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Vardhman Textiles Ltd.

BSE: 502986 Sector: Industrials
NSE: VTL ISIN Code: INE825A01020
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OPEN 332.55
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VOLUME 19429
52-Week high 576.00
52-Week low 245.50
P/E 6.97
Mkt Cap.(Rs cr) 9,867
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 332.55
CLOSE 335.65
VOLUME 19429
52-Week high 576.00
52-Week low 245.50
P/E 6.97
Mkt Cap.(Rs cr) 9,867
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Vardhman Textiles Ltd. (VTL) - Director Report

Company director report

Dear Members

The Directors of your Company have pleasure in presenting their 49th Annual Report ofthe business and operations of the Company along with the Audited Financial Statements forthe year ended 31st March 2022.

1. FINANCIAL RESULTS:

The financial performance of your Company for the year ended 31st March 2022 is asunder:-

( Rs in crore)

PARTICULARS STANDALONE CONSOLIDATED
2021-22 2020-21 2021-22 2020-21
Revenue from Operations (Net) 9386.10 5926.23 9622.34 6139.87
Other Income 385.26 188.16 224.51 201.56
Profit before Depreciation Interest & Tax (PBDIT) 2647.38 955.23 2538.11 1036.03
Interest and Financial expenses 99.53 112.78 99.72 113.32
Profit before Depreciation and Tax (PBDT) 2547.85 842.45 2438.39 922.71
Depreciation 362.10 358.39 367.51 363.81
Profit before Tax (PBT) 2185.75 484.06 2070.88 558.90
Provision for Tax - Current 521.03 103.49 527.96 118.75
- Deferred Tax (12.72) 13.83 (8.31) 13.24
Profit after tax (PAT) 1677.44 366.74 1551.23 426.91
Other Comprehensive Income/ (Expense) 6.52 4.72 6.80 4.75
Total Comprehensive Income for the period 1683.96 371.46 1558.03 431.66
Earnings per share (H)
- Basic 58.16 12.75 54.58 14.67
- Diluted 58.00 12.67 54.42 14.56

2. FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS:

PRODUCTION & SALES REVIEW:

During the year under review your Company has registered Revenue from Operations of Rs9386.10 crore as compared to Rs 5926.23 crore in the previous year. The export of the

Company (FOB value) increased from Rs 2784.86 crore to Rs 4523.80 crore showing anincrease of 62.44% over the previous year. The business wise performance is as under:-

a) Yarn:

The production of Yarn increased from 211343 MT to 238638 MT during the year2021-22. b) Fabric:

During the year the production of grey fabric increased from 155 million meter to 193million meter. The production of processed fabric increased from 100 million meter to 152million meter.

STANDALONE:

Profitability:

The Company earned profit before depreciation interest and tax of Rs 2647.38 crore asagainst Rs 955.23 crore in the previous year. After providing for depreciation of Rs362.10 crore (Previous Year Rs 358.39 crore) interest of Rs 99.53 crore  (PreviousYear Rs 112.78 crore) provision for current tax of  Rs 521.03 crore (Previous YearRs 103.49 crore) deferred tax of H(12.72) crore (Previous Year Rs 13.83 crore) the netprofit from operations after comprehensive income worked out to Rs 1683.96 crore ascompared to Rs 371.46 crore in the previous year.

The balance available for appropriation after adding balance in surplus account is Rs5955.44 crore.

Resources Utilisation:

a) Fixed Assets:

The Net Block as at 31st March 2022 was Rs 3435.69 crore as compared to Rs 3467.95crore in the previous year.

b) Current Assets:

The current assets as on 31st March 2022 were Rs 5617.42 crore as against Rs 4783.41crore in the previous year.

Inventory level was at Rs 2806.67 crore as compared to the previous year level of Rs2735.59 crore.

CONSOLIDATED:

Profitability:

The Company earned profit before depreciation interest and tax of Rs 2538.11 crore asagainst Rs 1036.03 crore in the previous year. After providing for depreciation of Rs367.51 crore (Previous Year Rs 363.81 crore) interest of Rs 99.72 crore (Previous Year Rs113.32 crore) provision for current tax of Rs 527.96 crore (Previous Year Rs 118.75crore) deferred tax of H(8.31) crore (Previous Year Rs 13.24 crore) the net profit fromoperations after comprehensive income worked out to Rs 1558.03 crore as compared to Rs431.66 crore in the previous year.

