Vardhman Acrylics Ltd Directors Report

Dear Members,

The Directors of your Company have pleasure in presenting their 35 th Annual Report of the business and operations of the Company along with the Audited Financial Statements for the year ended 31 st March, 2025.

1. FINANCIAL RESULTS:

The financial performance of your Company for the year ended 31 st March, 2025 is as under:

( in Lakhs)

PARTICULARS	2024-25	2023-24
Revenue from operations (Net)	28,156.53	29,747.87
Other Income	1,561.13	1,402.72
Profit before Depreciation, Interest & Tax (PBDIT)	1,929.99	2,726.73
Interest and Financial expenses	24.91	28.67
Profit before Depreciation and Tax (PBDT)	1,905.08	2,698.06
Depreciation	300.13	563.00
Profit before Tax (PBT)	1604.95	2,135.06
Provision for Tax - Current	159.63	406.37
- Deferred Tax (Net of Adjustment)	263.18	(24.87)
- Total tax expenses	422.81	381.50
Profit after tax (PAT)	1,182.14	1,753.56
Other Comprehensive Income	(7.00)	17.78
Total Comprehensive Income for the period	1,175.14	1,771.34
Earnings per share (?)
- Basic	1.47	2.18
- Diluted	1.47	2.18

2. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT:

Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2) (e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented as under:

A. ACRYLIC FIBER INDUSTRY - GLOBAL AND INDIAN PERSPECTIVE:

Global acrylic fiber consumption continues to suffer. Global consumption of acrylic fiber is estimated to have dropped by about 8 to 10% in CY 2024 over the previous year. Main reasons for this situation seem to be climate change leading to change in buyer preferences and geopolitical events leading to reduction in demand.

Acrylic fiber industrys overcapacity challenge has only aggravated. Addition of substantial new capacity in 2024 in China with plans of further expansion has only added

to the woes of industry. Increasing surplus capacity since last few years is prompting some countries to continue to dump acrylic fiber at very low prices in India where acrylic fiber consumption trend is still better than rest of the world.

Acrylic fiber consumption in India is estimated to have dropped by 5 to 7% in 2024-25 over previous year. Despite the drop, consumption trend in India can be considered to be better than rest of the world due to various domestic reasons that support its consumption. However, Indian acrylic fiber industry is facing squeezed margins due to low priced imports.

Performance of Indian AF producers in 2024-25 was affected mainly due to low priced imports from Asian and Latin American countries. This resulted in loss of business volume as well as margins. Your company could not utilise its full capacity due to loss of business volume which has also led to higher manufacturing costs.

Major raw material of acrylic fiber is Acrylonitrile. Indian consumers of Acrylonitrile are dependent upon imports. Acrylonitrile is a crude oil derivative. Therefore, Acrylonitrile cost in India is affected by fluctuations in crude oil, demand supply of its raw materials, geo-political events and exchange rate fluctuation as well. During the year 2024-25, Acrylonitrile prices have generally been on decline having lost about 15% during the year. New capacity addition in Asia coupled with weak demand from derivatives of Acrylonitrile helped in Acrylonitrile prices not showing high volatility during the year. Availability of Acrylonitrile was better during the year due to subdued demand from its derivatives as well as due to new capacity addition in China.

B. FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS:

?€? PRODUCTION & SALES REVIEW:

Your Company has achieved a turnover of C 28,156.53 lakhs against a turnover of C 29,747.87 lakhs in the previous year. The Company earned Profit before depreciation, interest and tax of C 1,929.99 lakhs as against C 2,726.73 lakhs in the previous year. After providing for depreciation of C 300.13 lakhs (previous year C 563.00 lakhs) and provision for current tax of C159.63 lakhs (previous year C 406.37 lakhs), deferred tax of C 263.18 lakhs (previous year C (24.87) lakhs), Profit after Tax after considering Other Comprehensive Income of the Company is C 1,175.14 lakhs as against C 1,771.34 lakhs in the previous year.

