Notes to Accounts of Stanley Lifestyles Ltd.

Mar 31, 2025

2.10 Provisions and contingent liabilities

Provisions are recognized when there is a present
obligation as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will
be required to settle the obligation and there is a reliable
estimate of the amount of the obligation.

Provisions are measured at the best estimate of the
expenditure required to settle the present obligation at
the Balance sheet date.

These are reviewed at each Balance Sheet date and
adjusted to reflect the current management estimates.

If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the
liability. When discounting is used, the increase in the
provision due to the passage of time is recognized as
a finance cost.

Contingent liabilities are disclosed when there is a possible
obligation arising from past events, the existence of which
will be confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly within the
control of the Company or a present obligation that arises
from past events where it is either not probable that an
outflow of resources will be required to settle or a reliable
estimate of the amount cannot be made. When there is an
obligation in respect of which the likelihood of outflow of
resources is remote no provision or disclosure is made.

Contingent assets are neither recognised nor disclosed
in the financial statements.

2.11 Borrowing costs

Borrowing cost includes interest, amortization of ancillary
costs incurred in connection with the arrangement
of borrowings and exchange differences arising
from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition
or construction of qualifying assets are capitalised as
part of the cost of the assets up to the date the asset is
ready for its intended use. All other borrowing costs are
recognised as an expense in the Statement of Profit and
Loss in the year in which they are incurred."

2.12 Cash and cash equivalents

Cash and cash equivalent in the Balance Sheet comprise
cash at banks, cash on hand and short-term deposits
net of bank overdraft with an original maturity of three
months or less, which are subject to an insignificant risk
of changes in value.

Cash and Cash Equivalents includes deposits maintained
by the Company with banks, which can be withdrawn by
the Company at any point of time without prior notice
or penalty on the principal. Cash and cash equivalents
include restricted cash and bank balances. The
restrictions are primarily on account of bank balances
held as margin money deposits against guarantees.

2.13 Investment in Subsidiary

When an entity prepares separate financial statements,
it shall account for investments in subsidiaries, joint
ventures and associates either:

(a) at cost, or

(b) in accordance with Ind AS 109.

Company accounts for its investment in subsidiary at cost.

2.14 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) Financial assets

(i) Initial recognition and measurement

At initial recognition, financial asset is
measured at its fair value plus, in the case of
a financial asset not at fair value through profit
or loss, transaction costs that are directly
attributable to the acquisition of the financial
asset. Transaction costs of financial assets
carried at fair value through profit or loss are
expensed in profit or loss.

(ii) Subsequent measurement

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

a) at amortized cost; or

b) at fair value through other
comprehensive income; or

c) at fair value through profit or loss.

The classification depends on the entity''s
business model for managing the financial
assets and the contractual terms of
the cash flows.

Amortized cost: Assets that are held for
collection of contractual cash flows where
those cash flows represent solely payments
of principal and interest are measured at
amortized cost. Interest income from these
financial assets is included in finance income
using the Effective Interest Rate method (EIR).

Fair Value Through Other Comprehensive
Income (FVOCI): Assets that are held for
collection of contractual cash flows and for
selling the financial assets, where the assets''

cash flows represent solely payments of
principal and interest, are measured at Fair
Value Through Other Comprehensive Income
(FVOCI). Movements in the carrying amount are
taken through OCI, except for the recognition
of impairment gains or losses, interest revenue
and foreign exchange gains and losses which
are recognized in Statement of Profit and Loss.
When the financial asset is derecognized, the
cumulative gain or loss previously recognized
in OCI is reclassified from equity to Statement
of Profit and Loss and recognized in other gains
/ (losses). Interest income from these financial
assets is included in other income using the
effective interest rate method.

Fair Value Through Profit or Loss: Assets that
do not meet the criteria for amortized cost or
FVOCI are measured at fair value through profit
or loss. Interest income from these financial
assets is included in other income.

(iii) Impairment of financial assets

In accordance with Ind AS 109, Financial
Instruments, the Company applies Expected
Credit Loss (ECL) model for measurement and
recognition of impairment loss on financial assets
that are measured at amortized cost and FVOCI.

For recognition of impairment loss on financial
assets and risk exposure, the Company
determines that whether there has been a
significant increase in the credit risk since
initial recognition. If credit risk has not
increased significantly, twelve-month ECL is
used to provide for impairment loss. However,
if credit risk has increased significantly lifetime
ECL is used. If in subsequent years, credit
quality of the instrument improves such that
there is no longer a significant increase in
credit risk since initial recognition, then the
entity reverts to recognizing impairment loss
allowance based on twelve months ECL.

