voith paper fabrics india ltd share price Directors report


DIRECTORS REPORT

Dear Members,

Your Directors are pleased to present before you, the Fifty-third Annual Report along with the Audited Financial Statements of the Company for the Financial Year ended on 31st March, 2023.

The Companys financial performance, for the year ended March 31,2023 is summarized below:

(INR in millions)

For the year ended

31/03/2023 31/03/2022

Revenue from operations

1,643.69 1,452.44

Profit before taxation

428.02 395.41

Tax expense

110.44 102.27

Total comprehensive income for the year

316.82 293.48

Earnings Per Share (EPS) (In rupees)

72.34 66.77

There were no material changes and commitments affecting the financial position of the company, which have occurred since the end of the financial year.

DIVIDEND

The Company endeavors to make dividend payout in such a way so that it results in capital appreciation for shareholders and also that the long term growth objectives of the Company can be met through internal accruals as and when the need arises.

Accordingly, the Directors are recommending for your approval payment of dividend @ 70%, i.e., of Rs.7/- per equity share of Rs.10/- each fully paid-up, for the year ended 31st March, 2023, aggregating to Rs.30.75 million. The dividend, if approved at the Annual General Meeting, would be paid to the eligible members, subject to TDS at applicable rates, within the stipulated time.

DIRECTORS

Mr. Ravinder Nath shall be retiring by rotation at the forthcoming Annual General Meeting (AGM) and being eligible, offers himself for reappointment.

Mr. Nath is an Advocate of Supreme Court of India and Partner at one of Indias oldest and reputed legal firms-Rajinder Narain & Co. LLP He is a Commerce Graduate and has done his LLB - International & Company Laws from Kings College, London and PIL from Harvard. He possesses rich and specialized experience in cross border acquisitions & transactions.

During his association with the Company since 1998, he has contributed to the Companys growth with his vast experience and knowledge. Hence, the Nomination and Remuneration Committee, as well as the Board of Directors, are of the view that his continued presence on Board would be beneficial for the Company.

During the year under review, the Board of Directors approved the appointment of Ms. Pallavi Dinodia Gupta, as an ‘Independent Woman Director, w.e.f. 29th May, 2022, subject to approval by shareholders of the Company and the Board of Directors satisfied themselves about the integrity, expertise and proficiency of Ms. Pallavi Dinodia Gupta. Subsequently, her appointment as an ‘Independent Woman Director effective from 29th May, 2022 has also been approved by shareholders of the Company at the AGM held on 17th August, 2022 in accordance with the provisions of the Companies Act, 2013, for an initial period of one year.

Further, based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors have recommended the appointment of Ms. Pallavi Dinodia Gupta as an Independent Woman Director with effect from 29th May, 2023 for a period of 5 years, subject to approval of shareholders at the ensuing Annual General Meeting (AGM). She is an established expert in taxation and finance. In addition to Chartered Accountancy expertise, she is trained as a lawyer and has also worked with numerous global and domestic businesses in Europe, Asia and India over the past two decades. She has completed her Bachelor of Law from Delhi University.

In Compliance with the requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (here-in-after referred to as ‘Listing Regulations), brief resume, expertise and details of other directorships, membership in Committees of other companies and shareholding in the Company, of Directors who are proposed to be re/appointed, are as under:

Name of the Director

Mr. Ravinder Nath

Ms. Pallavi Dinodia Gupta

DIN

00062186

06566637

Age in years

78 years

42 years

Date of initial Appointment in the Company

24th October, 1998

29th May, 2022

Expertise in Special Functional Areas

Legal

Taxation, Finance & Legal

Qualification

B.Com (H), LLB, International Law, London

B. Com (H); LLB; and Chartered Accountancy

Directorships held in other Companies in India, as on 31/03/2023

1. Somany Ceramics Limited (Listed entity)

Listed Companies:

2. Kadimi Construction Private Limited

1. Jagson Pal Pharmaceuticals Limited

3. Knowcross Solutions Private Limited

2. Indiamart Intermesh Limited

4. LEGO India Private Limited

5. Jay Dee Ess Leasing Company Private Limited

Name of the Director

Mr. Ravinder Nath

Ms. Pallavi Dinodia Gupta

Membership of Committees of other Companies, in which he/she is a Director, as on 31/03/2023

CSR Committee:

Audit Committee:

Somany Ceramics Limited

Jagson Pal Pharmaceuticals Limited

Indiamart Intermesh Limited

Nomination and Remuneration Committee:

Indiamart Intermesh Limited

SRC Committee:

Jagson Pal Pharmaceuticals Limited (Chairperson)

Risk Management Committee:

Indiamart Intermesh Limited (Chairperson)

CSR Committee:

Jagson Pal Pharmaceuticals Limited

Indiamart Intermesh Limited

Listed entities from which resigned in past three years

Nil

Nil

Number of shares held in the Company (Including those held by relatives)

Nil

Nil

Skills and capabilities for the role of Independent Director

Not applicable

Details given in above paragraphs

None of the Directors of the Company have any inter-se relationship with each other.

