g) Provisions

A provision is recognised if, as a result of a past event, the
Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an
outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the
expected future cash flows (representing the best estimate
of the expenditure required to settle the present obligation
at the balance sheet date) at a pre-tax rate that reflects
current market assessments of the time value of money
and the risks specific to the liability. The unwinding of the
discount is recognised as finance cost. Expected future
losses are not provided for.

h) Financial guarantee contracts

Financial guarantee contracts are recognised as a deemed
equity contribution if no premium was paid when guarantee
is received. Deemed equity contribution is initially
measured at fair value.

The fair value of financial guarantees is determined as the
present value of the difference in net cash flows between the
contractual payments under the debt instrument and the
payments that would be required without the guarantee,
or the estimated amount that would be payable to a third
party for assuming the obligations.

i) Contingent liabilities and contingent assets

A contingent liability exists when there is a possible but
not probable obligation, or a present obligation that may,
but probably will not, require an outflow of resources, or
a present obligation whose amount cannot be estimated
reliably. Contingent liabilities do not warrant provisions
but are disclosed unless the possibility of outflow of
resources is remote.

Contingent assets usually arise from unplanned or other
unexpected events that give rise to the possibility of an
inflow of economic benefits to the entity. Contingent assets
are recognized when the realisation of income is virtually
certain, then the related asset is not a contingent asset and
its recognition is appropriate.

A contingent asset is disclosed where an inflow of economic
benefits is probable.

j) Commitments

Commitments include the amount of purchase order (net
of advances) issued to parties for completion of assets.
Provisions, contingent liabilities, contingent assets and
commitments are reviewed at each reporting date.

k) Revenue from contract with customers

The Company earns revenue primarily from retail trading
of premium and luxury watches, accessories and other
luxury items and rendering of related after sale services. The
Company has concluded that it is the principal in its revenue
arrangement because it typically controls goods or services
before transferring them to the customers.

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

At contract inception, the Company assesses its promise
to transfer products or services to a customer to identify
separate performance obligations. The Company applies
judgement to determine whether each product or services
promised to a customer are capable of being distinct,
and are distinct in the context of the contract, if not, the
promised product or services are combined and accounted
as a single performance obligation. The Company allocates
the arrangement consideration to separately identifiable
performance obligation based on their relative stand-alone
selling price or residual method. Stand-alone selling prices
are determined based on sale prices for the components
when it is regularly sold separately, in cases where the
Company is unable to determine the stand-alone selling
price the Company uses third-party prices for similar
deliverables or the Company uses expected cost plus margin
approach in estimating the stand-alone selling price.

The method for recognizing revenues and costs depends on
the nature of the products sold and services rendered.

Sale of goods

Revenue on sale of goods are recognized when the customer
obtains control of the specified asset. The Company
considers whether there are other promises in the contract
that are separate performance obligations to which a
portion of the transaction price needs to be allocated (e.g.
customer loyalty points).

Variable Consideration

If the consideration in a contract includes the variable
amount, the Company estimates the amount of
consideration to which it will be entitled in exchange
for transferring the goods to the customer. The variable
consideration is estimated at contract inception and
constrained until it is highly probable that a significant
revenue reversal in the amount of cumulative revenue
recognised will not occur when the associated uncertainty
with the variable consideration is subsequently resolved.
Some contracts for the sale of goods provide the customers
with a right of return the goods within a specified period.

The Company uses the expected value method to estimate
the variable consideration given the large number of
contracts that have similar characteristics. The Company
then applies the requirements on constraining estimates of
variable consideration in order to determine the amount of
variable consideration that can be included in the transaction
price. A refund liability is recognized for the goods that are
expected to be returned (i.e., the amount not included in the
transaction price). A right of return asset (and corresponding
adjustment to cost of sales) is also recognised for the right
to recover the goods from a customer.

Right of return assets

A right-of-return asset is recognised for the right to recover
the goods expected to be returned by customers. The
asset is measured at the former carrying amount of the
inventory, less any expected costs to recover the goods and
any potential decreases in value. The Company updates the
measurement of the asset recorded for any revisions to its
expected level of returns, as well as any additional decreases
in the value of the returned products.

Refund liabilities

A refund liability is recognised for the obligation to refund
some or all of the consideration received (or receivable)
from the customer. The Company's refund liabilities arise
from customers' right of return. The Company updates
its estimates of refund liabilities (and the corresponding
change in the transaction price) at the end of each
reporting period.

Customer loyalty programmes

For customer loyalty programmes, the transaction price in
respect of initial sale is allocated between the award credits
and the other components of the sale. The amount allocated
to award credits is deferred and is recognised as revenue
when the award credits are redeemed and the Company
has fulfilled its obligations to supply the discounted products
under the terms of the programme or when it is no longer
probable that the award credits will be redeemed.

Sale of services

Revenue from services rendered is recognised in profit
or loss as they are rendered based on agreements/
arrangements with the concerned parties, and recognised
net of goods and services tax/ applicable taxes at the time
of completion of service.

Contract balances

Trade Receivable

A receivable is recognised if an amount of consideration
that is unconditional (i.e., only the passage of time
is required before payment of the consideration is
due). Refer to accounting policies of financial assets in
Section of Financial instruments - initial recognition and
subsequent measurement.

Contract liabilities

A contract liability is recognised if a payment is received
or a payment is due (whichever is earlier) from a customer
before the Company transfers the related goods or services.
Contract liabilities are recognised as revenue when the
Company performs under the contract (i.e., transfers control
of the related goods or services to the customer).

) Recognition of interest income or expense

Interest income or expense is recognised using the effective
interest method.

The ‘effective interest rate' is the rate that exactly discounts
the estimated future cash payments or receipts through the
expected life of the financial instrument to:

- The gross carrying amount of the financial asset; or

- The amortised cost of the financial liability.

In calculating interest income and expense, the effective
interest rate is applied to the gross carrying amount of
the asset (when the asset is not credit-impaired) or to the
amortised cost of the liability. However, for financial assets
that have become credit-impaired subsequent to initial
recognition, interest income is calculated by applying the
effective interest rate to the amortised cost of the financial
asset. If the asset is no longer credit-impaired, then the
calculation of interest income reverts to the gross basis.

m) Borrowing costs

Borrowing costs are interest and other costs (including
exchange differences arising from foreign currency
borrowings to the extent that they are regarded as an
adjustment to interest costs) incurred by the Company 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 capitalized as a part
of cost of the asset. Other borrowing costs are recognised
as an expense in the period in which they are incurred.
Borrowing cost also includes exchange differences to the
extent regarded as an adjustment to the borrowing costs.

n) Taxes

Income tax expenses comprises of current and deferred tax.
It is recognised in profit or loss except to the extent that
it relates to a business combination or an item recognised
directly in equity or in other comprehensive income.

Current tax

Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year and
any adjustment to the tax payable or receivable in respect
of previous years. The amount of current tax reflects the
best estimate of the tax amount expected to be paid or
received after considering the uncertainty, if any, related to
income taxes. It is measured using tax rates (and tax laws)
enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset only if
there is a legally enforceable right to set off the recognised
amounts, and it is intended to realise the asset and settle
the liability on a net basis or simultaneously.

Current income tax relating to items recognized outside
profit or loss is recognized outside profit or loss (either in other
comprehensive income (OCI) or in equity). Current tax items
are recognized in correlation to the underlying transaction
either in OCI or directly in equity. Management periodically
evaluates positions taken in the tax returns with respect to
situations in which applicable tax regulations are subject to
interpretation and considers whether it is probable that a
taxation authority will accept an uncertain tax treatment.
The Company shall reflect the effect of uncertainty for each
uncertain tax treatment by using either most likely method
or expected value method, depending on which method
predicts better resolution of the treatment.

