Accounting Policies of Redtape Ltd. Company

Mar 31, 2025

2) (i) Material accounting policies

I) Statement of compliance

These standalone financial statements have
been prepared & comply in all material aspects
with Indian Accounting Standards (“Ind AS”)
notified under section 133 of the Companies
Act, 2013 read with the Companies (Indian
Accounting Standards) Rules, 2015, as
amended & other relevant provisions of the Act.

II) Basis of preparation of standalone financial
statements

These standalone financial statements are
prepared under the historical cost convention
on the accrual basis except for certain financial
instruments which are measured at fair
values at the end of each reporting period, as
explained in the accounting policies below. The
Ind AS are prescribed under Section 133 of the
Act read with Rule 3 of the Companies (Indian
Accounting Standards) Rule 2015 and relevant
amendments rules issued thereafter.

Historical cost is generally based on the fair
value of the consideration given in exchange
for goods and services.

Fair value is the price that would be received
to sell an asset or paid to transfer a liability
in an ordinarily transactions between market
participants at the measurement date.

III) Functional and presentation currency

Items included in the standalone financial
statements of the Company are measured
using the currency of the primary economic

environment in which the Company operates
(“functional currency”). The standalone
financial statements are presented in Indian
Rupees O, which is the functional currency of
the Company.

IV) Use of estimates and judgements

The preparation of the standalone financial
statements requires the Management to make
certain estimates, judgments and assumptions.
These estimates, judgments and assumptions
affect the application of accounting policies and
the reported amounts of assets and liabilities,
the disclosures of contingent assets and
liabilities at the date of the standalone financial
statements and reported amounts of revenues
and expenses during the period. The estimates
and associated assumptions are based on
historical experience and other factors that
are considered to be relevant. Accounting
estimates could change from period to period.
Actual results may differ from these estimates.

This note provides an overview of the areas
that involved a higher degree of judgment or
complexity and of items which are more likely
to be materially adjusted due to estimates and
assumptions turning out to be different than
those originally assessed. Detailed information
about each of these estimates and judgments
is included in the relevant notes together with
information about the basis of calculation
for each affected line item in the standalone
financial statements.

V) Property, plant & equipment

(i) Freehold Land is carried at historical cost.
All other items of Property, Plant and
Equipment of the Company are valued at
cost of acquisition or construction net of
recoverable taxes, trade discounts and
rebates less accumulated depreciation
and impairment loss, if any. The cost of
fixed assets includes purchase price,
borrowing cost of Capitalization allocated
/ apportioned direct and indirect expenses
incurred in relation to bringing the fixed
assets to its working condition for its
intended life.

Subsequent costs are included in the
asset''s carrying amount or recognized
as a separate asset, as appropriate, only
when it is probable that future economic

benefits associated with the item will flow
to the Company and the cost of the item
can be measured reliably. The carrying
amount of any component accounted
for as separate asset is derecognized
when replaced. All other repairs and
maintenance are charged to Profit or Loss
during the reporting period in which they
are incurred.

The Company identifies and determines
cost of each component/ part of the
asset separately, if the component/ part
has a cost which is significant to the total
cost of the asset and has useful life that
is materially different from that of the
remaining asset.

An item of property, plant and equipment
and any significant part initially recognized
is derecognized upon disposal or when
no future economic benefits are expected
from its use or disposal. Any gain or loss
arising on derecognition of the asset
(calculated as the difference between the
net disposal proceeds and the carrying
amount of the asset) is included in the
standalone statement of profit and loss
when the asset is derecognized.

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

(ii) Capital Work in Progress - All costs
attributable to the assets or incurred in
relation to the assets under completion
are aggregated under Capital work in
progress to be allocated to individual
assets on completion.

Advances paid towards the acquisition
of property, plant and equipment
outstanding at each balance sheet date
is classified as capital advances under
other non-current assets and the cost of
assets not put to use before such date are
disclosed under Capital work-in-progress

VI) Depreciation on Property, plant & equipment

Leasehold improvements at stores are

depreciated on straight line basis over the

period of lease or useful life (not exceeding 9

years), whichever is lower.

Depreciation on property, plant and equipment
has been provided on the straight-line method
as per the useful life prescribed in Schedule II
to the Companies Act, 2013, except intangible
assets & assets held under lease and in respect
of the following categories of asset, in whose
case the life of the assets has been assessed
as under based on technical advice, taking into
account the nature of the asset, the estimated
usage of the asset, the operating conditions
of the asset, past history of replacement and
maintenance support, etc.:

Depreciation is calculated on pro-rata basis
from the date of installation till the date the
asset sold or discarded.

The residual values are not more than 5%
of the original cost of the asset. The assets
residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each
reporting period.

VII) Intangible assets

Intangible assets acquired separately are
measured in initial recognition at cost. Following
initial recognition, intangibles, intangible assets
are carried at cost less any accumulated
amortization and accumulated impairment
losses.

The useful lives of intangible assets are
assessed as either finite or indefinite.

Intangible assets with finite lives are amortized
over the useful life and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortization period
and the amortization method for an intangible
asset with finite life are reviewed at least at the
end of each reporting period.

Expenditure incurred which are eligible for
capitalizations under intangible assets are
carried as intangible assets under development
till they are ready for their intended use.

Amortization

Intangible assets are amortized over their
respective individual estimated useful lives on
a straight-line basis, from the date that they

are available for use. Useful life of Computer
Software is estimated at six years.

VIII) Impairment of Non-financial assets

The company assess at each reporting date,
whether there is an indication that an asset
may be impaired. If any indication exists, or
when annual impairment testing for an asset
is required, the company estimate the asset’s
recoverable amount. An asset’s recoverable
amount is the higher of an assets or cash¬
generating units (CGU) fair value less costs
of disposal and its value in use. Recoverable
amount is determined for an individual asset,
unless the asset does not generate cash
inflows that are largely independent of those
from other assets or group of assets. When the
carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered
impaired and is written down to its recoverable
amount.

In assessing value in use, the estimated future
cash flows are discounted to their present
value using a pre -tax discount rate that
refects current market assessments of the
time value of money and the risks specific to
the asset. In determining fair value less costs
of disposal, recent market transactions are
taken into account. If no such transactions can
be identified, an appropriate valuation model
is used. These calculations are corroborated
by valuation multiples, quoted share prices for
publicly traded companies or other available
fair value indicators.

For assets excluding goodwill, an assessment
is made at each reporting date to determine
whether there is an indication that previously
recognized impairment losses no longer exist
or have decreased. If such indication exists,
the company estimates the asset''s or CGU''s
recoverable amount. A previously recognized
impairment loss is reversed only if there has
been a change in the assumptions used to
determine the asset''s recoverable amount
since the last impairment loss was recognized.
The reversal is limited so that the carrying of the
asset does not exceed its recoverable amount,
nor exceed the carrying amount that would
have been determined, net of depreciation, had
no impairment loss been recognized for the
asset in prior years. Such reversal is recognized
in the Statement of Profit or Loss unless the
asset is carried at a revalued amount, in which
case, the reversal is treated as an increase in
revaluation.

IX) Dividend to equity holders of the Company

The Company recognizes a liability to make
dividend distributions to equity holders of the
Company when the distribution is authorized
and the distribution is no longer at the discretion
of the Company. As per the corporate laws
in India a distribution is authorized when it is
approved by the shareholders, However, Board
of Directors of a Company may declare interim
dividend during any financial year out of the
surplus in statement of profit and loss and out
of the profits of the financial year in which such
interim dividend is sought to be declared. A
corresponding amount is recognized directly in
equity.

X) Leases

The Company’s lease assets largely contain
leases for buildings/showrooms taken for
warehouses and retail stores company also
has taken Land as lease from Development
Authorities. At inception of a contract, the
Company assesses whether a contract
contains a lease. If the contract conveys the
right to control the use of an identified asset for
a period of time in exchange for consideration,
then the contract is considered as lease.
Following factors are considered to determine
whether a contract conveys the right to control
the use of an identified asset:

(i) The contract encompasses the use of an
identified asset;

(ii) The Company has extensively all of the
economic benefits from use of the asset
during the period of the lease; and

(iii) The Company is in position to direct the
use of the asset.

On the beginning of the lease, except for leases
with a term of twelve months or less and low value
leases, the Company recognizes a right-of-use
asset (“ROU”) and a corresponding lease liability
for all lease provisions in which it is a lessee.

For leases with a term of twelve months or less
and low value leases, the Company recognizes
the lease payments as an operating expense on
a straight-line basis over the term of the lease.

Where the lease provisions include the options
to extend or terminate the lease before the
end of the lease term. ROU assets and lease
liabilities adjusted only when it is reasonably
certain that they will be exercised.

The ROU assets are initially accounted for at
cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or prior to the commencement date
of the lease plus any initial direct costs less
any lease incentives. Subsequently they
are measured at cost less accumulated
depreciation and impairment losses, if any.

