Va Tech Wabag Ltd Directors Report.

Dear Members,

The Board of Directors of your Company is pleased to present its report on the performance of the Company together with the Audited Standalone and Consolidated Financial Statements for the Financial Year ended March 31,2022.

Financial/Operational Highlights

The financial highlights for the Financial Year ended March 31,2022 are summarised below:

(INR Crores)

Particulars FY 2021 - 22
Consolidated Standalone
Total Income (including Revenue from Operations and other Income) 3,011 2,170
Profit before interest, tax & depreciation (EBITDA) excluding exceptional items 237 174
Profit before tax 168 122
Provision for tax 36 30
Profit after tax attributable to owners of the parent 132 92

Business Environment

Globally the year FY 2021-22 commenced on an optimistic note with more relaxations and mass vaccination drives across the world. However, there were hurdles in the form of recurrent phases of the pandemic waves throughout the year. As things started settling in the new normal environment the nations were thronged with new set of challenges like supply chain disruptions, ongoing geo-political situations, soaring commodity prices especially crude oil prices resulting in elevated levels of inflation globally.

On the domestic front India continues to be one of the fastest growing economies registering a GDP of 8.7% in FY 2021-22 against a contraction of 6.6% in FY 2020-21. Pent-up demand across sectors, Government stimulus and investments across sectors, focus on infrastructure development, initiative towards building the Atmanirbar Bharat are acting as catalyst for growth and increasing the resilience towards uncertainties.

Company?s Performance

• Your Company has a healthy order book of over INR 10,000 Crores as on March 31, 2022 (including framework contracts) supported by order intake of INR 3,647 Crores.

• Total Consolidated Income for the FY 2021-22 was INR 3,011 Crores as against INR 2,842 Crores in the previous year and the total Standalone Income for the FY 2021-22 was INR 2,170 Crores as against INR 1,852 Crores in the previous year.

• Consolidated and Standalone Profit After Tax attributable to owners of the parent for the FY 2021-22 was INR 132 Crores and INR 92 Crores respectively as against INR 110 Crores and INR 73 Crores respectively in the previous year.

• Consolidated and Standalone EPS of the Company for the FY 2021-22 was INR 21.21 as against INR 18.83 in the previous year and INR 14.82 as against INR 12.49 in the previous year respectively.

• In terms of Section 134(3)(l) of the Companies Act, 2013, except as disclosed elsewhere in this Report, no material changes or commitments affecting the financial position of the Company have occurred between the end of the Financial Year and the date of this report.

• The revenue and profit for the year has improved compared to previous year?s performance as our new projects secured in FY 2020 - 21 and FY 2021 - 22 are in execution phase. The revenue from these projects and new orders secured in FY 2021 - 22 are expected to further enhance the momentum during FY 2022 - 23.

Dividend

Taking into account the investment requirements for growth capital and Hybrid Annuity Model (HAM) projects like Namami Gange Programme, etc. which will enhance shareholder value on long term basis, the Directors have decided to conserve funds and hence not recommended any dividend for the FY 2021-22.

Transfer to Reserves

The Board of Directors of your Company has decided to retain the entire amount of profit in the profit and loss account. Accordingly, the Company has not transferred any amount to ‘Reserves? for the Financial Year ended March 31,2022.

Share Capital

The issued, subscribed and paid up share capital of the Company stood at INR 12,43,80,856/- (Indian Rupees Twelve Crores Forty Three Lakhs Eighty Thousand Eight Hundred and Fifty Six only) as on March 31,2022 consisting of 62190428 equity shares of face value of INR 2/- each.

Unpaid / Unclaimed Dividends & Shares - Investor Education and Protection Fund (IEPF)

Pursuant to the provisions of Sections 124, 125 and other applicable provisions of the Companies Act, 2013 ("the Act") read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), the dividend which remains unpaid/ unclaimed for a period of 7 (seven) years from the date of transfer to the unpaid dividend account along with the shares on which dividend has not been encashed by the Members for 7 (seven) consecutive years has to be transferred to Investor Education and Protection Fund ("IEPF") within the prescribed time.

During the year under review, unclaimed dividend for the FY 2013-14 amounting to INR 56,872/- pertaining to 343 Members and 368 shares pertaining to 13 Members who had not claimed their dividends for 7 (seven) consecutive years has been transferred to IEPF Authority in September 2021.

The Company sends communication and reminder letters, from time to time, to the respective Members whose dividends are unpaid/unclaimed and / or due for transfer to IEPF and provides facilitation / support to Members as and when required, to enable them to claim their dividend entitlements before it is transferred to IEPF Authority in accordance with IEPF Rules.

Unclaimed dividend for the FY 2014-15 and shares in respect of which dividends has remained unclaimed for the last 7 (seven) consecutive years as on due date shall become due for transfer to IEPF Authority in August 2022. The details of Members and their unclaimed dividend/ equity shares entitlements / transferred / liable to be transferred to IEPF Authority are uploaded on the Company?s website www.wabag.com. The Members are requested to approach the Company and/or RTA for any support to claim their entitlements, if any.

Depository System

Your Company has established connectivity with the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) through KFin Technologies Limited, the Company?s Registrar and Transfer Agent (RTA). The shares of your Company are tradable in the electronic form only.

As on March 31,2022, the Company?s total paid up capital representing 62190428 equity shares wherein 99.99% of equity shares are held in dematerialised form. The Company through various modes of communication encourages its Members to hold the shares in dematerialised form.

Credit Rating

The India Ratings & Research, the Credit Rating Agency, rated the Bank facilities of the Company as "IND A+ with Stable Outlook."

The said rating has been disclosed to the Stock Exchanges and this information is available on the Company?s website www.wabag.com under Investor section.

Management Discussion and Analysis

A detailed analysis of your Company?s performance is discussed in the Management Discussion and Analysis ("MD&A") Report which forms part of this Annual Report.

Corporate Governance

Your Company is committed to the highest standards of Corporate Governance. At WABAG, Corporate Governance is fundamental to the business and core to its existence. Your Company has implemented several best Corporate Governance practices to enhance Shareholders value on a long term basis and respect Shareholders rights in all our business decision. Your Company also ensures best practices throughout the business cycle and follows a transparent procedure in sharing timely information to all it?s Stakeholders. Your Company places great emphasis on business ethics and ensures best practices throughout the business cycle.

Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR"), the Report on Corporate Governance for the year under review, is presented in a separate section, forming part of this Annual Report.

A certificate from Practicing Company Secretary, confirming compliance of conditions of Corporate Governance, as stipulated under the SEBI LODR, also forms part of this Annual Report. A Compliance Report on applicable compliances of SEBI Circular, Notifications, and Regulations etc., issued by Practicing Company Secretary was filed with Stock Exchanges.

KEY PROJECTS UPDATE

ONE CITY ONE OPERATOR - CLEAN GANGE MISSION PROJECT - INDIA

Your Company is executing INR 1,477 Crores worth order secured from State Mission for Clean Ganga - Uttar

Pradesh since FY 2019-20 towards Operation, Maintenance and Management of the Sewage treatment and network infrastructure in the cities of Agra and Ghaziabad for a period of 10 (ten) years, extendable for an additional period of 5 (five) years.

This is the first initiative across the country on the "One City - One Operator" model. Your Company will manage, operate and maintain 22 Sewage Treatment Plants (STP), 70 Pumping Stations and underground network of over 4,200 kilometers with the objective of providing round the clock uninterrupted operations. Your Company shall also improve, rehabilitate and up-grade facilities related to systems, structures and equipments etc., associated with the Sewage Treatment Plants (STP) and underground sewage network systems.

This project will ensure treatment of over 670 MLD in both cities of Agra and Ghaziabad put together, adhering to national treatment standards thus providing cleaner and healthier eco system to the 3 (three) Million population of Agra and Ghaziabad. Your Company is proud to play a significant part in the rejuvenation of river Yamuna, by treating over 80% of the sewage generated in both the cities.

In Agra and Ghaziabad, your Company is taking several steps to implement best practices in operation and maintenance of STP?s and pumping stations, so that sustainable and trouble free operations are achieved.

Your Company has taken several steps to eliminate direct manual intervention in underground sewage network and this is achieved by deploying jetting machines, super sucker machines for desilting and mini jetting for addressing issues in narrow streams. Through these initiatives, your Company has efficient improvement through technological intervention while maintaining safety of workmen. Your Company is determined to attain Operational Excellence through reliability, trouble free operations and enhanced customer services.

