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Notes to Accounts of Voith Paper Fabrics India Ltd.
Mar 31, 2025
(i) Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of
the time value of money is material, provisions are determined by discounting the expected future cash flows at pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the
reporting date, taking into account the risks and uncertainties surrounding the obligation. When some or all of the economic
benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if
it is virtually certain that the reimbursement will be received and the amount of receivable can be measured reliably.
Warranty costs are estimated on the basis of a technical evaluation and past experience. Provision is made for estimated liability
in respect of warranty costs in the year of sale of goods and is included in the Statement of Profit and Loss. The estimates used for
accounting for warranty costs are reviewed periodically and revisions are made, as and when required.
(j) Revenue recognition
Under Ind AS 115, the company recognized revenue when (or as) a performance obligation was satisfied, i.e. when âcontrolâ of the
goods underlying the particular performance obligation were transferred to the customer.
Further, revenue from sale of goods is recognized based on a 5-Step Methodology which is as follows:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligation in contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
Contract liability is recognised when there is billings in excess of revenues.
The specific recognition criteria described below must also be met before revenue is recognized.
I. Sale of products
Revenue from sale of products is recognized at the point in time when control of the goods is transferred to the customer
at the time of shipment to or receipt of goods by the customers at an amount that reflects the consideration to which the
Company expects to be entitled in exchange for those goods or services.
The Company has concluded that it is the principal in its revenue arrangements as it typically controls the goods or services
before transferring them to the customer.
If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which
it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract
inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue
recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved.
The goods and service tax (GST) is not received by the Company on its own account. Rather, it is tax collected on behalf
of the government. Accordingly, it is excluded from revenue. Additionally amount disclosed as revenue are excluding taxes
and net of return rebate, allowance etc.
The payment terms varies from customer to customer as per contract which includes advance payments and credit terms in
upto 30 to 60 days, based on customary business practices.
Trade receivables: A receivable represents the Companyâs right to an amount of consideration that is unconditional (i.e., only
the passage of time is required before payment of the consideration is due).
Contract liabilities: A contract liability is the obligation to transfer goods or services to a customer for which the Company has
received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before
the Company transfers goods or services to the customer, a contract liability is recognized when the payment is made, or
the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Company performs under
the contract.
(k) Retirement and other employee benefits
Short-term employee benefits
All employee benefits falling due within twelve months from the end of the period in which employees render the related services
are classified as short-term employee benefits, which includes benefits like salaries, wages, performance linked reward etc. and
are recognised as expenses in the period in which the employee renders the related service and measured accordingly.
Post-employment benefits
a) Gratuity
The Company has an obligation towards gratuity as per payment of Gratuity Act, 1972, a defined benefit retirement plan
covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in
employment or on termination of employment of an amount based on the respective employeeâs salary and the tenure of the
employment. The liability in respect of gratuity is recognised in the books of accounts based on actuarial valuation by an
independent actuary at each balance sheet date using projected unit credit method. The gratuity liability of the Company is
funded with Life Insurance Corporation of India, which is managed by separate trust set up the Company. Actuarial losses/
gains are recognised in the other comprehensive income and Loss in the year in which they arise.
b) Superannuation
Certain employees of the Company are also participants in the superannuation plan, a defined contribution plan. Contribution
made by the Company to the plan during the year is charged to Statement of Profit and Loss.
c) Provident fund
The Company makes contribution to the recognised provident fund - VPFIL Employees Provident Fund Trust for its employees,
which is a defined benefit plan to the extent that the Company has an obligation to make good the shortfall, if any, between the
return from the investments of the trust and the notified interest rate. The Companyâs obligation in this regard is determined by
an independent actuary and provided for if the circumstances indicate that the Trust may not be able to generate adequate
returns to cover the interest rates notified by the Government. Companyâs contribution to the provident fund is charged to
Statement of Profit and Loss.
d) Other long-term employee benefits
Compensated absences
As per the Companyâs policy, eligible leaves can be accumulated by the employees and carried forward to the future
periods to either be utilised during the service, or encashed. Encashment can be made during service, or early retirement,
on withdrawal of scheme, at resignation and upon death of employee. Accumulated compensated absences are treated as
other long-term employee benefits. The Companyâs liability in respect of other long-term employee benefits is recognised
in the books of accounts based on actuarial valuation using projected unit credit method as at Balance Sheet date by an
independent actuary. Actuarial losses/gains are recognised in the Statement of Profit and Loss in the year in which they arise.
(l) Income tax
Income tax expense comprises current and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that
it relates to a business combination or to an item recognized directly in equity or in comprehensive income.
a) Current tax
Current tax comprises the expected tax payable or receivable on the taxable income for the year and any adjustment to the
tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate
of the tax amount expected to be paid or received after considering uncertainty related to income taxes, if any. It is measured
using tax rates enacted at the reporting date.
Current tax assets and liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it
is intended to realise the asset and settle the liability on a net basis or simultaneously.
b) Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the corresponding amounts used for taxation purposes.
Deferred tax assets are recognised on deductible temporary differences to the extent that it is probable that future taxable
profits will be available against which they can be used. Deferred tax assets - unrecognised or recognised, are reviewed at
each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the
related tax benefit will be realised. Deferred tax is measured at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the
reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which
the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
Entity has recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity
according to where the entity originally recognised those past transactions or events.
(m) Leases
Determining whether a contract contains lease
At inception of a contract, the Company determines whether the contract is, or contains, a lease. The contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset or assets for a period of time in exchange for
consideration, even if that right is not explicitly specified in a contract. At inception or on reassessment of a contract that contains
lease component and one or more additional lease or non-lease components, the Company separates payments and other
consideration required by the contract into those for each lease component on the basis of their relative stand-alone price and
those for non-lease components on the basis of their relative aggregate stand-alone price. If the Company concludes that it is
impracticable to separate the payments reliably, then right-of-use asset and Lease liability are recognised at an amount equal to
the present value of future lease payments; subsequently the liability is reduced as payments are made and an imputed finance
cost on the liability is recognized using the Companyâs incremental borrowing rate.
Company as a lessee
At inception, the Company assesses whether a contract is or contains a lease. This assessment involves the exercise of judgement
about whether it depends on an identified asset, whether the Company obtains substantially all the economic benefits from the use
of that asset, and whether the Company has the right to direct the use of that asset.
The Company has elected to separate lease and non-lease components of contracts, wherever possible.
The Company recognizes a right-of-use (ROU) asset and a lease liability at the transition date/ lease commencement date. The
right-of-use asset is initially measured based on the present value of future lease payments, plus initial direct costs, and cost to
dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, and lease payments
made at or before the commencement date, less any incentives received. The right-of-use asset is depreciated over the shorter
of the lease term or the useful life of the underlying asset. The right of-use asset is subject to testing for impairment if there is an
indicator for impairment.
At the commencement date, Company measures the lease liability at the present value of the future lease payments that are not
yet paid at that date discounted using interest rate implicit in the lease or, if that rate cannot be readily determined, the Companyâs
incremental borrowing rate. Generally, the Companyâs uses its incremental borrowing rate as the discount rate. The lease liability is
measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments
arising from a change in an index or rate, if there is a change in the Companyâs estimate of the amount expected to be payable
under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or
termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Contingent rents payments are recognised as an expense in the period in which they are incurred. Lease payments generally
include fixed payments and variable payments that depend on an index (such as an inflation index). When the lease contains an
extension or purchase option that the Company considers reasonably certain to be exercised, the cost of the option is included in
the lease payments. The Company presents right-of-use assets that do not meet the definition of investment property and lease
liabilities in separately from other assets/ liabilities in the balance sheet.
The Company has elected not to recognize right-of-use assets and liabilities for leases where the total lease term is less than or
equal to 12 months, or for leases of low value assets. The payments for such leases are recognized in the Standalone Statement
of Profit and Loss on a straight-line basis over the lease term.
Company as a lessor
Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an underlying
assets are classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term
of the relevant lease unless the payments are structured to increase in line with the general inflation to compensate for the lessorâs
expected inflationary cost increase. Initial direct costs incurred in negotiating and arranging an operating lease are added to the
carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are
recognised as revenue in the period in which they are earned. Leases are classified as finance leases when substantially all of the
risks and rewards incidental to ownership of underlying asset is transferred from the Company to the lessee. Amounts due from
lessees under finance leases are recorded as receivables at the Companyâs net investment in the leases. Finance lease income
is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect
of the lease.
(n) Segment reporting
The Company is mainly in the business of manufacturing and trading of paper machine clothing for pulp, paper and board
industry. The Managing Director of the Company is identified as chief operating decision maker (CODM). The company has a
single reportable segment which is reviewed by Chief Operating Decision Maker (CODM).
(o) Foreign currency translation
(i) Functional and presentation currency
The functional currency of the Company is the Indian Rupee. These financial statements are presented in Indian rupees.
(ii) Transactions and balances
Monetary assets and liabilities denominated in foreign currencies are translated into functional currency at the exchange rate
at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated
into functional currency at the exchange rate when fair value was determined. Non-monetary assets and liabilities that are
measured based on a historical cost in a foreign currency are translated at the exchange rate at the date of the transaction.
Exchange differences are recognised in profit and loss, except exchange differences arising from the translation of the
following items which are recognised in OCI.
- equity investment at fair value through OCI (FVOCI)
- a financial liability designated as a hedge of the net investment in a foreign operation to the extent that hedge is
effective; and
- qualifying cash flow hedges to the extent that the hedges are effective.
(p) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the Company by the weighted
average number of equity shares outstanding during the financial year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figure used in the determination of basic earnings per share to take into account:
- the after-income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of
all dilutive potential equity shares.
(q) Critical estimates and judgements
The preparation of Financial Statements requires management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in
the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of
estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect of the amounts
recognised in the financial statements is included in the following notes:-
(a) Defined benefit plans (refer note. 2 (l) and 35)
The costs of post-retirement benefit obligation are determined using actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from actual developments in the future. These include the determination of the
discount rate; future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term
nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at
each reporting date.
(b) Useful lives of property, plant and equipment and Intangible asset (refer note 2(c) and 3(a))
The Company reviews the estimated useful lives of property, plant and equipment at the end of each reporting period. At the
end of the current reporting period, the management determined that the useful lives of property, plant and equipment at
which they are currently being depreciated represent the correct estimate of the lives and need no change.
(c) Assessment of litigations
The Company is contesting litigations at various forums. These litigations are assessed by the Company to evaluate the
likelihood for which provision is required in the books or disclosure as contingent liability in the financial statements.
(r) Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence
or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not
recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability
also arises in extremely rare cases where there is a liability that cannot be recognized since it cannot be measured reliably. The
Company does not recognize a contingent liability but discloses its existence in financial statements.
(s) Cash flow statement
Cash flows are reported using the indirect method, whereby profit for the year is adjusted for the effects of transactions of a non¬
cash nature, changes in working capital and item of income or expenses associated with investing or financing cash flows. The
cash flows from operating, investing and financing activities of the Company are segregated. The Company considers all highly
liquid investments that are readily convertible to known amounts of cash to be cash equivalents.
(t) Investment property
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the
ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Upon initial
recognition, an investment property is measured at cost. Subsequent to initial recognition, investment property is measured at cost
less accumulated depreciation and accumulated impairment losses, if any.
Based on technical evaluation, the management believes a period of 30 years as representing the best estimate of the period over
which buildings are expected to be used. Accordingly, the Company depreciates investment property over a period of 30 years
on a straight-line basis. The useful life estimate of 30 years is different from the indicative useful life of relevant type of buildings
mentioned in Part C of Schedule II to the Act. Freehold land given as investment property is not depreciated.
u) Recent accounting pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. On March 31, 2025, MCA has not notified any new standards or
amendments to the existing standards applicable to the Company.
During the year ended 31 March 2025, the Company completed the construction of a building for own use amounting to Rs.118.04 million.
