from electricity'', conducted in the remotest of villages in MP and ''Women''s Safety and Hygiene Campaign'' targeting Kathkari women.

28. Under the aegis of Tata Group, a new campaign was launched with the theme of ''Jaago Re - Power of 49'' (PO49), intended to empower women by helping them realize their right of 49% electoral representation in India. The Textile Machinery Division of Voltas at Coimbatore, reached out to women mill workers in and around the Tamil Nadu belt, to help them get registered for voting. Special care was taken to run a party-neutral campaign focused on creating awareness about the importance of exercising one''s vote.

GLOBAL COMPACT AND CARBON DISCLOSURE PROJECT

29. The Company isa signatory to the UN Global Compactand is committed to adhere to its principles. The Communication on Progress for the financial year 2013-14 has been uploaded along with the letter of Support on the Global Compact website.

ENVIRONMENT & SAFETY

30. The Company continued to address matters related to Health, Safety and Environment (HSE) through a variety of initiatives. The Executive Committee, together with the COOs, are responsible for delivering improved HSE performance. The Board has constituted a Safety, Health and Environment Committee comprising three Directors, including the Managing Director for reviewing HSE performance of operations.

31. To improve the consistency of the organization''s approach and the resilience of its Safety controls, the Company implemented OHSAS 18001 and introduced a series of global standards, principles and practices that each operation should adopt. Audits were conducted against these standards and improvements are ongoing. These initiatives have complemented the process of organizational learning, including sharing the lessons based on incidents and best practices.

32. Improving Safety performance continues to be a priority for the Company. This is evidenced by four more businesses attaining ISO 18001 accreditation and four others achieving OHSAS 14001 certification. ISO 18001 is also being implemented atthe Company''s Thane and Dadra Plants.

33. Improvements have been made in the methods of internal communication, knowledge sharing and reporting on Safety matters.There has been adequate worker participation in Safety meetings at project sites, yielding valuable inputs pertaining to the workforce segment. Safety awards have been instituted at project sites and manufacturing locations. Health-related initiatives such as yoga camps and medical checkups have been carried out for employees.

STATEMENT OF EMPLOYEES'' PARTICULARS

34. The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made thereunder, is provided in an Annexure forming part of this Report. In terms ofSection219(1)(b)(iv)ofthesaid Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary of the Company.

APPOINTMENT OF COST AUDITOR

35. The Central Government has approved the appointment of M/s. Sagar & Associates, Cost Auditors, for conducting cost audit for the year ended 31 st March, 2014.

36. The due date for filing the Cost Audit Report with the Ministry of Corporate Affairs for the year ended 31 st March, 2013 was 30th September, 2013 and the Cost Audit Report was filed by the Cost Auditors on 23rd September, 2013.The due date for filing the Cost Audit Report for the year ended 31st March, 2014 is 30th September, 2014.

SUBSIDIARIES AND JOINT VENTURES

37. Pursuant to the Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the financial information of subsidiary companies. The Central Government has by General Circular No.2/2011 dated 8th February, 2011, granted general exemption to companies from attaching the accounts of subsidiary companies, subject to certain conditions. As the Company has complied with all the conditions, the annual accounts and other documents of the subsidiary companies are not attached with the Balance Sheet of the Company. Details of capital, reserves, total assets, total liabilities, turnover/income, etc., of the aforesaid subsidiaries form part of the Consolidated Financial Statements. The Annual Accounts of the subsidiary companies are open for inspection by any member/investor and also available on the website of the Company - www.voltas.com. The Company will make the documents/details available, upon request by any member of the Company or its subsidiaries interested in obtaining the same.

38. The slow-down in the economy, especially in the Middle East region, continued during the whole of the year. However, some of the Company''s overseas subsidiaries/joint venture companies performed better in 2013-14 as compared to the previous year and secured good orders to sustain the growth. Thefinancial performance and other details of majoroperating subsidiaries/joint venture companies are given below.

39. Universal Comfort Products Limited (UCPL), a wholly- owned subsidiary of the Company engaged in the business of manufacturing air conditioners, recorded higher turnover of Rs. 928 crores and net profit of Rs. 58 crores for the year ended 31 st March, 2014 as compared to turnover of Rs. 740 crores and profit ofRs. 32 crores in the previous year. UCPL has declared 100% dividend aggregating approx. Rs. 28 crores.

40. Rohini Industrial Electricals Limited (RIEL) is engaged in undertaking turnkey electrical and instrumentation projects for industrial and commercial sectors. RIEL reported turnover of Rs. 99 crores and loss of Rs. 7 crores for the year 2013-14 as compared to turnover of Rs. 81 crores and loss of Rs. 13 crores in the previous year. Voltas purchased the residual shareholding (16.33%), comprising 298211 equity shares, from the Promoters of RIEL and accordingly, RIEL became a wholly-owned subsidiary of the Company with efect from 14th October, 2013.

41. Voltas Oman LLC, a subsidiary of the Company (65% shareholding of Voltas), is engaged in undertaking Engineering, Procurement and Construction (EPC) works for electro- mechanical projects in the Sultanate of Oman. Voltas Oman LLC recorded higher turnover of Omani Rial (RO) 3.519 million and profit of RO 0.053 million as compared to turnover of RO 0.698 million and net loss of RO 0.178 million in the previous year. The economy of Oman has started showing signs of recovery and the Government has budgeted higher expenditure in 2014. Voltas Oman LLC has secured a large and prestigious MEP project for Kempinski Hotel worth RO 17.400 million and expects to sustain the order book position during 2014.

42. Universal Voltas LLC, Abu Dhabi, a joint venture company engaged in the business of electro-mechanical projects and operations & maintenance of electro-mechanical works, recorded higher turnover of AED 154.870 million and profit of AED 24.863 million for the year ended 31st December, 2013 as compared to turnover and profit of AED 136.116 million and AED 24.560 million, respectively in the previous year.

43. Olayan Voltas Contracting Company Limited (OVCL), incorporated on 8th February, 2012, is a joint venture company engaged in the business of electro-mechanical projects in the Kingdom of Saudi Arabia. OVCL has recorded turnover of Saudi Riyal (SR) 102.632 million and profit of SR 9.707 million for the year ended 31st December, 2013 as compared to turnover of SR 130.861 million and profit of SR 11.667 million for the period ended 31st December, 2012.

44. Voltas Qatar WLL (VQ), a joint venture company incorporated on 2nd April, 2012, is engaged in the business of undertaking EPC works for MEP contracts in the State of Qatar. VQ has recorded turnover of Qatari Riyal (QR) 94.677 million and profit of QR 5.363 million for the year ended 31st December, 2013 as compared to turnover of QR 22.887 million and loss of QR 0.244 million for the period ended 31st December, 2012.

45. During the year under review, the Company entered into a joint venture agreement with DOW Chemical Pacifc (Singapore) Private Limited for establishing a joint venture company to tap the growing Water and Waste Water treatment market in the country. The proposed new company, Voltas Water Solutions Private Limited, will have equal capital contribution from Voltas and DOW.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

46. Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of energy and technology absorption is given by way of an Annexure to this Report. As for information in respect of foreign exchange earnings and outgo, the same has been given in the notes forming part of the accounts for the year ended 31st March, 2014.

DIRECTORS'' RESPONSIBILITY STATEMENT

47. Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(b) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of afairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

48. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance form part of the Annual Report. A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the Board Members and Senior Management personnel also forms part of the Annual Report.

DIRECTORATE

49. In accordance with the provisions of the Companies Act, 2013 and the Company''s Articles of Association, Mr. Ishaat Hussain and Mr. Sanjay Johri retire by rotation and being eligible, offer themselves for re-appointment.

INDEPENDENT DIRECTORS

50. Mr. S N Menon, due to his indifferent health, stepped down as an Independent Director of the Company with effect from 19th March, 2014. Accordingly, he also ceased to be a Member of the Board Remuneration Committee. The Directors place on record their sincere appreciation of the valuable advice given by Mr S N Menon during his tenure on the Board/Committee and wish him speedy recovery.

51. In line with the requirements of the Companies Act, 2013, Mr. Nani Javeri and Mr. R N Mukhija, satisfy the criteria of independence under Section 149(6) of the Act and are being appointed as Independent Directors, to hold office as per the tenure mentioned in the Notice of the ensuing Annual General Meeting (AGM) of the Company. At the same time, Mr. Nasser Munjee, has decided to step down with effect from 31st August, 2014 to comply with the requirements of SEBI, which limits directorship in seven listed companies only.

52. Mr. Debendranath Sarangi and Mr. Bahram N Vakil are proposed to be appointed as Independent Directors for a term of 5 years each and the approvals of the shareholders are being sought at the ensuing AGM of the Company. Attention of the Members is drawn to Resolution No. 8 and No.9 of the AGM Notice and its related Explanatory Statements.

AUDITORS

53. At the Annual General Meeting, members will be required to appoint Statutory Auditors of the Company. Messrs Deloitte Haskins & Sells, the present Auditors of the Company have pursuant to Section 139 of the Companies Act, 2013, furnished a certificate regarding their eligibility for reappointment. The approval of the members is also being sought for their appointment as the Branch Auditors of the Company. Attention of the members is invited to Item No. 5 of the Notice of the Annual General Meeting and the relevant Explanatory Statement.

GENERAL

54. The Notes forming part of the Accounts are self-explanatory or to the extent necessary, have been dealt with in the preceding paragraphs of the Report.

On behalf of the Board of Directors

ISHAAT HUSSAIN

Chairman

Mar 31, 2013

To the Members

The Directors present their Fifty-Ninth Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

Rs.in Crores

Standalone Consolidated 2012-13 2011-12 2012-13 2011-12

2. Revenue from Operations (Gross) 5618 5203 5584* 5219*

Profit for the year after meeting all expenses but before interest, depreciation and exceptional items 290 413 335 435

Interest 34 26 39 31

Depreciation and amortisation 22 29 28 34

Profit before exceptional items 234 358 268 370

Exceptional items 8 (151) 12 (151)

Profit before tax 242 207 280 219

Provision for taxation 62 55 73 57

Profit after tax 180 152 207 162

Minority Interest and Share of (Profit)/Loss of Associate - - 1 -

Profit after Minority Interest and Share of (Profit)/Loss of Associate 180 152 208 162

Adding thereto:

- Balance brought forward from the previous year 159 89 225 139

- Foreign Exchange Translation Difference - - (3) 7

- Reserves and Surplus transferred on divestment of a subsidiary - - 8 -

Profit available for appropriations 339 241 438 308

Appropriations:

- General Reserve 20 20 22 20

- Proposed Dividend 53 53 53 53

- Tax on Dividend 9 9 9 9

- Legal and Special Reserve - - 1 1

Leaving a balance to be carried forward 257 159 353 225

* Consolidated turnover is after eliminating inter-company purchase/sales transactions.

