The Directors of your Company have pleasure in presenting their 16^th Annual Report of the business and operations of the Company
along with the Audited Financial Statements for the year ended 31^st March, 2026.

1. FINANCIAL RESULTS:

The financial performance of your Company for the year ended 31^st March, 2026 is as under:- (H in Lakhs)

2. FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS:
PRODUCTION & SALES REVIEW:

During the year under review, the production of Billet
decreased from 2,47,635 MT to 2,42,070 MT, showing
a decrease of 2.25 % over the previous year. The Rolled
production decreased from 1,76,763 MT to 1,76,676 MT,
showing a decrease of 0.05% over the previous year.

Your Company has registered Revenue from Operations
of H1,75,443.31 lakhs as compared to H1,76,440.83 lakhs in
the previous year. The exports of the Company increased
from H5,883.58 lakhs to H7,085.41 lakhs showing an
increase of 20.43%.

PROFITABILITY:

The Company earned profit before depreciation, interest
and tax of H20,882.20 lakhs as against H17,715.76 lakhs
in the previous year. After providing for depreciation of

H3,286.68 lakhs (Previous Year H3,346.99 lakhs), interest of
H1,190.58 lakhs (Previous Year H1,862.71 lakhs), provision
for current tax including tax adjustment relating to prior
years of H3,791.00 lakhs (Previous Year H3,332.39 lakhs)
and Deferred Tax amounting to H411.55 lakhs (Previous
Year H(135.14) lakhs), the total comprehensive income
worked out to H12,246.73 lakhs as compared to H9,281.02
lakhs in the previous year.

The balance available for appropriation after adding
balance in surplus account is H59,016.79 lakhs. Out of
this, a sum of H2,895.11 lakhs has been utilised towards
dividend and balance of H56,121.68 lakhs is proposed to
be carried as surplus to the Balance Sheet.

RESOURCES UTILISATION:

a) Fixed Assets:

The net block as at 31^st March, 2026 was H58,477.87 lakhs
as compared to H30,831.42 lakhs in the previous year.

b) Current Assets:

The current assets as on 31^st March, 2026 were H95,538.31
lakhs as against H66,115.20 lakhs in the previous year.
Inventory level was at H35,024.13 lakhs as compared to
the previous year level of H33,497.38 lakhs.

FINANCIAL CONDITIONS & LIQUIDITY:

The Company enjoys a rating of "AA/Stable" from Credit
Rating Information Services of India Limited (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:-

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 28^th April,
2026 has recommended dividend of H3.50/- per share on
the fully paid-up Equity Shares of the Company.

5. CONSOLIDATED FINANCIAL STATEMENT:

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

6. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE
COMPANIES:

The Company does not have any subsidiary/ material
subsidiary, associate or joint venture company. Further,
during the year, Sone Solar Private Limited ceased to be
an associate of the Company w.e.f. 1^st April, 2025.

Except Sone Solar Private Limited, no other company
has become or ceased to be subsidiary, associate or joint
venture of the Company.

7. DIRECTORS:

Re-appointment of Managing Director: Mr. Sachit
Jain was re-appointed as the Vice-Chairman & Managing
Director of the Company for a period of 5 (five) years
w.e.f. from 1^st April, 2025. Further, the Board of Directors
of your Company has designated Mr. Sachit Jain as the
Chairman & Managing Director of the Company w.e.f. 25^th
September, 2025.

Liable to retire by rotation: In accordance with the
provisions of the Articles of Association of the Company,
Mr. Rajendar Kumar Rewari and Mr. Toshio Ito, 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
recommends their 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. Koichiro Hayashida was appointed as a Non¬
Executive Director (Subscriber Director of Aichi
Steel Corporation) of the Company, w.e.f. 4^th July,
2025. His appointment was further approved by the
Members of the Company in the Annual General
Meeting held on 24^th September, 2025.

• Mr. Dinkar Gupta and Mr. Nishant Arya were
appointed as Independent Directors of the Company
w.e.f. 25^th September, 2025. Their appointments
were further approved by the Members of the
Company through Postal Ballot ended on 10^th
December, 2025.