The balance available for appropriation after adding balance in surplus account is Rs6028.39 crore. Out of this a sum of Rs 3.99 crore has been transferred to StatutoryReserve a balance of Rs 6024.40 crore is proposed to be carried as surplus to theBalance sheet.

Resources Utilisation:

a) Fixed Assets:

The Net Block as at 31st March 2022 was Rs 3491.56 crore as compared to Rs 3526.57crore in the previous year.

b) Current Assets:

The current assets as on 31st March 2022 were Rs 5855.26 crore as against Rs 5202.21crore in the

previous year. Inventory level was at Rs 2882.29 crore as compared to the previousyear level of Rs 2796.05 crore.

FINANCIAL CONDITIONS & LIQUIDITY:

The Company enjoys a rating of "AA+/Stable" from Credit Rating InformationServices of India (CRISIL) for long term borrowings and "A1+" for short termborrowings. Management believes that the Company's liquidity and capital resources shouldbe sufficient to meet its expected working capital needs and other anticipated cashrequirements. The position of liquidity and capital resources of the Company is givenbelow:-

( Rs in crore)
PARTICULARS 2021-22 2020-21
Cash and Cash equivalents:
Beginning of the year 36.05 150.53
End of the year 62.06 36.05
Net cash provided (used) by:
Operating Activities 1429.90 115.40
Investing Activities (882.66) (31.09)
Financing Activities (521.23) (198.79)

3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

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

4. DIVIDEND:

During the year under review the Board of Directors in its meeting held on 27thOctober 2021 declared an interim dividend of Rs 34/- per share on the fully paid equityshares 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 withIEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 (‘the Rules')all unpaid or unclaimed dividends are required to be transferred by the Company to theIEPF established by the Central Government after the completion of seven years from thedate of transfer to the Unpaid Dividend Account of the Company. The shareholders whosedividends have been transferred to the IEPF Authority can claim their dividend from theAuthority. The unclaimed or unpaid dividend relating to the financial year 2014-15 is duefor remittance in the month of October 2022 to Investor Education and Protection Fundestablished by the Central Government.

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

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

6. CONSOLIDATED FINANCIAL STATEMENT:

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

7. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any material subsidiary. subsidiary. During the yearVardhman Nisshinbo Garments Company Limited and VMT Spinning Company Limited wholly ownedsubsidiaries of the Company got merged with the Company and as such ceased to besubsidiaries of the Company. The details of the financials of the subsidiary and associatecompanies for the year 2021-22 are as follows:-

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged in the business of investment. Theearnings of the Company mainly comes from the dividend/interest earned on its investmentsand profits made on sale of investments. During the financial year 2021-22 VTL recordedRevenue from operations of Rs 25.52 crore against Rs 4.07 crore in the previous year. Thenet profit of the Company worked out to Rs 19.93 crore as compared to Rs 3.31 crore duringthe previous year.

Vardhman Acrylics Limited (VAL)

This subsidiary of the Company is engaged in the business of manufacturing of AcrylicFibre. Presently the Company holds 70.74% shares in this subsidiary. During the financialyear 2021-22 VAL recorded Revenue from operations of Rs 303.33 crore against Rs 280.19crore in the previous year.

The net profit of the Company after comprehensive income worked out to Rs 14.85 croreas compared to Rs 42.94 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 threadsmanufacturing and distribution. Presently the Company holds 11% stake in VYTL. A&E isthe second largest player in threads manufacturing and distribution across the world.During the year under review the Revenue from operations was Rs 1010.63 crore as againstRs 703.77 crore in the previous year showing an increase of 43.60%. The net profit for theyear after comprehensive income worked out to Rs 132.62 crore as compared to Rs 86.06crore during last year.

Vardhman Special Steels Limited (VSSL)

Vardhman Special Steels Limited is an Associate of the Company. The Company holds23.94% shares of VSSL. The Revenue from operations of the Company was Rs 1368.46 crore ascompared to Rs 937.08 crore in the previous year. The net profit for the year aftercomprehensive income worked out to Rs 100.94 crore as compared to Rs 44.82 crore in theprevious year.