DIVIDEND

3. The Company''s dividend policy is based on the need to balance the twin objectives of appropriately rewarding the shareholders with dividend and of conserving resources to meet the Company''s future needs. Taking into consideration the performance of the Company, the Directors recommend a dividend of Rs. 1.60 per equity share of Rs. 1 each (160%) for the year 2012-13 (2011-12: 160%).

OPERATIONS

4. In terms of both domestic and global economic growth, momentum was slower than anticipated. The much- awaited economic recovery was delayed, with an extensive bottoming-out phase. The Indian Rupee sank to new lows due to excessive volatility in exchange rates. Although there was some respite, interest rates and inflation continued to pose serious challenges for major parts of the year. Capital investments in Projects in India were at levels as low as at the year 2004, according to some reports. The pace of execution also posed enormous challenges, leading to cost overruns and margin dilution in projects. Dampened sentiment impacted consumer behaviour, with the Room AC industry reporting a de-growth. Despite an overall depressed environment, the Consolidated Sales and Income from Operations for the financial year 2012-13 was higher by 7% at Rs. 5584 crores compared to Rs. 5219 crores in the previous year. Consolidated Profit after Tax and Minority Interest was also higher by 28% at Rs. 208 crores, as against Rs. 162 crores, last year.

5. The performance of electro-mechanical projects business, both in international and domestic geographies, was below par, also symptomatic of the endemic downtrend in the Projects industry. Execution of projects has been plagued by elongated schedules and delayed clearances. These problems were especially severe in the Company''s project for the Sidra Medical & Research Centre, under execution at Qatar. Revenue from variations is foreseen, and will be accounted in subsequent periods based on their realization. Nevertheless, the Company continues to deal objectively with the challenges faced, and frame a longer-term business strategy for future growth opportunities.

6. Similar adversity was faced by the Domestic Projects business, coupled with delayed payments, putting strain on working capital and cash flows. Several mitigation efforts are under way, including measures laid down in the previous year to reduce operational and administrative costs. The business has also adopted various IT initiatives and process changes to curb the dilution of margins that is now endemic across the Projects Industry landscape.

7. The Domestic Projects business continues its endeavour to extract synergies from the Water business and Rohini Industrial Electricals Limited (RIEL), under the integrated banner of the Domestic Projects Group (DPG). There have, however, been a number of challenges. The low-margin ''legacy'' orders have again impacted RIEL''s performance. The Management has conservatively written down the value of investment in this business to the extent of Rs. 17 crores. Nevertheless, the business continues to aggressively pursue profitable orders in its consolidated DPG identity.

8. The consolidated order book for the Projects Business stands at Rs. 3719 crores, yielding healthy visibility for the coming year.

9. The Engineering Products business too suffered its fair share of challenges. Most severe of all has been the ongoing ban on mining activities in several States in India, which deeply cut into the Mining & Construction Equipment business. Such problems have added impetus to the business'' efforts to seek greener pastures overseas. By leveraging its existing client relationships, the business has been successful in converting opportunities arising from overseas pursuits of existing customers. The ongoing Mozambique venture continues to be lucrative, providing a natural hedge against domestic setbacks. Strategically, the Company is investing substantially in expanding and reinforcing its credentials in product support, as well as its Operations & Maintenance capability.

10. The textile industry in India suffered the ill-effects of highly volatile cotton prices, combined with high inflation and interest rates, severe power shortages in South India and of course, the depressed global market. However, in the last few months of the year, the industry showed signs of revival, thanks to rising global and national demand for loom, coupled with the prospect of investment-friendly Governmental policy initiatives. Overall, the Textile Machinery business was well able to sustain its performance and even strengthen its presence in non-spinning segments.

11. In the Unitary Cooling business, the Company enjoyed the No.1 market position for most of the year, attributable largely to brand development and communications based on extensive market research. Along with substantial growth in both volume and market share of Room ACs, the business has benefited from better traction in Commercial Refrigeration products through sizable OEM orders. Growth in the Unitary Cooling business was achieved in the face of markedly more intense competition, as well as unfavourable climatic conditions and poor consumer sentiment. These factors did take a toll on the industry overall, which suffered aggregated sales volume de-growth of around 5%, according to GFK Report.

12. As part of its strategy to focus on core competencies, the Company has, during the year under review, hived off its subsidiary, Simto Investment Company Limited. In view of the transfer of the Materials Handling business to a JV with Kion in the previous year, the Company divested its investment in the JV to the Kion Group, thus exiting the business entirely.

FINANCE

13. Inflation rates remained high, due to the Government''s inability to contain supply side issues and boost production, coupled with the continuing high level of global commodity prices (especially in crude, which forms a major portion of India''s import basket). Further, the large twin deficits - fiscal and current account - posed significant risks to both growth and macro-economic stability, as high deficit and borrowings have a direct bearing on inflation. Accordingly, the Central bank maintained its stance of ensuring tight liquidity conditions. The Domestic Projects business faced the brunt of the resultant tight liquidity, in terms of delays in payments and the increasing numbers of ''days receivables''. However, the Consumer Durables business kept itself largely insulated from this downtrend, thanks to its cash-and-carry model and diligence on credit.

14. The operating geographies of the International Projects business also remained under the grip of recession, causing widespread delays in collections of dues. Nevertheless, there could be no stoppage in the deployment of resources for on-going projects, including the Sidra project at Qatar and other large projects in UAE, thus putting a significant strain on the Company''s finances.

15. With the help of timely mobilization of idle non-core assets, the Management has suitably managed the cash situation, with a satisfactory liquidity position comprising liquid investments of Rs. 318 crores. With WPI inflation at 3-year lows, and the RBI cutting interest rates, it is hoped that the economic situation has completed its ''bottoming-out'' phase, with growth to follow. The Management continues to focus regularly on its cash flow including inventory and receivables. The surplus funds are invested in low risk Debt Mutual Funds and monitored regularly by the Investment Committee of the Board to maximize returns with minimal risk.

TATA BUSINESS EXCELLENCE MODEL (TBEM)

16. In line with the decision taken at the Group level in respect of TBEM assessments, the Company is focusing on carrying out relevant integration activities and findings of past TBEM assessments are being reviewed. The intention is to participate in the TBEM External Assessments in a unified manner i.e. at Company level and not at individual Business Unit level, as hitherto in the past. In addition, the Company has undertaken several ''Continual Improvement Projects'' with the objective of improving operational efficiencies in areas critical to the respective Business Units/Functions. The Company''s unified participation is proposed for the Group Level External Assessment to be held in the next financial year.

17. To support its Business Excellence journey, the Company continues to develop a pool of trained TBEM assessors, and also provides trained assessors for the Group-level TBEM Assessment Process. The Company currently has over 70 TBEM Champions, of whom more than 30 are certified in the most up-to-date TBEM Criteria. During the year, 13 assessors participated in the Group level TBEM assessments and their contribution won the formal recognition at the Group-level Business Excellence Convention held in December 2012.

IT INITIATIVES

18. The Management continued its drive to improve organizational efficiency and productivity by developing appropriate IT-based solutions. During the year, the focus was on automation of business processes, including Project Accounting, Payroll, HR and Customer Relationship Management (CRM).

19. The Project Result Analysis process for Domestic Projects has yielded benefits in terms of better control over project costs, revenue and profitability. The integration of Payroll with the Human Capital Management (HCM) system for overseas employees helped in seamless payroll processing. CRM software was further refined for Unitary Products business, with expectations of quicker closure of dealer and franchisee payments and better customer service.

20. Due to increased emphasis on Compliance and Risk Mitigation, all SAP roles were redesigned and users were properly authorized through SAP''s Governance & Risk Compliance (GRC) Access Control tool. This has minimized the risks and conflicts within the SAP environment, with a suitable strategy for control and mitigation for each conflict identified.

21. In view of critical role of IT in all operations, many improvements were carried out to increase performance, reliability and security of underlying systems. These included: redesign and redeployment of the Disaster Recovery system for all crucial servers; clean-up of Master Data for Customers and Vendors; putting in place new policies and processes for network and end-user security and deployment of IDEA, a software tool to assist the Internal Audit Department for data analysis.

COMMUNITY DEVELOPMENT

22. Contribution to Society is one of the core values of the Company. The Company is continuously reviewing its efforts towards improving the quality of life of the communities it serves through both its Employability Programme and its endeavours in volunteering. During the year under review, employees devoted their time, energy and talent in the service of the less privileged. Volunteers visited homes for the aged, conducted income generation programmes for the differently-abled, mentored less privileged children, held blood donation camps and increased environmental awareness.

23. As a part of its Employability Programme, the Company continues to extend its Core Competency in Air Conditioning and Refrigeration (AC&R) to less privileged youth, primarily drop-outs from formal education who are ill-equipped to secure a sustainable livelihood. The desired outcome is to make the recipient self-reliant and employable, with technical capabilities attested by end-of-course certificates. Soft-skills training programs are also conducted for these youngsters, such as spoken English, customer interaction, personality development, communication skills, time management, value education and goal setting.

24. The course designed for them includes on-the-job- training, assessment and placement support. For Employability Programme, the Company is associated with: The Joseph Cardijn Technical School and Bosco Boys Home (Mumbai), GMR Varalakshmi Foundation (Hyderabad, Bangalore and Delhi), GTTI (Kolkata and Bhubaneswar), ITI (Delhi) and Kumaran ITI (Chennai). Recently, the Company partnered with The Indian Hotels Company Limited, which has set up a comprehensive Centre of Excellence for skills development at the Lonavala ITI in Maharashtra, where short-term vocational training courses are conducted and the Company will offer its course in AC&R for disadvantaged youth from surrounding rural areas.

25. The Company also embraces the Tata Group''s commitment to social equity and supports the Group''s Affirmative Action programme, which is based on the four pillars of Employment, Employability, Entrepreneurship and Aid in Education. The Company promotes ''Supplier Diversity'' through its vendor development initiatives for outsourcing products/services, through the Dalit India Chamber of Commerce and Industry. The Company also extends aid to the Kathkari tribal children studying at the Bethany School run by the Bethany Society in Panvel, Maharashtra, in the form of reimbursing the salary of a special English instructor, and providing mid-day meals for the children. In addition, volunteers of the Company have sponsored the education of six children of the Kathkari tribe.

26. The Voltas Organization of Women (VOW) is a Public Charitable Trust founded in 1965. VOW is exclusively run by women and its membership consists of women employees of Voltas and spouses of male employees. VOW supports several causes such as subsidizing the medical and basic education costs of the economically distressed, and raising awareness on issues concerning women.

GLOBAL COMPACT AND CARBON DISCLOSURE PROJECT

27. The Company is a signatory to the UN Global Compact and continues its commitment to adhere to the principles of the Global Compact. The Communication on Progress (COP) for the financial year 2012-13 has been uploaded along with the Letter of Support, on the Global Compact website.