Deferred tax

Deferred tax is provided using the liability method on
temporary differences between the carrying amounts of the
assets and liabilities for financial reporting purposes and the
corresponding amounts used for taxation purposes.

Deferred tax liabilities are recognized for all temporary
differences, except when the deferred tax liability arises
from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and, at
the time of the transaction, affects neither the accounting
profit nor taxable profit or loss and does not give rise to
equal taxable and deductible temporary differences and
in respect of taxable temporary differences associated
with investments in subsidiaries, associates and interests
in joint ventures, when the timing of the reversal of the
temporary differences can be controlled and it is probable
that the temporary differences will not reverse in the
foreseeable future.

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 liability in
a transaction that is not a business combination and, at
the time of the transaction, affects neither the accounting
profit nor taxable profit or loss and does not give rise to
equal taxable and deductible temporary differences and
in respect of deductible temporary differences associated
with investments in subsidiaries, associates and interests
in joint ventures, deferred tax assets are recognised only to
the extent that it is probable that the temporary differences
will reverse in the foreseeable future and taxable profit
will be available against which the temporary differences
can be utilized.

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.

In assessing the recoverability of deferred tax assets, the
Company relies on the same forecast assumptions used
elsewhere in the standalone financial statements and in
other management reports, which, among other things,
reflect the potential impact of climate-related development
on the business, such as increased cost of production as a
result of measures to reduce carbon emission.

Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset
is realized 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 relating to items recognised outside profit
or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items
are recognised in correlation to the underlying transaction
either in OCI or directly in equity.

Tax benefits acquired as part of a business combination, but
not satisfying the criteria for separate recognition at that
date, are recognised subsequently if new information about
facts and circumstances change. Acquired deferred tax
benefits recognised within the measurement period reduce
goodwill related to that acquisition if they result from
new information obtained about facts and circumstances
existing at the acquisition date. If the carrying amount
of goodwill is zero, any remaining deferred tax benefits
are recognised in OCI/ capital reserve depending on the
principle explained for bargain purchase gains. All other
acquired tax benefits realised are recognised in profit or loss.

The Company offsets deferred tax assets and deferred tax
liabilities if and only if it has a legally enforceable right to
set off current tax liabilities and assets and the deferred
tax assets and deferred tax liabilities relate to income taxes
levied by the same taxation authorities.

Sales tax/Goods and Service Tax (GST) paid on acquisition
of assets or on incurring expenses

Expenses and assets are recognised net of the amount of
sales tax / GST Paid, except:

- When the tax incurred on a purchase of assets or
services is not recoverable from the taxation authority,
in which case, the tax paid is recognized as part of
the cost of acquisition of the asset or as part of the
expense item, as applicable.

- When receivables and payables are stated with the
amount of tax included.

The net amount of tax recoverable from, or payable to,
the taxation authority is included as part of receivables or
payables in the balance sheet.

o) Leases

The Company assesses at contract inception whether a
contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for
a period of time in exchange for consideration.

Company as a lessee

The Company applies a single recognition and measurement
approach for all leases, except for short-term leases and
leases of low-value assets. The Company recognises lease
liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.

Right-of-use assets

The Company recognizes right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are
measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement
of lease liabilities. The cost of right-of-use assets includes
the amount of lease liabilities recognized, initial direct
costs incurred, and lease payments made at or before the
commencement date less any lease incentives received.
Right-of-use assets are depreciated on a straight-line basis
over the shorter of the lease term and the estimated useful
lives of the assets, as follows:

• Buildings 2 to 10 years

• Furniture 4 to 10 years

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.

The right-of-use assets are also subject to impairment. Refer
to the accounting policies in Section Impairment of non¬
financial assets.

Lease Liabilities

At the commencement date of the lease, the Company
recognized lease liabilities measured at the present value of
lease payments to be made over the lease term. The lease
payments include fixed payments (including in substance
fixed payments) less any lease incentives receivable,
variable lease payments that depend on an index or a rate,
and amounts expected to be paid under residual value
guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised
by the Company and payments of penalties for terminating
the lease, if the lease term reflects the Company exercising
the option to terminate. Variable lease payments that
do not depend on an index or a rate are recognized as
expenses (unless they are incurred to produce inventories)
in the period in which the event or condition that triggers
the payment occurs.

In calculating the present value of lease payments, the
Company uses its incremental borrowing rate at the
lease commencement date because the interest rate
implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for
the lease payments made. 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
(e.g., changes to future payments resulting from a change
in an index or rate used to determine such lease payments)
or a change in the assessment of an option to purchase the
underlying asset.

Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition
exemption to its short-term leases of machinery and
equipment (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 of office
equipment 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. 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.

p) 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

Initial recognition and measurement
Financial assets are classified, at initial recognition, as
subsequently measured at amortised cost, fair value through
other comprehensive income (OCI), and fair value through
profit or loss. The classification of financial assets at initial
recognition depends on the financial asset's contractual
cash flow characteristics and the Company's business model
for managing them. With the exception of trade receivables
that do not contain a significant financing component or
for which the Company has applied the practical expedient,
all financial assets are recognised initially at fair value plus,
in the case of financial assets not recorded at fair value
through profit or loss, transaction costs that are attributable
to the acquisition of the financial asset. Trade receivables
that do not contain a significant financing component or for
which the Company has applied the practical expedient are
measured at the transaction price determined under Ind

AS 115. Refer to the accounting policies in section of Revenue
from contracts with customers. In order for a financial asset
to be classified and measured at amortised cost or fair
value through OCI, it needs to give rise to cash flows that
are ‘solely payments of principal and interest (SPPI)' on the
principal amount outstanding. This assessment is referred
to as the SPPI test and is performed at an instrument
level. Financial assets with cash flows that are not SPPI are
classified and measured at fair value through profit or loss,
irrespective of the business model.

The Company's business model for managing financial
assets refers to how it manages its financial assets in order
to generate cash flows. The business model determines
whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both. Financial
assets classified and measured at amortised cost are held
within a business model with the objective to hold financial
assets in order to collect contractual cash flows while

financial assets classified and measured at fair value through
OCI are held within a business model with the objective of
both holding to collect contractual cash flows and selling.

Purchases or sales of financial assets that require delivery
of assets within a time frame established by regulation
or convention in the market place (regular way trades)
are recognised on the trade date, i.e., the date that the
Company commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets
are classified in four categories:

• Debt instruments at amortised cost

• Debt instruments at fair value through other
comprehensive income (FVOCI)

• Debt instruments, derivatives and equity instruments
at fair value through profit or loss (FVTPL)

• Equity instruments designated at fair value through
other comprehensive income (FVOCI)

Debt instruments at amortised cost
A ‘debt instrument' is measured at the amortised cost if
the asset is held within a business model whose objective
is to hold assets for collecting contractual cash flows, and
contractual terms of the asset give rise on specified dates to
cash flows that are solely payments of principal and interest
(SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are
subsequently measured at amortised cost using the
effective interest rate (EIR) method. The effective interest
rate is the rate that exactly discounts estimated future
cash payments or receipts through the expected life of
the financial instrument to the gross carrying amount of
the financial asset or the amortised cost of the financial
liability. 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 EIR amortisation
is included in other income in the Statement of Profit and
Loss. The losses arising from impairment are recognised in
the Statement of Profit and Loss.

Debt instrument at FVOCI

A ‘debt instrument' is classified as at the FVOCI if the
objective of the business model is achieved both by collecting
contractual cash flows and selling the financial assets, and
the asset's contractual cash flows represent SPPI.

Debt instruments included within the FVOCI category are
measured initially as well as at each reporting date at fair
value. Fair value movements are recognised in the other
comprehensive income (OCI). On derecognition of the
asset, cumulative gain or loss previously recognised in OCI
is reclassified to the Statement of Profit and Loss. Interest

earned whilst holding FVTOCI debt instrument is reported
as interest income using the EIR method.