Life time ECLs are the expected credit losses
resulting from all possible default events over
the expected life of a financial instrument.
The twelve month ECL is a portion of the
lifetime ECL which results from default events
that are possible within twelve months
after the year end.

ECL is the difference between all contractual cash
flows that are due to the Company in accordance
with the contract and all the cash flows that

the entity expects to receive (i.e. all shortfalls),
discounted at the original EIR. When estimating
the cash flows, an entity is required to consider
all contractual terms of the financial instrument
(including pre-payment, extension etc.) over the
expected life of the financial instrument. However,
in rare cases when the expected life of the
financial instrument cannot be estimated reliably,
then the entity is required to use the remaining
contractual term of the financial instrument.

In general, it is presumed that credit risk has
significantly increased since initial recognition
if the payment is more than 30 days past due.

(iv) De-recognition of financial assets

A financial asset is de-recognized only when :

a) the rights to receive cash flows from the
financial asset is transferred; or

b) retains the contractual rights to receive
the cash flows of the financial asset, but
assumes a contractual obligation to pay
the cash flows to one or more recipients.

Where the financial asset is transferred then in
that case financial asset is de-recognized only if
substantially all risks and rewards of ownership
of the financial asset is transferred. Where
the entity has not transferred substantially all
risks and rewards of ownership of the financial
asset, the financial asset is not de-recognized.

(b) Financial liabilities

(i) Initial recognition and measurement

Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss and at amortized cost,
as appropriate.

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

(ii) Subsequent measurement

The measurement of financial liabilities
depends on their classification, as
described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit
or loss include financial liabilities held for
trading and financial liabilities designated
upon initial recognition as at fair value through
profit or loss.

Loans and borrowings

After initial recognition, interest-bearing loans
and borrowings are subsequently measured at
amortized cost using the Effective Interest Rate
(EIR) method. Gains and losses are recognized
in Statement of Profit and Loss when the
liabilities are de-recognized as well as through
the EIR amortization process. 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 as finance costs in the
Standalone Statement of Profit and Loss.

(iii) De-recognition

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

(c) Offsetting financial instruments

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

2.15 Employee benefits

(a) Short-term obligations

Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within twelve months after the end of the year
in which the employees render the related service
are recognized in respect of employees'' services
up to the end of the year and are measured at the
amounts expected to be paid when the liabilities
are settled. The liabilities are presented as current
employee benefit obligations in the Balance Sheet.

(b) Defined contribution plan

The Company makes defined contribution to provident
fund and superannuation fund, which are recognised
as an expense in the Statement of Profit and Loss on
accrual basis. The Company has no further obligations
under these plans beyond its monthly contributions.

Employee''s State Insurance Scheme: Contribution
towards employees'' state insurance scheme is made
to the regulatory authorities, where the Company has
no further obligations. Such benefits are classified
as defined contribution schemes as the Company
does not carry any further obligations, apart from the
contributions made on a monthly basis which are
charged to the Statement of Profit and Loss.

(c) Defined benefit plans

Gratuity: The Company provides for gratuity, a defined
benefit plan (the "Gratuity Plan") covering eligible
employees in accordance with the Payment of Gratuity
Act, 1972. The Gratuity Plan provides a lump sum
payment to vested employees at retirement, death,
incapacitation or termination of employment, of an
amount based on the respective employee''s salary. The
Company''s liability is actuarially determined (using the
Projected Unit Credit method) at the end of each year.
Actuarial losses / (gains) are recognized in the other
comprehensive income in the year in which they arise.

(d) Other long term employee benefits

Compensated Absences: Accumulated

compensated absences, which are expected to
be availed or encashed within Twelve months
from the end of the year are treated as short term
employee benefits. The obligation towards the same
is measured at the expected cost of accumulating
compensated absences as the additional amount
expected to be paid as a result of the unused
entitlement as at the year end.

Accumulated compensated absences, which are
expected to be availed or encashed beyond twelve
months from the end of the year are treated as other
long-term employee benefits. The Company''s liability is
actuarially determined (using the Projected Unit Credit
method) at the end of each year. Actuarial losses / (gains)
are recognized in the Statement of Profit and Loss in the
year in which they arise.

Leaves under define benefit plans can be encashed only
on discontinuation of service by employee.

2.16 Earnings Per Share

Basic earnings per share is calculated by dividing the
net profit or loss for the year attributable to equity
shareholders by the weighted average number of equity
shares outstanding during the year. Earnings considered
in ascertaining the Company''s earnings per share is the
net profit or loss for the year after deducting preference
dividends and any attributable tax thereto for the year
(if any). The weighted average number of equity shares
outstanding during the year and for all the years presented
is adjusted for events, that have changed the number
of equity shares outstanding, without a corresponding
change in resources.

