Vardhman Holdings Ltd

Dear Members,

The Directors of your Company have pleasure in presenting their 60^th Annual Report of the business and operations of the Company along with the Audited Financial Statements for the year ended 31^st March, 2024.

1. FINANCIAL RESULTS:

The financial performance of your Company for the year ended 31^st March, 2024 is as under:-

( in lakhs)

2. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A. FINANCIAL ANALYSIS i. STANDALONE

During the year under review, your Company has registered Revenue from Operations of 4,398.19 lakhs as compared to 588.45 lakhs in the previous year. The Company earned other income of 247.22 lakhs during the year as against 188.17 lakhs during last year.

PROFITABILITY:

The Company earned profit before depreciation, interest and tax of 4,211.48 lakhs as against 339.68 lakhs in the previous year. After providing for depreciation of 0.72 lakhs (Previous Year 0.72 lakhs), provision for current tax 761.19 lakhs (Previous Year 347.67 lakhs), deferred tax 174.77 lakhs (Previous Year (698.83) lakhs), the net profit from operations worked out to 3,274.80 lakhs as compared to 690.12 lakhs in the previous year.

The balance available for appropriation after adding balance in surplus account is 64,925.04 lakhs. Out of this, a sum of 159.58 lakhs has been appropriated towards proposed dividend, 654.96 lakhs is proposed to be transferred to special reserve account and the balance of 68,682.78 lakhs is proposed to be carried as surplus to the balance sheet.

Return on Net Worth for the financial year 2023-24 is increased from 0.79% to 3.56% on account of increase in net profits during the year.

ii. CONSOLIDATED

During the year under review, your Company has registered Revenue from Operations of 1,490.13 lakhs as compared to 588.45 lakhs in the previous year. The Company earned other income of 247.22 lakhs during the year as against 188.17 lakhs during last year.

PROFITABILITY:

The Company earned profit before depreciation, interest and tax of 19,424.74 lakhs as against 22,492.82 lakhs in the previous year. After providing for depreciation of 0.72 lakhs (previous year 0.72 lakhs), provision for current tax 761.19 (previous year 347.67 lakhs), deferred tax 174.77 lakhs (previous year ( 698.83) lakhs), the net profit from operations worked out to 18,488.06 lakhs as compared to 22,843.26 lakhs in the previous year.

The balance available for appropriation after adding balance in surplus account is 3,07,090.66 lakhs. Out of this, a sum of 159.58 lakhs has been appropriated towards proposed dividend, 654.96 lakhs is proposed to be transferred to special reserve account and the balance of 3,06,297.41 lakhs is proposed to be carried as surplus to the balance sheet.

B. RESOURCES UTILISATION: a) Fixed Assets: The Net Block as at 31^st March, 2024 was 319.46 lakhs as compared to 320.18 lakhs in the previous year.

b) Current Assets: The current assets as on 31^st March, 2024 were 90,211.60 lakhs as against 85,359.70 lakhs in the previous year.

C. FINANCIAL CONDITIONS & LIQUIDITY:

( in lakhs)

D. BUSINESS OUTLOOK:

Vardhman Holdings Limited primarily earns its income from investments. The Company's strategy is to adopt a systematic approach of investment into different asset classes namely debt, equity & real estate and to keep the portfolio dynamic as per the changing market conditions.

Company's current portfolio consists of investments into debt, equity and real estate.

E. MANAGEMENT PERCEPTION OF RISK AND CONCERNS:

The Company recognizes that risk is an integral and unavoidable component of business and is committed to managing the risk in a proactive and effective manner.

The Company is a NBFC registered with RBI and mainly engaged in investment activities. It follows a strategy of adopting a systematic approach to investment into different asset classes and keeping the portfolio dynamic as per the changing market conditions. The Company is prone to all the financial risks and capital market fluctuations.

3. DIVIDEND:

The Board of Directors in its meeting held on 28^th May, 2024 has recommended a dividend of 5/- per share on the fully paid up Equity Shares of the Company.

4. PUBLIC DEPOSITS:

The Company has not accepted and does not intend to accept any deposits from the public. As at 31^st March, 2024, there are no outstanding/unclaimed deposits from the public.

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 2016-17 is due for remittance in the month of November, 2024 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 detail of these shares are also provided on the website of the Company at www.vardhman.com.

6. CONSOLIDATED FINANCIAL STATEMENT:

In accordance with the Companies Act, 2013 and Indian Accounting Standard IND AS-110 on Consolidated Financial Statements read with IND AS-28 on ‘Accounting for Investments in Associates' the Audited Consolidated Financial Statements are provided in the Annual Report.

7. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

During the year under review, no Company has become or ceased to be Company's subsidiary, joint venture or associate company. Further, the Company does not have any material subsidiary. The Company has following associate companies, the details of their financials for the year 2023-24 are given below:-

Vardhman Textiles Limited (VTXL)

Vardhman Textiles Limited (VTXL) is an Associate Company of the Company. The Company holds 28.76% shares of VTXL as on 31^st March, 2024. VTXL is engaged in manufacturing of world class textiles. During the year, the Revenue from Operations (Consolidated) of the VTXL was 9,504.68 crore as compared to 10,137.49 crore in the previous year. VTXL has a Net Profit after comprehensive income (Consolidated) of 640.59 crore as compared to 807.63 crore in the previous year.