NAMAMI GANGE PROJECT - INDIA

A) BIHAR URBAN INFRASTRUCTURE DEVELOPMENT CORPORATION HAM PROJECT - INDIA

Your Company, a leading Pure Play Water Technology Indian Multinational Company is executing the largest order under Namami Gange Programme worth INR 1,187 Crores secured from Bihar Urban Infrastructure Development Corporation (BUIDCo) under the prestigious National Mission for Clean Ganga (‘NMCG?) Scheme to build Sewage Treatment Plants (STP) of 150 MLD capacity along with sewerage network of over 453 km in Digha and Kankarbagh zones of Patna, one of the most populous cities on the banks of River Ganga.

This project comprises Design, Build and Operate (DBO) scope worth about INR 940 Crores and Hybrid Annuity Model (HAM) scope worth about INR 247 Crores. 40% of CAPEX of the EPC part of the HAM portion will be paid in the form of grant during construction and 60% will be paid as Annuity over 15 years, along with the OPEX. This will be the first water project on HAM, in the State.

At Digha, the scope comprises designing and building a 100 MLD STP, Interception and Diversion Work, 2 (two) Sewage Pumping stations and survey, redesigning and building a new sewerage network of about 300 kilometers. In Kankarbagh, the scope comprises designing and building a 50 MLD STP, Flow Diversion Works and all appurtenant structures and survey, redesigning and building new sewerage network of about 150 kilometers.

Your Company completed the financial closure of its Hybrid Annuity Model (HAM) project received from BUIDCo. To meet the project debt funding requirement, your Company has partnered with PTC India Financial Services Limited (‘PFS?), a leading green infrastructure finance Company which provides a vast array of services to the entities in infrastructure sector while contributing to the sustainable development goals of the Country.

The DBO portion of the project is under construction and the HAM portion is in advanced stage of engineering. Recently, with the completion of their Conditions Precedents, BUIDCo has declared the project effective date for HAM portion allowing construction activity to commence at site.

B) KOLKATA METROPOLITAN DEVELOPMENT AUTHORITY HAM PROJECT - INDIA

This KMDA Bally, Arupara, Baranagar project which is under execution, consists of construction of 3 (three) STPs at Arupara (65 MLD), Bally (40 MLD) and at Baranagar (60 MLD), associated pumping system and sewage transmission lines. Your Company will execute the Engineering, Procurement and Construction (EPC) portion of this project over 24 months followed by O&M of 15 (fifteen) years. This project is implemented by National Mission for Clean Ganga (‘NMCG?) and Kolkata Metropolitan Development Authority (‘KMDA?) with financial assistance from World Bank.

Your Company completed the financial closure for this Hybrid Annuity Model (‘HAM?) project received from KMDA. The project debt requirement will be funded by a consortium of International Finance Corporation (‘IFC?) and Tata Cleantech Capital Limited (‘TCCL?).

International Finance Corporation, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries.

In line with our "asset-light" principle, your Company signed an agreement with Kathari Water Management Private Limited (‘Kathari Water?), a wholly owned subsidiary of EverSource Capital, fund manager for Green Growth Equity Fund (‘GGEF?) who will be the investment partner in the project. GGEF is established with anchor investment from National Investment and Infrastructure Fund (‘NIIF?) anchored by Government of India and Foreign, Commonwealth & Development Office (‘FCDO?), Government of UK.

The project with a cumulative wastewater treatment capacity of 187 MLD (165 MLD of new plant, together with 22 MLD of existing facility) when completed, will contribute to eliminating the discharge of untreated sewage into the Holy River Ganga. This shall be the first Water Project on HAM, in the State. While WABAG has been associated with KMDA for projects on EPC / DBO type of contracts, your Company extends association with reputed clients on PPP HAM type of contracts too.

The plant is now in an advanced stage of execution, having completed substantial amount of construction at site. The required equity has been infused by your Company and we expect the first tranche of debt infusion in the next few weeks.

Multiple ESHS audits, monitoring mechanisms and training programs have enabled in executing the project in a safe and environmentally sustainable manner. With continuous engagement and support from all stakeholders, the project today has completed over one-Million safe man-hours.

C) GHAZIABAD HAM PROJECT, GHAZIABAD, UTTAR PRADESH - INDIA

WABAG, through its wholly owned subsidiary Ghaziabad Water Solutions Private Limited (SPV entity), has signed a concession agreement with Ghaziabad Nagar Nigam (GNN) with the state of Uttar Pradesh, for a new 40 MLD Tertiary Treatment Plant (TTP) under Hybrid Annuity Model (HAM). Under a Design-Build-Operate (DBO) contract with SPV worth INR 594 Crores. WABAG will construct the new plant over 2 (two) years and operate the facilities, including the existing upstream 56 MLD Sewage Treatment Plant up to a period of 15 (fifteen) years following the start of commercial operations. The construction phase of the project will be co-funded by the client through one of the first municipal Green Bonds in India for a water treatment plant.

Ghaziabad TTRO will be the largest plant of its type under HAM in India and will contribute to a sustainable water Management. It is the second TTRO plant from WABAG following the 45 MLD TTRO plant at Koyambedu, Chennai in the State of Tamil Nadu which was commissioned in 2019 and is being operated by WABAG till 2035.

The Tertiary treatment plant is similar to the Koyambedu TTRO Plant and will process treated wastewater from an existing 56 MLD STP to produce industrial-grade water. This reclaimed water will be used by industries located in Sahibabad Industrial Estate in the Ghaziabad Municipal area. Upon commissioning of the new plant, the industries will be mandated to use the TTRO- treated water, instead of presently used ground water, which is already depleting fast.

Another major success that further strengthens WABAG?s position as a leading water recycling expert, the project will receive funds from green bonds, which is first of its kind in the country. Ghaziabad Nagar Nigam is debt-free and has maintained a revenue surplus position in the last few years, according to India Ratings.

KANPUR CETP - INDIA

Your Company is currently executing INR 520 Crores worth order secured from Jajmau Tannery Effluent Treatment Association (JTETA) towards Engineering, Procurement, Construction, Operation & Maintenance of a 20 MLD Common Effluent Treatment Plant (CETP) along with treated sewage dilution facility for Jajmau leather cluster, in the state of Uttar Pradesh.

The scope of this Design and Build contract includes Design, Engineering, Supply, Erection, Construction and Commissioning of 20 MLD CETP. The CETP scheme includes pre-treatment, sulphide removal, de-nitrification, two stage extended aeration and tertiary treatment consisting of clarification, quartz filtration and ultra-filtration. The scope also includes setting up a collection and conveyance system, to collect and pump the effluent from various tanneries up to the treatment plant; setting up common chrome recovery unit, to treat chrome tanning effluents by recovering the chrome so that they can be reused in the tanneries and setting up a pilot plant with a zero liquid discharge facility.

The salient features of the project are effluent from 380 Tanneries will be treated as per the revised norms of Ministry of Environment and will be released for irrigation purpose. The proposed 20 MLD CETP project will have treatment process up to tertiary treatment including Ultra Filtration in Phase-I and an add-on Modular RO system in Phase-II. Spent Chrome liquor collection from each Tannery unit would

be transported through tankers to CCRU and the recovered chrome shall be sent through drums or sold. This will ensure that the chrome liquor is uniformly treated from all tanneries. Zero Liquid Discharge (ZLD) based field scale pilot plant with a capacity of 200 KLD is developed for Research and Development activities to demonstrate high recovery of water (>95%) and high purity sodium chloride and sodium sulphate salts.

Post successful commissioning, your Company will also Operate & Maintain the above plants for a period of 5 (five) years. The construction of this plant is being funded under the prestigious Namami Gange Programme and the Operation & Maintenance will be self-financed by JTETA. Work is in full swing and the Common Effluent Treatment Plant (CETP) is expected to be commissioned by early next year.

MANGLORE REFINERY AND PETROCHEMICALS LIMITED MANGALORE SEA WATER REVERSE OSMOSIS - INDIA

Your Company has executed INR 467 Crores worth order secured from Mangalore Refinery and Petrochemicals Limited (‘MRPL?) towards engineering, procurement and construction of a 30 MLD Sea Water Desalination plant expandable upto 70 MLD in Mangalore, Karnataka.