For the purpose of calculating diluted earnings per share,
the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares
outstanding during the year is adjusted for the effects of
all dilutive potential equity shares.

All amounts disclosed in financial statements and
notes have been rounded off to the nearest thousands
as per requirement of Schedule III of the Act, unless
otherwise stated.

2.17 Segment Reporting

Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker
regularly monitors and reviews the operating results
separately according to the nature of products and
services provided, with each segment representing a
strategic business unit that offers different products
and serves different markets. Segments are identified
having regard to the dominant source and nature of risks
and returns and internal organization and management
structure. The Company has considered business
segments as the primary segments for disclosure. The
business segment in which the Company operates is
‘manufacture, trading and sale of Automotive Seating
Covers, Furniture, Fixtures and Accessories''. The
Company does not have any geographical segment. The
accounting principles used in the preparation of the
financial statements are consistently applied to record
revenue and expenditure in the individual segment, and
are as set out in the significant accounting policies.

Thus, as defined in Ind AS 108 - Operating Segments,
The Company operates in a single business segment
of namely manufacture, trading and sale of Automotive
Seating Covers, Furniture, Fixtures and Accessories

2.18 Rounding off amounts

All amounts disclosed in financial statements and
notes have been rounded off to the nearest million
as per requirement of Schedule III of the Act, unless
otherwise stated.

3 Significant accounting judgments, estimates
and assumptions and recent pronouncements

The preparation of financial statements requires
Management to make judgments, estimates and
assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of assets or liabilities
affected in future years.

3.1 Estimates and assumptions

The key assumptions concerning the future and other
key sources of estimation uncertainty at the year end
date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described
below. The Company based its assumptions and estimates
on parameters available when the financial statements
were prepared. Existing circumstances and assumptions
about future developments, however, may change due to
market changes or circumstances arising that are beyond
the control of the Company. Such changes are reflected
in the assumptions when they occur.

(a) Defined Benefits and other long term benefits

The cost of the defined benefit plans such as
gratuity and leave encashment 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 year end.

The principal assumptions are the discount and
salary growth rate. The discount rate is based upon
the market yields available on government bonds at
the accounting date with a term that matches that
of liabilities. Salary increase rate takes into account
inflation, seniority, promotion and other relevant
factors on long-term basis.

(b) Share-based payments

Estimating fair value for share-based payment
transactions requires determination of the most
appropriate valuation model, which is dependent on the
terms and conditions of the grant. This estimate also
requires determination of the most appropriate inputs
to the valuation model including the expected life of the
share option, volatility and dividend yield and making
assumptions about them. The assumptions and models
used for estimating fair value for share-based payment
transactions are disclosed in Note 51 Equity-settled
transactions: The cost of equity-settled transactions is
determined by the fair value at the date when the grant
is made using an appropriate valuation model. That cost
is recognised, together with a corresponding increase
in share-based payment reserves in equity, over the
period in which the service conditions are fulfilled in
employee benefits expense. The cumulative expense
recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent
to which the vesting period has expired and Company
best estimate of the number of equity instruments
that will ultimately vest. The expense or credit in the
Standalone Statement of Profit and Loss for a period
represents the movement in cumulative expense
recognised as at the beginning and end of that period
and is recognised in employee benefits expense.

(c) Taxes

Deferred tax assets are recognized for unused tax
losses to the extent that it is probable that taxable
profit will be available against which the losses can
be utilized. Significant management judgment is
required to determine the amount of deferred tax
assets that can be recognized, based upon the likely
timing and the level of future taxable profits together
with future tax planning strategies.

The Company neither have any taxable temporary
difference nor any tax planning opportunities
available that could partly support the recognition of
these losses as deferred tax assets. On this basis, the
Company has determined that it cannot recognize
deferred tax assets on the tax losses carried forward
except for the unabsorbed depreciation.

3.2 Recent pronouncements

Ministry of Corporate Affairs (“MCA") notifies new
standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued
from time to time. For the year ended 31 March 2025, MCA
has not notified any new standards or amendments to the
existing standards applicable to the Company.

During the current year, the Company has invested an aggregate amount of Rs 480 million in its wholly owned subsidiary
Stanley Retail Limited (""SRL""). The purpose of this capital infusion was to enable the subsidiaries to support capital
expansion across the group and also for the purpose of routing the Initial Public Offering (""IPO"") fund to meet the objects
in adherence to the method as prescribed in the prospectus.

The Company participated in the rights issue of SRL and subscribed to 1,043,100 equity shares, offered in the ratio of 1,000
equity shares for every 4,713 equity shares held, against the valuation-based requirement of 1,042,146 equity shares. The
rights issue was fully subscribed. A nominal excess application amount of Rs 196 was refunded to the Company.

