The Directors of your Company have pleasure in presenting their 15^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.

The financial performance of your Company for the year ended 31^stMarch, 2025 is as under:-

(Rs.in Lakhs)

During the year under review, the production of Billet increased from 2,26,321 MT to 2,47,635 MT, showing an increase of 9.42% over the previous year. The Rolled production increased from 1,71,042 MT to 1,76,763 MT, showing an increase of 3.34% over the previous year.

Your Company has registered Revenue from Operations of Rs.1,76,440.83 lakhs as compared to Rs.166,135.93 lakhs in the previous year. The exports

of the Company decreased from Rs.6,303.01 lakhs to Rs.5,883.58 showing a decrease of 6.65%.

The Company earned profit before depreciation, interest and tax of Rs.17,715.76 lakhs as against Rs.17,226.24 lakhs in the previous year. After providing for depreciation of Rs.3,346.99 lakhs (Previous Year Rs.3,098.37 lakhs), interest of Rs.1,862.71 lakhs (Previous Year Rs.1,842.09 lakhs), provision for current tax including tax adjustment relating to prior years of

Rs.3,332.39 lakhs (Previous Year Rs.3,153.54 lakhs) and Deferred Tax amounting to Rs.(135.14) lakhs (Previous Year Rs.(30 56) lakhs), the total comprehensive income worked out to Rs.9,281.02 lakhs as compared to Rs.9,180.42 lakhs in the previous year.

The balance available for appropriation after adding balance in surplus account is Rs.48,399.97 lakhs. Out of this, a sum of Rs.1,629.90 lakhs has been utilised towards dividend and balance of Rs.46,770.07 lakhs is proposed to be carried as surplus to the Balance sheet.

The net block as at 31^stMarch, 2025 was Rs.30,831.42 lakhs as compared to Rs.32,414.17 lakhs in the previous year

The current assets as on 31^st March, 2025 were Rs.66,115.20 lakhs as against Rs.67,428.19 lakhs in the previous year. Inventory level was at Rs.33,497.38 lakhs as compared to the previous year level of Rs.35,617.24 lakhs.

The Company enjoys a rating of "AA/Stable" from Credit Rating Information Services of India (CRISIL) for long term borrowings and "A1+" for short term borrowings. 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:-

(Rs.in lakhs)

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

The Board of Directors in its meeting held on 22^nd April, 2025 has recommended dividend of Rs.3/- per share on the fully paid-up Equity Shares of the Company.

In accordance with the Companies Act, 2013 & applicable Indian Accounting Standards, the Audited Consolidated Financial Statements are provided in the Annual Report

The Company does not have any subsidiary and joint venture. However, during the year, your Company had acquired 26% shares in Sone Solar Private Limited, pursuant to terms and conditions of 'Share Subscription and Shareholder's Agreement' entered into by the Company with ASG HOLDCO BETA PTE. LTD. (Promoter) & Sone Solar Private Limited ("Sone") (Power Producer) and 'Power Supply and Offtake Agreement' entered into by the Company with Sone. According to Ind AS 109 and terms of Agreements, this investment in Sone is required to be classified as investment in an Associate using equity method. As per the terms of the investment, the Company is not entitled to any dividend or profit distribution. The Company holds a put option which is exercisable at the end of 18th year from the date of investment with an Option Price at Fair Market Value at least equal to the original investment amount. Therefore, the Company shall not be recording any downside on account of losses to its associate. As the Option Price will be determined at the end of 18th year, there shall be no recognition of upside also till the date of exercise of the option, since Company's return on this investment is uncertain until then. Therefore, there is no difference between the consolidation and standalone figures as provided in point no.l of this Report.

Except as stated above, no company have become or ceased to be subsidiary, joint venture or associate of the Company during the year.

