* Cash outflows related to disputed tax matters are determinable only on outcome of the pending cases at various forums/authorities. The potential undiscounted amount of total payments for taxes that the Company may be required to make if there was an adverse decision related to these disputed demands of regulators are as stated above.

** The Supreme Court of India vide order passed in November 2016, upheld the constitutional validity of entry tax and directed the Company to file fresh appeal before the High Court to decide other matters related to levy of entry tax in the state of Haryana. The matter is pending before the Punjab & Haryana High Court. However, the principal liability amounting to H46.80 crores for entry tax has been disclosed in note no.18.

*** The Company along with other plot allottees has received a demand notice from Haryana State Industrial & Infrastructure Development Corporation (‘HSIIDC’) towards enhanced cost for the industrial plots allotted to the Company.

Based on the Company's own assessment and advice given by its legal counsel, the Company has a good case in the above cases. Pending final disposal of the matters before the appropriate forum, the same have been disclosed as contingent liability.

The lawsuits in respect of certain intellectual property rights and other laws / matter are pending in courts / forums. The proceedings are going on before appropriate authorities and the ultimate outcome of the matter cannot presently be determined. In the opinion of management the amount involved is not material.

Risk Exposure

Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows :

Interest Rate Risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of liability.

Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to non availability of enough cash / cash equivalents to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Asset Liability Mismatch or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities / fall in interest rate.

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on investment.

Note No. 34: Disclosure on Employee Share Based Payment

Disclosure is hereby given in pursuant to Ind AS 102 “Share Based Payment”.

RFL Employee Stock Option Plan 2014 (hereinafter referred to as the “ESOP 2014” / “The Plan”), was approved by the shareholders through postal ballot on August 5, 2014. The plan entitles the permanent employees, existing and future, including the Whole Time Director (but excluding the Independent Directors and Promoter Directors) of the Company to exercise the option granted for purchase of equity shares in the Company at the exercise price i.e. the latest available closing price, prior to the date of meeting of the Board / Nomination & Remuneration Committee, in which options are granted subject to compliance with vesting conditions.

Note No. 38: Financial Risk Management

Financial risk management is an ongoing process within the Company. The Company has a robust risk management framework to identify, monitor, mitigate and minimise risks arising from financial instruments.

The Company's financial liabilities other than derivative instruments comprise of borrowings, trade payables, lease liabilities and other financial liabilities. The main purpose of these financial liabilities is to finance the Company's operations.

The Company's financial assets include investments, balances with banks, cash and cash equivalents, trade receivables, security deposits and other financial assets that are derived directly from its operations.

The Company's financial risk management is an integral part of planning and execution of its business strategies.

Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily, trade receivables, balances with banks including cash and cash equivalents and from its investing activities, derivative instruments.

Management of Credit Risk

Concentration of credit risk with respect to trade receivables is limited, due to the customer base being large across all regions. All trade receivables are reviewed and assessed at every reporting period. The Company has adopted a policy of only dealing with creditworthy counterparties, therefore the Company does not expect any material risk on this account.

Historical experience of collecting receivables of the Company is supported by low level of past defaults and hence the credit risk is perceived to be low.

Credit risk arising from balances with banks, including cash and cash equivalents, investment in mutual funds, perpetual bonds & non-convertible debentures and derivative instruments is limited because the counterparties are banks / mutual funds / corporates with high credit ratings.

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's main source of liquidity is cash and cash equivalents and the cash flows that are generated from operations. The Company's approach to manage liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. The Company manages liquidity risk by maintaining adequate reserves, continuously monitoring forecast with actual cash flows and matching the maturity profiles of the financial assets and liabilities.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market prices. Market risk comprises of currency risk, interest rate risk and other price risk, such as equity price risk and commodity price risk. Financial instruments affected by market risk includes borrowings, trade payables and Investments etc.

Currency Risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities i.e. import of materials, capital items and export of finished goods, when revenue or expense is denominated in a foreign currency.