The scope of this Design and Build contract includes Engineering, Supply, Erection, Construction and Commissioning of a 30 MLD Sea Water Desalination plant. The project was executed using state-of-the-art technologies, including Sea Water Reverse Osmosis with energy recovery system, Brackish Water Reverse Osmosis and Ultra - Filtration systems. The project also includes cross-country piping of 22 Kilometers to deliver the water to MRPL?s refinery. The plant aims to minimise the fresh water dependency.

The plant has been commissioned and Operation & Maintenance for a period of 10 (ten) years w.e.f. March 31, 2022 has commenced.

IPSACH BIEL SWW - SWITZERLAND

Your Company had received its biggest ever order towards Design and Build of Lake Water Treatment Plant from energie service biel/bienne, towards replacing the existing facility which is more than 50 years old, thereby ensuring water security to the city of Biel and Nidau, in Switzerland. The plant will be built with state-of-the-art technology that purifies water using a multi-barrier treatment including Reverse Osmosis. The project will be executed over a period of 5 (five) years and your Company will deliver the electro-mechanical equipment for all treatment steps as well

as the automation, starting with the raw water intake inside the building up to the distribution pumps to the network of the municipalities.

This order was awarded to your Company based on our technological superiority and the successful implementation of our pilot plant as well as the trust in WABAG Switzerland developed over the last 2 (two) decades. The lake Water Treatment Plant will be the first plant in Switzerland, which will also treat specific pesticides and micropollutant substances occurring in the last 2 (two) years.

300 MLD INDEPENDENT STP AT NEW JEDDAH AIRPORT- SAUDI ARABIA

This project to execute the 300 MLD Jeddah Airport 2 Independent Sewage Treatment Plant (ISTP) at Jeddah, Saudi Arabia is a repeat order for your Company in Saudi Arabia secured through Saudi Services for Electro Mechanical Works Company (‘SSEM?).

This plant, designed to treat 300 MLD is expandable to 500 MLD of wastewater treatment, will be built by your Company with the state-of-the-art NEREDA? technology for the first time in the region, a sustainable and cost-effective wastewater treatment technology that purifies water using the unique features of aerobic granular biomass for SSEM.

The project is progressing well amid global pandemic climate and has obtained approval of Basic Engineering package. Detailed Engineering and ordering is in full swing and construction activities has also commenced.

Your Company is extremely delighted to be part of the Vision 2030 that encourages private sector participation in achieving its economic development goals. In partnership with SSEM, your Company is happy to develop this sustainable wastewater infrastructure with the latest technology to be deployed for the first time in the region. This project will further expand your Company?s growing footprint in the Middle East region.

JUBAIL STP PROJECT - SAUDI ARABIA

This STP project in the Kingdom of Saudi Arabia is to Design and Build a large scale sewage treatment plant, capacity 120 MLD for Jubail Industrial City for a total contract value of around half a billion Saudi Riyals equivalent to approx. USD 126 Million.

This STP project in Saudi Arabia being implemented for MARAFIQ, is progressing well and has achieved Engineering and Ordering completion. Even in the tough ongoing environment of pandemic globally, most of the procurements are delivered to site and a few balance are in advanced stage of manufacturing. Site Civil works have progressed well with utmost focus on HSE where the project has achieved major milestone of 4 Million safe man-hours. Focus now is on expediting the Mechanical, Electrical, Instrumentation, Control and Automation (‘MEICA?) works commissioning and project is expected to complete by year end.

SOUTH DOHA STP PROJECT - QATAR

This EPC project from Pubic Works Authority (ASHGAL) is for rehabilitation of South Doha Sewerage Treatment facility using clarification, filtration and aerobic digestion technologies to treat additional sewage which will be generated from the football stadium which is under construction for the FIFA World Cup 2022. This breakthrough EPC order includes rehabilitation of the existing plant while simultaneously operating it till the plant is constructed for new capacity.

In this project, detailed engineering is completed, all long lead materials have been ordered and delivered to site. Non-process unit rehabilitation work is completed and handed over. Process unit?s rehabilitation work is progressing well and smoothly in sync with Client?s operations team requirement. Civil works for new unit?s Digesters, Side Stream Filtration unit, Bulk Chemical storage completed and MEICA works also have progressed significantly.

ZARAT PROJECT - TUNISIA

This project from SONEDE is to Design and Build a 50 MLD Sea Water Desalination plant in Tunisia, expandable upto 100 MLD. The project is a DBO contract, funded by KfW Germany and will be built using State of the Art Sea Water Reverse Osmosis with energy recovery system.

The project has progressed well with engineering and order nearing completion, civil works at site in full swing, equipment deliveries and installation commenced, MEICA items deliveries to site commenced with majority of items are at advanced stage of manufacturing completion. Intake and outfall pipes delivered to site.

DANGOTE REFINERY (DORL) LAGOS-NIGERIA

This project from Dangote Refinery and Petrochemicals Limited (‘DORL?) towards Engineering and Procurement of total water management system which incudes a 4000 M3/hr Raw Water Treatment includes Sequencing Batch Reactors, Dual Media Pressurised Filters followed by Ultra-filtration and Reverse Osmosis Plant (500m3/hr x 8 units) along with Effluent Treatment Plant followed by tertiary Reuse UFRO plant and a Demineralising and Condensate polishing plant to feed Refinery plant in Lagos, Nigeria. Plant is in advanced stage of construction and is expected to go on stream by Q3 FY 2023.

The plant treats lake water which is high in suspended solids and little BOD and COD converting this water suitable for cooling tower make up, other process use and part of the water is treated through Demin plant to meet High Pressure Boiler requirement in refinery. The treated water will cater to water requirements of one of the largest refinery (20 MMTPA) in Africa. This will be the first effluent recycle and reuse plant by your Company on a foreign soil.

SIBUR - RUSSIA

Your Company has consolidated its market position in the Oil and Gas sector further, by securing a breakthrough Engineering and Procurement (‘EP?) order from Amur Gas Chemical Complex LLC., (‘AGCC?) in Russia. AGCC is a joint venture of SIBUR Holding Russia and China Petroleum & Chemical Corporation (‘Sinopec?), China. AGCC is set to become one of the world?s largest basic polymer production facilities.

WABAG shall be the technology and system integrator for the Integrated Treatment Facilities (Waste Water Treatment unit). WABAG shall deploy advanced technologies to treat waste water streams. The facility will have a concentrate evaporator unit to maintain Zero Liquid Discharge (ZLD) and the sludge will be de-watered and dried. The facility will be designed to Recycle & Re-use the waste water released from the petrochemical unit, substituting about 25% of the raw water intake requirement. The deployment of ZLD and Recycle & Re-use makes the facility environmentally friendly and meets stringent environmental regulations.

WABAG shall perform the scope of Design, Engineering, Procurement, Supply and Supervision of the facilities during erection and commissioning including process and technology equipment, piping system, electrical, instrumentation / control systems and building and architectural materials.

This technology dominant breakthrough order in the CIS region, especially in the Russian Federation also marks WABAG?s largest order in the Oil and Gas sector.

This order from a marquee customer in the Oil and Gas sector, re-affirms our technological superiority and execution excellence, built over the years. Your Company is proud to have secured this contract amidst stiff international competition and we are confident that this project will be another landmark reference for your Company.

COVID-19

The COVID-19 crisis continued to impact globally during the FY 2021-22. Your Company, being a pure play water technology Indian Multi National Company, engaged in the water technology solutions across globe, ensured supply of water, treatment of wastewater /sewage for the society despite the hurdles posed by second wave of COVID-19 during the year.

Your Company have ensured continuous O&M operations during this pandemic situation, thanks to the local government(s)/authorities for providing us required support. In addition, in collaboration with the client(s), specific permissions/relaxations from the regulatory and other local authorities were obtained at certain highly critical construction sites to continue the work during restricted period.

As reports of the variants of Corona virus started coming in, your Company stepped up continuous efforts to protect the health of its employees. Together with health professionals and hospitals across our various locations, your Company offered COVID-19 related care for its employees and their families. Necessary safety and hygiene measures like vaccination drive / booster dose, face masks, social distancing norms, workplace sanitation and employee awareness programmes were followed in compliance with the guidelines of the local authorities.

Please refer our MD&A section and Financial Statements in this Annual Report for more details on COVID-19 situation.

