REPORT OF THE BOARD OF DIRECTORS To The Members 1.Your Directors present their Sixty-First Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2015. 2.Reserves An amount of Rs. 20 crores was transferred to the General Reserve out of Profit available for appropriation and Rs. 572 crores was retained in the Statement of Profit and Loss. 3. Dividend The Company's dividend policy is based on the need to balance the twin objectives of appropriately rewarding its shareholders with dividend and of conserving resources to meet its future needs. The Directors recommend a dividend of Rs. 2.25 per equity share of Rs. 1 each (225%) for the year 2014-15 (2013-14: 185% including a special Diamond Jubilee dividend of 25%), based on the Company's performance. 4. Operations There is an uptick in economic sentiment in India largely led by announcements and some positive news inflow. While the HSBC Purchasing Managers Index has remained above 50 for most part of the year, other macro indicators like GDP, inflation and deficits are demonstrating an encouraging trend. All these factors have contributed to a general perception of improved macro-economic stability. However, this mood has not translated into increased demand in the domestic business environment. Additionally, the Projects business has had to contend with several current day concerns which plague the industry, such as the slow pace of execution, delays in approval of designs, timely certification, resolution of claims and final settlement of accounts. Overall, led by a drop in turnover of the Projects business, the Consolidated Sales/Income from Operations was at Rs. 5205 crores as compared to Rs. 5303 crores last year. Nevertheless, improved margin realization and greater cost controls contributed to higher Profit before Exceptional items and tax at Rs. 467 crores, as compared to Rs. 318 crores in the previous year. During the year, an exceptional charge of Rs. 190 crores was taken to the Statement of Profit and Loss for Sidra, a well known onerous contract which was offset by an exceptional income of Rs. 236 crores realized on sale of property. Accordingly, Profit before Tax was higher at Rs. 513 crores as compared to Rs. 340 crores last year. Net Profit after Minority Interest was similarly higher at Rs. 384 crores. Despite its fair share of challenges, the Room AC industry had a comparatively better year, reporting growth of over 20%, following two consecutive years of slow growth. The growth in volumes was partly owing to favourable weather conditions along with a general improvement in customer sentiment. The Unitary Cooling Products business through various strategic marketing and sales promotion activities, has sustained its leadership position throughout the year and had widened its lead over its competition. This lead is reflective of the strong brand recall and associated customer pull that the Voltas brand now commands. There was also good growth in water dispensers and commercial refrigeration products. The steady rise in margin realization is due to favourable product mix (including growth in share of Split ACs), suitably complemented by optimization of procurement costs coupled with increased sales volumes. At the same time, the popular 0% finance scheme continues to add to the overall spend on promotion schemes. Neverthless, the business contributed substantially to the Company's turnover and profits. Similarly, the Textile Machinery business, despite environment led adversities, has recorded higher Revenue and Profit as compared to last year. The China effect leading to correction in cotton yarn prices and drop in yarn exports saw many mills curtailing utilization levels as well as taking all possible steps to cut losses. The more recent drop in domestic prices has eased some of the pressure, but the sentiments and operating levels of local spinning mills remain muted. The tight liquidity conditions and delays in disbursement of funds by financial institutions have added to the difficulties of this business. Meanwhile, the strategic focus on the parts and service business as well as diversification into post spinning assists the business to remain on an upward growth trajectory. The revenue and profitability of Mining and Construction Equipment business were lower in 2014-15 as compared to last year due to transition of certain agency lines on global consolidation. At the same time, the Indian Mining Industry is passing through various setbacks, including mining bans, policy paralysis, Supreme Court cancelling allocation of coal blocks, etc. Nevertheless, the foray overseas into Africa has helped the business to partially offset the drop in demand in the domestic market. Mozambique operations continue to remain strong, with additional orders and healthy contribution to the bottom line. In the Domestic Projects business, announcements are yet to translate into on the ground improvement. Slow pace of execution and delayed payments continue to put strain on the overall margins