The balance available for appropriation after adding balance in surplus account is C 10,491.22 lakhs. Out of this, a sum of C 1,60729 lakhs has been utilised towards dividend and balance of C 8,883.93 lakhs is proposed to be carried as surplus to the Balance sheet.

RESOURCE UTILIZATION:

a) Fixed Assets:

The gross fixed assets (including work in- progress) as at March 31,2025 were C 9,148.30 lakhs as compa red to C 8,748.37 lakhs in the previous year.

b) Current Assets:

The current assets as on March 31, 2025 were C 22,411.51 lakhs as against C 18,073.16 lakhs in theprevious year. Inventory level was at C 8,089.04 lakhs as against C 7,495.39 lakhs in the previous year.

FINANCIAL CONDITIONS & LIQUIDITY:

Management believes that the Companys liquidity and capital resources should be sufficient to meet its expected working capital needs and other anticipated cash requirements. The position of liquidity and capital resources of the Company is given below:-

(C In lakhs)

PARTICULARS	2024-25	2023-24
Cash & cash equivalents:
Beginning of the year	79.09	65.69
End of the year	76.96	79.09
Net cash provided/ (used) by:
Operating Activities	2,614.53	737.55
Investing Activities	(907.89)	1,226.10
Financial Activities	(1,708.77)	(1,950.25)

C. BUSINESS OUTLOOK

Major economic parameters such as interest rate, inflation and unemployment displayed moderation during the year in larger parts of world. This augurs well for recovery in economic activity which will support consumer discretionary spending on items including textiles.

Indian GDP growth rate is expected to sustain momentum in 2025-26. Forecast of normal to above normal monsoon is likely to support acrylic fiber consumption in the country. It is expected that demand for acrylic fiber will be close to normal during the year. However, there can be challenges for Indian acrylic fiber producers in domestic market if low priced imports of acrylic fiber in the country are not checked and more foreign sellers try to enter Indian market due to protective mechanism implemented by few countries.

China has added substantial new capacity of Acrylonitrile during the year. More additions are planned in coming years. Entire capacity addition in world has taken place in China alone which has made China a dominant player in Acrylonitrile market.

China is expected to add some more capacity of acrylic fiber in coming year. Some acrylic fiber producers in the region have cut back on operating rate. However, as global acrylic fiber consumption is not expected to increase, competition amongst acrylic fiber producers is likely to increase and keep margins of producers under pressure for some more time.

D. MAJOR RISK AND AREA OF CONCERN

Being a crude oil derivative, elevated rates of crude oil can adversely impact profitability and even demand of acrylic fiber in longer term. Climate change leading to changing weather patterns and general rise in temperatures globally is likely to result in decline of acrylic fiber consumption. Substitution of acrylic fiber by cheaper, though less effective fibers, is likely to get accelerated if price difference between acrylic fiber and such other fibers were to increase much. Specifically, for India, continued export of low priced acrylic fiber to India remains the major concern. Recent imposition of tariffs and reciprocal tariffs on few countries and a likely similar action against Indian exports has created uncertainty in trade. As of now, it is difficult to forecast its impact on acrylic Fiber trade but seems that higher tariffs and reciprocal tariffs can cause trade diversions and more focus of exporters on India. An end to ongoing geopolitical conflicts, when that happens, and normalization of transit thru Suez canal might bring much needed relief to global trade and economies.

E. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company reviews its Systems and Processes periodically to assess their robustness and sufficiency in view of business requirements, best industrial practices, corporate governance, statutory compliances, controls and audit purpose. A detailed and well-structured Internal Audit is carried out to identify practices for review by senior management where Company can possibly make systems more aligned with changing needs. Company places a great deal of emphasis on recommendations of Internal and Statutory Auditors which are seen as an opportunity to review and improve. Company has been investing in ERP to make the operations more system driven besides many other likely benefits.

F. INTERNAL FINANCIAL CONTROL:

Your Company is fully committed to all statutory compliances and following laid down practices, principles and accounting standards. Adequate internal controls thru ERP and approval systems are exercised to meet all of our obligations in time. Compliance to statutory requirements is monitored regularly. External independent agencies are engaged to update our system to meet latest regulations and align with best industry practices are engaged whenever a need is recognised. No reportable material weakness in the design or operation was observed during the year.

G. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS:

Health and safety of people working inside factory has always been of utmost importance to the management of your Company. Regular health check-up of entire plant team is carried out to ascertain their fitness and to identify areas requiring attention, if any. Regular training programmes by inhouse experts as well as by outside agencies are conducted to learn about techniques to improve personnel safety, safety of fellow employees and equipment are carried out. No reportable events related to health and safety took place in plant during the year.

Development and Training of team has always been a focus area of management as the production deployed in the plant is complex. Team members are encouraged to and participate in group activities and well-structured programmes aimed at honing their skills, building their knowledge and finding solutions to problems together and training of younger team members. During the year there was industrial peace and harmony in the company. The Company employed on average 318 persons on the rolls of the company.

H. SUMMARY OF KEY FINANCIAL RATIOS

PARTICULARS	2024-25	2023-24	% change
Debtors Turnover Ratio (Days)	16.21	18.2	-10.93
Inventory Turnover (Days)	101.11	97.1	4.13
Current Ratio (Times)	2.25	2.33	-3.43
Debt Equity Ratio (Times) 1	0.001	0.005	-80
Interest Coverage Ratio (Times) 2	60.86	82.43	-26.17
EBIDTA Margin (%) 2	6.85	9.17	-25.30
Net Profit Margin (%) 2	4.2	5.89	-28.69
Return on Net Worth(%) 2	4.95	7.22	-31.44

1. The decrease is mainly on account of lower utilization of cash credit limit.

2. The decrease is mainly on account of lower earnings on account of market conditions.

3. DIVIDEND:

The Board of Directors in its meeting held on 30 th April, 2025 has recommended dividend of H 1.50 /- per share on the fully paid-up Equity Shares of the Company.

4. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to the provisions ofSection 124 and 125 ofthe Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the Rules), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government after the completion of seven years from the date of transfer to the Unpaid Dividend Account of the Company. The unclaimed or unpaid dividend relating to the Financial Year 2017-18 is due for remittance in the month of November, 2025 to the Investor Education and Protection Fund established by the Central Government.

Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by shareholders for seven consecutive years or more shall also be transferred to the IEPF Authority. The Company has sent notice to all shareholders whose shares are due to be transferred to the IEPF Authority and has also published requisite advertisement in the newspapers in this regard.

The details of these shares are also provided on the website of the Company at www.vardhman.com.

5. CONSOLIDATED FINANCIAL STATEMENT:

As your Company does not have any subsidiary, associate or joint venture Company, therefore, the provisions of Companies Act, 2013 and Indian Accounting Standards (Ind AS) 110, 111, 112 in relation to consolidation of accounts do not apply.

6. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any subsidiary/ material subsidiary, associate or joint venture Company.

Further, during the year, no company have become or ceased to be subsidiary, joint venture or associate of the Company.

7. DIRECTORS:

Liable to retire by rotation: In accordance with the provisions of the Articles of Association of the Company, Mrs. Suchita Jain & Mr. Vivek Gupta, Directors of the Company, retires by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers themselves for re-appointment. The Board recommended their appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

Appointment of Directors: During the year under review, Mr. Bal Krishan Choudhary was appointed as an Additional Director (Non-Executive Non-Independent) on the Board of the Company with effect from 1 st April, 2024. His appointment

was further approved by the Members of the Company vide their resolution passed through Postal Ballot on 18 th May, 2024.

Declaration by Independent Directors:

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules thereof.

Your Board confirms that in its opinion the Independent Directors possess the requisite integrity, experience, expertise, proficiency and qualifications. All the Independent Directors on the Board of the Company are registered with the Indian Institute of Corporate Affairs, Manesar, Gurgaon (IICA) as notified by the Central Government under Section 150(1) of the Companies Act, 2013 and shall undergo online proficiency self-assessment test, if applicable, within the time prescribed by the IICA.