Debt instrument at FVTPL

FVTPL is a residual category for debt instruments. Any
debt instrument, which does not meet the criteria for
categorization as at amortised cost or as FVOCI, is classified
as at FVTPL. In addition, at initial recognition, the Company
may irrevocably elect to designate a debt instrument,
which otherwise meets amortised cost or FVOCI criteria, as
at FVTPL. However, such adoption is allowed only if doing
so reduces or eliminates a measurement or recognition
inconsistency (referred to as ‘accounting mismatch').

Debt instruments included within the FVTPL category are
measured at fair value with all changes recognised in the
Statement of Profit and Loss.

Equity investments

All equity investments in scope of Ind AS 109 are
measured at fair value. Equity instruments which are held
for trading and contingent consideration recognised by
an acquirer in a business combination to which Ind AS
103 applies are classified as at FVTPL. For all other equity
instruments, the Company may make an irrevocable
adoption to present subsequent changes in the fair value
under other comprehensive income subsequent changes
in the fair value. The Company makes such adoption 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 FVOCI, 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 Profit or Loss, even
on sale of investment. However, the Company may transfer
the cumulative gain or loss to retained earnings.

Equity instruments included within the FVTPL category are
measured at fair value with all changes recognised in the
Profit or Loss.

Impairment of financial assets

The Company recognises loss allowances for expected credit
loss on financial assets measured at amortised cost. At each
reporting date, the Company assesses whether financial
assets carried at amortised cost are credit-impaired. A
financial asset is ‘credit-impaired' when one or more events
that have detrimental impact on the estimated future cash
flows of the financial assets have occurred.

Evidence that the financial asset is credit-impaired includes
the following observable data:

- significant financial difficulty of the borrower or issuer;

- the breach of contract such as a default or being past
due for 180 days or more;

- the restructuring of a loan or advance by the
Company on terms that the Company would not
consider otherwise;

- it is probable that the borrower will enter bankruptcy
or other financial re-organisation; or

- the disappearance of active market for a security
because of financial difficulties.

The impairment methodology of the company depends
on whether there has been a significant increase in credit
risk since initial recognition. If credit risk has not increased
significantly, twelve month expected credit loss is used to
provide for impairment loss, otherwise lifetime expected
credit loss is used.

However, only in case of trade receivables, the Company
applies the simplified approach which requires expected
lifetime losses to be recognised from initial recognition of
the receivables.

The presumption under Ind As 109 with reference to
significant increases in credit risk since initial recognition
(when financial assets are more than 30 days past due),
has been rebutted and is not applicable to the Company,
as the Company is able to collect a significant portion of its
receivables that exceed the due date.

Measurement of expected credit losses
Expected credit losses are a probability-weighted estimate
of credit losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. difference between the cash
flow due to the Company in accordance with the contract
and the cash flow that the Company expects to receive).

Presentation of allowance for expected credit losses in
the balance sheet

Loss allowance for financial assets measured at the
amortised cost is deducted from the gross carrying
amount of the assets.

Write-off

The gross carrying amount of a financial asset is written
off (either partially or in full) to the extent that there is no
realistic prospect of recovery. This is generally the case when
the Company determines that the debtors do not have
assets or sources of income that could generate sufficient
cash flows to repay the amount subject to the write-off.
However, financial assets that are written off could still be
subject to enforcement activities in order to comply with the
Company's procedure for recovery of amounts due.

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
primarily derecognized (i.e., removed from the Company's
balance sheet) when:

- The rights to receive cash flows from the asset
have expired, or

- The Company has transferred its rights to receive cash
flows from the asset or has assumed an obligation to
pay the received cash flows in full without material
delay to a third party under a ‘pass-through'
arrangement; and either (a) the Company has
transferred substantially all the risks and rewards of
the asset, or (b) the Company has neither transferred
nor retained substantially all the risks and rewards of
the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive
cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent
it has retained the risks and rewards of ownership. When
it has neither transferred nor retained substantially all of
the risks and rewards of the asset, nor transferred control
of the asset, the Company continues to recognise the
transferred asset to the extent of the Company's continuing
involvement. In that case, the Company also recognises an
associated liability. The transferred asset and the associated
liability are measured on a basis that reflects the rights and
obligations that the Company has retained.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss, loans
and borrowings, payables as appropriate.

All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings and payables, net
of directly attributable transaction costs.

The Company's financial liabilities include trade and
other payables, loans and borrowings including bank
overdrafts, financial guarantee contracts and derivative
financial instruments.

The Company holds Derivative financial instruments which
are initially recognized at fair value on the date the contract
is entered into and are subsequently remeasured at fair
value at each reporting date. All derivatives are classified as
held for trading and are accounted for at fair value through
profit or loss (FVTPL), unless they are designated and
effective as hedging instruments.

Subsequent measurement

For purposes of subsequent measurement, financial
liabilities are classified in two categories:

• Financial liabilities at fair value through profit
or loss (FVTPL)

• Financial liabilities at amortised cost (loans
and borrowings)

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 of financial liabilities
A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or the
terms of an existing liability are substantially modified, such
an exchange or modification is treated as the derecognition
of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is
recognised in the Statement of Profit and Loss.

Offsetting

Financial assets and financial liabilities are offset and the
net amount 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.

q) Impairment of non-financial assets

The Company's non-financial assets, are reviewed at each
reporting date to determine if there is indication of any
impairment. If any such indication exists, then the asset's
recoverable amount is estimated. For impairment testing,
assets that do not generate independent cash flows are
grouped together into cash generating units (CGUs). Each
CGU represents the smallest group of assets that generate
cash inflows that are largely independent of the cash
inflows of other assets or CGUs.

The recoverable amount of as CGU (or an individual asset)
is the higher of its value in use and fair value less cost to sell.
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 assessments of the time value of
money and the risks specific to the CGU (or the asset).

The Company's corporate assets (e.g., central office building
for providing support to various CGUs) do not generate
independent cash inflows. To determine impairment of a
corporate asset, recoverable amount is determined for the
CGUs to which the corporate asset belongs.

An impairment loss is recognised whenever the carrying
amount of an asset or its cash generating unit exceeds its
recoverable amount. Impairment losses are recognised in
statement of profit or loss. 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.

r) Foreign currency transactions
Initial recognition

Transactions in foreign currencies are initially recorded by
the Company at functional currency spot rates at the date
the transaction first qualifies for recognition. However,
for practical reasons, the Company uses average rate if
the average approximates the actual rate at the date of
the transaction.

Measurement at the reporting date

Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at the
exchange rate at the reporting date. Exchange differences
arising on settlement or translation of monetary items are
recognised in statement of profit and loss with the exception
of the following:

Exchange differences arising on monetary items that
forms part of a reporting entity's net investment in a
foreign operation are recognised in profit or loss in the
separate financial statements of the reporting entity
or the individual financial statements of the foreign
operation, as appropriate. In the financial statements
that include the foreign operation and the reporting entity
(e.g., consolidated financial statements when the foreign
operation is a subsidiary), such exchange differences are
recognised initially in OCI. These exchange differences are
reclassified from equity to profit or loss on disposal of the
net investment.

Exchange differences arising on monetary items that
are designated as part of the hedge of the Group's net
investment of a foreign operation. These are recognized in
OCI until the net investment is disposed of, at which time,
the cumulative amount is reclassified to profit or loss.

Tax charges and credits attributable to exchange differences
on those monetary items are also recorded in OCI.