Cessation from Directorship: During the year under
review:

Mr. Rajeev Gupta, Non-Executive Director, ceased to
be a Director of the Company w.e.f. 24^th September,
2025. He retired by rotation in the previous Annual
General Meeting and does not seek re-appointment
due to personal issues.

• Mr. Sanjoy Bhattacharyya, Independent Director,
ceased to be a Director of the Company w.e.f. 24^th
September, 2025, on completion of his second term
of appointment.

Declaration by Independent Directors:

The Independent Directors have submitted their
disclosures to the Board that they fulfill all the
requirements as stipulated in section 149(6) of the

Companies Act, 2013 so as to qualify themselves to be
appointed as Independent Directors under the provisions
of the Companies Act, 2013 and the relevant rules thereof.

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

Familiarization Programmes for Board Members:

At the time of appointing a Director, a formal letter of
appointment is given, which inter-alia includes the role,
function, duties and responsibilities expected from
him/her as a Director of the Company and necessary
documents, reports and internal policies to enable him/
her to familiarise with the Company and it's procedures
and practices. Periodic presentations are made at the
Board and Committee meetings, on business and
performance updates of the Company, global business
environment, business strategy and risks involved etc.
Updates on relevant statutory changes on important laws
are periodically presented or circulated to the Board. The
Directors are also explained in detail the compliances
required from them under the Act, the SEBI Regulations
and other relevant Laws and Regulations.

The details of the Familiarisation Programme conducted

for the Independent Directors of the Company are

available on the Company's website at the link:

https://www.vardhman.com/Document/Report/

Company%20Information/Policies/Vardhman%20

Special%20Steels%20Ltd/Familiarisation_Programme_

for_Board_Members.pdf

Annual Evaluation of the Board Performance:

The meeting of Independent Directors of the Company
for the financial year 2025-26 was held on 30^th March,
2026 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.

8. NOMINATION AND REMUNERATION POLICY:

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

9. KEY MANAGERIAL PERSONNEL (KMP):

In compliance with the provisions of section 203 of the
Companies Act, 2013, following are the KMPs of the
Company as on 31^st March, 2026:

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

11. AUDITORS AND AUDITORS' REPORT:

Statutory Auditors:

M/s. BSR & Co., LLP, Chartered Accountants, (Firm
Registration No.: 101248W/W-100022) were re-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^th 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, 2026.

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

Secretarial Auditor:

M/s. Harsh Goyal & Associates, Company Secretary in
Practice, were appointed as Secretarial Auditors of the
Company by the Board of Directors in its meeting held on
22^nd April, 2025, for a consecutive term of 5 years w.e.f.
financial year 2025-26. 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, 2026. This
Report is self-explanatory and requires no comments and
it 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 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 2026-27 is placed for ratification by the
Members.

12. AUDIT COMMITTEE & VIGIL MECHANISM:

Composition of Audit Committee:

The Audit Committee comprises of Mr. Rakesh Jain,
Mrs. Vidya Shah, Mr. Suman Chatterjee and Mr. Hemant
Bharat Ram, Independent Directors. Mr. Rakesh Jain is the
Chairman 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
2025-26, the Board has accepted all the recommendations
of its Committees.

Vigil Mechanism:

Pursuant to the provisions of section 177(9) of the
Companies Act, 2013, the Company has established a
"Vigil Mechanism" incorporating Whistle Blower Policy
in terms of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, for employees and
Directors of the Company, for expressing the genuine
concerns of unethical behavior, actual or suspected
fraud or violation of the 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%20Information/
Policies/Vardhman%20Special%20Steels%20Ltd/_
Whistle_Blower_Policy.pdf

13. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate
Governance. Corporate Governance is about maximizing
shareholders' 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/Company%20
Information/Policies/Vardhman%20Special%20Steels%20
Ltd/Corporate_Social_Responsibility_Policy.pdf

During the year, the Company has spent H352.04 lakhs
on CSR activities. Out of this, an amount of H276.42 lakhs
pertains to FY 2025-26.

