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Notes to Accounts of Virat Industries Ltd.

Mar 31, 2015

1. Corporate Information:

Virat Industries Limited ("the Company") is a Manufacturer and Exporter of premium quality of dress and sport socks for Men, Ladies and Children. The Company also manufactures high quality football socks for many prestigious clubs of Europe. The socks are knitted and processed on imported machinery. The socks of the Company are exported to Switzerland, U.K and Gulf countries for top end markets.

The manufacturing activity and Registered Office of the Company are located in Navsari, South Gujarat. The Head Office of the Company is situated in Mumbai. The marketing function is carried out at the Mumbai Head Office.

Virat Industries Limited is a public imited Company, listed on the Bombay Stock Exchange.

Particulars As at As at 31 March, 2015 31 March, 2014 Rs. Rs.

2. Contingent Liabilities and Commitments (to the extent not provided for)

(i) Contingent Liabilities

Claims against the Company not acknowledged as debt Not Not Ascertained Ascertained

* For Assessment Year 2005-06 and 2006-07, the Income Tax Department has adjusted the carried forward of losses and unabsorbed depreciation in computing the benefit under section 10B of the Income Tax Act, 1961. During the year Company received favourable order in Income-tax Appellate Tribunal for the Assessment Year 2006-07 and the Income-tax Department, Navsari has referred the said matter to the High Court of Gujarat at Ahmedabad. Hence, the matter has been referred to the High Court of Gujarat at Ahmedabad for Assessment Year 2005-06 and 2006-07. Additional liability, if any, is not ascertained.

(ii) Commitments

Estimated amount of contracts remaining to be executed

on capital account and not provided for 200,000 -

Total 200,000 -

3. Employee Benefit Plans

(a) Defined Contribution Plan

The Company makes Provident fund and other funds contributions to defined contribution plans for qualifying employees. The Company recognised Rs. 1,668,602 (Year ended 31 March, 2014 Rs. 1,501,137) for Provident Fund contributions.

(b) Defined Benefit Plan: Gratuity

Provision is made for gratuity and compensated absences based upon actuarial valuation done at the end of every financial year using 'Projected Unit Credit' method and it covers all regular employees. Gains and losses on changes in actuarial assumptions are accounted for in the Statement of profit and loss.

During the previous year the Company funded gratuity with LIC of India.

The disclosures as required under revised Accounting Standard 15 on "Employee Benefits" are as follows: The following table sets out the funded status (unfunded in the previous year) of the defined benefit schemes and the amount recognised in the financial statements:

4. Segment information

The principal business of the Company is of manufacturing of socks. All other activities of the Company revolve around its main business. Hence, there is only one primary reportable business segment as defined by Accounting Standard 17 - "Segment Reporting".

The Secondary Segments are identified based on the geographical location of customers. The secondary geographical segments of the Company consist of regions of United Kingdom, Switzerland, UAE, India and Rest of the World.

5. Related Party Transactions Details of related parties:

Description of relationship Names of related parties:

Promoter Company Shapoorjee Chandabhoy Finvest Private Limited

Associates Armayesh Enterprise LLP

Key Management Personnel (KMP) Key Management Personnel:

and their Relatives Mr. Adi F. Madan - Managing Director

Mrs. Ayesha K. DadyBurjor - Whole-time Director (w.e.f. 01/09/2014)

Their Relatives:

Mr. Naozer J. Aga Mr. Armand N. Aga Mr. Kaizad R. DadyBurjor Mrs. Ayesha A. Madan Mr. Jehan Adi Madan

Entities over which promoter group Armayesh Consultancy and Agencies Private Limited has significant influence Armayesh Embroideries Private Limited

Note: Related parties have been identified by the Management.

6. Details of Leasing Arrangements As Lessee

The Company has acquired premises on lease, which are in the nature of cancellable operating lease as defined in Accounting Standard 19 "Leases". The lease rent paid and accounted during the year was Rs. 1,138,694 (Previous year Rs. 809,400) as per the terms and conditions of the lease agreements and is charged to the Statement of Profit and Loss.

7. The Company has not granted any loans / advances in the nature of loans as stipulated in the Clause 32 of the Listing Agreement with the Stock Exchanges. For this purpose, the loans to employees as per the Company's policy and security deposits paid towards premises taken on leave and license basis have not been considered.

