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EQUITY - MARKET SCREENER

Vardhman Textiles Ltd
Industry :  Textiles - Cotton/Blended
BSE Code
ISIN Demat
Book Value()
502986
INE825A01020
295.8405179
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
VTL
21.77
12439.76
EPS(TTM)
Face Value()
Div & Yield %
19.76
2
0.81
 

As on: Mar 03, 2024 09:03 AM

Dear Members,

The Directors of your Company have pleasure in presenting their 50th Annual Report of the business and operations of the Company along with the Audited Financial Statements for the year ended 31st March, 2023.

1. FINANCIAL RESULTS:

The financial performance of your Company for the year ended 31st March, 2023 is as under:-

( H in crore)

PARTICULARS STANDALONE CONSOLIDATED
2022-23 2021-22 2022-23 2021-22
Revenue from operations (Net) 9,840.79 9,386.10 10,137.49 9,622.34
Other Income 192.80 385.26 191.95 224.51
Profit before Depreciation, Interest & Tax 1,477.85 2,647.38 1,556.49 2,537.92
(PBDIT)
Interest and Financial expenses 101.86 99.53 102.15 99.72
Profit before Depreciation and Tax (PBDT) 1,375.99 2,547.85 1,454.34 2,438.20
Depreciation 388.95 362.10 394.43 367.51
Profit before Tax (PBT) 987.04 2,185.75 1,059.91 2,070.69
Provision for Tax - Current 224.98 521.03 235.96 527.96
- Deferred Tax 12.99 (12.72) 19.20 (8.31)
Profit after tax (PAT) 749.07 1,677.44 804.75 1,551.04
Other Comprehensive Income/ (Expense) 2.76 6.52 2.88 6.99
Total Comprehensive Income for the period 751.83 1,683.96 807.63 1,558.03
Earnings per share (H)
- Basic 25.91 58.16 27.96 54.58
- Diluted 25.90 58.00 27.95 54.42

2. FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS:

PRODUCTION & SALES REVIEW:

During the year under review, your Company has registered Revenue from Operations of H 9,840.79 crore as compared to H 9,386.10 crore in the previous year. The export of the

Company (FOB value) decreased from H 4,523.80 crore to H 4,264.93 crore showing a decline of 5.72% over the previous year. The business wise performance is as under:- a) Yarn:

The production of Yarn decreased from 2,38,065 MT to 2,33,314 MT during the year 2022-23. b) Fabric:

During the year, the production of grey fabric decreased from 193 million meter to 182 million meter. The production of processed fabric decreased from 152 million meter to 141 million meter.

STANDALONE:

Profitability:

The Company earned profit before depreciation, interest and tax of H 1,477.85 crore as against H 2,647.38 crore in the previous year. After providing for depreciation of H 388.95 crore (Previous Year H 362.10 crore), interest of H 101.86 crore (Previous Year H 99.53 crore), provision for current tax of H 224.98 crore (Previous Year H 521.03 crore), deferred tax of H 12.99 crore (Previous Year H -12.72 crore), the net profit from operations after comprehensive income worked out to H 751.83 crore as compared to H 1,683.96 crore in the previous year.

The balance available for appropriation after adding balance in surplus account is H 6,707.14 crore.

Resources Utilisation:

a) Fixed Assets:

The Net Block as at 31st March, 2023 was H 3,880.50 crore as compared to H 3,435.69 crore in the previous year.

b) Current Assets:

The current assets as on 31st March, 2023 were H 5,558.14 crore as against H 5,617.42 crore in the previous year. Inventory level was at H 2,312.16 crore as compared to the previous year level of H 2,806.67 crore.

CONSOLIDATED:

Profitability:

The Company earned profit before depreciation, interest and tax of H 1,556.49 crore as against H 2,537.92 crore in the previous year. After providing for depreciation of H 394.43 crore (Previous Year H 367.51 crore), interest of H 102.15 crore (Previous Year H 99.72 crore), provision for current tax of H 235.96 crore (Previous Year H 527.96 crore), deferred tax of H 19.20 crore (Previous Year H -8.31 crore), the net profit from operations after comprehensive income worked out to H 807.63 crore as compared to H 1,558.03 crore in the previous year.

The balance available for appropriation after adding balance in surplus account is H 6,880.71 crore. Out of this, a sum of H 0.08 crore has been transferred to Statutory Reserve, a balance of H 6,880.63 crore is proposed to be carried as surplus to the Balance sheet.

