Voith Paper Fabrics India Ltd Directors Report

Dear Members,

Your Directors are pleased to present before you, the Fifty-fourth Annual Report along with the Audited Financial Statements of the Company for the Financial Year ended on 31^st March, 2024.

FINANCIALHIGHLIGHTS

The Companys financial performance, for the year ended March 31, 2024 is summarized below:

(INR in millions)

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 Board of Directors makes recommendation of dividend keeping future growth objectives of the Company are met through internal accruals and ultimately leading to capital appreciation for investors over long term.

Based on your Companys performance, the Board of Directors of your Company has recommended, payment of dividend @ 80%, i.e., of Rs.8/- per equity share of Rs.10/- each fully paid-up, for the year ended 31^st March, 2024, aggregating to Rs.35.14 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. R. Krishna Kumar shall be retiring by rotation at the forthcoming Annual General Meeting (AGM) and being eligible, offers himself for reappointment.

Further, as per SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2023, sub-regulation 1D has been introduced under regulation 17 of the cited regulations, which provides that "with effect from 1^st April, 2024, the continuation of a director serving on the Board of a listed entity shall be subject to the approval by the shareholders in a general meeting at least once in every 5 years from the date of their appointment or re-appointment, as the case may be". Mr. Benno Edmund Morlock, was nominated by the Holding Company as a Non-Executive Director, designated as Chairman of the Board of Directors, effective from 10^th November, 2018, not liable to retire by rotation. Accordingly, his continuation on the Board would be subject to approval from members at the forthcoming Annual General Meeting.

Mr. Benno Edmund Morlock is a German National and studied Strategic Marketing, Industrial Management and Psychology at the University of Mannheim. In the past he has worked with several reputed Companies such as Kodak and Heidelberger Printing Systems, at senior positions. He has been associated with Voith Group since 2007 and has worked as CEO for Industry and Mining divisions. Since 2018, he is serving as the President, Business Line Fabrics and Roll Systems, a part of Voith Paper Group Division. During his association with the Company Mr. Morlock 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 beneficialfor the Company.

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:

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 2023/24.

CAPACITY ENHANCEMENT

Considering the opportunities likely to be created in future, Company is constantly on the look-out to bring about improvements in the process of its operations for improvement in the productivity and quality of its products. For this purpose, necessary capital investments are being made by the Company, that may not always result in significant capacity enhancement.

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

There were 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, forming 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 Transactions to ensure transparency in transactions between the Company and the related parties. The said Policy is available at link of ‘Company Policies on ‘Investors 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 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 w.r.t. the 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 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 31/03/2024, 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. Accordingly, 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.