of this business. The larger metro project orders are yet to pick up given the slow pace of civil works. However, the launch of a timely business efficiency improvement program has led to various improvements in the processes and systems, leading to realization of better margins and savings in cost. Collection of outstandings and realization of money through settlements remain a priority for this business. Similarly, during the last 12-18 months, the International 5. Projects business has also taken various actions to strengthen its internal capability to plan and address some critical challenges. In anticipation of heightened level of activity in the run-up to mega events such as FIFA and Dubai Expo, the competition levels have gone up manifold, leading to difficulty in procuring new orders at reasonable margins. Moreover, the increased propensity to dispute and delay payments have further compounded the adverse situation for existing projects. To mitigate these challenges, the business has adopted a stringent commercial approach apart from changes made in the leadership team. However, extension of project completion dates and delays in settlement have necessitated conservative accounting in line with the requirements of Accounting Standard (AS)-7. In the previous years, due to significant upward revision in estimated costs of the Sidra Medical and Research Centre project in Qatar, the Company had accounted for cost overruns in accordance with the requirement of AS-7. In July 2014, the Main Contractor was terminated by the end customer (Qatar Foundation) and a new main contractor was appointed. Although Qatar Foundation had asked for the assignment of contracts of select subcontractors of the Main Contractor, no understanding could be reached. In view of the uncertainties attached to the sub-contract, the Company has, as a matter of prudence, charged off Rs. 190 crores to the Statement of Profit and loss after evaluation of underlying assets and liabilities and contingencies related thereto. Nevertheless, the Company continues to pursue its entitlements and has sought legal advice on the way forward. The Company has adopted a strategy of selectively booking new orders with reasonable margins instead of aggressively pursuing turnover growth. The operating teams have defined business boundaries and key parameters to facilitate inflow of right quality of new orders. At the same time, Corporate extends support in ensuring that the strategy is implemented in a risk-mitigated manner. Risk assessments and Techno-commercial audits, both while booking jobs and during execution of the projects, are prudently carried out. In 6. parallel, there is also an added thrust on speedy closure of old projects under execution. During 2014-15, new orders aggregating Rs. 2238 crores were booked and the consolidated order book of Projects business was Rs. 3893 crores at the year end. Finance For most part of the year, the Reserve Bank of India (RBI) maintained its stance with high interest rates and tight liquidity. However, more recently, RBI announced successive rate cuts, taking the repo rate down to 7.5 per cent. The 50 basis points (bps) cut was in response to the perception of risk emanating from low capacity utilization and weak indicators of production and credit off-take. These cuts come on the back of moderating inflation data given sharp correction in global oil prices. The actions taken by RBI also extend support to the Government which is pushing the revival of economic growth. The Products business continues to provide much needed liquidity given the various challenges faced by the Projects businesses. Unitary Cooling Products business via support from initiatives like channel financing, cash discounts, etc., has been able to restrict credit to a minimum level whilst improving collections. The Engineering Products business with its lean organization structure, continues to deliver steady cash flows. The Projects businesses face working capital pressures magnified by an increasing tendency of customers to delay and dispute certifications and payments. Settlements have become increasingly hard due to tight liquidity conditions of the end customer. In response, both International and Domestic projects businesses have become increasingly cash conscious and are making all possible efforts to recover their commercial entitlements. While the strong drive has yielded good results, the pain continues for some of the on-going projects, including the Sidra project at Qatar and puts significant strain on the Company's finances. The overall cash position has been strengthened by increasing the cash and liquid investments to Rs. 1281 crores from Rs. 954 crores in the previous year. At the same time, borrowings specific to overseas projects were reduced substantially from Rs. 263 crores in previous year to Rs. 122 crores at a consolidated level. The focus on cash flow and working capital has started yielding some results. However, the vigil will need to be maintained given the various environment led challenges. 