Voltas Ltd Directors Report

To the Members

Your Directors present their 70^th Annual Report and the Audited Statement of Accounts for the year ended 31 March, 2024.

1. Financial Results

Rs In Crores

	Consolidated	Standalone
	2023-24	2022-23	2023-24	2022-23
Total Income	12,734	9,667	8,988	7,850
Profit for the year after meeting all expenses but before exceptional items, interest and depreciation	728	742	822	601
Interest	56	30	21	12
Depreciation and amortization	48	40	43	36
Profit before exceptional items, share of profit/(loss) of joint ventures and associates and tax	624	672	758	553
Exceptional items	--	(244)	--	975
Share of profit/(loss) of joint ventures and associates	(138)	(121)	--	--
Profit before tax	486	307	758	1,528
1 ax expenses	2S8	171	154	12 3
Profit after tax	248	136	604	1,405
Other comprehensive income (net)	255	(38)	262	(5 7)
Total comprehensive income	503	98	866	1,348

2. Operations

The global geopolitical tensions and financial market volatility overshadowed the initial outlook for the calendar year 2023. In most of the major developed and emerging economies around the world, inflation rose, compelling Central Banks to embark on a rigorous path of rate hikes to calm inflationary pressures. In addition, the uncertainty of growth across the world kept commodity and crude oil prices volatile for most of the year.

Despite multiple headwinds globally, the Indian economy demonstrated resilience in 2023. The increase in tax revenues and positive PMI across manufacturing and service industries, coupled with the highest economic growth rate amongst world economies, stand as a testimony to this.

Your Company grew its top line for the year in a demanding environment, however, favourable climatic and festive conditions towards the end of the financial year supported the Unitary Cooling Products business (UCP).

Voltas made history by selling over 2 million AC units in 2023-24, the highest number of ACs ever sold by any brand in a single year in India. This achievement was facilitated by the Companys expanded range of products, featuring enhanced attributes and enhanced participation with key Regional Retailers and Modern Trade Partners.

Voltas strong brand positioning, distribution reach, and leverage on the supply chain helped the Company retain its market leadership position for the year, with a market share of 18.7%. Your Company continued to build its strength in traditional channels and increased its concentration in Modern Trade and Organized channels. We continue to build an extensive network of Exclusive Brand Outlets (EBOs), including Experience Zones at strategic locations, all of which will help in further strengthening our market share and brand presence.

The Companys expansion of manufacturing capacity is on track and the commercial production from the Room Air Conditioner facility in Tamil Nadu is expected to start from Q1 2024-25. This would help to cater to the increased demand and balance the supply chain, especially in the South and West markets of India.

The Commercial Refrigeration (CR) Products business remained subdued for most of the year on account of a reduction in the capital expenditure of our customers, more particularly in the chocolate category. However, volumes increased due to the anticipated scorching summer which led to an improvement in our business by the end of the financial year.

The Commercial Refrigeration business vertical continued to maintain its market leadership in Chest Freezers, Water Dispensers and Water Coolers posting annual sales of more than 6 lakh units, duly supported by an all-time high production of 4.60 lakh units from the Pantnagar facility. The Cold Rooms business made good progress and the Company has received a Letter of Intent (LOI) for a large order of Cold Rooms for delivery in 2024-25.

The new manufacturing facility at Waghodia in Gujarat commenced trial production at the end of March 2024, with ISO 9001 and BIS certifications for horizontal Glass Top models of Freezers.

The Air Cooler vertical also witnessed a good seasonal sales uplift and registered robust growth of 40% in volumes over the last year. The acceptance of our high-end product portfolio and the expansion of the sales channel with tactical distributor schemes that supported the primary delivery to channel partners helped in registering growth during the year. The Company also launched Water Heaters during the year in various capacities ranging between 3 litres and 25 litres with quartzline technology, which was well accepted.

The Commercial Air Conditioning (CAC) business vertical has registered healthy growth for Chillers, VRF, Ducted and Packaged Air Conditioners, both from the retail and the healthcare sectors. Increased commercial activities across the country, coupled with a focus on customer retention and after-sales services, should support the overall growth of this business vertical going forward. CAC has also launched new products to widen its portfolio of offerings.

