1. Corporate information

Aditya Birla Lifestyle Brands Limited (the “Company"), a public company domiciled in India and incorporated
under the provisions of the Companies Act, 2013. 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.

1.4 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 next 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 - 42.

(c) 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.

(d) Provision for discount and sales return

The Company provides for discount and sales return based on season wise, brand wise and channel wise
trend. 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.

(e) 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.

2.5 New and amended standards adopted by the Company:

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. These
amendments are effective from April 01, 2025. a) Ind AS 21, “The Effects of Changes in Foreign Exchange
Rates b) Ind AS 101, First-time Adoption of Indian Accounting Standards. The above amendments are not
likely to have any material impact on the financial statements of the Company.

NOTE: 3a

PROPERTY, PLANT AND EQUIPMENT

Accounting Policy

Freehold land is carried at historical cost. Property, plant and equipment is stated at historical cost net of accumulated
depreciation and accumulated impairment losses, if any.

Depreciation methods, estimated useful lives and residual value

Depreciation on property, plant and equipment is calculated on a straight-line basis over the useful life of the
asset estimated by the management. Depreciation on additions is provided on a pro rata basis from the month
of installation or acquisition. Depreciation on deletions/ disposals is provided on a pro rata basis upto the month
preceding the month of deletions/ disposals. The management believes that the estimated useful lives below reflect
fair approximation of the period over which the assets are likely to be used.

NOTE: 4

RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

Accounting Policy

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time
in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified
asset, the Company assess whether:

• The contract involves the use of an identified asset - this may be specified explicitly or implicitly and should
be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier
has a substantive substitution right, then the asset is not identified;

• The Company has the right to obtain substantially all of the economic benefits from the use of the asset
throughout the period of use; and

• The Company has the right to direct the use of the asset. The Company has the right when it has the decision¬
making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases
where the decision about how and for what purpose the asset is used is predetermined, either the Company
has the right to operate the asset; or the Company designed the asset in a way that predetermines how and
for what purpose it will be used.

At inception or on reassessment of a contract that contains a lease component, the Company allocates the
consideration in the contract to each lease component on the basis of their relative stand-alone prices.

Where the Company is the lessee

Right-of-use assets

The Company recognises a right-of-use asset and a lease liability at the lease commencement date except for
short-term leases which are less than 12 months and leases of low value assets. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability plus any initial direct costs incurred
less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the lease commencement
date to the end of the lease term. If ownership of the leased asset transfers to the Company at the end of the lease
term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful
life of the asset. Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the
lease term on a straight-line basis. In addition, the right-of-use asset is periodically reduced by impairment losses,
if any, adjusted for certain remeasurements of the lease liability.

Right-of-use assets taken over pursuant to the Scheme of Arrangement from Aditya Birla Fashion and Retail Limited
have been depreciated over their remaining estimated useful lives.

Lease liabilities

The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date. The lease payments are discounted using the interest rate implicit in the lease, if that
rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental
borrowing rate.

Lease payments included in the measurement of the lease liability comprise of fixed payments, including
in-substance fixed payments. The lease liabilities are measured at amortised cost using the effective interest
method.

In addition, the carrying amount of lease liabilities is re-measured if there is a modification arising due to change
in the lease term, change in the lease payments or a change in the assessment of an option to purchase the
underlying asset. When the lease liability is re-measured in this way, a corresponding adjustment is made to the
carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use
asset has been reduced to zero and there is a further reduction in measurement of the lease liability.

The Company presents right-of-use assets that do not meet the definition of investment property, and lease
liabilities, separately in the Standalone Balance Sheet.

Short-term leases and leases of low value assets

The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that
have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It
also applies the lease of low-value assets recognition exemption to leases that are considered to be low value.
Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line
basis over the lease term.

Where the Company is the lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset is
classified as an operating lease. Assets subject to operating leases are included in the property, plant and equipment.
Rental income on an operating lease is recognised in the Standalone Statement of Profit and Loss on a straight-line
basis over the lease term. Costs, including depreciation, are recognised as an expense in the Standalone Statement
of Profit and Loss.

NOTE: 5a

IMPAIRMENT TESTING OF GOODWILL

Goodwill acquired through various business combinations have been allocated to the two Cash-Generating Units
(CGUs) as below:

1. Madura Fashion & Lifestyle CGU

2. Forever 21 CGU

Goodwill relating to Madura Fashion & Lifestyle and Forever 21 undertakings were taken over pursuant to acquisition
upon aprrovel of the Scheme of Arrangement between the Company and Aditya Birla Fashion and Retail Limited
by the NCLT on March 27, 2025. (Refer note 48)

Madura Fashion & Lifestyle CGU

Madura Undertaking is a leading premium branded apparel player in India with brands like Louis Philippe, Van Heusen,
Allen Solly and Peter England and having licences to retail various international brands like Reebok, American Eagle
and Simon Carter. The Madura Garments division is invloved in manufacturing of garments.

Forever 21 CGU

Forever 21 business comprises operating retail stores in India for the sale of clothing, artificial jewellery, accessories
and related merchandise under the brand name “Forever 21" (“F21"), and is considered as a separate CGU. At
September 30, 2024, management has restructured the operations of Forever 21 CGU and re-estimated the
recoverable amount of the Forever 21 CGU, using the value-in-use (VIU) method. On the basis of evaluation,
management has recognised an impairment provision of ' 64.38 crores on September 30, 2024.

ending March 31, 2028 and cash flow projections for financial years 2029 and 2030 has been extrapolated to
demonstrate the tapering of growth rate for computation of perpetual cash flows. The Company has considered a
terminal growth rate of 5% to arrive at the value in use to perpetuity beyond March 31,2030. The post-tax discount
rate is applied to discounted future cash flow projections. It is concluded that the carrying value of goodwill does not
exceed the value in use. As a result of this analysis, the management did not identify impairment for these CGUs.

Key assumptions used for value in use calculations
Discount rates:

Discount rates represent the current market assessment of the risks specific to the CGU, taking into consideration
the time value of money and individual risks of the underlying assets that have not been incorporated in the cash
flow estimates. The discount rate calculation of the CGU is derived from its Weighted Average Cost of Capital
(WACC). The WACC takes into account both cost of debt and equity. The cost of equity is derived from the expected
return on investment by the Company's investors. The cost of debt is based on the interest-bearing borrowings of
the Company. Adjustments to the discount rate are made to factor in the specific amount and timing of the future
tax flows in order to reflect a post-tax discount rate.