Vardhman Spinning & General Mills Limited (VSGM)

Vardhman Spinning & General Mills Limited is an Associate of the Company. TheCompany holds 50% shares of VSGM. It is a trading company. However during the year theCompany has not traded any goods. The Revenue from operations of the Company was Rs 0.42lac as against Rs 0.99 lac in the previous year.

8. DIRECTORS:

Liable to retire by Rotation: In accordance with the provisions of the Articlesof Association of the Company Mr. Neeraj Jain Director of the Company retires byrotation at the conclusion of the forthcoming Annual General Meeting and being eligibleoffers himself for reappointment. The Board recommended his re-appointment for theconsideration of the Members of the Company at the ensuing Annual General Meeting.

Independent Director: The Board of Director in its meeting held on 22nd January2022 had appointed Mr. Udeypaul Singh Gill as an Additional Director (Independent) on theBoard of the Company for a term of three (3) consecutive years w.e.f. 22nd January 2022.His appointment as an Independent Director was further approved by the Members of theCompany vide their resolution passed by Postal Ballot dated 11th March 2022.

Declaration by Independent Directors:

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

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

Company's Policy relating to Directors appointment payment of remuneration anddischarge of their duties:

The Nomination & Remuneration Committee of the Company has formulated the‘Nomination & Remuneration Policy' on Director's appointment and remunerationwhich includes the criteria for determining qualifications positive attributesindependence of a director and other matters as provided under Section 178(3) of theCompanies Act 2013.

The Nomination & Remuneration Policy is annexed hereto and forms part of thisReport as Annexure I.

Familiarization programmes for Board Members:

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

The Familiarization Programme for Board members may be accessed on the Company'swebsite at the link: https://www.vardhman.com/Document/Report/Company%20Information/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 2021-22 washeld on 29th March 2022 to evaluate the performance of Non-Independent DirectorsChairperson 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 andother individual Directors which includes criteria for performance evaluation ofnon-executive directors and executive directors has been formulated by the Company.

9. KEY MANAGERIAL PERSONNEL (KMP):

In compliance with provisions of Section 203 of the Companies Act 2013 following arethe KMPs of the Company as on 31st March 2022:

S. Name Designation
1. S.P. Oswal Chairman & Managing Director
2. Rajeev Thapar Chief Financial Officer
3. Sanjay Gupta Company Secretary

10. NUMBER OF BOARD MEETINGS:

During the year under review the Board met Seven (7) times and the intervening gapbetween any two meetings was within the period prescribed under Companies Act 2013. Thedetails of Board Meeting are set out in Corporate Governance Report which forms part ofthis Annual Report.

11. AUDITORS AND AUDITORS' REPORT:

Statutory Auditors:

M/s Deloitte Haskins & Sells LLP Chartered Accountants (Firm Registration No.117366W/W-100018) (‘Deloitte') were appointed as Statutory Auditors of the Companyfor a term of 5 years at the 44th Annual General Meeting of the Company held on 22ndSeptember 2017. Since their term is expiring at the ensuing Annual General Meeting the

Board of Directors in its meeting held on 21st May 2022 has approved and recommendedto the Shareholders the re-appointment of M/s Deloitte Haskins & Sells LLP as theStatutory Auditors of the Company for a second consecutive term of 5 years starting fromthe conclusion of 49th Annual General Meeting till the conclusion of 54th Annual GeneralMeeting. The said re-appointment is subject to approval by the Members of the Company.

Further the Statutory Auditors of the Company have submitted Auditors' Report on theaccounts of the Company for the accounting year ended 31st March 2022.

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

Secretarial Auditor:

M/s. Ashok K Singla & Associates Company Secretary in Practice were appointed asSecretarial Auditors of the Company by the Board of Directors of the Company in itsmeeting held on 25th May 2021 for the financial year 2021-22.

The Secretarial Auditors of the Company have submitted their Report in Form No. MR-3 asrequired under Section 204 of the Companies Act 2013 for the financial year ended 31stMarch 2022. This Report is self-explanatory and requires no comments. The Report formspart of this report as Annexure II.