Since the company has no immediate use of this building, the company now intends to receive rental income from this construction by
entering into a facility sharing lease agreement with one of itâs associate enterprises for an initial period of 5 years. In view of above, the
company has considered the entire amount as investment property. The Company has also considered a portion of its building which is a
part of an existing lease agreement as investment property since going forward it will be a part of the new lease arrangement mentioned
above. Accordingly, the company has also reclassified an amount of Rs.13.54 million from Property, Plant and Equipment to Investment
Property as at year end.
The building is now held to earn rentals and has been leased to an associated enterprise under a lease agreement with an initial term of five
years effective April 1, 2025.
The investment property has been initially recognized in current year at cost which includes the cost of construction and any directly
attributable expenditure incurred to bring the asset to its intended use not on the fair value.
The fair value of the property has not been disclosed because it is not reliably measurable due to absence of active and frequent market
transactions for properties of a similar nature in the similar area as well as the location of the lease property. Consequently, there is insufficient
information to determine market evidence for a fair value.
Further the Company has no restriction on the realisability of its investment property and no contractual obligation to purchase, construct or
develop investment properties or for repairs, maintenance and enhancements.
(a) Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying
amount due to the short term maturities of these instruments.
(b) The fair value is determined by using the valuation model/technique with observable/ non-observable inputs and assumptions.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds) is determined
using valuation techniques which maximize the use of observable market data and rely possibly on entity-specific
estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
There are no transfers between level 1 and level 2 during the years.
37. Financial risk management
(A) Financial risk management
Risk management framework
The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management
framework.
The Company, through three layers of defence namely policies and procedures, review mechanism and assurance, aims to
maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The
audit committee of the board with top management oversees the formulation and implementation of the Risk Management Policies.
The risks and mitigation plan are identified, deliberated and reviewed at appropriate forums.
The Company has exposure to the following risks arising from financial instruments:
- credit risk (see (i))
- liquidity risk (see (ii))
- market risk (see (iii))
- interest rate risk (see (iv))
- price risk (see (v))
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its
contractual obligations, and arises principally from the Companyâs receivables from customers.
The carrying amount of financial assets represents the maximum credit risk exposure.
Trade receivable and other financial assets
The Company has established a credit policy under which each new customer is analysed individually for creditworthiness
before the payment and delivery terms and conditions are offered. The Companyâs review includes external ratings, if they
are available, financial statements and industry information etc.
In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they
are an individual or a legal entity, their geographic location, industry, trade history with the Company and existence of
previous financial difficulties. The Company creates specific provision, if required, for credit impaired customers.
Expected credit loss for trade receivable:
The Company based on internal assessment which is driven by the historical experience / current facts available in relation to
defaults and delays in collection thereof, the credit risk for trade receivable is considered low except for impaired customers. The
Company estimates its allowance for trade receivable using lifetime expected credit loss. The balance (net of expected credit
loss allowance), excluding receivable from group companies is Rs. 277.35 million (31 March 2024 : Rs. 208.47 million).
Expected credit loss on financial assets other than trade receivable:
With regards to all financial assets with contractual cash flows other than trade receivable, management believes these to
be high quality assets with negligible credit risk. The management believes that the parties from whom these financial assets
are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no
provision for expected credit loss has been provided on such financial assets. Break up of financial assets other than trade
receivables have been disclosed on balance sheet.
ii. Liquidity risk
Liquidity risk is the risk that Company will encounter difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as
far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
The Companyâs finance department is responsible for managing the short term and long term liquidity requirements. Short
term liquidity situation is reviewed regularly by finance. Long term liquidity position is reviewed on a regular basis by the
Board of Directors and appropriate decisions are taken according to the situation.
The company has sanctioned borrowing facilities, comprising, non-fund based limits from various bankers on unsecured
basis.
Exposure to the liquidity risk
The following are remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and
undiscounted.
Market risk is the risk that changes in market prices - such as foreign exchange rates - will affect the Companyâs income or
the value of its holding of financial instruments. The objective of market risk management is to manage and control market
risk exposure within acceptable parameters, while optimising the return. The value of a financial instrument may change as
a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market
changes.
Currency risk
The Company is exposed to currency risk to the extent that there is a mismatch between currencies in which sales and
purchases are denominated and the functional currency of the Company. The currencies which the Company is exposed to
risk are EUR, USD, SEK, CNY, MYR, CAD, JPY and CHF.
The Company follows a policy to hedge its forex exosure by taking regular forward contracts to the extent possible. Any
residual risk is evaluated, including but not limited to, entering into forward contract.
Gross exposure to currency risk
The summary quantitative data about the Companyâs exposure to currency risk are reported to management of the company
as follows:
(D) Key terms and conditions of related party transactions:
Transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances
at year end are unsecured and interest free and settlement occurs in cash. This assessment is undertaken each financial year through
examining the financial assumptions and the market in which the related parties operates.
40 A. Contingent liabilities to the extent not provided for:
(a) Labour case:
(i) Fifteen ex-contractual employees filed a case before the Industrial Tribunal-cum-Labour Court II, Haryana, seeking reinstatement
with continuity of service, back wages, and related benefits. The Labour Court ruled in their favor, and the Company challenged
the decision through a writ petition before the Honâble Punjab & Haryana High Court. Subsequently, eight of these employees
initiated execution proceedings. Although the Honâble High Court granted a stay in a related matter, the Civil Court, Faridabad,
ruled that the stay did not apply to the execution of the Labour Court award.
The Civil Court proceedings are ongoing, with objections raised by both parties on the Commissionerâs report regarding back
wages. Meanwhile, the Companyâs writ petition was dismissed in August 2020, and Letter Patent Appeal is currently pending before
the Double Bench of the Honâble High Court. In compliance with Section 17-B of the Industrial Disputes Act, 1947, the Company
has disbursed Rs. 0.78 million to the workers. Based on view provided by legal counsel and internal management analysis, the
Company believes that a favorable outcome is probable. However, the financial impact, if any, is currently unascertainable and
will depend on future developments.
(ii) The Company is also involved in other labour-related cases where the liability is not presently quantifiable at various forums.
Based on view provided by legal counsel and internal management analysis, the Company believes that a favorable outcome is
probable. However, the financial impact, if any, is currently unascertainable and will depend on future developments.
(b) Provident Fund:
In February 2019, Supreme Court of India in its judgement clarified the applicability of allowances that should be considered to measure
obligations under Employees Provident Fund Act, 1952. The Company has been legally advised that there are interpretative challenges
on the application of judgement retrospectively and as such does not consider there is any probable obligations for past periods.
Accordingly, based on legal advice the Company has made a provision for provident fund contribution from the date of Supreme Court
order.
40 B.Other Matters:
(a) Haryana Tax on Entry of Goods into Local Area Act, 2008
During the year, the Company received notices of assessment under the Haryana Tax on Entry of Goods into Local Area Act, 2008 ("Haryana
Entry Tax Act") for the financial years 2015-16, 2016-17, and 2017-18, demanding entry tax amounting to Rs. 8.73 million. The Company
has challenged the validity of these notices on the grounds of lack of jurisdiction. Additionally, the Company has relied on the provisions
of Section 8(1) of the Haryana Entry Tax Act, which allows for the exclusion of the value of goods delivered outside the local area without
use or consumption, and the value of goods on which sales tax has been paid or is payable to the State, from the calculation of turnover.
Based on a legal assessment and the facts of the case, the Company believes that the likelihood of any cash outflow in respect of this
matter is remote.
(b) Income Tax Act, 1961
The Company received a transfer pricing order for A.Y. 2021-2022 in the current year. The Income tax authorities made an adjustment of
INR 50.91 million to the taxable income concerning the Commission sales and trading segment and raised a demand of Rs. 19.81 million.
The Company filed an appeal with the Income Tax Appellate Tribunal, Delhi and currently awaiting the final order. As of 31 March 2025,
the management, in consultation with its tax expert, has reassessed the exposure and strongly believes that the likelihood of liability
devolving upon the Company in this matter is remote.
48. Other statutory information :
(i) The Company do not have any transactions with companies struck off.
(ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(iii) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any
other relevant provisions of the Income Tax Act, 1961).
(iv) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for
holding any Benami property.
(v) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(vi) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall :
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vii) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(viii) The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during
the current or previous year.
(ix) The company has no borrowings from banks and financial institutions on the basis of security of current assets.
(x) The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(xi) The company has complied with the number of layers prescribed under the Companies Act, 2013.
(xii) The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial
year.
(xiii) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India and the
Group (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016) does not have any CIC.
(xiv) The Company has not granted any loans to the promoters, directors, Key Managerial Personâs and the related parties (as defined
under Companies Act, 2013), either severally or jointly with any other person which are repayable on demand or without specifying
any terms or period of repayments.
For B S R & Co. LLP For and on behalf of the Board of Directors of
ICAI Firm Registration Number: 101248W/W-100022 Voith Paper Fabrics India Limited
Chartered Accountants
Ankush Goel Martin Bassmann R. Krishna Kumar
Partner Chairman Managing Director
Membership No. 505121 DIN : 10766607 DIN : 05344619
Deepti Gupta Kalyan Dasgupta
Director Finance Controller
DIN : 08481203 CMA No. : 25152
Pallavi D. Gupta C.S. Gugliani
Director Company Secretary
DIN : 06566637 FCS No. : 4301
Ram Sewak Sharma
Director
DIN : 02166194
Place : New Delhi Place : New Delhi
Dated : 22 May 2025 Dated : 22 May 2025
Mar 31, 2024
(i) Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that the reimbursement will be received and the amount of receivable can be measured reliably.
Warranty costs are estimated on the basis of a technical evaluation and past experience. Provision is made for estimated liability in respect of warranty costs in the year of sale of goods and is included in the Statement of Profit and Loss. The estimates used for accounting for warranty costs are reviewed periodically and revisions are made, as and when required.
(j) Revenue recognition
Under Ind AS 115, the company recognized revenue when (or as) a performance obligation was satisfied, i.e. when âcontrolâ of the goods underlying the particular performance obligation were transferred to the customer.
Further, revenue from sale of goods is recognized based on a 5-Step Methodology which is as follows:
Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligation in contract Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation Contract liability is recognised when there is billings in excess of revenues.
The specific recognition criteria described below must also be met before revenue is recognized.
I. Sale of products
Revenue from sale of products is recognized at the point in time when control of the goods is transferred to the customer at the time of shipment to or receipt of goods by the customers at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
The Company has concluded that it is the principal in its revenue arrangements as it typically controls the goods or services before transferring them to the customer.
If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved.
The goods and service tax (GST) is not received by the Company on its own account. Rather, it is tax collected on behalf of the government. Accordingly, it is excluded from revenue. Additionally amount disclosed as revenue are excluding taxes and net of return rebate, allowance etc.
The payment terms varies from customer to customer as per contract which includes advance payments and credit terms in upto 30 to 40 days, based on customary business practices.
Trade receivables: A receivable represents the Companyâs right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
Contract liabilities: A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognized when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Company performs under the contract.
(k) Retirement and other employee benefits Short-term employee benefits
All employee benefits falling due within twelve months from the end of the period in which employees render the related services are classified as short-term employee benefits, which includes benefits like salaries, wages, performance linked reward etc. and are recognised as expenses in the period in which the employee renders the related service and measured accordingly.
