Dividend

The Board of Directors of the company has decided to conserve cash and not to recommend any dividend for the Financial Year 2023-24. The management has decided to utilize the internal accruals to finance the plans to expand and upgrade the production capacity and install equipment to help reduce the cost of power.

Year in retrospect:

During the year under review, India has emerged as the shining beacon in the world's fastest-growing economy, in a grim global scenario by growing at 6.8% this year, with IMF estimated growth at 6.9% for the Financial Year 2024-25, well above other economics of significant scale. This has been achieved despite many challenges arising out of the global economic slowdown, inflationary pressures and ongoing increasing geopolitical tensions.

The robust growth in the Indian economy was driven by strong investment which was augmented by the central government's capex push and buoyant private consumption.

However, India's merchandise exports of USD 437 billion this year registered a drop of 3% against the previous year.

Indian textile exports at USD 34.4 billion this year took a hit for the second consecutive year at 3% and 16.3% respectively, as geopolitical issues caused a shadow on the global economy. Export of readymade garments this year dropped by 10% against year bygone. Despite lower total merchandise exports; the electronics and pharmaceutical sectors emerged as star performers.

Production:

Your company manufactures premium quality dress and sport socks, for export to various geographies of the world. Such socks are patronized by reputed brands and are sold in top end overseas markets. The socks are made with numerous attractive shades and fashion designs for men, ladies and kids. Superior quality of yarn spun from combed cotton, BCI cotton and organic cotton with nylon, high bulk polyester and elastane are used to make such socks.

Your company also manufactures exclusive quality sports socks for niche overseas markets. Such socks made by your company are exported for various football clubs in the UK and Europe. These are specialized socks and fetch higher prices.

A good product quality, timely dispatches, prompt services and fair dealings are the cornerstones of your company's business. This has resulted in retaining our export clients for over two decades of business maintaining a very cordial and congenial relation.

Revenues:

The sale value of your company of 3074.64 lakh this year has dropped by 13.1% compared to 3537.83 lakh of previous year.

The export sale of 2885.17 lakh this year (constituting 93.58% of total sales) are 13.25% lower compared to 3317.35 lakh of previous year.

The weakening demand in export of textiles particularly garments/apparels is due to persistent global inflation and lingering possibilities of a recession. The other reasons are;

The USA and the European economies are experiencing a period of muted growth. UK which is one of main buyers of your company's goods is facing a contraction in its economy and pressure on higher living costs.

During and after Covid many US and European clients had stopped purchasing goods from China, which gave an edge to India for enhanced share of market. Again China has made inroads in Europe, leading to reduction in textile shipments from India to Europe and decline in prices, as China prices are very competitive.

There was an unprecedented rise in manufacturing cost in India. In Gujarat, the factory minimum wages increased by 30% over previous year. There was hike in the prices of electricity power and other cost input items. The overseas clients are reluctant to increase prices, to even partly compensate the rise in cost due to the pressure on retail prices and intense competition.

Continuing rebel/pirate attacks in the Red Sea and Mediterranean region stemming from ongoing conflicts have impacted transit shipping times and higher costs of freight, further adding to the woes of the exporters.

The cumulative impact of such reasons has resulted in a lower inflow of textile export orders and lower sales prices.

Realized Prices

Due to changes in client/product-mix as per the requirement of export clients particularly experienced in third and fourth quarters of the year under review the proportion of lower price goods like sneaker socks, kids socks, and multi packs of socks increased which resulted in lower average price, this year compared to the preceding year.

Inflation and price rise in cost inputs:

In the year under review, your company had to bear the unprecedented incidence of price rise of some cost inputs leading to increase in overall cost of production.

Dyed cotton yarn prices were about 8% lower against prices of previous year.

There was increase of 30% in minimum wages including fringe benefits as declared by Gujarat Government.

Electricity power showed rise of 8.16% at 8.49 per KWH this year, against 7.85 per KWH in previous year.

Profit & Loss Account:

Due to a drop in the inflow of purchase orders and lower realized rates, the total income of 3341.23 lakh this year was 13.18% lower compared to the total income of 3841.90 lakh in the previous year.

The drop in income and rise in input prices more than offset the benefits of lower raw materials prices and exchange gain. This resulted significantly lower profit before tax of 103.57 lakh against 213.00 lakh achieved in the previous year drop of 52.4%.