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 initial transaction. 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 OCI or profit or
loss are also recognised in OCI or profit or loss, respectively).

s) Operating segments

An operating segment is a component of the Company
that engages in business activities from which it may
earn revenues and incur expenses, including revenues
and expenses that relate to transactions with any of the
Company's other components, and for which discrete
financial information is available. All operating segments'
operating results are reviewed regularly by the Company's
Chief Executive Officer/Managing Director as Chief
Operating Decision Maker (CODM) to make decisions
about resources to be allocated to the segments and assess
their performance.

t) Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise
cash at banks and on hand and short-term deposits with an
original maturity of three months or less, that are readily
convertible to a known amount of cash and subject to an
insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and
cash equivalents consist of cash and short-term deposits,
as defined above, net of outstanding bank overdrafts as
they are considered an integral part of the Company's
cash management.

u) Cash flow statement

Cash flows are reported using the indirect method, whereby
profit for the period is adjusted for the effects of transactions
of a non-cash nature, any deferrals or accruals of past or
future operating cash receipts or payments and item of
income or expenses associated with investing or financing
cash flows. The cash flows from operating, investing and
financing activities of the Company are segregated.

v) Earnings per share

Basic earnings/ (loss) per share are calculated by dividing
the net profit/ (loss) for the year attributable to equity
shareholders of the Company by the weighted average
number of equity shares outstanding during the year. The
weighted average number of equity shares outstanding
during the year is adjusted for events of bonus issue and
share split. For the purpose of calculating diluted earnings/
(loss) per share, the net profit or loss for the year attributable
to equity shareholders and the weighted average number
of shares outstanding during the year are adjusted for the
effects of all dilutive potential equity shares.

w) Measurement of fair values

The Company measures financial instruments, such as,
derivatives at fair value at each 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:

1. In the principal market for the asset or liability, or

2. I n 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 economic best 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 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 standalone financial statements are
categorised within the fair value hierarchy, described as
follows, based on the lowest level input that is significant to
the fair value measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active
markets for identical assets or liabilities

Level 2 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable

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

For the purpose of fair value disclosures, the Company has
determined classes of assets and liabilities on the basis of
the nature, characteristics and risks of the asset or liability
and the level of the fair value hierarchy as explained above.

Further information about the assumptions made in
measuring fair values used in preparing these standalone
financial statements is included in the respective notes.

2.3 Changes in accounting policies and disclosures
New and amended standards

I. Ind AS 1 (Presentation of Financial Statements):
Classification of Liabilities: Clarifies that liabilities are
classified as current/non-current based on rights existing
at the reporting date, replacing “unconditional right” with
“substantive right” to defer settlement.

Covenants: Enhanced disclosures are required for covenants
that must be met within 12 months, specifically how entities
manage the risk of breaching those covenants.

The Company has reviewed the new pronouncements and
based on its evaluation it has determined that it does not
have any impact in its financial statements

II. Ind AS 7 & Ind AS 107 (Cash Flows & Financial Instruments):
Supplier Finance Arrangements: Companies must provide
detailed disclosures on supplier finance arrangements
(reverse factoring), including terms, outstanding balances,
and liquidity risk, to improve transparency.

The Company has reviewed the new pronouncements and
based on its evaluation has determined that it does not
have any impact in its financial statements

III. Ind AS 12 (Income Taxes - Pillar Two): Global Minimum
Tax: Introduces a temporary exception to deferred tax
accounting related to Pillar Two model rules. It requires new
disclosures about exposure to this tax, which treats top-up
taxes as current tax expenses

The Company has reviewed the new pronouncements and
based on its evaluation has determined that it does not
have any impact in its financial statements

IV. Ind AS 21 (Effects of Changes in Foreign Exchange Rates):
Lack of Exchangeability: Provides guidance on assessing
when a currency is exchangeable and how to determine the
spot rate when it is not.

The Company has reviewed the new pronouncements and based
on its evaluation has determined that it does not have any impact
in its financial statements

2.4 Significant accounting judgements, estimates and assumptions

The preparation of the Company's standalone financial
statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and 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.

Judgments

Information about judgments made in applying accounting
policies that have the most significant effects on the amounts
recognised in the standalone financial statements is included in
the following notes:

- Note 2.2 (c) - Assessment of useful life of Property,
plant and equipment

- Note 2.2 (d) - Assessment of useful life of Intangible assets

- Note 2.2 (g) and (i) - Provisions and contingent liabilities

- Note 2.2 (n) - Income taxes

Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties
that have a significant risk of resulting in a material adjustment in
the year ended March 31, 2026 is included in the following notes:

a) Defined benefit plans

The present value of the gratuity is determined using
actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from actual
developments in the future. These include the determination
of the discount rate, future salary increases and mortality
rates. Due to the complexities involved in the valuation and
its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All assumptions
are reviewed at each reporting date.

The parameter most subject to change is the discount rate.
In determining the appropriate discount rate for plans
operated in India, the management considers the interest
rates of government bonds in currencies consistent with the
currencies of the post-employment benefit obligation. The
mortality rate is based on publicly available mortality tables
for the specific countries. Those mortality tables tend to
change only at interval in response to demographic changes.
Future salary increases, and gratuity increases are based on
expected future inflation rates for the respective countries.

b) Taxes

Uncertainties exist with respect to the interpretation of
complex tax regulations, changes in tax laws, and the
amount and timing of future taxable income. Given the wide
range of business relationships and the long term nature and
complexity of existing contractual agreements, differences
arising between the actual results and the assumptions
made, or future changes to such assumptions, could
necessitate future adjustments to tax income and expense
already recorded. The Company establishes provisions,
based on reasonable estimates. The amount of such
provisions is based on various factors, such as experience
of previous tax audits and differing interpretations of tax
regulations by the taxable entity and the responsible tax
authority. Such differences of interpretation may arise

on a wide variety of issues depending on the conditions
prevailing in the respective domicile of the companies.
Refer Note 2.2 (n) and 9- Recognition of deferred tax assets:
availability of future taxable profit against which tax losses
carried forward can be used;

c) Contingencies

Refer Note 35 - Recognition and measurement of provision
and contingencies, key assumptions about the likelihood
and magnitude of an outflow of resources;

d) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or
cash generating unit exceeds its recoverable amount, which
is the 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 of the
asset. The value in use calculation is based on a DCF model.
The cash flows are derived from the budget for the next
five years and 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 and other intangibles with indefinite useful lives
recognised by the Group.

Refer Note 2.2 (p)- Impairment test of non-financial assets:
key assumptions underlying recoverable amounts;

e) Determining the lease term of contracts with renewal
and termination options - Company as lessee:

The key assumptions concerning the future and other key
sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year. The Company based its assumptions and
estimates on parameters available when the standalone
financial statements were prepared. 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.

Leases - Estimating the incremental borrowing rate: The
Company cannot readily determine the interest rate implicit
in the lease, therefore, it uses its incremental borrowing
rate (IBR) to measure lease liabilities. The IBR is the rate
of interest that the Company would have to pay to borrow
over a similar term, and with a similar security, the funds
necessary to obtain an asset of a similar value to the right-
of-use asset in a similar economic environment. The IBR
therefore reflects what the Company ‘would have to pay',

which requires estimation when no observable rates are
available or when they need to be adjusted to reflect the
terms and conditions of the lease. The Company estimates
the IBR using observable inputs (such as market interest
rates) when available and is required to make certain entity-
specific estimates.

f) Useful life of Property, plant and equipment
and intangibles:

The management estimates the useful life and residual
value of property, plant and equipment and other
intangible assets. These assumptions are reviewed at each
reporting date.

g) Provision for slow and obsolete inventory:

The Company is in business of trading of watches,
accessories & luxury items and rendering of related after¬
sales services and consists of inventory of watches at various
stores of the Company. The Company on a periodic basis
and at each reporting date assess the inventory age listing
to identify slow-moving allowance and obsolete inventories
and then estimates the amount of inventory provision.
In doing so, it estimates the net realisable value of aged
inventory based on current selling price of such/similar aged
inventory and likely sales volume based discount offered
and past sales trend. Also, the Company reviews catalogues
of various brands to verify whether all inventory items are
appearing in them.