Business Responsibility Report

Environmental, Social and Governance responsibility is an integral part of your Company in its business. Your Company is conscious of its impact on the society within which it operates and it is committed to pursuing its business objectives ethically, transparently and with accountability to all its Stakeholders. Your Company has systems to eliminate or control any adverse impacts of its operations on society. Pursuant to the SEBI LODR, the Business Responsibility Report (BRR), describing the initiatives taken by the Company from Environmental, Social and Governance (ESG) perspective forms part of this Annual Report. The Report provides an overview of initiatives taken by your Company.

Policies of the Company

The Board of Directors and your Company have framed various statutory policies, codes as prescribed under the Act and SEBI LODR, from time to time. The Board/ Committee continuously reviews and updates the Policies and Codes, in line with the amendments to Act and SEBI LODR. Some of the key policies adopted by your Company are as follows:

1. Code of Conduct for Board Members and Senior Management Personnel

2. Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Policy for identifying legitimate purpose

3. Corporate Social Responsibility Policy

4. Dividend Distribution Policy

5. Nomination, Evaluation & Remuneration Policy

6. Policy for Determination of Materiality for Disclosure of Events or Information

7. Policy on Determining Material Subsidiaries

8. Policy on Preservation and Archival of Documents

9. Policy on Related Party Transactions & Materiality of Related Party Transactions

10. Whistle Blower Policy

The aforesaid policies can be viewed in the Company website under "Polices / Codes" section in the link namely https://www.wabag.com/compliances/

Code of conduct for Prevention of Insider Trading, Prevention Of Sexual Harrasment (POSH) policy and other policies etc., are available on your Company?s intranet portal.

Directors & Key Managerial Personnel

Your Company being a professionally managed Company is functioning under the overall supervision and guidance of 3 (three) Independent Directors including an Independent Woman Director, 1 (one) Non - Executive Non - Independent Director and 2 (two) Executive Directors. The changes in Directors and Key Managerial Personnel position from April 01,2021 till the date of this report are as follows:

1. Mr. Amit Goela (DIN:01754804), was appointed as a Non - Executive Non - Independent Director w.e.f July 19, 2021

2. Mr. Sandeep Agrawal, Chief Financial Officer (Key Managerial Personnel) resigned w.e.f the closing working hours on June 07, 2021

3. Mr. Skandaprasad Seetharaman, appointed as Chief Financial Officer (Key Managerial Personnel) of the Company w.e.f. June 08, 2021

4. Mr. V. Arulmozhi, appointed as Chief Financial Officer - India Cluster (Key Managerial Personnel) of the Company w.e.f June 01,2021.

5. During the year under review, with profound sadness and grief, the Board took note of the sad demise of Mr. Malay Mukherjee, Non - Executive Chairman and Independent Director of the Company, aged 74 years, on January 29, 2022.

Mr. Malay Mukherjee had over 43 years of rich experience in a range of technical, commercial and managerial roles in the mining, steel industry and holds directorship position in listed and unlisted entities in India and overseas. He was a Non - Executive Independent Director in WABAG since 2015 and occupied the position of Non - Executive Chairman from September 23, 2020 until his demise.

As Chairman and Member of the Board and various other Board Committees of the Company, he was instrumental in bringing various policy changes, process and business decisions, which benefitted the Company at large.

During his tenure, WABAG has formulated its vision document namely ‘WABAG 2025 Growth Strategy?, restructured its presence across geographies, secured large order book size, became more focused on risk management and liquidity management and increased its credibility and visibility as an Indian MNC with global recognition.

The Board of Directors have placed on record its appreciation for invaluable services rendered by Mr. Malay Mukherjee during his Directorship. His dedication, support, guidance will remain an inspiration for the people at WABAG.

Based on the recommendation of Nomination and Remuneration Committee and considering the rich and vast experience of Mr. Rajiv Mittal, Managing Director & Group CEO, the Board of Directors ("Board") of the Company at their meeting held on March 26, 2022 had appointed Mr. Rajiv Mittal as Chairman and accordingly re-designated him as Chairman cum Managing Director & Group CEO with immediate effect.

Retirement by rotation and subsequent re-appointment

In accordance with the provisions of the Act read with the Rules made thereunder, SEBI LODR and the Articles of Association of the Company, the Independent Directors and the Managing Director of the Company are not liable to retire by rotation.

In order to comply with the provisions of Section 152 of the Act read with rules issued thereunder, Mr. S. Varadarajan, (DIN: 02353065) Whole Time Director & Chief Growth Officer, who was appointed by the Members of the Company at the 23rd AGM held in 2018 for a period of 5 (five) years, has to be considered to retire by rotation at the ensuing Annual General Meeting (AGM) and he being eligible, offers himself for re-appointment. A brief profile of

Mr. S. Varadarajan is given in the notice dated May 27, 2022 convening the 27th AGM of the Company. The Board of Directors of your Company recommends his re-appointment.

Independent Directors

The Members of the Company at the 24th AGM held on August 13, 2019, has appointed Mr. Milin Mehta (DIN: 01297508), as an Independent Director of the Company to hold office for a period of 3 (three) consecutive years upto the conclusion of the 27th AGM to be held in calendar year 2022. The Board of Directors of your Company at their meeting held on May 27, 2022, on the recommendation of Nomination and Remuneration Committee and subject to the approval of the Members at the ensuing Annual General Meeting, considered and approved the reappointment of Mr. Milin Mehta (DIN: 01297508), as an Independent Director of the Company for a period of 5 (five) years from the conclusion of the ensuing 27th AGM who shall not be liable to retire by rotation.

Your Board seeks approval from Members for re- appointment of Mr. Milin Mehta (DIN: 01297508), as an Independent Director of the Company to hold office for a period of 5 (five)years from the conclusion of the ensuing 27th AGM viz; August 24, 2022. Your Company has received requisite notice in writing from the Member proposing his candidature. The brief profile of Mr. Milin Mehta along with other requisite information have been outlined in the Notice convening the 27th AGM of the Company.

Declaration of Independence by Independent Directors

All Independent Directors of your Company have confirmed that they meet the "Independence criteria" laid down under the Section 149(6) of the Act and Regulation 16(1)(b) of SEBI LODR. In addition, they continue to maintain their maximum limits of Directorships as required under SEBI LODR.

Your Company has received necessary declarations from the Independent Directors in this regard.

Board?s opinion on integrity, expertise and experience (including the proficiency) of the Independent Directors appointed during the year

During the FY 2021-22, there were no new Independent Directors appointed to the Board. With regard to proficiency of the Independent Directors, ascertained from the online proficiency self-assessment test conducted by the IICA (Indian Institute of Corporate Affairs), as notified under Section 150(1) of the Act, the Board of Directors have taken on record the declarations submitted by Independent Directors that they have complied with the requirements.

Key Managerial Personnel

The Key Managerial Personnel (KMP) of your Company as on March 31, 2022 as per Section 203 of the Act, are as follows:

a) Mr. Rajiv Mittal, Chairman cum Managing Director & Group CEO

b) Mr. S. Varadarajan, Whole Time Director & CGO

c) Mr. Pankaj Sachdeva, CEO - India Cluster

d) Mr. Skandaprasad Seetharaman, CFO

e) Mr. V. Arulmozhi, CFO - India Cluster

f) Mr. R. Swaminathan, Company Secretary & Compliance Officer

During the year under review, Mr. Sandeep Agrawal, Chief Financial Officer (Key Managerial Personnel) of the Company, resigned from the closing working hours on June 07, 2021. Mr. Skandaprasad Seetharaman was appointed as Chief Financial Officer (Key Managerial Personnel) of the Company w.e.f. June 08, 2021 and Mr. V. Arulmozhi was appointed as Chief Financial Officer - India Cluster (Key Managerial Personnel) of the Company w.e.f June 01,2021.

Board Diversity

Your Company recognises the importance of a diverse Board for its success and believes that a diverse Board will ensure effective corporate governance, responsible decision-making ability, sustainable business development and Company?s reputation.

The Company recognises and sets out the approach to have diversity on the Board of the Company in terms of thought, knowledge, skills, regional and industry experience, cultural and geographical background, perspective, gender, age, ethnicity and race in the Board, based on the laws / regulations applicable to the Company and as appropriate to the requirements of the businesses of the Company.

The Nomination and Remuneration Committee sets out the approach to diversity of the Board of Directors.

Board & Performance Evaluation

The Nomination and Remuneration Committee and the Board of Directors of your Company has in accordance with the provisions of the Act and SEBI LODR, laid down the manner in which formal annual evaluation of the performance of the Board, Committees, Individual Directors and Chairman to be made.

