1. CORPORATE INFORMATION
Aditya Birla Fashion and Retail Limited (the “Company”), a public company domiciled in India and
incorporated under the provisions of the Companies Act, 1956. Its equity shares are listed on the
National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India. The registered office
of the Company is located at Piramal Agastya Corporate Park, Building ‘A’, 4th and 5th Floor, Unit
No. 401, 403, 501, 502, L.B.S. Road, Kurla, Mumbai - 400 070.
The Company is engaged in the business of manufacturing and retailing of branded apparels/
accessories and runs a chain of apparels and accessories retail stores in India.
The standalone financial statements, as reviewed and recommended by the Audit Committee,
have been approved by the Board of Directors in their meeting held on May 23, 2025
2. BASIS OF PREPARATION
2.1 Compliance with Ind AS and historical cost convention
The standalone financial statements of the Company have been prepared in accordance
with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting
Standards) Rules, 2015 (as amended), read with Section 133 of the Companies Act, 2013 (“the
Act”) and presentation requirements of Division II of Schedule III of the Act and other relevant
provisions of the Act as applicable. The financial statements have been prepared on accrual
basis under the historical cost convention, except the following assets and liabilities, which
have been measured at fair value as required by the relevant Ind AS:
• Certain financial assets and liabilities (refer accounting policy regarding financial
instruments);
• Defined employee benefit plans;
• Share-based payment; and
• Derivative financial instruments.
2.2 Functional and Presentation Currency:
The financial statements are presented in Indian Rupee (?) which is the functional currency
of the Company. All amounts are rounded to two decimal places to the nearest Crore, unless
otherwise stated. (' 1 Crore is equal to ' 10 Million)
2.3 Current versus non-current classification
The Company presents assets and liabilities in the Standalone Balance Sheet based on current/
non-current classification.
An asset is treated as current when it is:
• Expected to be realised or intended to be sold or consumed in normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realised within twelve months after the reporting period; or
• Cash or cash equivalents unless restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is treated as current when:
• It is expected to be settled in normal operating cycle;
• It is held primarily for the purpose of trading;
• It is due to be settled within twelve months after the reporting period; or
• There is no unconditional right to defer the settlement of the liability for at least twelve
months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their
realisation in cash and cash equivalents. The Company has identified twelve months as its
operating cycle.
2.4 Critical Accounting Judgements, Estimates And Assumptions
The preparation of the Company’s financial statements requires the management to make
judgements, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets, liabilities, the accompanying disclosures and the disclosure of contingent
liabilities. Uncertainty about these assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of assets or liabilities affected in future
periods. Estimates and assumptions are reviewed on periodic basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised.
The key assumptions concerning the future and other key sources of estimation, that have
a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities, within the next financial year, are described below. The Company’s assumptions
and estimates are based on parameters available at the time of preparation of financial
statements. Existing circumstances and assumptions about future developments, however,
may change due to market changes or circumstances arising that are beyond the control of
the Company. Such changes are reflected in the assumptions when they occur.
(a) Impairment of non-financial assets including Goodwill
Impairment exists when the carrying value of an asset or Cash-Generating Unit (CGU)
exceeds its recoverable amount, which is higher of its fair value less costs of disposal
and its value in use. The fair value less costs of disposal calculation is based on available
data from binding sales transactions, conducted at arm’s length, for similar assets or
observable market prices less incremental costs for disposing off the asset. The value
in use calculation is based on Discounted Cash Flow (DCF) model. The cash flows are
derived from the budget for the next three years and the following 2 years have been
extrapolated to demonstrate the tapering of growth rate for computation of perpetual
cash flows. These cashflows are considered as a base to arrive at the value of perpetuity.
The budget do not include restructuring activities that the Company is not yet committed
to or significant future investments that will enhance the asset’s performance of the
CGU being tested. The recoverable amount is sensitive to the discount rate used for the
DCF model as well as the expected future cash inflows and the growth rate used for
extrapolation purposes. These estimates are most relevant to goodwill recognised by
the Company. The key assumptions used to determine the value in use for the different
CGUs, are disclosed and further explained in Note - 5a
(b) Share-based payment
The Company uses the most appropriate valuation model depending on the terms and
conditions of the grant, including the expected life of the share option, volatility and
dividend yield. For cash-settled transactions, the liability needs to be remeasured at
the end of each reporting period upto the date of settlement, with any changes in fair
value recognised in the Standalone Statement of Profit and Loss. The assumptions and
models used for estimating fair value for share-based payment transactions are disclosed
in Note - 43.
(c) Taxes
Deferred tax assets are recognised for unused tax losses to the extent that it is probable
that taxable profit will be available against which the losses can be utilised. Significant
management judgement is required to determine the amount of deferred tax assets that
can be recognised, based upon the likely timing and the level of future taxable profits.