Familiarization Programmes for Board Members:

Your Company has formulated Familiarization Programme for all the Board members in accordance with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Schedule IV of the Companies Act, 2013 which provides that the Company shall familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of Industry in which the Company operates, business model of the Company etc. through various programs.

The Familiarization Programme for Board members may be accessed on the Companys website at the link: https://www. vardhman.com/Document/Report/Company%20Information/ Policies/Vardhman%20Acrylics%20Ltd/Familisation program for Board Members.pdf

Annual Evaluation of the Board Performance:

The Meeting of Independent Directors of the Company for the Financial Year 2024-25 was held on 20 th March, 2025 to evaluate the performance of the Non-Independent Directors, Chairman of the Company and the Board as a whole.

The evaluation was done by way of discussions on the performance of the Non- Independent Directors, Chairman and Board as a whole.

A policy on the performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of nonexecutive directors and executive directors has been formulated by the Company.

8. NOMINATION AND REMUNERATION POLICY:

In compliance with Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination and Remuneration Policy of the Company has been duly approved and adopted by the Board pursuant to recommendations of Nomination and Remuneration Committee of the Company and may be accessed on the website of the Company at the link https://www.vardhman.com/Document/Report/ Company%20Information/Policies/Vardhman%20Acrylics%20 Ltd/Nomination and Remuneration Policy.pdf.

As mandated by proviso to Section 178(4) of the Companies Act, 2013, salient features of Nomination and Remuneration Policy are as under:

a) Identifying persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down and recommending to the Board their appointment and removal.

b) Formulating the criteria for determining qualifications, positive attributes and independence of a Director and evaluating the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an independent director.

c) Recommending to the Board, policy relating to remuneration of Directors (Whole time Directors, Executive Directors etc.), Key Managerial Personnel and other employees while ensuring the following:

i. That the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully.

ii. That relationship of remuneration to performance is clear and meets appropriate performance benchmarks.

iii. That remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate of the working of the Company and its goals.

d) Formulating the criteria for evaluating performance of Board and all the Directors.

e) Devising a policy on diversification of Board.

f) Determining whether to extend or continue the term of appointment of the independent director on the basis of the report of performance evaluation of independent directors.

g) Recommending to the Board remuneration payable to Senior Management

9. KEY MANAGERIAL PERSONNEL (KMP):

In compliance with the provisions of Section 203 of the Companies Act, 2013, following are the KMPs of the Company as on 31 st March, 2025:

Sr. No.	Name	Designation
1.	Vivek Gupta	Whole time Director
2.	Raish Shaikh	Chief Financial Officer
3.	Satin Katyal	Company Secretary

10. NUMBER OF BOARD MEETINGS:

During the year under review, the Board met four (4) times and the intervening gap between any two meetings was within the period prescribed under the Companies Act, 2013. The details of Board Meeting are set out in Corporate Governance Report which forms part of this Annual Report.

11. AUDITORS AND AUDITORS REPORT:

Statutory Auditors:

At the 32 nd Annual General Meeting held on 30 th September, 2022, M/s. SCV & CO. LLP. (Formerly S.C. Vasudeva & Co.), Chartered Accountants (Firm Registration no. 000235N/ N500089) were re-appointed as Statutory Auditors of the Company for a second term of five (5) consecutive years starting from the conclusion of 32 nd Annual General Meeting till the conclusion of 37 th Annual General Meeting.

Further, the Statutory Auditors of the Company have submitted Auditors Report on the accounts of the Company for the accounting year ended 31 st March, 2025.

This Auditors Report is self-explanatory and requires no comments.

Secretarial Auditor:

M/s. Ashok K Singla & Associates, Company Secretary in Practice, were appointed as Secretarial Auditors of the Company by the Board of Directors of the Company in its meeting held on 4 th May, 2024 for the financial year 2024-25. The Secretarial

Auditors of the Company have submitted their Report in Form No. MR-3 as required under Section 204 of the Companies Act, 2013 for the financial year ended 31 st March, 2025. This Report is self-explanatory and requires no comments. The Report forms part of this report as Annexure I.