During the year under review, the Board carried out an annual evaluation of its own performance, its Committees and performance of all the Directors individually. The evaluation was carried out based on the responses sought from the Directors by way of an organised questionnaire covering various aspects of the functions of the Boards adequacy, culture, execution and delivery of performance of specific duties, obligations and Governance.

The Nomination and Remuneration Committee of the Board carried out a separate exercise to evaluate the performance of Individual Directors. The Independent Directors of the Company carried out the performance evaluation of the Executive Directors and the Board as a whole at their Meeting held during FY 2021-22. Taking into account the views of the Executive Directors, the Independent Directors carried out the performance evaluation of the Chairman of the Board of Directors of the Company. The report on Corporate Governance forming part of this Annual Report covers details of the evaluation process and other requisite information.

Familiarisation Programme

As part of Familiarisation Program, your Company conducts various programmes, session and seminars for the Directors, from time to time, to update them with various aspects covering the industry including the business process, procedures, laws, rules and regulations as applicable for the business of the Company, making presentations on the business areas of the Company including business strategy, risk opportunities, quarterly performance of the Company, etc.

A formal letter of appointment was issued to Directors at the time of their appointment, capturing their role, function, duties and responsibilities and expectation of Board. The Directors of your Company are given the full opportunity to interact with Senior Management Personnel and provided with the access to all the documents/ information sought by them to have a good understanding of the Company, its business and various operations and the industry of which it is a part.

Details of the Familiarisation Programme are explained in the Report on Corporate Governance and are available on the Company?s website at link https://www.wabag.com/ compliances/.

Appointment of Directors

Pursuant to Section 134(3)(e) and 178(3) of the Act, the Nomination, Evaluation & Remuneration Policy lays down the criteria for determining qualifications, positive attributes and independence of a Director. The Nomination and Remuneration Committee has formulated the criteria for appointment of Director on the Board of Directors of the Company. In accordance with the provisions of the Act and SEBI LODR, the Nomination and Remuneration Committee based on the criteria formulated makes necessary recommendation to the Board for the appointment of Directors.

In addition, the Nomination and Remuneration Committee on the basis of the performance evaluation of Directors, recommends to the Board on extension or continuation of the term of office of Independent Directors from time to time.

Board & Committees

The Board of your Company comprises the following Directors:

(i) Mr. Rajiv Mittal, Chairman cum Managing Director & Group CEO

(ii) Mr. Milin Mehta, Non-Executive Independent Director;

(iii) Mr. Ranjit Singh, Non-Executive Independent Director;

(iv) Ms. Vijaya Sampath, Non-Executive Independent Director;

(v) Mr. Amit Goela, Non - Executive Non - Independent Director; and

(vi) Mr. S. Varadarajan, Whole Time Director & Chief Growth Officer (CGO)

Your Company maintains the highest standards of Corporate Governance practices and is in compliance with the requirements of the relevant provisions of applicable laws and statutes.

As on March 31, 2022, the Board of your Company has 6 (six) Committees viz.

a) Stakeholders Relationship Committee inter - alia to look into various matters relating to the security holders of the Company

b) Nomination and Remuneration Committee inter - alia with wider terms of reference as per the statutory requirements

c) Corporate Social Responsibility Committee, inter - alia, to undertake CSR activities, monitoring and reporting system for utilisation of funds for the CSR activities

d) Risk Management and Monitoring Committee inter - alia to review and monitor the various projects of the Company from time to time and evaluate the risks existing in the business and ensure appropriate mitigation measures in a time bound manner

e) Overseas Investment Committee inter - alia, to scrutinise, evaluate and approve any new/enhancement in the investment by the Company in setting up a branch/ subsidiary/joint venture entity, in India or overseas and periodically monitor that the investments made in such group entities are used for such approved purpose so as to ensure that return on investment to the Company is protected in the long run. Please refer page no. 45 of this Annual Report for investment made by Company in Overseas Direct Investment (ODI) entities.

f) Audit Committee which acts as an interface between the statutory and internal auditors, the Management and the Board of Directors. It assists the Board in fulfilling its responsibilities of monitoring financial reporting processes, reviewing the Company?s established systems and processes for internal financial controls, governance and reviews the Company?s statutory and internal audit processes. The Board reviews/ accepts the recommendations made by the Committee. Pursuant to Section 177(8) of the Act, the Audit Committee of the Board comprises 3 (three) Independent Directors and 1 (one) Executive Director viz., Mr. Milin Mehta, Chairman of the Committee, Mr. Ranjit Singh, Ms. Vijaya Sampath and Mr. Rajiv Mittal, Members of the Committee.

The respective Chairperson of each Committee convenes the meetings of the Committees. The Board is apprised with the discussion held at the meeting of the Committees, from time to time, for review/ necessary action, wherever required. In compliance with the Secretarial Standards -1, the Minutes of the Meetings of the Committees are sent to all Members of the Committees for their comments, if any. The approved Minutes are signed and certified minutes are shared with the Board and respective Committees and tabled at the subsequent meeting of Board of Directors/Committees.

The annual calendar of the Board and Committee Meetings are finalised by the Board before the beginning of the year to enable the Directors to plan their schedule in advance and to ensure their participation in the meetings.

During the year, your Board met 8 (eight) times through Physical and Video Conferencing/ other Audio Visual Means on May 14, 2021, May 31, 2021, June 05, 2021, July 19, 2021, August 11, 2021, November 13, 2021, February 11, 2022, and March 26, 2022. The details regarding composition of Board, attendance of the Directors and other relevant information are set out in the Report on Corporate Governance forming part of this Annual Report.

Directors Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134 of the Act:

• that in the preparation of the annual accounts of the Company, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

• that they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the

Company at the end of the Financial Year and of the profit of the Company for that period;

• that they had taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

• that they had prepared the annual accounts on a going concern basis;

• that they had laid down internal financial controls which are adequate and operating effectively; and

• that they had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

Remuneration Policy

Your Company designed its remuneration policy based on various evaluation criteria determined by the Nomination and Remuneration Committee in line with the requirements of the applicable law. The objective of the Remuneration Policy is to assess the effectiveness of the Board as a whole, Committees of the Board and Individual Directors on regular basis and to attract, motivate and retain the Directors, Key Managerial Personnel, Senior Management Personnel and other expert Individuals that the Company requires in order to achieve its strategic and operational objectives.

In accordance with the relevant provisions of the Act and SEBI LODR, the following Policies/ Framework have been adopted by the Board upon recommendation of the Nomination and Remuneration Committee as part of Nomination, Evaluation & Remuneration Policy:

• Board Nomination Policy

• Policy for appointment and removal of Director, Key Managerial Personnel and Senior Management Personnel

• Board Evaluation Policy

• Board Diversity Policy

• Policy related to Remuneration for the Executive Directors, Key Managerial Personnel and Senior Management Personnel

• Policy related to Remuneration for the Non - Executive Directors / Independent Directors

The Nomination, Evaluation & Remuneration Policy of the Company is available on the website of the Company www.wabag.com. The information on Director?s Commission and other matters as provided in Section 178(3) of the Act are disclosed in the Report on Corporate Governance forming part of this Annual Report. The overall limit of remuneration payable to the Board of Directors and Managerial Personnel are governed by provisions of Section 197 of the Act and rules made thereunder.

Executive Directors

The remuneration of the Executive Directors consists of fixed component and a variable performance incentive. The Nomination and Remuneration Committee makes annual appraisal of the performance of the Executive Directors based on a detailed performance evaluation and recommends the compensation payable to them, within the parameters approved by the Members, to the Board for their approval.

Non-Executive Directors

The Non-Executive Directors are paid remuneration in the form of commission subject to overall ceiling limits prescribed under the Act. The Board can determine different remuneration for different Directors on the basis of their role, responsibilities, duties, time involvement etc. The Company has no pecuniary relationship with Non- Executive Directors except for the commission being paid to them.

KMP/ Senior Management/ Other Employees

The remuneration of Key Managerial Personnel (other than Executive Directors) and any revision thereof, shall be approved by the Board in accordance with the compensation and appraisal policy of the Company which consists of fixed and variable pay includes salary, benefits, perquisites, provident fund etc. The Chairman cum Managing Director & Group CEO and Whole Time Director & CGO carry out the performance evaluation of senior management/ other employees and apprises the Board/ Nomination and Remuneration Committee about the same and on the basis on achievement of KPI and KRA they will be paid remuneration/ any revision thereof.