Liable to retire by rotation: In accordance with the provisions of the Articles of Association of the Company, Mrs. Soumya Jain and Mrs. Suchita Jain,

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 reappointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

Further, in accordance with the provisions of the Articles of Association of the Company, Mr. Rajeev Gupta, Director of the Company, also retires by rotation at the ensuing Annual General Meeting of the Company. However, he has not offered himself for re-appointment as a Director. Accordingly, he would cease to be a Director of the Company at the ensuing AGM.

Appointment of Director: During the year under review, Mr. Hemant Bharat Ram and Mr. Randhir Singh Kalsi were appointed as Independent Directors of the Company w.e.f. 25^th July, 2024 and 7^th November, 2024, respectively. Their appointments were further approved by the Members of the Company in the Annual General Meeting held on 19^th September, 2024 and through Postal Ballot dated 13^th December, 2024, respectively.

Cessation from Directorship: During the year under review, Mr. Raghav Chandra, Independent Director, ceased to be a Director of the Company w.e.f. 4^(h May, 2024, on completion of his term of appointment.

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, if applicable, shall undergo online proficiency self-assessment test within the time prescribed by the IICA.

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://wwvv.vardhman.com/Document/Report/ Companv%2 Pin forma tion/Policies/Vardhman%20 Special %2QSteels%2QLtd /Familiarisation Programme for Board Members.pdf

The meeting of Independent Directors of the Company for the financial year 2024-25 was held on 24^(h March, 2025 to evaluate the performance of 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 non-executive directors and executive directors has been formulated by the Company.

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 the 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/Companv%20information/ Policies/Vardhman%20Special%20Steels%20 Ltd/ Nomination &_Remuneration Policv.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 evaluation of 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 the Senior Management.

In compliance with the provisions of section 203 of the Companies Act, 2013, following are the KMPs of the Company as on 31^s' March, 2025:

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 Companies Act, 2013. The details of Board Meetings are set out in Corporate Governance Report which forms part of this Annual Report.

M/s. BSR & Co., LLP, Chartered Accountants, (Firm Registration No.: 101248W/W-100022) were appointed as Statutory Auditors of the Company for a second consecutive term of 5 years at the 13^th Annual General Meeting held on 27^(h September, 2023.

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.

M/s. Harsh Goyal & 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 1^st 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 -1.

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. Harsh Goyal & Associates, Peer Reviewed Company Secretary in Practice (CP No. 2802) 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. Harsh Goyal & Associates, Company Secretaries in Practice, are separately disclosed in the Notice of ensuing AGM.

M/s. Harsh Goyai & 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.

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 had 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 2025-26. 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 2025-26 is placed for ratification by the Members.

The Audit Committee comprises of Mrs. Vidya Shah, Mr. Rakesh Jain, Mr. Sanjoy Bhattacharyya and Mr. Suman Chatterjee, Independent Directors and Mr. Rajinder Kumar Jain, Non-Executive Director. Mrs. Vidya Shah is the Chairperson of the Committee and Mrs. Sonam Dhingra 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.

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 theSEBI (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 code of conduct by way of direct access to the Managing Director/ 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%20 lnformation/Policies/Vardhman%20Special%20 Steels%20Ltd/ Whistle Blower Policy.pdf

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.

14. 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 are more clearly laid down in the Companies Act, 2013. The Company's vision on CSR is to pursue a corporate strategy that enables shareholder value enhancement and societal value creation in a mutually reinforcing and synergistic manner

CSR Policy: The Corporate Social Responsibility 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/Companv%20lnformation/Policies/ Vardhman%20Special%20Steels%20Ltd/Corporate Social_Responsibilitv_Policv.pdf

During the year, the Company has spent Rs.263.76 lakhs on CSR activities. Out of this, an amount of Rs.230.46 lakhs pertains to FY 2024-25 and Rs.33.30 lakhs pertains to FY 2023-24.

The disclosures related to CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with

ANNUAL REPORT 2024-25 Q$e> 49

Rule 9 of Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014 is annexed hereto and forms part of this report as Annexure - II.

