2 (b) MATERIAL ACCOUNTING POLICIES

The accounting policies set out below have been applied
consistently to the periods presented in these financial
statements.

(i) Foreign currency transactions:

Transactions in foreign currencies are translated into the
functional currency of the Company at the exchange rates at
the dates of the transactions or an average rate if the average
rate approximates the actual rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at the
exchange rate at the reporting date. Non-monetary assets and
liabilities that are measured at fair value in a foreign currency
are translated into the functional currency at the exchange
rate when the fair value was determined. Non-monetary assets
and liabilities that are measured based on historical cost in a
foreign currency are translated at the exchange rate at the date
of the transaction. Foreign currency exchange differences are
recognised in statement of profit and loss.

(ii) 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.

Recognition and initial measurement

Trade receivables are initially recognized when they are
originated. All other financial assets and financial liabilities
are recognized when the Company becomes a party to the
contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a
significant financing component) or financial liability is initially
measured at fair value plus or minus, for an item not at fair
value through profit and loss (FVTPL), transaction costs that are
directly attributable to its acquisition or issue. A trade receivable
without a significant financing component is initially measured
at the transaction price.

Classification and subsequent measurement
Financial assets

On initial recognition, a financial asset is classified as measured
at:

- Amortised cost;

- FVOCI - debt investment;

- FVOCI - equity investment; or

- FVTPL.

Financial assets are not reclassified subsequent to their initial
recognition, unless the Company changes its business model
for managing financial assets, in which case all affected financial
assets are reclassified on the first day of the first reporting
period following the change in the business model.

A financial asset is measured at amortised cost if it meets both
of the following conditions and is not designated as at FVTPL:

- the asset is held within a business model whose objective
is to hold assets to collect contractual cash flows; and

- the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the
following conditions and is not designated as at FVTPL:

- the asset is held within a business model whose objective
is achieved by both collecting contractual cash flows and
selling financial assets; and

- the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held
for trading, the Company may irrevocably elect to present

subsequent changes in the investment's fair value in OCI. This
election is made on an investment-by-investment basis.

Financial assets that are held for trading or are managed
and whose performance is evaluated on a fair value basis are
measured at FVTPL.

All financial assets not classified as measured at amortised cost
or FVOCI as described above are measured at FVTPL. On initial
recognition, the Company may irrevocably designate a financial
asset that otherwise meets the requirements to be measured at
amortised cost or at FVOCI as at FVTPL if doing so eliminates
or significantly reduces an accounting mismatch that would
otherwise arise.

Subsequent measurement

Financial assets at amortised cost are subsequently measured
at amortised cost using the effective interest method. The
amortised cost is reduced by impairment losses. Interest
income, foreign exchange gains and losses and impairment are
recognised in statement of profit and loss. Any gain or loss on
derecognition is also recognised in statement of profit and loss.

Financial assets at FVTPL are subsequently measured at fair
value. Net gains and losses, including any interest or dividend
income, are recognised in the statement of profit and loss. This
includes all derivative financial assets.

Impairment of financial assets:

The Company applies expected credit loss (ECL) model for
measurement and recognition of loss allowance on the following:

i. Financial assets measured at amortized cost;

ii. Financial assets i.e. debt investments measured at fair
value through other comprehensive income (FVTOCI).

In case of trade receivables, the Company follows a simplified
approach wherein an amount equal to lifetime ECL is measured
and recognized as loss allowance.

In case of other assets (listed as i and ii above), the Company
determines if there has been a significant increase in credit
risk of the financial asset since initial recognition. If the credit
risk of such assets has not increased significantly, an amount
equal to 12-month ECL is measured and recognized as loss
allowance. However, if credit risk has increased significantly, an
amount equal to lifetime ECL is measured and recognized as
loss allowance.

Subsequently, if the credit quality of the financial asset improves
such that there is no longer a significant increase in credit risk
since initial recognition, the Company reverts to recognizing
impairment loss allowance based on 12-month ECL.

ECL 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.