These intra-group capital transactions were carried out in compliance with applicable provisions of the Companties Act,
2013 and which were aimed at ensuring adequate capitalisation of the group entities to support their respective operational
and strategic requirements.

6.2 The Company under the Employee Stock Option Plan 2022 has granted stock options to its employees, employees of
subsidiary company and employees of step down subsidiary companies ("Company Companies"). The fair value of the share
options is estimated at the grant date using a Black Scholes model. model, taking into account the terms and conditions.
As required under Ind AS 102, the Company has recognised deemed investment for stock options granted to employees
of subsidiaries.

6.3 Investment in Stanley OEM Sofas Limited includes amounts recognised as deemed investment. Deemed investment has
been arrived at on account of preferential interest rate charged by the Company on long term loan advanced to Stanley OEM
Sofas Limited as required under Ind AS 109. The impact of the same is summarised in the table below.

33 Financial risk management objectives and policies
Risk management framework

The Board of Directors of the Company have the overall responsibility for the establishment and oversight of the their risk
management framework. The Company has constituted a Risk Management Committee. The Company has in place a Risk
management framework to identify, evaluate business risks and challenges across the Company. The risk management policies are
established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks
and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions
and the Company''s activities. The Audit Committee oversees how management monitors compliance with the Company''s risk
management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced
by the Company. The Audit Committee is assisted in its oversight role by Internal Audit which regularly reviews risk management
controls and procedures, the results of which are reported to the Audit Committee. These risks include foreign currency risk, credit
risk, liquidity risk and interest rate risk.

Foreign currency risk management

The Company''s functional currency in Indian Rupees (INR). The Company undertakes transactions denominated in foreign
currencies due to which it is exposed to exchange rate fluctuations. Volatility in exchange rate of foreign currencies affects the

33 Financial risk management objectives and policies (Contd..)

cost of imports, primarily in relation to raw materials. The Company is generally exposed to foreign exchange risk arising through
its sales and purchases denominated in foreign currency predominantly in US dollars and Euro;

During the current year there are no exports, however the Company has imported leather and other raw materials which is subject
to foreign exchange risk.

Refer note 39 for foreign currency risk exposure as at standalone balance sheet date.

Commodity price risk

The Company doesn''t enter into any long term contract with its suppliers for hedging its commodity price risk.
a) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company. The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The Company is exposed to credit risk from its operating activities mainly trade receivables. The Company has adopted a
policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. Credit
risk is managed by the Company through approved credit norms, establishing credit limits and continuously monitoring the
creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The provision for doubtful receivables has been historically negligible. The assessment is done at regular intervals and
allowance for doubtful trade receivables as at 31 March 2025 and 31 March 2024 is considered to be adequate.

b) Liquidity risk:

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is
to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. Ultimate
responsibility for managing the liquidity risk rests with the management, which has established an appropriate liquidity
risk management framework for managing the Company''s short-term, medium-term and long-term funding. The Company
manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual short-term and
long-term cash flows, and by matching the maturity profiles of financial assets and liabilities. The following are the remaining
contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted.

34 Financial instruments

The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are
disclosed in note 2 to the standalone financial statements.

Financial instruments by category and hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are
(a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the
standalone financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the
Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation
of each level is as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part
using a valuation model based on assumptions that are neither supported by prices from observable current market transactions
in the same instrument nor are they based on available market data.

There are no transfers between levels during the year.

The management considers that the carrying amount of financial assets and financial liabilities recognised in these standalone
financial statements at amortised cost approximate their fair values.

Notes:

1. M/s Alif Enterprises & Ors. have filed suit against the Company for non payment of rent, hoarding and other maintenance
charges for the space allocated in ''Atria Mall'' which amounts to Rs. 26 millions. The Company has filed counter claim
against M/s Alif Enterprises & Ors. for loss suffered due to the poor maintenance in ''Atria Mall''. The Management is of the
opinion that the case would be settled favorably and hence there is no necessity to provide for any anticipated liability.

2. An order under Section 143(3) of the Income Tax Act, 1961 has been received invoking provision u/s 37 of Income Tax
Act, 1961 disallowing certain expenses for assessment year 2021-2022. The demand is Rs 1 million and the Company
has appealed against the same during the year ended 31 March 2022 by remitting 20% i.e. Rs 0.28 million under dispute.

3. L''Oreal filed a suit against the Company for Trademark Infringment and Passing off of their slogan "Because I''m worth It".
The Company had filed a Rectification Petition against L''Oreal''s Trademark Registration for the mark "L''Oreal Because
I''m Worth It". The matter is posted for arguing the Injunction Application on 18th July 2025. The Management is of the
opinion that the case would be settled favorably and hence there is no necessity to provide for any anticipated liability.