ROU assets are depreciated from the
commencement date on a straight-line basis
over the shorter of the lease term and useful life
of the underlying ROU asset. Whenever events
or changes in circumstances designate that
their carrying amounts may not be recoverable
ROU assets are evaluated for recoverability.

Variable lease payments that depend on sales
are recognized in profit or loss in the period
which the condition that triggers those payment
occurs.

The lease liabilities at the commencement are
measured at amortized cost at the present
value of the future lease payments. The lease
payments are discounted using the interest
rate implicit in the lease or, if not readily
determinable, using the incremental borrowing
rates or risk-free rate as the case may be. Lease
liabilities are re-measured with a consistent
change to the related ROU asset if the Company
changes its appraisal about exercise of option
for extension or termination.

Lease liabilities and ROU assets have been
presented separately in the Balance Sheet
and lease payments have been classified as
financing cash flows.

XI) 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.

a. Initial recognition and measurement

All financial assets and liabilities are
recognized at fair value on initial
recognition.

Transaction cost in relation to financial
assets and financial liabilities other than
those carried at fair value through profit
or loss (FVTPL) are added to the fair
value on initial recognition. However, the
trade receivables that doesn’t contain
a significant financing component are

measured at transaction price.

Transaction cost that are directly
attributable to the acquisition or issue
of financial assets and financial liabilities
that are carried at fair value through profit
or loss are immediately recognized in the
statement of profit or loss.

b. Subsequent measurement

- Non-derivative financial instruments

(i) Financial assets carried at
amortized cost

A f nancial asset is
subsequently measured at

amortized cost if it is held
within a business model
whose objective is to hold
the asset in order to collect
contractual cash f ows and
the contractual terms of the

financial asset give rise on

specified dates to cash flows
that are solely payments of
principal and interest on the
principal amount outstanding.

(ii) Financial assets at fair value
through other comprehensive
income

A f nancial asset is
subsequently measured
at fair value through other
comprehensive income if
it is held within a business
model whose objective is
achieved by both collecting
contractual cash f ows and
selling financial assets and
the contractual terms of the
financial asset give rise on
specified dates to cash flows
that are solely payments of
principal and interest on the
principal amount outstanding.

(iii) Financial assets at fair value
through profit or loss

A financial asset which is not
classified in any of the above
categories is subsequently
measured at fair value through
profit or loss.

(iv) Financial liabilities

The financial liabilities are
subsequently carried at
amortized cost using the
effective interest method.
For trade and other payables
maturing within one year from
the balance sheet date, the
carrying amounts approximate
fair value due to the short
maturity of these instruments.

- 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 recognized by an
acquirer in a business combination
to which Ind AS103 (Business
Combinations) applies are classified
as at FVTPL. The classification is
made on initial recognition and is
irrevocable.

If the company decides to classify
an equity instrument as at FVTOCI,
then all fair value changes on the
instrument, excluding dividends, are
recognized in the OCI. There is no
recycling of the amounts from OCI
to P&L, even on sale of investment.
However, the company may transfer
the cumulative gain or loss within
equity.

Equity instruments included within
the FVTPL category are measured
at fair value with all changes
recognized in the P&L.

- Financial assets or financial liability at
fair value through profit or loss

This category has financial assets or
liabilities which are not designated as

hedges.

Although the Company believes that
these derivatives constitute hedges from
an economic perspective, they may not
qualify for hedge accounting under Ind AS
109, Financial Instruments. Any derivative
that is either not designated a hedge, or is
so designated but is ineffective as per Ind
AS 109, is categorized as a financial asset
or financial liability, at fair value through
profit or loss.

Derivatives not designated as hedges
are recognized initially at fair value
and attributable transaction costs are
recognized in net profit in the statement of
profit and loss when incurred. Subsequent
to initial recognition, these derivatives are
measured at fair value through profit or
loss and the resulting exchange gains
or losses are included in other income.
Assets/liabilities in this category are
presented as current assets/current
liabilities if they are either held for trading
or are expected to be realized within 12
months after the balance sheet date.

- Derivative financial instruments and
hedge accounting

In the ordinary course of business, the
Company uses certain derivative financial
instruments to reduce business risks
which arise from its exposure to foreign.
The instruments are confined principally
to forward foreign exchange contracts.
The instruments are employed as hedges
of transactions included in the standalone
financial statements or for highly probable
forecast transactions/firm contractual
commitments. These derivatives
contracts do not generally extend beyond
twelve months.

Derivatives are initially accounted for and
measured at fair value on the date the
derivative contract is entered into and
are subsequently remeasured to their fair
value at the end of each reporting period.

The Company adopts hedge accounting
for forward foreign exchange contracts
wherever possible. At inception of each
hedge, there is a formal, documented
designation of the hedging relationship.

This documentation includes, inter alia,
items such as identification of the hedged
item and transaction and nature of the
risk being hedged. At inception, each
hedge is expected to be highly effective
in achieving an offset of changes in fair
value or cash flows attributable to the
hedged risk. The effectiveness of hedge
instruments to reduce the risk associated
with the exposure being hedged is
assessed and measured at the inception
and on an ongoing basis. The ineffective
portion of designated hedges is
recognized immediately in the statement
of profit and loss.

When hedge accounting is applied:

- For fair value hedges of recognized
assets and liabilities, changes in
fair value of the hedged assets
and liabilities attributable to the
risk being hedged, are recognized
in the statement of profit and loss
and compensate for the effective
portion of symmetrical changes in
the fair value of the derivatives.

- For cash flow hedges, the effective
portion of changes in fair value
of derivatives that are designated
and qualify as cash flow hedges is
recognized in other comprehensive
income and accumulated under
the heading of cash f ow hedging
reserve. The gain or loss relating to
the ineffective portion is recognized
immediately in profit or loss.

Amounts previously recognized
in other comprehensive income
and accumulated in equity relating
to effective portion as described
above are reclassified to profit or
loss in the periods when the hedged
item affects profit or loss, in the
same line as the recognized hedged
item. However, when the hedged
forecast transaction results in the
recognition of a non- financial asset
or a non-financial liability, such
gains or losses are transferred from
equity (but not as a reclassification
adjustment) and included in the
initial measurement of the cost

of the non-f nancial asset or non¬
financial liability.

Hedge accounting is discontinued
when the hedging instrument expires
or is sold, terminated, or exercised,
or when it no longer qualifies for
hedge accounting. Any gain or loss
recognized in other comprehensive
income and accumulated in equity
at that time remains in equity and
is recognized when the forecast
transaction is ultimately recognized
in profit or loss. When a forecast
transaction is no longer expected to
occur, the gain or loss accumulated
in equity is recognized immediately
in profit or loss.

- Equity share capital

Equity shares

Equity shares issued by the
Company are classified as

equity. Incremental costs directly
attributable to the issuance of new
ordinary shares and share options
are recognized as a deduction from
equity, net of any tax effects.

De-recognition of financial

instruments

A financial asset is derecognized
when the contractual rights to the
cash f ows from the f nancial asset
expire or it transfers the financial
asset and the transfer qualifies for
De-recognition under Ind AS 109.

A financial liability is derecognized
when the obligation specified in the
contract is discharged or cancelled
or expires.

Fair Value of Measurement

Fair value is the price that would
be received to sell an asset or paid
to transfer a liability in an ordinarily
transactions between market
participants at the measurement
date.

Fair value measurement under Ind
AS are categorized as below based
on the degree to which the inputs

to the fair value measurements are
observable and the significance
of the inputs to the fair value
measurement in its entirety:

Level 1 inputs are quoted prices
(unadjusted) in active markets
for identical assets or liabilities
that the Company can access at
measurement date.

Level 2 inputs are inputs, other than
quoted prices included in level 1,
that are observable for the assets or
liability, either directly or indirectly and

Level 3 inputs are unobservable
inputs for the valuation of assets/
liabilities.

In case of financial instruments where
the carrying amount approximates
fair value due to the short maturity of
those instruments, carrying amount is
considered as fair value.

Offsetting financial instruments

Financial assets and financial
liabilities are offset and the net
amount is reported in the standalone
financial statement if there is a
currently enforceable legal right to
offset the recognized amounts and
there is an intention to settle on a
net basis, to realize the assets and
settle the liabilities simultaneously.

Dividend Income

Dividends are recognized in the
Statement of Profit and Loss only
when the right to receive payment
is established. Incomes from
investments are accounted on an
accrual basis.

Interest Income

Interest income is recognized on
time proportion basis taking in to
account the amount outstanding
and rate applicable.

XII) Impairment of financial assets

The Company measures the expected credit
loss associated with its assets based on
historical trend, industry practices and the

business environment in which the entity
operates or any other appropriate basis. The
impairment methodology applied depends on
whether there has been a significant increase in
credit risk.