Vardhman Spinning and General Mills Limited (VSGM)

Vardhman Spinning and General Mills Limited (VSGM) is an Associate Company of the Company. The Company holds 50% shares of VSGM as on 31^st March, 2024. It is a trading Company dealing in trading of Cotton and Fibre. During the year, the Company has not traded any goods, however, the Revenue from Operations is 0.003 lakhs for the financial year 2023-24 as compared to 0.01 lakhs in the previous year. The Company earned a Net Loss of 0.47 lakhs as compared to 0.20 lakhs 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, retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers herself for re-appointment. The Board recommended her appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

Cessation from Directorship: During the year under review:

Mrs. Shakun Oswal ceased to be a Director of the Company w.e.f. 30^th September, 2023 and Mr. Sanjeev Jain ceased to be a Director of the Company w.e.f. 13^th November, 2023 on completion of his 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, 2013andshallundergoonlineproficiencyself-assessment test, if applicable, within the time prescribed by the IICA.

9. 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%20 Information/Policies/Vardhman%20Holdings%20Ltd/

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.

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 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%20Holdings%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 2023-24 was held on 20^th March, 2024 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, 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 non-executive directors and executive directors has been formulated by the Company.

10. 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, 2024:

* During the year, Mrs. Poorva Bhatia was appointed as the Chief Financial Officer of the Company with effect from 8^th July, 2023.

# Ms. Swati Mangla, Company Secretary has left the services of the Company w.e.f 17th November, 2023 and Ms. Aakriti Gupta has been appointed as a Company Secretary in her place w.e.f. 14^th February, 2024.

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 Meetings are set out in Corporate Governance Report which forms part of this Annual Report.

Statutory Auditors:

M/s K.C. Khanna & Co., Chartered Accountants (Registration No. 000481N) were appointed as the Statutory Auditors of the Company for a period of five consecutive years starting from the conclusion of 58^th Annual General Meeting till the conclusion of 63^rd Annual General Meeting of the Company.

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, 2024.

This Auditors' Report is self explanatory and requires no comments

Secretarial Auditors:

M/s Khanna Ashwani & Associates, Company Secretaries, were appointed as Secretarial Auditors of the Company by the Board of Directors of the Company in its meeting held on 20^th May, 2023 for the financial year 2023-24.

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, 2024. This Report is self-explanatory and requires no comments. The Report forms part of this report as Annexure I.

Cost Auditors

Under the provisions of Section 148(1) of the Companies Act, 2013, maintenance of cost records is not applicable to the Company.

Composition of Audit Committee:

The Audit Committee consists of three Independent Directors i.e. Mr. Devendra Bhushan Jain, Mr. Manjul Pahwa and Mrs. Pooja Mehta.

Mr. Devendra Bhushan Jain 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.

14. VIGIL MECHANISM & SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

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 Company's website at the link:

https://www.vardhman.com/Document/Report/ Company%20Information/Policies/Vardhman%20 Holdings%20Ltd/Vigil_Mechanism_and_Whistle_Blower_Policy.pdf

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Your Directors further state that during the year under review, there were no complaints filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

15. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR):

In compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, BRSR is available on the Company's website at the link: https:// www.vardhman.com/Document/Report/Compliances/BRR/Vardhman%20Holdings%20Ltd/BRSR_2023-24.pdf

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 be taken into account by the Board in determining 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 Holdings%20Ltd/Dividend_Distribution_Policy.pdf

17. 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 the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the report on Corporate Governance.

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

During the year, the Company has spent 35.92 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 the Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014 is annexed hereto and forms part of this report as Annexure II.

19. RISK MANAGEMENT:

The Risk Management Policy required to be formulated under the Companies Act, 2013 and the 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%20Holdings%20Ltd/ Risk_Management_Policy.pdf

20. 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 as Annexure B and Independent Auditor's Report on Consolidated Financial Statements as Annexure A.

21. 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%20Holdings%20Ltd/Related_Party_Transactions_Policy.pdf

Your Directors draw attention of the Members to Note no. 26 to the standalone financial statements which sets out related party disclosures.

22. 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 statements (Please refer to Note no. 6 to the standalone financial statements).

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

Particulars with respect to conservation of energy and other areas as per Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 are not applicable.

24. 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 .

25. HUMAN RESOURCES /INDUSTRIAL RELATIONS:

The Company is not carrying on any manufacturing activity and no workers were employed during the year.

26. 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 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 the Companies (Appointment & Remuneration of Managerial Personnel)

Rules, 2014 is annexed hereto and forms part of this report. Since the Company has no holding or subsidiary Company, no particulars are required to be given pursuant to the provisions of section 197(14) of the Companies Act, 2013. All the above details are provided in Annexure III.

27. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY 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.

28. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to 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, 2024 and of the profit of the Company for the year ended on 31^st March, 2024;

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.

29. GENERAL DISCLOSURES:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transaction on these items during the year under review:

1. Change in nature of Business of the Company.

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

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

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

30. 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 co-operation 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 of the Company during the year.