Resources Utilisation:

a) Fixed Assets:

The Net Block as at 31st March, 2023 was H 3,934.97 crore as compared to H 3,491.56 crore in the previous year.

b) Current Assets:

The current assets as on 31st March, 2023 were H 5,784.52 crore as against H 5,855.26 crore in the previous year. Inventory level was at H 2,392.68 crore as compared to the previous year level of H 2,882.29 crore.

FINANCIAL CONDITIONS & LIQUIDITY:

The Company enjoys a rating of "AA+/Stable" from Credit Rating Information Services of India (CRISIL) for long term borrowings & "A1+" for short term borrowings and IND A1+ for Commercial Papers from India Ratings and Research. Management believes that the Company's 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:-

( H in crore)

PARTICULARS 2022-23 2021-22
Cash and Cash equivalents:
Beginning of the year 62.06 36.05
End of the year 74.66 62.06
Net cash provided (used) by:
Operating Activities 1,814.81 1,429.90
Investing Activities (1,405.56) (882.66)
Financing Activities (396.65) (521.23)

3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report.

4. DIVIDEND:

The Board of Directors in its meeting held on 5th May, 2023 has recommended dividend of H 3.5/- per share on the fully paid equity shares of the Company.

5. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to the provisions of Section 124 and 125 of the 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 shareholders whose dividends have been transferred to the IEPF Authority can claim their dividend from the Authority. The unclaimed or unpaid dividend relating to the financial year 2015-16 was remitted to Investor Education and Protection Fund established by the Central Government in the month of April, 2023.

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.

6. CONSOLIDATED FINANCIAL STATEMENT:

In accordance with Companies Act, 2013 & Indian Accounting Standards (Ind AS) 110 on ‘Consolidated Financial Statements' read with Ind AS 111 on ‘Joint Arrangements' and Ind AS 112 on ‘Disclosure of Interest in other entities', the Audited Consolidated Financial Statements are provided in the Annual Report.

7. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any material subsidiary. The details of the financials of the subsidiary and associate companies for the year 2022-23 are as follows:-

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged in the business of investment. The earnings of the Company mainly comes from the dividend/interest earned on its investments and profits made on sale of investments. During the financial year 2022-23, VTL recorded Revenue from operations of H

0.87 crore against H 25.52 crore in the previous year. The net profit of the Company worked out to H 0.39 crore as compared to H 19.93 crore during the previous year.

Vardhman Acrylics Limited (VAL)

This subsidiary of the Company is engaged in the business of manufacturing of Acrylic Fibre. Presently, the Company holds 70.74% shares in this subsidiary. During the financial year 2022-23, VAL recorded Revenue from operations of H 426.66 crore against H 303.33 crore in the previous year.

The net profit of the Company after comprehensive income worked out to H 33.04 crore as compared to H 14.85 crore in the previous year.

Vardhman Yarns and Threads Limited (VYTL)

Vardhman Yarns and Threads Limited, Joint Venture with American & Efird Global, LLC (A&E), is an Associate of the Company. It is engaged in the business of threads manufacturing and distribution. Presently, the Company holds 11% stake in VYTL. A&E is the second largest player in threads manufacturing and distribution across the world. During the year under review, the Revenue from operations was H 1,089.57 crore as against H 1,010.63 crore in the previous year showing an increase of 7.84%. The net profit for the year after comprehensive income worked out to H 142.12 crore as compared to H 132.62 crore during last year.

Vardhman Special Steels Limited (VSSL)

Vardhman Special Steels Limited is an Associate of the Company. The Company holds 23.90% shares of VSSL. The Revenue from operations of the Company was H 1,735.50 crore as compared to H 1,368.46 crore in the previous year.

The net profit for the year after comprehensive income worked out to H 100.16 crore as compared to H 100.94 crore in the previous year.

Vardhman Spinning & General Mills Limited (VSGM)

Vardhman Spinning & General Mills Limited is an Associate of the Company. The Company holds 50% shares of VSGM. It is a trading company. However, during the year, the Company has not traded any goods. The Revenue from operations of the Company was H 0.06 lac as against H 0.42 lac in the previous year.