51

(i) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

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

iii) The Company has not traded or invested in crypto currency or virtual currency during the financial period.

iv) The Company has not been declared willful defaulter by any bank or financial institution or government or any
government authority.

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

52

A) The Company has not advanced or loaned or invested funds to any persons or entities, including foreign entities
(intermediaries) other than as disclosed in the financial statements with the understanding that the Intermediary shall:

1) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Company (ultimate beneficiaries) or

2) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

B) The Company has not received any fund from any persons or entities, including foreign entities (funding party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the funding party (ultimate beneficiaries) or

b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

53 The Company has used accounting softwares for maintaining its books of account for the financial year ended 31 March 2025
which has a feature of recording audit trail (edit log) facility, however, the same has not been enabled throughout the year for
all relevant transactions recorded in the software. The Company is in process of implementing the changes inline with the
regulations.

55

(i) Proceeds from issue of shares includes recoveries towards the share issue expenses on account of IPO attributable to selling
shareholders amounting to Rs 223 million in the current year.

(ii) Share issue expenses on account of IPO includes payments towards share issue expenses on account of IPO attributable to
selling shareholders amounting to Rs 164 million (31 March 2024: Rs 59 million).

56 All amounts disclosed in this standalone financial statements and notes to standalone financial statements have been
rounded off to the nearest million, unless otherwise stated. 0 represents amounts less than Rs. 1 million.

57 The Company evaluated all events or transactions that occurred after 31 March 2025 up through 26 May 2025, the date the
standalone financial statements were authorized for issue by the Board of Directors. Based on this evaluation, the Company
is not aware of any events or transactions that would require recognition or disclosure in the standalone financial statements.

58 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits
received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on
which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes
into effect and will record any related impact in the period the Code becomes effective.

For and on behalf of the Board of Directors

STANLEY LIFESTYLES LIMITED

Sunil Suresh Shubha Sunil Pradeep Kumar Mishra Akash Shetty

Managing Director Whole Time Director Chief Financial OfficerCompany Secretary &

DIN 01421517 DIN 01363687 Compliance officer

FCS No: 11314

Place: Bengaluru

Date: 26 May 2025

---

Mar 31, 2024

6.2 The Company under the Employee Stock Option Plan 2022 has granted stock options to its employees, employees of subsidiary company and employees of step down subsidiary companies ("Company Companies"). The fair value of the share options is estimated at the grant date using a Black Scholes model. model, taking into account the terms and conditions. As required under Ind AS 102, the Company has recognised deemed investment for stock options granted to employees of Company Companies.

6.3 Investment in Stanley OEM Sofas Limited includes amounts recognised as deemed investment. Deemed investment has been arrived at on account of preferential interest rate charged by the Company on long term loan advanced to Stanley OEM Sofas Limited as required under Ind AS 109. The impact of the same is summarised in the table below.

7B.1 i) The loan to Stanley OEM Sofas Limited i.e. Subsidiary Company of Rs. 50 millions( as at 31 March 2023 Rs 100 millions) at a rate of interest of 12.70% ( 31 March 2023: 9% p.a.) is receivable in monthly installment of Rs 7 million commencing from 30 April 2029 with an option for early prepayment.

ii) Reduction in loan on account of fair valuation of borrowings in accordance with Ind AS 109 of Rs. Nil (as at 31 March 2023: Rs 21 millions)

15.5 Rights, preferences and restrictions

The Company has only one class of equity share having a par value of Rs 2 per share (31 March 2023 Rs 10 per share). Each holder of equity share is entitled to one vote per share. In event of liquidation of the Company, the holders of equity shares would be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

15.6 Share allotted as fully paid up by way of other than cash during five year immediately preceding 31 March 2024

For the period of five years immediately preceding the restated standalone balance sheet date, there are no shares allotted as fully paid up pursuant to contract(s) without payment being received in cash or shares allotted as fully paid up by way of bonus shares or shares bought back except for issue of 14,742,048 bonus shares to existing shareholders on 19 June 2023.

Notes:

(i) The Company''s Board of Directors, at its meeting held on 16 June 2023, proposed/recommended to the members of the Company a subdivision of authorised share capital from 7,500,000 equity shares having a face value of Rs. 10 each per equity share to 37,500,000 equity shares having a face value of Rs. 2 each per equity share in terms of Sections 13, 61, and 64 and other applicable provisions of the Companies Act, 2013, which was further approved by the members in the general meeting held on 19 June 2023.

(ii) The Company''s Board of Directors, at its meeting held on 16 June 2023, proposed/recommended to the members of the Company, an increase in the authorised share capital from Rs. 75 million to Rs. 150 million in terms of Section 61 and other applicable provisions of the Companies Act, 2013, which was further approved by the members in the general meeting held on 19 June 2023.