8. Effective from 1 April, 2014, the Company has charged depreciation based on the remaining useful life of the assets as per the requirements of Schedule II of the Companies Act, 2013 ("the Act"). Consequent to this, depreciation charge for the year ended on 31 March, 2015 is higher by Rs. 1,763,765. Pursuant to the transition provisions prescribed in Note 7(b) of Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be nil as on 1 April, 2014, and has adjusted an amount of Rs. 623,393 (Net of Deferred Tax of Rs. 307,920) against opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus in respect of assets wherein the remaining useful life of the assets is Nil.

9. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2014

1 Corporate Information:

Virat Industries Limited is a manufacturer and Exporter of premium quality of dress and sport socks for Mens, Ladies and Children. The Company also manufactures high quality football socks for many prestigious clubs of Europe. The socks are knitted and processed on imported machinery. The socks of the Company are exported mainly to Switzerland, U.K and Gulf countries for top end markets. The manufacturing activity and Registered Office of the Company are located in Navsari, South Gujarat. The Head Office of the Company is situated in Mumbai. The marketing function is carried out at the Mumbai Head Office. Virat Industries Limited is a Public Limited Company, listed on the Bombay Stock Exchange.

Particulars As at As at 31 March, 2014 31 March, 2013 2 Contingent Liabilities and Commitments (to the extent not provided for)

i Contingent Liabilities

a Claims against the Company not acknowledged as debt Not Not Ascertained Ascertained

- For Assessment Year 2005-06 and 2006-07, the Income Tax Department has adjusted the carried forward of losses and unabsorbed depreciation in computing the benefit under section 10B of the Income Tax Act, 1961. The matter has been referred to the High Court of Gujarat at Ahmedabad for Assessment Year 2005-06 and is pending before the Income Tax Appellate Tribunal for Assessment Year 2006-07. Additional liability, if any, is not ascertained.

Total - -

DISCLOSURE UNDER ACCOUNTING STANDARDS

3 Employee Benefit Plans

(a) Defined Contribution Plan

The Company makes Provident fund and other funds contributions to defined contribution plans for qualifying employees. The Company recognised Rs. 1,501,137/- (Year ended 31st March, 2013 Rs. 1,335,804/-) for Provident Fund contributions.

(b) Defined Benefit Plan: Gratuity

Provision is made for gratuity and compensated absences based upon actuarial valuation done at the end of every financial year using ''Projected Unit Credit'' method and it covers all regular employees. Gains and losses on changes in actuarial assumptions are accounted for in the statement of profit and loss. During the year the Company funded gratuity with LIC of India.

The disclosures as required under revised Accounting Standard 15 on "Employee Benefits" are as follow: The following table sets out the funded status(unfunded in the previous year) of the defined benefit schemes and the amount recognised in the financial statements:

4 Segment information

The principal business of the company is of manufacturing of socks. All other activities of the Company revolve around its main business. Hence, there is only one primary reportable business segment as defined by Accounting Standard 17 - "Segment Reporting".

The Secondary Segment are identified based on the geographical location of customers. The secondary geographical segments of the company consist of regions of United Kingdom, Switzerland, UAE, India and Rest of the World.

Previous year figures are given in brackets.

Segregation of assets (except trade receivable) into secondary segments has not been done as all the assets are located and used in India and the Company is of the view that it is not practical to reasonably allocate such assets and an ad-hoc allocation will not be meaningful.

5 Related Party Transactions

Details of related parties:

Description of relationship Names of related parties:

Promoter Company Shapoorjee Chandabhoy Finvest Private Limited

Key Management Personnel (KMP) Adi F. Madan

Entities over which promoter group has Armayesh Consultancy and Agencies Private Limited

significant influence Armayesh Embroideries Private Limited

Associates Armayesh Enterprise LLP

Note: Related parties have been identified by the Management.

6 Details of Leasing Arrangements

As Lessee

The Company has acquired premises on lease, which are in the nature of cancellable operating lease as defined in Accounting Standard 19 "Leases". The future lease obligations payable within one year aggregate to NIL (Previous Year Nil). The lease rent paid and accounted during the year was Rs. 809,400/- (Previous year Rs.735,480/-) as per the terms and conditions of the lease agreements and is charged to the Statement of Profit and Loss.

