REPORT OF THE BOARD OF DIRECTORS Dear Members, Your directors are pleased to present before you, the Forty Sixth Annual Report along with the Audited Financial Statements of the Company for the Financial Year ended on 31st March, 2016. DIVIDEND The dividend payout for the year under review is in accordance with the Company’s policy to build long term shareholder value. It is also linked to long term growth objectives of the Company to be met by internal cash. Accordingly your Directors recommend for your approval a dividend of Rs. 4/- per equity share of Rs. 10/- each fully paid-up for the year ended 31st March, 2016 amounting to Rs. 17.57 million. In addition Rs. 3.65 million shall be payable as Corporate Dividend Tax. The dividend, if approved at the Annual General Meeting, would be paid to the eligible members within the stipulated time. DIRECTORS During the year under review office of Ms. Patricia Annette Sargeant stood vacated on 5th November, 2015, in accordance with the provisions of Section 167 of the Companies Act, 2013. Mr. R Krishna Kumar shall be retiring by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. Further, on recommendation of the Nomination & Remuneration Committee, at the Board Meeting held on 6th February, 2016, Ms. Shahana Basu was appointed as an Additional Director, who holds office up to the date of the ensuing Annual General Meeting and is eligible for appointment as a Director. TRANSFER TO RESERVES For the year under review, company has transferred a sum of Rs. 15.47 million to the reserves. PARTICULARS OF LOANS, GUARANTEE 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. 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 During the year under review, there were no material transactions, as defined under the provisions of listing regulations, between the company and related parties. 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. AUDITORS REPORT The observations of the 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 (Registration No. 101248W/W-100022) were appointed as Statutory Auditors of the Company for a period of five years i.e., from the conclusion of 45th Annual General Meeting up to the conclusion of 50th Annual General meeting subject to ratification by members every year. B. Internal Auditors - During the year under review, M/s Lodha & Co., Chartered Accountants, carried out the internal audit exercise and submitted their report. C. Secretarial Auditors - During the year under review, M/s Satyender Kumar and Associates, Company Secretaries, carried out the Secretarial Audit and submitted their report. DIRECTOR’S RESPONSIBILITY STATEMENT Pursuant to Section 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 effectively; 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 he/she meets the criteria of independence laid down in Section 149(6) of Companies Act, 2013 and Regulation 16 of the Listing Regulations, 2015. 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 – I. 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) Rules, 2014, are given in Annexure – II. REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES 1. Outline of CSR Policy including overview of projects or pragrams undertaken during the year ended 31st March, 2016: Corporate Social Responsibility (CSR) is the integration of business operations & its values in relation to betterment of society. To achieve this integration of interests of all stakeholders, including investors, customers, employees and community, the company aims to put in efforts for protection & sustenance of environment through its policies, operations and actions. During the year under review, company had contributed the requisite sums towards fulfilling its CSR obligations, by providing financial aid to some NGOs involved in the field of promoting education, healthcare and women empowerment, especially to those belonging to socially and economically backward strata of society as well as towards promotion of health & hygiene. The CSR Policy and the report can be accessed at link of ‘Company Policies’ on ‘Investor Corner’ page on the company’s website www.voithpaperfabricsindia.com ANNUAL EVALUATION BY THE BOARD As required under the provisions of Section 134(3)(p) of the Companies Act, 2013 and Listing Regulations, 2015, the Board has carried out an annual evaluation of its own performance, of its Committees and individual directors. The manner in which such performance evaluation was carried out is as under: The performance evaluation framework is in place to seek their response on the evaluation of the entire board and individual directors. The Nomination and Remuneration Committee carries out evaluation of Director’s performance. The performance of the Board and Individual Directors was evaluated by the Board seeking input from all Directors. The performance of committees was evaluated by the Board seeking input from the committee members. The Nomination and Remuneration Committee reviews the performance of the Individual Directors. 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. The criteria of evaluation of Board includes mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board based on the criteria laid down by Nomination and Remuneration Committee which includes attendance, contribution at the meetings and otherwise, independent judgement, safeguarding of minority shareholders interest, adherence to Code of Conduct and business ethics, monitoring of regulatory compliance, risk management and review of internal control system, etc. NUMBER OF MEETINGS OF BOARD During the year under review, six 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 & Listing Agreement/Regulations. POLICY ON DIRECTOR’S 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, consider the integrity, qualification, expertise and experience of the person for appointment as a Director and then recommend 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 Company’s business relating to the position. • Other Directors: The Company will remunerate its non-executive Indian director by way of Sitting Fees for attending meeting of the Board and/or 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 on the website of the company at www.voithpaperfabricsindia.com SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Act and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed M/s Satyender Kumar & Associates, Company Secretaries to undertake secretarial audit of the company. The report of the secretarial audit is annexed as ANNEXURE – III. The secretarial audit report doesn’t contains any qualification, reservation or adverse remarks. However, the observations of the secretarial auditor were noted by the Board and the Company Secretary was advised to ensure due compliances. EXTRACT OF ANNUAL RETURN In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return in the prescribed format is annexed as ANNEXURE-IV to the Board’s Report. APPRECIATIONS Your Directors wish to place on record their appreciation to all the stakeholders for their support and contributions towards achieving the performance of the company. The Board expects to receive their continued support and contributions in future also. For and on behalf of the Board of Directors Biren De (DIN: 00011607) Directors S K Nagpal (DIN: 01171148) Directors Shahana Basu (DIN: 07137715) Directors R. Krishna Kumar (DIN: 05344619) Managing Director Place : New Delhi Date : 7th May, 2016 |