(iii) The Company''s Board of Directors, at its meeting held on 16 June 2023, proposed/recommended to the members of the Company, a bonus share in the proportion of 2 new bonus shares of Rs 2 each per equity share for every 5 existing fully paid-up equity shares of Rs 2 each, by capitalisation an amount of Rs 29 million in terms of Sections 63 and 123(5) and other applicable provisions of the Companies Act, 2013, which was further approved by the members in the general meeting held on 19 June 2023.

Consequent to above allotments, the paid-up equity share capital of the Company stands increased from Rs. 74 million consisting of consisting of 7,371,024 equity shares of Rs. 10 each to Rs 103 Millions consisting of 51,597,168 Equity Shares of Rs. 2 each. Earnings per equity share has been calculated for the current period after considering the total number of equity shares post subdivision and issue of bonus shares as per the provisions of the applicable Ind AS.

Securities premium reserve

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

Retained earnings

Retained Earnings represents surplus/accumulated earnings of the Company and are available for distribution to shareholders.

Employee stock option plan

Employee stock option plan represents the outstanding employee stock option reserve.

Other comprehensive income

Other comprehensive income represents the remeasurement of defined benefit plans.

a) The Company during the year ended 31 March 2022, has taken auto loan from HDFC bank for Rs 8 millions which is repayable

in 39 equated monthly installments at the rate of interest of 7% per annum secured by hypothetical life of vehicle

b) Working capital facilities (fund based and non-fund based) from State Bank of India (Rs. 500 million), ICICI Bank (Rs. 220

million) aggregating to Rs. 720 Millions (As at 31 March 2023 Rs 720 Millions) are secured by first pari-passu charge on all the hypothecation of inventory, receivables, book debts and other current assets (present and future) and second pari-passu charge on hypothecation on unencumbered plant, machinery and equipment''s, electrical works and lien on bank deposit of Rs. 400 Millions (State Bank of India - Rs. 150 million, & ICICI Bank - Rs. 250 million) (31 March 2023 Rs 150 Millions).

c) The Company has not defaulted/ delayed in repayment of principal or payment of interest during the period 1 April 2023

to 31 March 2024.

*Assurance type warranties

A provision is recognised for expected warranty claims on products sold during the years, based on past experience of the level of repairs and returns. It is expected that most of these costs will be incurred in the next financial year. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about returns based on the warranty period for all products sold.

a) for information required to be furnished as per Section 22 of the Micro, small, and medium Enterprises Development Act 2006 (MSMED Act) and schedule III of the companies Act 2013, refer to note 39

b) for details on transactions with related party, refer to note 42

c) Trade payables are payables in respect of the amount due on account of goods purchased or services received in the normal course of business.

Performance obligation

Information about the Company''s performance obligations are summarised below:

Sales as original equipment manufacturer

i. The performance obligation is satisfied upon delivery of the goods on ex-works basis at the Company''s manufacturing facility

ii. The customer pays the transaction price equal to the cash selling price as per agreed credit terms which ranges from 0-40 days.

iii. In some contracts, warranty beyond fixing the defects that existed at the time of sale is provided to customers. The warranty is accounted for as a separate performance obligation. The performance obligation for the warranty service is satisfied over time.

Sales to related party

i. The performance obligation is satisfied upon delivery of the good on to customer.

ii. The customer pays the transaction price equal to the cash selling price as per agreed credit terms which ranges from 0-90 days.

iii. In some contracts, warranty beyond fixing the defects that existed at the time of sale is provided to customers. The warranty is accounted for as a separate performance obligation. The performance obligation for the warranty service is satisfied over time.

33 Financial risk management objectives and policies Risk management framework

The Board of Directors of the Company have the overall responsibility for the establishment and oversight of the their risk management framework. The Company has constituted a Risk Management Committee. The Company has in place a Risk management framework to identify, evaluate business risks and challenges across the Company. The risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Audit Committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit which regularly reviews risk management controls and procedures, the results of which are reported to the Audit Committee. These risks include foreign currency risk, credit risk, liquidity risk and interest rate risk.

Foreign currency risk management

The Company''s functional currency in Indian Rupees (INR). The Company undertakes transactions denominated in foreign currencies due to which it is exposed to exchange rate fluctuations. Volatility in exchange rate of foreign currencies affects the cost of imports, primarily in relation to raw materials. The Company is generally exposed to foreign exchange risk arising through its sales and purchases denominated in foreign currency predominantly in US dollars and Euro;

During the current year there are no exports, however the Company has imported leather and other raw materials which is subject to foreign exchange risk.