The Company assesses at each date of balance
sheet whether a financial asset or a Company
of financial assets is impaired. Ind AS 109
requires expected credit losses to be measured
through a loss allowance. In determining the
allowances for doubtful trade receivables, the
Company has used a practical expedient by
computing the expected credit loss allowance
for trade receivables based on a provision
matrix. The provision matrix takes into account
historical credit loss experience and is adjusted
for forward looking information. The expected
credit loss allowance is based on the ageing
of the receivables that are due and allowance
rates used in the provision matrix. For all other
financial assets, expected credit losses are
measured at an amount equal to the 12-month
expected credit losses or at an amount equal
to the lifetime expected credit losses if the
credit risk on the financial asset has increased
significantly since initial recognition.

XIII) Borrowing and borrowing cost

Borrowings are initially recognized at fair value,
net of transaction cost incurred. Borrowings
are subsequently measured at amortized cost.
Any difference between the proceeds (net of
transaction cost) and the redemption amount
is recognized in profit or loss over the period
of the borrowings, using the effective interest
method. Fees paid on the established loan
facilities are recognized as transaction cost of
the loan, to the extent that it is probable that
some or all the facility will be drawn down.

Borrowings are classified as current liabilities
unless the Company has an unconditional
right to defer settlement of the liability for at
least 12 months after the reporting period.
Costs that are attributable to the acquisition,
construction or production of qualifying assets
are capitalized as part of cost of such assets,
all other Borrowing cost are charged to the
Statement of Profit & Loss. Borrowing costs
comprise of interest and other costs incurred in
connection with borrowing of funds.

XIV) Investments in subsidiaries, joint ventures
and associates

Investments in subsidiaries, joint ventures and
associates are recognized at cost as per Ind AS
27. Except where investments accounted for at
cost shall be accounted for in accordance with
Ind AS 105, Non-current Assets Held for Sale
and Discontinued Operations, when they are
classified as held for sale.

XV) Inventories

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

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

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

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

Goods in Process: At cost plus estimated value
addition/cost of conversion at each major stage
of production.

Net Realizable Value of inventory

The Company has defined policy for

provision on inventory based on obsolete,
damaged and slow-moving inventories. The
Company provides provision based on policy,
past experience, current trend and future
expectations of these materials depending on
the category of goods.

Provision on Inventory -

The company has defined policy for provision
on inventory for each of its business by
differentiating the inventory into core and non -
core (fashion) and sub categorized into finished
goods and raw materials. The company provides
provision based on policy, past experience,
current trend and future expectations of these
materials depending on the category of goods.

XVI) Foreign currency transactions

(i) Financial Instruments

Derivative financial instruments such as
forward contracts, option contracts and
cross currency swaps, to hedge its foreign
currency risks are initially recognized at
fair value on the date a derivative contract
is entered into and are subsequently re¬
measured at their fair value with changes
in fair value recognized in the Statement
of Profit and Loss in the period when they
arise.

(ii) Transactions and balances

Transactions in foreign currencies are
recognized at the prevailing exchange
rates on the transaction dates. Realized
gains and losses on settlement of foreign
currency transactions are recognized in
the Statement of Profit and Loss.

Monetary foreign currency assets and
liabilities at the year-end are translated at the
year-end exchange rates and the resultant
exchange differences are recognized in the
Statement of Profit and Loss.

XVII) Cash flow statement

The cash flow statement is prepared in
accordance with the Indian Accounting
Standard (Ind AS) - 7 “Statement of Cash
flows” using the indirect method for operating
activities.

XVIII)Revenue Recognition

(i) Revenue from sale of goods and
services

Revenue from contracts with customer
is recognized when control of goods are
transferred to the customer at an amount
that reflects the consideration entitled in
exchange for those goods or services, and
excludes taxes and levies collected on
behalf of the Government. In accordance
with Ind AS 115 on revenue and schedule
III of Companies Act, 2013, duties levy
like GST are not part of revenue.

Generally, control is transfer upon
shipment of goods to the customer or
when the goods are made available to
the customer, provided the transfer of
the title to the customer occurs and the
Company has not retained any significant
title of ownership or future obligations
with respect to the goods shipped.

Revenue is measured based on
the transaction price, which is the
consideration, adjusted for discounts,
price Concessions and incentives, if
any, as specified in the contract with the
customer. Revenue also excludes taxes
collected from customers.

The Company provides for discount and
sales return based on season wise, brand
wise and channel wise trend of previous
years. The Company reviews the trend at
regular intervals to ensure the applicability
of the same in the changing scenario, and
based on the management’s assessment
of market conditions.

For e-commerce sales, it is the Company’s
policy to sell its products to the end
customer with a right of return within 10
to 20 days. Therefore, a refund liability in
relation to expected returns (included in
other current liabilities- refund liabilities)
and a right to recover the returned goods
(included in other current assets) are
recognized for the products expected to
be returned. Past experience is used to
estimate such returns at the time of sale at
a portfolio level (expected value method).
Because the number of products returned
has been steady for years, it is highly

probable that a significant reversal in the
cumulative revenue recognized will not
occur. The validity of this assumption
and the estimated amount of returns are
reassessed at each reporting date.

Revenue from related party is recognized
based on transaction price which is at
arm’s length.

The Company does not expect to have
any contracts where the period between
the transfer of the promised goods or
services to the customer and payment
by the customer exceeds one year. As a
consequence, it does not adjust any of
the transaction prices for the time value
of money.

(ii) Export incentives

The revenue in respect of export benefits
is recognized on post export basis at the
rate at which the entitlements accrue.

(iii) Insurance and other claims

Insurance and other claims are recognized
when there exists no significant
uncertainty with regard to the amount to
be realized and the ultimate collection
thereof.

XIX) Employee benefits

a. Short-term obligations

Liabilities for wages and salaries, including
non- monetary benefits that are expected
to be settled wholly within 12 months
after the end of the period in which the
employees render the related service
are recognized in respect of employees’
services up to the end of the reporting
period and are measured at the amounts
expected to be paid when the liabilities
are settled.

b. Compensated absences

Compensated absences which are not
expected to occur within twelve months
after the end of the period in which the
employee renders the related services are
recognized as a liability at the Balance
Sheet date, the cost of providing benefit is
determined based on actuarial valuation
using projected unit credit method.

Actuarial gain /loss are recognized in the
statement of profit or loss in the period
in which they occur. Non accumulating
compensated absences are recognized in
the period, in which the absences occur.

c. Post-employment obligations

The Company operates the following
post- employment schemes:

(1) Defined benefit plans such as
gratuity; and

(2) Defined contribution plans such as
provident fund etc.

Gratuity

The liability recognized in the balance
sheet in respect of defined benefit gratuity
is the present value of the defined benefit
obligation at the end of the reporting
period. The defined benefit obligation is
calculated annually by actuaries using the
projected unit credit method.

The present value of the defined benefit
obligation is determined by discounting
the estimated future cash outflows by
reference to market yields at the end
of the reporting period on government
bonds that have terms approximating to
the terms of the related obligation.

The interest cost is calculated by applying
the discount rate to the net balance of the
defined benefit obligation. This cost is
included in employee benefit expense in
the Statement of Profit and Loss.

Re measurement gains and losses
arising from experience adjustments and
changes in actuarial assumptions are
recognized in the period in which they
occur, directly in other comprehensive
income. They are included in retained
earnings in the statement of changes in
equity and in the balance sheet.

Defined Contribution Plans

Defined Contribution Plans such as
Provident Fund etc., are charged to the
Statement of Profit and Loss as incurred
and deposited with the Government
Provident Fund Scheme.

Termination benefits

Termination benef ts are payable when
employment is terminated by the
Company before the normal retirement
date, or when an employee accepts
voluntary redundancy in exchange for
these benefits. The Company recognizes
termination benefits at the earlier of the
following dates: (a) when the Company
can no longer withdraw the offer of those
benefits; and (b) when the Company
recognizes costs for a restructuring that is
within the scope of Ind AS 37 and involves
the payment of terminations benefits. In
the case of an offer made to encourage
voluntary redundancy, the termination
benef ts are measured based on the
number of employees expected to accept
the offer. Benefits falling due more than
12 months after the end of the reporting
period are discounted to present value.

XX) Accounting for taxes on income

Income tax expense is recognized in net profit
in the Statement of Profit and Loss except to
the extent that it relates to items recognized
directly in equity, in which case it is recognized
in other comprehensive income

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

Deferred income tax is provided in full, using the
liability method on temporary differences arising
between the tax bases of assets and liabilities
and their carrying amount in the standalone
financial statements. Deferred income tax is
determined using tax rates (and laws) that have
been enacted or substantially enacted by the
end of the reporting period and are expected
to apply when the related deferred income tax
asset is realized, or the deferred income tax
liability is settled.

Deferred tax assets are recognized for all
deductible temporary differences and unused
tax losses, only if, it is probable that future
taxable amounts will be available to utilize
those temporary differences and losses.