6. Tata Business Excellence Model (TBEM) Advancing its commitment by experienced senior executives from other Tata Group companies, based on criteria that included Leadership, Strategic Planning, Customer Focus, Measurement, 8. Analysis, Knowledge Management, Work Focus, Operation Focus, Business Results and Safety. Several useful insights were drawn and the Company was placed in the 'Good Performance' score band. The Company is now implementing plans based on its TBEM feedback and remains geared up to advance its Business Excellence journey in the coming years The Company's capabilities are augmented by 30 certified BE champions on its roster, including 4 assessors who received recognition at the 2014 annual Business Excellence Convention. The Company continues its participation in Tata Innovista, a Group initiative to foster the culture of innovation and continual improvement in Tata group companies. 17 effective practices were identified across the Company and assessed by subject matter experts across the Tata Group. Three projects were selected for Regional rounds and one of these qualified for the final round. Additionally, the Unitary Cooling Products business participated in 'Innoverse', 'Challenges Worth Solving', and other Tata Group level initiatives. 7. IT Initiatives The Company's IT function focused on providing deeper insights into data and improving user efficiency and productivity, through smart analytics, multi-device access and several user-friendly applications. To assist the Unitary Cooling Products Service team take informed decisions, a Business Intelligence layer was built for Siebel CRM. This facility analyses CRM data and presents useful trends and insights. The Service capability of domestic projects business was also enhanced by providing service management teams, real-time information about customers and their machines. This was achieved through a mobile-based Service Application that allowed the technicians to update equipment data at site and make it immediately available to service management teams for appropriate action. Several other changes were also introduced to improve system functionality. For example, extending the HR Leave System to mobile handsets. A critical cost related need in the Projects business -material pricing information, was similarly addressed through a search facility, to help extract historical purchase information from ERP transactional data. At a more macro level, numerous improvements were made in overall IT systems to increase performance, reliability and security. These included migration of SAP to IBM Power 8 Series servers, Data Center and Location firewalls and deployment of new Proxy and User Data Backup systems. Environment and Safety The Company's leadership believes that environment and safety of all its stakeholders including those associated with projects sites and manufacturing facilities is of prime importance. A Board Committee comprising 3 Directors, including the Managing Director reviews Environment, Health and Safety (EHS) performance and guides the Company on the way forward. A Steering Committee comprising Corporate Management Group and other key members periodically reviews Safety performance and oversees the timely implementation of various initiatives. Improving Safety performance continues to be a priority for the Company. The manufacturing facilities certified as ISO 14001 and OHSAS 18001 undergo Internal as well as External audits and the systems / processes are continuously fine-tuned. OHSAS 18001 based Management Systems is being implemented at the Company's Thane and Dadra manufacturing facilities. To assess the Safety processes, the Company engaged British Safety Council to conduct a 5 Star external audit within India as well as Overseas. Based on the observations, an action plan has been developed and is being implemented. The Company has improved the communication channels to capture Safety - Health - Environment -Quality (SHEQ) related observations. To ensure uniform communication and understanding about Safety practices and knowledge sharing, the communication system has been enhanced through creation of groups of Safety practitioners. An On-line system for capturing SHEQ observations and ensuring timely implementation of action plans has been implemented, resulting in reduction of unsafe / adverse work conditions. The improved communication mechanisms have seen good participation by the workmen in Safety meetings and trainings at project sites, resulting in improved engagement. Safety awards have also been instituted at project sites and manufacturing locations. The Company believes that incidents and risk to health and environmental impact are preventable through continuous involvement of all stakeholders to create Zero Harm, Zero Illness, Zero Waste and a Zero Defect work environment. 