As reported last year, to have better emphasis on sustainable and profitable growth, with increased focus on B2C and B2B business verticals, the Domestic Projects business of MEP, HVAC and Water projects; Mining and Construction Equipment (M&CE) business and Textile Machinery Division (TMD) were transferred by Voltas effective 1 August, 2022 to its 100% wholly owned subsidiary, Universal MEP Projects & Engineering Services Limited (UMPESL) through a slump sale. The primary objective of this internal restructuring was to increase focus on each business separately.

During 2023-24, the Domestic Projects business of MEP, Water, Electrical and Solar projects grew by 38% year-on- year and now has a healthy carried forward order book position of over 5000 crores at the year-end. Timely execution, focus on certifications and collections, tight control of working capital and other project management related initiatives have resulted in a robust top-line and bottom-line growth in all the segments. Additionally, a high ROCE showcases the capability of strong execution and fostering a healthy pre-qualification experience (PQE), which is fundamental for the future outlook of this business.

UMPESL executed HVAC projects at the New Parliament Building and Tiruchirappalli Airport. Both these prestigious projects were inaugurated by the Honourable Prime Minister of India. UMPESL is now executing several major projects in the Building & Industrial segment, Metro Infra projects, including Mumbai, Kolkata, Bangalore and Chennai Metros and the MMRDA tunnel project.

In the Water segment, UMPESL commissioned 6 Rural Water Supply and Sanitation projects (RWSS) in Odisha, which have been commissioned and have started supplying treated drinking water to 21 villages. Similarly, in Uttar Pradesh, 31 schemes under the State Water and Sanitation Mission (SWSM) projects were commissioned and water supply has started in 74 villages in Ayodhya and 49 villages in Sultanpur. Several other projects are under execution under the RWSS and SWSM.

Under the Electrical & Solar business segment, UMPESL has successfully established an electrical network in extremely difficult terrains of riverine areas in West Bengal. A 33 MW project of Green Infra Clean Solar Energy at Gangawati, Karnataka has also been efficiently executed and handed over. Major projects under the Revamped Distribution Sector Scheme (RDSS) projects in Uttar Pradesh, Madhya Pradesh, West Bengal and Jamshedpur are in progress.

The carry-forward order book of last year by the International Projects Business Group (IOBG), comprising projects in the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia, helped the business deliver a healthy turnover in 2023-24. However, IOBG continued to face headwinds. A few projects, especially in Qatar remained under stress due to extraordinary delays in the realization of overdue receivables from Main Contractors and prolongation of execution timelines which resulted in the Company making large provisions of around 400 crores thereby significantly impacting the performance of IOBG and in turn, the overall profitability of Voltas, at the consolidated level. The Company continues to engage with all concerned stakeholders in these projects, to pursue its rightful claims and ensure recovery of its due receivables.

During 2023-24, the Company booked a large order, over 800 crores, in the Kingdom of Saudi Arabia (KSA) and was re-appointed as the sub-contractor for one of the projects in Dubai, UAE. The Client had last year in 2022-23, terminated the Main Contractor for this project and in turn, the Main Contractor, had terminated the sub-contract of Voltas and encashed the bank guarantees, necessitating the Company to make provision of over 100 crores in 2022-23 on this project. The Client has in 2023-24 appointed a new Main Contractor, which has re-appointed Voltas as their sub-contractor to continue and complete the balance portion of MEP works of this project. Successful execution could enable the Company to recover part of the outstanding amounts, which might result in reversal of the provisions earlier made.

The Board has advised the local management to focus on the execution of existing ongoing projects in an efficient manner, including collection of due receivables within the timelines as per the contractual terms, to minimise the Companys exposure.

Increased demand for crushing and screening equipment owing to extensive infrastructure spending in the country and the revival of the iron ore sector resulted in a good performance by the Mining & Construction Equipment business (M&CE). M&CE is also providing mining services in Mozambique, Africa where it has maintenance contracts for loaders and other equipment.