Lifetime ECL are the expected credit losses resulting from all
possible default events over the expected life of a financial
asset. 12-month ECL are a portion of the lifetime ECL which
result from default events that are possible within 12 months
from the reporting date.

ECL are measured in a manner that they reflect unbiased
and probability weighted amounts determined by a range of
outcomes, taking into account the time value of money and other
reasonable information available as a result of past events,
current conditions and forecasts of future economic conditions.

As a practical expedient, the Company uses a provision matrix
to measure lifetime ECL on its portfolio of trade receivables.
The provision matrix is prepared based on historically observed
default rates over the expected life of trade receivables and
is adjusted for forward-looking estimates. At each reporting
date, the historically observed default rates and changes in the
forward-looking estimates are updated.

Financial liabilities: Classification, subsequent
measurement and gains and losses

Financial liabilities are classified as measured at amortised
cost or FVTPL. A financial liability is classified as at FVTPL if
it is classified as held-for-trading, or it is a derivative or it is
designated as such on initial recognition. Financial liabilities
at FVTPL are measured at fair value and net gains and losses,
including any interest expense, are recognised in statement
of profit and loss. Other financial liabilities are subsequently
measured at amortised cost using the effective interest method.
Interest expense and foreign exchange gains and losses are
recognised in statement of profit and loss. Any gain or loss on
derecognition is also recognised in statement of profit and loss.

Derecognition
Financial assets

The Company derecognises a financial asset when

- the contractual rights to the cash flows from the financial
asset expire; or

- it transfers the rights to receive the contractual cash flows
in a transaction in which either:

• substantially all of the risks and rewards of ownership
of the financial asset are transferred; or

• the Company neither transfers nor retains
substantially all of the risks and rewards of ownership
and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers
assets recognised on its balance sheet but retains either all
or substantially all of the risks and rewards of the transferred
assets. In these cases, the transferred assets are not
derecognised.

Financial liabilities

The Company derecognises a financial liability when its
contractual obligations are discharged or cancelled, or expire.

The Company also derecognises a financial liability when its
terms are modified and the cash flows of the modified liability
are substantially different, in which case a new financial liability
based on the modified terms is recognised at fair value.

On derecognition of a financial liability, the difference between
the carrying amount extinguished and the consideration
paid (including any non-cash assets transferred or liabilities
assumed) is recognized in statement of profit and loss.

Offsetting

Financial assets and financial liabilities are offset and the net
amount is presented in the balance sheet when, and only when,
the Company currently has a legally enforceable right to set off
the amounts and it intends either to settle them on a net basis
or to realise the asset and settle the liability simultaneously.

(iii) Property, plant and equipment

Recognition and measurement

The cost of an item of property, plant and equipment shall be
recognised as an asset if, and only if 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.

Items of property, plant and equipment (including capital-work-
in progress) are measured at cost, which includes capitalised
borrowing costs, less accumulated depreciation and any
accumulated impairment losses. Freehold land is carried at
historical cost less any accumulated impairment losses.

The cost of an item of property, plant and equipment comprises
the cost of materials and direct labour, any other costs directly
attributable to bringing the item to working condition for its
intended use, and estimated costs of dismantling and removing
the item and restoring the site on which it is located.

If significant parts of an item of property, plant and equipment
have different useful lives, then they are accounted for as
separate items (major components) of property, plant and
equipment.

Subsequent costs are included in the assets carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable of future economic benefits and the cost of item can be
measured reliably.

Property, plant and equipment which are not ready for intended
use as on date of reporting period, are disclosed as Capital work
in progress.

Any gain or loss on disposal of an item of property, plant and
equipment is recognised in statement of profit and loss.

Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated
useful lives using the written down value method and is generally recognised in the statement of profit and loss. Freehold land is
not depreciated.

The estimated useful lives of items of property, plant and equipment are as follows:

Depreciation method, useful lives and residual values are
reviewed at each financial year-end and adjusted if appropriate.
In case of a revision, the unamortized depreciable amount is
charged over the revised remaining useful life.