ENVIRONMENT AND SAFETY

28. The Company continues to strive to address matters related to Safety, Health and Environment (S-H-E) through a variety of initiatives. In keeping with its vision of ''Engineering Solutions for a Greener Tomorrow'', the Company pursues the development of eco-friendly products and appropriate engineering solutions. Other environment-related initiatives include discharge of effluents, recycling of waste water, disposal of solid and hazardous waste, rain water harvesting, vermiculture, use of solar energy for water heating and use of environment-friendly refrigerants. The manufacturing plant at Pantnagar as well as overseas Projects have been certified to OHSAS standards and work is under way to secure OHSAS certification for other facilities of the Company. The manufacturing facilities at Pantnagar and Thane are also certified to ISO 14001 standards. In order to give further impetus, a Board-level Committee was constituted to oversee and lend direction in respect of S-H-E matters. Health-related initiatives include organizing yoga camps and conducting medical checkups for employees.

29. The Company proposes to undertake a host of other initiatives including Carbon Footprint Assessment, Safety Audits and numerous measures to foster employee health and well-being. The Company has also tied up with a professional e-waste Management company to address the critical disposal challenge.

STATEMENT OF EMPLOYEES'' PARTICULARS

30. The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made thereunder, is provided in an Annexure forming part of this Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

APPOINTMENT OF COST AUDITOR

31. The Central Government has approved the appointment of M/s. Sagar & Associates, Cost Auditors, for conducting cost audit for the year ended 31st March, 2013.

32. The due date for filing the Cost Audit Report with the Ministry of Corporate Affairs for the year ended 31st March, 2012 was 28th February, 2013 and the Cost Audit Report was filed by the Cost Auditors on 30th January, 2013. The due date for filing the Cost Audit Report for the year ended 31st March, 2013 is 30th September, 2013.

SUBSIDIARIES AND JOINT VENTURES

33. Pursuant to the Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the financial information of subsidiary companies. The Central Government has by General Circular No. 2/2011 dated 8th February, 2011, granted general exemption to companies from attaching the accounts of subsidiary companies, subject to certain conditions. As the Company has complied with all the conditions, the annual accounts and other documents of the subsidiary companies are not attached with the Balance Sheet of the Company. Details of capital, reserves, total assets, total liabilities, turnover/income, etc., of the subsidiaries form part of the Consolidated Financial Statements. The Annual Accounts of the subsidiary companies are open for inspection by any member/investor and also available on the website of the Company - www.voltas.com. The Company will make the documents/details available, upon request by any member of the Company or its subsidiaries interested in obtaining the same.

34. Despite the on-going economic slow down, especially in the Middle East region, many of the Company''s overseas subsidiaries/joint ventures (JVs) performed better in the financial year 2012-13 as compared to last year. The financial performance and other details of operating subsidiaries/joint venture companies are given below:

35. Weathermaker Limited (WML), engaged in the business of manufacturing galvanized iron, aluminium, black mild steel, stainless steel ducts and other speciality air distribution products is a wholly-owned subsidiary of the Company and has its manufacturing facility in Jebel Ali Free Zone, UAE. WML has reported higher turnover of AED 29.527 million and profit of AED 2.616 million for the year ended 31st December, 2012 as compared to turnover of AED 28.638 million and profit of AED 2.086 million in the previous year.

36. Saudi Ensas Company for Engineering Services WLL (Saudi Ensas), a wholly-owned subsidiary of the Company in Jeddah, Kingdom of Saudi Arabia (KSA) is engaged in execution and operations/maintenance of electro-mechanical installations in KSA. Saudi Ensas has recorded higher turnover of SR 14.896 million and net profit of SR 0.243 million for the year ended 31st December, 2012 as compared to turnover of SR 4.218 million and net loss of SR 2.124 million in the previous year.

37. Voltas Oman LLC, a subsidiary of the Company (65% shareholding of Voltas), is engaged in undertaking Engineering, Procurement and Construction (EPC) works for electro-mechanical projects in Sultanate of Oman. Voltas Oman LLC commenced execution of projects during the financial year ended 31st December, 2012 and reported turnover of Omani Rial (RO) 0.698 million and net loss of RO 0.178 million.

38. Lalbuksh Voltas Engineering Services & Trading LLC (Lalvol), a subsidiary of the Company (60% shareholding), is engaged in the business of Water Well Drilling, Water Management and Landscaping in Oman. Lalvol recorded turnover of RO 3.577 million and net profit of RO 0.021 million for the year ended 31st December, 2012 as compared to turnover of RO 3.359 million and net profit of RO 0.278 million in the previous year.

39. Universal Voltas LLC, Abu Dhabi, a joint venture company engaged in the business of electro-mechanical projects and operations & maintenance of electro-mechanical works, recorded higher turnover of AED 136.116 million and Profit of AED 24.559 million for the year ended 31st December, 2012 as compared to turnover and profit of AED 134.635 million and AED 37.043 million, respectively in the previous year.

40. Universal Weathermaker Factory LLC (UWF), a joint venture company incorporated in Abu Dhabi, is engaged in the manufacture and sale of air conditioning ducts and other related fixtures. UWF reported lower turnover and profit of AED 16.682 million and AED 0.531 million, respectively for the year ended 31st December, 2012 as compared to turnover of AED 20.065 million and profit of AED 0.667 million in the previous year.

41. Olayan Voltas Contracting Company Limited (OVCL), incorporated on 8th February, 2012, is a new joint venture company engaged in the business of electro-mechanical projects in Kingdom of Saudi Arabia. In its first year of operations, OVCL has recorded turnover of Saudi Riyal (SR) 130.861 million and profit of SR 11.667 million.

42. Voltas Qatar WLL (VQ), a new joint venture company incorporated on 2nd April, 2012, is engaged in the business of undertaking EPC works for the MEP contracts in the State of Qatar. VQ has recorded revenue of Qatari Riyal (QR) 22.887 million in the first year of its operations between 2nd April, 2012 and 31st December, 2012. However, due to initial registration fees, licences and professional fees, loss of QR 0.244 million was reported for the period under review.

43. Universal Comfort Products Limited (UCPL), a wholly- owned subsidiary of the Company, engaged in the business of manufacturing air conditioners, recorded higher turnover of Rs. 740 crores for the year ended 31st March, 2013 as compared to Rs. 486 crores in the previous year. However, due to higher incidence of tax (30% exemption as compared to 100% in the previous year), net profit was Rs. 32 crores for the year under review as compared to Rs. 34 crores in the previous year.

44. Rohini Industrial Electricals Limited (RIEL) is engaged in undertaking turnkey electrical and instrumentation projects for industrial and commercial sectors. RIEL has reported lower turnover of Rs. 81 crores and loss of Rs. 13 crores for the year ended 31st March, 2013 as compared to turnover of Rs. 117 crores and loss of Rs. 26 crores in the previous year.

45. During the year under review, the Company had transferred its entire shareholding in Simto Investment Company Limited (Simto) in favour of Tata Investment Corporation Limited with effect from 31st August, 2012. Accordingly, Simto ceased to be a subsidiary of the Company. Voice Antilles N.V. was closed and liquidated effective 14th September, 2012. The legal process for voluntary liquidation of Voice Antilles N.V. in Willemstad, Curacao (erstwhile Netherlands Antilles) has been completed. The entire equity shareholding (34%) in Voltas Material Handling Private Limited (VMHPL) was transferred on 2nd November, 2012 in favour of Linde Material Handling Asia Pacific Pte Limited, Singapore, an affiliate of KION Group and existing shareholder with balance 66% equity shareholding of VMHPL.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

46. Information pursuant to Section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of energy and technology absorption is given by way of an Annexure to this Report. As for information in respect of foreign exchange earnings and outgo, the same has been given in the notes forming part of the accounts for the year ended 31st March, 2013.

DIRECTORS'' RESPONSIBILITY STATEMENT

47. Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(b) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

48. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance form part of the Annual Report. A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the Board Members and Senior Management personnel also forms part of the Annual Report.

DIRECTORATE

49. The Directors report with regret, the sad demise of Mr. Jimmy Bilimoria, who passed away on 3rd May, 2013. Mr. Bilimoria was an Independent Director of the Company since 22nd September, 2008 and also a member of the Board Audit Committee and Chairman of the Investment Committee. Mr. Bilimoria was appointed as the Chairman of the Audit Committee on 9th August, 2010, which position he held till 25th March, 2013. Thereafter, he continued as a member of the Board Audit Committee. Mr. Bilimoria''s financial acumen, mature advice and constructive approach were of great assistance to the Company and the Directors place on record their appreciation of the valuable advice given by Mr. Bilimoria during his tenure on the Board/Committees.

50. In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Mr. Nasser Munjee, Mr. Nani Javeri and Mr. N. N. Tata retire by rotation and being eligible, offer themselves for re-appointment.

51. Mr. Thomas Mathew T. was appointed as an Additional Director by the Board of Directors on 10th January, 2013, representing Life Insurance Corporation of India. In accordance with the provisions of the Companies Act, 1956, Mr. Thomas Mathew T. holds office upto the date of the forthcoming Annual General Meeting and Notice under Section 257 of the Act has been received from a member proposing his appointment as Director of the Company. The Resolution seeking approval of the members for appointment of Mr. Thomas Mathew T. as a Director of the Company has been incorporated in the Notice of the forthcoming Annual General Meeting.

AUDITORS

52. At the Annual General Meeting, members will be required to appoint Auditors for the current year. Messrs Deloitte Haskins & Sells, the present Auditors of the Company have pursuant to Section 224(1) of the Companies Act, 1956, furnished a certificate regarding their eligibility for reappointment. The approval of the members is also being sought for their appointment as the Branch Auditors of the Company. Attention of the members is invited to Item No.7 of the Notice of the Annual General Meeting and the relevant Explanatory Statement.

GENERAL

53. The Notes forming part of the Accounts are self-explanatory or to the extent necessary, have been dealt with in the preceding paragraphs of the Report.

On behalf of the Board of Directors

ISHAAT HUSSAIN

Chairman

Mumbai, 20th May, 2013

Mar 31, 2012

The Directors present their Fifty-Eighth Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS

Rs.in Crores Stand-alone Consolidated

2011-12 2010-11 2011-12 2010-11

2. Revenue from Operations 5203 5183 5219 5226 Profit for the year after meeting all expenses but before interest, depreciation and exceptional items 413 507 435 521

Interest 26 13 31 16

Depreciation and amortisation 29 16 34 21

Profit before exceptional items 358 478 370 484

Exceptional items (151) 45 (151) 40

Profit before tax 207 523 219 524

Provision for taxation 55 169 57 172

Profit after tax 152 354 162 352

Minority Interest and Share of (Profit)/Loss of Associate Ã Ã Ã 5

Profit after Minority Interest and Share of (Profit)/Loss of Associate 152 354 162 357 Adding thereto:

- Balance brought forward from the previous year 89 82 139 125

- Foreign Exchange Translation Difference Ã Ã 7 1

- Reserves and Surplus of a subsidiary transferred on liquidation Ã Ã Ã 5 Profit available for appropriations 241 436 308 488 Appropriations:

- General Reserve 20 270 20 271

- Proposed Dividend 53 66 53 66

- Tax on Dividend 9 11 9 11

- Legal and Special Reserve Ã Ã 1 1 Leaving a balance to be carried forward 159 89 225 139

3

DIVIDEND

3. The Company's dividend policy is based on the need to balance the twin objectives of appropriately rewarding the shareholders with dividend and of conserving resources to meet the Company's future needs. Taking into consideration the performance of the Company, the Directors recommend a dividend of Rs. 1.60 per equity share of Rs. 1 each (160%) for the year 2011-12 (2010-11: 200%).