The Textile Machinery Division (TMD) continued with improved performance on the disciplined execution of the strong order book and focus on accessories sales, including auxiliary and value-added services. Investment in the textile sector on the back of the policy initiatives of the Government like the PLI scheme, PM Mitra Integrated Textile Park and revival of export demand are an indication of a positive outlook for the business. UMPESL is the largest distributor for Lakshmi Machine Works, which has a market share of 65% for Spinning Machinery in India. Voltbek, the joint venture company for white goods has, despite being a relatively new entrant, achieved a remarkable milestone of cumulative sales volume of 5 million units in its 5 years of operations and is the fastest growing consumer durables brand in India, thus, demonstrating trust in the Voltas Beko brand and acceptance of the products by consumers across the value chain. Voltbek performance was aided by robust demand, improved consumer sentiments as well as product management initiatives which have led to a premiumisation of the overall portfolio. The tie-ups with Organised Trade partners and E-commerce platforms, in addition to the traditional channels, have contributed to achieving a higher volume growth in 2023-24 over last year. The favourable product mix and cost-rationalization measures alongside localization of the fast-moving SKUs have resulted in improvement in overall market share, both for Refrigerators as well as Washing Machines.

The Company has reported a higher consolidated total income from operations at 12,734 crores as compared to 9,667 crores last year, an increase of 32%. The consolidated Profit before share of profit/loss from joint ventures and associates and tax was 624 crores and the consolidated Net Profit after tax was 248 crores. Voltas ended the year with an Earnings per Share of 7.62 (Face Value per share of 1).

The Companys balance sheet continues to remain strong and healthy. The borrowings are primarily for overseas operations and capacity expansion projects in Chennai, Tamil Nadu and Waghodia, Gujarat. The tight control of the working capital with focus on collections in the 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 Companys shareholders with a dividend, and of conserving resources to meet its future requirements. The Policy is available on the Companys website at:

https://www.voltas.in/images/_ansel_image_collector/DIVIDEND_DISTRIBUTION_POLICY_1.pdf

5. Dividend

Based on the Companys 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 2023-24 (2022-23: 425%). The dividend would result in a cash outflow of around 182 crores, reflecting a payout of 30.12% of the Net Profit.

The dividend on equity shares is subject to the Shareholders approval at the 70^th Annual General Meeting (AGM) scheduled to be held on 10 July, 2024. The Register of Members and Share Transfer Books of the Company will remain closed from 26 June, 2024 to 10 July, 2024 (both days inclusive) for the purpose of payment of the dividend for the year ended 31 March, 2024, and the AGM.

6. Finance

Cash management continues to be a key focus area for the Company. Robust Working Capital management has resulted in better optimization, considering the seasonality of the Consumer Products business and keeping in mind the interests of all the stakeholders across the sourcing and supply chain. Improved Working Capital has resulted in a healthy cash balance which has been conserved for various organic growth opportunities and planned capex requirements of the Company.

During the year, the Company has capitalized on the opportunity afforded to us by the various Government initiatives on self-sustainability and "Make in India". In addition, the Company has also invested in the greenfield manufacturing capacity expansion for Air-conditioners and Commercial Refrigeration Products by setting up new manufacturing facilities in Tamil Nadu and Gujarat, respectively. The Company has deployed capital expenditure of around 600 crores for expansion and component manufacturing in a phased manner. Internal accruals and long-term borrowings will finance these expansion drives.

The Company has also invested additional capital of 108.78 crores in Voltbek to support its accelerated growth plans.

The cash and bank balance, including investments, continue to remain robust and would be utilised to support various initiatives, including the capex plans for the expansion of production capacities and growth avenues.

The Companys credit rating has been confirmed at AA+ for long-term borrowings and A1+ for short-term borrowings by a reputed Rating Agency, enabling the Company to avail banking facilities at competitive rates.

Digital transformation through the adoption of new-age technology has made the Company more effective and efficient. Cost optimization across all functions, combined with tight control over working capital, has resulted in generating cash surplus during the year.