EBITDA:

The EBITDA this year is 8.26% compared to 10.87% of previous year.

Capital Expenditure:

During the year, the company implemented following two capital works. (i) Boundary wall

Old wire fencing across the periphery of the factory was too old and had badly corroded, creating security problem for the factory. New masonry boundary wall with columns and beam was installed. The cost incurred was 17.30 lakh. (ii) Mezzanine Floor New pillars supported mezzanine floor system with 600 kilograms per square meter load carrying capacity and MDF flooring was erected in one raw material warehouse. This has helped to create additional space for storage of raw materials and finished goods. The cost incurred was 30.74 lakh. A total of 48.04 lakh was incurred on capital goods.

FINANCE

As of the date of the Balance Sheet, the Company is debt-free in terms of long-term loans, excepting loans on vehicles.

WORKING CAPITAL LOAN

The Company is enjoying export packing credit and foreign bill purchase facilities from our Bankers.

INSURANCE

The properties and insurable interests of your Company in buildings, plant, machinery, stocks, etc. are adequately insured by the Company.

CHANGE IN SHARE CAPITAL

The paid-up share capital of the Company as on March 31, 2024, was 4.93 Crore, and there has been no change in the capital structure of the Company.

RESERVES

During the year under review, the Company has not transferred any amount to reserves.

DIRECTORS AND KEY MANAGERIAL PERSONNEL KEY MANAGERIAL PERSONNEL

Shri. Kaizad R. DadyBurjor was reappointed as a Non-Executive Director and retires by rotation, being eligible to offer himself for re-election.

BOARD OF DIRECTORS

The Company has a broad-based Board of Directors, duly constituted with proper balance of Executive Directors, Non-Executive Directors, and Independent Directors. There is one Woman Director on the Board. The changes in the composition of the Board of Directors are carried out in compliance with the provisions of the Companies Act, 2013 and Listing Regulations.

Shri. Kaizad R. DadyBurjor (DIN: 00022387) who retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

BOARD MEETINGS

Regular meetings of the Board of Directors are held to discuss and decide on various business policies, strategies, and other business.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Independent Directors have submitted the Declaration of Independence, as required pursuant to section 149(7) of the Companies Act 2013, stating that they meet the criteria of independence as provided in sub-section (6).

COMPOSITION OF AUDIT COMMITEE

The Board has constituted an Audit Committee comprising of three Independent Directors. The Audit Committee reviews reports including significant audit observations and follow-up actions thereon. The Audit Committee also meets the Company's Statutory Auditors and Internal Auditors to ascertain their views on the financial statements. The Committee members meet regularly and make their recommendations in accordance with the terms of reference specified by the Board. Such recommendations are thoroughly discussed in Board meetings and by and large accepted for implementation.

All the members of the Audit Committee are financially literate and bring in expertise in the fields of Finance, Taxation, Technical, Secretarial and Legal issues. The attendance records of the members at the meeting were as follows:

The Committee has the mandate to recommend the appointment/re-appointment of Executive Directors and appointment of employees from the level of Vice-President and above along with the remuneration to be paid to them. The remuneration is fixed keeping in mind the person's track record, his/her potential, individual performance, the market trends, and scales prevailing in a similar industry.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Board has constituted a Stakeholder Relationship Committee consisting of three Directors, two independent Directors and the Managing Director.

The Company Secretary is designated as the “Compliance Officer” who oversees the redressal of the Investors' grievances.

The Committee meets to approve share transfers, transmission, issue of duplicate share certificates, re-materialization of shares and all other issues pertaining to shares and also to redress investor grievances like non-receipt of dividend warrants, non-receipt of share certificates, etc. The Committee regularly reviews the movement in shareholding and ownership structure. The Committee also reviews the performance of the Registrar and Transfer Agents. The Company is in compliance with the SCORES, which has initiated by SEBI for processing the investor complaints in a centralized web-based redress system and online redressal of all the shareholders complaints.

