To the Members

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

1. Financial Results

Rs in crores

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 Rs 8,124 crores, as compared to Rs 7,745 crores last year achieved growth of 5%. Profit before share of profit/ loss from joint ventures and associates was Rs 808 crores (Previous year: Rs 770 crores) and consolidated Profit before tax was at Rs 697 crores as compared to Rs 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 Rs 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 Rs 5.50 per equity share of Rs 1 each (550%) for the year 2021-22 (2020-21: 500%). The dividend would result in a cash outflow of Rs 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 Rs 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 Rs 350 crores for manufacturing of inverter compressors for Room Airconditioners, through a separate proposed joint venture company.

In the Project business, over Rs 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 Rs 3,638 crores comprised orders across Water, HVAC, Rural Electrification and Urban Infra-activities and the international order book of Rs 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 Rs 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 Rs 8124 crores was higher than that of the previous year. At the PAT level, the Company was marginally lower than the previous year at Rs 506 crores. Voltas ended the year with an Earnings per Share of Rs 15.23 (Face Value per share of Rs 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.

In 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.

• 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.

• 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.

• 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.

• 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.

• 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.

Initiating 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 Rs 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.

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

Presently, the Company does not have any material subsidiary.

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

• 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 Rs 397 crores and profit before tax of Rs 12 crores in 2021-22 as compared to Rs 323 crores and Rs 18 crores respectively, in the previous year.

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

White Goods has reported turnover of Rs 944 crores as compared to Rs 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 Rs 1027.01 crores. During 2021-22, the Company invested Rs 93.10 crores in the share capital of Voltbek and the Company's total investment in Voltbek (49% share) was Rs 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:

• 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.

• 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 Rs 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

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 and2021- 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 between2022- 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 andRemuneration 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:

* 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:

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

(c) Percentage increase in the median remuneration of employees in 2021-22:

6.42%

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

2,576 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 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.

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 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

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 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

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

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:

* 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;

(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) 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

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 2021-22.

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