Further, pursuant to the amended provisions of Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) ("LODR") Regulations, 2015 and Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company, on the recommendation of the Audit Committee, have approved and recommended the appointment of M/s. Ashok K Singla & Associates, Peer Reviewed Company Secretary in Practice (CP No. 1942) as Secretarial Auditors of the Company for a term of 5 (Five) consecutive years from the FY 2025-26 to 2029-30, for approval of the Members at ensuing AGM of the Company. Brief resume and other details of M/s. Ashok K Singla & Associates, Company Secretaries in Practice, are separately disclosed in the Notice of ensuing AGM.

M/s. Ashok K Singla & Associates have given their consent to act as Secretarial Auditors of the Company and confirmed that their aforesaid appointment (if made) would be within the prescribed limits under the Act & Rules made thereunder and SEBI (LODR) Regulations. They have also confirmed that they are not disqualified to be appointed as Secretarial Auditors in terms of provisions of the Act & Rules made thereunder and SEBI (LODR) Regulations.

Cost Auditor:

The Company is maintaining the Cost Records, as specified by the Central Government under section 148(1) of the Companies Act, 2013.

The Board of Directors has appointed Mr. R.A. Mehta, Practising Cost Accountant, as the Cost Auditor of the Company to conduct Cost Audit of the Accounts for the financial year 202526. However, as per provisions of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the remuneration to be paid to the Cost Auditor is subject to ratification by Members at the Annual General Meeting. Accordingly, the remuneration to be paid to Mr. R.A. Mehta, Practising Cost Accountant, for financial year 2025-26 is placed for ratification by the Members.

12. AUDIT COMMITTEE:

Composition of Audit Committee:

The Audit Committee consists of three Independent Directors i.e. Mr. Anil Kumar, Ms. Parakh Oswal and Mr. Sanjeev Jain, Independent Directors. Mr. Anil Kumar is the Chairman of the

Committee and Company Secretary of the Company is the Secretary of the Committee. All the recommendations made by the Audit Committee were accepted by the Board.

Apart from the Audit Committee, the Company has also constituted other Board level Committees as mandated by applicable laws. Details of the Committees, along with their composition, charters and meetings held during the year, are provided in the Corporate Governance Report, which forms a part of this Report. Further, during the FY 2024-25, the Board has accepted all the recommendations of its Committees.

13. VIGIL MECHANISM:

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013, the Company has established a "Vigil Mechanism" incorporating Whistle Blower Policy in terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for employees and Directors of the Company, for expressing the genuine concerns of unethical behavior, actual or suspected fraud or violation of the codes of conduct by way of direct access to the Chairman/ Chairman of the Audit Committee.

The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns.

The Policy on Vigil Mechanism and Whistle Blower Policy as approved by the Board may be accessed on the Companys website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Va rdhman%20 Acrylics%20Ltd/Vigil Mechanism Policy.pdf

14. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate Governance. Corporate Governance is about maximizing shareholder value legally, ethically and sustainably. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Practising Company Secretary regarding compliance of conditions of Corporate Governance as stipulated under Corporate Governance Clauses of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the report on Corporate Governance.

15. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Vision & core areas of CSR: Your Company is committed to and fully aware of its Corporate Social Responsibility (CSR), the guidelines in respect of which were more clearly laid down in the Companies Act, 2013. The Companys vision on CSR is that the Company being a responsible Corporate Citizen would continue to make a serious endeavor for a quality value

addition and constructive contribution in building a healthy and better society through its CSR related initiatives and focus on education, environment, health care and other social causes.

CSR Policy: The Corporate Social Responsibility (CSR) Policy of the Company indicating the activities to be undertaken by the Company, as approved by the Board, may be accessed on the Companys website at the link: https://www.vardhman. com/Document/Report/Company%20Information/ Policies/Vardhman%20Acrylics%20Ltd/Corporate Social Responsibility Policy.pdf

During the year, the Company has spent H 28.01 lakhs on CSR activities.

The disclosures related to CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014 are annexed hereto and forms part of this report as Annexure II.