Deferred tax assets and liabilities are offset
when there is a legally enforceable right to
offset current tax assets and liabilities and
when the deferred tax balances relate to the
same taxation authority. Current tax assets and
tax liabilities are off set where the Company has
a legally enforceable right to offset and intends
either to settle on a net basis, or to realize the
asset and settle the liability simultaneously.

Current and deferred tax is recognized in the
Statement of Profit and Loss, except to the
extent that it relates to items recognized in
other comprehensive income or directly in
equity. In this case, the tax is also recognized
in other comprehensive income or directly in
equity, respectively

XXI) Earnings per share

Basic earnings per equity share are computed
by dividing the net profit attributable after tax
to the equity holders of the Company by the
weighted average number of equity shares
outstanding during the period. Diluted earnings
per equity share are computed by dividing the
net prof t after tax attributable to the equity
holders of the Company by the weighted
average number of equity shares considered
for deriving basic earnings per equity share and
also the weighted average number of equity
shares that could have been issued upon
conversion of all dilutive potential equity shares.

The Dilutive potential equity shares are deemed
converted as of the beginning of the period,
unless issued at a later date. Dilutive potential
equity shares are determined independently for
each period presented.

---

Mar 31, 2024

1) Corporate information

REDTAPE Limited (‘The Company’) (CIN -L74101UP2021PLC156659) is a public limited company incorporated in India on 8^th Dec,2021 having its registered office located at Plot No. 08, Sector 90, Noida - 201301, Uttar Pradesh, India.

The Company is in the business of retail sale of Footwear, Garments & apparels and allied products and is also a manufacturer of footwear.

The Company shares are listed on the Bombay Stock Exchange and National Stock Exchange in India.

The standalone financial statements for the year ended March 31, 2024 are approved for issuance by Company’s Board of Directors on May 29, 2024.

2) (i) Material accounting policies

I) Statement of compliance

These standalone financial statements have been prepared & comply in all material aspects with Indian Accounting Standards (“Ind AS”) notified under section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended & other relevant provisions of the Act.

II) Basis of preparation of standalone financial statements

These standalone f nancial statements are prepared under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values at the end of each reporting period, as explained in the accounting policies below. The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rule 2015 and relevant amendments rules issued thereafter.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinarily transactions between market participants at the measurement date.

III) Functional and presentation currency

Items included in the standalone financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (“functional currency”). The standalone financial statements are presented in Indian Rupees O, which is the functional currency of the Company.

IV) Use of estimates and judgements

The preparation of the standalone financial statements requires the Management to make certain estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the standalone financial statements and reported amounts of revenues and expenses during the period. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Accounting estimates could change from period to period. Actual results may differ from these estimates.

This note provides an overview of the areas that involved a higher degree of judgment or complexity and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included in the relevant notes together with information about the basis of calculation for each affected line item in the standalone financial statements.

V) Property, plant & equipment

(i) Freehold Land is carried at historical cost. All other items of Property, Plant and Equipment of the Company are valued at cost of acquisition or construction net of recoverable taxes, trade discounts and rebates less accumulated depreciation and impairment loss, if any. The cost of fixed assets includes purchase price, borrowing cost of Capitalization allocated

/ apportioned direct and indirect expenses incurred in relation to bringing the fixed assets to its working condition for its intended life.

Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as separate asset is derecognized when replaced. All other repairs and maintenance are charged to Profit or Loss during the reporting period in which they are incurred.

The Company identifies and determines cost of each component/ part of the asset separately, if the component/ part has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset.

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the standalone statement of profit and loss when the asset is derecognized.

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

(ii) Capital Work in Progress - All costs attributable to the assets or incurred in relation to the assets under completion are aggregated under Capital work in progress to be allocated to individual assets on completion.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under Capital work-in-progress

VI) Intangible assets

Intangible assets acquired separately are measured in initial recognition at cost. Following initial recognition, intangibles, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with finite life are reviewed at least at the end of each reporting period.

Subsequent measurement (amortization)

The cost of capitalized software is amortized over a period of 5 years from the date its put to use.

The cost of usage rights is being amortized over the concession period in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such intangible assets till the end of concession period.

VII) Depreciation and Amortization

Leasehold improvements at stores are depreciated on straight line basis over the period of lease or useful life (not exceeding 9 years), whichever is lower.

Depreciation on property, plant and equipment has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except intangible assets, assets held under lease and in respect of the following categories of asset, in whose

case the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement and maintenance support, etc.:

Category	Useful Life
Plant and Machinery and Solar	LO CM O ¦*—> o
Power Plant	years

Depreciation is calculated on pro-rata basis from the date of installation till the date the asset sold or discarded.

The residual values are not more than 5% of the original cost of the asset. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

VIII) Impairment of Non-financial assets

The company assess at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the company estimate the asset’s recoverable amount. An asset’s recoverable amount is the higher of an assets or cashgenerating units (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre -tax discount rate that ref ects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, the company estimates the asset''s or CGU''s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the Statement of Profit or Loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as an increase in revaluation.

IX) Dividend to equity holders of the Company

The Company recognizes a liability to make dividend distributions to equity holders of the Company when the distribution is authorized and the distribution is no longer at the discretion of the Company. As per the corporate laws in India a distribution is authorized when it is approved by the shareholders, However, Board of Directors of a Company may declare interim dividend during any financial year out of the surplus in statement of profit and loss and out of the profits of the financial year in which such interim dividend is sought to be declared. A corresponding amount is recognized directly in equity.

X) Leases

The Company’s lease assets largely contain leases for buildings/showrooms taken for warehouses and retail stores company also has taken Land as lease from Development Authorities. At inception of a contract, the Company assesses whether a contract contains a lease. If the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration, then the contract is considered as lease. Following factors are considered to determine whether a contract conveys the right to control the use of an identified asset:

(i) The contract encompasses the use of an identified asset;

(ii) The Company has extensively all of the economic benefits from use of the asset during the period of the lease; and

(iii) The Company is in position to direct the use of the asset.

On the beginning of the lease, except for leases with a term of twelve months or less and low value leases, the Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease provisions in which it is a lessee.

For leases with a term of twelve months or less and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Where the lease provisions include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities adjusted only when it is reasonably certain that they will be exercised.

The ROU assets are initially accounted for at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. Subsequently they are measured at cost less accumulated depreciation and impairment losses, if any.

ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying ROU asset. Whenever events or changes in circumstances designate that their carrying amounts may not be recoverable ROU assets are evaluated for recoverability.

Variable lease payments that depend on sales are recognized in profit or loss in the period which the condition that triggers those payment occurs.

The lease liabilities at the commencement are measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates or risk-free rate as the case may be. Lease

liabilities are re-measured with a consistent change to the related ROU asset if the Company changes its appraisal about exercise of option for extension or termination.

Lease liabilities and ROU assets have been presented separately in the Balance Sheet and lease payments have been classif ed as financing cash flows.

XI) 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.

a. Initial recognition and measurement

All financial assets and liabilities are recognized at fair value on initial recognition.

Transaction cost in relation to financial assets and financial liabilities other than those carried at fair value through profit or loss (FVTPL) are added to the fair value on initial recognition. However, the trade receivables that doesn’t contain a significant financing component are measured at transaction price.

Transaction cost that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are carried at fair value through profit or loss are immediately recognized in the statement of profit or loss.

b. Subsequent measurement

- Non-derivative financial instruments

(i) Financial assets carried at

amortized cost

A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash f ows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(iii) Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories is subsequently measured at fair value through profit or loss.

(iv) Financial liabilities

The financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

- 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 recognized by an acquirer in a business combination to which Ind AS103 (Business Combinations) applies are classified as at FVTPL. The classification is made on initial recognition and is irrevocable.

If the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.

- Financial assets or financial liability at fair value through profit or loss

This category has financial assets or liabilities which are not designated as hedges.

Although the Company believes that these derivatives constitute hedges from an economic perspective, they may not qualify for hedge accounting under Ind AS 109, Financial Instruments. Any derivative that is either not designated a hedge, or is so designated but is ineffective as per Ind AS 109, is categorized as a financial asset or financial liability, at fair value through profit or loss.

Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in net profit in the statement of profit and loss when incurred. Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income. Assets/liabilities in this category are presented as current assets/current liabilities if they are either held for trading or are expected to be realized within 12 months after the balance sheet date.

- Derivative financial instruments and hedge accounting

In the ordinary course of business, the Company uses certain derivative financial instruments to reduce business risks which arise from its exposure to foreign. The instruments are confined principally to forward foreign exchange contracts. The instruments are employed as hedges of transactions included in the standalone financial statements or for highly probable forecast transactions/firm contractual commitments. These derivatives contracts do not generally extend beyond twelve months.

Derivatives are initially accounted for and measured at fair value on the date the derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period.