Refer note 40 for foreign currency risk exposure as at standalone balance sheet date

Commodity price risk

The Company doesn''t enter into any long term contract with its suppliers for hedging its commodity price risk.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Company is exposed to credit risk from its operating activities mainly trade receivables. The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. Credit risk is managed by the Company through approved credit norms, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. Ultimate responsibility for managing the liquidity risk rests with the management, which has established an appropriate liquidity risk management framework for managing the Company''s short-term, medium-term and long-term funding. The Company manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual short-term and long-term cash flows, and by matching the maturity profiles of financial assets and liabilities. The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees at floating rates of interest.

The sensitivity analyses below have been determined based on the exposure to interest rates for floating rate liabilities, assuming the amount of the liabilities outstanding at the year end was outstanding for the whole year.

If interest rates had been 100 basis points higher / lower and all other variables were held constant, the Company''s profit for the year ended 31 March 2024 would decrease / increase by Rs 0.15 million (for the year ended 31 March 2023: decrease / increase by Rs 0.08 million). This is mainly attributable to the Company''s exposure to interest rates on its variable rate borrowings.

Capital management

The Company''s objective for capital management is to maximize shareholder''s wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long term and other strategic investment plans. The funding requirement are met through equity, borrowings and operating cash flows required.

34 Financial instruments

The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2 to the standalone financial statements.

Financial instruments by category and hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level is as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

There are no transfers between levels during the year.

The management considers that the carrying amount of financial assets and financial liabilities recognised in these standalone financial statements at amortised cost approximate their fair values.

The Company as not disclosed the fair value for of trade receivables, cash and cash equivalents, other bank balances, other financial assets, lease liabilities, trade payables and other financial liabilities because their carrying amounts are the approximation of fair values.

35 The Company has used accounting softwares for maintaining its books of account for the financial year ended 31 March 2024 which has a feature of recording audit trail (edit log) facility, however, the same has not been enabled throughout the year for all relevant transactions recorded in the software. The Company is in process of implementing the changes inline with the regulations.

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

(e) Rental expense recorded for short-term leases was Rs. 6 million for the period ended 31 March 2024 (31 March 2023: Rs. 6 million)

(f) Sub-lease income:

The Company has sub-let certain factory and showroom spaces that are renewable on a periodic basis. All leases are cancellable by providing sufficient notice. Rental income received during the period in respect of operating lease is Rs 60 millions (31 March 2023: Rs 50 millions).

b. Defined benefit plan - Gratuity

The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per The Payment of Gratuity Act, 1972 and the Company''s scheme applicable to the employee. The Company makes annual contributions to an Insurance managed fund to fund its gratuity liability. The Company operates single type of gratuity plans wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service depending on the date of joining and eligibility terms. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service.

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

The weighted average duration of the defined benefit obligation as at 31 March 2024 is 8 years (As at 31 March 2023: 9 years)

38 Contingent liabilities and commitments (to the extent not provided for)
Particulars	31 March 2024	31 March 2023
(i) Contingent liabilities:
(a) Income tax (relating to disallowance of expenses/deduction, expenses claimed & adjustments) (Refer note 2 below)	1	1
(b) Customs(relating to EPCG license)	8	-
(c) Atria mall case (Refer note 1 below)	26	26
(d) Others (relating to consumer complains and other matters)	2	2
(ii) Commitments:
(a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)	31	14
(c) Corporate Guarantee
- Stanley Retail Limited, Subsidiary Company	201	201
- Stanley OEM Sofas Limited, Subsidiary Company	170	170

Notes:

1. M/s Alif Enterprises & Ors. have filed suit against the Company for non payment of rent, hoarding and other maintenance charges for the space allocated in ''Atria Mall'' which amounts to Rs. 26 millions. The Company has filed counter claim against M/s Alif Enterprises & Ors. for loss suffered due to the poor maintenance in ''Atria Mall''. The Management is of the opinion that the case would be settled favorably and hence there is no necessity to provide for any anticipated liability.

2. An order under Section 143(3) of the Income Tax Act, 1961 has been received invoking provision u/s 37 of Income Tax Act, 1961 disallowing certain expenses for assessment year 2021-2022. The demand is Rs 1 million and the Group has appealed against the same by remitting 20% i.e. Rs 0.28 million under dispute. In the financial ended 31 March 2022, the Company has filed an appeal.

41 Segment information

The primary reporting of the Company has been made on the basis of Business Segments. The Company has a single business segment as defined in Indian Accounting Standard (Ind AS) 108 on Segment Reporting, namely business of manufacturing and trading of furniture and leather products. The Managing Director of the Company allocates and assess the performance of the Company and is the chief operating decision maker (CODM). The CODM monitors the operating results of the business as a single segment, hence no separate segment need to be considered.