7 The Company has not granted any loans / advances in the nature of loans as stipulated in the Clause 32 of the Listing Agreement with the Stock Exchanges. For this purpose, the loans to employees as per the Company''s policy and security deposits paid towards premises taken on leave and license basis have not been considered.

8 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

1. Corporate tofanmaiion

Virat Industries Limited is a Manufacturer and Exporter of premium quality of dress and sport socks for .Mens, Ladies and Children. The Company also manufactures high quality football socks for many prestigious clubs of Europe. The socks are knitted and processed on imported machinery.

The installed capacity of the Company is 50 lakhs pairs per annum. 95 to 96 % of the revenue of the Company is derived from export sales. The socks of the Company are exported to Switzerland, U.K and Gulf countries for top end markets.

The manufacturing activity and Registered Office of the Company are located in Navsari, South Gujarat. The Head Office of the Company is situated in Mumbai. The marketing function is carried out at the Mumbai Head Office.

Virat Industries Limited is a public limited Company, listed on the Bombay Stock Exchange.

2 Employee Benefit Plans

(a) Defined Contribution Plan

The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. The Company recognised Rs. 798,666 (Year ended 31 March, 2012 Rs. 1,204,302) for Provident Fund contributions.

(b) Defined Benefit Plan: Gratuity

Provision is made for unfunded gratuity and compensated absences based upon actuarial valuation done at the end of every financial year using "Projected Unit Credit" method and it covers all regular employees. Gains and losses on changes in actuarial assumptions are accounted for in the Profit and Loss account.

The disclosures as required under revised Accounting Standard 15 on "Employee Benefits" are as follow: The Companies gratuity plan is not funded and liability is provided for in the account.

3 Segment information

The principal business of the Company is of manufacturing of socks. All other activities of the Company revolve around its main business. Hence, there is only one primary reportable business segment as defined by Accounting Standard 17 - "Segment Reporting".

The Secondary Segments are identified based on the geographical location of customers. The secondary geographical segments of the Company consist of regions of United Kingdom, Switzerland, UAE, India and Rest of the World.

4 The Company has not granted any Joans / advances in the nature of loans as stipulated in the Clause 32 of the Listing Agreement with the Stock Exchanges. For this purpose, the loans to employees as per the Company''s policy and security deposits paid towards premises taken on leave and license basis have not been considered.

5 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

1. Corporate Information

Virat Industries Limited is manufacturer and exporter of premium quality of dress and sport socks for Mens, Ladies and Children. The Company also manufactures high quality football socks for many prestigious clubs of Europe. The socks are knitted and processed on state of art imported machinery. The installed capacity of the Company is 47 lakhs pairs per annum. 95 to 96% sale revenue of the Company is derived from export sales. The socks of the Company are exported to Switzerland, U.K and Gulf countries for top end markets.

The manufacturing activity and registered office of the Company are located in Navsari, South Gujarat. The Head Office of the Company is situated in Mumbai. The marketing function is carried out at Mumbai Head Office.

Virat Industries Limited is public limited Company, listed on Bombay Stock Exchange.

Particulars As at 31 March, 2012 As at 31 March, 2011 Rs. Rs.

2 Contingent Liabilities and Commitments (to the extent not provided for) (i) Contingent Liabilities Not Not Ascertained Ascertained (a) Claims against the company not acknowledged as debt

- For Assessment Year 2005-06 and 2006-07, the Income Tax Department has adjusted the carried forward of losses and unabsorbed depreciation in computing the benefit under section 10B of the Income Tax Act, 1961. The matter has been referred to the High Court of Gujarat at Ahmedabad for Assessment Year 2005-06 and is pending before the Income Tax Appellate Tribunal for Assessment Year 2006-07. Additional liability, if any, is not ascertained.

3 Employee Benefit Plans

(a) Defined Contribution Plan

The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. The Company recognised Rs. 1,204,302 (Year ended 31 March, 2011 Rs. 1,103,333) for Provident Fund contributions.