Exposure to Currency Risk

The Company uses foreign exchange forward contracts to mitigate foreign exchange related risk exposures. The Company's exposure to unhedged foreign currency risk as at March 31, 2025 and March 31, 2024 has been disclosed in note no. 36.

The Company's unhedged foreign currency exposure denominated in EUR, CAD, QAR and AED are insignificant, hence sensitivity analysis has not been disclosed.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is mainly exposed to interest rate risk due to its variable interest rate borrowings. The interest rate risk arises due to uncertainties about the future market interest rate of these borrowings.

Exposure to Interest Rate Risk

As at March 31, 2025, the exposure to interest rate risk due to variable interest rate borrowings amounted to Nil (previous year H18.54 crores).

Price Risk

The Company's exposure to price risk arises from investment in mutual funds, bonds & non-convertible debentures and equity instruments held and classified as FVTPL or FVTOCI. To manage the price risk arising from investments, the Company diversifies its portfolio of assets with banks / mutual funds / corporates with high credit ratings.

The Company's unquoted equity instruments are susceptible to market price risk arising from uncertainties about future value of the investment. The investment in unquoted equity instruments is not significant, hence sensitivity analysis has not been disclosed.

The following table demonstrate the sensitivity to a reasonably possible change in prices of investment in mutual funds, bonds & non-convertible debentures with all other variables held constant. The impact on the Company's profit before tax due to changes in the prices of investments is given below : (H in Crore)

The key raw materials used in the manufacturing of footwear are natural / synthetic rubber, EVA, PU. Price volatility of these commodities depend mainly on demand and supply, fluctuation in the price of crude oil and it's derivatives. To mitigate price risk and availability issues, the Company is taking several pro-active initiatives like continuously monitoring the price trend of key materials in global / domestic markets by subscribing to various commodity reports, development of new vendors and alternate material for better price competitiveness and quality sustainability / improvement etc.

Note No. 39: Capital Management

Capital includes equity share capital and other equity attributable to the equity holders of the Company. The primary objective of the Company's capital management is to ensure that it maintains an optimal capital structure and maximise the shareholder's value. The Company has complied with those covenants throughout the reporting period.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions to meet requirements of the financial covenants. To maintain or adjust the capital structure, the Company may review the dividend payment to shareholders, return capital to shareholders or issue new shares.

Fair value of financial assets and liabilities is normally determined by references to the transaction price or market price. If the fair value is not reliably determinable, the Company determines the fair value using valuation techniques that are appropriate in the circumstances and for which sufficient data are available, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

The following section describes the valuation techniques used and key inputs for fair valuation :

a. Foreign exchange forward contracts are valued using market observable inputs such as foreign exchange spot rates and forward rates at the end of reporting period.

b. Fair value of mutual funds are at published net asset value (NAV).

c. The fair value of perpetual bonds / non-convertible debentures are determined based on prevailing yield to discount future cash flows.

d. Commercial Paper is valued using the effective interest rate method.

e. Unquoted equity instruments where most recent information to measure fair value is insufficient, cost has been considered as best estimate of fair value.

f. The carrying amount of other financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

Fair Value Hierarchy

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial

instruments into the three levels prescribed as per Ind AS 113 “Fair Value Measurement”.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement

date.

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

Company implements its CSR activities through partner organisations registered with Ministry of Corporate Affairs (MCA). Company has a vision of ensuring sustained human development of the most deprived communities primarily under thematic areas viz. Education, Health & Hygiene, Skill Development and Environment Conservation.

There is no transaction with related party in relation to CSR expenditure as per Ind AS 24 “Related Party Disclosures”.

Nature of CSR activities

Short Term Project: Remedial Education Project, in Delhi is undertaken as a short term initiative through which government school students are being supported with remedial classes.