Post-employment benefits
a) Gratuity
The Company has an obligation towards gratuity as per payment of Gratuity Act, 1972, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount based on the respective employeeâs salary and the tenure of the employment. The liability in respect of gratuity is recognised in the books of accounts based on actuarial valuation by an independent actuary at each balance sheet date using projected unit credit method. The gratuity liability of the Company is funded with Life Insurance Corporation of India, which is managed by separate trust set up the Company. Actuarial losses/ gains are recognised in the other comprehensive income and Loss in the year in which they arise.
b) Superannuation
Certain employees of the Company are also participants in the superannuation plan, a defined contribution plan. Contribution made by the Company to the plan during the year is charged to Statement of Profit and Loss.
c) Provident fund
The Company makes contribution to the recognised provident fund - VPFIL Employees Provident Fund Trust for its employees, which is a defined benefit plan to the extent that the Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate. The Companyâs obligation in this regard is determined by an independent actuary and provided for if the circumstances indicate that the Trust may not be able to generate adequate returns to cover the interest rates notified by the Government. Companyâs contribution to the provident fund is charged to Statement of Profit and Loss.
d) Other long-term employee benefits Compensated absences
As per the Companyâs policy, eligible leaves can be accumulated by the employees and carried forward to the future periods to either be utilised during the service, or encashed. Encashment can be made during service, or early retirement, on withdrawal of scheme, at resignation and upon death of employee. Accumulated compensated absences are treated as other long-term employee benefits. The Companyâs liability in respect of other long-term employee benefits is recognised in the books of accounts based on actuarial valuation using projected unit credit method as at Balance Sheet date by an independent actuary. Actuarial losses/gains are recognised in the Statement of Profit and Loss in the year in which they arise.
(l) Income tax
Income tax expense comprises current and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that it relates to a business combination or to an item recognized directly in equity or in comprehensive income.
i) Current tax
Current tax comprises the expected tax payable or receivable on the taxable income for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received after considering uncertainty related to income taxes, if any. It is measured using tax rates enacted at the reporting date.
Current tax assets and liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.
ii) Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.
Deferred tax assets are recognised on deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets - unrecognised or recognised, are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised. Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
Entity has recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events.
(m) Leases
Determining whether a contract contains lease
At inception of a contract, the Company determines whether the contract is, or contains, a lease. The contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset or assets for a period of time in exchange for consideration, even if that right is not explicitly specified in a contract. At inception or on reassessment of a contract that contains lease component and one or more additional lease or non-lease components, the Company separates payments and other consideration required by the contract into those for each lease component on the basis of their relative stand-alone price and those for non-lease components on the basis of their relative aggregate stand-alone price. If the Company concludes that it is impracticable to separate the payments reliably, then right-of- use asset and Lease liability are recognised at an amount equal to the present value of future lease payments; subsequently the liability is reduced as payments are made and an imputed finance cost on the liability is recognized using the Companyâs incremental borrowing rate.
Company as a lessee
At inception, the Company assesses whether a contract is or contains a lease. This assessment involves the exercise of judgement about whether it depends on an identified asset, whether the Company obtains substantially all the economic benefits from the use of that asset, and whether the Company has the right to direct the use of that asset.
The Company has elected to separate lease and non-lease components of contracts, wherever possible.
The Company recognizes a right-of-use (ROU) asset and a lease liability at the transition date/ lease commencement date. The right-of- use asset is initially measured based on the present value of future lease payments, plus initial direct costs, and cost to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, and lease payments made at or before the commencement date, less any incentives received. The right-of-use asset is depreciated over the shorter of the lease term or the useful life of the underlying asset. The right of-use asset is subject to testing for impairment if there is an indicator for impairment.
At the commencement date, Company measures the lease liability at the present value of the future lease payments that are not yet paid at that date discounted using interest rate implicit in the lease or, if that rate cannot be readily determined, the Companyâs incremental borrowing rate. Generally, the Companyâs uses its incremental borrowing rate as the discount rate. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Companyâs estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. Contingent rents payments are recognised as an expense in the period in which they are incurred. Lease payments generally include fixed payments and variable payments that depend on an index (such as an inflation index). When the lease contains an extension or purchase option that the Company considers reasonably certain to be exercised, the cost of the option is included in the lease payments. The Company presents right-of-use assets that do not meet the definition of investment property and lease liabilities in separately from other assets/ liabilities in the balance sheet.
The Company has elected not to recognize right of- use assets and liabilities for leases where the total lease term is less than or equal to 12 months, or for leases of low value assets. The payments for such leases are recognized in the Standalone Statement of Profit and Loss on a straight-line basis over the lease term.
Company as a lessor
Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an underlying assets are classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease unless the payments are structured to increase in line with the general inflation to compensate for the lessorâs expected inflationary cost increase. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned. Leases are classified as finance leases when substantially all of the risks and rewards incidental to ownership of underlying asset is transferred from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Companyâs net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
(n) Segment reporting
The Company is mainly in the business of manufacturing and trading of paper machine clothing for pulp, paper and board industry. The Managing Director of the Company is identified as chief operating decision maker (CODM). The company has a single reportable segment which is reviewed by Chief Operating Decision Maker (CODM).
(o) Foreign currency translation
(i) Functional and presentation currency
The functional currency of the Company is the Indian Rupee. These financial statements are presented in Indian rupees.
(ii) Transactions and balances
Monetary assets and liabilities denominated in foreign currencies are translated into functional currency at the exchange rate at the reporting date. Non monetary assets and liabilities that are measured at fair value in a foreign currency are translated into functional currency at the exchange rate when fair value was determined. Non- monetary assets and liabilities that are measured based on a historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences are recognised in profit and loss, except exchange differences arising from the translation of the following items which are recognised in OCI.
- equity investment at fair value through OCI (FVOCI)
- a financial liability designated as a hedge of the net investment in a foreign operation to the extent that hedge is effective; and
- qualifying cash flow hedges to the extent that the hedges are effective.
(p) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the Company by the weighted average number of equity shares outstanding during the financial year
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figure used in the determination of basic earnings per share to take into account:
the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
(q) Critical estimates and judgements
The preparation of Financial Statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect of the amounts recognised in the financial statements is included in the following notes:-
(a) Recoverability of deferred taxes (note 2(m) or 17)
In assessing the recoverability of deferred tax assets, management considers whether it is probable that taxable profit will be available against which the losses can be utilized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible.
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
(b) Defined benefit plans (note 2(1) and 35)
The costs of post-retirement benefit obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate; future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
(c) Useful lives of property, plant and equipment and Intangible asset (refer note 2(c) and 3a)
The Company reviews the estimated useful lives of property, plant and equipment at the end of each reporting period. At the end of the current reporting period, the management determined that the useful lives of property, plant and equipment at which they are currently being depreciated represent the correct estimate of the lives and need no change.
(d) Assessment of litigations
The Company is contesting litigations at various forums. These litigations are assessed by the Company to evaluate the likelihood for which provision is required in the books or disclosure as contingent liability in the financial statements.
(r) Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non- occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized since it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in financial statements.
(s) Cash flow statement
Cash flows are reported using the indirect method, whereby profit for the year is adjusted for the effects of transactions of a noncash nature, changes in working capital and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated. The Company considers all highly liquid investments that are readily convertible to known amounts of cash to be cash equivalents.
(t) Recent accounting pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
37. Financial risk management
(A) Financial risk management Risk management framework
The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework.
The Company, through three layers of defence namely policies and procedures, review mechanism and assurance, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The audit committee of the board with top management oversees the formulation and implementation of the Risk Management Policies. The risks and mitigation plan are identified, deliberated and reviewed at appropriate forums.
The Company has exposure to the following risks arising from financial instruments:
- credit risk (see (i))
- liquidity risk (see (ii))
- market risk (see (iii))
- interest rate risk (see (iv))
- price risk (see (v))
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers.
The carrying amount of financial assets represents the maximum credit risk exposure.
Trade receivable and other financial assets
The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the payment and delivery terms and conditions are offered. The Companyâs review includes external ratings, if they are available, financial statements and industry information etc.
In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry, trade history with the Company and existence of previous financial difficulties. The Company creates specific provision, if required, for credit impaired customers.
Expected credit loss for trade receivable:
The Company based on internal assessment which is driven by the historical experience / current facts available in relation to defaults and delays in collection thereof, the credit risk for trade receivable is considered low except for impaired customers. The Company estimates its allowance for trade receivable using lifetime expected credit loss. The balance (net of expected credit loss allowance), excluding receivable from group companies is Rs. 208.47 million (31 March 2023 : Rs. 219.24 million).
Expected credit loss on financial assets other than trade receivable:
With regards to all financial assets with contractual cash flows other than trade receivable, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from whom these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for expected credit loss has been provided on such financial assets. Break up of financial assets other than trade receivables have been disclosed on balance sheet.
ii. Liquidity risk
Liquidity risk is the risk that Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
The Companyâs finance department is responsible for managing the short term and long term liquidity requirements. Short term liquidity situation is reviewed daily by finance. Long term liquidity position is reviewed on a regular basis by the Board of Directors and appropriate decisions are taken according to the situation.
The Company has sanctioned borrowing facilities, comprising non-fund based limits from various bankers on unsecured basis.
Market risk is the risk that changes in market prices - such as foreign exchange rates - will affect the Companyâs income or the value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposure within acceptable parameters, while optimising the return. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes.
Currency risk
The Company is exposed to currency risk to the extent that there is a mismatch between currencies in which sales and purchases are denominated and the functional currency of the Company. The currencies which the Company is exposed to risk are EUR, USD, SEK, CNY, MYR, CAD, JPY,CHF and NOK.
The Company follows a natural hedge driven currency risk mitigation policy to the extent possible. Any residual risk is evaluated and appropriate risk mitigating steps are taken, including but not limited to, entering into forward contract.
Gross exposure to currency risk
The summary quantitative data about the Companyâs exposure to currency risk are reported to management of the company as follows:
40. Contingent liabilities to the extent not provided for:
Labour case:
15 ex-contractual employees had filed a case against the Company under Industrial Tribunal cum Labour Court II, Haryana. The dispute pertains to reinstatement of these employees with continuity of service, full back wages and all consequential benefits since the date of termination. The labour court had decided the case in favour of the ex-contractual employees. The Company had filed a writ petition in High Court (Punjab & Haryana) based on a legal opinion sought in the matter. 8 ex- contractual employees out of the above filed an appeal for the execution of the labour court award order decided earlier. The Honâable High Court (Punjab & Haryana) passed a stay order in notice of the Civil Court, Faridabad but the application against implementation of Labour Court Award was dismissed for stay on the ground that the stay order by the High Court pertains to criminal prosecution and not the civil execution of the Award. 8 ex- contractual employees have been directed by the Civil Court, Faridabad to file fresh applications as per the prescribed format after objections raised by Companyâs legal counsel. The Companyâs legal counsel has again filed objections against the revised applications submitted by 8 ex- contractual employees and now the same is pending for arguments. The Civil Judge, Jr. Division has appointed Commissioner to calculate back wages of 8 ex- contractual employees and Commissioner has submitted report to the Civil Judge to which both the parties have filed their objections, which is now pending for final order. Further, the Companyâs civil writ petition before the High Court was dismissed in August, 2020. The company has filed Letter Patent Appeal against the dismissal before the Double bench of the High Court on 8 September 2020 and 25 October 2020. Based on the order of the Honâable High Court, the Company has issued cheques to workers under section 17-B of Industrial Disputes Act, 1947 amounting to Rs. 0.40 million. Based on the opinion from legal consultants, the Company is of the view that the likelihood of potential favorable judgement in the Companyâs favour is probable. Further, the financial implications canât be quantified in this case and will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
48. Other statutory information :
(i) The Company do not have any transactions with companies struck off.
(ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(iii) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
(iv) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(v) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(vi) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall :
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vii) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(viii) The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
(ix) The company has no borrowings from banks and financial institutions on the basis of security of current assets.
(x) The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority
(xi) The company has complied with the number of layers prescribed under the Companies Act, 2013
(xii) The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
(xiii) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India and the Group (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016) does not have any CIC.