There are no projects whose completion is over due or has exceeded its cost compared to its original plan during the financial year ending
2025-26 and 2024-25.

There are no restrictions over the title of the Company's intangible assets, nor any intangible assets pledged as security for liabilities.

** Impairment testing of brand (Ethos)

The Company has entered into an agreement dated January 1, 2022 with its Holding company i.e. KDDL Limited to purchase its brand-name
“Ethos” and “Summit” (including trademarks, trade names, logos and all related rights) for an agreed amount of H 4,017.

The Company performed its annual impairment test for the year ended March 31,2026. The recoverable amount of intangible asset (Brand) as
at March 31, 2025 was determined based on a value in use calculation using cash flow projections from financial budgets approved by senior
management covering a five-year period.

(a) Discount rate: Discount rate 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 is based on the specific circumstances of the Company and is derived from its weighted average cost of capital
(WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the
Company's investors.

(b) Growth rate is based on the Company's projection of business and growth of the industry

An analysis of the calculation's sensitivity to a change in the key parameters (revenue growth, operating margin, discount rate and long¬
term growth rate) based on reasonably probable assumptions, did not identify any probable scenarios where the Brand's recoverable
amount would fall below its carrying amount.

b) During the year ended March 31,2025, the Company invested INR 951.66 lakhs to acquire an additional 3,46,000 shares of CHF 1 each
in Silvercity Brands AG, from a new issuance of 12,20,000 shares by Silvercity Brands AG. Due to the increase in the overall share capital
to 72,20,000 shares, the Company's ownership percentage was diluted from 35% to 33.88%.

c) The Company has incorporated a wholly owned subsidiary, namely Ethos Lifestyle Private Limited (formerly knows as RF Brands
Private Limited) on February 02, 2024 in accordance with the provisions of Companies Act, 2013 read with rules made thereunder.
During the year ended March 31,2025, the Company has invested an amount of Rs 500 in its paid up share capital by subscribing to

50.00. 000 equity shares of Rs. 10 each.

During the year ended March 31,2026, There has been a change in the shareholding of Ethos Lifestyle Private Limited (formerly RF Brands
Private Limited), a wholly owned subsidiary of the Company.

A. Consequent to a further allotment of shares by way of preferential issue by Ethos Lifestyle Private Limited, the Company's
shareholding has been diluted from 100% to 95%. The transaction involves issuance of equity shares by Ethos Lifestyle Private
Limited to individuals belonging to the promoter and promoter group of Ethos Limited. Accordingly, Ethos Lifestyle Private Limited
ceases to be a wholly owned subsidiary of the Company with effect from July 16, 2025.

B. Further on August 13, 2025, consequent to fund raising of Rs. 17,950 by way of preferential issue by Ethos Lifestyle Private Limited to
identified investors not related to / belonging to the promoters and promoter group of Ethos Limited, the Company's shareholding
has been diluted from 95.00% to 75.05%. Ethos Lifestyle Private Limited continues to be a subsidiary of the Company.

d) During the year ended March 31,2026, the Company has incorporated a Wholly Owned Subsidiary in Dubai, United Arab Emirates, having
License Number: 1474470 and Commercial Registration Number: 2538436 Issued by Department of Economy and Tourism (DET), Dubai.
Ethos Limited infused INR 69.87 (AED 300,000) towards initial paid-up capital in Ficus Trading LLC (300 shares of AED 1000 each) on June
16, 2025. The Company will engage in trading of watches, clocks, and their spare parts. refer note 50.

e) During the year ended March 31,2026, the Company has incorporated Micron Watch Services Private Limited , a subsidiary of Ethos
Limited, on 22nd August 2025 with Corporate Identification Number (CIN) U95294HR2025PTC135383 under the jurisdiction of the laws
of India. The registered office of the Company is situated at 359, Udyog Vihar, Phase-II, DLF QE, Gurgaon, Haryana, India 122002. The
C select Indian cities, focusing on watch service and repair. Ethos Limited owned 50,100 shares of Rs. 10 each out of total share capital of

1.00. 000 shares of Rs. 10 each. refer note 51.

* Includes interest on unutilised proceeds from Initial Public Offer (IPO) received amounting to nil (March 31,2025: Rs. 1.34) which have
been temporarily invested in deposits with scheduled banks. Refer note 46.

Includes interest on unutilised proceeds from Qualified Institutional Placement (QIP) received amounting to nil (March 31, 2025:
Rs.245.20) which have been temporarily invested in deposits with scheduled banks and kept in current account with scheduled bank and
monitoring agency bank account. Refer note 47.

Includes interest on unutilised proceeds from rights issue received amounting to Rs. 1,228.01 which have been temporarily invested in
deposits with scheduled banks and kept in current account with scheduled bank and monitoring agency bank account. Refer note 48.

Notes:-

1. As on March 31,2026, H283.07 (March 31, 2025: H135.21) was recognised as an expense for inventories carried at net realisable value.

2. Inventories comprises of traded goods are valued at the lower of cost and net realisable value.

The cost of inventories is based on the specific identification, and includes expenditure incurred in acquiring the inventories less duties and
taxes those are recoverable from government authorities, and other costs incurred in bringing them to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. The
comparison of cost and net realisable value is made on an item-by-item basis.

* Balance as on March 31,2026 includes Nil (March 31,2025: H 79.72) balance of unutilised Initial Public Offer (IPO) proceed with monitoring
agency bank account. Refer note 46.

Balance as on March 31,2026 includes Nil (March 31,2025: H 3.67) balance of unutilised Qualified Institutional Placement (QIP) proceed with
monitoring agency bank account. Refer note 47.

Balance as on March 31,2026 includes H 11.53 balance of unutilised Rights issue proceed with monitoring agency bank account. Refer note 48.

There are no repatriation restrictions with regard to cash and cash equivalents as at the end of March 31,2026, and March 31,2025.

*** Highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.

** Fixed deposits include balance of Initial Public Offer (IPO) proceeds of Nil (March 31, 2025: H 900) which will be utilised as stated in the
prospectus of IPO. Net unutilised proceeds from IPO as on March 31, 2025 have been temporarily invested in deposits with scheduled
bank. Refer note 46.

‘These deposits include restricted bank deposits amounting to nil (March 31, 2025 : H 1021.60) on account of deposits pledged as security for
bank guarantees, security for cash credit facilities and earmarked against deposits from shareholders.

# These deposits include restricted bank deposits amounting to H349.68 (March 31, 2025 : H 2,638.28) on account of deposits pledged as
security for bank guarantees, security for cash credit facilities and earmarked against deposits from shareholders. Also, fixed deposits include
balance of qualified institutional placement (QIP) proceeds of Nil (March 31,2025: H8,500) which has been utilised as stated in the preliminary
placement document for QIP and was temporarily invested in deposits with scheduled bank as on March 31, 2025. Net unutilised proceeds
from QIP as on March 31, 2026 is Nil and have been fully utilised in year ended March 31, 2026. Refer note 47.

## Fixed deposits include balance of Rights issue proceeds of H 30,000 which will be utilised as stated in the prospectus of rights issue. Net
unutilised proceeds from rights issue as on March 31,2026 have been temporarily invested in deposits with scheduled bank. Refer note 48.

(a) Right preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of H10 per share. Each holder of equity shares is entitled to one vote per
share. The voting rights of an equity shareholder on show of hand or through proxy shall be in proportion to his share of the paid up capital of
the Company. The Company declares and pays dividends in Indian Rupees. The Dividend proposed by the board of directors (Except for interim
dividend) is subject to approval of shareholders in the ensuring Annual General Meeting (AGM). In the event of liquidation of the Company

(e ) Bonus shares, shares buyback and issue of shares without consideration being received in cash (during five years immediately preceding
March 31,2026).