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

15. 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%20Special%20Steels%20Ltd/Risk_
Management_Policy.pdf

16. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT:

In compliance with the Regulation 34(2)(f) of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015, Business Responsibility & Sustainability
Report of the Company for the FY 2025-26 is available on
the Company's website at the link: https://www.vardhman.
com/Document/Report/Compliances/BRR/Vardhman%20
Special%20Steels%20Ltd/BRSR_2025-26.pdf

17. DIVIDEND DISTRIBUTION POLICY (DDP):

As per Regulation 43A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the
Company is 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%20Special%20Steels%20Ltd/Dividend_
Distribution_Policy.pdf

18. 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 the Independent Auditor's Report on the
Financial Statements as Annexure B.

19. 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 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%20Special%20Steels%20Ltd/
Related_Party_Transaction_Policy.pdf

Your Directors draw attention of the Members to Note 43
to the financial statements which sets out related party
disclosures.

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

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).

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

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

22. ANNUAL RETURN:

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

23. HUMAN RESOURCES /INDUSTRIAL RELATIONS:

Human resource is considered as the most valuable of
all resources available to the Company. The Company
continues to lay emphasis on building and sustaining
an excellent organizational 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, 2026, the Company employed around
1,400 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.

24. PARTICULARS OF EMPLOYEES AND RELATED
DISCLOSURES:

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

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

All the above details are provided in Annexure - IV.

In terms of section 197(14) of the Companies Act, 2013,
the Company does not have any Holding or Subsidiary
Company.

25. MATERIAL CHANGES AND COMMITMENT, IF ANY,
AFFECTING THE FINANCIAL POSITION OF THE
COMPANY OCCURRED BETWEEN THE END OF
THE FINANCIAL YEAR TO WHICH THE FINANCIAL
STATEMENTS RELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the
financial position of the Company occurred between the
end of the financial year to which the financial statements
relate and the date of this report.

26. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134(5) of the
Companies Act, 2013, the Board hereby 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^st March, 2026 and of the profit
of the Company for the year ended on 31^st March,
2026;

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

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

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

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

27. GENERAL DISCLOSURES:

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

a. Details relating to deposits covered under Chapter V
of the Companies Act, 2013.

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. The Company is also in
regular compliance of the 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 and the Maternity Benefit
Act, 1961.

In addition to this, all the policies as required under
the Act or the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 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.

28. UTILISATION OF FUNDS THROUGH PREFERENTIAL
ALLOTMENT:

In compliance with the provisions of the SEBI (Issue of
Capital and Disclosure Requirements) Regulations, 2018,
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and Sections 42 & 62 of the Companies

Act, 2013 and Rules made thereunder, your Company
had issued and allotted 1,47,70,100 Equity Shares of face
value of H10/- each to Aichi Steel Corporation through
Preferential Allotment, at an issue price of H260.60/- per
Equity Share, aggregating to H384,90,88,060 on 4^th July,
2025.

29. VARDHMAN SPECIAL STEELS LIMITED EMPLOYEE
STOCK OPTION PLAN:

The Company had granted Options to its eligible
employees under Vardhman Special Steels Limited
Employee Stock Option Plan, 2016 (hereinafter referred
as ESOP Plan 2016) and Vardhman Special Steels Limited
Employee Stock Option 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 the
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 the
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 in the ratio of 1:1.

Now, during the financial year, 23,375 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 51,250 shares (including Bonus Shares)
were allotted to employees; and 40,250 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 1,31,000 shares (including Bonus
Shares) were allotted to employees. Accordingly, the
paid-up equity share capital of the Company after this
allotment stood increased to H96,68,56,780.

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%20Ltd/
ESOP_Disclosure_-_2025-26.pdf

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

FOR AND ON BEHALF OF THE BOARD

Place : Ludhiana (SACHIT JAIN)

Dated : 28^th April, 2026 Chairman & Managing Director