For B S R & Co. LLP For and on behalf of the Board of Directors of
ICAI Firm Registration Number: 101248W/W-100022 Voith Paper Fabrics India Limited
Chartered Accountants
Ankush Goel S.K.Nagpal R. Krishna Kumar
Partner Director Managing Director
Membership No. 505121 DIN : 01171148 DIN : 05344619
Deepti Gupta Kalyan Dasgupta
Director Finance Controller
DIN : 08481203 CMA No. : 25152
Pallavi D. Gupta C.S. Gugliani
Director Company Secretary
DIN : 06566637 FCS No. : 4301
Place : New Delhi Place : New Delhi
Dated : 28 May 2024 Dated : 28 May 2024
Mar 31, 2023
Rights, preferences and restrictions attached to equity shares
The company has only one class of shares referred to as equity shares having par value of INR 10 each. Holder of each equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
(i) Gratuity
In accordance with Ind AS 19 "Employee Benefits", an actuarial valuation has been carried out in respect of gratuity. The discount rate assumed is 7.20% p.a. (31 March 2022 : 7.25% p.a.) which is determined by reference to market yield at the balance sheet date on government bonds. The retirement age has been considered at 58 years (31 March 2022 : 58 years).
The estimates of future salary increases, considered in actuarial valuation is 10% p.a. (31 March 2022 : 10%), taking into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The plan assets are maintained with Life Insurance Corporation of India in respect of gratuity scheme. The details of investments maintained by Life Insurance Corporation are not available with the Company, hence not disclosed. The expected rate of return based on LIC statement on plan assets is 7.20% p.a. (31 March 2022 : 7.25% p.a.).
The sensitivity analysis above has been determined based on reasonably possible changes of the respective assumptions occurring at the end of the year and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant.
(iii) Providend Fund:
The Company makes monthly contributions to provident fund managed by trust for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. As per Ind AS 19 on "Employee Benefits", employer established provident fund trusts are treated as defined benefit plans, since the Company is obliged to meet interest shortfall, if any, with respect to covered employees. The total liability of Rs. 3.31 Millions (31 March 2022 : Rs. Nil) has been charge to Statement of Profit and Loss during the year.
(d) The Code on Social Security, 2020 (âCodeâ) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
(a) Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturities of these instruments.
(b) The fair value is determined by using the valuation model/technique with observable/ non-observable inputs and assumptions. Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. There are no transfers between level 1 and level 2 during the years.
34. Financial risk management(A) Financial risk management Risk management framework
The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework.
The Company, through three layers of defence namely policies and procedures, review mechanism and assurance, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The audit committee of the board with top management oversees the formulation and implementation of the Risk Management Policies. The risks and mitigation plan are identified, deliberated and reviewed at appropriate forums.
The Company has exposure to the following risks arising from financial instruments:
- credit risk (see (i))
- liquidity risk (see (ii))
- market risk (see (iii))
- interest rate risk (see (iv))
- price risk (see (v))
i. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers.
The carrying amount of financial assets represents the maximum credit risk exposure.
Trade receivable and other financial assets
The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the payment and delivery terms and conditions are offered. The Companyâs review includes external ratings, if they are available, financial statements and industry information etc.
In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry, trade history with the Company and existence of previous financial difficulties. The Company creates specific provision, if required, for credit impaired customers.
Expected credit loss for trade receivable:
The Company based on internal assessment which is driven by the historical experience / current facts available in relation to defaults and delays in collection thereof, the credit risk for trade receivable is considered low. The Company estimates its allowance for trade receivable using lifetime expected credit loss. The balance (net of expected credit loss allowance), excluding receivable from group companies is Rs. 219.24 million (31 March 2022 : Rs. 195.63 million).
The Company has also created specific provision of Rs. 5.11 Millions (31 March 2022: Rs. 3.93 Millions) in respect of trade receivables where risk of inability to collect is high.
Expected credit loss on financial assets other than trade receivable:
With regards to all financial assets with contractual cash flows other than trade receivable, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from whom these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for expected credit loss has been provided on such financial assets. Break up of financial assets other than trade receivables have been disclosed on balance sheet.
Liquidity risk is the risk that Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
The Companyâs finance department is responsible for managing the short term and long term liquidity requirements. Short term liquidity situation is reviewed daily by finance. Long term liquidity position is reviewed on a regular basis by the Board of Directors and appropriate decisions are taken according to the situation.
The Company has sanctioned borrowing facilities, comprising non-fund based limits from various bankers on unsecured basis.
Exposure to the liquidity risk
The following are remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted.
Market risk is the risk that changes in market prices - such as foreign exchange rates - will affect the Companyâs income or the value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposure within acceptable parameters, while optimising the return. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes.
The Company is exposed to currency risk to the extent that there is a mismatch between currencies in which sales and purchases are denominated and the functional currency of the Company. The currencies which the Company is exposed to risk are EUR, USD, GBP, SEK, CNY, MYR, CAD, JPY,CHF and NOK.
The Company follows a natural hedge driven currency risk mitigation policy to the extent possible. Any residual risk is evaluated and appropriate risk mitigating steps are taken, including but not limited to, entering into forward contract."
Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
Fair value sensitivity on bank deposits has not been disclosed as interest rate on such deposits is equivalent to market rate. v. Price risk
Commodity price risks fluctuation in commodity price in market affects directly or indirectly the price of raw material and components used by the Company. The Company sells its products mainly to paper industries, whereby there is a regular negotiation /adjustment of prices on the basis of changes in commodity prices.
The Companyâs objectives when managing capital is to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital.
37. Contingent liabilities to the extent not provided for:Labour case:
15 ex-contractual employees had filed a case against the Company under Industrial Tribunal cum Labour Court II, Haryana. The dispute pertains to reinstatement of these employees with continuity of service, full back wages and all consequential benefits since the date of termination. The labour court had decided the case in favour of the ex-contractual employees. The Company had filed a writ petition in High Court (Punjab & Haryana) based on a legal opinion sought in the matter. 8 ex- contractual employees out of the above filed an appeal for the execution of the labour court award order decided earlier. The Company brought the High Court (Punjab & Haryana) stay order in notice of the Civil Court, Faridabad but the application against implementation of Labour Court Award was dismissed for stay on the ground that the stay order by the High Court pertains to criminal prosecution and not the civil execution of the Award. 8 ex- contractual employees have been directed by the Civil Court, Faridabad to file fresh applications as per the prescribed format after objections raised by Companyâs legal counsel. The Companyâs legal counsel has again filed objections against the revised applications submitted by 8 ex- contractual employees and now the same is pending for arguments. The Civil Judge, Jr. Division has appointed Commissioner to calculate back wages of 8 ex- contractual employees and Commissioner has submitted report to the Civil Judge to which both the parties have filed their objections, which is now pending for final order. Further, the Companyâs civil writ petition before the High Court was dismissed in August, 2020. The company has filed Letter Patent Appeal against the dismissal before the Double bench of the High Court on 8 September 2020 and 25 October 2020. Based on the opinion from legal consultants, the Company is of the view that the likelihood of potential favorable judgement in the Companyâs favour is probable. Further, the financial implications canât be quantified in this case and will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. Further, the Company has also certain other labour cases for which the liability is not ascertainable and the Company is of the view that the likelihood of potential favorable judgement in the Companyâs favour is probable.
Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgement/decision pending with various forums/ authorities. The Company does not expect any reimbursement in respect of the above contingent liability.
In February 2019, Supreme Court of India in its judgement clarified the applicability of allowances that should be considered to measure obligations under Employees Provident Fund Act, 1952. The Company has been legally advised that there are interpretative challenges on the application of judgement retrospectively and as such does not consider there is any probable obligations for past periods. Accordingly, based on legal advice the Company has made a provision for provident fund contribution from the date of Supreme Court order.
* The Company has contributed INR 7.35 million to various parties for the CSR expenditure. The said amount has been utilised by the aforesaid parties as on 31 March 2023.
* The Company has contributed INR 6.89 million to various parties for the CSR expenditure for the year ended 31 March 2022. Out of the said amount, INR 2.11 million have remain unutilised by the aforesaid parties as on 31 March 2022 and the same has been utilised in the financial year 2022-23.
40. Hedging and derivative instruments:
i) The Company uses foreign exchange forward contracts to selectively hedge its exposure. These derivative instruments are not used for speculative or trading purposes.
ii) Mark to market gain (loss in March 2022) amounting to Rs. 6.22 million (31 March 2022: Rs. 4.41 million) in respect of forward contracts have been accrued to the Statement of Profit and Loss. The mark to market gain (loss in March 2022) on forward contract outstanding as at 31 March 2023 is Rs. 0.73 million (31 March 2022: Rs. 5.50 million)
41. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the specified domestic transactions entered into with the specified persons and the international transactions entered into with the associated enterprises during the current financial year and expects such records to be in existence before the due date of filing of income tax return. The management is of the opinion that itâs international transactions are at armâs length so that the aforesaid legislation will not have any impact on financial statements, particularly on the amount of tax expense and that of provision for taxation.
Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assessing performance. The Companyâs chief operating decision maker is the Managing Director and the Company has only one reportable business segment i.e. manufacturing and trading of paper machine clothing for pulp, paper and board industry.
Entity wide disclosure details as per Ind AS 108 on Operating segments are given below:
Information about geographical areas :
The following table shows the distribution of the Companyâs operating revenue by geographical location of customers, regardless of where the goods were produced/services were rendered from:
45. Other statutory information :
(i) The Company do not have any transactions with companies struck off.
(ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(iii) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
(iv) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(v) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(vi) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall :
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vii) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(viii) The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
(ix) The company has no borrowings from banks and financial institutions on the basis of security of current assets.
(x) The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority
(xi) The company has complied with the number of layers prescribed under the Companies Act, 2013
(xii) The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
Mar 31, 2018
1. Corporate information
Voith Paper Fabrics India Limited (âthe Companyâ) is a public limited company domiciled in India and with its registered office at Plot No. 113/114 - A, Sector - 24, Faridabad - 121005, Haryana, India under the provisions of Indian Companies Act, 1956 and its equity shares are listed on Bombay Stock Exchange in India. The Company is a subsidiary of VP Auslandsbeteiligungen GmbH which holds 74.04% paid up equity share capital of the Company. The Company is primarily involved in the business of manufacturing and selling of paper machine clothing for pulp, paper and board industry.
The write-down of inventories to net realisable value during the year amounted to Rs. 7,691,784; (31 March 2017 : 11,035,832; 1 April 2016 : 12,845,614). The reversal of write-downs during the year amounted to Rs. 5,150,814 (31 March 2017 : 6,337,176; 1 April 2016 : 14,837,513 ). The write-down and reversal are included in cost of materials or changes in inventories of finished goods and work-in-progress.
a) Rights, preferences and restrictions attached to equity shares
The company has only one class of shares referred to as equity shares having par value of INR 10 each. Holder of each equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
As per the records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of equity shares.
2(a).Provision for warranty represents costs associated with providing sales and support services which are accrued at the time of recognition of revenue and are expected to be utilized over a period of 1 year. Assumption used to calculate the provision for warranties were based on current sales level and current information about actual claims settlement based on the five year warranty period for all products sold. A summary of activity is as follows:
2(b).Provision for litigation primarily made for probable liabilities/claims arising out of pending disputes/litigations with various regulatory authorities. These provisions are affected by numerous uncertainties and management has taken all efforts to make a best estimate. Timing of outflow of resources will depend upon timing of decision of cases. A summary of activity is given below:
During the year ending 31 March 2018 and 31 March 2017, the Company has paid dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of shareholders. Hence DDT paid is charged to equity. Distribution tax on dividend represents distribution tax on dividend paid during the year ended 31 March 2018 amounting to Rs. 3,576,887 (31 March 2017 3,576,887).
3. Micro, small and medium enterprises
There are no Micro, small and medium enterprises, to whom the company owes dues, which are outstanding for more than 45 days as at the end of the year. The information as required to be disclosed in relation to Micro, small and medium enterprises has been determined to the extent such parties have been identified on the basis of information available with the company.