Policy on Preservation & Archival of Documents

In accordance with Regulation 9 read with Regulation 30(8) of the SEBI LODR, your Company has framed a Policy on "Preservation & Archival of the Documents". This policy is available on the Company?s website www.wabag.com. The Policy provides guidelines for the retention of records, duration of preservation of relevant documents, archival/ safe disposal/ destruction of the documents. The Policy inter - alia aids the employees in handling the documents efficiently either in physical form or electronic form. The Policy not only covers the various aspects on preservation, but also archival of documents.

Employees stock option scheme (ESOP)

Your Company does not have any existing ESOP scheme as on date of this report.

Particulars of Employees

Pursuant to Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, disclosures with respect to the remuneration of Directors, KMP and employees, are enclosed as Annexure I to the Board?s Report.

Pursuant to provisions of section 197(12) of the Act, read with Rules 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, details of employee remuneration are available to any Member on request and such details are also available on the Company?s website www.wabag.com.

Industrial Relations

Your Company maintained healthy, cordial and harmonious industrial relations at all levels with Stakeholders. The enthusiasm and unstinted efforts of our employees have enabled your Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across the organisation.

Policy on Prevention of Sexual Harassment at Workplace

Your Company has a Policy on Prevention of Sexual Harassment in place in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH"). Your Company maintains a collaborative, inclusive, nondiscriminative and safe work culture, and provide equal opportunities to all employees. Your Company has a ‘Zero Tolerance? policy towards sexual harassment at the workplace. Your Company has constituted Internal Complaints Committee under POSH, which comprises 6 (six) Members, majority being women members including 1 (one) external women representative.

All employees viz; permanent, consultant, contractual, temporary and trainees are covered under your Company?s Policy on Prevention of Sexual Harassment.

During the year under review, your Company did not receive any complaint for Sexual Harassment at workplace. An Annual Report comprising details of complaints received, disposed off and pending at the end of the Calendar Year i.e. December 31, 2021 was duly submitted by the Internal Compliant Committee, in accordance with the Section 21 of POSH.

Auditors

A. Statutory Auditors

The Members of the Company at the 23rd AGM held on August 10, 2018 had appointed M/s. Sharp & Tannan, Chartered Accountants, Chennai (Firm Regn No: 003792S) as the Statutory Auditors of the Company to hold office for a term of 5 (five) years from the conclusion of the 23rd AGM until the conclusion of the 28th AGM of the Company to be held in the calendar year 2023.

The Statutory Auditors of the Company have submitted Independent Auditors? reports for FY 2021-22 and is forming part of this Annual Report. The Auditor?s Report on Standalone and Consolidated Financial Statements of the Company for the Financial Year ended March 31, 2022, does not contain any qualification, reservation or adverse remark.

B. Cost Auditor

Pursuant to the provisions of the Section 148(1) of the Act, Mr. K Suryanarayanan, Practicing Cost Accountant (Membership No.24946) was appointed as Cost Auditor of the Company, for conducting the audit of costs records for the FY 2021-22. The audit of cost records is in progress and report by Cost Auditor will be filed with the Authority within the prescribed time. A proposal for ratification of remuneration of the Cost Auditors for the FY 2021-22 will be placed before the Members of the Company at the ensuing AGM.

The cost records, as applicable to the Company are maintained in accordance with the sub-section (1) of Section 148 of the Act.

C. Secretarial Auditor

The Board of Directors had appointed Mr. M. Damodaran of M/s M Damodaran & Associates LLP, Practicing Company Secretaries, Chennai as the Secretarial Auditors of the Company, to undertake the Secretarial Audit of the Company for FY 2021-22. The Secretarial Audit Report was placed before the Board and it does not contain any qualification, reservation or adverse remark. The Report of the Secretarial Auditor is enclosed as Annexure II to the Board?s Report.

Your Board has appointed M/s. M Damodaran & Associates LLP, Practicing Company Secretaries, as Secretarial Auditor of the Company for FY 2022-23.

D. Internal Auditors

M/s PKF Sridhar & Santhanam LLP, Chartered Accountants, Chennai, (Firm Regn. No - 003990S/ S200018) was appointed as Internal Auditors of the Company to conduct the Internal Audit for the FY 2021-22. The Internal Auditors reports directly to the Audit Committee and makes comprehensive presentations at the Audit Committee meeting(s) on the Internal Audit Report covering the business areas required by the Audit Committee, from time to time.

Your Board has appointed M/s PKF Sridhar & Santhanam LLP, Chartered Accountants, Chennai, as Internal Auditor of the Company for the FY 2022-23.

None of the Auditors of the Company have reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Act, including rules made thereunder.

Subsidiaries, Joint Ventures & Associates

a) During the FY 2021 - 22, Your Company invested INR 1,00,00,000 in Compulsorily Convertible Preference Shares (Series A CCPS) of face value of INR 10/- each and INR 8,51,50,000 in Non - Convertible Debentures (Series A NCD) of face value of INR 10/- each in Ganga STP Project Private Limited, a Subsidiary Company, on April 30, 2021 and February 02, 2022 respectively. Please refer project update on page no. 34 of Board?s Report for more details.

b) During the FY 2021-22, Kathari Water Management Private Limited had invested INR 4,90,000/- in Equity shares (49000 Equity shares of face value of INR 10/- each) on September 22, 2021, INR 9,31,86,470/- in Compulsorily Convertible Preference Shares (9318647 Series B CCPS of face value of INR 10/- each), INR 24,23,50,000/- in Non-Convertible Debentures (24235000 Series A NCD of face value of INR 10/- each) and INR 18,38,23,530/- in Non-Convertible Debentures (18382353 Series B NCD of face value of INR 10/- each) on March 31, 2022 of Ganga STP Project Private Limited, a Subsidiary Company.

c) During the FY 2021-22, the name of the Company?s wholly owned subsidiary Digha STP Projects Private Limited was changed to Ghaziabad Water Solutions Private Limited.

d) Subsequent to the close of the financial year, M/s. International Water Treatment LLC, Oman, JV entity which was formed for carrying out Engineering, Procurement and Construction Contract for Water Desalination Project in Muscat, The Sultanate of Oman, has been liquidated with effect from April 17, 2022, post completion of the said project and all contractual and other formalities.

Your Company has 18 (eighteen) subsidiaries, 3 (three) associates and 1 (one) Joint Venture entity as on date of this report. Pursuant to Section 129(3) of the Act, a statement containing the salient features of the Financial Statement of our subsidiaries in the prescribed format AOC - 1 is enclosed as Annexure III to the Board?s Report.

Material Subsidiaries

The Board of Directors of your Company has framed a Policy for "Determining Material Subsidiaries" in accordance with the SEBI LODR. The policy is also made available on your Company?s website www.wabag.com.

In accordance with the provisions of SEBI LODR and Policy for Determining Material Subsidiaries, your Company has 1 (one) Material Subsidiary i.e. VA Tech Wabag GmbH, Austria, as on the date of this report.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company for the Financial Year ended March 31, 2022 are prepared in compliance with the applicable provisions of the Act including Indian Accounting Standards specified under Section 133 of the Act. The audited consolidated Financial Statements together with the Auditors? Report thereon form part of this Annual Report.

Pursuant to the provisions of Section 136 of the Act, the Financial Statements of the Subsidiaries, Associates and Joint Venture entities of the Company are available for inspection by the Members at the Registered Office of the Company. Your Company shall provide a copy of the Financial Statements of its Subsidiary companies to the Members upon their request. The statements are also available on the website of your Company at www.wabag.com under Investors Section.

Related Party Transactions

All transactions entered into with Related Parties by the Company, during the year under review, were in the ordinary course of business and at arm?s length basis and in accordance with the provisions of the Act and the SEBI LODR.

There were no materially significant Related Party Transactions entered into by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The details of the same are given in the notes to Financial Statements.

The Related Party Transactions were placed before the Audit Committee for their review, consideration and approval/ recommendation and then placed before the Board for suitable noting/approval. Amended Policy on Materiality of Related Party Transactions & on dealing with Related Party Transactions is available on the Company?s website www.wabag.com.

The details as required to be provided under Section 134(3) (h) of the Act, in the prescribed Form no. AOC-2 are enclosed as Annexure V to the Board?s report.