Depreciation on additions/(disposals) is provided on a pro-rata
basis i.e. from/(upto) the date on which asset is ready for use/
(disposed off).

Leasehold improvements are amortised over the lower of lease
period or estimated useful life, on straight line basis from the
date that they are available for use.

The useful lives have been determined based on internal and
technical evaluation done by management and are in line with
the estimated useful lives, to the extent prescribed by the
Schedule II to the Companies Act, 2013, in order to reflect the
technological obsolescence and actual usage of the asset.

(iv) Intangible assets

Intangible assets that are acquired by the Company are
measured initially at cost. After initial recognition, an intangible
asset is carried at its cost less any accumulated amortization
and any accumulated impairment loss.

Subsequent expenditure is capitalised only when it increases
the future economic benefits from the specific asset to which it
relates and the cost of asset can be measured reliably. All other
expenditure is recognised in profit and loss as incurred.

Intangible assets are amortised in the Statement of Profit and
Loss over their estimated useful lives, from the date that they are
available for use based on the expected pattern of consumption
of economic benefits of the asset. Accordingly, at present, these
are being amortised on straight line basis. Intangible assets are
amortised over the best estimate of the respective useful lives
as under:

(a) Trademarks: Amortised over the period of 10 years.

(b) Software: Amortised over the period of 5 years.

Amortisation method, useful lives and residual values are
reviewed at the end of each financial year and adjusted if
appropriate.

An intangible asset is derecognized on disposal or when no
future economic benefits are expected from its use and disposal.

Gains or losses arising from retirement and gains or losses
arising from disposal of an intangible asset are measured as the
difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the Statement of
Profit and Loss.

Internally generated intangibles, excluding capitalised
development costs, are not capitalised and the related
expenditure is reflected in statement of profit and loss in the
period in which the expenditure is incurred.

Intangible assets under development

Expenditure incurred on intangible assets under development
stage eligible for capitalization carried as intangible assets
under development.

(v) Impairment

Impairment of non-financial assets

The Company's non-financial assets, other than inventories, are
reviewed at each reporting date to determine whether there is
any indication of impairment. If any such indication exists, then
the asset's recoverable amount is estimated.

For impairment testing, assets that do not generate independent
cash inflows are grouped together into cash-generating units
(CGUs). Each CGU represents the smallest group of assets that
generates cash inflows that are largely independent of the cash
inflows of other assets or CGUs.

The recoverable amount of a CGU (or an individual asset) is
the higher of its value in use and its fair value less costs of
disposal. Value in use is based on the estimated future cash
flows, discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value
of money and the risks specific to the CGU (or the asset).

An impairment loss is recognised if the carrying amount of
an asset or CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in the statement of profit
and loss. They are allocated first to reduce the carrying amount
of any goodwill allocated to the CGU, and then to reduce the
carrying amounts of the other assets in the CGU on a pro rata
basis.

In respect of other assets for which impairment loss has been
recognised in prior periods, the Company reviews at each
reporting date whether there is any indication that the loss has
decreased or no longer exists. An impairment loss is reversed if
there has been a change in the estimates used to determine the
recoverable amount. Such a reversal is made only to the extent
that the asset's carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.

(vi) Borrowing costs

Borrowing costs are interest and other costs (including exchange
differences relating to foreign currency borrowings to the extent
that they are regarded as an adjustment to interest costs, if any)
incurred in connection with the borrowing of funds. Borrowing
costs directly attributable to acquisition or construction of an
asset which necessarily take a substantial period of time to get
ready for their intended use are capitalised as part of the cost of
that asset. Other borrowing costs are recognised as an expense
in the period in which they are incurred.

(vii) Leases

Company 'as a' lessee

The Company's lease asset classes primarily consist of leases
for land and buildings taken for warehouses, retail stores and
factories. The Company assesses whether a contract contains
a lease, at inception of a contract. 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 assesses whether:

(i) the contract involves the use of an identified asset,

(ii) the Company has substantially all of the economic benefits
from use of the asset through the period of the lease; and

(iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company
recognizes a right-of-use asset ("ROU”) and a corresponding
lease liability for all lease arrangements in which it is a lessee,
except for leases with a term of twelve months or less (short¬
term leases) and low value leases.