Growth rate estimates:

Rates are based on published industry research. Growth rate is based on the Company's projection of business and
growth of the industry in which the CGU is operating. The growth rate is in line with the long-term growth rate
of the industry . The growth rate of the CGU considers the Company's plan to launch new stores, expected same
store growth and change in merchandise.No reasonable possible change in key assumptions are likely to result in
the recoverable amount of the CGU being less than their carrying amount.

NOTE: 31

REVENUE FROM OPERATIONS

Accounting Policy

(I) Revenue from contracts with customers

Revenue from contracts with customers is recognised upon transfer of control of promised goods/ services to
customers at an amount that reflects the consideration to which the Company expect to be entitled for those
goods/ services.

To recognize revenues, the Company applies the following five-step approach:

• Identify the contract with a customer;

• Identify the performance obligations in the contract;

• Determine the transaction price;

• Allocate the transaction price to the performance obligations in the contract; and

• Recognise revenues when a performance obligation is satisfied.

Revenue from sale of products

Revenue from sales of products is measured at the amount of transaction price (net of returns, customer incentives,
discounts, variable consideration and other similar charges offered by the Company) allocated to that performance
obligation.

Goods and Service Tax (GST) is not received by the Company on its own account. Rather, it is tax collected on
behalf of the government. Accordingly, it is excluded from revenue.

Assets and liabilities arising from right to return

The Company has contracts with customers which entitles them an unconditional right to return.

Right to return assets

A right of return gives an entity a contractual right to recover the goods from a customer (right to return asset),
if the customer exercises its option to return the goods and obtain a refund. The asset is measured at the carrying
amount of the inventory, less any expected costs to recover the goods, including any potential decreases in the
value of the returned goods.

Refund liabilities

A refund liability is the obligation to refund part or all of the consideration received (or receivable) from the
customer. The Company has therefore recognised refund liabilities in respect of customer's right to return. The
liability is measured at the amount the Company ultimately expects it will have to return to the customer. The
Company updates its estimate of refund liabilities (and the corresponding change in the transaction price) at the
end of each reporting period.

The Company has presented its right to return assets and refund liabilities under other current assets and other
current liabilities, respectively.

Income from gift voucher

Gift voucher sales are recognised when the vouchers are redeemed, and the goods are sold to the customer.
Loyalty points programme

The Company operates a loyalty programme which allows customers to accumulate points on purchases made
in retail stores. The points give rise to a separate performance obligation as it entitles them for redemption as
settlement of future purchase transaction price. Consideration received is allocated between the sale of products
and the points issued, with the consideration allocated to the points equal to their fair value. Fair value of points
is determined by applying statistical techniques based on the historical trends.

Transaction price allocated to reward points is deferred and recognised when points are redeemed or when the
points expire. The amount of revenue is based on the value of points redeemed/ expired.

Income from services

Income from services is recognised as they are rendered based on agreements/ arrangements with the concerned
parties, and recognised net of goods and services tax/ applicable taxes.

Export incentives income

Export incentives under various schemes notified by government are accounted for in the year of exports based
on eligibility and when there is no uncertainty in receiving the same.

Licence fees and royalties

Royalty and licensing revenue is received from customers for usage of the Cpmpany's brand name. Revenue is
recognised over time based on the terms of contracts with the customer

Commission income

In case of sales of goods, where the Company is an agent in the transaction, the difference between the revenue
and the cost of the goods sold is disclosed as commission income in other operating income.

ihv/ it. jia

EXCEPTIONAL ITEMS

Exceptional items for the period ended March 31, 2025 includes provision for impairment of goodwill, right-of-
use assets, franchisee rights and Inventory Obsolescence amounting to ' 98.33 Crore pursuant to restructuring of
operations of a business unit.

NOTE: 38

INCOME TAX EXPENSE

The major components of income tax (income)/ expense are:

In Standalone Statement of Profit and Loss:

Profit or loss section

NOTE: 39

EARNINGS PER SHARE (EPS)

Basic EPS amounts are calculated by dividing the profit/(loss) for the year attributable to equity holders of the
Company by the weighted average number of equity shares outstanding during the period.

Diluted EPS amounts are calculated by dividing the profit/(loss) attributable to equity holders of the Company
by the weighted average number of equity shares outstanding during the year plus the weighted average number
of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

The following reflects the profit/(loss) and equity share data used in the basic and diluted EPS computations:

NOTE - 41

GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Company operates a gratuity plan through a Trust wherein certain employees are entitled to the benefit
equivalent to fifteen days salary last drawn for each completed year of service as per the Payment of Gratuity Act,
1972. In case of some employees, the Company's scheme is more favourable as compared to the obligation under
Payment of Gratuity Act, 1972. The benefits are payable on termination of service or retirement, whichever is earlier.
The benefits vests after five years of continuous service. A part of the gratuity plan is funded and another part is
unfunded, hence the liability has been bifurcated into funded and unfunded. The gratuity plan in the Company
funded through annual contribution to Insurer Managed Fund (managed by Life Insurance Corporation of India)
under its Gratuity Scheme. Post demerger Management will initiate appropriate steps towards transferring of the
said fund maintained with LIC in the name of Company.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating
the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present
value of the defined benefit obligation calculated using the projected unit credit method at the end of the reporting
period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.

Defined contribution plans

Provident Fund: Contributions are made mainly to provident fund in India for employees at the rate of 12%
of basic salary as per regulations. The contributions are made to registered provident fund administered by the
government. The obligation of the Company is limited to the amount contributed and it has no further contractual
nor any constructive obligation.

Employees' State Insurance: Employees' State Insurance is a state plan applicable to employees of the Company
whose salaries do not exceed a specified amount. The contributions are made on the basis of a percentage of
salary to a fund administered by government authority. The obligation of the Company is limited to the extent of
contributions made on a monthly basis.

Superannuation Fund: Certain executive staff of the Company participate in Superannuation Fund, which is a
voluntary contribution plan.The Company has no further obligations to the plan beyond its monthly contributions
to the Superannuation Fund, the corpus of which is administered by a Trust belonging to demerged company and
is invested in insurance products.

National Pension Scheme: Certain executive staff of the Company participate in National Pension Scheme, which is
a voluntary contribution plan. The Company has no further obligations to the plan beyond its monthly contributions

I. Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2017

On July 25, 2017, the Nomination and Remuneration Committee (“NRC") and the Board of Directors (“Board") of Aditya Birla
Fashion and Retail Limited (‘ABFRL') approved the introduction of a Employee Stock Option Scheme, viz. Aditya Birla Fashion
and Retail Limited Employee Stock Option Scheme 2017 (“Scheme 2017") for issue of Stock Options in the form of Options
(“Options") and/or Restricted Stock Units (“RSUs") to the identified employees, subject to the approval of the Shareholders.
Shareholders of ABFRL, vide a resolution passed at the Tenth Annual General Meeting of the Company, held on August 23, 2017,
approved the introduction of the Scheme 2017 and authorised the Board/ NRC to finalise and implement the Scheme 2017.