The Company adopts hedge accounting for forward foreign exchange contracts wherever possible. At inception of each hedge, there is a formal, documented designation of the hedging relationship. This documentation includes, inter alia, items such as identification of the hedged item and transaction and nature of the risk being hedged. At inception, each hedge is expected to be highly effective in achieving an offset of changes in fair value or cash flows attributable to the hedged risk. The effectiveness of hedge instruments to reduce the risk associated with the exposure being hedged is assessed and measured at the inception and on an ongoing basis. The ineffective portion of designated hedges is recognized immediately in the statement of profit and loss.

When hedge accounting is applied:

- For fair value hedges of recognized assets and liabilities, changes in fair value of the hedged assets and liabilities attributable to the risk being hedged, are recognized in the statement of profit and loss and compensate for the effective portion of symmetrical changes in the fair value of the derivatives.

- For cash flow hedges, the effective portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income and accumulated under the heading of cash f ow hedging reserve. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.

Amounts previously recognized in other comprehensive income and accumulated in equity relating to effective portion as described above are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognized hedged item. However, when the hedged forecast transaction results in the recognition of a non- financial asset or a non-financial liability, such gains or losses are transferred from equity (but not as a reclassification adjustment) and included in the initial measurement of the cost of the non-financial asset or non-financial liability.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognized in other comprehensive income and accumulated in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.

- Equity share capital

Equity shares

Equity shares issued by the Company are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.

De-recognition of financial instruments

A financial asset is derecognized when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for De-recognition under Ind AS 109.

A financial liability is derecognized when the obligation specified in the contract is discharged or cancelled or expires.

Fair Value of Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinarily transactions between market participants at the measurement date.

Fair value measurement under Ind AS are categorized as below based on the

degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety;

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at measurement date.

Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the assets or liability, either directly or indirectly and

Level 3 inputs are unobservable inputs for the valuation of assets/liabilities.

In case of financial instruments where the carrying amount approximates fair value due to the short maturity of those instruments, carrying amount is considered as fair value.

Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the standalone financial statement if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

Dividend Income

Dividends are recognized in the Statement of Profit and Loss only when the right to receive payment is established. Incomes from investments are accounted on an accrual basis.

Interest Income

Interest income is recognized on time proportion basis taking in to account the amount outstanding and rate applicable.

XII) Impairment of financial assets

The Company measures the expected credit loss associated with its assets based on historical trend, industry practices and the business environment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

The Company assesses at each date of balance sheet whether a financial asset or a Company of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. In determining the allowances for doubtful trade receivables, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and allowance rates used in the provision matrix. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses or at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

XIII) Borrowing and borrowing cost

Borrowings are initially recognized at fair value, net of transaction cost incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction cost) and the redemption amount is recognized in profit or loss over the period of the borrowings, using the effective interest method. Fees paid on the established loan facilities are recognized as transaction cost of the loan, to the extent that it is probable that some or all the facility will be drawn down.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of cost of such assets, all other Borrowing cost are charged to the Statement of Profit & Loss. Borrowing costs comprise of interest and other costs incurred in connection with borrowing of funds.

XIV) Investments in subsidiaries, joint ventures and associates

Investments in subsidiaries, joint ventures and associates are recognized at cost as per Ind AS 27. Except where investments accounted for at cost shall be accounted for in accordance with

ind AS 105, Non-current Assets Held for Sale and Discontinued Operations, when they are classified as held for sale.

XV) Inventories

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

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

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

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

Goods in Process: At cost plus estimated value addition/cost of conversion at each major stage of production.

Net Realizable Value of inventory

The Company has defined policy for provision on inventory based on obsolete, damaged and slow-moving inventories. The Company provides provision based on policy, past experience, current trend and future expectations of these materials depending on the category of goods.

Provision on Inventory -

The company has defined policy for provision on inventory for each of its business by differentiating the inventory into core and non -core (fashion) and sub categorized into finished goods and raw materials. The company provides provision based on policy, past experience, current trend and future expectations of these materials depending on the category of goods

XVI) Foreign currency transactions

(i) Financial Instruments

Derivative financial instruments such as forward contracts, option contracts and cross currency swaps, to hedge its foreign currency risks are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value with changes in fair value recognized in the Statement of Profit and Loss in the period when they arise.

(ii) Transactions and balances

Transactions in foreign currencies are recognized at the prevailing exchange rates on the transaction dates. Realized gains and losses on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss.

Monetary foreign currency assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognized in the Statement of Profit and Loss.

XVII) Cash flow statement

The cash flow statement is prepared in accordance with the indian Accounting Standard (ind AS) - 7 “Statement of Cash flows” using the indirect method for operating activities.

XVIII) Revenue Recognition

(i) Revenue from sale of goods and services

Revenue from contracts with customer is recognized when control of goods are transferred to the customer at an amount

that reflects the consideration entitled in exchange for those goods or services, and excludes taxes and levies collected on behalf of the Government. In accordance with Ind AS 115 on revenue and schedule III of Companies Act, 2013, duties levy like GST are not part of revenue.

Generally, control is transfer upon shipment of goods to the customer or when the goods are made available to the customer, provided the transfer of the title to the customer occurs and the Company has not retained any significant title of ownership or future obligations with respect to the goods shipped.

Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts, price Concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.

The Company provides for discount and sales return based on season wise, brand wise and channel wise trend of previous years. The Company reviews the trend at regular intervals to ensure the applicability of the same in the changing scenario, and based on the management’s assessment of market conditions.

For e-commerce sales, it is the Company’s policy to sell its products to the end customer with a right of return within 10 to 20 days. Therefore, a refund liability in relation to expected returns (included in other current liabilities- refund liabilities) and a right to recover the returned goods (included in other current assets) are recognized for the products expected to be returned. Past experience is used to estimate such returns at the time of sale at a portfolio level (expected value method). Because the number of products returned has been steady for years, it is highly probable that a significant reversal in the cumulative revenue recognized will not occur. The validity of this assumption and the estimated amount of returns are reassessed at each reporting date.

Revenue from related party is recognized based on transaction price which is at arm’s length.

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, it does not adjust any of the transaction prices for the time value of money.

(ii) Export incentives

The revenue in respect of export benefits is recognized on post export basis at the rate at which the entitlements accrue.

(iii) Insurance and other claims

Insurance and other claims are recognized when there exists no significant uncertainty with regard to the amount to be realized and the ultimate collection thereof.

XIX) Employee benefits

a. Short-term obligations

Liabilities for wages and salaries, including non- monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.

b. Compensated absences

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability at the Balance Sheet date, the cost of providing benefit is determined based on actuarial valuation using projected unit credit method. Actuarial gain /loss are recognized in the statement of profit or loss in the period in which they occur. Non accumulating compensated absences are recognized in the period, in which the absences occur.

c. Post-employment obligations

The Company operates the following post- employment schemes:

(1) Defined benefit plans such as gratuity; and

(2) Defined contribution plans such as provident fund etc.

Gratuity

The liability recognized in the balance sheet in respect of defined benefit gratuity is the present value of the defined benefit obligation at the end of the reporting period. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.

The interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation. This cost is included in employee benefit expense in the Statement of Profit and Loss.

Re measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Defined Contribution Plans

Defined Contribution Plans such as Provident Fund etc., are charged to the Statement of Profit and Loss as incurred and deposited with the Government Provident Fund Scheme.

Termination benefits

Termination benefits are payable when employment is terminated by the Company before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Company recognizes termination benefits at the earlier of the following dates: (a) when the Company can

no longer withdraw the offer of those benefits; and (b) when the Company recognizes costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of terminations benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

XX) Accounting for taxes on income

Income tax expense is recognized in net profit in the Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income

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

Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the standalone financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized, or the deferred income tax liability is settled.

Deferred tax assets are recognized for all deductible temporary differences and unused tax losses, only if, it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are off set where the Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Current and deferred tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively

XXI) Earnings per share

Basic earnings per equity share are computed by dividing the net profit attributable after tax to the equity holders of the Company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share are computed by dividing the net prof t after tax attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

The Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

XXII) Provisions, contingent liabilities and contingent assets

Provision:

Provision is recognized in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made.

Contingent Liabilities:

Wherever there is a possible obligation that arises from past events and whose existence will be conf rmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognized because

(a) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(b) The amount of the obligation cannot be

measured with sufficient reliability. Show cause notices are not considered as Contingent Liabilities unless converted into demand.

Contingent Asset:

Contingent asset is neither recognized nor disclosed in the financial statements.

XXIII) Government Grant

Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received, and the Company will comply with all attached conditions.

Government grants receivable as compensation for expenses or financial support are recognized in profit or loss of the period in which it becomes available.

Government grants relating to the purchase of property, plant and equipment are accounted for as deferred Income by crediting the same to a specific reserve and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.