PERFORMANCE OVERVIEW

TRANSFER TO RESERVES

For the year under review, Company has added the entire available surplus to the brought forward balance in "Statement of Profit and Loss", without making any transfer to the general reserve.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the company neither gave any loans or guarantee nor made any investments in terms of provisions of Section 186 of the Companies Act, 2013.

CHANGES IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the Company during the Financial Year 2022/23.

CAPACITY ENHANCEMENT

The Company is in the process of its capacity enhancement, which is likely to mainly result in improvement in quality, productivity and customer satisfaction in coming years. However, the commissioning of equipment was delayed due to inability of visit by foreign technical team on site, owing to restrictions related to Covid-19.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant material orders passed by the Regulators or Courts or Tribunals, which would impact the ‘going concern status of the Company and its future operations. However, members attention is drawn to the details about Contingent Liabilities and Commitments appearing in the Notes forming part of the Financial Statements.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Details of Internal Financial Controls and its adequacy are included in the Management Discussion and Analysis Report, which forms part of this Report.

PARTICULARS OF CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES

As per the provisions of Companies Act, 2013 and Regulation 23 of ‘Listing Regulations, the Company has formulated a Policy on Related Party Transaction to ensure transparency in transactions between the Company and the related parties. The said Policy is available at link of ‘Company Policies on ‘Investor Corner page on the companys website at www.voithpaperfabricsindia.com

During the year under review, all transactions with related parties were carried out in the ordinary course of business at arms length basis and details of such transactions (including related party transactions considered as ‘material) are mentioned in Notes attached to the Financial Statements, appearing elsewhere in the Annual Report. Further, Form AOC-2 containing the necessary disclosure in this regard is attached as Annexure - I and forms an integral part of this report.

AUDITORS REPORT

The observations of statutory auditors are self-explanatory and therefore do not call for any further comments.

AUDITORS

A. Statutory Auditors - During the year under review, M/s B S R & Co. LLP, Chartered Accountants, carried out the Statutory Audit and submitted their report.

B. Internal Auditors - During the year under review, M/s Lodha & Co., Chartered Accountants, carried out the Internal Audit and submitted their report.

C. Secretarial Auditors - During the year under review, M/s P.C. Jain & Co., Company Secretaries, carried out the Secretarial Audit and submitted their report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Sections 134(3)(c) and 134(5), the Board of Directors, to the best of their knowledge and ability, confirm that:

1. In preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and are prudent so as to give a true & fair view of the state of affairs of the Company at the end of the Financial Year and of the profits of the Company for the period;

3. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities;

4. the Directors have prepared the Annual Accounts on a ‘going concern basis;

5. the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating efficiently; and

6. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

RISK MANAGEMENT

The Board confirms that there exists a structure in the Company to identify, assess, evaluate and mitigate various types of risks with respect to operations of the Company. In view of the Board, none of the elements of any such risk threaten the existence of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16 of the ‘Listing Regulations.

CORPORATE GOVERNANCE

The Board of Directors has laid down a Code of Conduct to be followed by all the Directors and members of Senior Management of your Company. The Board of Directors supports the principles of Corporate Governance and lays strong emphasis on transparency, accountability and integrity.

A Report on Corporate Governance along with required Certificate from a Company Secretary in Practice, pursuant to requirements of the Listing Regulations has been included in this Report separately. In terms of Regulation 17(8) of the Listing Regulations, a Certificate of CEO & CFO is also provided to the Board.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act, read along with Rule 8, of Companies (Accounts) Rules, 2014, is given in Annexure - II.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

As Company is not falling under the Top-1000 listed entities, based on market capitalization as at 31/03/2023, the provisions of Regulation 34(2)(f) of the Listing Regulations pertaining to the Business Responsibility and Sustainability Report (BRSR), are not applicable.

FIXED DEPOSITS

The Company has neither invited nor accepted any deposits from public during the year under review and there are no unclaimed or unpaid deposits lying with the company for the year under review.

PARTICULARS OF EMPLOYEES

Particulars required to be disclosed in pursuance of the provisions of Section 197, read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure - III.