Pursuant to the approved Scheme of arrangement between Company and ABFRL, the employees of the Madura undertaking
continue to be entitled to ESOPs issued by ABFRL.

The weighted average remaining contractual life for the share Options and RSUs outstanding as at March 31,2025
is 1 year.

II. Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2019

On July 26, 2019, the Nomination and Remuneration Committee and the Board of Directors (“Board") of ABFRL,
approved introduction of Employee Stock Option Scheme, viz. Aditya Birla Fashion and Retail Limited Employee
Stock Option Scheme 2019 (“Scheme 2019"), for issue of Stock Options in the form of Options (“Options") and/
or Restricted Stock Units (“RSUs") to the identified employees. Pursuant to the approved Scheme of arrangement
between Company and ABFRL, the employees of the Madura undertaking continue to be entitled to ESOPs issued
by ABFRL.

I. Aditya Birla Fashion and Retail Limited Stock Appreciation Rights Scheme 2019

On February 04, 2019, the NRC and the Board of ABFRL, at their respective meetings had approved the “Aditya
Birla Fashion and Retail Limited Stock Appreciation Rights Scheme 2019" (“SARs Scheme 2019"), to grant Stock
Appreciation Rights (SAR) in the form of “Option SARs" and “RSU SARs", from time to time, to the eligible employees
(as defined in the SARs Scheme 2019). Pursuant to the approved Scheme of arrangement between Company and
ABFRL, the employees of the Madura undertaking continue to be entitled to SARs issued by ABFRL.

The initial non-cancellable period of the lease agreement pertaining to stores are upto 3 years, beyond which
there is an option for the Company to continue the lease, which the Company expects to continue for a period
of 2 years after the initial non-cancellable period, accordingly 5 years has been considered as the lease term
of the stores. Post such period, the Company has the option to exit the lease by giving a notice period and
the Company assesses its intention to continue considering location and other economic factors associated
with the lease arrangement.

Total cash outflow for leases for the year ended March 31,2025 is ' 1,494.26 Crore.

In accordance with its capital expenditure strategy, the Demerged Company engaged in a sale and leaseback
transaction involving certain assets, including furniture and fixtures, and office equipment, pertaining to the
Demerged undertaking. These assets and liabilities were assumed as part of the Business Combination (Refer
Note 48). The lease agreement spans a duration of 4-5 years, and the transaction has been recorded as right-
of-use assets with corresponding lease liabilities.

Variable lease payments

Some property leases contain variable payment terms that are linked to sales generated from a store. For
certain individual stores, upto 100% of lease payment are on the basis of variable payment terms. Variable
payment terms are used for a variety of reasons, including minimising the fixed cost base for newly established
stores. Variable lease payments that depend on sales are recognised in profit or loss in the period in which
the condition that triggers those payments occur.

The Company's pending litigations comprise of claims against the Company primarily for excise duty, comprising
various cases demanding duty on reversal of CENVAT credit on sale of capital goods and for commercial
taxes, comprising various cases in respect of short fall in submission of Forms F, H, I and C, disallowance of input
credit, etc.

The Company has reviewed all its pending litigations and proceedings, and has adequately provided for where
provisions are required and disclosed the contingent liabilities in its standalone financial statements where financial
outflow is not probable. The Company does not expect the outcome of these proceedings to have a materially
adverse effect on its standalone financial statements. In respect of litigations, where the management's assessment
of a financial outflow is probable, the Company has a provision of ' 50.02 Crore as at March 31, 2025
(Refer Note: 29).

The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable
losses. The Company has made provision as required under the accounting standards for material foreseeable losses
on derivative contracts as at March 31, 2025.Note :- As per the approved Composite Scheme of Arrangement,
the Company has assumed contingent liabilities specifically related to the Madura division of the Demerged
Company.

Note:-

(a) The above amounts are classified as trade receivables and trade payables (Refer Notes:15 and 27 respectively).

(b) No amounts in respect of the related parties have been written off/ back during the year.

(c) Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm's
length transactions. Amount owed to and by related parties are unsecured and interest free and settlement
occurs in cash. There have been no guarantees received or provided for any related party receivables or payables.
For the year ended March 31, 2025, the Company has not recorded any impairment of receivables relating to
amounts owed by related parties. This assessment is undertaken each financial year through examining the
financial position of the related party and the market in which the related party operates.

(d) Also refer note 48 for disclosure ordering to transfer Madura undertaking from Aditya Birla Fashion and Retail
Limited pursuant to a scheme of arrangement.

(e) For the year ended March 31,2025, the remuneration for Key Managerial Personnel (KMP) has been paid by
Aditya Birla Fashion and Retail Limited (‘ABFRL') and allocated to the Madura division on an overall basis.
Additionally, KMP are entitled to Employee Stock Options (ESOPs), Stock Appreciation Rights (SARs), and
Restricted Stock Units (RSUs) issued by ABFRL.

Key inputs for level 1 and 3 fair valuation techniques

a) Derivative contracts:

i) Forward contracts: Fair value of forward foreign exchange contracts is determined using forward exchange

rates as provided by banks to the Company (level 2). Forward contracts were entered into by ABFRL,
prior to demerger, to hedge against risk of fluctuations in foreign exchange rates on financial assets
and liabilities relating to Madura division. Accordingly the forward contracts have been transferred to
the Company, pursuant to the demerger.

b) Investment:

i) Quoted investments: Valuation has been done based on market value of the investment i.e. fair value
(level 1)

B. Risk management objectives and policies

The Company's principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and
other payables. The main purpose of these financial liabilities is to finance the Company's operations. The
Company's principal financial assets include trade and other receivables and cash and cash equivalents that
arise directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management
oversees the management of these risks. It is the Company's policy that no trading in derivatives for speculative
purposes may be undertaken. The Board of Directors review and agree policies for managing each of these
risks, which are summarised below:

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because
of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and price
risk.

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in the market interest rates. The Company's exposure to the risk of changes in market
interest rates relates primarily to the Company's debt obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans
and borrowings. As at March 31, 2025, approximately 58% of the Company's borrowings are at a fixed rate
of interest.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that
portion of loans and borrowings taken at floating rates. With all other variables held constant, the Company's
profit/ (loss) before tax is affected through the impact on floating rate borrowings, as follows:

ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because
of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange
rates relates primarily to the Company's operating activities denominated in foreign currency.