45 Details submitted to bank on account of credit facility availed

Working capital facilities (fund based and non-fund based) aggregating to Rs. 720 million (as at 31 March 2023 Rs. 720 million) are secured by first pari-passu charge on all the hypothecation of inventory, receivables, book debts and other current assets (present and future) and second pari-passu charge on hypothecation on unencumbered plant, machinery and equipment''s, electrical works, corporate guarantee by Stanley Lifestyles Limited, Parent Company and lien on bank deposit of Rs. 400 million (31 March 2023: Rs 150 million).

Explanations for variances change more than 25%:

i. Increase in Earning before interest and taxes of the Company during the year has resulted in movement in this ratio.

ii. Increase in Profit of the Company during the year has resulted in movement in this ratio.

iii. Increase in current liabilities of the Company during the year has resulted in movement in this ratio.

51 Employee Stock Options

Employee Stock Option Plan 2022 ("ESOP 2022")

The Company established the Employee Stock Option Plan 2022 ("ESOP 2022") with effect from 30 September 2022 as approved vide Board Resolution dated 6 September 2022 and shall continue to be in force until (i) its termination by the Board or (ii) the date on which all of the options available for issuance under ESOP 2022 have been issued and exercised.

Pursuant to the ESOP 2022, the Company has granted options to the employees of the Company and employees of subsidiary Company and Companies forming part of the Company, which would vest to the employees as per the terms of the Grant Letter.

Fair value of share options grant

The fair value of the share options granted is estimated at the grant date using the option pricing model (Black Scholes), taking into account the terms and conditions upon which the share options were granted.

52

(i) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

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

iii) The Company has not traded or invested in crypto currency or virtual currency during the financial period.

iv) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

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

vi) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies (ROC) beyond statutory period.

53

A) The Company has not advanced or loaned or invested funds to any persons or entities, including foreign entities (intermediaries) with the understanding that the Intermediary shall:

1) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or

2) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

B) The Company has not received any fund from any persons or entities, including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

54 The Company has maintained proper books of account as required by law except for keeping backup on daily basis of such books of account maintained in electronic mode, in a server physically located in India.

55 The Company has undertaken the following changes to share capital:

(i) The Company''s Board of Directors, at its meeting held on 16 June 2023, proposed/recommended to the members of the Company a subdivision of authorised share capital from 75,00,000 equity shares having a face value of Rs. 10 each per equity share to 3,75,00,000 equity shares having a face value of Rs. 2 each per equity share in terms of Sections 13, 61, and 64 and other applicable provisions of the Companies Act, 2013, which was further approved by the members in the general meeting held on 19 June 2023.

(ii) The Company''s Board of Directors, at its meeting held on 16 June 2023, proposed/recommended to the members of the Company, an increase in the authorised share capital from Rs. 75 million to Rs. 150 million in terms of Section 61 and other applicable provisions of the Companies Act, 2013, which was further approved by the members in the general meeting held on 19 June 2023.

(iii) The Company''s Board of Directors, at its meeting held on 16 June 2023, proposed/recommended to the members of the Company, a bonus share in the proportion of 2 new bonus shares of Rs 2 each per equity share for every 5 existing fully paid-up equity shares of Rs 2 each, by capitalisation an amount of Rs 29.48 million in terms of Sections 63 and 123(5) and other applicable provisions of the Companies Act, 2013, which was further approved by the members in the general meeting held on 19 June 2023.

(iv) The Company''s Board of Directors, at its meeting held on 22 August 2023, proposed/recommended to the members of the Company amending the employee stock option scheme of the Company, namely, Stanley Lifestyles Limited Employee Stock Option Plan 2022, to comply with the requirements of the Securities and Exchange Board of India (Share-Based Employee Benefits and Sweat Equity) Regulations, 2021 (the ""SEBI SBEB & SE Regulations""), as amended, which was further approved by the members in the annual general meeting.

56 The Company evaluated all events or transactions that occurred after 31 March 2024 up through 19 July 2024, the date the financial statements were authorized for issue by the Board of Directors. Based on this evaluation, the Company is not aware of any events or transactions that would require recognition or disclosure in the financial statements other than as below:

1. The Company''s equity shares have been listed on Bombay Stock Exchange Limited ( "" BSE"" ) and on National Stock Exchange of India Limited ( ""NSE"") on June 28, 2024 by completing Initial Public Offering of 14,553,508 equity shares of face value of Rs. 2 each at an issue price of Rs 369 per equity share, consisting of an offer for sale of 9,133,454 equity shares by selling shareholders and fresh issue of 5,420,054 equity shares.

57 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.