TH The Committee met Four (4) times during the financial year ended on March 31, 2024. The attendance records of the members at the meeting were as follows:

SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards on Board Meetings and General Meetings, issued by The Institute of Company Secretaries of India.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Fraud and corruption-free work culture has been the core of the Company. In view of the potential risk of fraud, corruption, and unethical behavior, which could adversely impact the Company's business operations, the Company has an established mechanism for Directors/Employees to report concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct or ethics policy. It also provides for adequate safeguards against victimization of Directors/employees who avail of the mechanism. The Company affirms that no personnel have been denied access to the Audit Committee. The Company has formulated a Policy of Vigil Mechanism and has established a mechanism that any personnel may raise Reportable Matters within 60 days after becoming aware of the same. All suspected violations and Reportable Matters are reported to the Chairman of the Audit Committee. The key directions/actions are informed to the Managing Director of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

In pursuance of section 134 (5) of the Companies Act, 2013, the Board of Directors hereby confirms that:

(a) In the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same.

(b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as on March 31, 2024, and of the profit and loss of the Company for the period ended March 31, 2024.

(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

(d) The Directors had prepared the annual accounts on a going concern basis.

(e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

SUBSIDIARIES

As the Company has no subsidiaries, Section 129(3) of the Companies Act, 2013, does not apply.

ANNUAL RETURN

In terms of provisions of Section 92(3), 134(3)(a) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return in Form MGT-7 for the financial year ended March 31, 2023, is placed on the website of the Company and can be accessed at http://viratindustries.com/.

AUDITORS

STATUTORY AUDITOR

M/s. B. K. Khare & Co., Chartered Accountants (Firm Registration No. 105102W) were re-appointed as the Statutory Auditors of the Company for a tenure of 5 years commencing from the conclusion of the 32^nd AGM of the Company until the conclusion of the 37^th AGM of the Company to be held in the year 2027. The Statutory Auditor's Report does not contain any qualifications, reservations, adverse remarks, or disclaimers.

SECRETARIAL AUDITOR

M/s. Vishal Dewang & Associates, practicing Company Secretary was appointed as a Secretarial Auditor under the provision of section 204 of the Companies Act, 2013 for FY 2023 2024. The Report of the Secretarial Auditor for FY 2023 2024 is annexed to this report as Annexure I. The said Secretarial Audit Report does not contain any qualifications, reservations, adverse remarks, or disclaimers. As observed by Mr. Vishal Dewang, the company did not have a Whole-Time Company Secretary from 03^rd December 2023 to 29^th February 2024. However, the company has appointed a new Whole-Time Company Secretary at the meeting of the Board of Directors held on 01^st March, 2024. The company has complied with the provisions of Regulation 6 of SEBI (LODR) Regulations, 2015 and Section 203(4) of the Companies Act, 2013. Also, at the time of Secretarial Audit, the website of the company was in the process of updation. however, it is fully functional as on date.

INTERNAL AUDITOR

The Board of Directors has appointed M/s S.R. Rege & Co., Chartered Accountant, as Internal Auditors for the FY 2023 2024 to conduct the internal audit of the various areas of operations and records of the Company. The periodic reports of the said internal auditors are regularly placed before the Audit Committee along with the comments of the management on the action taken to correct any observed deficiencies on the working of the various departments.

COST AUDITORS

Your Company is not required to maintain cost accounting records as specified under Section 148(1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS, AND OUTGOING

Additional information on conservation of energy, technology absorption, foreign exchange earnings, and outgo as required to be disclosed in terms of Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 for the FY 2023 2024 is annexed and forms part of this Report as Annexure II.

DETAILS RELATING TO DEPOSITS

The Company has not accepted any deposit during the year, nor has any deposit remained unpaid or unclaimed as at the end of the year.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

No significant and material orders were passed by the regulators or Courts or Tribunals during the year, which would adversely impact the Company's operation in the future.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Your Company has not-

Given any loan to any person or other body corporate,

Given any guarantee and provided any security in connection with a loan to any other body corporate or any person. Acquired by way of subscription, purchase or otherwise the securities of any other body corporate otherwise than in accordance with the law.

TRANSFER OF UNCLAIMED DIVIDEND AND SHARES

During the year, your Company transferred the 5,15,387/- for the financial year ended March 31, 2015, to the Investor Education and Protection Fund in compliance with the provisions of Sections 124 and 125 of the Companies Act, 2013.

In compliance with these provisions read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, your Company also transferred 11,586 Shares to the Demat Account of the IEPF Authority, in respect of which dividend had remained unpaid/ unclaimed for a consecutive period of 7 years.