The Company manages foreign currency risk by hedging its transactions using foreign currency forward
contracts. The foreign exchange forward contracts are not designated as cash flow hedges, and are entered
into for periods consistent with foreign currency exposure of the underlying transactions, generally from 2
to 6 months. As at March 31,2025, the Company has not hedged its receivables in foreign currency and has
hedged 98% of its payables in foreign currency.

b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. To manage this, the Company periodically assesses financial reliability
of customers and other counterparties, taking into account the financial condition, current economic trends,
and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically
reviewed on the basis of such information. Credit risk from balances with banks and financial institutions
is managed by the Company's treasury department in accordance with the Company's policy. Investments
of surplus funds are made only with approved counterparties and within credit limits assigned to each
counterparty.

The Company only deals with parties which has good credit rating given by external rating agencies or based
on the Company's internal assessment.

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor
failing to engage in a repayment plan with the Company. Where loans or receivables have been written off,
the Company continues to engage in enforcement activity to attempt to recover the receivable dues where
recoveries are made, these are recognised as income in the Standalone Statement of Profit and Loss.

The Company is exposed to credit risk from its operating activities (primarily trade receivables and security
deposits).

Trade receivables

Customer credit risk is managed by each business unit, subject to the Company's established policy, procedures
and control relating to customer credit risk management. Credit quality of a customer is assessed, and
individual credit limits are defined in accordance with this assessment. Outstanding customer receivables
are regularly monitored. As at March 31, 2025, the Company has 24 customers that owed the Company more
than ' 5.00 Crore each and account for approximately 75% of all the receivables outstanding. There are 158
customers with balances greater than ' 0.50 Crore each and account for approximately 12% of the total
amounts receivable.

An impairment analysis is performed at each reporting date on the basis of sales channel. In addition, a large
number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively.
The calculation is based on losses from historical data.

The Company's maximum exposure to credit risk for the components of the Standalone Balance Sheet as at
March 31, 2025 , is the carrying amount as provided in Note - 15.

Credit risk from balances with banks is managed by the Company's treasury department in accordance with
the Company's policy. Investments of surplus funds are made only with approved counterparties and within
credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company's Board of
Directors on an annual basis. The limits are set to minimize the concentration of risks and therefore mitigate
financial loss through counterparty's potential failure to make payments.

c) Liquidity risk

The Company monitors its risk of shortage of funds. The Company's objective is to maintain a balance between
continuity of funding and flexibility through the use of bank overdrafts, bank loans, debentures, preference
shares and commercial papers. Approximately, 99.88% of the Company's debt will mature in less than one
year based on the carrying value of borrowings reflected in the financial statements. The Company assessed
the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has
access to various sources of funding.

The below tables summarises the maturity profile of the Company's financial liabilities based on contractual
payments.

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities
in the same geographical region, or have economic features that would cause their ability to meet contractual
obligations, to be similarly affected by changes in economic, political or other conditions. Concentrations
indicate the relative sensitivity of the Company's performance to developments affecting a particular industry.

The Company is leader in apparels in the country and has a diversified portfolio of brands.

d) Price risk

The Company invests in debt mutual fund schemes of leading fund houses. Such investments are susceptible
to market price risks that arise mainly from changes in interest rate which may impact the return and
value of such investments. However, given the relatively short tenure of underlying portfolio of the mutual
fund schemes in which the Company has invested, such price risk is not significant.The sensitivity analysis
has prepared by the Management is based on the financial assets and financial liabilities held at
March 31, 2025.

NOTE - 47

CAPITAL MANAGEMENT

The Company's objective, when managing capital is to ensure the going concern operation and to maintain an
efficient capital structure to reduce the cost of capital, support the corporate strategy and meet shareholder's
expectations. The policy of the Company is to borrow funds through banks/ financial institutions supported by
committed borrowing facilities to meet anticipated funding requirements. The Company manages its capital
structure and makes adjustments in the light of changes in economic conditions and the requirement of financial
markets.

The capital structure is governed by policies approved by the Board of Directors, and is monitored by various metrics.
Funding requirements are reviewed periodically with any debt issuances.

In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure
that it meets financial covenants attached to the interest-bearing loans and borrowings.

During the year, the Company has not defaulted on any loans payable, and there have been no breach of any
financial covenants attached to the borrowings.

No changes were made in the objectives, policies or processes for managing capital during the year ended
March 31,2025.

NOTE 48: BUSINESS COMBINATION

DEMERGER OF MADURA FASHION & LIFESTYLE BUSINESS (“MFL BUSINESS")

The Board at its meeting held on April 19, 2024, subject to necessary approvals, considered and approved the
demerger of the Madura Fashion and Lifestyle (‘MFL') Business under a Scheme of Arrangement between Aditya
Birla Fashion and Retail (‘Demerged Company') and Aditya Birla Lifestyle Brands Limited (‘Resulting Company').
The Scheme provided for demerger, transfer, and vesting of the MFL Business from the Demerged Company to
the Resulting Company on a going concern basis, with the Resulting Company issuing equity shares to the equity
shareholders of the Demerged Company as a consideration. The demerger was executed through an NCLT scheme of
arrangement. The Scheme provided that all shareholders of the demerged company will hold identical shareholdings
in both the companies, post the demerger. Pursuant to the NCLT's directions, a meeting of the equity shareholders
of the Demerged Company was conducted on January 21, 2025, and the Scheme was approved by the requisite
majority of equity shareholders. The Demerged Company and the Resulting Company filed a joint petition with the
Hon'ble NCLT on January 25, 2025. The Scheme received sanction from the Hon'ble NCLT on March 27, 2025, and
a certified copy of the order was received on April 22, 2025 (“Order"). Subsequently, the Demerged and Resulting
Company filed the certified copy of the Order and the Scheme with the Registrar of Companies, Mumbai, making
the Scheme effective from May 1, 2025. The Record Date was set for May 22, 2025.

Management has evaluated that Promoter along with other promoter group companies (together referred to as
‘Promoters') of the demerged company have de-facto control over the MFL division, both before and after the
demerger, on account of the factors described below:

1. The Company is a wholly owned subsidiary of Aditya Birla Fashion and Retail Limited (‘ABFRL') on the date
of transfer;

2. Total cumulative shareholding of the Promoters relative to the size and dispersion of holding of other
shareholders;

3. Post issue of shares by the Company to the existing shareholders of the Demerged Company, there would be
no potential voting rights other than the equity shares. Further, none of the other shareholders would have
any contractual or legal veto rights.