OPERATIONS

4. The global economic crisis continues to adversely impact all aspects of business and the economy. Volatile exchange, high interest rates and inflation continued to be an enormous challenge. This has resulted in the deferment of capital investment apart from creating a slowdown in business activity, also evidenced by the continuously declining IIP numbers. In view of this difficult situation, the Company's consolidated Sales and Income from Operations were marginally lower at Rs. 5219 crores, as compared to Rs. 5226 crores last year. Profit after Tax, Minority Interest was Rs. 162 crores, as against Rs. 357 crores in the previous year, primarily due to the recognition of expected cost overruns caused by an Onerous international contract.

5. The performance of the Electro Mechanical business and in particular, the International Projects Business were impacted due to the Sidra Medical & Research Centre project under execution at Qatar. This is a large and prestigious, state-of-the-art hospital with world-class facilities with a total investment of approx. USD 2.5 billion and has been in execution since 2008. The Company's share of work is valued in excess of Rs. 1000 crores and involves extensive coordination with multiple agencies and intermediaries. The design and build nature and complexity of the project, combined with the Client's quest for attaining truly global standards has had an impact on various cost parameters. In addition to elongated project schedules and lapsed time, there have also been numerous difficulties and complications including the non-availability of Indian Workmen visas. The Company has in line with AS-7 accounted for the estimated cost of the project. These estimates have been finalized after an extensive techno commercial review by the Management taking cognizance of cost incurred and to be incurred, to complete the project on time, aggregating Rs. 277 crores. The same has been reflected as Onerous Contract under Exceptional Items excluding Rs. 44 crores cost overrun accounted under 'Cost of jobs'. Additional revenue claims will be recognized subsequently as per the accounting standard requirement, once they are crystallized and there is greater clarity about the final outcome.

6. The Domestic Projects Business has performed comparatively well, despite the difficult economic conditions. However, managing cost and cash flow continues to be a challenge and there has been a slower pace of project movement combined with delayed payments leading to higher outstandings. As part of mitigation efforts, the Company has put in place various measures to reduce operational and administrative costs.

7. In addition, the Domestic Projects business has also been reorganized to comprehensively extract multiple synergies as well as offering a one-window solution to the Customer. Consequently, the Water Business and Rohini Industrial Electricals Limited (RIEL) has been integrated with the Domestic Electro Mechanical business. The performance of RIEL has been impacted largely owing to the proportion of 'legacy' orders with poor margins. The Company is making a concerted effort to develop new business while reducing its fixed costs, to become more competitive and profitable in times to come.

8. The consolidated order backlog for the entire Electro Mechanical business stands at Rs. 4292 crores and gives a healthy visibility for the coming year.

9. In view of transfer of Materials Handling business to a Joint Venture with Kion, the figures for the Engineering Products and Services for the period under review are not directly comparable with the previous year. The Mining and Construction business has been impacted by high interest rates and the poor pace of environmental clearance for mining activities. Global industry consolidation and takeover of the mining businesses of the Company's erstwhile major Principals (Bucyrus and Le-tourneau by Caterpillar and Joy, respectively) have affected the Engineering Products and Services business. While Voltas continues to retain some maintenance contracts, Caterpillar has transferred part of its India business to its own dealers. Service agreements with Joy/P&H India are currently under discussion. In the meantime, business management is making a determined effort to manage costs and take advantage of each growth opportunity.

10. The Textile Machinery business has performed well, achieving growth on the back of a sizeable order book built earlier. New investments in the Textile industry are however lagging given the poor sentiment, cyclical nature and pollution based environment issues being encountered.

11. In spite of intense competition, unfavorable climatic conditions and poor consumer sentiment, Voltas has successfully maintained its No. 2 market position in the Unitary Cooling business nationally. At the same time, it has held onto its No. 1 position in the important market of Northern India and is making inroads in other regions as well. The industry as a whole has suffered aggregated sales volume de-growth of around 20% during the year under review. Voltas however contained the volume shortfall and has managed to do comparatively well on the back of mix and pricing corrections. The Company continued its focus on Tier-II and Tier-III towns and the thrust in commercial refrigeration products has also yielded growth over the period.

12. Over the year, the Company has also undertaken extensive market research, the findings of which were used to revitalize the Voltas Brand communication.

FINANCE

13. Liquidity in the domestic markets remained tight throughout the year on account of high inflation and periodic increases in Repo and Reverse Repo rates by Reserve Bank of India. In the Domestic Projects business, the high cost of capital resulted in delayed payments and consequently, higher number of days receivables. This was partly compensated by an increase in Trade payables to manage the cash flows of the business. The unpredictable weather and de-growth of the Consumer Durables business led to high levels of inventory for the major part of the year as compared to the past, resulting in increased capital employed.

14. The international markets were also under stress in 2011-12. During the year under review, deployment of

significant resources, combined with a delay in execution of a large design and build project at Qatar caused a significant strain on the Company's finances. A part of surplus funds had to be liquidated to fund the cost overruns at Sidra while delays in settlements of some large projects also affected the capital employed by the international projects business. The above factors led to a negative cash flow from Operating activities in the current year.

15. Despite the above, the liquidity position of the Company was satisfactory with liquid investments of Rs. 221 crores. Borrowings at a consolidated level of Rs. 225 crores were mainly on account of certain project specific overseas requirements.

16. The Interest Rate scenario in India is at a peak and expected to taper down in a gradual manner. The Management continues to focus regularly on its cash flow including inventory and receivables. The surplus funds are invested in Debt Mutual Funds and monitored regularly by the Investment Committee of the Board to maximize returns with minimal risk.

TATA BUSINESS EXCELLENCE MODEL (TBEM)

17. In its Business Excellence Journey, the Company continued its focus on carrying out assessments, to identify areas for improving the operational efficiencies. Accordingly, External Assessments at the Tata Group level were carried out by teams of qualified assessors in respect of Unitary Cooling Products business and Engineering Projects business (comprising Mining & Construction Equipment business, Textile Machinery business and the manufacturing operations of Materials Handling business). The performance of Unitary Cooling Products business was rated as "Emerging Industry Leader" and Engineering Products business was rated as"Good Performance", based on the findings of the assessments.

18. The Company has developed a pool of trained TBEM Assessors to support these Business Excellence initiatives and also to provide External Assessors at the Group level. Further, various initiatives to strengthen quality, namely Process Management, Process Improvement, Total Quality Management at the manufacturing plants and other improvement initiatives are under way on a continuous basis.

IT INITIATIVES

19. The Company continued to invest in developing IT-based solutions that would support improvements in organisational efficiency.

20. During the year under review, the Company moved its entire collaboration platform to Google Cloud. This has enabled all employees to access the e-mails from any location and any device, at any time. Additionally, all the advanced features- such as voice and video communication, document- sharing and web conferencing - have been made available to all employees, thereby improving their productivity.

21. IT also enabled compliance monitoring by implementing (a) tracking tool for legal cases (b) SAP authorization control through a Governance cum Risk management compliance tool and (c) assets-tracking tool for license compliance.

COMMUNITY DEVELOPMENT

22. The Company shares the Tata Group's commitment for developing a strong self-reliant community as part of its business process. Through its Core Competency program, the Company extended its technical skills in Air conditioning and Refrigeration to under-privileged youth, supplemented with soft-skills training, to help them build sustainable livelihoods. It also helped in expanding the pool of young employable talent and expertise for the benefit of both society and business. The Core Competency projects were pursued in alliance with Joseph Cardin Technical School and Bosco Boys Home in Mumbai, as well as GMR Varalakshmi Foundation in Hyderabad. In addition, there were several community initiatives driven by volunteer activity, with a focus on mentoring orphans and underprivileged children, community service for the aged and the physically/mentally challenged, income generation schemes and blood donation camps.

23. The Company supports the national endeavour to bring about equality of opportunity for the socially and economically disadvantaged SC/ST communities, through its Affirmative Action (AA) Policy. The Company has re-constituted its Cross Functional Team on AA, and reviewed its engagement in the Tata Group's four initiative areas of Employment, Employability, Entrepreneurship and Aid in Education. The Company has enhanced the representation of SC/ST in recruitment at all levels, and expanded the pool of employable personnel from SC/ST through mass skills up-gradation endeavours. As part of Aid-in-Education, the Company gives scholarships to certain deserving SC/ST students pursuing Engineering courses. The Company plans to promote 'Supplier Diversity' by developing vendors for products/services through the Dalit India Chamber of Commerce and Industry (DICCI).

24. The Voltas Organization of Women (VOW) is a Public Charitable Trust founded in 1965 and registered in 1975. VOW's membership and leadership is exclusively drawn from the Company's women employees and spouses of male employees. VOW assists the needy people in the fields of health and education, conducts programmes on atrocities and domestic violence against women, and is active in issues concerning tribal women through its various partners. In 2011-12, VOW supported the Bethany Society towards formation of Self-Help Groups for Women whose members are active in Gram Sabhas and income generation programs. VOW also supported the Shanti Avedna Sadan for terminally ill cancer patients and the Snehalaya Charitable Trust for vocational training for the mentally and physically challenged, besides giving medical relief to the very poor and needy.

GLOBAL COMPACT AND CARBON DISCLOSURE PROJECT

25. The Company is a signatory to the UN Global Compact and continues its commitment to adhere to the principles of the Global Compact. The Communication on Progress (COP) for 2011-12 has been uploaded along with the Letter of Support on the Global Compact Site. The COP communicates publicly to the stakeholders on progress made in implementing the Global Compact's ten principles.

ENVIRONMENT AND SAFETY

26. In its endeavour to address environment related matters, the Company continues to strengthen its Processes and Action Plans based on related studies carried out earlier. In addition, the Company continues to develop eco-friendly products and appropriate Engineering Solutions. The Company's Vision Statement "Engineering Solutions for a Greener Tomorrow" aims to guide and motivate all the endeavours keeping in mind the environmental concerns.

27. The Overseas Projects business and the manufacturing plant of Unitary Cooling Products business at Pantnagar have been awarded with OHSAS 18001 certification for health and safety. The Company's Plants at Pantnagar and Thane have been awarded ISO 14001 certification.

STATEMENT OF EMPLOYEES' PARTICULARS

28. The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made there under, is provided in an Annexure forming part of this Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

APPOINTMENT OF COST AUDITOR

29. As per the directions given by the Central Government, the Company has, based on an application made, received the Government's approval for re-appointment of M/s. Sagar & Associates, a firm of Cost Accountants as the Cost Auditor of the Company for the year ended 31st March, 2012 in respect of refrigeration products manufactured by the Company. The Cost Audit Report of M/s. Sagar & Associates, in respect of refrigeration products for the year ended 31st March, 2011 was filed with the Central Government on 2nd September, 2011 well within the due date (27th September, 2011).