RISK MANAGEMENT

A documented risk management policy is in place as per section 134(3) (n) of the Companies Act, 2013.

Your Company is exposed to risk from fluctuation of foreign exchange rates, market economic slowdown or decline in demand in the country of buyers of your Company's products, prices of raw materials and finished goods, compliances risk and people risk.

Foreign Exchange Risk

During year under review the Company endeavored to further mitigate the risk associated with the exchange fluctuations by entering into Forward Contracts with the Company's Bankers, on a very conservative and risk-adverse basis.

Commodity Prices Risk

Your Company proactively manages the risk of purchasing raw materials through forward booking,vendor development practices, and inventory management. The Company's strong reputation for quality and services with overseas clients to some extent mitigates the impact of price risk on finished goods.

Compliance Risk

Your company must follow various statutes and regulations including the Companies Act. The Company is mitigating these risks through regular review of legal compliances carried out through internal as well as external compliance audits.

People Risk

Your Company nurtures and grooms the talented and key personnel for future business leadership and looks after them judiciously so that they stay with the Company.

CORPORATE SOCIAL RESPONSIBILITY

Section 135(1) of the Companies Act, 2013, is not applicable to your Company, because the net worth, turnover, and net profit of your Company during the year is less than the required limits.

PREVENTION OF INSIDER TRADING

SEBI notified the SEBI (Prohibition of Insider Trading) Regulations, 2015 which came into effect from May 15, 2015. Pursuant thereto, the Company has formulated a new Code for Prevention of Insider Trading for Directors, Promoters and Senior Executive Officers.

The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of the Company's shares by the Directors, Key managerial personnel, and designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered during the financial year were in the ordinary course of business of your Company and were on arm's length basis. There were no materially significant related party transactions entered by your Company with Promoters, Directors, Key Managerial Personnel, or other persons which may have a potential conflict with the interest of your Company. The details are given in Annexure - III, forming part of this report.

FORMAL ANNUAL EVALUATION

During the year, the Board adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors. The exercise was carried out through a structured evaluation process covering various aspects of the Board functioning such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, governance issues etc.

MEETING OF INDEPENDENT DIRECTORS

All the independent Directors of the Company held a meeting on February 13, 2024 and reviewed the performance of non-independent Directors and the Board as a whole. They also assessed the quality, quantity, and timeliness of flow of information between the Company management and the Board.

They expressed their satisfaction at the performance of non-independent Directors and appreciated the flow of information from the Company management.

RATIO OF REMUNERATION TO EACH DIRECTOR

The ratio of remuneration of each director to the median employee's remuneration and other details in terms of sub-section 12 of section 197 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming a part of this Report as Annexure IV.

LISTING FEES

Your Company has paid the listing fees up to March 31, 2024, to the Bombay Stock Exchange on April 23, 2024.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

Your Company is committed to adopting good Corporate Governance practices in letter and spirit. A detailed report on Corporate Governance is given in a separate section of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), is presented in a separate section, forming part of the Annual Report.

ANTI SEXUAL HARASSMENT POLICY

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of 'The Sexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal) Act, 2013. An “Internal Complaints Committee (ICC)” has been set up to redress complaints received regarding Sexual Harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. A Lady NGO representative is a member of the said Internal Complaints Committee and regularly attends the meetings which are noted.

The following is a summary of Sexual Harassment complaints received and disposed of during the year 2023 2024: No. of complaints received: Nil No. of complaints disposed of: Not applicable

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANACIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN MARCH 31, 2024 AND DATE OF THIS REPORT

There were no Material changes and Commitments affecting the Financial Positions of the Company which have occurred between March 31, 2024 and date of this report.

PARTICULARS OF EMPLOYEES

As per provision of Section 197 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, particulars of the employees are required tobe annexed in respect of the employees of the Company who were in receipt of total remuneration of 60.00 Lakh per annum or 5.00 Lakh per month. During the financial year 2023 2024, there is no employee drawing remuneration as above.

ACKNOWLEDGMENT

Your Directors wish to place on record their sincere appreciation for the co-operation and support extended to the Company by the Government of India, the Gujarat State Government and by the relevant Government Authorities, Central, State and Local, the Company's Bankers and Business Associates.

Your Directors also thank all the employees at every level, who, through their dedication, co- operation, and support, have enabled the Company to achieve sustained growth.