The Companys Investment Policy considers three important principles viz. safety, security and liquidity. The investments are prudently monitored by the Investment Committee. As of 31 March, 2024, the Companys liquid investments (Mutual Funds, Bonds, ICDs and Bank Fixed Deposits) stood at 2,300 crores.

The Company has a well-defined Forex policy, based on which, its currency exposure is closely monitored to hedge the forward risk in a more structured and timely manner.

7. Tata Business Excellence Model (TBEM)

Voltas has embarked on a transformative Business Excellence journey, leveraging insights from the TBEM External Assessment done in 2022. Action plans were crafted based on the findings of the assessment. Voltas has participated in Tata Group level eHackathon, fostering ideation and Innovista Program with ten entries across various business units.

Voltas has also conducted the TBEM Internal Assessment for its 100% subsidiary - Universal MEP Projects & Engineering Services Limited (UMPESL), involving the Tata Business Excellence Group (TBExG) and a few external assessors. The findings were reflective of "Good Performance" in scoring band. On the Quality Assurance front, various Quality Process Audits were conducted at major projects and UMPESL - Infra Projects have been certified for Integrated Management Systems (ISO 9001, ISO 14001 and ISO 45001).

8. IT Initiatives

During 2023-24, Voltas embarked on an enterprise-wide digital transformation journey, known as V-vartana, aimed at ushering into a new era of innovation and efficiency across the Company.

The Company has migrated to the Microsoft 365 platform, which will enhance productivity and provide the next level of collaboration capabilities. The Company is also migrating its ERP systems from ECC to S/4 HANA.

In alignment with the Industry 4.0 paradigm, the Company has launched several strategic projects aimed at revolutionizing the manufacturing processes and supply chain operations. Deployment of IoT-enabled equipment in new plants in Chennai and Waghodia exemplifies the commitment to embracing emerging technologies for proactive maintenance and operational excellence.

The Company has launched mobile applications in its project business for inventory management and attendance management at the project sites. This brings real-time visibility of the material movement and personnel at the sites.

In essence, the initiatives undertaken as part of the V-vartana journey are collectively aimed at positioning our organization as a future-ready, digitally advanced, and data-driven enterprise.

9. Safety Health Environment (SHE)

Voltas commenced its safety culture transformation journey in 2019 and is currently moving towards the Independent phase on the Bradley Curve, considering the performance of employees, business partners and workers and has implemented several measures, including:

• Standardization of SHE management across all businesses, including the review and revision of policies, manuals, risk assessments and procedures.

• Establishment of SHE strategy and SHE goal setting, including training index, number of observations and number of leadership audits.

• I mplementation of business-centric SHE leadership programs, mandatory training of senior leaders and their engagement in leadership audits. More than 1000 safety audits were conducted by senior leaders across various project sites, manufacturing plants, warehouses and offices during 2023-24.

• Conducted dedicated campaigns on e-waste collection, road safety, working at heights and hazard identification.

• Implemented 5S (sorting, setting in order, shining, standardizing and sustaining) in all manufacturing units and 2S (sorting and setting in order) in all project sites.

• Digitization of SHE management processes, continuation of QR code-based hazard/observation reporting, MIS reporting, safety leadership audits, contractor safety management portal, vendor management platform, visitor management system and technician tracking app. 1039 contractors were registered on the vendor and CSM platforms and more than 10,000 technicians were tracked through the technician tracking app.

10. Sustainable Development

Based on the Tata Ethos of Giving back to the Community,

Voltas has designed its CSR framework on three verticals:

(a) Sustainable Livelihood which emphasizes 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 address 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 the inclusion of SC and ST communities, Women and People with Disabilities (PWD).

Sustainable Livelihood

Voltas offers industry-linked courses on Air Conditioning, Plumbing and Electrical. These courses emphasize 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 domain expertise of the Company.

The Company also offers other trade courses like BSFI, Retail, IT-enabled services, Tally and Accounting, Nursing assistant and Tailoring. The programs are implemented in association with Tata Strive, GMR Varalakshmi Foundation, Grey Sim Learnings Foundation, CARE Foundation, Pratham and Agnel Institute of Technical Training & Entrepreneurship Development.