The reserve to these Grants is diminished every year by a prorate portion of the depreciation of the assets, to amortize the grant overdue life of the assets. Where the Grants carry conditions of specific performance, the contingent aspect is disclosed in due notes to the accounts.

XXIV) Operating cycle for current and non-current classification

Operating cycle for the business activities of the company covers the duration of the specific product line/ service including the defect liability period wherever applicable and extends up to the realization of receivables within the agreed credit period normally applicable to the respective lines of business.

2) (ii) New and amended standards adopted by the Company

The Ministry of Corporate Affairs has vide notification dated 31 March 2023 notified Companies (Indian Accounting Standards) Amendment Rules, 2023 (the ‘Rules’) which

amends certain accounting standards, and are effective 1 April 2023. The Rules predominantly amend Ind AS 12, Income taxes, and Ind AS 1, Presentation of standalone financial statements. The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications. These amendments are not expected to have a material impact on the company in the current or future reporting periods and on foreseeable future transactions.

2) (iii) Critical estimates and judgements

The preparation of standalone f nancial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company’s accounting policies. Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances. This note provides detailed information of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. The areas involving critical judgements are:

I. Defined benefit plans estimates

The cost of the defined benefit gratuity plan compensated absences and other post-employment defined benefits

(Provident Fund) are 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, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The underlying bonds are further reviewed for quality. 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. Further details about gratuity obligations are given in note 32.

II. Net Realizable Value of inventory

The Company has defined policy for provision on inventory based on obsolete, damaged and slow-moving inventories. The Company provides provision based on policy, past experience, current trend and future expectations of these materials depending on the category of goods.

---

Mar 31, 2023

NOTE: 43 FRAUD

The Company deals in Fashion Items such as Footwear, Apparel, Accessories etc. Company has made its sales network through its retail stores pan India at various remote locations. The Company operates these retail stores, through its owned stores or stores operated by its Franchisee. Due to remote locations and volumes of transactions, there are few instances where employees of the company misappropriated the Cash of the sale proceeds of the retail store.

During the year under Audit there are three cases reported where they have misappropriated '' 19.01 lakh (''36.77 lakh) constitute even less than 0.01% of the total sales proceeds of company owned stores. This is general trend of the industry. Although due to efficient internal checks and controls, we could unearth these misappropriations and took the legal action against such employees of the company.

NOTE 44

COMPANY OVERVIEW AND SIGNIFICANT ACCOUNTING POLICIES

I. COMPANY OVERVIEW:

REDTAPE Limited (‘The Company’) is a public limited company incorporated in India on 8^th Dec,2021 having its registered office located at Plot No. 08, Sector 90, Noida - 201301, Uttar Pradesh, India.

Pursuant to the Scheme of the Arrangement as approved by the Hon’able National Company Law Tribunal, Allahabad Bench, Prayagraj (the Tribunal) vide its Order dated February 21, 2023 approved the Composite Scheme of Arrangement (refer sub note 28 of Note 44). The Scheme become operative on filing

of the NCLT Order with the Registrar of Companies, Uttar Pradesh, Kanpur on February 25, 2023. The Scheme is to take effect from January 1, 2022, being the Appointed Date of the Scheme.

The Company is in the retail sale of Footwear, garments & apparels and allied products and also a manufacturer of footwear.

II. STATEMENT OF COMPLIANCE:

These standalone financial statements have been prepared & comply in all material aspects with Indian Accounting Standards (“Ind AS”) notified under section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended & other relevant provisions of the Act.

III. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

These standalone financial statements are prepared under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values at the end of each reporting period, as explained in the accounting policies below. The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rule 2015 and relevant amendments rules issued thereafter.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinarily transactions between market participants at the measurement date.

Fair value measurement under Ind AS are categorized as below based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at measurement date.

Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the assets or liability, either directly or indirectly and

Level 3 inputs are unobservable inputs for the valuation of assets/liabilities.

IV. USE OF ESTIMATES AND JUDGEMENT:

The preparation of the financial statements requires the Management to make certain estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Accounting estimates could change from period to period. Actual results may differ from these estimates.

This note provides an overview of the areas that involved a higher degree of judgment or complexity and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included in the relevant notes together with information about the basis of calculation for each affected line item in the financial statements.

V. PROPERTY PLANT AND EQUIPMENT:

i. Freehold Land is carried at historical cost. All other items of Property, Plant and Equipment of the Company are valued at cost of acquisition or construction net of recoverable taxes, trade discounts and rebates less accumulated depreciation and impairment loss, if any. The cost of fixed assets includes purchase price, borrowing cost of Capitalization allocated / apportioned direct and indirect expenses incurred in relation to bringing the fixed assets to its working condition for its intended life. The said cost is not reduced by specific Grants/ subsidy received against the assets.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as separate asset is derecognized when replaced. All other repairs and maintenance are charged to Profit or Loss during the reporting period in which they are incurred.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss within other gains/(losses).

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

ii. Capital Work in Progress - All costs attributable to the assets or incurred in relation to the assets under completion are aggregated under Capital work in progress to be allocated to individual assets on completion.

VI. DEPRECIATION & AMORTIZATION

1) Depreciation on Building, Plant and machinery, Furniture & fixtures, Vehicles and Computers is provided as per the Straight-Line Method (SLM), over the estimated useful lives of assets.

2) Depreciation on all assets except intangible assets and assets held under lease are provided as per Schedule II to the Companies Act,2013. Management believes that useful life of assets are same as those prescribed in Schedule II to the Companies Act,2013.

3) The residual values are not more than 5% of the original cost of the asset. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

4) Depreciation on additions / deletions is calculated pro-rata from the month of such addition / deletion, as the case maybe.

5) Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.

VII. CASH AND CASH EQUIVALENTS

Cash and short-term deposits in the balance sheet comprise cash at banks and cash in hand and shortterm deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

Cash and cash equivalents include bank overdrafts are form an integral part of Company’s cash management.”

VIII. BORROWING AND BORROWING COST Borrowings are initially recognized at fair value, net of transaction cost incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction cost) and the redemption amount is recognized in profit or loss

over the period of the borrowings, using the effective interest method. Fees paid on the established loan facilities are recognized as transaction cost of the loan, to the extent that it is probable that some or all the facility will be drawn down.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of cost of such assets, all other Borrowing cost are charged to the Statement of Profit & Loss. Borrowing costs comprise of interest and other costs incurred in connection with borrowing of funds.

IX. LEASES:

The Company’s lease assets largely contain leases for buildings/showrooms taken for warehouses and retail stores company also has taken Land as lease from Development Authorities. At inception of a contract, the Company assesses whether a contract contains a lease. If the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration, then the contract is considered as lease. Following factors are considered to determine whether a contract conveys the right to control the use of an identified asset:

(i) The contract encompasses the use of an identified asset.

(ii) The Company has extensively all of the economic benefits from use of the asset during the period of the lease; and

(iii) The Company is in position to direct the use of the asset.

On the beginning of the lease, except for leases with a term of twelve months or less and low value leases, the Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease provisions in which it is a lessee.

For leases with a term of twelve months or less and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Where the lease provisions include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities adjusted only when it is reasonably certain that they will be exercised.

The ROU assets are initially accounted for at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. Subsequently they are measured at cost less accumulated depreciation and impairment losses, if any.

ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying ROU asset. Whenever events or changes in circumstances designate that their carrying amounts may not be recoverable ROU assets are evaluated for recoverability.

The lease liabilities at the commencement are measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates or risk-free rate as the case may be. Lease liabilities are re-measured with a consistent change to the related ROU asset if the Company changes its appraisal about exercise of option for extension or termination.

Lease liabilities and ROU assets have been presented separately in the Balance Sheet and lease payments have been classified as financing cash flows.

X. 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

All financial assets are recognized 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. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized 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 following categories:

A) Debt instruments at amortized cost

A ‘debt instrument’ is measured at the amortized cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b) 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.

All financial liabilities are recognized at fair value on initial recognition. Transaction costs that are directly attributable to the issue of financial liabilities, that are not at fair value through profit or loss are added to the fair value on initial recognition. After initial measurement, such financial liabilities are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized 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 amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss.

B) Debt instruments at fair value through other comprehensive income (FVTOCI)

A ‘debt instrument’ is classified as at the FVTOCI if both of the following criteria are met:

a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

b) The asset’s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the P&L. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to P&L. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

C) Debt instruments at fair value through profit or loss (FVTPL)

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

I n addition, the company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). The company has not designated any debt instrument as at FVTPL.

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.

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 recognized by an acquirer in a business combination to which Ind AS103 (Business Combinations) applies are classified as at FVTPL. The classification is made on initial recognition and is irrevocable.