For these short-term and low value leases, the Company
recognizes the lease payments as an operating expense on a
straight-line basis over the term of the lease.

Certain lease arrangements include the options to extend or
terminate the lease before the end of the lease term. ROU assets
and lease liabilities include these options when it is reasonably
certain that they will be exercised. The right-of-use assets are
initially recognized at cost, which comprises the initial amount
of the lease liability adjusted for any lease payments made at
or prior to the commencement date of the lease plus any initial
direct costs and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the
site on which it is located, less any lease incentives received.

They are subsequently measured at cost less accumulated
depreciation and impairment losses. Right-of-use assets are
depreciated from the commencement date on a straight¬
line basis over the shorter of the lease term and useful life
of the underlying asset. Right of use assets are evaluated for
recoverability whenever events or changes in circumstances
indicate that their carrying amounts may not be recoverable.
In addition, the right-of-use asset is periodically reduced
by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.

The lease liability is initially measured at amortized cost at the
present value of the future lease payments. The lease payments
are discounted using the interest rate implicit in the lease or, if

not readily determinable, using the incremental borrowing rates
in the country of domicile of these leases.

In addition, the carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease term, a change
in the lease payments. When the lease liability is remeasured in
this way, a corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in statement of
profit and loss if the carrying amount of the right-of-use asset
has been reduced to zero.

Company 'as a' lessor

Leases for which the Company is a lessor is classified as a
finance or operating lease. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to
the lessee, the contract is classified as a finance lease. All other
leases are classified as operating leases. When the Company is
an intermediate lessor, it accounts for its interests in the head
lease and the sublease separately. The sublease is classified
as a finance or operating lease by reference to the right-of-use
asset arising from the head lease. For operating leases, rental
income is recognized on a straight -line basis over the term of
the relevant lease.

(viii) Inventories

Inventories are valued at the lower of cost and net realisable
value. The cost of inventories is calculated based on Weighted
average formula.

Raw materials: Cost includes cost of purchase and other costs
incurred in bringing the inventories to their present location and
condition.

Finished goods (manufactured) and work in progress: Cost
includes cost of direct materials and labour and an appropriate
share of production overheads based on normal operating
capacity.

Stock in trade: Cost includes cost of purchase and other costs
incurred in bringing the inventories to their present location and
condition.

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

Inventories in transit are valued at the lower of cost and net
realisable value.

The comparison of cost and net realisable value is made on an
item-by-item basis.

The net realisable value of work-in-progress is determined
with reference to the selling prices of related finished goods.
Raw materials and packing material held for use in the
production of finished products are not written down below
cost except in cases when a decline in the price of materials
indicates that the cost of the finished products shall exceed the
net realisable value.

Appropriate adjustments are made to the carrying value of
damaged, slow moving and obsolete inventories based on
management's current best estimate.

(ix) Revenue from contract with customers

Ind AS 115 establishes a comprehensive framework for
determining whether, how much and when revenue is to be
recognised.

Revenue is recognised upon transfer of control of promised
goods or services to customers in an amount that reflects the
consideration which the Company expects to receive in exchange
for those products or services.

The company is primarily engaged in the business of
manufacturing and trading of footwear and accessories through
its own retail stores, wholesale and e-commerce.

Sale of goods - Company owned retail stores

The Company operates a network of own retail stores across
India. Revenue from the sale of goods sold through own retail
stores is recognized when the Company delivers goods to the
customer. Payment of the transaction price is due immediately
when the customer purchases the goods and takes delivery in
store.

