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.