If the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when:

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

The respective company has transferred their rights to receive cash flows from the asset or have assumed the obligation to pay the received cash flows in full without material delay to a third party under a ‘pass- through’ arrangement; And

Either the Company:

(a) has transferred substantially all the risks and rewards of the asset, or

(b) has neither transferred nor retained substantially all the risks and rewards of the asset, but have 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 recognize the transferred asset to the extent of the continuing involvement of Company. In that case, the Company also recognizes 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.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay.

Impairment of financial assets

The Company measures the expected credit loss associated with its assets based on historical trend, industry practices and the business environment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

Income recognition Interest income

Interest income from debt instruments is recognized using the effective interest rate method.

Dividends

Dividends are recognized in the Statement of Profit and Loss only when the right to receive payment is established.

Interest Income

Interest income is recognized on time proportion basis taking in to account the amount outstanding and rate applicable.

XI. INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

Investments in subsidiaries, joint ventures and associates are recognized at cost as per Ind AS 27. Except where investments accounted for at cost shall be accounted for in accordance with Ind AS 105, Non-current Assets Held for Sale and Discontinued Operations, when they are classified as held for sale.

XII. INVENTORIES:

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

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

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

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

Goods in Process: At cost plus estimated value addition/cost of conversion at each major stage of production.

Provision on Inventory -

The company has defined policy for provision on inventory for each of its business by differentiating the inventory into core and non - core (fashion) and sub categorised into finished goods and raw materials. The company provides provision based on policy, past experience, current trend and future expectations of these materials depending on the category of goods

Provision for discount and sales return -

The Company provides for discount and sales return based on season wise, brand wise and channel wise trend of previous years. The Company reviews the trend at regular intervals to ensure the applicability of the same in the changing scenario, and based on the management’s assessment of market conditions.

XIII. FOREIGN CURRENCY TRANSACTIONS

(i) Functional and presentation currency

The financial statements are presented in Indian rupee (''), which is Company’s functional and presentation currency.

ii) Financial Instruments

Derivative financial instruments such as forward contracts, option contracts and cross currency swaps, to hedge its foreign currency risks are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value with changes in fair value recognized in the Statement of Profit and Loss in the period when they arise

(iii) Transactions and balances

Transactions in foreign currencies are recognized at the prevailing exchange rates on the transaction dates. Realized gains and losses on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss.

Monetary foreign currency assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognized in the Statement of Profit and Loss.

XIV. SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

XV. DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING

Cash flow hedges

The effective portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income and accumulated under the heading of cash flow hedging reserve. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.

Amounts previously recognized in other comprehensive income and accumulated in equity relating to effective portion as described above are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognized hedged item. However, when the hedged forecast transaction results in the recognition of a non- financial asset or a non-financial liability, such gains or losses are transferred from equity (but not as a reclassification adjustment) and included in the initial measurement of the cost of the non-financial asset or non-financial liability.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognized in other comprehensive income and accumulated in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.

XVI. REVENUE RECOGNITION:

Revenue from Sale of Goods, Export Incentives-Revenue is recognized upon transfer of control of promised products or services to customers only when it can be reliably measured, and it is reasonable to expect ultimate collection. Revenue in respect of contracts for services is recognized when the services are rendered, and related costs are incurred. Export Incentives under various schemes are accounted in the year of export.

Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts, price

Concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.

Revenue from related party is recognized based on transaction price which is at arm’s length.

Interest Income is recognized on time proportion basis taking into account the amount outstanding and the applicable interest rates and is disclosed in “other income”

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, it does not adjust any of the transaction prices for the time value of money.

XVII. RECEIVABLES

Receivables are disclosed in Indian currency equivalent of actually invoiced values Receivables covered by bills of exchange purchased by the Company’s bankers are neither shown as assets nor liabilities. Contingent liability in the event of nonpayment of the same is reflected in the Notes to the Accounts.

XVIII. EMPLOYEE BENEFITS

(i) Short-term obligations

Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.

(ii) Leave Encashment

The liabilities for earned leave and sick leave are settled as when accrued within the financial year.

(iii) Post-employment obligations

The Company operates the following postemployment schemes:

(a) Defined benefit plans such as gratuity and pension; and

(b) Defined contribution plans such as provident fund etc.

Pension and gratuity obligations

The liability or asset recognized in the balance sheet in respect of defined benefit pension and gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss.

Re measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Defined Contribution Plans

Defined Contribution Plans such as Provident Fund etc., are charged to the Statement of Profit and Loss as incurred and deposited with the Government Provident Fund Scheme.

Termination benefits

Termination benefits are payable when employment is terminated by the Company before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Company recognizes termination benefits at the earlier of the following dates: (a) when the Company can no longer withdraw the offer of those benefits; and (b) when the Company recognizes costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of terminations benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

XIX. TAXES ON INCOME

I ncome tax expense is recognized in net profit in the Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income

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

Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statement. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized, or the deferred income tax liability is settled.

Deferred tax assets are recognized for all deductible temporary differences and unused tax losses, only if, it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are off set where the Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Current and deferred tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively

Minimum Alternate Tax credit is recognized as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period

XX. INTANGIBLE ASSETS

Intangible assets acquired separately are measured in initial recognition at cost. Following initial recognition, intangibles, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses.

The useful lives of intangible assets are assessed as either finite or indefinite.

I ntangible assets with finite lives are amortized over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with finite life are reviewed at least at the end of each reporting period.

Subsequent measurement (amortization)

The cost of capitalized software is amortized over a period of 5 years from the date its put to use.

The cost of usage rights is being amortized over the concession period in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such intangible assets till the end of concession period.

XXI. EARNINGS PER SHARE

Basic earnings per equity share are computed by dividing the net profit attributable after tax to the equity holders of the Company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share are computed by dividing the net profit after tax attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

The Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

XXII. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision:

Provision is recognized in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made.

Contingent Liabilities:

Wherever there is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognized because

(a) I t is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(b) The amount of the obligation cannot be measured with sufficient reliability. Show cause notices are not considered as Contingent Liabilities unless converted into demand.

Contingent Asset:

Contingent asset is neither recognized nor disclosed in the financial statements

XXIII. EVENTS AFTER THE REPORTING PERIOD

It is the Company’s Policy to take into the account the impact of any significant event that occurs after the reporting date but before the finalization of accounts

XXIV. GOVERNMENT GRANTS:

Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received, and the Company will comply with all attached conditions.

Government grants receivable as compensation for expenses or financial support are recognized in profit or loss of the period in which it becomes available.

Government grants relating to the purchase of property, plant and equipment are accounted for as deferred Income by crediting the same to a specific reserve and are credited to profit or loss on a straightline basis over the expected lives of the related assets and presented within other income.

The reserve to these Grants is diminished every year by a prorate portion of the depreciation of the assets, to amortize the grant overdue life of the assets. Where the Grants carry conditions of specific performance, the contingent aspect is disclosed in due notes to the accounts.

XXV. IMPAIRMENT OF TANGIBLE & INTANGIBLE ASSETS

(i) Financial assets (other than at fair value)

The Company assesses at each date of balance sheet whether a financial asset or a Company of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. In determining the allowances for doubtful trade receivables, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and allowance rates used in the provision matrix. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses or at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

(ii) Non-financial assets

The company assess at each reporting date, whether there is an indication that an asset may

be impaired. If any indication exists, or when annual impairment testing for an asset is required, the company estimate the asset’s recoverable amount. An asset’s recoverable amount is the higher of an assets or cash-generating units (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

I n assessing value in use, the estimated future cash flows are discounted to their present value using a pre -tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, the company estimates the asset’s or CGU’s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the Statement of Profit or Loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as an increase in revaluation.

XXVI.OPERATING CYCLE FOR CURRENT AND NONCURRENT CLASSIFICATION

Operating cycle for the business activities of the company covers the duration of the specific product line/ service including the defect liability period wherever applicable and extends up to the realization of receivables within the agreed credit period normally applicable to the respective lines of business.

XXVII. ECGC Policy

As per the accounting policy of ECGC, only 90% of the claim amount is claimable from ECGC and for balance 10% of claim amount company has to made necessary provision.

XXVIII. Composite Scheme of Arrangement

a) A Composite Scheme of Arrangement of RTS Fashions Pvt. Ltd, Mirza International Ltd and REDTAPE Limited (hereinafter referred to as the Composite Scheme of Arrangement/the Scheme) was framed in terms of the provisions of Sections 230 & 232 of the Companies Act, 2013, read with Section 66 of the Companies Act, 2013, the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, together with Sections 2(1 B) and 2(19AA) of the Income Tax Act, 1961, and other applicable provisions, if any.

b) The aforesaid Composite Scheme of Arrangement provides for:

i. Amalgamation of RTS Fashions Pvt. Ltd (the Transferor Company) with and into Mirza International Ltd (the Transferee Company);

ii. Demerger of Branded Business/REDTAPE Business (the Demerged Business) of Mirza International Ltd into REDTAPE Limited (the Resulting Company) on going concern basis; and

iii. Various other matters incidental, consequential or otherwise integrally connected with the aforesaid Amalgamation and De-merger.

c) Salient features of the Composite Scheme of Arrangement are as follows:

Being part of composite scheme:

i. All assets and liabilities including Income Tax and all other statutory liabilities, if any, of RTS Fashions Pvt. Ltd (the Transferor Company) will be transferred to and vest in Mirza International Ltd (the Transferee Company).

ii. All assets and liabilities including Income Tax and all other statutory liabilities, if any, of Branded Business/REDTAPE Business (the Demerged Business) of Mirza International Ltd (the Transferee Company) will be transferred to and vest in REDTAPE Limited (the Resulting Company) on going-concern basis.