4. Employee benefits in respect of the Company have been calculated as under:
(A) Defined Contribution Plans
The company has certain defined contribution plan such as provident fund, employee state insurance, employee pension scheme, employee superannuation fund wherein specified percentage is contributed to them. During the year, the Company has contributed following amounts to:
(B) Defined Benefit Plans
(i) Gratuity
In accordance with Ind AS 19 âEmployee Benefitsâ, an actuarial valuation has been carried out in respect of gratuity. The discount rate assumed is 7.70% p.a. (31 March 2017 : 7.30% p.a.; 1 April 2016 : 7.85% p.a.) which is determined by reference to market yield at the balance sheet date on government bonds. The retirement age has been considered at 58 years (31 March 2017 : 58 years; 1 April 2016 : 58 years).
The estimates of future salary increases, considered in actuarial valuation is 10% p.a. (31 March 2017 : 10%; 1 April 2016: 10%), taking into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The plan assets are maintained with Life Insurance Corporation of India in respect of gratuity scheme. The details of investments maintained by Life Insurance Corporation are not available with the Company, hence not disclosed. The expected rate of return based on LIC statement on plan assets is 8.25% p.a. (31 March 2017 : 8.25% p.a.; 1 April 2016 : 8.25% p.a.)
The sensitivity analysis above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the year and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant.
(ii) Retirement benefit award
In accordance with Ind AS 19 âEmployee Benefitsâ, an actuarial valuation has also been carried out in respect of retirement benefit award. The discount rate assumed is 7.70% p.a. (31 March 2017 : 7.30% p.a.; 1 April 2016 : 7.85% p.a.) which is determined by reference to market yield at the balance sheet date on government bonds. The retirement age has been considered at 58 years (31 March 2017 : 58 years; 31 March 2016 : 58 years).
The sensitivity analysis above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the year and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant.
(iii) Providend Fund:
The Company makes monthly contributions to provident fund managed by trust for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. As per Ind AS 19 on âEmployee Benefitsâ, employer established provident fund trusts are treated as defined benefit plans, since the Company is obliged to meet interest shortfall, if any, with respect to covered employees. The total liability of Nil (31 March 2017 : Nil; 1 April 2016 : Nil) has been charge to Statement of Profit and Loss during the year.
(a) Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturities of these instruments.
(b) The fair value is determined by using the valuation model/technique with observable/non-observable inputs and assumptions.
5. Financial risk management
(A) Financial risk management Risk management framework
The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework.
The Company, through three layers of defence namely policies and procedures, review mechanism and assurance, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The audit committee of the board with top management oversees the formulation and implementation of the Risk Management Policies. The risks and mitigation plan are identified, deliberated and reviewed at appropriate forums.
The Company has exposure to the following risks arising from financial instruments:
- credit risk (see (i))
- liquidity risk (see (ii))
- market risk (see (iii))
- liquidity risk (see (iv))
i. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers.
The carrying amount of financial assets represents the maximum credit risk exposure.
Trade receivable and other financial assets
The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the payment and delivery terms and conditions are offered. The Companyâs review includes external ratings, if they are available, financial statements, industry information and business intelligence.
In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry, trade history with the Company and existence of previous financial difficulties.
Expected credit loss for trade receivable:
The Company based on internal assessment which is driven by the historical experience / current facts available in relation to defaults and delays in collection thereof, the credit risk for trade receivable is considered low. The Company estimates its allowance for trade receivable using lifetime expected credit loss. The balance past due (net of expected credit loss allowance), excluding receivable from group companies and government companies is 160,546,394.
With regards to all financial assets with contractual cash flows other than trade receivable, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from whom these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for expected credit loss has been provided on such financial assets. Break up of financial assets other than trade receivables have been disclosed on balance sheet.
ii. Liquidity risk
Liquidity risk is the risk that Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
The Companyâs finance department is responsible for managing the short term and long term liquidity requirements. Short term liquidity situation is reviewed daily by finance. Long term liquidity position is reviewed on a regular basis by the Board of Directors and appropriate decisions are taken according to the situation.
Exposure to the liquidity risk
The following are remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted.
iii. Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates - will affect the Companyâs income or the value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposure within acceptable parameters, while optimising the return.
Currency risk
The Company is exposed to currency risk to the extent that there is a mismatch between currencies in which sales and purchases are denominated and the functional currency of the Company. The currencies which the Company is exposed to risk are EUR, USD, GBP and NOK.
The Company follows a natural hedge driven currency risk mitigation policy to the extent possible. Any residual risk is evaluated and appropriate risk mitigating steps are taken, including but not limited to, entering into forward contract.
Exposure to currency risk
The summary quantitative data about the Companyâs exposure to currency risk are reported to management of the company as follows:
Sensitivity analysis
A reasonable possible strengthening (weakening) of the USD, EUR, GBP and NOK against all other currencies at 31 March would have affected the measurement of financial exposure denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant and ignores any impact on forecast sales and purchases.
iv. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs fixed deposits.
Exposure to interest rate risk
The interest rate profile of the Companyâs interest-bearing financial instruments is as follows:
Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
Fair value sensitivity on bank deposits has not been disclosed as interest rate on such deposits is equivalent to market rate.
6. Related Party Disclosures
(A) Related Party Names
(a) Related parties where control exists
a) Holding Company VP Auslandsbeteiligungen GmbH, Germany
b) Ultimate Holding Company Voith Paper Holding GmbH & Co. KG, Germany
(Holds 100% Equity of VP Auslandsbeteiligungen GmbH)
(b) Fellow subsidiaries
Syn Strand Inc., United State of America
Voith Paper Fabrics Stubbins Ltd., United Kingdom
Voith Digital Solutions GmbH, Germany
(Formerly known as Voith IT Solutions GmbH, Germany)
Voith Paper Fabrics Asia Pacific Sdn. Bhd., Malaysia
Voith Paper Fabrics Ipoh Sdn. Bhd., Malaysia
Voith Paper Fabrics & Rolls Systems GmbH & Co. KG, Germany
Voith Paper Technology (India) Private Limited, India
Voith Hydro Private Limited, India
Voith Paper Fabric & Roll Systems Inc. (Wilson), United State of America
Voith Paper Fabric & Roll Systems Inc. (Shreveport), United State of America
Voith Paper GmbH & Co. KG, Germany
Voith Paper Rolls GmbH & Co KG, Austria
Voith Paper Fabrics GmbH, Austria
Voith Paper Fabrics Hogsjo AB, Sweden
Voith Paper Fabrics Waycross, LLC
PT. Voith Paper Rolls Indonesia
Voith Paper (China) Co., Ltd., China
Voith Paper Fabrics BV, Nedarland
Voith Digital Solutions India Private Ltd., India
(c) Key Management Personnel
R. Krishna Kumar, Managing Director Kalyan Dasgupta, Financial Controller
C. S. Gugliani, Company Secretary
7. Contingent liabilities to the extent not provided for:
A Guarantees
Outstanding guarantees furnished by Banks on behalf of the Company is Rs. 5,483,075 (31 March 2017: 6,609,027; 1 April 2016: 5,253,346)
B Claims against Company, disputed by the Company not acknowledged as debt:
(a) Rs. 2,637,144 (31 March 2017 : Rs. 2,637,144; 1 April 2016 : Rs. 6,385,564) as the amount of demand raised by the assessing officer for assessment year 2009-10 on account of disallowances in respect of shifting expenses & repair building etc. (previous year shifting expenses, repair building and technical know-how fees).
The assessing officer disallowed in his assessment order expenses on shifting, repair building, provision for leave encashment & warranty and technical know-how fees/royalty. The Company had filed an appeal with the Commissioner (Appeals) - Income Tax against the said order. The Commissioner (Appeals) had allowed all other grounds in favour of the company except shifting expenses pursuant to which the Company and the department have filed cross appeals in Income Tax Appellate Tribunal.
(b) Rs. 1,715,600 (31 March 2017 : 1,715,600; 1 April 2016 : Rs. 1,715,600) as the amount of demand raised by the assessing officer for assessment year 2008-09 on account of shifting expenses.
The assessing officer disallowed in his assessment order expenses on shifting, repair, forex expenditure on capital assets, legal expenses and additional depreciation. The Company had filed an appeal with the Commissioner (Appeals)- Income Tax against said order. The Commissioner (Appeals) had allowed only repair expenses in favour of the company. Aggrieved by the order, the Company had preferred itâs appeal to Income Tax Appellate Tribunal. Department has also filed an appeal in Income Tax Appellate Tribunal against one ground allowed in favour of the company.
During the year, the Company has received favourable order from Income tax Appellate Tribunal. However, the department is expected to initiate further proceedings against the order of Income tax Appellate Tribunal with the higher appellate authority. Hence, the amount is continue to be disclosed in the above table.
(c) Rs. 6,614,020 (31 March 2017 : 6,614,020; 1 April 2016 : 6,614,020) as the amount of demand raised by assessing officer for assessment year 2007-08 on account of repair expenses.
The assessing officer re-opened the assessment u/s 147/148 and disallowed all the repair expenditure claimed in the Statement of Profit & Loss account. Aggrieved by the order, the Company filed an appeal with Commissioner (Appeals) which was allowed in favour of the Company. Pursuant to this order, the department has filed an appeal in the Income Tax Appellate Tribunal.
During the year, the Company has received favourable order from Income tax Appellate Tribunal. However, the department is expected to initiate further proceedings against the order of Income tax Appellate Tribunal with the higher appellate authority. Hence, the amount is continue to be disclosed in the above table.
In all of the above cases, the management is confident of a favorable outcome from higher appellate authority.
C Other contingent liabilities Labour case:
15 contractual ex-employees had filed a case against the Company under Industrial Tribunal cum Labour Court II, Haryana. The dispute pertains to reinstatement of these employees with continuity of service, full back wages and all consequential benefits since the date of termination. The labour court had decided the case in favour of the workmen. The Company had filed a writ petition in High Court (Punjab & Haryana) based on a legal opinion sought in the matter. 8 employees out of the above filed an appeal for the execution of the labour court award order decided earlier. The Company brought the High Court (Punjab & Haryana) writ petition in notice of the Labour court II, Haryana, but the application has been dismissed for stay on the ground that the stay order by the High Court pertains to criminal prosecution and not the civil execution of the Award. The Company further filled a writ petition in High Court (Punjab & Haryana) against the execution order of Labour Court II, Haryana and currently awaiting for hearing. Based on the opinion from legal consultant, the Company is of the view that the likelihood of potential favorable judgement in the Companyâs favour is probable. Further, the financial implications canât be quantified in this case and will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. Further, the Company has certain other labour cases for which the liability is not ascertainable.
8. Capital Commitments:
Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 95,498,072 (31 March 2017 : Nil; 1 April 2016 : 4,190,412)
9. Hedging and derivative instruments:
i) The Company uses foreign exchange forward contracts to selectively hedge its exposure. These derivative instruments are not used for speculative or trading purposes.
ii) Mark to market loss/ (gain) amounting to Rs. (263,719) (31 March 2017: 440,440) in respect of forward contracts have been credited/charged to the Statement of Profit and Loss. The mark to market losses on forward contract outstanding liability as at 31 March 2018 is Rs. 55,019 (31 March 2017: 318,738)
10. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the specified domestic transactions entered into with the specified persons and the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence before the due date of filing of income tax return. The management is of the opinion that itâs international transactions are at armâs length so that the aforesaid legislation will not have any impact on financial statements, particularly on the amount of tax expense and that of provision for taxation.
11. First time adoption of Ind AS
These are the Companyâs first financial statements prepared in accordance with Ind AS.
The significant accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the Companyâs date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows is set out in the following tables and notes.
(A) Exemptions and exemptions availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.
Ind AS optional exemptions
1. Deemed cost
Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all of itâs property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.
Accordingly, the Company has elected to measure all of its property, plant and equipment at their previous GAAP carrying value. Ind AS mandatory exemptions
1. Estimates
An entityâs estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were an error.
Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP
The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP - Impairment of financial assets based on expected credit loss model.
2. De-recognition of financial assets and liabilities
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entityâs choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initial accounting for those transactions.
The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
3 Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
12(E) Statement of cash flows
Other than effect of certain reclassifications due to difference in presentation, there was no other material effect on cash flow from operating, financing and investing activities for all periods presented.
Note 1 : Lease equalisation reserve
Under previous GAAP, lease rentals on operating lease were required to be recognised as income on straight line basis over the lease term by recognising corresponding lease equalisation reserve. However, under Ind AS, there is no such requirement unless under specific circumstances specified in the Ind AS.
Note 2 : Expected credit loss allowance
On transition to Ind AS, the Company has recognised impairment loss on trade receivable measured at amortized cost based on the expected credit loss model as required by Ind AS 109. Consequently, trade receivable have been reduced with a corresponding decrease in retained earnings on the date of transition and there has been an incremental provision for the year ended 31 March 2017.
Note 4 : Other financial liabilities
Under the previous GAAP, liability for security deposit were classified as other current liabilities based on the realisability. Liability for security deposit was carried at cost. Under Ind AS, this security deposit is required to be measured at fair value. The resulting changes before the date of transition have been recognised in retained earnings.
Note 5 : Proposed Dividend
Under the previous GAAP, dividends proposed by the board of directors after the Balance Sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend including dividend distribution tax, was recognised as a liability. Under Ind AS, dividends so proposed by the board are considered to be non-adjusting event. Accordingly, provision for proposed dividend and dividend distribution tax recognised under previous GAAP has been reversed.
Note 6 : Excise duty
Under the previous GAAP, revenue from sale of goods was presented net of the excise duty on sales. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Excise duty is presented in the Statement of Profit and Loss as an expense. This has resulted in an increase in the revenue from operations and expenses for the year ended 31 March 2017. The total comprehensive income for the year ended and equity as at 31 March 2017 has remained unchanged.
Note 7 : Remeasurement of post employment benefit obligation
Under Ind AS, all actuarial gains and losses are recognised in other comprehensive income. Under previous GAAP, the Company recognised actuarial gains and losses in statement of profit or loss. However, this has no impact on the total comprehensive income and total equity as on 1 April 2016 or as on 31 March 2017.
Note 8 : Tax expenses
Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. Also, the above changes (decreased)/increased the deferred tax liability as follows based on a tax rate of 34.608 percent:
13. During the year, the company had no Specified Bank Notes (SBNs) as defined in the MCA notification, G.S.R.308(E), dated 31 March 2017. The details of SBNs held and transacted during the period from 8 November 2016 to 30 December 2016, the denomination-wise SBNs and other notes as per notification are as follows:
14. a) Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:
On 28 March 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.
The amendment will come into force from 1 April 2018. The Company has evaluated the effect of this on the financial statements and is of the view that no change in accounting policy is required and the impact is not material.
b) Ind AS 115- Revenue from Contracts with Customers:
On 28 March 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when âcontrolâ of the goods or services underlying the particular performance obligation is transferred to the customer.
Moreover, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers.
The effective date for adoption of Ind AS 115 is financial periods beginning on or after 1 April 2018. The Company will adopt the standard on 1 April 2018 by using the cumulative catch-up transition method as defined under standard and accordingly, comparatives for the year ending or ended 31 March 2018 will not be retrospectively adjusted.
While, the Company is in the process of implementing Ind AS 115 on financial statement, it is of the view that there will not be any significant change in its revenue recognition policy and the impact of the same will not be material.
15. Figures in bracket indicate deductions
16. Previous periodâs/ yearâs figures have been regrouped / reclassed, where necessary, to conform to current yearâs classification as per Ind AS.
Mar 31, 2017
b. Rights, preferences and restrictions attached to equity shares
The Company has only one class of shares referred to as equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.
During the year ended 31 March 2017, the amount of per share dividend paid as distributions to equity shareholders and pertaining to the year ended 31 March 2016 is Rs. 4.0 (previous year Rs. 4.5)
The Board of Directors, in its meeting held on 25 May, 2017, has proposed a final dividend of Rs. 4.00 per equity share for the financial year ended 31 March 2017. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on 6th July, 2017 and if approved would result in a cash outflow of approximately Rs. 21,147,123 including corporate dividend tax.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
# Provision for warranties
A provision is recognized for expected warranty claims on products sold during the year, based on past experience of level of claim settlement. It is expected that the most of this cost will be incurred within one year of the balance sheet date. Assumption used to calculate the provision for warranties were based on current sales level and current information about claims settlement based on the five year warranty period for all products sold.
## Provision for contingencies represents the following:-
(a) Potential tax liability estimated through various notices issued by sales tax department towards differential amount of sale tax applicable on products sold - Rs. 2,707,113 (previous year: Rs. 2,707,113)
(b) Estimated contingencies in respect of Local area development tax, applicability of which is not certain on the Company -Rs. 4,439,556 (previous year: Rs. 4,439,556)
1. Gratuity and other post-employment benefit plans
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days of last drawn salary for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy. These benefits are funded with Life Insurance Corporation of India.
The Company has also agreed to pay Rs. 25,000 at retirement to all the workers (Other Retirement Benefit). These benefits are un-funded.
The following tables summarize the components of net benefit expense recognized in the statement of Profit and Loss and the funded status and amounts recognized in the Balance Sheet for the respective plans.
Statement of profit and loss
Net employee benefit expense recognized in the employment cost
2. Related party disclosures a. List of related parties:
Names of Related Parties where control exists irrespective of whether transactions have occurred or not:
|
(A) |
Holding Company |
VP Auslandsbeteiligungen GmbH, Germany |
|
(B) |
Ultimate Holding Company |
Voith Paper Holding GmbH & Co. KG, Germany (Holds 100% Equity of VP Auslandsbeteiligungen GmbH) |
|
Names of Related Parties with whom transactions have occurred during the period |
||
|
(A) |
Fellow subsidiaries |
Syn Strand Inc., United State of America Voith Paper Fabrics Stubbins Ltd., United Kingdom Voith Digital Solutions GmbH, Germany (Formerly known as Voith IT Solutions GmbH, Germany) Voith Paper Fabrics Asia Pacific Sdn. Bhd., Malaysia Voith Paper Fabrics Ipoh Sdn. Bhd., Malaysia Voith Paper Fabrics GmbH & Co. KG, Germany Voith Paper Fabrics & Rolls Systems GmbH & Co. KG, Germany J.M. Voith GmbH & Co. Beteiligungen KG, Germany Voith Paper Technology (India) Private Limited, India Voith Hydro Private Limited, India Voith GmbH, Germany Voith Paper Fabric & Roll Systems Inc., United State of America Voith Turbo Private Limited, India Voith Paper GmbH & Co. KG, Germany Voith Paper Rolls GmbH & Co KG, Germany Voith Paper Fabrics GmbH, Austria Voith Paper GmbH, Austria Voith Paper Fabrics Hogsjo AB, Sweden Voith Paper Fabrics Waycross, LLC PT. Voith Paper Rolls Indonesia Voith Paper (China) Co., Ltd. |
|
(B) |
Key Management Personnel |
R. Krishna Kumar, Managing Director |
Income tax demand consists of:-
(a) Rs. 2,637,144 (Previous year - 6,385,564) as the amount of demand raised by the assessing officer for assessment year 2009-10 on account of disallowances in respect of shifting expenses & repair building etc. (previous year shifting expenses, repair building and technical know-how fees).
The assessing officer disallowed in his assessment order expenses on shifting, repair building, provision for leave encashment & warranty and technical know-how fees/royalty. The Company had filed an appeal with the Commissioner (Appeals) - Income Tax against the said order. The Commissioner (Appeals) had allowed all other grounds in favour of the company except shifting expenses pursuant to which the Company and the department have filed cross appeals in Income Tax Appellate Tribunal.
(b) Rs. 1,715,600 (Previous year - Rs. 1,715,600) as the amount of demand raised by the assessing officer for assessment year 2008-09 on account of shifting expenses.
The assessing officer disallowed in his assessment order expenses on shifting, repair, forex expenditure on capital assets, legal expenses and additional depreciation. The Company had filed an appeal with the Commissioner (Appeals) - Income Tax against said order. The Commissioner (Appeals) had allowed only repair expenses in favour of the company. Aggrieved by the order, the Company had preferred it''s appeal to Income Tax Appellate Tribunal. Department has also filed an appeal in Income Tax Appellate Tribunal against one ground allowed in favour of the company.
The amount disclosed above is raised on account of shifting expenses.
(c) Rs. 6,614,020 (Previous year - Rs. 6,614,020) as the amount of demand raised by assessing officer for assessment year 2007-08 on account of repair expenses.
The assessing officer re-opened the assessment u/s 147/148 and disallowed all the repair expenditure claimed in the Statement of Profit & Loss account. Aggrieved by the order, the Company filed an appeal with Commissioner (Appeals) which was allowed in favour of the Company. Pursuant to this order, the department has filed an appeal in the Income Tax Appellate Tribunal.
In all of the above cases, the management is confident of a favorable outcome from higher appellate authority.
Labour case:
15 contractual ex-employees had filed a case against the Company under Industrial Tribunal cum Labour Court II, Haryana. The dispute pertains to reinstatement of these employees with continuity of service, full back wages and all consequential benefits since the date of termination. The labour court had decided the case in favour of the workmen. The Company had filed a writ petition in High Court (Punjab & Haryana) based on a legal opinion sought in the matter. In this scenario, the company''s exposure in this case is still not finally ascertainable.
For the following assets, based on internal assessment and independent technical evaluation carried out by external valuers, the management believes that the useful lives as given below best represent the period over which the management expects to use these assets. Hence, the useful lives of these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013:-
Mar 31, 2016
(a) Rs. 6,385,564 (Previous period - Rs 949,670) as the amount of demand raised by the assessing officer for assessment year 200910 on account of disallowances in respect of shifting expenses, repair building & technical know-how expenses.
The assessing officer disallowed in his assessment order expenses on shifting, repair building, provision for leave encashment & warranty and technical know-how fees/royalty. The Company had filed an appeal with the Commissioner (Appeals) - Income Tax against the said order. The Commissioner (Appeals) had allowed all other grounds in favour of the company except shifting expenses pursuant to which the Company and the department have filed cross appeals in Income Tax Appellate Tribunal.
The amount disclosed above raised on account of shifting expenses, repair building and technical know-how expenses.
(b) Rs. 1,715,600 (Previous period - Rs. 1,715,600) as the amount of demand raised by the assessing officer for assessment year 2008-09 on account of shifting expenses.
The assessing officer disallowed in his assessment order expenses on shifting, repair, forex expenditure on capital assets, legal expenses and additional depreciation. The Company had filed an appeal with the Commissioner (Appeals) - Income Tax against said order. The Commissioner (Appeals) had allowed only repair expenses in favour of the company. Aggrieved by the order, the Company had preferred its appeal to Income Tax Appellate Tribunal. Department has also filed an appeal in Income Tax Appellate Tribunal against one ground allowed in favour of the company.
The amount disclosed above is raised on account of shifting expenses.
(c) Rs. 6,614,020 (Previous period - Rs. Nil) as the amount of demand raised by assessing officer for assessment year 2007-08 on account of repair expenses.
The assessing officer re-opened the assessment u/s 147/148 and disallowed all the repair expenditure claimed in the Statement of Profit & Loss account. Aggrieved by the order, the Company filed an appeal with Commissioner (Appeals) which was allowed in favour of the Company. Pursuant to this order, the department has filed an appeal in the Income Tax Appellate Tribunal.