(b) Defined Benefit Plan: Gratuity

Provision is made for unfunded gratuity and compensated absences based upon actuarial valuation done at the end of every financial year using 'Projected Unit Credit' method and it covers all regular employees. Gains and losses on changes in actuarial assumptions are accounted for in the Profit and Loss Account.

4 Segment information

The principal business of the company is of manufacturing of socks. All other activities of the Company revolve around its main business. Hence, there is only one primary reportable business segment as defined by Accounting Standard 17 - "Segment Reporting".

The Secondary Segment are identified based on the geographical location of customers. The secondary geographical segments of the company consist of regions of United Kingdom, Switzerland, UAE, India and Rest of the World.

Previous year figures are given in brackets. Segregation of assets (except sundry debtors) into secondary segments has not been done as all the assets are located and used in India and the. Company is of the view that it is not practical to reasonably allocate such assets and an ad-hoc allocation will not be meaningful.

5 the Company has not granted any loans / advances in the nature of loans as stipulated in the Clause 32 of the Listing Agreement with the Stock Exchanges. For this purpose, the loans to employees as per the Company's policy and security deposits paid towards premises taken on leave and license basis have not been considered.

6 The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2011

1. Capital Commitments:

The estimated amounts of contracts remaining to be executed on capital account, and not provided for (net of advance) as at March 31,2011 NIL (Previous year:Rs 206,919/-)

2. Contingent Liabilities

a) For Assessment Years 2005-06 and 2006-07 the Income Tax Department has adjusted the carried forward losses and unabsorbed depreciation in computing the benefit u/s 10B of the Income Tax Act, 1961.

The matter has been referred to the High Court of Gujarat at Ahmedabad for Assessment Year 2005-06 and is pending before the Income Tax Appellate Tribunal for Assessment Year 2006-07. Additional liability, if any, is not ascertained.

b) For Assessment Year 2009-10 the Income tax department has served an intimation u/s 143(1) of the Income Tax, 1961 demanding Rs 81,70,174/-. The company has also preferred rectification application, since the demand has arisen on account of non-setting off of the brought forward loss against the business income for the year under consideration. The Company is in appeal with the Commissioner of Income-Tax (Appeal). Additional liability of Rs 54,20,173/- may arise on the said matter.

3. Depreciation

a) Depreciation on fixed assets has been provided on Written Down Value basis in accordance with the provisions of section 205(2)(a) of the Companies Act, 1956, in respect of the assets acquired/ purchased upto March 31,1995.

b) Depreciation on assets acquired/purchased since April 1, 1995, has been provided on Straight Line Basis in accordance with the provisions of section 205(2)(b) of the Companies Act, 1956.

c) The depreciation under sections 205(2)(a) and 205(2)(b), as stated above, has been provided at the rates specified in Schedule XIV of the Companies Act, 1956, and has been provided on pro-rata basis according to the period each asset was put to use during the period.

4. Contributions are made to Provident Fund and Family Pension Fund which covers all regular employees. Amount recognized as expense in respect of these defined contribution plans, aggregate to Rs 1,103,333/- (previous year Rs 952,016/-).

Provision is made for unfunded gratuity and compensated absences based upon actuarial valuation done at the end of every financial year using 'Projected Unit Credit' method and it covers all regular employees: Gains and losses on changes in actuarial assumptions are accounted for in the Profit and Loss account.

The above excludes amounts pertaining to gratuity and compensated absences for the year as the same is provided on the basis of the actuarial valuation for the Company as a whole.

Computation of Net Profit in accordance with the provisions of section 349 of the Companies Act, 1956, has not been given as commission by way of percentage of profits is not payable for the year to the Directors of the Company.

5. The principal business of the Company is of manufacturing socks. All other activities of the Company revolve around its main business. Hence, there is only one primary reportable business segment as defined by Accounting Standard 17 - "Segment Reporting" (AS 17).

The Secondary Segments are identified based on the geographical location of customers. The secondary geographical segments of the company consist of regions of United Kingdom, Switzerland, UAE, India and Rest of the World.

*As certified by management and relied upon by the auditors.

"Actual production excludes 1,160,107 pairs (previous year 1,461,400 pairs) manufactured by the job workers.