Overseas Direct Investment

Your Company, over the years has expanded its global reach through Overseas Direct Investments (ODI), through Subsidiaries, Associate & Joint Venture Entities. As of March 31,2022, the aggregate financial investments in such ODIs amount to INR 87.49 Crores as against INR 156.82 Crores as of last year. Out of such overseas investments, a very substantial component of investment comprises guarantees/ non-funded exposure for various projects, which as of March 31, 2022 amounted to INR 60.35 Crores (68.98% of total financial exposure). The funded exposure of the Company in ODI for the same period consists of equity investments of INR 25.30 Crores (28.92% of total financial exposure) and loans amounting to INR 1.84 Crores (2.10% of total financial exposure). Your Company has not provided any loan to its ODI entities during the year.

Your Company has been benefitted from these ODIs in the form of export/ other earnings.

The benefits generated by the Company from its overseas entities are substantial considering its relative meagre funded investment in such ODI entities. During the FY 2021-22, the Standalone revenue of the Company included revenue from overseas projects amounting to INR 1,035 Crores as against INR 924 Crores last year. The aggregate operational revenue generated by the Group during the FY 2021-22 through Company?s overseas entities and exports out of India aggregated to INR 1,905 Crores which is 64% of overall consolidated revenue of INR 2,979 Crores.

Corporate Social Responsibility (CSR)

Your Company?s CSR Committee comprises Ms. Vijaya Sampath (Chairperson) (DIN: 00641110), Mr. Amit Goela (DIN: 01754804), Mr. Rajiv Mittal (DIN: 01299110) and Mr. S. Varadarajan (DIN:02353065) as Members. The Committee is responsible for formulating and monitoring the CSR policy of the Company.

Pursuant to Section 135(4) of the Act, the major contents of CSR policy include your Company?s CSR approach and guiding principles, core Ideology, total outlay for each Financial Year, allocation of resources and thrust areas, formulation of annual action plan, Executing Agency/ Partners and Impact Assessment.

This policy is available on the Company?s website in the following link: https://www.wabag.com/compliances/.

Your Company being engaged in Water business, as part of its CSR Policy and guiding principles, would prefer to take up CSR projects relating to water, waste water management and sanitation, which could be closer to establishments viz., offices or project sites to help the project neighborhood.

In terms of Section 135 of the Act read with CSR Rules and in accordance with CSR Policy and in accordance with the Annual Action Plan, your Company allocated a limit equivalent to 2% of the average net profits of its 3 (three) immediately preceding Financial Years for implementation of

CSR activities. During the year under review, your Company spent a sum of INR 24.56 Lakhs towards CSR projects implementation.

Pursuant to the provisions of Section 135(6) of the Companies Act, 2013, the Board decided to transfer the unspent amount of INR 136.97 Lakhs for Financial Year 2021-22, towards the Ongoing Projects to a special account called as "Unspent Corporate Social Responsibility Account". (UCSRA).

Further, during the year, your Company implemented the following CSR projects -

(i) Livelihood Improvement Programme at Kolkata - On going Project

(ii) Sanitation Programs at Chennai City - On going Project

(iii) E - Bio Toilets at Kumbh Mela, Haridwar - Completed During the FY 2021-22, the Company has spent an amount of INR 100.9 Lakhs (including INR 89.09 Lakhs transferred to Unspent Corporate Social Responsibility Account) towards Usharmukti Project at West Bengal, categorised as On-going Project during FY 2020-21, which has now been completed.

The details of the aforesaid projects are covered in the annual report on our CSR activities forming part of this Board?s Report.

The CSR Committee of the Board has been constantly reviewing the projects and gives directions to expedite implementation of the projects undertaken. It also focus on proposals covering skill development CSR initiatives in the form of training and development programmes to enrich the knowledge, skill sets, communication, on the job training, improve efficiency and performance level of technical and non-technical persons viz., diploma holders, graduates and other eligible persons.

Core Ideology: For WABAG, responsible business practices include being responsible for our business processes, engaging in responsible relations with employees, customers and the community. Hence for the Company, Corporate Social Responsibility goes beyond just adhering to statutory and legal compliances, and creates social and environmental value while supporting the Company?s business objectives and reducing operating costs and at the same time enhancing relationships with key Stakeholders and Customers.

Your Company?s commitment to CSR will be manifested by investing resources in one or more of the following areas:

a. Eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water;

b. Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differentiated and livelihood enhancement projects;

c. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans, setting up old age homes, day care centers and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;

d. Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro-forestry, conservation of natural resources and maintaining quality of soil, air and Water;

e. Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art;

f. Contribution to any fund set up by the Central Government for socio-economic development disaster relief and for any other purpose for which these funds are allocated and utilised;

g. Contribution of funds provided to technology incubators located within academic institutions which are approved by the Central Government for CSR purposes;

h. Rural Development Projects

i. Setting up facilities related to pandemic illnesses like COVID-19, health infrastructure for COVID care, establishment of medical oxygen generation and storage plants?, ‘manufacturing and supply of oxygen concentrators, ventilators, cylinders and other medical equipment for countering pandemics?.

The annual report on our CSR activities is enclosed as Annexure IV to the Board?s Report.

Particulars of Loans, Guarantees or Investments

Pursuant to provisions of Section 186 of the Act and Schedule V of the SEBI LODR the details of loans, guarantees and investments, as on March 31,2022, are given in the notes to the Financial Statements of the Company.

Internal Control / Audit and its adequacy

Your Company has built robust control system upon which the internal controls are built to mitigate the risks. Under the controlled environment; Company?s policies, procedures and standards are developed to uphold control across the organisation. Adequate internal controls are in place to commensurate with business and operating dynamics.

Internal controls are designed to provide reasonable assurance over:

1. Achieving strategic objectives

2. Efficiency and effectiveness of business operations

3. Prevention and detection of frauds and errors

4. Safeguarding its assets

5. Complying with applicable laws and regulations

6. Providing reliable financial information

Your Company has independent internal audit agency, spearheaded by industry veterans and process experts. The Audit Committee of the Board periodically reviews the audit functions and key issues are acted upon immediately. The Key controls are periodically reviewed and improvements are made to enhance the reliability of information. The Company through its global ERP continues to align its processes and controls with industry best practices.

Internal Control Over Financial Reporting The Act, re-emphasises the need for an effective Internal Financial Control system in the Company which should be adequate and shall operate effectively.

1. The internal financial controls within the Company commensurates with the size, scale and complexity of its operations.

2. Audit Committee of the Board periodically reviews the internal audit plans and provides observations/ recommendations to the Internal and Statutory Auditors.

3. The controls were tested during the year and no reportable material weaknesses.

4. Your Company continuously tries to automate these controls to increase its reliability.

5. Your Company follows accounting policies which are in line with the Indian Accounting Standards (IndAS) notified under Section 133 of the Act read with Companies (Indian Accounting Standard) Rules, 2015. These are in accordance with Generally Accepted Accounting Principles (GAAP) in India.

6. Your Company?s Books of Accounts are maintained in IFS and transactions are executed through IFS setups to ensure correctness/ effectiveness of all transactions, integrity and reliability of reporting.

7. Your Company has a mechanism of building budgets at an integrated cross - functional level. The budgets are reviewed on a monthly basis so as to analyse the performance and take corrective action, wherever required.

8. Overseas subsidiaries provide required information of consolidation of accounts in the format prescribed by your Company along with certification from respective entity auditors.

Risk Management

Your Board has constituted a dedicated Committee viz. "Risk Management and Monitoring Committee" to review risks trends, exposure, its potential impact analysis and mitigation plans. The Committee consists of 4 (four) Directors out of which 2 (two) are Independent Directors and 2 (two) are Executive Directors. The details on your Company?s risk Management framework/ strategy, risk assessment, risk acceptance, risk avoidance, risk mitigation, risk review etc. form part of Management Discussion and Analysis section of this Annual Report.

Awards and Recognitions

During the year under review, your Company received numerous awards and accolades conferred by reputable organisations, distinguished bodies and clients for achievements in CSR, sustainable solutions, project completion etc.

Please refer this Annual Report for the details of the rewards and recognition achieved by the Company globally during the FY 2021 - 22.

Significant and material orders passed by the regulators or courts or tribunals impacting the going concerns status and Company?s operations in future

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company?s operations in future.

Insolvency and Bankruptcy Code, 2016

There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016 (IBC).

Other Disclosures

Deposits: Your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), during the year under review.