Cost Auditor:

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

The Board of Directors has appointed M/s. Ramanath Iyer & Company CostAccountants New Delhi as the Cost Auditors of the Company to conduct Cost Audit of theAccounts for the financial year ended 2022-23. However as per the provisions of Section148 of the Companies Act 2013 read with Companies (Cost Records and Audit) Rules 2014the remuneration to be paid to the Cost Auditors is subject to ratification by Members atthe Annual General Meeting. Accordingly the remuneration to be paid to M/s. Ramanath Iyer& Company Cost Accountants New Delhi for financial year 2022-23 is placed forratification by the Members.

12. AUDIT COMMITTEE & VIGIL MECHANISM:

Composition of Audit Committee:

The Audit Committee consists of Mr. Prafull Anubhai Dr. S.K. Bijlani and Mr. A.K.Kundra Independent Directors.

Mr. Prafull Anubhai is the Chairman of the Committee and Company Secretary of theCompany is the Secretary of the Committee. All the recommendations made by the AuditCommittee were accepted by the Board.

Vigil Mechanism:

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

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

The Policy on Vigil Mechanism and Whistle Blower Policy as approved by the Board may beaccessed 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

13. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate Governance. Corporate Governance isabout maximizing shareholder value legally ethically and sustainably. A separate reporton Corporate Governance forming part of the Annual Report of the Company is annexedhereto. A certificate from the Practising Company Secretary of the Company regardingcompliance of conditions of Corporate Governance as stipulated under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is annexed to the report onCorporate Governance.

14. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Vision & Core areas of CSR: Your Company is committed to and fully aware ofits CSR the guidelines in respect of which were more clearly laid down in the CompaniesAct 2013. The Company's vision on CSR is that the Company being a responsible CorporateCitizen would continue to make a serious endeavor for a quality value addition andconstructive contribution in building a healthy and better society through its CSR relatedinitiatives and focus on education environment health care and other social causes.

CSR Policy: The CSR Policy of the Company indicating the activities to beundertaken by the Company as approved by the Board may be accessed on the Company'swebsite at the link: https://www.vardhman.com/Document/Report/Company%20Information/Policies/Vardhman%20Textiles%20Ltd/Corporate_Social_Responsibility_Policy.pdf

During the year the Company has spent Rs 20.09 crore on CSR activities. Out of thisan amount of Rs 3.06 crore pertains to FY 2021-22.

The disclosures related to CSR activities pursuant to Section 134(3) of the CompaniesAct 2013 read with Rule 9 of Companies (Accounts) Rules 2014 and Companies (CorporateSocial Responsibility) Rules 2014 is annexed hereto and form part of this report as AnnexureIII.

15. BUSINESS RESPONSIBILITY REPORT (BRR):

SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandate theinclusion of the BRR as part of the Annual Report for top 1000 listed entities based onmarket capitalization. In compliance with the Listing Regulations we have integrated BRRdisclosure in our Annual Report.

16. DIVIDEND DISTRIBUTION POLICY (DDP):

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the top 1000 listed companies are required to formulate a DDP.Accordingly a DDP was adopted to set out the parameters and circumstances that will betaken into account by the Board in determining the distribution of dividend to itsshareholders and/or retaining profits earned by the Company. The Policy is available onthe Company's website at the link: https://www.vardhman.com/Document/Report/Company%20Information/Policies/Vardhman%20Textiles%20Ltd/Dividend_Distribution_Policy.pdf

17. RISK MANAGEMENT:

The Risk Management Policy required to be formulated under the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 has been dulyformulated and approved by the Board of Directors of the Company. The aim of RiskManagement Policy is to maximize opportunities in all activities and to minimizeadversity. The policy includes identifying types of risks and its assessment riskhandling monitoring and reporting which in the opinion of the Board may threaten theexistence 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

18. INTERNAL FINANCIAL CONTROLS:

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

A report on the Internal Financial Controls under clause (i) of sub-section 3 ofsection 143 of the Companies Act 2013 as given by the Statutory Auditors of the Companyforms part of Independent Auditor's Report on Standalone Financial Statements andConsolidated Financial Statements as

Annexure A.

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

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

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

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

20. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013

Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the standalone financial statement (Please referto Note 4 5 9 and 12 to the standalone financial statement).