30. Pursuant to the Order dated 24th January, 2012 passed by the Ministry of Corporate Affairs (MCA), Cost Audit Branch, directing all companies to which the Companies (Cost Accounting Records) Rules, 2011 apply, to get their cost accounting records for products covered under specified chapters of the Central Excise Tariff Act, 1985 audited by a Cost Auditor, the Company has made an application to the Central Government (MCA) for reappointment of M/s. Sagar & Associates as the Cost Auditor of the Company for the year ending 31st March, 2013 in respect of products covered under Chapters 84 and 87 of the Central Excise Tariff Act, 1985. The approval of the Central Government is awaited.

SUBSIDIARIES AND JOINT VENTURES

31. Pursuant to the Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, the Consolidated Financial Statements presented by the Company include the financial information of subsidiary companies. The Central Government has by General Circular No. 2/2011 dated 8th February, 2011, granted general exemption to companies for dispensing with the requirement of attaching the accounts of subsidiary companies, subject to certain conditions. As the Company has complied with all the conditions, the annual accounts and other documents of the subsidiary companies are not attached with the Balance Sheet of the Company. Details of capital, reserves, total assets, total liabilities, turnover/ income, etc., of the aforesaid subsidiaries form part of the Consolidated Financial Statements. The Annual Accounts of the subsidiary companies are open for inspection by any member/ investor and also available on the website of the Company - www.voltas.com. The Company will make the documents/ details available, upon request by any member of the Company or its subsidiaries interested in obtaining the same.

32. The economic situation in the Middle East region, where most of the Company's subsidiaries/joint ventures (JVs) operate, largely remained impacted like last year. As a result, the overseas subsidiaries and JVs, except Universal Voltas LLC, performed lower than the budgeted level. The geo-political situation and unrest amongst the local population in some countries in the Middle East Region also adversely affected the overall marketing efforts of the overseas subsidiaries/JVs. The financial performance and other details of major operating subsidiaries/JVs are given below.

33. Universal Voltas LLC, Abu Dhabi, a joint venture company engaged in the business of electro-mechanical projects and operations & maintenance of electro-mechanical works, performed better than last year and recorded turnover of AED 134.635 million with Profit of AED 37.043 million for the year ended 31st December, 2011.

34. Weather maker Limited (WML), engaged in the business of manufacturing galvanized iron, aluminium, black mild steel, stainless steel ducts and other specialty air distribution products is a wholly-owned subsidiary of the Company and has its manufacturing facility in Jebel Ali Free Zone, UAE. WML has reported turnover of AED 28.638 million and Profit of AED 2.086 million for the year ended 31st December, 2011.

35. Saudi Ensas Company for Engineering Services WLL (Saudi Ensas), a wholly-owned subsidiary of the Company in Jeddah, Kingdom of Saudi Arabia (KSA) is engaged in execution and operations/maintenance of electro- mechanical installations in KSA and has for the year ended 31st December, 2011, recorded higher turnover of SR 4.218 million. However, due to increase in staff costs and administrative expenses, including provision made for Zakat arrears upon rejection of appeal by the concerned authorities, Saudi Ensas incurred a loss of SR 2.124 million.

36. Voltas Oman LLC, was incorporated on 15th February, 2011, as a joint venture between Voltas (65% shareholding) and Mustafa Sultan Group (35% shareholding) to leverage the respective strengths of the joint venture partners by undertaking Engineering, Procurement and Construction (EPC) works for electro-mechanical projects in Sultanate of Oman. Voltas Oman LLC has reported loss of RO 0.208 million, mainly towards staff and administrative costs for the financial period between 15th February, 2011 and 31st December, 2011.

37. Lalbuksh Voltas Engineering Services & Trading LLC (Lalvol), a limited liability company incorporated in Sultanate of Oman is a subsidiary of the Company engaged in the business of Water Well Drilling, Water Management and Landscaping. Lalvol recorded turnover of RO 3.359 million and net profit of RO 0.278 million for the year ended 31st December, 2011.

38. The Company had entered into a joint venture agreement with Olayan Group in Riyadh, Kingdom of Saudi Arabia (KSA) and established a 50:50 joint venture company - Olayan Voltas Contracting Company Limited (OVCL) on 8th February, 2012, in Riyadh, KSA with initial capital of Saudi Riyal (SR) 10 million, contributed equally by both the partners. OVCL is engaged in the business of electro-mechanical projects in KSA and its first financial year is for the period between 8th February, 2012 and 31st December, 2012.

39. Universal Comfort Products Limited (UCPL), a wholly-owned subsidiary of the Company is engaged in the business of manufacturing air conditioners. Due to unfavourable weather conditions and low market sentiments, there was a drop in sales volumes of air conditioners. UCPL recorded lower turnover of Rs. 486 crores for the year ended 31st March, 2012 as compared to Rs. 492 crores in the previous year. However, due to better sales realization, efficient management of inventory and finance costs, UCPL had higher net profit at Rs. 34 crores for the year under review as compared to Rs. 27 crores in the previous year.

40. Rohini Industrial Electricals Limited (RIEL) is engaged in undertaking turnkey electrical and instrumentation projects for industrial and commercial sectors. The performance of RIEL continued to remain impacted in 2011-12 primarily due to old projects which had witnessed cost overruns and other deficiencies. RIEL has reported turnover of Rs. 117 crores and loss of Rs. 26 crores as compared to turnover of Rs. 162 crores and loss of Rs. 36 crores in the previous year. However, the new orders booked have better margins and in view of several initiatives taken to curtail the losses/streamline the operations, the performance of RIEL is expected to improve in the near future. RIEL has also issued Preference Shares aggregating Rs. 25 crores which were subscribed by Voltas and allotted on 29th March, 2012.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

41. Information pursuant to Section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of energy and technology absorption is given by way of an Annexure to this Report. As for information in respect of foreign exchange earnings and outgo, the same has been given in the notes forming part of the accounts for the year ended 31st March, 2012.

DIRECTORS' RESPONSIBILITY STATEMENT

42. Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(b) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

43. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report. A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the Board Members and Senior Management personnel forms part of the Annual Report.

DIRECTORATE

44. In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. S. N. Menon, Mr. Ishaat Hussain and Mr. Sanjay Johri retire by rotation and being eligible, offer themselves for reappointment.

45. Mr. Vinayak Deshpande was appointed as an Additional Director by the Board of Directors on 14th February, 2012. In accordance with the provisions of the Companies Act, 1956, Mr. Vinayak Deshpande holds office upto the date of the forthcoming Annual General Meeting and Notice under Section 257 of the Act has been received from a member proposing his appointment as Director of the Company. The Resolution seeking approval of the members for appointment of Mr. Vinayak Deshpande as a Director of the Company has been incorporated in the Notice of the forthcoming Annual General Meeting.

46. Mr. Ravi Kant stepped down as a Director of the Company on 14th February, 2012. The Directors place on record their sincere appreciation of the valuable services rendered and advice given by Mr. Ravi Kant during his long tenure on the Board since 10th April, 2001.

AUDITORS

47. At the Annual General Meeting, members will be required to appoint Auditors for the current year. Messrs. Deloitte Haskins & Sells, the present Auditors of the Company have pursuant to Section 224(1) of the Companies Act, 1956, furnished a certificate regarding their eligibility for reappointment. The approval of the members is also being sought for their appointment as the Branch Auditors of the Company. Attention of the members is invited to Item No. 7 of the Notice of the Annual General Meeting and the relevant Explanatory Statement.

GENERAL

48. The Notes forming part of the Accounts are self-explanatory or to the extent necessary, have been dealt with in the preceding paragraphs of the Report.

On behalf of the Board of Directors

ISHAAT HUSSAIN

Chairman

Mumbai, 24th May, 2012

Mar 31, 2011

To the Members

The Directors present their Fifty-Seventh Annual Report and the Audited Statement of Accounts for the year ended 31st March 2011.

FINANCIAL RESULTS

Rs in Crores

Stand-alone Consolidated

2010-11 2009-10 2010-11 2009-10

2. Sales and Services 5169 4517 5211 4782

profit for the year after meeting all expenses but before interest, depreciation and exceptional items 507 472 522 538

Interest 13 7 16 10

Depreciation 16 16 21 21

profit before exceptional items 478 449 485 507

Exceptional items 45 36 40 25

profit before tax 523 485 525 532

Provision for taxation 169 141 173 147

profit after tax 354 344 352 385

Minority Interest and Share of (profit)/Loss of Associate - - 5 (4)

profit after Minority Interest and Share of (profit)/Loss of Associate 354 344 357 381

Adding thereto:

- Balance brought forward from the previous year 82 62 125 71

- Amount transferred from Foreign Projects Reserve - 3 - 3

- Foreign Exchange Translation Diference - - 1 (1)

- Reserves and Surplus of a subsidiary transferred on liquidation - - 5 -

profit available for appro -priations 436 409 488 454

Appropriations:

- General Reserve 270 250 271 251

- Proposed Dividend 66 66 66 66

- Tax on Dividend 11 11 11 11

- Legal and Special Reserve - - 1 1

Leaving a balance to be carried forward 89 82 139 125

DIVIDEND

3. The Company's dividend policy is based on the need to balance the twin objectives of appropriately rewarding the shareholders with dividend and of conserving resources to meet the Company's future needs. The Directors recommend a dividend of Rs 2 per equity share of Rs 1 each (200%) for the year 2010-11 (2009-10: 200%).

OPERATIONS

4. The Business Environment during the year under review was full of uncertainty both in domestic as well as in international markets. In India, major areas of concern were high infation and increase in commodity prices. Interest rates were increased by RBI almost every quarter and there was a declining trend in the growth rate of IIP numbers. Despite this dificultscenario, the Company has been able to augment its revenue from Rs 4517 crores to Rs 5169 crores. While profits have also kept pace on a stand-alone basis, they were impacted by significantnegative swing in Rohini Industrial Electricals Limited. The domestic Projects business focused on non-traditional areas of Industrial and Infrastructure, as also on Water supply and Water treatment as a result of which, there has been around 45% increase in the order book position as compared to the previous year.

5. A very challenging and competitive environment prevailed in the Middle East and there was a significantdrop in announcement of new projects in Dubai. This resulted in new order booking being much lower than what was anticipated. However, the carry forward order book continues to be comfortable at almost Rs 3000 crores on a consolidated basis.

6. Engineering Products and Services business had a conducive environment and in particular, Textile Machinery business performed well despite several unfavorable conditions like closure of looms in Tirupur due to environmental issues, high cotton prices and suspension of the Textile Upgradation Fund.

7. Materials Handling business performed well due to higher volumes. Despite several new mining projects getting impacted due to non-availability of clearances and low award of new Road Construction projects, Mining and Construction business has done well. In the Mining business, the focus has been more on maintenance and operation contracts and stock and sale of spares and accessories. A significant achievement of the business during the year was its entry in Mozambique for providing the Maintenance and Operations Services.