During the five years immediately preceding March 31,2026 (‘the period'), neither any bonus shares have been issued nor any shares
have been bought back. In addition, during the period, no shares have been issued for consideration other than cash except as follows:-

I. During the year ended March 31,2022, 104,750 equity shares of Rs.10 each had been issued under employee stock option plans for
which only exercise price had been received in cash.

Note: The Company has not issued any bonus shares, shares for consideration other than cash or bought back any shares since the incorporation
of the Company.

17. Other equity

(also refer to Statement of Changes in Equity)

(i) Deemed capital contribution

a) Includes H14.51 towards fair value of guarantees given by the Holding Company in the earlier years.

b) Includes H36.00 towards interest accrued on 12% cumulative redeemable preference shares, classified as finance cost, which is no longer
payable at the time of redemption.

Nature and purpose of reserves

(ii) Capital reserve

Reserve created under the scheme of arrangement (Business Combination). This will be utilised in accordance with the provisions of the
Companies Act, 2013.

(iii) Securities premium

Securities premium represents the excess consideration received by the Company over the face value of the shares issued to shareholders. This
will be utilised in accordance with the provisions of the Companies Act, 2013.

The Company, at its IPO meeting held on May 26, 2022 approved allotment of 42,71,070 Equity Shares of H10 each pursuant to Initial
Public Offering at a securities premium of H868 per share under Fresh Issue and offer for sale of 3,10,430 Equity Shares at an Offer Price of
H878 per Equity Share, to the respective applicants in various categories, in terms of the basis of allotment approved in consultation with the
authorized representative of BSE Limited. The equity shares of the Company were listed on BSE Limited and National Stock Exchange of India
Limited on May 30, 2022. The total offer expenses in relation to share issued amounting to H3,531.05 has been adjusted against securities
premium. Refer Note 46.

The Company, at its QIP meeting held on November 03, 2023 approved allotment of 11,31,210 Equity Shares of H10 each pursuant to
Qualified Institutional Placement at a securities premium of H1,537 per share under private placement, to eligible qualified institutional buyers.
The total offer expenses in relation to share issued amounting to H540.18 has been adjusted against securities premium. Refer Note 47.

The Company, at its Rights issue meeting held on July 04, 2025, inter-alia, have considered and approved the allotment of 22,77,250 fully
paid-up equity shares of face value of INR 10 each on rights basis to the eligible shareholders of the Company and/or renounce(s) in terms
of the Letter of Offer dated June 6, 2025 at an issue price of INR 1,800 per equity share (including a premium of INR 1,790 per equity share).
The total offer expenses in relation to the fresh issue were INR 379.02 lakhs (excluding taxes). Refer Note 48.

(iv) Retained earnings

Retained earnings are the profit that the Company has earned till date, less dividends or other distributions paid to shareholders. Retained
earnings includes re-measurement (loss) / gain on defined benefit plans, net of taxes that will not be reclassified to statement of profit and
loss. Retained earnings is a free reserve available to the Company and eligible for distribution to shareholders, in case where it is having positive
balance representing net earnings till date.

(v) Other comprehensive income

Other comprehensive income comprises actuarial gain / loss on remeasurement of defined benefit obligation and return on plan assets.

Note: The Company has not declared or recommended any dividend for the year ended March 31, 2026 (Previous year: Nil)

Notes:

(a) The fair value in respect of the unquoted equity investments has been determined using discounted cash flow method and market
comparison technique based on market multiples derived from quoted prices of companies comparable to the investee. The significant
unobservable inputs used are expected cash flows, estimated EBITDA of the investee.

(b) Fair value of non-current financial assets and non- current financial liabilities has not been disclosed as there are no significant differences
between carrying value and fair value.

(c) Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due
to the short term maturities of these instruments.

(d) The fair value of borrowings is based upon a discounted cash flow analysis that used the aggregate cash flows from principal and finance
costs over the life of the debt and current market interest rates.

(e) The fair value of derivative financial instrument has been determined using valuation techniques with market observable input. The
model incorporate various input include the credit quality of counter-parties and foreign exchange forward rate.

(f) There are no transfers between Level 1, Level 2 and Level 3 during the year ended March 31,2026 and March 31, 2025

II. Financial risk management

(i) Risk management framework

The Company's Risk management Committee has overall responsibility for the establishment and oversight of the Company's risk
management framework. The Company's risk management policies are established to identify and analyse the risk faced by the Company,
to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to effect changes in market conditions and Company's activities. The Company, through its training and management
standards and procedures, aims to maintain discipline and constructive control environment in which all employees understand their roles
and obligations.

The Company's audit committee oversees how management monitors compliance with Company's risk management policies and
procedures, and reviews the adequacy of the risk management framework in relation to risk faced by the Company. The audit committee
is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls
and procedures, the result of which are reported to audit committee.”

The Company has exposure to the following risks arising from financial instruments:

- Credit risk (see (ii));

- Liquidity risk (see (iii));and

- Market risk (see (iv))

(ii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. The carrying amount of financial assets represents the maximum credit risk exposure and arises principally from the
Company's receivable from customers and loans.

Trade receivables and Loans

The Company's retail business is pre-dominantly on cash and carry basis which is largely through credit-card collections. The credit risk
on such collections is minimal, since they are primarily owned by customers' card issuing banks. The Company has adopted a policy of
dealing with only credit worthy counterparties in case of institutional customers and the credit risk exposure for institutional customers
is managed by the Company by credit worthiness checks. The Company also carries credit risk on lease deposits with landlords for
store properties taken on leases, for which agreements are signed and property possessions timely taken for store operations. The risk
relating to refunds after store shut down is managed through successful negotiations or appropriate legal actions, where necessary.
The Company's experience of delinquencies and customer disputes have been minimal. Further, Trade and other receivables consist of a
large number of customers, across geographies within India, hence, the Company is not exposed to concentration risks.

Cash and cash equivalents

The Company holds cash and cash equivalents of H8,423.55 as at March 31, 2026 (March 31, 2025: H2,491.14). The cash and cash
equivalents are mainly held with scheduled banks.

(iii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial assets. The Company's approach to manage liquidity is to have sufficient liquidity to
meet its liabilities when they are due, under both normal and stressed circumstances, without incurring unacceptable losses or risking
damage to the Company's reputation.

Management manages the liquidity risk by monitoring cash flow forecasts on a periodic basis and maturity profiles of financial assets and
liabilities. This monitoring takes into account the accessibility of cash and cash equivalents and additional undrawn financing facilities.
The Company will continue to consider various borrowings of leasing options to maximize liquidity and supplement cash requirements
as necessary. Post completion of Initial Public Offer, the Company has repaid all working capital loans / limits and part of shareholder

deposits and also, surrendered the sanctioned borrowing limits. During the year ended March 31, 2025, The Company was having
sanctions of borrowing limits and no amount was drawn against the limits during the year ended March 31. 2026. There is no sanction
applicable in current financial year ended March 31, 2026.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and
undiscounted, and include contractual interest payments.

(iv) Market Risk

a) Product price risk

In a potentially inflationary economy, the Company expects periodical price increases across its retail product lines. Product price
increases which are not in line with the levels of customers' discretionary spends, may affect the business/retail sales volumes. Since
the Company operates in premium and luxury watch category, the demand is reasonably inelastic to changes in price. However, the
Company continually monitors and compares prices of its products in other developed markets as its customers tend to compare
prices across markets. In the event that prices deviate significantly unfavourably from the markets, the Company negotiates with
its vendor for change of prices. The Company also manages the risk by offering judicious product discounts to retail customers to
sustain volumes. The Company negotiates with its vendors for purchase price rebates such that the rebates substantially absorb the
product discounts offered to the retail customers. This helps the Company protect itself from significant product margin losses.

b) Interest rate risk

Interest rate sensitivity analysis

The entity has no borrowings as of the reporting date. Consequently, changes in market interest rates do not have a direct impact
on the profit or loss, and the interest rate risk is considered minimal”

c) Currency risk

The Company is exposed to currency risk to the extent that there is mismatch between the currencies in which purchases are
denominated and the functional currency of the Company. Currencies in the which the Company is exposed to risk are CHF, USD,
AED, SGD and EUR. The Company evaluates this risk on a regular basis and appropriate risk mitigating steps are taken, including
but not limited, entering into forward contracts.