In all of the above cases, the management is confident of a favorable outcome from higher appellate authority,
Labour case:
15 contractual ex-employees had filed a case against the Company under Industrial Tribunal cum Labour Court II, Haryana. The dispute pertains to reinstatement of these employees with continuity of service, full back wages and all consequential benefits since the date of termination. The labour court had decided the case in favour of the workmen. The Company had filed a writ petition in High Court (Punjab & Haryana) based on a legal opinion sought in the matter. In this scenario, the companyâs exposure in this case is still not finally ascertainable,
1. Figures have been regrouped/ rearranged wherever necessary to confirm to the classification adopted for the current year.
2. During previous period, the financial year of the Company had been extended to 31 March, 2015 in order to comply with the provisions of the Companies Act, 2013. Hence, the amounts of current period 12 months (from 1 April, 2015 to 31 March, 2016) and previous period 18 months (from 1 October, 2013 to 31 March, 2015) are not comparable.
Mar 31, 2015
1. Corporate information
Voith Paper Fabrics India Limited (''the Company'') is a subsidiary of VP
Auslandsbeteiligungen GmbH which holds 74.04% paid up equity share
capital of the Company. The Company is mainly in the business of
manufacturing and selling of paper machine clothing for pulp, paper and
board industry.
2. Basis of preparation
The financial statements have been prepared in accordance with
generally accepted accounting principles in India (Indian GAAP) under
the historical cost convention on an accrual basis in compliance with
all material aspect of the Accounting Standard (AS) Notified by the
Companies Accounting Standard Rules, 2006 (as amended), and the
relevant provisions of the Companies Act, 1956 read with General
Circular 8/2014 dated April 4, 2014, issued by the Ministry of
Corporate Affairs to the extent applicable. The accounting policies
have been consistently applied by the Company and are consistent with
those used in the previous year.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle, and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has ascertained its operating cycle as up to
twelve months for the purpose of current/non-current classification of
assets and liabilities.
3. Terms / rights attached to equity shares
The Company has only one class of shares referred to as equity shares
having a par value of Rs. 10/- per share. Each holder of equity shares
is entitled to one vote per share. The Company declares and pays
dividends in Indian rupees. The dividend propsed by the Board of
Directors is subject to approval of the shareholders in the ensuing
Annual General Meeting.
During the period ended March 31,2015, the amount of per share dividend
recognized as distributions to equity shareholoders was Rs. 3 (Previous
year Rs. 3)
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the share-
holders.
4. Provision for contingencies represents the following:-
(a) Potential tax liability estimated through various notices issued by
sales tax department towards differential amount of sale tax applicable
on products sold - Rs. 3,476,802 (Previous year : Rs. 3,476,802)
(b) Demand from excise department towards interest on cenvat credit
wrongly availed - Rs. Nil (Previous year : Rs. 469,000)
(c) Estimated contingencies in respect of Local area development tax,
applicability of which is not certain to the Company - Rs. 4,439,556
(Previous year : Rs. 4,439,556)
(d) Provision for 1% additional duty on import - Rs. 40,256 (Previous
year - Rs. 40,256)
In all these cases, based on legal advice/opinion obtained or base its
own assessment, management considers probable that economic outflows
will occur.
5. Gratuity and other post-employment benefit plans
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days of last drawn salary for each completed year of service. The
scheme is funded with an insurance company in the form of a qualifying
insurance policy.
The Company has also agreed to pay Rs 25,000 at retirement to all the
workers (Other Retirement Benefit). These benefits are un-funded. The
following tables summarize the components of net benefit expense
recognized in the statement of Profit and Loss and the funded status
and amounts recognized in the Balance Sheet for the respective plans.
Statement of profit and loss
6. Segment Reporting
(a) Primary Segment
The company is engaged in the business of manufacturing and selling of
paper machine clothing for pulp, paper and board industry. The entire
operation is governed by the same set of risk and returns and hence,
the same has been considered as representing a single primary segment.
7. Related party disclosures
a. List of related parties :
Names of Related Parties where control exists irrespective of whether
transactions have occurred or not:
(A) Holding Company VP Auslandsbeteiligungen GmbH (formerly
VPT Auslandsbeteiligungen GmbH)
(B) Ultimate Holding Voith Paper Holding GmbH & Co. KG
Company (Holds 100% Equity of VP
Auslandsbeteiligungen GmbH)
Names of Related Parties with whom transactions have occurred during
the period
(A) Fellow subsidiaries Syn Strand Inc.
Voith Paper Fabrics Stubbins Limited
Voith IT Solution GmbH
Voith Paper Fabrics Asia Pacific Sdn Bhd
Voith Paper Fabrics Ipoh Sdn. Bhd.
Voith Paper Fabrics GmbH & Co. KG
Voith Paper Holding (VPT) Heidenheim
Voith Paper Fabrics (China) Co. Ltd.
Voith Paper Technology (India) Private
Limited
Voith Hydro Private Limited
Voith Paper Fabrics & Roll Systems GmbH
Voith GmbH, Heidenheim
Voith Paper Fabrics SAS
Voith Turbo Private Limited
Voith Paper GmbH & Co. KG
Voith Paper Rolls GmbH & Co KG
Voith Paper Fabrics GmbH, Frankenmarkt
Voith Paper GmbH
Voith Paper Fabrics Hogsjo AB
(B)Key Management Personnel R. Krishna Kumar, Managing Director
(w.e.f. 01-08-2014)
8. Contingent liabilities
Particulars As at As at
March 31,2015 September 30, 2013
Rs. Rs.
a) Claim against the Company not a - 1,605,000
cknowledged as debts*
b) Income tax demand** 2,665,270 19,527,915
c) Bank guarantees given 6,063,748 5,345,289
by the Company
d) Tax liability in respect of
C-Forms pending to be collected 30,632,980 29,180,465
*The claims against the Company comprises of:-
(a) Rs. Nil (Previous year - Rs. 1,605,000) in respect of order from
Excise department for penalty of Cenvat wrongly taken and reversed
later on. The Company had filed an appeal with the Custom, Excise and
Service Tax Appellate Tribunal against the said order whereby the stay
was granted. During the current period, the matter has been decided in
company''s favour.
** Income tax demand consists of:-
(b) Rs. Nil (Previous year - Rs. 10,169,127) as the amount of demand
raised by the assessing officer for assessment year 2010-11 on account
of disallowance pertaining to technical know-how fees/royalty. The
Company had filed an appeal with the Commissioner (Appeals) - Income
Tax against the said order. During the current period, the company has
received a order dated 18th December, 2014 from CIT(Appeals) in which
the issue has been allowed in company''s favour.
(c) Rs. 949,670 (Previous year - Rs 6,302,822) as the amount of demand
raised by the assessing officer for assessment year 2009-10 on account
of certain disallowances. The Company had filed an appeal with the
Commissioner (Appeals) - Income Tax against the said order; During the
current period, the company has received two orders dated 16th
December, 2014 from CIT(Appeals) in which out of the 4 grounds 3
grounds have been allowed in company''s favour.
(d) Rs. 1,715,600 (Previous year - Rs. 3,055,966) as the amount of
demand raised by the assessing officer for assessment year 2008-09 on
account of certain disallowances. The Company had filed an appeal with
the Commissioner (Appeals) - Income Tax against said order. During the
current period, the appeal has been decided partly in company''s favour
by CIT(Appeals).
In all of the above cases, the management is confident of a favorable
outcome from higher appellate authority.
9. Previous year figures have been regrouped/rearranged wherever
necessary to confirm to the classification adopted for the current
year.
10. The financial year of the company has been extended to March
31,2015 in order to comply with the provisions of the Companies Act,
2013. Hence, the amounts of current period 18 months (from October 1,
2013 to March 31, 2015) and previous period 12 months (from October
1,2012 to September 30, 2013) are not comparable.
Sep 30, 2013
1. Corporate information
Voith Paper Fabrics India Limited (''the Company'') is a subsidiary of VP
Auslandsbeteiligungen GmbH which holds 74.04% paid up equity share
capital of the Company. The Company is mainly in the business of
manufacturing and selling of paper machine clothing for pulp, paper and
board industry.
2. Basis of preparation
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006 (as amended) and
the relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention. The accounting policies adopted in the
preparation of financial statements are consistent with those of
previous year.
3. Gratuity and other post-employment benefit plans
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days of last drawn salary for each completed year of service. The
scheme is funded with an insurance company in the form of a qualifying
insurance policy.
The Company has also agreed to pay Rs 25,000 at retirement to all the
workers (Other Retirement Benefit). These benefits are un-funded.
The following tables summarize the components of net benefit expense
recognized in the statement of Profit and Loss and the funded status
and amounts recognized in the Balance Sheet for the respective plans.
4. Related party disclosures
a. List of related parties :
Names of Related Parties where control exists irrespective of whether
transactions have occurred or not:
(A) Holding Company VP Auslandsbeteiligungen GmbH (formerly VPT
Auslandsbeteiligungen GmbH)
(B) Ultimate Holding Company Voith Paper Holding GmbH & Co. KG
(Holds 100% Equity of VP Auslandsbeteiligungen GmbH)
Names of Related Parties with whom transactions have occurred during
the year
(A) Fellow subsidiaries Syn Strand Inc.
Voith Paper Fabrics Stubbins Limited
Voith IT Solution GmbH
Voith Paper Fabrics GmbH
Voith Paper Fabrics Asia Pacific Sdn Bhd
Voith Paper Fabrics Ipoh Sdn. Bhd.
Voith Paper Fabrics GmbH & Co. KG
Voith Paper Holding (VPT) Heidenheim
Voith Paper Fabrics (China) Co. Ltd.
Voith Paper Technology (India) Private Limited
Voith Hydro Pvt. Ltd.
Voith Paper Fabrcis & Roll Systems GmbH
Voith GmbH, Heidenheim
Voith Paper Fabrics SAS
Voith Turbo Private Limited
5. Capital and other commitments
At September 30, 2013, the Company has capital commitments of Rs.
73,091,493 (Previous year Rs 23,952,685) net of advances.
6. Contingent liabilities
Particulars As at As at
September 30, 2013 September 30, 2012
Rupees Rupees
(a) Claim against the Company
not acknowledged as debts* 1,605,000 2,837,344
(b) Income tax demand** 19,527,915 9,358,788
(c) Bank guarantees given by
the Company 5,345,289 6,708,479
*The claims against the Company comprises of:-
(a) Rs. 1,605,000 (Previous year - Rs. 1,605,000) in respect of order
from Excise department for penalty of Cenvat wrongly taken and reversed
later on. The Company had filed an appeal with the Custom, Excise and
Service Tax Appellate Tribunal against the said order whereby the stay
was granted. The management is hopeful of matter being settled in its
favor.
(b) Rs. Nil (Previous year - Rs. 1,232,344 ) in respect of duty
deposited with custom authorities on account of purchase from related
parties.
** Income tax demand consists of:-
(c) Rs. 10,169,127 as the amount of demand raised by the assessing
officer for assessment year 2010-11 on account of disallowance
pertaining to technical know-how fees/royalty. The Company has filed
an appeal with the Commissioner (Appeals) - Income Tax against the said
order;
(d) Rs. 6,302,822 as the amount of demand raised by the assessing
officer for assessment year 2009-10 on account of certain
disallowances. The Company has filed an appeal with the Commissioner
(Appeals) - Income Tax against the said order;
(e) Rs. 3,055,966 as the amount of demand raised by the assessing
officer for assessment year 2008-09 on account of certain
disallowances. The Company has filed an appeal with the Commissioner
(Appeals) - Income Tax against said order.
In all of the above cases, the management is confident of a favorable
outcome.
7. During the year, the Company has recorded sales commission expense
of Rs.2,439,263 in the profit and loss account. The agreements relating
to this transaction expired in the month of December 2012. The
necessary approval of Central Government confirming renewal of
agreements for a period of five years effective from 1st January, 2013,
with the selling agents, is yet to be received by the company. The
management is of the view that it shall be able to obtain the approval
shortly and no significant adjustments are expected from this.
8. Previous year figures have been regrouped/rearranged wherever
necessary to confirm to the classification adopted for the current
year.