8. DIRECTORS:

Liable to retire by Rotation: In accordance with the provisions of the Articles of Association of the Company, Mrs. Suchita Jain, Director of the Company, retires by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers herself for reappointment. The Board recommended her re-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. Suresh Kumar was appointed as an Independent Director of the Company for a term of five (5) consecutive years w.e.f. 29th September, 2022; and

- Ms. Sagrika Jain was appointed as an Executive Director of the Company for a term of three (3) years w.e.f. 6th August, 2022.

Their appointments were further approved by the Members of the Company in the Annual General Meeting held on 30th September, 2022.

Cessation from Directorship: During the year under review, Mr. A.K. Kundra and Dr. S.K. Bijlani, Independent Directors, ceased to be Directors of the Company w.e.f. 30th September, 2022 on completion of their second term of appointment.

Declaration by Independent Directors:

The Independent Directors have submitted their disclosures to the Board that they fulfil 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, if applicable, shall undergo online proficiency self-assessment test 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 Company's website at the link: https:// www.vardhman.com/Document/Report/Company%20 Information/Policies/Vardhman%20Textiles%20Ltd/ Familarisation_Programme_for_Board_Members.pdf

Annual Evaluation of the Board Performance:

The meeting of Independent Directors of the Company for the financial year 2022-23 was held on 30th March, 2023 to evaluate the performance of Non-Independent Directors, Chairperson 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, Chairperson 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 non-executive directors and executive directors has been formulated by the Company.

9. NOMINATION AND REMUNERATION POLICY:

In compliance with Section 178 of the Companies Act, 2013 and Regulation 19 of 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%20Textiles%20Ltd/Nomination_&_ 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.

10. KEY MANAGERIAL PERSONNEL (KMP):

In compliance with provisions of Section 203 of the Companies Act, 2013, following are the KMPs of the Company as on 31st March, 2023:

S. No. Name Designation
1. S.P. Oswal Chairman & Managing Director
2. Rajeev Thapar Chief Financial Officer
3. Sanjay Gupta Company Secretary

11. NUMBER OF BOARD MEETINGS:

During the year under review, the Board met Six (6) times and the intervening gap between any two meetings was within the period prescribed under Companies Act, 2013. The details of Board Meeting are set out in Corporate Governance Report which forms part of this Annual Report.

12. AUDITORS AND AUDITORS' REPORT:

Statutory Auditors:

M/s Deloitte Haskins & Sells, LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018) (‘Deloitte') were re-appointed as Statutory Auditors of the Company for a second consecutive term of 5 years at the 49th Annual General Meeting of the Company held on 30th September, 2022.

Further, the Statutory Auditors of the Company have submitted Auditors' Report on the accounts of the Company for the accounting year ended 31st March, 2023.

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 21st May, 2022 for the financial year 2022-23.

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 31st March, 2023. This Report is self-explanatory and requires no comments. The Report forms part of this report as Annexure I.

Cost Auditor:

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

The Board of Directors has appointed M/s. Ramanath Iyer

& Company, Cost Accountants, New Delhi, as the Cost Auditors of the Company to conduct Cost Audit of the Accounts for the financial year ended 2023-24. However, as per the 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 Auditors is subject to ratification by Members at the Annual General Meeting. Accordingly, the remuneration to be paid to M/s. Ramanath Iyer & Company, Cost Accountants, New Delhi, for financial year 2023-24 is placed for ratification by the Members.

13. AUDIT COMMITTEE & VIGIL MECHANISM:

Composition of Audit Committee:

The Audit Committee consists of Mr. Prafull Anubhai, Mr. Suresh Kumar and Mrs. Harpreet Kaur Kang, Independent Directors. Mr. Prafull Anubhai 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.

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 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 Company's website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Vardhman%20 Textiles%20Ltd/Whistle_Blower_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 of the Company regarding compliance of conditions of Corporate Governance as stipulated under 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 CSR, the guidelines in respect of which were more clearly laid down in the Companies Act, 2013. The Company's 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 CSR Policy of the Company indicating the activities to be undertaken by the Company, as approved by the Board, may be accessed on the Company's website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Vardhman%20 Textiles%20Ltd/Corporate_Social_Responsibility_Policy.pdf

During the year, the Company has spent H 1,799.66 lac on CSR activities. Out of this, an amount of H 430.58 lac pertains to FY 2022-23.

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 is annexed hereto and form part of this report as Annexure II.

16. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR):

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandate the inclusion of the BRSR as part of the Annual Report for top 1000 listed entities based on market capitalization. In compliance with the Listing Regulations, we have integrated BRSR disclosure in our Annual Report.