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/ComDanv%20 lnformation/Policies/Vardhman%20SDecial%20 Steels%20Ltd/Risk Management Policy pdf

The 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, BRSR is available on the Company's website at the link : https://www.vardhman.com/Document/Report/ Compliances/BRR/Vardhman%20Special%20 Steels%20Ltd/BRSR 2024-25.pdf

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 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.yardhman.com/Document/Report/ Companv%20lnformation/Policies/Vardhman%20 Special%2 OS teels%20 Ltd/Dividend Distribution Policv.pdf

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 the Independent Auditor's Report on Standalone Financial Statements and Consolidated Financial Statements as Annexure B.

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 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/Companv%20 lnformation/Policies/Vardhman%20Special%20 Steels%20Ltd/Related Party Transaction Policy pdf

Your Directors draw attention of the Members to Note 44 to the financial statements which sets out related party disclosures.

Particulars of loans given/ taken, 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 6, 7,12 and 19 to the financial statements).

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 - III.

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/lnvestors/ Compliances

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 culture 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 31^st March, 2025, the Company employed around 1,363 employees on permanent rolls

Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation on the shop floor of the plant.

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

All the above details are provided in Annexure - IV In terms of section 197(14) of the Companies Act, 2013, the Company does not have any Holding or Subsidiary Company.

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.

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby submit its Responsibility Statement that:—

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^s' March, 2025 and of the profit of the Company for the year ended on 31^s' 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. a proper system has been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

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

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

b. Issue of equity shares with differential rights as to

dividend, voting or otherwise.

c. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

d. Change in nature of Business of the Company.

e. Transfer of Unclaimed dividend to Investor Education and Protection fund.

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

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

h. 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 complaint 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.

The Company had granted Options to its eligible employees under Vardhman Special Steels Limited Employee Stock Options Plan, 2016 (hereinafter referred as ESOP Plan 2016) and Vardhman Special Steels Limited Employee Stock Options Plan, 2020 (hereinafter referred as ESOP Plan 2020).

• As per the terms of the ESOP Plan 2016, the Company can grant a maximum of 3,71,108 Options to eligible employees from time to time. One Option entitles the holder to apply for one equity share of the Company in terms of ESOP Plan 2016.

• As per the terms of the ESOP Plan 2020, the Company can grant a maximum of 5,00,000 Options to eligible employees from time to time. One Option entitles the holder to apply for one equity share of the Company in terms of ESOP Plan 2020.

During the financial year 2023-24, the Company had issued Bonus Shares to the existing shareholders of the Company in the ratio of 1:1. As per ESOP Plan 2016 and 2020, the employees who will exercise Options, shall also be entitled to receive Bonus Shares n the ratio of 1:1.

Now, during the financial year, 32,000 Options and 2,250 Options were exercised by the eligible employees under 2^nd grant and 3^rd grant, respectively, of ESOP Plan 2016 and consequently 68,500 shares (including Bonus Shares) were allotted to employees; and 77,250 Options and 25,250 Options were exercised by the eligible employees under 1^st grant and 2^nd grant, respectively, of ESOP Plan 2020 and consequently 2,05,000 shares (including Bonus Shares) were allotted to employees. Accordingly, the paid-up equity share capital of the Company after this allotment stood increased to Rs.81,73,33,280.

Further, the Nomination and Remuneration Committee in its meeting held on 18^th July, 2024 had made a third grant of 1,36,500 Options under ESOP Plan 2020 to its eligible employees out of 1,37,125 Options lying un-granted under the ESOP Plan 2020. These Options will vest with the eligible employees after two years from the date of grant.

The ESOP Plan 2016 and 2020 of the Company are being implemented in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 and the resolutions passed by the shareholders approving the said Plans. A certificate from the Secretarial Auditor of the Company in this regard would be available during 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%20Special%20Steels%20 Ltd/ESOP DISCLOSURE - 2024-25.pdf

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 at all levels of the operations of the Company during the year.