8. Exceptionally severe summer and the generally upbeat consumer sentiment in the early part of the year helped in significant improvement in volumes of Airconditioners, where the growth in Company's volumes continued to be higher than the industry, resulting in an increase in the market share, from 15% to around 18%.

9. The Company continued to focus on higher productivity and lower costs as a means to improve its competitive position.

FINANCE

10. The Money market during most part of 2010-11 was tight with rising interest costs and infation in India and some amount of stress in the international market. This along with changed business model in the projects business in India, with higher concentration on industrial and infrastructure MEP, where the Company operates more as a sub-contractor to the turnkey main contractors, elongated the cycle of submission and recovery of claims. In the international market, significantresources were engaged in design-build projects with high costs being incurred during the initial designing phase, which can only be recovered once the execution of projects commences. During the year under review, some large projects like Burj Khalifa were completed, where settlement of claims and fnal measurement take an extended period of time. All these factors have resulted in much higher receivables and consequently, engagement of working capital. Consequently, cash generation during the year has been low despite the Company's policy of ensuring cash generation.

11. Despite this, the liquidity position of the Company continues to be satisfactory with liquid investments of Rs 225 crores. The Company also ensured that surplus funds are used to reduce borrowings of its subsidiary companies so that the overall cost of funds is minimised. However, there were some project specific borrowings in the international business which resulted in overall consolidated borrowings of Rs 138 crores.

12. Infationary pressures in India have resulted in higher interest rates, which while being a challenge for some other organizations, has benefited the Company in terms of interest earnings on surplus funds. Management will focus its attention in the future to bring down the levels of inventories and receivables and thereby release cash in the system. Investment of surplus funds, is being regularly monitored by the Investment Committee of the Board, so as to maximize the returns while ensuring low risk.

TATA BUSINESS EXCELLENCE MODEL (TBEM)

13. The Company continued to put greater eforts on its business excellence model through a number of improvement initiatives including Six Sigma projects for operational excellence. The Balanced Scorecard mechanism adopted by the Company was made more robust through a strategy deployment matrix aimed at efective implementation of action plans in line with the strategic objectives. The initiatives at the manufacturing plants in the area of Total Quality Management and Total Productive Maintenance made satisfactory progress. OHSAS 18001 was rolled out across some major areas and during the current year, its coverage will be extended to other parts of the organization, to enhance the culture of safety.

14. During the year under review, the Company's Unitary Products business participated in the Tata Group level TBEM External Assessment and its performance was rated as 'Good Performance', entitling the business to an award at the Group level. Other businesses were subjected to a process of Internal Assessment to evaluate their respective progress on the Business Excellence journey. The overseas Electro- mechanical business recently received the "Dubai Quality Appreciation Programme Award" at UAE. This prestigious award was presented to Voltas by the Crown Prince of Dubai in the presence of the UAE Prime Minister/Dubai's Ruler, at a ceremony in Dubai on 5th April, 2011. The Company has developed a pool of trained TBEM assessors to support its Business Excellence initiatives and also to provide external assessors at the Group level.

IT INITIATIVES

15. The Company has taken various IT initiatives and SAP modules implemented for the international Electro- mechanical business have started showing benefits in terms of better budgetary control. The Primavera project management system has yielded better visibility of project schedules and variances.

16. Customer Relationship Management (CRM) software for the domestic Electro-mechanical business helped in better tracking of service calls and service SLAs for maintenance projects. Project dashboards prepared in SAP Business Objects yielded better control on project costs and working capital of domestic Electro-mechanical as well as Mining & Construction Equipment businesses.

17. The Unitary Products business continued its focus on enhancing its Customer Relationship Management (CRM) system and using the database for enabling better service deliveries. The automated system helped in better management of dealer accounts.

18. The Company has also successfully made its IT systems IFRS compliant.

COMMUNITY DEVELOPMENT

19. Community development takes the form of human development through Voltas' Core Competency projects. The underlying belief is in the sharing of knowledge and instruction and not charitable donation. The desired outcome is to free recipients from dependence on hand-outs and make them self-reliant and employable, with technical capabilities attested by end-of-course certificates and various 'soft' skills. The Company continued to partner with the Joseph Cardijn Technical School in Mumbai, ofering a course that 249 students from 17 batches have successfully completed since 2002. Since 2008, the Company has also partnered with Bosco Boys, Mumbai and GMR Varalakshmi Foundation, Hyderabad, from which 20 students from 2 batches and 231 students from 13 batches, respectively have successfully completed the course.

20. The Company increased its footprint by tying up with CAP Foundation (Hyderabad) on an all-India basis and Manipal University (Karnataka), for imparting technical training in air conditioning and refrigeration. This was also pursued at the Company's Pantnagar plant through in-house training programme. More than 1000 trainees benefited from the programmes conducted during the year under review.

21. Afrmative Action is defned as a voluntary commitment by Indian companies to help the Government and civil society in the national endeavour to ensure equal opportunity to members of the Scheduled Castes and Scheduled Tribes (SCs/STs) communities. A beginning was made to embed Afrmative Action initiatives in the Company's HR and other business activities. About 260 SC/ST trainees are presently undergoing technical training through such programmes.

22. Voltas Organization of Women (VOW), a registered Public Charitable Trust, has been working towards providing medical and educational relief to the needy. The membership of VOW consists of lady employees and the wives of male employees. VOW supported the Bethany Society in the formation of self-help groups for women, the Shanti Avedna Sadan for terminally ill cancer patients and the Snehalaya Charitable Trust for vocational training for the mentally and physically challenged, besides giving medical relief to the poor and needy. Under the aegis of VOW, volunteers from Voltas as well as other Tata companies visited a village of the Kathkari tribe at Panvel to celebrate International Women's Day. The volunteers donated food and utility items to all families in the village.

GLOBAL COMPACT AND CARBON DISCLOSURE PROJECT

23. The Company is a signatory to the UN Global Compact and adheres to the ten key principles based on universally agreed and internationally applicable values and goals in the areas of Human Rights, Labour Standards and Environment.

24. The Company is also a signatory to the Carbon Disclosure Project initiated by CDP-UK with Confederation of Indian Industries and World Wild Life Fund. The Company shares information pertaining to sustainability-related issues with CDP, on an annual basis.

ENVIRONMENT AND SAFETY

25. In line with the Policy on Climate Change, the Company has put in place action plans to reduce its carbon footprint and also develop environment-friendly products and appropriate engineering solutions. Implementation of ISO 14001 is in an advanced stage at manufacturing locations, as also implementation of OHSAS 18001 for Health and Safety, at some of the key locations. All the manufacturing plants have appropriate safety initiatives underway, headed by senior ofcials who diligently oversee the safety aspect.

STATEMENT OF EMPLOYEES' PARTICULARS

26. The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made thereunder, is provided in an Annexure forming part of this Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

APPOINTMENT OF COST AUDITOR

27. As per the directions given by the Central Government, the Company has, based on an application made, received the Government's approval for re-appointment of M/s. Sagar & Associates, a frm of Cost Accountants as the Cost Auditor of the Company for the year ending 31st March, 2012 in respect of refrigeration products manufactured by the Company.

SUBSIDIARIES AND JOINT VENTURES

28. Pursuant to the Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the financial information of subsidiary companies. The Central Government has by General Circular No.2/2011 dated 8th February, 2011, granted general exemption to companies from dispensing with the requirement of attaching the accounts of subsidiary companies, subject to certain conditions. As the Company has complied with all the conditions, the annual accounts and other documents of the subsidiary companies are not attached with the Balance Sheet of the Company. Details of capital, reserves, total assets, total liabilities, turnover/income, etc., of the subsidiaries forms part of the Consolidated Financial Statements. The Annual Accounts of the subsidiary companies are open for inspection by any member/investor and also available on the website of the Company - www.voltas.com. The Company will make the documents/details available, upon request by any member of the Company or its subsidiaries interested in obtaining the same.

29. Uncertain conditions in the Middle East, where most of the Company's subsidiaries/joint ventures (JV) operate, continued to face headwinds as a result of which, the overseas subsidiary and JV companies performed lower than the previous year. However, towards the end of the year, the environment improved for smaller projects in which arena these companies operate and therefore, the order booking has been much better as compared to the corresponding period in the previous year. The financial performance and other details of major operating subsidiaries/joint venture companies are given below.

30. Weathermaker Limited (WML) engaged in the business of manufacturing galvanized iron, aluminium, black mild steel, stainless steel ducts and other speciality air distribution products is a wholly-owned subsidiary of the Company and has its manufacturing facility in Jebel Ali Free Zone, UAE. WML has reported turnover of AED 27.659 million and profit of AED 3.882 million for the year ended 31st December, 2010.

31. Saudi Ensas Company for Engineering Services WLL (Saudi Ensas), a wholly-owned subsidiary of the Company in Jeddah, Kingdom of Saudi Arabia is engaged in the execution and operations/maintenance of electro-mechanical installations in KSA and has for the year ended 31st December, 2010, recorded turnover of SR 2.882 million and higher Net profit of SR 3.185 million, due to reversal of certain past provisions.

32. The Company has entered into a joint venture arrangement with Mustafa Sultan Group and established a joint venture company Ã Voltas Oman LLC on 15th February, 2011 in Sultanate of Oman with initial capital of Omani Riyal 500,000, to engage in the business of executing electro-mechanical projects in Sultanate of Oman. Voltas Oman LLC is a subsidiary of Voltas and 65% of its capital is held by Voltas Netherlands B.V., a wholly owned subsidiary of Voltas. The first financial year of Voltas Oman LLC is for the period between 15th February, 2011 and 31st December, 2011.

33. Lalbuksh Voltas Engineering Services & Trading LLC (Lalvol), a limited liability company incorporated in Sultanate of Oman is a joint venture company engaged in the business of Water Well Drilling, Water Management and Landscaping. The Company alongwith its subsidiary Ã Voltas Netherlands B.V. held 49% share capital and balance 51% was held by Lalbuksh Contracting & Trading Establishment LLC., the local partner. Voltas has recently through Voltas Netherlands B.V., acquired 11% shareholding of the local partner and increased the overall shareholding of Voltas Group in Lalvol to 60%. Upon completion of the legal process, Lalvol became a subsidiary of the Company efective 31st March, 2011.

34. Universal Comfort Products Limited (UCPL), a wholly-owned subsidiary of the Company, engaged in the business of manufacturing air conditioners, has due to larger volumes of own manufactured airconditioners, recorded higher turnover of Rs 492 crores and Net profit of Rs 27 crores for the year ended 31st March, 2011 as compared to turnover of Rs 332 crores and Net profit of Rs 14 crores in the previous year.

35. During the year under review, the Company increased its shareholding in Rohini Industrial Electricals Limited (RIEL) from 67.33% to 83.67% of its share capital. RIEL is engaged in undertaking large turnkey electrical and instrumentation projects for industrial and commercial sectors. The performance of RIEL was a major disappointment, where due to multiplicity of reasons, profit of Rs 14 crores achieved in 2009-10 slid into a loss of Rs 35 crores in 2010-11, a swing of Rs 49 crores. However, the margins in the carry forward order book are at a satisfactory level and therefore, going forward, there should be improvement in its performance.