Voltas has taken a target of skilling 45,000 students by 31 March, 2025. By training 5,570 students in 2023-24, Voltas has so far trained 45,256 students against this target, well in advance.

Community Development

During 2023-24, Voltas has undertaken several Community Development projects in the fields of Education, Health, Art and Culture and extended financial support for cancer patients, vocational training, libraries and tribal children.

In 2023-24, 1,580 Voltas employees volunteered in various volunteering events, clocking 4,437 volunteering hours and reaching out to more than 19,000 beneficiaries.

11. Corporate Social Responsibility (CSR)

During 2023-24, the Company spent 9.12 crores towards various CSR activities, in line with the requirements of Section 135 of the Companies Act, 2013 (Act). The Company has undertaken an ongoing CSR project to set up a Medical Healthcare facility in Chennai, Tamil Nadu and an amount of 4 crores was earmarked for 2023-24. However, due to certain delays, the said amount was not spent by 31 March, 2024. The Company has, therefore, in accordance with provisions of Section 135(6) of the Companies Act, 2013, transferred this unspent amount to a separate bank account opened with a Scheduled Bank.

Disclosure as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014, in prescribed form (as amended) is enclosed as Annexure I to the Directors Report. Details of the composition of the CSR Committee and Meetings held during 2023-24 are disclosed in the Corporate Governance Report.

The Company incorporated a Section 8 company - Voltas Social Development Foundation, as a subsidiary on 12 December, 2023, for the purpose of pursuing the CSR activities of Voltas Group (the Company and its subsidiaries).

12. Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its subsidiaries for the year 2023-24 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 Auditors Report thereon, forms part of this Annual Report.

13. Subsidiary/JointVentures/Associate Companies

As of 31 March, 2024, the Company had 10 subsidiaries (direct and indirect), 3 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 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 Companys website - www.voltas.com.

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

As of 31 March, 2024, the Company had a material subsidiary - Universal MEP Projects & Engineering Services Limited (UMPESL) in India. Mr. Debendranath Sarangi, the Independent Director of the Company is on the Board of UMPESL, in accordance with the requirements of Regulation 24(1) of the Listing Regulations.

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

• UMPESL has reported a turnover of 2,865 crores and profit before tax of 288 crores in 2023-24, as compared to 1,767 crores and 235 crores, respectively in the previous year.

• Voltbek Home Appliances Private Limited (Voltbek), the joint venture with Argelik A.?. for Consumer White Goods has reported a turnover of over 1,500 crores for 2023-24. During 2023-24, the Company has invested 108.78 crores in the share capital of Voltbek. The Companys total investment in Voltbek is 734.51 crores, representing a 49% share in its paid-up capital of 1,499 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 2023-24.

14. Number of Board Meetings

During 2023-24, seven Board Meetings were held on 26 April, 2023; 26 June, 2023; 11 August, 2023; 19 October, 2023; 8 November, 2023; 30 January, 2024 and 18 March, 2024. All the Board Meetings were held physically and the facility of participation at Board Meetings through video conferencing was provided to those Directors who had requested for the same.

15. Policy on Directors Appointment and Remuneration, including Criteria for Determining Qualifications, Positive Attributes and 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 Companys 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

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

Pursuant to the provisions of the Act and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Board evaluated 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, guidance and 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 11 March, 2024, and also shared with the NRC and Board. At the separate Annual Meeting of Independent Directors, the performance of Non-Independent Directors, including the Chairman, the 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, which 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, the performance and role of the Board and Committees were also discussed at the Board Meeting held on 7 May, 2024. The performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

17. Statutory Auditors

At the 68^th 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 68^th AGM till the conclusion of 73^rd 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 2023-24 does not contain any qualifications, reservations or adverse remarks, except for Key Audit Matters.

18. 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 2023-24, and they have been reappointed as Cost Auditors of the Company for 2024-25. Approval of the Shareholders is being sought for ratification of their remuneration at the ensuing AGM.