Exposure to currency risk

The summary quantitative data about the Company's exposure to currency risk as reported to the management of the Company
is as follows :

33. Capital Management
Risk management

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business. The management monitors the return on capital. The Company monitors capital using a ratio of ‘adjusted net
debt' to ‘total equity'. For this purpose, adjusted net debt is defined as total borrowings including lease liabilities and trade payables net of
cash and cash equivalents. Equity comprises all components of equity (as shown in the Balance Sheet). The Company always tries to minimize
its adjusted net debt to equity ratio.

II. Defined benefit plan - Gratuity

The employees' gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation
is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The Company made annual
contributions to the LIC of India of an amount advised by the LIC.

The above defined benefit plan exposes the Company to following risks:

Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation
will tend to increase.

Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement.
The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase,
discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short
career employee typically costs less per year as compared to a long service employee.

The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising
from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous periods. The funds
are managed by specialised team of Life Insurance Corporation of India.

a) Funding

Gratuity is a partially funded benefit plan for qualifying employees. Partial funded and plan assets are managed by LIC. The assets managed
are highly liquid in nature and the Company does not expect any significant liquidity risks.

III. Defined contribution plans

The Company makes contribution, determined as a percentage of employee salaries, in respect of qualifying employees towards Provident
fund, which is a defined contribution plan. The Company has no obligation other than to make the specified contributions. The Company has
recognised H337.96 during the period (March 31, 2025: H268.98) as expense towards contribution to these plans.

36. Leases

A. Company as a lessee

The Company has lease contracts for various retail stores and furniture to be used for its operations. The leases generally have lease terms 2 - 10
years for building and 4 - 10 years for furniture. The Company's obligations under its leases are secured by the lessor's title to the leased assets.
The Company is restricted from assigning or sub leasing the leased assets.

The Company has certain leases with lease terms of 12 months or less. The Company applies the ‘short-term lease' recognition exemptions
for these leases.

Notes:

1 The Company's principal related parties consist of KDDL Limited, its subsidiaries and key managerial personnel. The Company's material
related party transactions and outstanding balances are with related parties with whom the Company routinely enters into transactions
in the ordinary course of business.

2 Key Managerial Personnel are entitled to post-employment benefits and other long term employee benefits recognised as per Ind AS 19
‘- ‘Employee Benefits' in the financial statements. As these employees benefits are lump sum amounts provided on the basis of actuarial
valuation the same is not included above.

3 All transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions and within the
ordinary course of business.

2. Purchases of stock-in-trade include transactions amounting to H 2,068.74 (March 31,2025: H 915.31) from Silvercity Brands AG.

3. Advertisement and sales promotion include transaction amounting to H 552.60 (March 31, 2025: H 510.17) with Cognition Digital LLP.

4. Recovery of expenses incurred includes transactions amounting to H 392.28 (March 31, 2025: H 283.94) from Silvercity Brands AG,
H 200.55 (March 31,2025: 140.78) from Cognition Digital LLP, H 73.92 (March 31,2025: H54.38) from Pasadena Retail Private Limited, H
16.50 from Ficus Trading LLC and H 67.51 (March 31,2025: H 23.48) from Ethos Lifestyle Pvt. Ltd.

5. During the year ended March 31, 2025, guarantees given by the company to Pasadena Retail Private Limited

6. Investment in subsidiary / Joint venture include transaction amounting to H 69.87 in Ficus Trading LLC and H 5.01 in Micron Watch Service
Pvt. Ltd. (March 31, 2025: H 951.66 with Silvercity Brands AG and H 500 with Ethos Lifestyle Private Limited).

7. During the March 31, 2026, Sale of goods includes transactions amounting to H 2,315.01 to Ethos Lifestyle Pvt. Limited for lifestyle
products (Brands: Rimowa and Messika)

8. Share capital and share premium proceeds from rights issue issued during the year ended March 31, 2026

9. Share application money for purchase of equity shares in Ethos Lifestyle Pvt. Ltd. given to individual belongs to promoter group.

* Sale of property, plant and equipment if H 573.72 to Ethos Lifestyle Pvt Ltd

** Rent income includes H 1.20 (March 31, 2025: H 1.20) from Dream Digital Technology Private Limited, H 0.06 from Micron Watch Services
Private Limited, H 12.00 (March 31,2026: 12.00) from Cognition Digital LLP and H 0.50 from Ethos Lifestyle Pvt Ltd.

*** Purchase of property, plant and equipment and intangible assets of H 7.68 from Silvercity Brands AG

^AA Rent expenses includes H 27.10 to KDDL Limited (March 31, 2025: H 31,41, H 13.91 to Pylania SA and H 13.62 (March 31, 2025:

H 13.23) to Saboo Housing Projects LLP

38. Segment information
Operating segments

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses,
including revenues and expenses that relate to transactions with any of the Company's other components, and for which discrete financial
information is available.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker of the
Company. As the chief operating decision maker of the Company assess the financial performances and position of the Company as a whole
and makes strategic decision, the management considers retail trading of premium and luxury watches, accessories and other luxury items
and including related after sale services as a single operating segment as per Ind AS 108, hence separate segment disclosure, have not
been furnished.

Information about major customers

There are no revenues from transactions with a single external customer amounting to 10% or more of an entity's revenues during the current
and previous year.

Information about major geographies

The Company primarily operates in India only.

39. Corporate Social Responsibility

In light of Section 135 of the Companies Act, 2013, the Company has incurred expenses on Corporate Social Responsibility (CSR) aggregating
to H 220.00 (March 31,2025: Rs 147.41) for CSR activities carried out during the current year.

42. During year ended March 31,2026, the Government of India has notified on November 21,2025, the four Labour Codes - the Code on Wages,
2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions
Code, 2020 consolidating 29 existing labour laws. The Ministry of Labour & Employment published draft Central rules and FAQs to enable
assessment of the financial impact due to changes in regulations.

The Company has assessed the incremental impact of these changes amounting to Rs 171.58 towards gratuity , on the basis of the best
information available, consistent with the guidance provided by the Institute of Chartered Accountants of India (ICAI).

Considering the materiality and regulatory-driven, non-recurring nature of this impact, the company has presented such incremental impact
under “Exceptional Items” for the period ended March 31, 2026.

The Company continues to monitor the finalisation of central/ state rules and clarifications from the government on other aspects of the
Labour Codes and would provide the appropriate accounting effect on the basis of such developments as needed.