9. Community Development In 2014-15, Voltas partnered with ICICI Foundation to launch the Central Air Conditioning (CAC) program and open a centre at Coimbatore. Subsequently, two more centers were set up at Indore and Bhilai. The project aims to provide vocational training to underprivileged youth for three months. Till date, 379 youths have passed out of the institute and are employed at various organizations. The Company continues to impart skills based on its own core competencies, through five GMRVF centers across India, as well as its alliance with Joseph Cardijn Technical School and Bosco Boys Home in Mumbai. During the year, 314 youths successfully passed out from these centers. The Company is also exploring opportunities to collaborate with other Group companies to broaden this initiative. To gauge the effectiveness of these 'skilling' programs, the Company conducted Impact Assessment studies at a GMRVF training facility, in consultation with Tata Institute of Social Science. The report has confirmed that alumni of these institutes have experienced significant advancement in their livelihoods. Along with skilling, the Company also prioritizes Education, Health and Affirmative Action, largely through volunteer programs. Around 1311 employees across different geographies offered approximately 4466 hours of volunteering during the year. Voltas volunteers also took part in the Tata Engage global volunteering drive managed by Tata Sustainability Group. Employees and family members responded positively, with their efforts, time and money. Voltas was awarded for the highest number of employees who shared their experiences on the Tata Engage website. As part of its Affirmative Action program, the Company conducted cancer screening camps in Panvel for Kathkari tribal women. In addition, the Company continues to provide a mid-day meal for 65 Kathkari children studying at the school run by the Bethany Society in Panvel, as well as faculty fees for the teaching staff. All such initiatives now take directions from the CSR Policy, which the Company has formulated and uploaded on its website. A CSR Committee of 3 Board Members has been constituted. The Company has initiated a project to identify community needs at all its manufacturing locations (Pantnagar, Dadra and Thane) and would formulate specific programs based on inputs received, with focus on skill-building, education and health. 10. Corporate Social Responsibility Disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 in prescribed form is given in Annexure I to the Directors' Report. 11. Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report No material changes have occurred after the close of the financial year on 31st March, 2015 till the date of Directors' Report, which could affect the financial position of the Company. 12. Details of significant and material orders passed by the regulators/ courts/ tribunals impacting the going concern status and the Company's operations in future During the year under review, no material Orders were passed by the Regulators/ Courts/ Tribunals, impacting the Company's going concern status and future operations. 13. Details of Subsidiary / Joint Ventures / Associate Companies Pursuant to AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the financial information of subsidiary companies. As per the requirement of Section 129(3) of the Companies Act, 2013, a separate statement containing the salient features of the financial statements of subsidiaries / joint ventures / associate companies in prescribed Form AOC-1 is attached to the financial statements of the Company. The annual Accounts of the subsidiary companies are available on the website of the Company - www.voltas.com . The financial performance and other details of subsidiaries/ joint venture companies are given below: • Universal Comfort Products Limited (UCPL), a wholly owned subsidiary of the Company, engaged in the business of manufacturing air conditioners, recorded higher turnover of Rs. 1158 crores and net profit of Rs. 72 crores for the year ended 31st March, 2015 as compared to turnover of Rs. 929 crores and profit of Rs. 58 crores in the previous year. UCPL has recommended dividend @ 150% aggregating Rs. 41 crores approx. (previous year: 100%). • Rohini Industrial Electricals Limited (RIEL), a wholly owned subsidiary of the Company, is engaged in undertaking turnkey electrical and instrumentation projects for industrial and commercial sectors. RIEL reported turnover of Rs. 53 crores and loss of Rs. 29 crores for 2014-15. The drop in revenue was due to lack of new orders during the beginning of the year, which could not get converted into turnover during the year. However, by year end, RIEL had pending orders worth Rs. 204 crores. The increase in loss was due to provisions made for bad and doubtful debts of old legacy projects. • Auto Aircon (India) Limited (AAIL), a wholly owned subsidiary of the Company is a dormant company, with no assets and employees. In view of certain fixed overheads, AAIL reported loss of Rs. 0.15 lakh in 2014-15. • Weathermaker