Long Term Projects: In partnership with the Samagra Shiksha of Uttarakhand State, the company continues to focus on its flagship initiative the ‘Parivartan Model School Project', which aims to build/provide the equitable opportunities to the students studying in the government schools of rural areas. As of now a total of 104 government primary, upper primary, and higher secondary schools located in the Khanpur and Laksar blocks of Haridwar district, Uttarakhand are being covered. The emphasis is on two prime areas; one is the renovation/new construction of the school building/facilities and second is capacity building & skill development of stakeholders like teachers, students, school management committee (SMC) members, parents, and community as well.

Company also focuses over the skilling the youth with the ‘Skill Development Project' in Delhi with traits like customer service, front desk, retail sales, logistic support, microfinance & customer relationship management (CRM) voice and non-voice with placement assistant.

Under the thematic area of health, company is implementing projects like ‘Mobile Health Unit' (MHU) and project ‘Nayan. The MHU is providing the basic primary health care facilities to the residents of eleven villages near Bhiwadi and project Nayan is focusing over the preventive and corrective procedures related to the avoidable blindness covering the risk population residing in 189 villages including screenings of 281 government schools of Tijara Block in Khairthal district of Rajasthan.

The company understands the need of the hour and environment conservation projects are focused to mitigate the impacts of global warming, climate change and loss of biodiversity. In coordination with the ‘Forest Department' and ‘Watershed Development & Soil Conservation Department' of Alwar District Rajasthan, plantation of 50,000 saplings at one site, and construction of 2 Anicuts/check dams are being done in the Thanagazhi block of Alwar district. Apart from this plantation on the road dividers at Bhiwadi, Khairthal Rajasthan and green belt area at Jhajjar district of Haryana are under the maintenance phase.

Reasons for shortfall : Company is on track in spending the allocated funds towards the long term projects envisaged for the year. The amount of H4.84 crores has been transferred to unspent CSR account on April 29, 2025.

The Board of Directors at its meeting held on May 9, 2025 have recommended final dividend at the rate of H3.00 per share of face value of HI/- each for the approval of shareholders aggregating to H74.68 crores for the year ended March 31, 2025.

There are no projects where activity has been suspended.

b. Details of benami property held

Company does not hold any benami property. No proceedings have been initiated or pending against the Company for holding any benami property under Prohibition of Benami Property Transactions Act,1988 and the rules made thereunder.

c. Borrowings secured against current assets

Quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of accounts.

d. Wilful defaulter

The Company is not declared wilful defaulter by any bank in accordance with the guidelines on wilful defaulters issued by the RBI.

e. Relationship with struck off Companies

The Company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013. This is determined to the extent such parties have been identified on the basis of information available with the Company.

f. Registration of charges or satisfaction with Registrar of Companies (ROC)

The Company has registered all charges or satisfaction with Registrar of Companies (ROC) within the statutory period.

g. Compliance with number of layers of Company

The number of layers prescribed under clause (87) section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017 is not applicable to the Company.

i. Compliance with approved Scheme(s) of Arrangements

During the year, no scheme of arrangements has been approved by the competent authority in terms of sections 230 to 237 of the Companies Act, 2013.

j. Utilisation of borrowed funds and share premium

The Company has not advanced or loaned or invested funds to any other persons (intermediaries) with the understanding that the intermediary shall directly or indirectly lend or invest in other persons or provide any guarantee in any manner whatsoever on behalf of the Company (ultimate beneficiary).

The Company has also not received any fund from any persons with the understanding that the Company shall directly lend or invest or provide any guarantee to any other persons on behalf of the funding party.

Note No. 52: Undisclosed Income

Company does not have any transaction which are 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.

Note No. 53: Details of crypto currency or virtual currency

Company has not traded or invested in crypto currency or virtual currency during the year.

Note No. 54: Audit trail

As proviso to rule 3(1) of Companies (Accounts) Rules, 2014 (as amended), the Company is using accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility in terms of laid down requirements along with change log management and the same has operated throughout the financial year including previous year for all relevant transactions recorded in the software.