All the employees of the Transferee Company employed in the activities relating to the Demerged Business, in service on the Effective Date, if any, shall become the employees of the Resulting Company on and from such date without any break or interruption in service and upon terms and conditions not less favorable than those applicable to them in the Demerged Business of the Transferee Company, on the Effective Date.

The Resulting Company-REDTAPE Limited will issue 1 (one) Equity Share of ''2 each, credited as fully paid-up, to the Shareholders of the Transferee Company for every 1 (one) Equity Share of ''2 each held in the Transferee Company-Mirza International Ltd.

Upon the Scheme becoming effective, the preScheme issued and paid-up share capital of the Resulting Company which consists of 50,000 Equity Shares of ''2 each aggregating ''1,00,000, will be cancelled and 50,000 9% Compulsorily Redeemable Preference Shares of ''2 each, credited as fully paid-up, aggregating ''1,00,000, will be issued in place of such cancelled equity share capital.

Appointed Date for the Scheme will be January 1, 2022, or such other date as the Hon’ble National Company Law Tribunal or any other competent authority may approve.

BSE Ltd will act as the Designated Stock Exchange for the purposes of the Scheme of Arrangement.

Post-Scheme, REDTAPE Limited will be listed on BSE and NSE.

d) The Hon’ble National Company Law Tribunal, Allahabad Bench, Prayagraj (the Tribunal) vide its Order dated February 21, 2023 (date of pronouncement of Order) approved the Composite Scheme of Arrangement. The Scheme has become operative with effect from the Effective Date: February 25, 2023, on filing of the NCLT Order with the Registrar of Companies, Uttar Pradesh, Kanpur. The Scheme is effective from January 1, 2022, being the Appointed Date of the Scheme.

e) I n terms of the Scheme, RTS Fashions Pvt Ltd. has been merged into Mirza International Ltd along with all the assets and liabilities; and entire REDTAPE Business of Mirza International Limited has been demerged into Redtape Limited, with effect from January 1, 2022.

f) The present Financial Statements of the Company have been prepared after giving effect of the Amalgamation and Demerger in terms of the Scheme. Further, figures of the previous Financial Year ended March 31, 2022, have also been restated to give effect to the Scheme with effect from January 1, 2022.

g) Prior to the Scheme, the Transferee Company-Mirza International Limited was engaged in

design, development, manufacturing, marketing, trading, export and retailing of leather footwear, sports shoes, garments & apparels, leather goods and accessories, and other related activities.

h) The Resulting Company-Redtape Ltd was newly incorporated on December 8, 2021, to carry on the Demerged Business-REDTAPE Business after the Demerger in terms of the Scheme.

i) Accounting Treatment for Demerger
1. The details of assets and liabilities transferred from Mirza International Limited (Transferee Company)
to Redtape Limited (resulting Company) are as under:	'' in Lacs
Particulars	As at
	December 31, 2021
Asset
Non Current Assets
Property Plant & Equipment (Net of Accumulated Depreciation)	13,521
Capital Work in Progress	2,013
Right of Use Assets	14,551
Financial Assets
(i) Investments	97
Total Non Current Assets	30,182
Current Assets
(i) Inventories	33,186
Financial Assets
(i) Trade receivables	6,845
(ii) Cash and Bank Balances	3,641
(iii) Loans and Advances	3,420
Total Current Assets	47,091
Total assets transferred to REDTAPE LIMITED (A)	77,273
Liabilities
Non Current Liabilities
(i) Secured Loans	4,174
(ii) Deferred Tax	466
Total Non Current Liabilities	4,640
Current Liabilities
(i) Current Liabilities	26,117
(ii) Provisions	235
(iii) Lease Rent Laibilities (Net)	16,135
Total Current Liabilities	42,487
Total liabilities transferred to REDTAPE (B)	47,127
Net Amount (A-B)	30,146

Particular	Net Assets/ (Liability) acquired (reserves)	Value of Equity Shares Issued	Other Equity
Demerger of branded business/REDTAPE from Mirza International Limited (Demerged Company) to REDTAPE Limited (Resulting Company)	30,416	2,764	27,382
Balance Sheet
The restated Financial Information as at December 31,2021 are as under:
			'' In Lakhs
Particular		As per Restated Financials as at December 31,2021
Assets
Non-Current Assets
Property, Plant and Equipment			13,521
Capital Work-in-progress			2,013
Right-of-Use Assets			14,551
Financial Assets
(i) Investments			97
Total Non-Current Assets		(a)	30,182

'' In Lakhs
Particular		As per Restated
		Financials as at
		December 31,2021
Current Assets
Inventories		33,186
Financial Assets
(i) Trade Receivables		6,845
(ii) Cash and Cash Equivalents		3,641
(iii) Loans and Advances		3,420
Total Current Assets	(b)	47,091
Total Assets	(a b)	77,273
Equity And Liabilities
Equity
Equity Share Capital to be issued		2,764
Other Equity		27,382
Total Equity	(c )	30,146
Non-Current Liabilities
(i) Secured Loans		4,174
(ii) Deferred Tax		466
Total Non-Current Liabilities	(d)	4,640
Current Liabilities
(i) Current Liabilities		26,117
(ii) Provisions		235
(iii) Lease Rent Laibilities (Net)		16,135
Total Current Liabilities	(e )	42,487
Total Equity And Liabilities	(c d e)	77,273

The following accounting treatment has been given to some of the issues pertaining to the Demerger:

i. REDTAPE Ltd has recorded the assets and liabilities pertaining to the Demerged Business vested in it pursuant to the Scheme, at the values as appearing in the books of the Transferee Company as on the Appointed Date.

ii. I n terms of the Scheme, the Company has issued 13,82,01,900 Equity Shares of ''2/- each, credited as fully paid up, aggregating ''27,64 Lakh to the members of the Transferee Company in exchange of 100% post-amalgamation share capital of the Transferee Company.

iii. Pursuant to the Scheme, the Company has issued 50,000 9% Compulsorily Redeemable Preference Shares of ''2/- each, credited as fully paid-up, aggregating ''1,00,000/-; and entire pre-Scheme issued and paid-up share capital of the Company consisting of 50,000 Equity Shares of ''2/- each aggregating ''1,00,000/- stands cancelled.

iv. Surplus of '' 273,82 Lakhs arising on Demerger being difference between the value of the assets and the liabilities pertaining to the Demerged Business after taking into account the face value of the Equity Shares issued by the Company has been credited to the Capital Reserve Account in the books of the Company.

The transactions pertaining to the transferred business of the Company from the appointed date upto the effective date of the Scheme have been deemed to be made by Redtape Limited.

As per the Order, the assets of the Company stand free from all charges, mortgages and encumbrances relating to liabilities

relating to business transferred to Redtape Ltd. The Company had created charges over its assets (including those which now belong to Redtape Ltd) under section 77 of the Companies Act, 2013 in respect of certain credit facilities taken from various banks for itself and for various undertakings of Redtape Ltd. The Company continues to enjoy credit facilities by the subsisting

charges, mortgages and encumbrances over such assets. Vice-versa, Redtape Ltd enjoys credit facilities by the subsisting charges, mortgages and encumbrances over assets retained by the Redtape Ltd. Till creation/ modification/ satisfaction of Charges, as the case may be, in favour of the various banks of the respective Companies in terms of the applicable laws/sanction terms.

2. The Impact of the Demerger on these financial statements is as under:

The Company has given effect to the Scheme for the year ended March 31,2023 considering it to be an adjusting event and has accounted the same as per the pooling of interest method since the conditions as per the requirements of Ind AS 103 - Business Combinations of entities under common control are met. The Company came under common control on January 1, 2022 and hence the comparative numbers have to be restated for the period of March 31, 2022. However it is not practically possible to arrive at Financial Results of Demerged Undertakings for the period one day i.e. January 1, 2022, therefore, in order to present the actual scale of operations of the Dermerged Undertakings for the financial year ended March 31,2022, the management has presented the Financial Information of the Demerged Undertakings for the period

of Nine months ended December 31, 2021 as additional disclosure and not restated the statement of profit and loss account for the year ended March 31, 2022. The said Financial Information for nine months periods of the Financial Year 2021-22 have been extracted from the disclosure in the financial Inf