Ratios have been computed as follows:

1. Current ratio = Current Assets / Current Liabilities (excluding Lease Liabilities accounted as per Ind AS 116)

2. Debt equity ratio = Debt / Equity

Debt = Borrowings (excluding Lease Liabilities accounted as per Ind AS 116) - Cash and Bank Balance (includes
fixed deposits) - Liquid Investments

Equity = Equity share capital Other equity (excluding Ind AS 116)

3. Debt service coverage ratio = Earnings before interest* and tax / [Finance cost* Principal repayment of
non-current borrowings (netted off to the extent of non-current borrowings availed during the same period
for the repayments)]

4. Return on equity ratio = Profit after tax / Average of opening and closing Net Worth

5. Inventory turnover = Revenue from Operations for the period / Average of opening and closing Inventories

6. Debtors turnover = Revenue from Operations for the period / Average of opening and closing Trade Receivables

7. Trade payables turnover = Total Purchases / Average of opening and closing Trade Payables

8. Net capital turnover = Revenue from Operations for the period / Average of opening and closing Working
Capital

9. Net profit margin = Profit After Tax / Revenue from Operations

10. Return on Average Capital Employed = Earnings before interest and tax / Average of opening and closing
Capital Employed

11. Return on Investment = Earnings before interest and tax / Average of opening and closing Total Assets

* Finance cost/ interest comprises of Interest expense on borrowings and excludes interest expense on lease
liabilities and interest charge on fair value of financial instruments.

Note:-

1. The Ratio have been calculated considering the assets and liabilities acquired by the company pursuant to
the scheme of arrangement as opening assets and liabilities.

2. The Company was incorporated on April 09, 2024. This is the first financial statements of the Company.
Accordingly, explanation of reason for variance more than 25% is not applicable in the current year.

NOTE - 50

SEGMENT INFORMATION

Operating segment have been identified on the basis of nature of products and other quantitative criteria specified
in the Ind AS 108. Operating segments are reported in a manner consistent with the internal reporting provided
to the Chief Operating Decision Maker (“CODM") of the company. The company's business activity falls within a
single operating business segment of Branded Apparels (Garments and Accessories).

NOTE 51:

SUMMARY OF OTHER ACCOUNTING POLICIES

(a) Fair value measurements and hierarchy

The Company measures financial instruments, such as investments (other than equity investments in
subsidiaries) and derivatives at fair value at each Standalone Balance Sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on
the presumption that the transaction to sell the asset or transfer the liability takes place either:

(a) In the principal market for the asset or liability; or

(b) In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their best economic interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate
economic benefits by using the asset in its highest and best use, or by selling it to another market participant
that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances, and for which sufficient
data are available to measure the fair value, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy based on its nature, characteristics and risks:

• Level 1 - inputs are quoted (unadjusted) market prices in active markets for identical assets or liabilities
that the entity can access at the measurement date;

• Level 2 - valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable; and

• Level 3 - valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization
(based on the lowest level of input that is significant to the fair value measurement as a whole) at the end
of each reporting period.

(b) Foreign currencies

Transactions and balances:

Transactions in foreign currency are recorded applying the exchange rate at the date of transaction. Monetary
assets and liabilities denominated in foreign currency, remaining unsettled at the end of the year, are translated
at the closing exchange rates prevailing on the Standalone Balance Sheet date.

Exchange differences arising on settlement or translation of monetary items are recognized in the Standalone
Statement of Profit and Loss.

Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the
rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in
terms of historical cost in a foreign currency are not retranslated. The gain or loss arising on translation of
non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the
change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognised
in Other Comprehensive Income (OCI) or the Standalone Statement of Profit and Loss are also reclassified
in OCI or the Standalone Statement of Profit and Loss, respectively).

(c) Government grants

Government grants are recognised where there is a reasonable assurance that the grant will be received and
all attached conditions will be complied with:

• When the grant relates to an expense item, it is recognised as income on a systematic basis over the
periods that the related costs, for which it is intended to compensate, are expensed.

• When the grant relates to an asset, it is recognised as income in Statement of Profit and Loss in equal
amounts over the expected useful life of the related asset.

When loans or similar assistance are provided by governments or related institutions, at a below-market
rate of interest, the effect of this favourable interest is treated as a government grant. The loan or assistance
is initially recognised and measured at fair value, and the government grant is measured as the difference
between the proceeds received and the initial carrying value of the loan. The loan is subsequently measured
as per the accounting policies applicable to financial liabilities.

(d) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of the
respective asset. All other borrowing costs are expensed in the period they occur in the Standalone Statement
of Profit and Loss.

Borrowing cost includes interest and other costs incurred in connection with the arrangement of borrowings.

Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the interest
costs.

(e) Taxes

Current tax

The Income tax expense or credit for the period is the tax payable on the current period's taxable income
based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.

Income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted at the reporting date in India.

The management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is recognised on temporary differences between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except when the deferred tax
liability arises from the initial recognition of goodwill or an asset or a liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting profit nor the taxable
profit or loss.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences and the carry forward of
unused tax credits and unused tax losses can be utilised, except when the deferred tax asset relating to the
deductible temporary difference arises from the initial recognition of an asset or a liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit
nor the taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised
to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be
recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or
substantively enacted at the reporting date.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.

The Company had adopted the new tax regime as per Section 115BAA of the Income Tax Act, 1961, as
introduced by the Taxation Laws (Amendment) Ordinance, 2019.

Current tax and deferred tax relating to items recognised outside the Standalone Statement of Profit and Loss
are recognised outside the Standalone Statement of Profit and Loss (either in OCI or in equity). Current tax
and deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly
in equity.

(f) Property, plant and equipment

Freehold land is carried at historical cost. Historical cost includes expenditure that is directly attributable to
the acquisition of the items. Property, plant and equipment is stated at cost net of accumulated depreciation
and accumulated impairment losses, if any. Cost includes borrowing costs for long-term construction projects,
if the recognition criteria is met.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company,
and the cost of the item can be measured reliably. The carrying amount of any component accounted for

as a separate asset is de-recognised when replaced. All other repairs and maintenance are charged to the
Standalone Statement of Profit and Loss, during the reporting period in which they are incurred.

Capital work-in-progress is stated at cost net of accumulated impairment losses, if any.

Based on managements' assessment, items of property, plant and equipment individually costing less than
five thousand rupees, are depreciated within one year from the date the asset is ready to use or useful life
of class of asset to which these assets belong.

Gains or losses on disposal of property, plant and equipment are determined by comparing proceeds with
carrying amount. These are included in the Standalone Statement of Profit and Loss within other gains/ losses.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed
at each financial year end and adjusted prospectively, if appropriate.

(g) Intangible assets

Intangible assets are stated at cost less accumulated amortisation and impairment. The cost of intangible
assets acquired in a business combination is their fair value at the date of acquisition. Internally generated
intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected
in the Standalone Statement of Profit and Loss, in the period in which the expenditure is incurred.