19. 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 2023-24. 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 reappointed as the Secretarial Auditor of the Company for 2024-25.

Pursuant to Regulation 24A of the Listing Regulations, the Secretarial Audit Report of UMPESL, a material subsidiary of the Company has also been annexed to the Directors Report as Annexure IV. The Secretarial Audit Report of UMPESL does not contain any qualification, reservation, or adverse remarks.

20. Audit Committee

The Audit Committee comprises Mr. Zubin Dubash, Mr. Debendranath Sarangi, Mr. Arun Kumar Adhikari and Mr. Jayesh Tulsidas Merchant, all Independent Directors, in line with Section 177 of the Act. Mr. Jayesh Merchant was appointed as a Member of the Committee with effect from 30 January, 2024. The Board has accepted all the recommendations made by the Audit Committee from time to time. Details of Audit Committee Meetings held during the year 2023-24 are disclosed in the Corporate Governance Report.

21. Internal Financial Controls

The Internal Financial Controls (IFCs), its adequacy and operating effectiveness are 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.

22. Reporting of Fraud

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

23. 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, Mr. Debendranath Sarangi, Mr. Arun Kumar Adhikari and Mr. Jayesh Tulsidas Merchant, all Independent Directors. Mr. Jayesh Merchant was appointed as a Member of the Risk Management Committee with effect from 30 January, 2024. The Company has formulated a Risk Management Policy to establish an effective and integrated framework for the Risk Management process. During 2023-24, two Meetings were held on 27 July, 2023 and 14 December, 2023, wherein, the top 10 risks and relevant mitigation measures identified for the Company were reviewed and discussed.

24. 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, is given below:

(a) The ratio of each Directors remuneration, to the median remuneration of the Companys employees for 2023-24: ^*

Directors	Ratio to Median Remuneration
Mr. Noel lata	2.39
Mr. Vinayak Deshpande	0.99
Mr. Debendranath Sarangi	2.92
Mr. Bahram N. Vakil	2.32
Ms. Anjali Bansal	2.06
Mr. Arun Kumar Adhikari	2.13
Mr. Zubin Dubash	2.54
Mr. Saurabh Agrawal	0.32
Mr. Jayesh Merchant (w.e.f. 30 January, 2024)	*
Executive Directors
Mr. Pradeep Bakshi Managing Director & CEO	60.70
Mr. Mukundan Menon Executive Director & Head-RAC (w.e.f. 10 July, 2023)

* 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: The ratio of Remuneration of Directors was computed based on sitting fees paid during 2023-24 and commission paid for 2022-23 in 2023-24. However, in line with the internal guidelines, no commission was paid to Mr. Saurabh Agrawal for 2022-23, as he was in full-time employment with another Group company. He was 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 2023-24:

Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary	% Increase / (Decrease) in Remuneration in 2023-24 over 2022-23
Mr. Noel Tata	*
Mr. Pradeep Bakshi	(3.61)
Mr. Vinayak Deshpande	*
Mr. Debendranath Sarangi	(3 3.26)
Mr. Bahram N. Vakil	(44.75)
Ms. Anjali Bansal	(44.69)
Mr. Arun Kumar Adhikari	(49.29)
Mr. Zubin Dubash	(44.20)
Mr. Saurabh Agrawal	(40.00)
Mr. Mukundan Menon (w.e.f 10 July, 2023)	**
Mr. Jayesh Merchant (w.e.f 30 January, 2024)	**
Mr. Jitender P Verma (Chief Financial Officer)	13.15
Mr. V. P. Malhotra (Company Secretary)	11.78

*As proportionate commission to Mr. Noel Tata and no commission to Mr. Vinayak Deshpande for 2021-22 was paid to them in 2022-23 being employed with another Group company, the percentage increase in their remuneration is not comparable and hence, not mentioned.

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

(c) Percentage increase in the median remuneration of employees in 2023-24:

3.91%

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

1938 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:

The average percentile increase in salary of employees other than managerial personnel was 6.19%. Average percentile increase in managerial remuneration was 17.33% in 2023-24 over 2022-23. Employees in India as on 1 April, 2022 and also on 31 March, 2024 have only been considered.