6. Assets acquired on Lease

a) The Company has acquired premises on lease, which are in the nature of Operating lease as defined in Accounting Standard 19 "Leases". The future lease obligations payable within one year aggregate to NIL (Previous Year Rs. 288,000/-). The lease rent paid and accounted during the year was Rs 288,000/- (Previous Year Rs 205,219/-) as per the terms and conditions of the lease agreements and is charged to the profit and loss account.

general description of Lease terms:

(i) Lease rentals are charged on the basis of agreed terms. (ii) Asset is taken on lease over a period of 36 months.

7. The Company has not granted any loans / advances in the nature of loans as stipulated in the Clause 32 of the Listing Agreement with the Stock Exchanges. For this purpose, the loans to employees as per the Company's policy and security deposits paid towards premises taken on leave and license basis have not been considered.

8. The dues outstanding to Micro, Small and Medium Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 are based on the information available with the Company and hence the disclosures as required under the said Act have not been given.

9. Figures of the previous year have been regrouped wherever necessary to correspond with those of the current year.


Mar 31, 2010

1. Capital Commitments:

The estimated amounts of contracts remaining to be executed on capital account, and not provided for (net of advance) as at March 31, 2010 Rs. 206,919/- (Previous year: Rs. 348,660/-)

Current Year Previous Year

2. Contingent Liabilities Rupees Rupees

Guarantees given by the Bank on behalf of the Company to Excise/ Customs authorities NIL 335,000



3. Depreciation

a) Depreciation on fixed assets has been provided on Written Down Value basis in accordance with the provisions of section 205(2)(a) of the Companies Act, 1956, in respect of the assets acquired/purchased upto March 31,1995.

b) Depreciation on assets acquired/purchased since April 1, 1995, has been provided on Straight Line Basis in accordance with the provisions of section 205(2)(b) of the Companies Act, 1956.

c) The depreciation under sections 205(2)(a) and 205(2)(b), as stated above, has been provided at the rates specified in Schedule XIV of the Companies Act, 1956, and has been provided on pro-rata basis according to the period each asset was put to use during the period.

4. Contributions are made to Provident Fund and Family Pension Fund which covers all regular employees. Amount recognized as expense in respect of these defined contribution plans, aggregate to Rs.952,016/- (previous year Rs. 718,917/-).

Provision is made for gratuity and leave encashment based upon actuarial valuation done at the end of every financial year using Projected Unit Credit method and it covers all regular employees. Gains and losses on changes in actuarial assumptions are accounted for in the Profit and Loss account.

5. The principal business of the Company is of manufacturing socks. All other activities of the Company revolve around its main business. Hence, there is only one primary reportable business segment as defined by Accounting Standard 17 - "Segment Reporting" (AS 17).

The Secondary Segments are identified based on the geographical location of customers. The secondary geographical segments of the company consist of regions of United Kingdom, Switzerland, India and Rest of the World.

6. As required under Accounting Standard 18 on "Related party disclosures" (AS 18), following are details of transactions during the period with the related parties of the Company:

(a) Names of related parties and description of relationship

Promoter Company - (which can Shapoorjee Chandabhoy Finvest Pvt. Ltd. exercise significant influence)

Others Related Company - (Other entities Armayesh Consultancy and Agencies Pvt. Ltd. which can exercise significant influence) Indijack Limited

Key Management Personnel Mr. Adi F. Madan



7. Assets acquired on Lease

The Company has acquired premises on lease, which are in the nature of Operating lease as defined in Accounting Standard 19 "Leases". The future lease obligations payable within one year aggregate to Rs. 288,000/- (Previous Year Rs. 127,700/-). The above lease agreement was extended during the year for a period of one year. The lease rent paid and accounted during the year was Rs. 205,219/- (Previous Year Rs. 219,000/-) as per the terms and conditions of the lease agreement and is charged to the profit and loss account.

8. The Company has not granted any loans advances in the nature of loans as stipulated in the Clause 32 of the Listing Agreement with the Stock Exchanges. For this purpose, the loans to employees as per the Companys policy and security deposits paid towards premises taken on leave and license basis have not been considered.

9. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, as required under the said Act have been given accordingly.

10. Figures of the previous year have been regrouped wherever necessary to correspond with those of the current year.







 
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