ANNUAL EVALUATION BY THE BOARD

The Board has carried out the annual evaluation of its own performance, of each of its Committee and of all individual Directors, as required under the provisions of Section 134(3)(p) of the Companies Act, 2013 and the applicable provisions of Listing Regulations. The manner in which such performance evaluation exercise was carried out is given below:

The Nomination and Remuneration Committee (NRC) carries out the evaluation process at initial stage, followed by evaluation by Board. The performance evaluation framework is in place to seek the response of each Director on the evaluation of the entire Board and Individual Directors, on defined parameters.

The criteria of evaluation of Board as well as that of its each Committee; and individual Directors, including the Chairman of the Board; as defined by NRC in this regard, includes attendance and contribution of each Director at the meetings or otherwise, independent judgment, adherence to code of conduct and business ethics, monitoring of regulatory compliance, risk management and review of internal control system, etc.

The performance of the Board and Individual Directors was also evaluated by the Board seeking inputs from all Directors on aforesaid parameters. The performance of Committees was evaluated by the Board seeking inputs from concerned Committee Members. A separate meeting of the Independent Directors was also held to review the performance of Non-independent Directors; performance of the Board as a whole and performance of the Chairman of the Company, taking into account the views of Executive as well as Non-Executive Directors.

PREVENTION OF SEXUAL HARASSMENT CASES

As required under the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rules made thereunder, the Company has constituted an "Internal Complaints Committee" which is responsible for redressal of complaints related to sexual harassment. The necessary disclosure in terms of requirements of Listing Regulations in this regard is given below:

a) Number of complaints filed during the financial year - Nil

b) Number of complaints disposed of during the financial year - Nil

c) Number of complaints pending as on end of financial year - Nil

NUMBER OF MEETINGS OF THE BOARD

During the year under review, four meetings were convened and held. Details of composition of Board and its committees and of the meetings held, attendance of the Directors and other relevant details are provided in the Corporate Governance Report.

The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Listing Regulations and the circulars issued by the MCA and SEBI in this regard.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Board has originally constituted its Remuneration Committee on 31st January, 2002 as part of good corporate governance practice. The current policy is to ensure that appropriate and suitable members are appointed on the Board of the Company and that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors and meets appropriate benchmarks.

The Nomination & Remuneration Committee, at its sole discretion, considers the integrity, qualification, expertise, proficiency and experience of the person for appointment as a Director and then recommends to the Board of his/her appointment.

REMUNERATION CRITERIA

• Executive Director / Managing Director / Whole-time Director: They shall be paid remuneration comprising of several components (including fixed as well as variable) decided and approved by the Board from time to time on recommendation of the Committee. Such remuneration is determined according to industry standards, experience, laws and regulations, prevailing market conditions and the scale of Companys business relating to the position.

• Other Directors: The Company remunerates its Non-Executive Indian Directors by way of Sitting Fees for attending meetings of the Board and/or any Committee thereof as may be decided by the Board from time to time, subject to the maximum amount as may be prescribed by the Central Government in this regard.

The policy is available at ‘Company Policies link on ‘Investors Corner page at Companys website at www.voithpaperfabricsindia.com SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s P.C. Jain & Co., Company Secretaries to undertake the Secretarial Audit of the Company. The report of the Secretarial Audit is annexed as Annexure - IV.

The Secretarial Audit Report does not contain any qualification, observation or other adverse remarks.

FRAUDS REPORTED BY THE AUDITORS

None of the auditors - Statutory, Secretarial or Internal - have reported any incident of fraud to the Audit Committee/Board of Directors, in their respective report, for the periods reviewed by them.

SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards, as amended from time-to-time.

SUBSIDIARY COMPANIES, JOINT VENTURE OR ASSOCIATE COMPANIES

The Company neither has any subsidiary, joint venture or associate company; nor has any Company become or ceased to be its subsidiary, joint venture or associate company, during the year.

ANNUAL RETURN

As required under the provisions of Section 92(3) read with section 134(3)(a) of the Companies Act, 2013, a copy of the relevant Annual Return would be made available at ‘Investor Relations link on the ‘Investors Corner page of Companys website at www.voithpaperfabricsindia.com

MAINTENANCE OF COST RECORDS

Maintenance of cost records as specified under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.

PROCEEDINGS PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31of 2016) during the year along with their status as at the end of the financial year is not applicable.

VALUATION DONE WHILE TAKING LOAN FROM BANKS OR FINANCIAL INSTITUTIONS

The requirement to disclose the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

APPRECIATIONS

The Board of Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment, in particular during the year. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain an industry leader.

The Board conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support. The Board would like to reiterate its commitment to continue to build the organization into a truly world-class enterprise in all aspects.

For and on behalf of the Board of Directors

Ravinder Nath (DIN: 00062186)

R. Krishna Kumar (DIN: 05344619)

Director

Managing Director

Date : 12th May, 2023

Place : Faridabad