Contracts or Arrangements with Related Parties: Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act, in the prescribed Form AOC-2 is enclosed as Annexure V to the Board?s Report;

Annual Return: In accordance with Section 134(3)(a) read with Section 92(3) of the Act, an extract of the annual return in the prescribed format is available on the Company?s website in the following link: https://www.wabag.com/compliances:

Secretarial Standards: The Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Conservation of Energy: The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Act, read with the Companies (Accounts) Rules, 2014, is enclosed as Annexure VI to the Board?s Report; Differential rights: The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

Nature of Business: During the year under review, there was no change in nature of business of the Company or any of its subsidiaries.

Health, Safety and Environmental Protection (HSE)

Your Company is committed to providing a safe, healthy and conducive environment to all of its employees and associates and complied with labour related laws. The details of quality, health, safety, environment initiatives, objectives and achievements made by the Company are detailed in the Management Discussion and Analysis section of this Annual Report.

Sustainability Initiatives

Sustainability is a key mantra for your Company. Globally, your Company is actively involved in providing sustainable solutions for the future that are eco-friendly and renewable in nature. Your Company?s contribution towards sustainability is constantly driving in nature as is reflected throughout this report and forms an integral part of our business.

Whistle Blower Policy / Vigil Mechanism

Pursuant to the Act and SEBI LODR, your Company has formulated a Whistle-Blower Policy which serves as a mechanism for its Directors, Employees, Business Associates and other Stakeholders to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct without fear of reprisal. The vigil mechanism consists of a dedicated email- id. Any Director or employee who becomes aware of an unethical behavior or fraud or violation of code shall report to the Ethics Committee for redressal as provided in the policy. The Audit Committee of the Board oversees the functioning of this policy. The policy is available on the website of the Company www.wabag.com.

Green Initiatives

WABAG stands for sustainability and has showcased its commitment to creating a green earth for over 9 (nine) decades.

WABAG?s vision is aligned to the United Nations SDGs 2030 and this has been reflected in the Group?s numerous initiatives as highlighted below:

1. Green Initiatives begin at home: Over 97% of the total power requirement of our headquarters in Chennai is derived from wind energy, thereby bringing down energy cost by 10% as well as becoming a part of green energy compliant corporate. It is in recognition of this initiative that our headquarters, WABAG HOUSE, has been re-certified as a platinum rated green building by IGBC. Other initiatives taken by your Company are as follows:

• Paper Waste is being sent to ITC Limited for recycling and the proceeds obtained in the form of stationeries are distributed to local panchayat schools.

• Batteries, oil waste and e-Waste being disposed for recycling through Pollution Control Board (PCB) authorised re-cycler.

• Employee friendly initiatives like ergonomics, indoor air quality and LUMO level are maintained as per standards.

• Conservation on energy and water management has resulted in low Energy and Water Performance Index.

• Introduction of e-Tender process for sourcing materials in our procurement function as a step towards digitisation.

2. Digitisation: Moving forward on its commitment towards a Green Planet for future generations and in furtherance of digitisation commitment to Go-Green initiative of the Government, the Company has been using digital mechanism to conduct Board/ Committee Meeting(s) as per the provisions of law and the agendas, notes and other supporting documents of the Board / Committee meetings are circulated through a secured electronic platform for ease of access to the Directors/Members for their review and consideration, thereby reducing usage of papers to a limited purpose. Your Company took various initiatives to reduce the usage of physical Annual Reports by continuously persuading the Members to get registered their e-mail ids with their respective DPs to avail the e-version of Annual Reports and providing e-voting facility to all its Members to enable them to cast their votes electronically on all resolutions set forth in the Notice including attending AGM electronically.

3. Breathing life into lifelines: Clean water and rejuvenated rivers are key to enhancing the Green cover on Planet Earth. WABAG has been playing an integral role to ensuring this by collaborating with Governments worldwide. In India particularly, WABAG has emerged as one of the foremost partners of the Government in rejuvenating India?s lifeline, Holy River Ganga under the world?s largest river cleaning program Namami Gange.

4. Contributing to a Circular Economy:

a) WABAG emerged as a pioneer in promoting resource recovery at wastewater plants in India over 15 years ago - Green Power Generation from Kodungayur Wastewater Treatment Plant, Chennai. The plant has the distinction of completing maximum hours of gas engine run time of 113,000 hours and generated cumulative green power of over 60,000 Mwh and producing over 70,000 Mwh of green power till now. IMAGINE THE SAVINGS ON GRID POWER WHICH IS PRIMARILY DRIVEN BY HIGH POLLUTION THERMAL GENERATION!!

b) WABAG stands true to its presence in a sunrise sector. It executed a Sewage Treatment Plant (STP) in Sanliurfa, Turkey wherein the sludge drying component was powered by solar energy.

c) WABAG has been instrumental in making Chennai, the southern metropolis of India, the first city in South India to reuse over 20% of its treated wastewater. Recently, WABAG installed one of the largest and technologically most advanced water reuse plants in Chennai at Koyambedu with a potential to prioritise over 16,425 Million litres of freshwater every year for domestic consumption. Similar plants with an eye for circular economy and rejuvenating the world?s natural resources have been built by WABAG over the last 25 years, summing up to around 50 plants with a total capacity of over 2000 Million litres every day.

d) Your Company believes in creating a clean, green and circular ecosystem (land, air and water) around us for the wellbeing of nature and humanity. Your Company has been focusing on resource recovery at wastewater treatment plants and recently, forayed into Zero Liquid Discharge systems (ZLD) which is evolving into a regulatory requirement and hence, portends very high potential for the business. Primarily, most of the sewage treatment plants wherein the treated sewage after meeting the national standards is discharged to river and the sludge which is generated from sewage is used for further digestion generating biogas thereafter producing clean power to be used for plant operation thus ensuring minimal / nil power requirement used from Grid which is powered primarily by thermal power plants and the sludge is converted into manure for Horticulture / Agriculture. Plants are in operation at JICA funded WWTP in Dinapur, Varanasi, Uttar Pradesh, K&C Valley WWTP in Bangalore, Karnataka and in an ADB funded WWTP at Guheswori, Nepal etc.

With respect to Industrial effluents, for most of the plants, your Company is advising for high quality effluent treatment followed by recycle and reuse of the effluent. This contributes to first, savings of limited freshwater sources which can be used for domestic and industrial sector and second, ensuring water security for the industrial facilities. In some instances, WABAG has helped recover up to 90% of usable water from treated effluents. A few of such marquee projects are set-up in:

- Reliance - Jamnagar, Dahej and Hazira, Gujarat

- IOCL Refineries - Panipat, Paradip and for Nayara (formerly ESSAR Oil)

Currently your Company is executing Zero liquid discharge plant located in NMDC, Nagarnar, which is a land locked area. In this project, after recovery of 90% water, balance water is treated through evaporators, thus ensuring Zero Liquid Discharge which contributes a great deal environmentally.

e) In water scarce areas in the coastal areas, you Company has continued its rich legacy of being leader in desalination and has continued settin up Desalination plants for Reliance in Jamnagar for Adani in Mundra, for MRPL in Mangalore for CMWSSB in Nemmeli, Chennai Tamil Nadu for SONEDE in Tunisia. In all these projects, : recovery of 45% approx. is achieved with lates energy recovery systems and the concentrate brine is diffused and discharged consciously int the sea at a good distance from the shore withou disturbing marine and life and fishing. WABAG has been recognised for promoting a drinkin water model for coastal India by its excellence o setting up desalination projects.

Your Company has a dedicated R&D team and i: constantly tracking all global developments in th field of desalination with the support of a CTO fo desalination. Your Company?s desalination system: factor environmental consensus with integratio of clean technology, energy efficient systems wit possibility of integrating renewable power in line wit the Company?s vision aligned to UN SDGs 2030 ant Kyoto Protocol?s Clean development mechanism.

Appreciation

Your Board of Directors placed on record their sincere gratitude and appreciation to all the employees at all levels fo their hard work, solidarity, cooperation and dedication durin the year. Your Board conveys its appreciation to its valuabl Customers, Members, Suppliers, Bankers, Busines Associates, Regulatory and Government Authorities for thei continued support.

For and on behalf of the Board of Directors
Milin Mehta Rajiv Mittal
May 27, 2022 Director Chairman cum Managing Director & Group CEO
Chennai (DIN: 01297508) (DIN: 01299110)