As at March 31,2025, the Company has ' 1739.23 Crore (March 31, 2024: ' 1,876.62 Crore) of
tax losses carried forward as per income tax records of the Company. These losses pertain
to unabsorbed business loss as at March 31, 2025 of ' 895.55 Crore (March 31, 2024: ' 579.89
Crore) which has an expiry of eight years from the year of such losses and unabsorbed
depreciation loss as at March 31, 2025 of ' 843.68 Crore (March 31, 2024: ' 1,296.73 Crore)
which do not have any expiry period. Further details on taxes are disclosed in Notes - 10
and 38.
(d) Provision on inventories
The Company has defined policy for provision on inventory for each of its business by
differentiating the inventory into core and non-core (fashion) and sub-categorised into
finished goods and raw materials. The Company provides provision based on policy, past
experience, current trend and future expectations of these materials depending on the
category of goods.
(e) Provision for discount and sales return
The Company provides for discount and sales return based on season wise, brand wise
and channel wise trend of previous years. The Company reviews the trend at regular
intervals to ensure the applicability of the same in the changing scenario, and based on
the management’s assessment of market conditions.
(f) Leases
The Company determines the lease term as the non-cancellable term of the lease,
together with any periods covered by an option to extend the lease if it is reasonably
certain to be exercised, or any periods covered by an option to terminate the lease, if it
is reasonably certain not to be exercised.
The Company has several lease contracts that include extension and termination options.
The Company applies judgement in evaluating whether it is reasonably certain to exercise
the option to renew or terminate the lease. It considers all relevant factors that create
an economic incentive for it to exercise either the renewal or termination. After the
commencement date, the Company reassesses the lease term if there is a significant
event or change in circumstances that is within its control and affects its ability to exercise
or not to exercise the option to renew or to terminate.
(g) Valuation of Put Option and Call Option
The fair value of financial liability (put option) arising from acquisition agreements, has
been determined by discounting consideration payable at the time of exercise of the
put option as per the terms of the agreement, using appropriate valuation model. The
probability of the estimate within the range can be reasonably assessed and are used
in the management’s estimates of fair value of the put option. The fair value of financial
asset (call option) arising from terms of acquisition agreements, has been determined
by discounting the call option payoff, using an appropriate discount rate, considering
the terms of the agreement. Such valuation includes assumptions such as discount rate,
future cashflow and EBITDA estimates. Such assumptions are reviewed at each reporting
date.
(h) Common control business acquisition
Acquisition of business under common control has been accounted in accordance with
"Pooling of interest method”, as specified below:
(a) All assets and liabilities acquired are stated at their carrying values as appearing in
the financial statements of de-merged company
(b) Shares held by the de-merged company in the Company shall be cancelled
(c) Difference between the carrying amounts of assets and liabilities acquired, face
value of the shares cancelled as referred to in (b) above and the amount recorded
as share-capital issued to the shareholders of the de-merged company shall be
transferred to capital reserve; and
(d) Financial information relating to the acquired business has been accounted from
the beginning of the financial year, as if the acquisition had occurred from that
date.
(i) Accounting Treatment for Demerger
Management has accounted for the demerger in accordance with the accounting
treatment specified in the sanctioned Scheme as a common control transaction where
assets and liabilities have been transferred to Resulting Company at their respective
book values. Management has evaluated that Promoter along with other promoter
group companies (Promoters) have de-facto control over the MFL division, both before
and after the demerger, on account of the following factors:
a) Total cumulative shareholding Promoters relative to the size and dispersion of
holding of other shareholders
b) There are no potential voting rights other than the equity shares. None of the other
shareholders have any contractual or legal veto rights. Further, there has not been
any instance of any resolutions being vetoed by other shareholders.
Basis above, demerger of the MFL division has been accounted as a common control
transaction and assets and liabilities have been transferred to Resulting Company at
their respective book values after the sanction of scheme by the NCLT.
(j) Going concern
Management has considered the cash and cash equivalents and current investments at
March 31, 2025, committed undrawn borrowing facilities available and also evaluated the
future cash flow projections for a period of 12 months from the balance sheet date. Based
on the said assessment, the management believes that there is no material uncertainty
with respect to any events or conditions that may cast a significant doubt on the entity
to continue as a going concern, hence the financial statements have been prepared on
a going concern basis.
2.5 a) Standards issued but not yet effective:
The Ministry of Corporate Affairs has vide notification dated May 7, 2025 notified
Companies (Indian Accounting Standards) Amendment Rules, 2025 (the ‘Rules’) which
amended the following accounting standards. a) Ind AS 21, "The Effects of Changes in
Foreign Exchange Rates b) Ind AS 101, First-time Adoption of Indian Accounting Standards.
These amendments are effective from April 01, 2025. The above amendments are not
likely to have any material impact on the financial statements of the Company.
b) New and amended standards adopted by the Company:
The Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the
existing standards under Companies (Indian Accounting Standards) Rules as issued
from time to time. During the year ended March 31, 2025, MCA has notified Ind AS 117 -
Insurance Contracts and amendments to Ind As 116 - Leases, relating to sale and lease
back transactions, applicable from April 1, 2024. The Company has assessed that there
is no significant impact on its financial statements.
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