Sale of goods - Other than owned retail stores

i. Wholesale

The Company sells products to its distributors and franchisee
stores. Revenue from sale of goods in such arrangements is
recognized when control of the products has transferred, being
when the products are delivered to the customer, the customer
has full discretion over the channel and price to sell the
products, and there is no unfulfilled obligation that could affect
the customer's acceptance of the products. Delivery occurs
when the products have been delivered to the customer.

ii. E-commerce

The Company through its own website and marketplace sells
its products to customers. Revenue from sale of goods through
online channel is recognized when control of the products
has transferred, being when the products are delivered to the
customer. For e-commerce sales, it is the Company's policy
to sell its products to the end consumer with a right of return
depending on the terms of arrangement. Therefore, a refund
liability in relation to expected returns (included in other current
liabilities) and a right to recover the returned goods (included in
other current assets) are recognized for the products expected
to be returned. Accumulated experience is used to estimate
such returns at the time of sale at a portfolio level (expected
value method). Because the number of products returned has
been steady for years, it is highly probable that a significant
reversal in the cumulative revenue recognized will not occur.
The validity of this assumption and the estimated amount of
returns are reassessed at each reporting date.

Revenue from the sale of goods is recognised at the point in time
when control is transferred to the customer which coincides
with the performance obligation under the contract with the
customer.

Revenue is measured based on the transaction price, which is
the consideration, adjusted for discounts, price concessions and
incentives, if any, as specified in the contract with the customer.
Revenue also excludes taxes collected from customers. Invoices
are usually payable based on the credit terms agreed with
customers which vary up to 90 days.

Use of significant judgments in revenue recognition:

Judgment is also required to determine the transaction price
for the contract. The transaction price could be either a fixed
amount of customer consideration or variable consideration
with elements such as volume discounts, price concessions and
incentives. Any consideration payable to the customer (or to
other parties that purchase the entity's goods or services from
the customer) is adjusted to the transaction price, unless it is
a payment for a distinct product or service from the customer.
The estimated amount of variable consideration is adjusted in
the transaction price only to the extent that it is highly probable
that a significant reversal in the amount of cumulative revenue
recognized will not occur and is reassessed at the end of each
reporting period. The Company allocates the elements of
variable considerations to all the performance obligations of the
contract unless there is observable evidence that it pertains to
one or more distinct performance obligations.

Assets and liabilities arising from right to return

For contracts that permit the customer to return an item,
revenue is recognised to the extent that it is highly probable
that a significant reversal in the amount of cumulative revenue
recognised will not occur.

Therefore, the amount of revenue recognised is adjusted for
expected returns, which are estimated based on the historical
data. In these circumstances, a refund liability and a right to
recover returned goods asset are recognised.

Right to return assets

A right of return gives an entity a contractual right to recover
the goods from a customer (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. The right to
recover returned goods is included in Other current assets.

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 refund liability is
included in other current liabilities.

The Company reviews its estimate of expected returns at each
reporting date and updates the amounts of the asset and liability
accordingly.

Other Operating Revenue

Other operating revenue include revenue arising from a
Company's operating activities, i.e., either its principal or
ancillary revenue-generating activities, but which is not revenue
arising from sale of products or rendering of services. The other
operating revenue of the company includes revenue from scrap
sales, Protection fund, franchisee fees, export incentives, etc.

Export incentives are recognized as income on accrual basis to
the extent its realization is certain.

Other income

Interest income from a financial asset is recognized when it is
probable that the economic benefits will flow to the Company
and the amount of income can be measured reliably. Interest
income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable.

Other income is recognized on accrual basis in the financial
statements, except when there is uncertainty of collection.

(x) Government grants and incentives

Export benefits in the form of duty drawback, duty entitlement
pass book (DEPB) and other schemes are recognised in the
Statement of profit and loss when the right to receive credit
as per the terms of the scheme is established in respect of
exports made and when there is reasonable assurance that the
grant will be received and the Company will comply with all the
attached conditions.

Government grants are recognised in the statement of profit
and loss, either on a systematic basis when the Company
recognises, as expenses, the related costs that the grants
are intended to compensate or, immediately if the costs have
already been incurred. Government grants related to assets are
deferred and amortised over the useful life of the asset.