Sep 30, 2012
1. Corporate information
Voith Paper Fabrics India Limited ('the Company') is a subsidiary of VP
Auslandsbeteiligungen GmbH which holds 74.04% paid up equity share
capital of the Company. The Company is mainly in the business of
manufacturing and selling of paper machine clothing for pulp, paper and
board industry.
2. Basis of preparation
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006 (as amended) and
the relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention.
The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year, except for the
change in accounting policy explained below.
a. Terms / rights attached to equity shares
The Company has only one class of shares referred to as equity shares
having a par value of Rs. 10/- per share. Each holder of equity shares
is entitled to one vote per share. The Company declares and pays
dividends in Indian rupees. The dividend proposed by the Board of
Directors is subject to approval of the shareholders in the ensuing
Annual General Meeting.
During the year ended September 30, 2012, the amount of per share
dividend recognized as distributions to equity shareholoders was Rs. 3
(Previous year Rs. 3)
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
# Provision for warranties
A provision is recongnized for expected warranty claims on products
sold during the year, based on past experience of level of repairs and
returns. It is expected that the most of this cost will be incurred in
the next financial year and all will have been incurred within one year
of the balance sheet date. Assumption used to calculate the provision
for warranties were based on current sales level and current
information about returns based on the three year warranty period for
all products sold.
Provision for contigencies represents the following:-
(a) Tax claims/potential claims made by sales tax department towards
differential amount of sale tax applicable on products sold - Rs.
3,476,802 (Previous year : Rs. 5,045,045)
(b) Demand from excise department towards interest on cenvat credit
wrongly availed - Rs. 469,000 (Previous year : Rs. 680,281)
(c) Demand of Local area development tax applicability of which is not
certain to the Company - Rs. 4,439,556 (Previous year : Rs. 4,439,556)
(d) Provision for 1% additional duty on import - Rs. 40,256 (Previous
year : Rs. Nil)
In all these cases, based on legal advice/opinion obtained or base its
own assessment, management considers probable that economic outflows
will occur.
# Excise duty on sales amounting to Rs. 62,692,245/- (Previous Year :
Rs. 53,115,182/-) has been reduced from sales in statement of profit
and loss account and excise duty on decrease in stock amounting to Rs.
1,157,629 (Previous Year : Rs. 66,096) has been considered as income in
note 15 of financial statement.
3. Gratuity and other post-employment benefit plans
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days of last drawn salary for each completed year of service. The
scheme is funded with an insurance company in the form of a qualifying
insurance policy.
The Company also pays Rs 25,000 at retirement to all the workers (Other
Retirement Benefit). These benefits are un-funded.
The following tables summarize the components of net benefit expense
recognized in the statement of Profit and Loss and the funded status
and amounts recognized in the Balance Sheet for the respective plans.
The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
The overall expected rate of return on assets is determined based on
the market prices prevailing on that date, applicable to the period
over which the obligation is to be settled. There has been significant
change in expected rate of return on assets due to change in the market
scenario.
4. Segment Reporting
(a) Primary Segment
The company is engaged in the business of manufacturing and selling of
paper machine clothing for pulp, paper and board industry. The entire
operation is governed by the same set of risk and returns and hence,
the same has been considered as representing a single primary segment.
(b) Geographical Segments
The following is the distribution of the company's consolidated sales
by geographical market, regardless of where the goods were produced:
All the assets of the Company except receivables are located in India,
therefore, separate figures for fixed assets/additions to fixed assets
have not been furnished.
5. Related party disclosures
a. List of related parties:
Names of Related Parties where control exists irrespective of whether
transactions have occurred or not:
(A) Holding Company VP Auslandsbeteiligungen GmbH (formerly VPT
Auslandsbeteiligungen GmbH)
(B) Ultimate Holding Company Voith Paper Holding GmbH & Co. KG
(Holds 100% Equity of VP Auslandsbeteiligungen GmbH)
Names of Related parties with whom transactions have occurred during
the year
(A) Fellow subsidiaries Syn Strand Inc.
Voith Paper Fabrics Stubbins Limited
Voith IT Solution GmbH
Voith Paper Fabrics GmbH
Voith Paper Fabrics Asia Pacific Sdn Bhd
Voith Paper Fabrics Ipoh Sdn. Bhd.
Voith Paper Fabrics GmbH & Co. KG
Voith Paper Holding (VPT) Heidenheim
Voith Paper Fabrics (China) Co. Ltd.
Voith Paper Technology (India) Private Limited
Voith Hydro Pvt. Ltd.
Voith Paper Fabrics & Roll Systems GmbH
Voith GmbH, Heidenheim
6. Capital and other commitments
At September 30, 2012, the Company has capital commitments of Rs.
23,952,685 (Previous year Rs 395,751) net of advances.
7. Contingent liabilities Particulars As at As at
September
30, 2012 September
30, 2011
Amount
(Rs.) Amount (Rs.)
(a) Claim against the Company not
acknowledged as debts* 2,837,344 2,565,715
(b) Income tax demand** 9,358,788 -
(c) Bank guarantees given by the Company 6,708,479 6,697,772
*The claims against the Company comprises of:-
(a) Rs. 1,605,000 (previous year - Rs. 1,605,000) in respect of order
from Excise department for penalty of Cenvat wrongly taken and reversed
later on. The Company had filed an appeal with the Custom, Excise and
Service Tax Appellate Tribunal against the said order whereby the stay
was granted. The management is hopeful of matter being settled in its
favour.
(b) Rs.1,232,344 (previous year - Rs. 960,715 ) in respect of duty
deposited with custom authorities on account of purchase from related
parties.
** Income tax demand consists of:-
(c) Rs. 6,302,822 as the amount of demand raised by the assessing
officer for assessment year 2009-10 on account of certain
disallowances. The Company has filed an appeal with the Commissioner
(Appeals) - Income Tax against the said order;
(d) Rs. 3,055,966 as the amount of demand raised by the assessing
officer for assessment year 2008-09 on account of certain
disallowances. The Company has filed an appeal with the Commissioner
(Appeals) - Income Tax against said order.
In both the above cases, the management is confident of a favorable
outcome.
8. Previous year figures have been regrouped/ rearranged wherever
necessary to confirm to the classification adopted for the current
year. Also refer note 2.1(a).
Sep 30, 2010
1. Nature of Operations
Voith Paper Fabrics India Limited (the Company), is a subsidiary of
VPT Auslandsbeteiligungen GmbH which holds 74.04% paid up equity share
capital of the Company. The Company is mainly in the business of
manufacturing and selling of paper machine clothing for pulp, paper and
board industry.
2. Segment Information
(a) Primary Segment
The Company is engaged in the business of manufacturing and selling of
paper machine clothing for pulp, paper and board industry. The entire
operation is governed by the same set of risk and returns and hence,
the same has been considered as representing a single primary segment.
The said treatment is in accordance with the guiding principles
enunciated in the Accounting Standard 17 on Segment Reporting.
(b) Geographical Segments:
The following is the distribution of the Companys consolidated sales
by geographical market, regardless of where the goods were produced:
2. Related Party Disclosure
a.Names of related parties where control exists irrespective of whether
transactions have occurred or not.
(A) Ultimate Holding Company VPT Auslandsbeteiligungen GmbH (VF
Auslandsbeteiligungen GmbH till October 1, 2009)
Voith Paper Holding GmbH & Co. KG*
("holds 100% Equity of VPTAuslandsbeteiligungen GmbH)
Names of other related parties with whom transactions have taken place
during the year
(B) Fellow Subsidiary Voith Paper Fabrics Ipoh Sdn Bhd (IPOH)
Voith Paper Fabrics Syn Strand (Syn. Strand)
Voith Paper Fabrics Blackburn Ltd (VFBL) **
Voith Paper Fabrics Stubbins Ltd. (Stubbins)
Voith IT Solution GMBH, (VOIS)
Voith Paper Fabrics Frankenmarkt GMBH
Voith Paper Fabrics Asia Pacific Sdn. Bhd. (VFIS)
Voith AG, Heidenheim (VZ)
Voith Paper Fabrics GmbH & Co. KG
Voith Paper Holding GmbH & Co. KG (VPT)
Voith Paper Fabrics (China) Co. Ltd.
Voith Paper Fabrics, SA
Voith Paper Technology (India) Limited
(C) Key Management Personnel Manoj Kumar Kapoor (till March 26, 2009)
3. Details of dues to Micro and Small Enterprises
Pursuant to the amendment of Schedule VI of the Companies Act, 1956,
regarding disclosure of amount due to creditors which are Micro and
Small Enterprises, the Company has sent request to creditors to confirm
on the status and has not received intimation regarding the status from
some of suppliers hence disclosures, if any, relating to amounts unpaid
as at the year end along with interest paid/payables to them as
required under the said act have been given to the extent of
information available. The Company generally makes payments to all its
suppliers within the agreed credit period (generally less than 45 days)
and thus the Management is confident that there will be no liability of
interest under the MSMED Act. The disclosure required under Micro Small
and Medium Enterprise Development Act, 2006 are as follows:
4. Gratuity and other post-employment benefit plans
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded with an insurance company in the form of a
qualifying insurance policy.
The Company has also agreed to provide certain additional benefits to
workers. These benefits are unfunded.
The following tables summarize the components of net benefit expense
recognized in the Profit and Loss Account and the funded status and
amounts recognized in the Balance Sheet for the respective plans.
5. Contingent Liabilities not provided for
S.No Particulars As at As at
September September
30, 2010 30, 2009
(Rs.) (Rs.)
(a) Claims against the Company not
acknowledged as debts* 5,265,527 1,675,435
(b) Income Tax Demand - 1,682,980
(c) Bank Guarantees given by the Company 3,860,510 3,808,656
* The claims against the Company comprises of:-
a) Rs. 1,605,000 (previous year- Rs. 1,605,000) in respect of Order
from Excise department for penalty of Cenvat wrongly taken and reversed
later on. The Company had filed an appeal with the Custom, Excise and
Service Tax Appellate Tribunal against the said order whereby the stay
was granted.
b) Rs.2,872,952 (previous year- nil) represents the potential claims by
Excise Department towards the amount of Local area development tax
leviable on entry of goods in the state of Haryana. Since, the law was
struck down by the state court and the case is under hearing in Supreme
Court and no demands have been raised, the management does not consider
this to be payable.
c) Rs.787,575 (previous year - Rs.70,435) towards non-deposition of
service tax in respect of commission received without deposition of
service tax. The Company has got favourable order by Additional
Commissioner, Service Tax, New Delhi. The department has filed
application against the said order with Commissioner of Central Excise
(Appeals).
**Income tax demand of as at Sept 30,2009 consists of:
a) Rs.525,570 as the the amount of demand raised by the assessing
officer in its assessment for assessment year 2005-
06 on account of certain disallowances and the Company had filed an
appeal with the Commissioner (Appeals) - Income Tax against the said
order; and
b) Rs. 1,157,410 as the amount of demand raised by the assessing
officer in this assessment for assessment year 2006-
06 on account of disallowances which is being contested by the Company.
Company has received the order of CIT(A) against it and it will file
its appeal in the tribunal.
The Company has been advised by its Counsel that it is possible, but
not probable, the action will succeed and accordingly no provision for
any liability has been made in these financial statements.
7. In accordance with para 10 of Accounting Standard- 9 Revenue
Recognition notified under the Companies (Accounting Standard) Rules,
2006 (as amended), excise duty on sales amounting to Rs. 47,050,798
(Previous year Rs.27,176,161) has been reduced from sales in profit &
loss account and increase/(decrease) in excise duty on closing stock
amounting to Rs. 514,863 (Previous year (Rs.2,694,080)) has been
considered as income/expense in Schedule 14 of the financial
statements.
8. Previous years figures have been regrouped/ reclassified wherever
considered necessary to conform to current years classification.
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