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

Energy conservation continues to be an area of major emphasis in our Company. Effortsare made to optimize the energy cost while carrying out the manufacturing operations.Particulars with respect to conservation of energy and other areas as per Section134(3)(m) of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 areannexed hereto and form 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 ofthe Company is available on the website of the Company at the link: www.vardhman.com

23. HUMAN RESOURCES /INDUSTRIAL RELATIONS:

Human resource is considered as the most valuable of all resources available to theCompany. The Company continues to lay emphasis on building and sustaining an excellentorganization climate based on human performance. The Management has been continuouslyendeavoring to build high performance culture on one hand and amiable work environment onthe other hand. As on 31st March 2022 the Company employed around 27599 employees onpermanent rolls.

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

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 ManagerialPersonnel) Rules 2014 is annexed hereto and form part of this report. A statement showingthe names and other particulars of the employees drawing remuneration in excess of thelimits set out in Rule 5(2) and 5(3) of the Companies (Appointment

& Remuneration of Managerial Personnel) Rules 2014 is annexed hereto and formspart of this report.

In terms of section 197(14) of the Companies Act 2013 the Company does not have anyHolding Company. Further none of the Director of the Company has received anyremuneration or commission from any subsidiary company. All the above details are providedin Annexure V.

25. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT:

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

26. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to provisions of Section 134 (5) of the Companies Act 2013 the Board herebysubmit its responsibility Statement:— a. in the preparation of the annual accountsthe applicable accounting standards have been followed along with the proper explanationrelating to material departures; b. appropriate accounting policies have been selected andapplied consistently and have made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as at31st March 2022 and of the profit of the Company for the year ended on 31st March 2022;c. proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets 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 financialcontrols has been laid down to be followed by the Company and that such internal financialcontrols are adequate and are operating effectively; and f. a proper system has beendevised to ensure compliance with the provisions of all applicable laws and such systemsare adequate and operating effectively.

27. GENERAL DISCLOSURES:

Your Directors state that no disclosure or reporting is required in respect of thefollowing 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 whichimpact 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 provisionsrelating to constitution of Internal Complaints Committee under the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and there was no casefiled under the said Act.

28. VARDHMAN TEXTILES LIMITED EMPLOYEE STOCK OPTION PLAN 2016:

The Company has granted options to its employees under Vardhman Textiles LimitedEmployee Stock Options Plan 2016 (hereinafter referred as ESOP Plan). As per the terms ofthe ESOP Plan the Company can grant a maximum of 636518 options of face value of Rs10/- each to eligible employees from time to time. One option entitles the holder to applyfor one equity share of Rs 10/- each of the

Company in terms of the Plan. During the financial year 2021-22 210250 equityshares of face value of Rs 10/- each were allotted to the eligible employees. So the paidup equity share capital of the Company stood increased to Rs 577728100 as on 31stMarch 2022.

The ESOP Plan of the Company is being implemented in accordance with SEBI (Share BasedEmployee Benefits) Regulations 2014 and the resolution passed by the shareholdersapproving the said plan. A certificate from the Secretarial Auditor of the Company in thisregard 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 beaccessed at https:// www.vardhman.com/Document/Report/Compliances/Miscellaneous/Vardhman%20Textiles%20Ltd/ESOP_ Disclosure__2021-22.pdf

29. SPLIT/ SUB-DIVISION:

During the year pursuant to the approval of the shareholders through their PostalBallot dated 11th March 2022 the equity shares of the Company were sub-divided fromexisting face value of Rs 10/- per equity shares into 5 equity shares having face value ofRs 2 per equity share. The Record

Date for effecting this sub-division of equity share was 26th March 2022.

30. MERGER OF VMT SPINNING COMPANY LIMITED AND VARDHMAN NISSHINBO GARMENTS COMPANYLIMITED WITH THE COMPANY:

During the year the National Company Law Tribunal (NCLT) Chandigarh vide its Ordersdated 30th March 2022 has sanctioned the Scheme of Amalgamation of VMT Spinning CompanyLimited (VMT) and Vardhman Nisshinbo Garments Company Limited (VNGL) with the Company.Both VMT and VNGL were wholly owned subsidiaries of the Company and their merger hasbecome effective from the Appointed Date as mentioned in the Scheme of Amalgamation i.e.1st April 2020.

31. ACKNOWLEDGEMENT:

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

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

FOR AND ON BEHALF OF THE BOARD
Place : Ludhiana (S.P. Oswal)
Dated : 21st May 2022 Chairman & Managing Director

.