(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 Shareholders 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.

25. 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 during 2023-24.

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

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

27. Directors and Key Managerial Personnel (KMP)

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

Mr. Mukundan Menon was appointed by the Board of Directors as an Executive Director and Head - Room Air Conditioner Business with effect from 10 July, 2023 for a term up to 24 May, 2027 (i.e. till he attains the retirement age). His appointment was approved by the Shareholders by Postal Ballot on 21 September, 2023. Mr. Jayesh Tulsidas Merchant was also appointed, by the Board, as an Independent Director for a term of 5 years commencing from 30 January, 2024 up to 29 January, 2029. His appointment was approved by the Shareholders by Postal Ballot on 15 March, 2024.

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) to attend Meetings of the Board and Committees of the Company.

Mr. Pradeep Bakshi (Managing Director & CEO), Mr. Mukundan C.P. Menon (Executive Director and Head - Room Air Conditioner Business), 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 Director or Whole-time Director of any subsidiary of the Company.

28. 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 of the Act and have also confirmed that their registration with the databank of Independent Directors maintained by the Indian Institute of Corporate Affairs complies with

the requirements of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

29. Business Responsibility and Sustainability Report

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

30. 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 regarding 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

31. 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 or Chairman of the Audit Committee of the Company in case of any concern. The Whistle Blower Policy can be accessed on the Companys website at the link: https://www.voltas.com/images/_ansel_image_

collector/WHISTLE_BLOWER_POLICY_1.pdf

32. Particulars of Loans, Guarantees or Investments under Section 186 of the Act during 2023-24

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act, made during the year 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 2023-24		The purpose for which the loans, guarantees and investments are proposed to be utilised
		Investment (Rs In Crores)	Guarantee (Rs In Crores)
l&l Infra Debt 1 und	Investment in NCDs	26.40		General C orporate Purpose
Mahindra Rural Housing 1 inance	Investment in NCDs	40.70"		General C orporate Purpose
Saudi Ensas Company for Engineering Services WLL *	Guarantees		45 7.85	Business purpose, as a collateral
Voltas Netherlands B.V. *	Subscription of Shares	45.38		Strategic Investment
HDB Financial Services	Investment in NCDs	19.60		General Corporate Purpose
Kotak Mahindra Prime Limited	Investment in Bonds	10.13		General Corporate Purpose
Voltas Social Development Foundation *	Subscription/ purchase of Shares	0.10		Subscription of initial capital and purchase of 1 share
Voltbek Home Appliances Private Limited	Subscription of Rights Equity Shares	108.78		Strategic investment

* wholly-owned subsidiary.

** Including 20.92 crores redeemed during the year. As of 31 March, 2024, the outstanding amount was 19.78 crores.

33. 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 justification for entering such contracts or arrangements in Form AOC-2 do not form part of the report, as the same is not applicable.

34. Secretarial Standards

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

35. 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 the Companys operations in future.

36. Proceeding under the Insolvency and Bankruptcy Code, 2016

There were 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 of 31 March, 2024.

37. Deposits from Public

The Company has not accepted any deposits from the public and as such, no amount on account of principal or interest on deposits from the public was outstanding as of 31 March, 2024.

38. 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 Companys internal financial controls were adequate and effective during the financial year 2023-24. 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 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 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;

(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 a proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

39. Annual Return

Pursuant to Sections 92(3) and 134(3)(a) of the Act, the Annual Return for 2023-24 is available on the Companys website at the link: https://www.voltas.in/file-uploads/ general/MGT-7_for_uploading_on_website_Pre_ AGM_2024.pdf.

40. 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 the 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 the POSH Act, the Company has formed an Internal Committee to address complaints pertaining to sexual harassment in the workplace. The Company had received one complaint during the financial year 2023-24, which was investigated by the Internal Committee and the matter was closed after taking necessary action.

41. 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;

(c) taising of funds through preferential allotment or qualified institutional placement;

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

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
Date: 7 May, 2024	Noel Tata
Place: Mumbai	Chairman