Intangible assets with finite life are amortised over the useful economic life and assessed for impairment,
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period and changes if any, made on prospective basis. The amortisation expense on intangible assets
with finite lives is recognised in the Standalone Statement of Profit and Loss.

Intangible assets with indefinite useful life are not amortised, but are tested for impairment annually, either
individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to
determine whether the indefinite life continues to be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognised in the Standalone Statement
of Profit and Loss when the asset is de-recognised.

(h) Business combination and goodwill

Business Combinations are accounted for using the acquisition method. Cost of an acquisition is measured as
the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any
non-controlling interests in the acquiree. Acquisition-related costs are recognised in Standalone Statement
of Profit and Loss as incurred.

At the acquisition date, the identifiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured at their fair values. However, certain assets and liabilities i.e.
deferred tax assets or liabilities, assets or liabilities related to employee benefit arrangements, liabilities or
equity instruments related to share-based payment arrangements and assets or disposal groups that are
classified as held for sale, acquired or assumed in a business combination are measured as per the applicable
Ind-AS.

Judgement is applied in determining the acquisition date and determining whether control is transferred from
one party to another. Control exists when the Company is exposed to or has rights to variable returns from

its involvement with the entity and has the ability to affect those returns through power over the entity. In
assessing control, potential voting rights are considered only if the rights are substantive.

At the acquisition date, goodwill on business combination is initially measured at cost, being the excess of
the sum of the consideration transferred, the amount recognised for any non-controlling interests in the
acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the
net identifiable assets acquired and the liabilities assumed.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purposes
of impairment testing, goodwill acquired in a business combination is allocated to each of the Company's
cash-generating units that are expected to benefit from the synergies of the combination, irrespective of
whether other assets or liabilities of the acquiree are assigned to those units.

A cash-generating unit (CGU) to which goodwill has been allocated is tested for impairment annually as at
reporting date. When the recoverable amount of the CGU is less than its carrying amount, an impairment
loss is recognised.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the
determination of the profit or loss on disposal.

(i) Impairment of non-financial assets

At the end of each reporting period, the Company reviews the carrying amounts of its assets to determine
whether there is any indication of impairment based on internal/ external factors. An impairment loss, if any, is
charged to the Standalone Statement of Profit and Loss in the year in which an asset is identified as impaired.
An asset's recoverable amount is higher of an asset's or cash-generating unit's (CGUs) fair value less costs
of disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rates, that reflects current market assessment of the time value
of money and the risks specific to the asset for which estimates of future cash flows have not been adjusted.
Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or groups of assets. When the carrying amount of
an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount. Impairment losses are recognised in the Standalone Statement of Profit and Loss.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually as at reporting
date. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment
loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the
other assets of the unit pro-rata based on the carrying amount of each asset in the unit. Any impairment loss
for goodwill is recognised directly in the Standalone Statement of Profit and Loss.

Reversal of impairment losses, except on goodwill, is recorded when there is an indication that the impairment
losses recognised for the assets no longer exist or have decreased. An impairment loss recognised for goodwill
is not reversed in subsequent periods.

(j) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity.

Financial assets and financial liabilities are recognised when a Company becomes a party to the contractual
provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value, except for trade receivables
which do not contain significant financing component are initially measured at transaction price.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial liabilities measured at fair value through profit or loss)
are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate,
on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or
financial liabilities at fair value through the Standalone Statement of Profit and Loss are recognised
immediately in the Standalone Statement of Profit and Loss.

Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the market place are recognised on the trade date.

All recognized financial assets, are subsequently measured in their entirety at either amortised cost or fair
value, depending on the classification of the financial assets. For trade receivables, the company applies the
simplified approach required by Ind AS 109, which requires expected lifetime credit losses to be recognized
from initial recognition of the receivables.

For the purpose of subsequent measurement, financial instruments of the Company are classified in the
following categories:

(a) Non-derivative financial assets

(i) Financial assets at amortised cost

Financial asset is measured at amortised cost using Effective Interest Rate (EIR), if both the
conditions are met:

• The asset is held within a business model whose objective is to hold assets in order to
collect contractual cash flows; and

• The contractual terms of the instrument give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.

Effective Interest Rate (EIR) method:

The EIR method is a method of calculating the amortised cost of a debt instrument and of allocating
interest income over the relevant period. Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part of the EIR. The
effective interest rate is the rate that exactly discounts estimated future cash receipts (including all
fees and points paid or received that form an integral part of the effective interest rate, transaction
costs and other premiums or discounts) through the expected life of the debt instrument or, where
appropriate, a shorter period, to the gross carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial
assets classified as at Fair Value Through Profit or Loss (FVTPL). Interest income is recognised in
the Standalone Statement of Profit and Loss and is included in the ‘Other income' line item.

(ii) Financial assets at Fair Value Through Other Comprehensive Income (FVTOCI)

An instrument shall be measured at FVTOCI, if both of the following conditions are met:

• The objective of the business model is achieved by both collecting contractual cash flows
and selling financial assets; and

• The asset's contractual cash flows represent Solely Payments of Principal and Interest (SPPI).

Financial assets included within FVTOCI category are measured initially as well as at each
reporting period at fair value plus transaction cost. Fair value movements are recognised in other
comprehensive income. However, the Company recognises interest income, impairment losses
and reversals and foreign exchange gain/ (loss) in the Standalone Statement of Profit and Loss.
On de-recognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified
from equity to the Standalone Statement of Profit and Loss.

(iii) Financial assets at Fair Value Through Profit or Loss (FVTPL)

Financial assets that do not meet the amortised cost criteria or FVTOCI criteria (refer above)
are measured at FVTPL. In addition, financial assets that meet the amortised cost criteria or the
FVTOCI criteria but are designated as at FVTPL are measured at FVTPL.

A financial asset that meets the amortised cost criteria or financial assets that meet the FVTOCI
criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or
significantly reduces a measurement or recognition inconsistency that would arise from measuring
assets or liabilities or recognising the gains and losses on them on different bases. The Company
has not designated any debt instrument as at FVTPL.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any
gains or losses arising on re-measurement recognised in the Standalone Statement of Profit and
Loss. The net gain or loss recognised in the Standalone Statement of Profit and Loss incorporates
any dividend or interest earned on the financial asset and is included in the ‘Other income' line
item. Dividend on financial assets at FVTPL is recognised when the Company's right to receive the
dividends is established, it is probable that the economic benefits associated with the dividend will
flow to the entity, the dividend does not represent a recovery of part of cost of the investment
and the amount of dividend can be measured reliably.

Call options over shares in the acquired subsidiary is initially recognised as a financial asset at fair
value, with subsequent changes in fair value recognised in the standalone statement of profit and
loss.