16. RISK MANAGEMENT:

The Risk Management Policy required to be formulated under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been duly formulated and approved by the Board of Directors of the Company. The aim of Risk Management Policy is to maximize opportunities in all activities and to minimize adversity. The policy includes identifying types of risks and its assessment, risk handling, monitoring and reporting, which in the opinion of the Board may threaten the existence of the Company.

The Risk Management Policy may be accessed on the Companys website at the link: https://www.vardhman .com/Document/ Report/Company%20Information/Policies/Va rdhman%20 Acrylics%20Ltd/Risk Management Policy.pdf

17. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR):

In compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, BRSR is available on the Companys website at the link: https://www.vardhman. com/Document/Report/Compliances/BRR/Va rdhman%20 Acrylics%20Ltd/BRSR 2024-25.pdf

18. INTERNAL FINANCIAL CONTROLS & ITS ADEQUACY:

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

A report on the Internal Financial Controls under clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013, as given by the Statutory Auditors of the Company forms part of Independent Auditors Report on Financial Statements as Annexure B.

19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. The particulars of Contracts or Arrangements made with related parties as required under Section 134(3) (h) of the Companies Act, 2013 in specified form AOC-2 forms part of Directors Report as Annexure III.

The Policy on dealing with related party transactions as approved by the Board may be accessed on the Companys website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Va rdhman%20 Acrylics%20Ltd/Related Party Transactions Policy.pdf

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the financial statement (Please refer to Note 4, 5, 9 and 12 to the financial statements).

21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Energy conservation continues to be an area of major emphasis in our Company. Efforts are made to optimize the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are annexed hereto and forms part of this report as Annexure IV.

22. ANNUAL RETURN:

In terms of Section 92(3) and 134(3)(a) of the Companies Act, 2013 the Annual Return of the Company is available on the website of the Company at the link: https://www.vardhman. com/Investors/Compliances

23. HUMAN RESOURCES /INDUSTRIAL RELATIONS:

Human resource is considered as the most valuable of all resources available to the Company. The Company continues to lay emphasis on building and sustaining an excellent organization climate based on human performance. The Management has been continuously endeavoring to build high performance culture on one hand and amiable work environment on the other hand.

During the year, the Company employed around 318 employees on permanent rolls.

24. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The disclosures in respect of managerial remuneration as required under Section 197(12) read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, are annexed hereto and forms part of this report.

A statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5 (2) and 5 (3) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, is annexed hereto and forms part of this report.

All the above details are provided in Annexure V.

In terms of section 197(14) of the Companies Act, 2013, the Company does not have any Subsidiary Company. Further, none of the Director of the Company has received any remuneration or commission from any Holding Company.

25. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of this report.

26. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013, the Board, hereby submits its responsibility Statement:

a. In the preparation of the annual accounts, the applicable Accounting Standards have been followed along with the proper explanation relating to material departures;

b. Appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 st March, 2025 and of the profit of the Company for the year ended on 31 st March, 2025;

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The annual accounts have been prepared on a going concern basis;

e. The Internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

27. GENERAL DISCLOSURES:

Your Directors state that no disclosure or reporting is required

in respect of the following items as there were no transactions

on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

4. Change in nature of Business of the Company.

5. No fraud has been reported by the Auditors to the Audit Committee or the Board.

6. There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.

7. There was no instance of one time settlement with any Bank or Financial Institution.

Further, your Directors state that the Company has complied with the provisions relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention,

28. ACKNOWLEDGEMENT:

Your Directors are pleased to place on record their sincere gratitude to the Government, Bankers, Business Constituents and Shareholders for their continued and valuable cooperation and support to the Company and look forward to their continued support and co-operation in future too.

Prohibition and Redressal) Act, 2013 & there was no case filed under the said Act and applicable Secretarial Standards with respect to Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

In addition to this, all the policies as required under the Act or the SEBI LODR Regulations have been formulated by the Company and are available on the website of the Company, links whereof are provided in the Corporate Governance Report, which forms part of this report.

They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

FOR AND ON BEHALF OF THE BOARD

Place: Ludhiana Dated: 30 th April, 2025

Sd/- (S.P. Oswal)

Chairman