36. Kingdom of Saudi Arabia (KSA) has huge business potential in construction segment and provides good opportunity to the Company's overseas electro-mechanical business. After careful evaluation and selection process through external experts, the Company entered into a joint venture arrangement with Olayan Group in Riyadh, KSA to establish a joint venture company Ã Olayan Voltas Contracting LLC, with 50:50 shareholding to engage in the business of electro-mechanical projects in KSA. Olayan is one of the mostinfluential business groups in KSA and is engaged in various businesses through successful joint ventures with globally renowned corporations.

37. Pursuant to a joint venture arrangement with KION Group, Germany, the Company has subsequent to the close of the financial year, transferred its Materials Handling business to a joint venture company (JVC) Ã Voltas Materials Handling Private Limited. Majority of the equity share capital of the JVC is held by Linde Material Handling Asia Pacifc Pte Limited, Singapore, an afliate of KION Group. The Company has also entered into a Supply Agreement with the JVC for forklifts and warehousing equipment and granted licence to the JVC for use of 'Voltas' brand for forklifts and warehousing equipment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

38. Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of energy and technology absorption is given by way of an Annexure to this Report. As for information in respect of foreign exchange earnings and outgo, the same has been given in the notes forming part of the accounts for the year ended 31st March, 2011.

DIRECTORS' RESPONSIBILITY STATEMENT

39. Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confrm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(b) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of afairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) they have taken proper and suficientcare to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

40. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis, Corporate Governance Report and Auditors' certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report. A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the Board Members and Senior Management personnel forms part of the Annual Report.

DIRECTORATE

41. In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. Noel N. Tata and Mr. Jimmy S. Bilimoria retire by rotation and being, eligible, ofer themselves for re-election.

42. Mr. N. D. Khurody, who is also due to retire by rotation has indicated his desire not to seek re-election. The Directors place on record their sincere appreciation of the valuable services rendered and advice given by Mr. N. D. Khurody during his long tenure on the Board since 28th January, 2002.

43. Mr. R. N. Mukhija was appointed as an Additional Director by the Board of Directors on 3rd December, 2010. In accordance with the provisions of the Companies Act, 1956, Mr. R. N. Mukhija holds ofce upto the date of the forthcoming Annual General Meeting and Notice under Section 257 of the Act has been received from a member proposing his appointment as Director of the Company. The Resolution seeking approval of the members for appointment of Mr. R. N. Mukhija as a Director of the Company has been incorporated in the Notice of the forthcoming Annual General Meeting.

44. Mr. N. J. Jhaveri retired as a Director of the Company on 9th August, 2010 on completing 75 years of age, in line with the Company's Retirement Policy. The Directors place on record their sincere appreciation of the valuable services rendered and advice given by Mr. N. J. Jhaveri during his long tenure on the Board since 10th August, 1998.

AUDITORS

45. At the Annual General Meeting, members will be required to appoint Auditors for the current year. Messrs. Deloitte Haskins & Sells, the present Auditors of the Company have pursuant to Section 224(1) of the Companies Act, 1956, furnished a certificate regarding their eligibility for re-appointment. The approval of the members is also being sought for their appointment as the Branch Auditors of the Company. Attention of the members is invited to Item No. 7 of the Notice of the Annual General Meeting and the relevant Explanatory Statement.

GENERAL

46. The Notes forming part of the Accounts are self-explanatory or to the extent necessary, have been dealt with in the preceding paragraphs of the Report.

On behalf of the Board of Directors

ISHAAT HUSSAIN

Chairman

Mumbai, 19th May, 2011

Mar 31, 2010

The Directors have pleasure in presenting their Fifty-Sixth Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS

Rs. in Crores

Stand-alone Consolidated

2009-10 2008-09 2009-10 2008-09

2. Sales and Services 4565 4070 4830 4374

Proft for the year after meeting all expenses but before depreciation and exceptional items 465 352 528 367

Depreciation 16 17 21 21

Proft before exceptional items 449 335 507 346

Exceptional items 36 32 25 26

Proft before tax 485 367 532 372

Provision for taxation including deferred tax and

MAT credit entitlement 141 115 147 117

Proft after tax 344 252 385 255

Minority Interest and Share of Loss of Associate _ _ (4) (3)

Proft after Minority Interest and Share of Loss of Associate 344 252 381 252

Adding thereto:

- Balance brought forward from the previous year 62 59 71 73

- Amount transferred from Foreign Projects Reserve 3 3 3 3

- Foreign Exchange Translation Diference _ _ (1) 3 Proft available for appropriations 409 314 454 331

Appropriations:

- General Reserve 250 190 251 197

- Proposed Dividend 66 53 66 53

- Tax on Dividend 11 9 11 9

- Legal and Special Reserves _ _ 1 1 Leaving a balance to be carried forward 82 62 125 71

DIVIDEND

3. The Companys dividend policy is based on the need to balance the twin objectives of appropriately rewarding the shareholders with dividend and of conserving resources to meet the Companys future needs. The Directors recommend a dividend of Rs.2 per equity share of Re.1 each (200%) for the year 2009-10 (2008-09: 160%).

OPERATIONS

4. The after-efects of the global slowdown of 2008, spilled over into the frst half of the fnancial year 2009-10. Though there was an improvement in the domestic business environment in the latter half of the fnancial year, the emergence of the Dubai debt crisis again created some uncertainty about the pace and extent of the global economic recovery.

5. Against this backdrop, the Turnover of the Company grew by 12% to Rs.4565 crores and the Proft before Tax increased by over 32% to Rs.485 crores. The Earning per share for the year was Rs.10.40, an increase of 36%.

6. The growth of the Company was due to both external factors as well as the eforts of the Management. On the external front, as the general outlook improved and consumers resumed spending, there was a signifcant pick-up in the consumer durables sector and this benefted our Unitary Products Business. A planned expansion of the distribution channel, improved supply chain management and better product-mix and an aggressive advertising strategy fuelled growth of sales of both Room Air Conditioners as well as Refrigeration products in India.

7. The efective execution of projects by the Companys international electro-mechanical business also contributed signifcantly to the improved proftability of the Company. Your Company won laurels for its role in completing the Formula 1 Race Track in Abu Dhabi, a project of world-class quality that was implemented under very demanding time-lines. The Company also played a signifcant role in completing the electro-mechanical works on the iconic Burj Khalifa Tower in Dubai, the worlds tallest building, in time for the opening in early-2010.

8. The general economic uncertainty did, however, lead to a slowdown in the award of new electro-mechanical projects, both domestically and overseas. An overhang of supply in the commercial buildings sector has slowed down the pace of implementation of new projects. To mitigate this impact, your Company is making a deliberate move to take on more electro-mechanical projects in the industrial segment, including building up capabilities and requisite technical pre-qualifcations. The Companys equity stake in Rohini Industrial Electricals Limited was in line with this strategy, enabling it to expand the domestic project oferings signifcantly into electrical contracting. The rising price of oil has also led to a sustained thrust by governments in the Middle East, particularly the GCC countries, to encourage construction projects and your Company has picked up some new contracts in 2010.

9. The Engineering Products and Services businesses have also seen a pick up in activity during the year, both in the textile machinery business as well as in mining and construction equipment business. Though the pace of activity is below the peak reached earlier, companies are again beginning to invest in capital goods and the trend is encouraging.

10. Your Companys management took several initiatives to mitigate the volatility in global metal prices as well as currency fuctuations, entering into advance contracts where feasible. There was also a conscious thrust to evolve a leaner cost structure and this enabled the Company to improve its performance.

FINANCE

11. The Companys policies in respect of fnances and foreign exchange helped the Company steer through a challenging environment.

12. The Companys cash fow for the year has been good and in line with proftability. With continued good working capital management, the amount and number of days of receivables have declined. Most of the excess stock has been liquidated. At the end of the year, the Company held liquid investments in excess of Rs.200 crores as against Rs. 121 crores at the end of the previous year. The return on liquid investments has been lower compared to the previous year due to the low interest yields that prevailed during the year. The Company has also given advances to its subsidiary companies to meet their liquidity imbalances and reduce dependence on external fnancing. With efcient realization of collections, the Company has reduced foats in the system. In the International Operations, cash balances have risen from Rs.240 crores per end of the previous year to Rs. 308 crores. During the year, the Company invested around Rs. 24 crores in acquiring a further 16% shareholding in Rohini Industrial Electricals Limited and the Company now owns 67% in Rohini. The Companys external debt, at the year end was negligible at Rs.19 crores and the Net Worth was Rs.995 crores.

13. On management of foreign exchange, except conversion of balances held overseas, the results have been encouraging. The Companys philosophy is to hedge the known risks in a conservative manner.

TATA BUSINESS EXCELLENCE MODEL (TBEM)

14. As a part of ongoing eforts to create a culture of continuous improvement and total employee engagement, the Company focused on various initiatives, such as Six Sigma, Process Management & Process Improvement, Strategy Deployment Matrix and Total Productive Maintenance. These have been progressing well, and providing the desired benefts. The Company has undertaken implementation of OHSAS 18001 in its drive towards a strong and efective safety policy.

15. During the year, the international Electro-Mechanical business (EM) and the domestic Electro-Mechanical and Refrigeration business (EM&R) participated in the Tata Group level TBEM External Assessment. While the performance of EM&R was steady as compared to the previous assessment, the performance of EM showed considerable improvement, entitling the business to an award at the Group level. Both EM and EM&R began work on action plans for further improvements based on feedback reports from the Assessments. The Company has developed a pool of trained TBEM Assessors to support its Business Excellence initiatives and also to provide External Assessors at the Group level.

IT INITIATIVES

16. During the year under review, the Company initiated and completed several strategic projects in IT. The Human Capital Management (SAP-HCM) system for overseas employees integrated all employees on a single platform, yielding better control over manpower costs. SAP modules implemented for international Electro-mechanical business would result in better project management through increased visibility and operational control.

17. Customer Relationship Management (CRM) software implemented for the domestic Electro-mechanical business will help in better service delivery of maintenance projects. Unitary Products business upgraded its existing CRM software by incorporating Dealers Service Reports and claims, with linkage through the SAP system.

18. The upgrade of SAP to the latest version would also enable the Company comply with the reporting requirements proposed under IFRS.

COMMUNITY DEVELOPMENT

19. The Company plays an active role in improving the quality of life of the communities amongst which it operates, through a well-defned framework for implementing its Community Development philosophy.