17. DIVIDEND DISTRIBUTION POLICY (DDP):

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the top 1,000 listed companies are required to formulate a DDP. Accordingly, a DDP was adopted to set out the parameters and circumstances that will be taken into account by the Board in recommending the distribution of dividend to its shareholders and/or retaining profits earned by the Company. The Policy is available on the Company's website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Vardhman%20 Textiles%20Ltd/Dividend_Distribution_Policy.pdf

18. 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 Company's website at the link: https://www.vardhman. com/Document/Report/Company%20Information/Policies/ Vardhman%20Textiles%20Ltd/Risk_Management_Policy. pdf

19. INTERNAL FINANCIAL CONTROLS:

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 Auditor's Report on Standalone Financial Statements and Consolidated Financial Statements as

Annexure A.

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

All contracts/arrangements/transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

The Policy on dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Vardhman%20 Textiles%20Ltd/Related_Party_Transaction_Policy.pdf

Your Directors draw attention of the Members to Note 46 to the standalone financial statement which sets out related party disclosures.

21. 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 standalone financial statement (Please refer to Note 4, 5, 9 and 12 to the standalone financial statement).

22. 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 form part of this report as Annexure III.

23. 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: www.vardhman. com

24.HUMANRESOURCES/INDUSTRIALRELATIONS:

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. As on 31st March, 2023, the Company employed around 28,283 employees on permanent rolls.

Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation on the shop floors of the various plants.

25. 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 is annexed hereto and form 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 the Companies (Appointment

& Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and forms part of this report.

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

All the above details are provided in Annexure IV.

26. 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 this financial statements relate and the date of this report.

27. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to provisions of Section 134 (5) of the Companies Act, 2013 the Board hereby submit 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 31st March, 2023 and of the profit of the Company for the year ended on 31st March, 2023;

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 has been laid down to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. a proper system has been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

28. 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 Company's operations in future.

4. Change in nature of Business of 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, Prohibition and Redressal) Act, 2013 and there was no case filed under the said Act.

29. VARDHMAN TEXTILES LIMITED EMPLOYEE STOCK OPTION PLAN, 2016:

The Company has granted options to its employees under Vardhman Textiles Limited Employee Stock Options Plan, 2016 (hereinafter referred as ESOP Plan). As per the terms of the ESOP Plan, the Company can grant a maximum of 31,82,590 options of face value of H 2/- each to eligible employees from time to time. During the financial year 2022-23, 2,63,000 equity shares of face value of H 2/- each were allotted to the eligible employees. So, the paid up equity share capital of the Company stood increased to H 57,82,54,100 as on 31st March, 2023.

The ESOP Plan of the Company is being implemented in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 and the resolution passed by the shareholders approving the said plan. A certificate from the Secretarial Auditor of the Company in this regard would be available at the Annual General Meeting for the inspection by the Members.

The details as required to be disclosed are put on the Company's website and may be accessed at https:// www.vardhman.com/Document/Report/Compliances/ Miscellaneous/Vardhman%20Textiles%20Ltd/ESOP_ Disclosure_2022-23.pdf

30. NON-CONVERTIBLE DEBENTURES:

During the year, your Company has issued 15,000 Rated Listed Unsecured Redeemable Non-Convertible Debentures (‘NCDs") of H 1,00,000 each aggregating to H 150.00 crore for cash at par on private placement basis, at a coupon rate of 7.70% p.a. The NCD's are listed at the Bombay Stock Exchange of India (BSE) and are repayable on March 27, 2024.

31. ACQUISITION OF STAKE IN RENEW GREEN (MPR ONE) PRIVATE LIMITED:

During the year, your Company has entered into a ‘Share Subscription and Shareholder's Agreement' with ReNew Green Energy Solutions Private Limited (Promotor) and ReNew Green (MPR One) Private Limited (Power Producer) along with a ‘Power Purchase Agreement' with Renew Green (MPR One) Private Limited (Power Producer). The purpose of entering into the Agreements is to set-up a 11.5 MW Wind-Solar Hybrid Power Plant in the state of Madhya Pradesh wherein the power generated will be supplied exclusively to your Company under the Captive Rules. Your Company will acquire 31.2% stake in ReNew Green (MPR One) Private Limited.

32. 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.

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 (S.P. Oswal)
Dated : 5th May, 2023 Chairman & Managing Director