(iv) Equity investments

Investment in Subsidiaries is out of scope of Ind AS 109 and hence, the Company has accounted for
its investment in Subsidiaries at cost. All other equity investments are measured at fair value as per
Ind AS 109. Equity instruments which are held for trading are classified as at FVTPL. For all other
equity instruments, the Company has an irrevocable election to present in other comprehensive
income subsequent changes in the fair value. The Company makes such election on an instrument-
by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes
on the instrument, excluding dividends, are recognised in the OCI. There is no recycling of the
amounts from OCI to the Standalone Statement of Profit and Loss, even on sale of investment.
However, the Company may transfer the cumulative gain or loss within equity.

Impairment of financial assets:

Expected credit losses are the weighted average of credit losses with the respective risks of default

occurring as the weights. Expected credit loss is the difference between all contractual cash flows
that are due to the Company in accordance with the contract and all the cash flows that the
Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest
rate (or credit adjusted effective interest rate for purchased or originated credit-impaired financial
assets).

The Company measures the loss allowance for a financial instrument at an amount equal to
the lifetime expected credit losses if the credit risk on that financial instrument has increased
significantly since initial recognition. If the credit risk on a financial instrument has not increased
significantly since initial recognition, the Company measures the loss allowance for that financial
instrument at an amount equal to 12-month expected credit losses. 12-month expected credit
losses are portion of the lifetime expected credit losses and represent the lifetime cash shortfalls
that will result if default occurs within 12 months after the reporting date and thus, are not cash
shortfalls that are predicted over the next 12 months.

If the Company measured loss allowance for a financial instrument at lifetime expected credit
loss model in the previous period, but determines at the end of a reporting period that the credit
risk has not increased significantly since initial recognition due to improvement in credit quality
as compared to the previous period, the Company again measures the loss allowance based on
12-month expected credit losses.

When making the assessment of whether there has been a significant increase in credit risk since
initial recognition, the Company uses the change in the risk of a default occurring over the expected
life of the financial instrument instead of the change in the amount of expected credit losses. To
make that assessment, the Company compares the risk of a default occurring on the financial
instrument as at the reporting date with the risk of a default occurring on the financial instrument
as at the date of initial recognition and considers reasonable and supportable information, that
is available without undue cost or effort, that is indicative of significant increases in credit risk
since initial recognition.

For trade receivables or any contractual right to receive cash or another financial asset that results
from transactions that are within the scope of Ind AS 115, the Company always measures the loss
allowance at an amount equal to lifetime expected credit losses.

Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables,
the Company has used a practical expedient as permitted under Ind AS 109. This expected credit
loss allowance is computed based on a provision matrix, which takes into account historical credit
loss experience and adjusted for forward looking information.

The impairment requirements for the recognition and measurement of a loss allowance are equally
applied to debt instruments at FVTOCI except that the loss allowance is recognised in OCI and is
not reduced from the carrying amount in the Standalone Balance Sheet.

The Company determines whether it is necessary to recognise an impairment loss on its investment
in its subsidiaries. At each reporting date, the Company determines whether there is objective
evidence that the investment in the subsidiaries is impaired. If there is such evidence, the Company
calculates the amount of impairment as the difference between the recoverable amount of the

subsidiaries its carrying value, and then recognises the impairment loss in the standalone statement
of profit and loss.

(b) Non-derivative financial liabilities
(i) Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or
as equity in accordance with the substance of the contractual arrangements and the definitions
of a financial liability and an equity instrument.

(1) Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of an
entity after deducting all of its liabilities. Equity instruments issued by the Company are
recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company's own equity instruments is recognised and deducted directly
in equity. No gain or loss is recognised in the Standalone Statement of Profit and Loss on
the purchase, sale, issue or cancellation of the Company's own equity instruments.

(2) Compound financial instruments:

The component parts of compound financial instruments (convertible notes) issued by the
Company are classified separately as financial liabilities and equity in accordance with the
substance of the contractual arrangements and the definitions of a financial liability and
an equity instrument. A conversion option that will be settled by the exchange of a fixed
amount of cash or another financial asset for a fixed number of the Company's own equity
instruments is an equity instrument.

At the date of issue, the fair value of the liability component is estimated using the prevailing
market interest rate for similar non-convertible instruments. This amount is recognised as
a liability on an amortised cost basis using the effective interest method until extinguished
upon conversion or at the instrument's maturity date.

(3) Financial liabilities:

All financial liabilities are measured at amortised cost using the effective interest method
or at FVTPL.

However, financial liabilities that arise when a transfer of a financial asset does not qualify
for derecognition or when the continuing involvement approach applies, financial guarantee
contracts issued by the Company, and commitments issued by the Company to provide a
loan at below-market interest rate are measured in accordance with the specific accounting
policies set out below.

Financial liabilities at FVTPL:

Financial liabilities are classified as at FVTPL when the financial liability is either held for
trading or it is designated as at FVTPL.

A financial liability is classified as held for trading, if:

• It has been acquired or incurred principally for the purpose of selling or repurchasing
it in the near term; or

• On initial recognition it is part of a portfolio of identified financial instruments that
the Company manages together and has a recent actual pattern of short-term profit¬
taking; or

• It is a derivative that is not a financial guarantee contract or designated and effective
as a hedging instrument.

A financial liability other than a financial liability held for trading may, be designated as at
FVTPL upon initial recognition, if:

• Such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise;

• The financial liability forms part of a group of financial assets or financial liabilities
or both, which is managed and its performance is evaluated on a fair value basis, in
accordance with the Company's documented risk management or investment strategy,
and information about the Company is provided internally on that basis; or

• It forms part of a contract containing one or more embedded derivatives, and Ind AS
109 permits the entire combined contracts to be designated as at FVTPL in accordance
with Ind AS 109.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re¬
measurement recognised in the Standalone Statement of Profit and Loss.

However, financial liabilities that are not held-for-trading and are designated as at FVTPL,
the amount of change in the fair value of the financial liability that is attributable to changes
in the credit risk of that liability is recognised in other comprehensive income, unless the
recognition of the effects of changes in the liability's credit risk in other comprehensive
income would create or enlarge an accounting mismatch in the Standalone Statement of
Profit and Loss, in which case these effects of changes in credit risk are recognised in the
Standalone Statement of Profit and Loss. The remaining amount of change in the fair value
of liability is always recognised in the Standalone Statement of Profit and Loss. Changes
in fair value attributable to a financial liability's credit risk that are recognised in other
comprehensive income are reflected immediately in other comprehensive income under
other equity and are not subsequently reclassified to the Standalone Statement of Profit
and Loss.