20. Through its Core Competency projects, the Company continues to provide hands-on technical training to youth from less privileged backgrounds. The involvement of the Company in terms of employees time, knowledge and interest, as well as fnancial assistance, goes a long way towards the projects usefulness and productivity.The objective of the programme is to impart vocational training to underprivileged youth to empower them, educate them, and enhance their employability. The Company continues to partner with the Joseph Cardijn Technical School, Mumbai, from which 15 batches covering 214 students have completed the course successfully since 2002. The Company has also partnered with Bosco Boys, Mumbai, with one batch of 9 students so far; and GMR Varalakshmi Foundation, Hyderabad, with 5 batches of 83 students to date. Soft-skills programmes in Communication, Personality Development and Customer Care are being conducted for the students.

21. As part of the implementation of its Afrmative Action policy, in accordance with CII guidelines, the Company has rolled out initiatives in the areas of Employment, Employability, Entrepreneurship and Aid in Education. The Company has adopted the Policy of Positive Discrimination in recruitment towards candidates belonging to SC/ST communities. Similarly, the Company has a tie-up with selected Technical Institutes across India in order to increase scope for employment among trainees from SC/ST communities. Hitherto about 93 trainees from SC/ST candidates have completed the Technical Training and about 28 trainees have been deployed on overseas projects. Similarly, in the areas of employability and entrepreneurship, the Company has put in place a scheme for providing capacity-building training in housekeeping and gardening to SC/ST candidates. Three batches have successfully completed the training under this scheme.

22. As part of Aid-in-Education, the Company provides monetary help to deserving SC/ST students from engineering colleges. During the year, the Company extended scholarships to 24 students from the Mechanical and Electrical streams. In addition, the Company sponsored a youth delegate to the Climate Change Convention held at the Bella Centre in Copenhagen, Denmark. The Company is also working towards adopting appropriate policies for positive discrimination in the areas of employment and vendor development.

23. In accord with its commitment to energy-saving and Ãgreen initiatives, the Company partnered with The Energy & Resources Institute (TERI) to sponsor electrifcation of 10 villages entirely through sustainable energy sources. The initiative was carried forward by Unitary Products business, linked to a nationwide drive to promote awareness of energy-saving products such as Voltas ÃStar-rated ACs.

24. During the year, the Companys volunteers participated in numerous activities, including care for the elderly, income generation programmes, tutoring and mentoring of orphans and underprivileged, volunteer visits to care-giving institutions, blood donation drives, awareness programmes such as for Road Safety and Environment, and assistance to SC/ST children with specialized English- language classes and mid-day meals.

25. Voltas Organisation of Women (VOW), exclusively run by lady employees and the wives of male employees, continued to live up to its objective of helping the needy by way of providing fnancial assistance in the feld of health and education and promoting the upliftment of women. In 2009, VOW organized street plays on human trafcking, domestic violence and property rights of women. VOW also supported vocational training for women through its various partners.

GLOBAL COMPACT AND CARBON DISCLOSURE PROJECT

26. The Company is a signatory to the Global Compact and adheres to the ten key principles based on universally agreed and internationally applicable values and goals in the areas of Human Rights, Labour Standards and Environment.

27. The Company is also a signatory to the Carbon Disclosure Project initiated by CDP-UK with Confederation of Indian Industries and World Wild Life Fund. The Company shares information pertaining to sustainability-related issues with CDP, on an annual basis.

ENVIRONMENT AND SAFETY

28. Towards this end the Company recently completed a Carbon Footprint mapping exercise for all its manufacturing plants and has undertaken initiatives to reduce its Carbon Footprint. During the year, the Company formally adopted a Policy on Climate Change. The Thane Manufacturing Plant is in an advanced stage of ISO 14001 standard implementation, which deals with environmental issues. The Company has also reached an advanced stage of OHSAS 18001 standard implementation at one of its manufacturing plants, one project site and at the Head Ofce. During the year this initiative will be further extended to other parts of the organization. All the manufacturing plants have appropriate safety initiatives under way, headed by senior ofcials who diligently oversee the safety aspect.

STATEMENT OF EMPLOYEES PARTICULARS

29. The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made thereunder, is provided in an Annexure forming part of this Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

APPOINTMENT OF COST AUDITOR

30. As per the directions given by the Central Government, the Company has, based on an application made, received the Governments approval for re-appointment of M/s. Sagar & Associates, a frm of Cost Accountants as the Cost Auditors of the Company for the year ending 31st March, 2011 in respect of refrigeration products manufactured by the Company.

APPOINTMENT OF TSR DARASHAW LIMITED AS REGISTRAR AND SHARE TRANSFER AGENT

31. In order to beneft from the specialized services provided by TSR Darashaw Limited (TSRDL) and taking into consideration, various other factors including costs and upgradation of IT systems, the Company was in dialogue with TSRDL for providing depository related services for the shares held in demat form and as Transfer Agent in respect of shares held in physical form. TSRDL are the Registrars and Share Transfer Agents for most of the listed Tata companies. Accordingly, at the last Annual General Meeting held on 10th August, 2009, the Company had taken the approval of the shareholders for keeping the Registers and Indexes of Members and Debentureholders and copies of Annual Returns and other relevant documents in the premises of TSRDL in addition to the Registered Ofce and/or such other ofce building within the premises of the Company at Chinchpokli. The transfer of share related activities including records and database has been completed and TSRDL has been appointed as the Registrar and Share Transfer Agent of the Company from 8th March, 2010. A suitable announcement to that efect was published in the newspapers and individual intimation was also sent to all the shareholders.

SUBSIDIARIES

32. Pursuant to the Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the fnancial information of subsidiary companies, namely Weathermaker Limited, Saudi Ensas Company for Engineering Services W.L.L., Metrovol FZE, VIL Overseas Enterprises B.V., Voice Antilles N.V., Universal Comfort Products Limited, Rohini Industrial Electricals Limited, Simto Investment Company Limited and Auto Aircon (India) Limited. In terms of the approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, copy of the Balance Sheet, Proft and Loss Account, Directors Report, Auditors Report and other documents of the aforesaid subsidiary companies for the year ended 31st March, 2010 (31st December, 2009 in case of Weathermaker and Saudi Ensas), have not been attached to the Balance Sheet of the Company. A statement giving details of turnover/income, net proft, dividend, share capital, reserves and surplus, assets and liabilities, etc. of the aforesaid subsidiaries forms part of the Annual Report. The Annual Accounts of the subsidiary companies are open for inspection by any member/ investor and also available on the website of the Company - www.voltas.com. The Company will make the documents/ details available, upon request by any member of the Company or its subsidiaries interested in obtaining the same.

33. Weathermaker Limited (WML) engaged in the business of manufacturing galvanized iron, aluminium, black mild steel and stainless steel duct is a wholly-owned subsidiary of the Company and has its manufacturing facility in Jebel Ali Free Zone, UAE. WML has reported turnover of AED 33.423 million and profit of AED 5.053 million for the year ended 31st December, 2009.

34. The rehabilitation/fnancial restructuring of Saudi Ensas Company for Engineering Services WLL (Saudi Ensas), a wholly-owned subsidiary of the Company in Jeddah, Kingdom of Saudi Arabia (KSA) is almost complete. Saudi Ensas is engaged in the execution and operations/ maintenance of electro-mechanical installations in KSA and has for the year ended 31st December, 2009, recorded turnover of SR 10.248 million and net proft of SR 0.109 million. The Company has provided fnancial assistance from time to time, aggregating SR 19.955 million (equivalent to Rs.24 crores approx.) to Saudi Ensas. KSA has huge business potential and provides good opportunity to the Companys overseas electro-mechanical business. It was therefore decided to establish a branch ofce of the Company in KSA, subject to requisite approvals including commercial registration. While small and medium size projects would be catered to by Saudi Ensas, large size projects would be executed by the Companys branch ofce in KSA.

35. Universal Comfort Products Limited (UCPL), a wholly- owned subsidiary of the Company, engaged in the business of manufacturing air conditioners, has recorded a turnover of Rs.332 crores and net proft of Rs.14 crores for the year ended 31st March, 2010.

36. During the year under review, the Company increased its shareholding in Rohini Industrial Electricals Limited (RIEL) from 51% to 67.33% of its share capital. RIEL is engaged in undertaking large turnkey electrical and instrumentation projects for industrial and commercial sectors and recorded turnover of Rs. 214 crores and net proft of Rs. 9 crores for the year ended 31st March, 2010.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

37. Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of energy and technology absorption is given by way of an Annexure to this Report. As for information in respect of foreign exchange earnings and outgo, the same has been given in the notes forming part of the accounts for the year ended 31st March 2010.

DIRECTORS RESPONSIBILITY STATEMENT

38. Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confrm that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(b) They have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of afairs of the Company at the end of the financial year and of the proft of the Company for that period;

(c) They have taken proper and sufcient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) They have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

39. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis, Corporate Governance Report and Auditors Certifcate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report. A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the Board Members and Senior Management personnel forms part of the Annual Report.

DIRECTORATE

40. In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Mr. Ishaat Hussain, Mr. Nasser Munjee and Mr. Ravi Kant retire by rotation and being eligible, offer themselves for re-election.

41. Mr. Nani Javeri was appointed an Additional Director by the Board at its Meeting held on 29th October, 2009. Mr. Sanjay Johri was appointed Additional Director and as the Managing Director of the Company with efect from 23rd April, 2010 by the Board at its Meeting held on 19th April, 2010. In accordance with the provisions of the Companies Act, 1956, Mr. Nani Javeri and Mr. Sanjay Johri hold ofce upto the date of the forthcoming Annual General Meeting and Notices under Section 257 of the Act have been received from a member proposing their appointment as Director of the Company. Resolutions seeking approval of the members for appointment of Mr. Nani Javeri as a Director and Mr. Sanjay Johri as a Director and Managing Director of the Company have been incorporated in the Notice of the forthcoming Annual General Meeting and the Explanatory Statements thereto.

42 Mr. S.D. Kulkarni retired as a Director of the Company on 20th September, 2009 on completing 75 years of age, in line with the Companys Retirement Policy. The Directors place on record their sincere appreciation of the valuable advice and guidance given by Mr. Kulkarni during his long tenure on the Board since September 1999.

43 Mr. A. Soni retired as the Managing Director of the Company upon expiry of his contact on 22nd April, 2010. The Directors appreciated the enormous eforts put in by Mr. Soni and his outstanding contribution in transforming Voltas and for the signifcant improvement in the fnancial performance of the Company, over the past few years. The Board of Directors complimented the valuable services rendered and the excellent work done by Mr. Soni during his long tenure on the Board since September 2000.

AUDITORS

44. At the Annual General Meeting, members will be required to appoint Auditors for the current year. Messrs. Deloitte Haskins & Sells, the present Auditors of the Company have pursuant to Section 224(1) of the Companies Act, 1956, furnished a certifcate regarding their eligibility for re-appointment. The approval of the members is also being sought for their appointment as the Branch Auditors of the Company. Attention of the members is invited to Item No.9 of the Notice of the Annual General Meeting and the relevant Explanatory Statement.

GENERAL

45. The Notes forming part of the Accounts are self-explanatory or to the extent necessary, have been dealt with in the preceding paragraphs of the Report.

On behalf of the Board of Directors

ISHAAT HUSSAIN

Chairman

Mumbai, 28th May, 2010

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