Limited (WML), a wholly owned subsidiary of the Company, is engaged in manufacturing and trading of ducts and duct accessories in Jebel Ali, Dubai, UAE. Slow down in the economy has impacted new orders and there are delays in execution of projects in hand due to extension of completion dates. WML reported lower turnover of AED 10.024 million for the year ended 31st December, 2014 and loss of AED 2.259 million in view of certain provisions made for bad and doubtful debts and slow moving inventories. During 2014, WML ventured into Offsite Pre-fabrication activity and is hopeful to get some good orders in 2015. • Saudi Ensas Company for Engineering Services WLL (SECL), incorporated in Kingdom of Saudi Arabia (KSA), is a wholly-owned subsidiary of the Company. SECL is engaged in the business of design, installation, operation and maintenance of airconditioning, refrigeration systems and electro-mechanical projects. SECL has reported higher turnover of SR 12.405 million and profit of SR 0.131 million for the year ended 31st December, 2014 and has booked orders aggregating SR 35 million in KSA during 2014. • Lalbuksh Voltas Engineering Services & Trading LLC (Lalvol), is a joint venture company with Lalbuksh Contracting & Trading Establishment LLC, with Voltas group shareholding at 60%. Lalvol is engaged in the business of water well drilling, water management and landscaping and has for the year ended 31st December, 2014 reported higher turnover of RO 4.065 million and net profit of RO 0.407 million as compared to turnover of RO 3.437 million and net profit of RO 0.028 million in the previous year. Lalvol declared dividend of RO 0.225 million for the year 2014 and improved its order book position with new orders aggregating RO 3.350 million. • Voltas Oman LLC, a subsidiary of the Company (65% shareholding of Voltas), is engaged in undertaking Engineering, Procurement and Construction (EPC) works for electromechanical projects in the Sultanate of Oman. Voltas Oman LLC, recorded higher turnover of Omani Rial (RO) 4.774 million and profit of RO 0.120 million as compared to turnover of RO 3.519 million and profit of RO 0.053 million in the previous year. • Voltas Netherlands B.V. (VNBV), a wholly-owned subsidiary of the Company, is an investment company in The Netherlands. VNBV has reported profit of Euro 0.152 million for the year ended 31st March, 2015 and recommended dividend of Euro 1 million from its accumulated Reserves. • Universal Voltas LLC (UV), Abu Dhabi, a flagship joint venture of the Company is engaged in the business of electro-mechanical projects and operations and maintenance contracts. UV recorded higher turnover of AED 183.268 million and Profit of AED 26.155 million for the year ended 31st December, 2014 as compared to turnover and profit of AED 154.870 million and AED 24.863 million, respectively in the previous year. • Universal Weathermaker Factory LLC (UWF), a joint venture company with Universal Group is engaged in manufacturing airconditioning ducts and related fixtures in Abu Dhabi, UAE. UWF reported turnover of AED 9.940 million and loss of AED 0.755 million for the year ended 31st December, 2014. • Olayan Voltas Contracting Company Limited (OVCL), a joint venture company with Olayan Group is engaged in the business of electromechanical projects in KSA. OVCL recorded turnover of Saudi Riyal (SR) 42.989 million and loss of SR 12.35 million for the year ended 31st December, 2014. • Voltas Qatar WLL (VQ), a joint venture company is engaged in the business of undertaking EPC works for MEP contracts in Qatar. VQ recorded turnover of Qatari Riyal (QR) 36.102 million and profit of QR 1.033 million for the year ended 31st December, 2014. • Voltas Water Solutions Private Limited (VWS), is a new joint venture company, loss of Rs. 0.46 crore for the period ended 31st March, 2015, primarily due to pre-incorporation expenses and other standing overheads. • During the year under review, the Company increased its shareholding in Terrot GmbH to 20.07% and therefore, Terrot is an Associate company. Terrot has reported sales of Euro 37.937 million and profit of Euro 1.002 million for the year ended 31st December, 2014. • Naba Diganta Water Management Limited (NDWML) is a joint venture company with Jamshedpur Utilities and Services Company Limited (JUSCO) to provide water supply and sewerage system at Naba Diganta township, Kolkata. The Company's shareholding is 26% and balance 74% is held by JUSCO, a subsidiary of Tata Steel. NDWML has reported turnover of Rs. 8 crores and profit of Rs. 1.43 crores for the year ended 31st March, 2015. The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013. 15. Number of Meetings of the Board During 2014-15, nine Board Meetings were held on 28th April, 2014; 29th May, 2014; 20th June, 2014; 13th August, 2014; 29th September, 2014; 13th November, 2014; 16th January, 2015; 11th February, 2015 and 25th March, 2015. 16. Policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director Based on the recommendation of Nomination and Remuneration Committee (NRC), the Board has adopted the Remuneration Policy for Directors, KMP and other Employees. NRC has formulated the criteria for determining qualifications, positive attributes and independence of an Independent Director and also criteria for evaluation of individual Directors and the Board / Committees. Evaluation of Directors was done by the NRC at its meeting held on 26th March, 2015. The criteria for determining qualifications, positive attributes and independence of Directors and the Remuneration Policy is given by way of Annexure II to this Report. 17. Evaluation of Performance of Board, its Committees and of Directors Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, Committees and performance of individual Directors. The performance of the Board, Committees and individual directors was evaluated by seeking inputs from all Directors based on certain parameters such as: degree of fulfillment of key responsibilities; Board / Committee structure and composition; establishment and delineation of responsibilities to various Committees; effectiveness of Board processes, information and functioning; Board / Committee culture and dynamics and quality of relationship between the Board / Committees and the Management. The Directors made a self assessment of their effectiveness in terms of attendance, contribution at Meetings and guidance / support extended to the Management outside Board / Committee Meetings. The feedback received from the Directors was discussed and reviewed by the Independent Directors at their annual separate Meeting and also shared with the NRC. The Chairman of the Board is a member of NRC. At the separate Meeting of Independent Directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman of the Company was evaluated taking into account the views of the Managing Director and Non-Executive Directors The performance of the individual Directors, including Independent Directors, performance and role of the Board / Committees was also discussed at the Board Meeting. 18. Statutory Auditors At the 60th Annual General Meeting (AGM) held on 1st September, 2014, the shareholders had approved the appointment of Deloitte Haskins & Sells LLP (DHS) as Statutory Auditors as well as Branch Auditors of the Company to audit the accounts of the Company for three consecutive financial years, between 2014-15 and 2016-17, subject to ratification at every AGM. The approval of members' is being sought for ratification of appointment of DHS as Statutory Auditors from the conclusion of the 61st AGM till the conclusion of the 62nd AGM to be held in 2016, to examine and audit the accounts of the Company for the financial year 2015-16. The Auditors' Report does not contain any qualification, reservation or adverse remark. 19. Cost Auditors The Board has appointed M/s. Sagar & Associates, Cost Accountants as the Cost Auditors for the financial year 2014-15. M/s. Sagar & Associates, have been appointed as Cost Auditors of the Company for the financial year 2015-16 and approval of the Members is being sought for ratification of their remuneration. 20. Secretarial Auditor M/s. N. L. Bhatia & Associates the Practicing Company Secretaries were appointed as Secretarial Auditor to undertake Secretarial Audit of the Company for the year 2014-15. Their Secretarial Audit Report, in prescribed Form No. MR-3, is annexed to the Directors Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. 21. Audit Committee The Audit Committee comprises Mr. Nani Javeri (Chairman), Mr. R. N. Mukhija and Mr. Debendranath Sarangi, in line with the requirements of Section 177 of the Companies Act, 2013. Mr. Thomas Mathew T. ceased to be the Member of Audit Committee on 5th May, 2015. The Board has accepted the recommendations made by the Audit Committee from time to time. 22. Internal Financial Controls The Internal Financial Controls and its adequacy is included in the Management Discussion and Analysis, which forms part of this Report. 23. Risk Management Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company had constituted a Risk Management Committee comprising Mr. Nani Javeri (Chairman), Mr. R. N. Mukhija, Mr. Debendranath Sarangi and Mr. Thomas Mathew T. (upto 5th May, 2015). A Risk Management Committee Meeting was held on 15th January, 2015 whereat, the Risk policy of the Company and various elements of risks were discussed. 25. Employee Stock Option The Company has not issued any Employee Stock Options. 26. Conservation of energy, technology absorption, foreign exchange earnings and outgo Information pursuant to Section 134(3)(m) of the Companies Act, 2013, relating to conservation of energy, technology absorption, foreign exchange earning and outgo is given as Annexure III to this Report. 