* Ratio numerator and denominator

a. Current ratio = Current assets / Current liabilities

b. Debt Equity Ratio = Total debt / shareholder's equity

c. Debt service coverage ratio = Earnings available for debt service (Net profit before taxes Non-cash operating expenses Finance cost) /
Debt Service (Interest & Lease payments Principal repayments)

d. Return on equity ratio = Net profit / Average shareholder's equity

e. Inventory Turnover ratio = Cost of goods sold / Average inventory

f. Trade receivables turnover ratio = Net sales (Net sales = Total sales - sales return) / Average trade receivable

g. Trade payables turnover ratio = Net purchase (Gross purchases - purchase return) / Average trade payable

h. Net capital turnover ratio = Net Sales (Net sales = Total sales - sales return) / Working capital (Current assets - Current liabilities)

i. Net profit ratio = Net profit after tax / Net Sale (Net sales = Total sales - sales return)

j. Return on capital employed = Earnings before interest and taxes / Capital employed (Capital employed = total equity total debt)

k. Return on investment = Income on investments / Average investment
** Explanation for variance in ratios

a. Debt equity ratio - The debt-equity ratio decreased from 0.28 to 0.21 due to infusion of funds through rights issue proceeds during the
year ended March 31,2026, resulting in strengthening of the Company's equity base.

b. Return on equity ratio - The return on equity ratio decreased from 10.55% to 7.71% primarily due to increase in shareholders' equity
consequent to infusion of funds through the rights issue. Further, net profit declined compared to the previous year on account of adverse
foreign exchange fluctuations in global markets, which impacted the cost of imported materials. As a result, despite the increase in equity
base, profitability declined during the year.

c. Net profit ratio - The net profit ratio decreased from 7.85% to 5.89% mainly due to increase in operating and other costs, despite growth
in revenue and improved business performance during the current year.

d. Return on capital employed - ROCE decreased from 12.00% to 8.60% primarily on account of increase in capital employed following
fund infusion during the year, while the corresponding return generation remained moderate.

e. Return on investment - ROI decreased from 3.44% to 1.68% mainly due to lower returns earned on investments and increase in the
investment base during the current year.

44. During the year ended March 31, 2025, the Company invested INR 951.66 lakhs to acquire an additional 3,46,000 shares of CHF 1 each
in Silvercity Brands AG, from a new issuance of 12,20,000 shares by Silvercity Brands AG. Due to the increase in the overall share capital to
72,20,000 shares, the Company's ownership percentage was diluted from 35% to 33.88%.

45. Other Statutory Information

1) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding
any Benami property.

2) The Company does not have any transactions with companies struck off.

3) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

4) The Company has not traded or invested in Crypto currency or Virtual currency during the financial year.

5) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries)
with the understanding that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company
(Ultimate Beneficiaries); or

b) provide any guarantee, security or the like to or on behalf of the Ultimate beneficiaries;

6) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding
Party (Ultimate Beneficiaries) or;

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

7) The Company does not have any such Transaction which is not recorded in the books of accounts that has been surrendered or disclosed
as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant
provisions of the Income Tax Act, 1961

8) The Company is not declared as wilful defaulter by any bank or financial institution

46. During the previous year ended March 31, 2023, the Company had completed its Initial Public Offering (‘IPO') of 45,81,500 equity shares
of face value of H 10 each at an issue price of H878 per share (including securities premium of H868 per share). The issue was comprised
of fresh issue of 42,71,070 equity shares aggregating to H 37,500.00 and offer for sale of 3,10,430 equity shares aggregating to
H2,725.58. The equity shares of the Company were listed on BSE Limited and National Stock Exchange of India Limited on May 30, 2022.
Consequent to allotment of fresh issue, the paid-up equity share capital of the Company stands increased from H1,907.82 consisting of
1,90,78,163 equity shares of H10 each to H2,334.92 consisting of 2,33,49,233 Equity Shares of H10 each.

*Amount of H3,609.87 was original proposed in offer document as part of general corporate purpose has been increased by H348.48 on
account of saving in offer expenses.

“There is no outstanding unutilized proceeds as on 31st March 2026, and the balance in monitoring account stands Nil.

47. During the previous year, the Company has issued 11,31,210 equity shares of face value of H 10 each at an issue price of H 1,547 per share
(including securities premium of H 1,537 per share) aggregating to H 17,499.82 under Qualified Institutions Placement (‘QIP').

Consequent to allotment of aforesaid equity shares on November 3, 2023, the paid-up equity share capital of the Company stands increased
from H 2,334.92 consisting of 2,33,49,233 Equity Shares of H 10 each to H 2,448.04 consisting of 2,44,80,443 Equity Shares of H 10 each.

48. During the year ended March 31, 2026, the Company completed its rights issue of 22,77,250 equity shares of face value of H 10 each at an
issue price of H 1,800 per share (including securities premium of H 1,790 per share) aggregating to H 40,990.50.

Consequent to allotment of fresh issue of equity shares on July 4, 2025, the paid-up equity share capital of the Company stands increased from
H 2,448.04 consisting of 2,44,80,443 Equity Shares of INR 10 each to H 2,675.77 consisting of 2,67,57,693 Equity Shares of H 10 each.

The total offer expenses in relation to the fresh issue were H 379.02 (excluding taxes). The utilization of right issue proceeds from fresh issue
(net of Right issue related expense of H368.49) is summarized below:
** Out of the estimated expenses of Rs 379.02, the Company has utilized Rs 368.49 towards issue related expenses till the reported quarter and
the balance of Rs 10.53 is lying in the Monitoring Agency Account maintained with HDFC Bank.

# The unutilised proceeds as on March 31, 2026 have been temporarily invested in deposits with scheduled banks and kept in current account
with monitoring agency bank

49. The Company has incorporated a Wholly Owned Subsidiary , namely Ethos Lifestyle Private Limited (formerly knows as RF Brands Private
Limited) on February 02, 2024 in accordance with the provisions of Companies Act, 2013 read with rules made thereunder.

During the year ended March 31,2025, the Company has invested an amount of Rs 500 (March 31,2024: 100) in its paid up share capital by
subscribing to 50,00,000 equity shares of H 10 each.

During the year ended March 31, 2026, There has been a change in the shareholding of Ethos Lifestyle Private Limited (formerly RF Brands
Private Limited), a wholly owned subsidiary of the Company.

A. Consequent to a further allotment of shares by way of preferential issue by Ethos Lifestyle Private Limited, the Company's shareholding
has been diluted from 100% to 95%. The transaction involves issuance of equity shares by Ethos Lifestyle Private Limited to individuals
belonging to the Promoter and Promoter Group of Ethos Limited. Accordingly, Ethos Lifestyle Private Limited ceases to be a wholly owned
subsidiary of the Company with effect from July 16, 2025.

B. Further on August 13, 2025, consequent to fund raising of H 17,950 by way of preferential issue by Ethos Lifestyle Private Limited to
identified investors not related to / belonging to the Promoters and Promoter Group of Ethos Limited, the Company's shareholding has
been diluted from 95.00% to 75.05%. Ethos Lifestyle Private Limited continues to be a subsidiary of the Company."

50. During the year ended March 26, the Company has incorporated a Wholly Owned Subsidiary 6, 2025 in Dubai, United Arab Emirates, having
License Number: 1474470 and Commercial Registration Number: 2538436 Issued by Department of Economy and Tourism (DET), Dubai.
Ethos Limited infused INR 69.87 (AED 300,000) towards initial paid-up capital in Ficus Trading LLC (300 shares of AED 1000 each) on June 16,
2025. The Company will engage in trading of watches, clocks, and their spare parts.

51. During the year ended March 26, the Company has incorporated Micron Watch Services Private Limited , a subsidiary of Ethos Limited, on
22nd August 2025 with Corporate Identification Number (CIN) U95294HR2025PTC135383 under the jurisdiction of the laws of India. The
registered office of the Company is situated at 359, Udyog Vihar, Phase-II, DLF QE, Gurgaon, Haryana, India 122002. The C select Indian cities,
focusing on watch service and repair. Ethos Limited owned 50,100 shares of H 10 each out of total share capital of 1,00,000 shares of H 10 each.

52. “The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail
(edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the accounting software.
Further, during the course of our audit, we did not identify any instance of the audit trail feature having been tampered with. Additionally, the
audit trail has been preserved by the Company in accordance with the applicable statutory record-retention requirements.”

53. There are no significant events after reporting date which need to be disclosed.