Gains or losses on financial guarantee contracts and loan commitments issued by the Company
that are designated by the Company as at fair value through profit or loss are recognised in
the Standalone Statement of Profit and Loss.

Financial liabilities subsequently measured at amortised cost:

Financial liabilities that are not held-for-trading and are not designated as at FVTPL are
measured at amortised cost at the end of subsequent accounting periods. The carrying
amounts of financial liabilities that are subsequently measured at amortised cost are
determined based on the effective interest method. Interest expense that is not capitalised
as part of costs of an asset is included in the ‘Finance costs' line item.

The effective interest method is a method of calculating the amortised cost of a financial
liability and of allocating interest expense over the relevant period. The effective interest
rate is the rate that exactly discounts estimated future cash payments (including all
fees and points paid or received that form an integral part of the effective interest rate,
transaction costs and other premiums or discounts) through the expected life of the financial
liability, or (where appropriate) a shorter period, to the gross carrying amount on initial
recognition.

(ii) Loans and borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings
are subsequently measured at amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is recognised in the Standalone Statement
of Profit and Loss over the period of borrowings using the EIR method. Fees paid on the
establishment of loan facilities are recognised as the transaction cost of the loan to the extent
it is probable that some or all of the facility will be drawn down, the fees are deferred until
the draw down occurs. To the extent that there is no evidence that is probable that some
or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity
and amortised over the period of facility to which it relates.

Preference shares, which are mandatorily redeemable on a specific date, are classified
as liabilities. The dividends on these preference shares are recognised in the Standalone
Statement of Profit and Loss as ‘Finance costs'.

(iii) Foreign exchange gains and losses

The fair value of financial assets denominated in a foreign currency is determined in that
foreign currency and translated at the spot rate at the end of each reporting period.

• For foreign currency denominated financial assets measured at amortised cost and
FVTPL, the exchange differences are recognised in the Standalone Statement of Profit
and Loss, except for those which are designated as hedging instruments in a hedging
relationship.

• For the purposes of recognising foreign exchange gains and losses, FVTOCI financial
assets are treated as financial assets measured at amortised cost. Thus, the exchange
differences on the amortised cost are recognised in the Standalone Statement of Profit
and Loss, and other changes in the fair value of FVTOCI financial assets are recognised
in OCI.

For financial liabilities that are denominated in a foreign currency and are measured at
amortised cost at the end of each reporting period, the foreign exchange gains and losses
are determined based on the amortised cost of the instruments and are recognised in ‘Other
income'.

The fair value of financial liabilities denominated in a foreign currency is determined in
that foreign currency and translated at the spot rate at the end of the reporting period. For
financial liabilities that are measured as at FVTPL, the foreign exchange component forms
part of the fair value gains or losses and is recognised in the Standalone Statement of Profit
and Loss.

De-recognition of financial assets and financial liabilities

The Company de-recognises a financial asset when the contractual rights to the cash flows
from the asset expire, or when it transfers the financial asset and substantially all the risks
and rewards of ownership of the asset to another party. If the Company neither transfers
nor retains substantially all the risks and rewards of ownership and continues to control the
transferred asset, the Company recognises its retained interest in the asset and an associated
liability for the amounts it may have to pay. If the Company retains substantially all the
risks and rewards of ownership of a transferred financial asset, the Company continues to
recognise the financial asset and also recognises a collateralised borrowing for the proceeds
received.

On de-recognition of a financial asset in its entirety, the difference between the asset's
carrying amount and the sum of the consideration received and receivable, and the cumulative
gain or loss that had been recognised in OCI and accumulated in equity is recognised in the
Standalone Statement of Profit and Loss.

On de-recognition of a financial asset other than in its entirety (for example: when the
Company retains an option to repurchase part of a transferred asset), the Company
allocates the previous carrying amount of the financial asset between the part it continues
to recognise under continuing involvement and the part it no longer recognises on the
basis of the relative fair values of those parts on the date of the transfer. The difference
between the carrying amount allocated to the part that is no longer recognised and the
sum of the consideration received for the part no longer recognised and any cumulative
gain or loss allocated to it that had been recognised in other comprehensive income is
recognised in the Standalone Statement of Profit and Loss. A cumulative gain or loss that
had been recognised in other comprehensive income is allocated between the part that
continues to be recognised and the part that is no longer recognised on the basis of the
relative fair values of those parts.

The Company de-recognises financial liabilities only when the Company's obligations are
discharged, cancelled or have expired. An exchange with a lender of debt instruments with
substantially different terms is accounted for as an extinguishment of the original financial
liability and the recognition of a new financial liability. Similarly, a substantial modification
of the terms of an existing financial liability (whether or not attributable to the financial
difficulty of the debtor) is accounted for as an extinguishment of the original financial liability
and the recognition of a new financial liability. The difference between the carrying amount
of the financial liability de-recognised and the consideration paid and payable is recognised
in the Standalone Statement of Profit and Loss.

Offsetting financial instruments

Financial assets and liabilities are offset, and the net amount is reported in the Standalone
Balance Sheet where there is a legally enforceable right to offset the recognised amounts,
and there is an intention to settle on a net basis or realise the asset and settle the liability
simultaneously. The legally enforceable right must not be contingent on future events and
must be enforceable in the normal course of business.

(k) Derivative financial instruments

The Company uses derivative financial instruments, such as forward currency contracts, to hedge its foreign
currency risks and options contract in accordance with agreement. Such derivative financial instruments are
initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently
re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as
financial liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to the Standalone
Statement of Profit and Loss, except for the effective portion of cash flow hedges, which is recognised in
OCI and later reclassified to the Standalone Statement of Profit and Loss when the hedge item affects the
Standalone Statement of Profit and Loss or treated as basis adjustment, if a hedged forecast transaction
subsequently results in the recognition of a non-financial asset or non-financial liability.

(l) Inventories

Raw materials, components, stores and spares, and packing materials are valued at lower of cost or net
realisable value. However, these items are considered to be realisable at cost if the finished products, in which
they will be used, are expected to be sold at or above cost. Cost includes cost of purchase and other costs
in bringing the inventories to their present location and condition. Cost is determined on weighted average
cost basis.

Traded goods, work-in-progress and finished goods are valued at cost or net realisable value, whichever is
lower. Work-in-progress and finished goods include costs of direct materials, labour and a proportion of
manufacturing overheads based on the normal operating capacity but excluding borrowing cost. Traded goods
cost includes cost of purchase and other costs incurred in bringing the inventories to their present location
and condition. Cost is determined on weighted average cost basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.

Proceeds in respect of sale of raw materials/ stores are credited to the respective heads. Obsolete and defective
inventory are duly provided for, basis the management estimates.