27. Directors and Key Managerial Personnel In accordance with the provisions of the Companies Act, 2013 and the Company's Articles of Association, Mr. Vinayak Deshpande retires by rotation and being eligible, offers himself for re-appointment. Ms. Anjali Bansal was appointed as an Additional Director with effect from 9th March, 2015. In accordance with the provisions of Section 161 of the Companies Act, 2013, Ms. Anjali Bansal holds office upto the date of the forthcoming Annual General Meeting and is eligible for appointment as a Director. Notice under Section 160 of the Act has been received from a member proposing her appointment as Director of the Company. Ms. Anjali Bansal was also appointed as Independent Director for a term of 5 years upto 8th March, 2020, subject to approval of Shareholders at the forthcoming AGM. Ms. Anjali Bansal satisfies the test of independence as stipulated under Section 149(6) of the Act. The Resolution seeking approval of the members for appointment of Ms. Anjali Bansal as a Director and as Independent Director forms part of the Notice of AGM of the Company. The Members had at the 56th Annual General Meeting of the Company held on 16th August, 2010 approved appointment of Mr. Sanjay Johri as the 'Managing Director' of the Company with effect from 23rd April, 2010 for a term of 5 years. Based on the recommendation of NRC, the Board of Directors have, at its Meeting held on 21st April, 2015, approved the re-appointment of Mr. Sanjay Johri as Managing Director for a further period up to 9th February, 2018, with effect from 23rd April, 2015. Mr. Nasser Munjee and Mr. Thomas Mathew T., a Director representing Life Insurance Corporation of India ceased to be Directors of the Company with effect from 31st August, 2014 and 5th May, 2015, respectively. The Directors place on record their sincere appreciation of the valuable advice given by Mr. Nasser Munjee and Mr. Thomas Mathew T. during their respective tenures on the Board. None of the Directors is the Managing or Wholetime Director of any subsidiary of the Company. During the year, Mr. Sanjay Johri (Managing Director), Mr. Anil George (CFO) and Mr. V. P. Malhotra (Company Secretary) were appointed as Key Managerial Personnel (KMPs) of the Company, in line with the requirements of Section 203 of the Companies Act, 2013. 28. Declaration by Independent Directors Pursuant to Section 149(7) of the Companies Act, 2013, 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 and Clause 49 of the Listing Agreement. 29. Corporate Governance Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance form part of the Annual Report. A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the Board Members and Senior Management personnel also forms part of the Annual Report. 30. Details of establishment of vigil mechanism for directors and employees The Company had adopted a Whistle Blower Policy ("the Policy") as required under Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Policy has been formulated with a view to provide a mechanism for directors and employees of the Company to approach the Ethics Counsellor/Chairman of the Audit Committee of the Company in case of any concern. The Whistle Blower Policy may be accessed on the Company's website at the link: <http://www.voltas.com/WBP.PDF> 31. Particulars of loans, guarantees or investments under Section 186 during 2014-15 Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statements (Please refer to Notes 10,12 and 28 of the standalone financial statements). 32. Particulars of contracts or arrangements with related parties All related party transactions during 2014-15 were in the ordinary course of business and satisfied the test of arm's length. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in prescribed Form No. AOC-2 as Annexure IV to this Report. 33. Directors' Responsibility Statement Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial 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 2014-15. Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that: (i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures; (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 Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) they have prepared the annual accounts on a going concern basis; (v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (vi) proper system has been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 34. Extract of the Annual Return Pursuant to Sections 92(3) and 134(3)(a) of the Companies Act, 2013, read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return in prescribed Form No. MGT-9 is given as Annexure V to this Report. 35. Disclosure as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a 'Respect for Gender' Policy on prevention, prohibition and redressal of sexual harassment in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Company has not received any written complaint on sexual harassment during the financial year. 36. General The Notes forming part of the Accounts are self-explanatory or to the extent, necessary, have been dealt with in the preceding paragraphs of the Report. On behalf of the Board of Directors Ishaat Hussain Chairman Mumbai, 21st May, 2015 |