Notes to Accounts of Vedant Fashions Ltd.

Mar 31, 2025

q) Provisions tor liabilities, contingent liabilities and contingent assets

The Company recognises a provision when there is a present obligation as a result of a past event that probably
requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are
determined based on best estimates of the amount required to settle the obligation at the balance sheet date. These
are reviewed at each balance sheet date and adjusted to reflect the current best estimates. If the effect of time value
of money is material, provisions are discounted. The discount rate used to determine the present value is a pre-tax
rate that reflects current market assessments of the time value of money and the risks specific to the liability. The
increase in the provision due to the passage of time is recognised as interest expense. The Company does not recognize
a contingent liability but discloses its existence in the financial statements. A disclosure for a contingent liability is
made when there is a possible obligation arising 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 it is not probable that an outflow of
resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot
be measured with sufficient reliability. Where there is a possible obligation or a present obligation that the likelihood
of outflow of resources is remote, no provision or disclosure is made. Contingent liabilities are reviewed at each balance
sheet date and adjusted to reflect the current best estimates.

Contingent asset is not recognised in financial statements since this may result in the recognition of income that
may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a
contingent asset and is recognized.

r) Declaration ot Dividend

The Company recognises a liability to pay final dividend to equity holders when the distribution is authorised, and
the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a final dividend is
authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

s) Share capital

Equity shares

Incremental costs directly attributable to the issue of equity shares are recognised as a deduction from equity. Income
tax relating to transaction costs of an equity transaction is accounted for in accordance with Ind AS 12.

t) Impairment of non-financial asset

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than biological
assets, investment property, inventories, contract assets and deferred tax assets) to determine whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is
tested annually for impairment.

u) Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

An asset is treated as current when it is:

- Expected to be realized or intended to be sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realized within twelve months after the reporting period, or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.

All other assets are classified as non-current.

A liability is treated as current when:

- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;

- It is due to be settled within twelve months after the reporting period, or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period.

All other liabilities are classified as non-current.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and
cash equivalents. The Company has evaluated and considered its operating cycle as 12 months. Deferred tax assets/
liabilities are classified as non-current assets/ liabilities.

5. Intangible Assets and Intangible Assets Under Development (IAUD)¹ (Contd.)

The projections cover a period of five years, as the Company believes this to be the most appropriate time period
over which to review and consider annual performances and thereafter fixed terminal value has been considered.
The estimated future projections are after considering past performance and expected normal future performance
excluding disruption caused by the pandemic.

Weighted Average Cost of Capital % (WACC) = Risk free return ( Market risk premium x Beta for the Company).

The goodwill and brand (with indefinite life) are tested for impairment annually and based on such testing, no provision
towards impairment has been considered necessary in each of the year presented. Further based on Management
assessment there is no trigger for impairment as on March 31, 2025.

The Company has performed sensitivity analysis around the base assumptions and has concluded that reasonable
possible change in key assumptions would not result in the recoverable amount of the CGU to be less than the carrying
value.

(3) Represents usage rights acquired under license arrangement from Kolkata Municipal Corporation as recorded permit
holder.

(4) Represents applications made for various trademark registration.

8. Non-current - utner assets (Conta.)

transferred was considered more reliably measurable pending commencement of construction. Based on valuation
exercise conducted by an external valuer, fair value of the leasehold land was considered equivalent to the cost of land
transferred. Subsequently, the Company had exercised an exclusive and irrevocable option, granted by the aforesaid
developer, to convert such area/space sharing arrangement into the revenue sharing arrangement in terms of which
the Company is entitled to receive certain agreed percentage of proceeds from sale of the constructed area/space to
third parties. During the previous financial year ended March 31, 2024 share of sale proceeds received from developer
has been adjusted against capital advance and resultant income of Rs 19.76 million has been accounted as other
income due to transfer of control of the respective constructed space.

Nature and purpose of reserves

Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general
reserve, dividends or other distributions paid to shareholders. Retained earnings is a free reserve available to the Company
and eligible for distribution to shareholders.

Securities Premium: The amount received in excess of face value of the equity shares is recognised in Securities Premium
as per the provision of Companies Act, 2013. This reserve is utilised in accordance with the provisions of the Act.

Capital Redemption Reserve: As per the provisions of section 68 of Companies Act, 2013, the Company has recognised
Capital Redemption Reserve on buyback of equity shares from its securities premium and retained earnings. The amount
in Capital Redemption Reserve is equal to nominal amount of the equity shares bought back.

Capital Reserve: During amalgamation, the excess amount of the cancelled share capital of the Company over the investment
by the amalgamating Company in the Company is treated as Capital Reserve in the Company’s financial statements.

Share options outstanding account: The fair value of the equity-settled share based payment transactions is recognised
in Statement of Profit and Loss with corresponding credit to Share based payment reserve.The same is adjusted on ESOP
allotment made by the Company.

42.Employee benefits

(I) Defined contribution plan

In accordance with The Employees Provident Funds and Miscellaneous Provisions Act, 1952 employees are entitled
to receive benefits under the provident fund. Both the employee and the employer make monthly contributions to the
plan at a predetermined rate as per the provisions of applicable statute. Retirement benefit in the form of provident
fund and employees’ state insurance (ESI) are defined contribution scheme and the contributions are charged to
statement of profit and loss of the period when the employee renders the service. There are no obligations other than
the contribution payable to the respective funds.

(II) Defined benefit plan - Unfunded

In accordance with the Payment of Gratuity Act, 1972, the Company contributes to a defined benefit plan (the “Gratuity
Plan”) for employees who have completed 5 years of service. The Gratuity Plan provides a lump sum payment to vested
employees at retirement, disability or termination of employment being an amount based on the respective employee’s
last drawn salary and the number of years of employment with the Company.

E. Risk analysis

Company is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined
benefits plans and management estimation of the impact of these risks are as follows:

(1) Salary growth risks

The present value of the defined benefit plan liability is calculated by reference to the future salaries of
plan participants. Salary increase considered at the rate of 7%. As such, an increase in the salary of the plan
participants will increase the plan’s liability.

(2) Life expectancy / Longevity risks

The present value of the defined benefit plan liability is calculated by reference to the best estimates of the
mortality of plan participants both during and after their employment. Mortality tables as per Indian Assured
Lives Mortality (2006-08) Ult. is used for during the employment and post retirement respectively. An increase
in the life expectancy of the plan participants will increase the plan’s liability.

(3) Interest rate risks

A decrease in the bond interest rate will increase the plan liability.

(4) Inflation risks

A decrease in the inflation rate will increase the plan’s liability.

F. 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 and the final rules/interpretation
have not yet been issued. 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.

48 Financial Risk Management (Contd.)

a) Market Risk

Market risk is the risk that changes in market prices - e.g. foreign exchange rates, interest rates and equity prices - will
affect the company income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Currency Risk

The Company operates both in domestic and international market and consequently the Company is exposed to foreign
exchange risk through its sales in overseas countries. The Company holds forward contracts such as foreign exchange
contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

(1) For the year ended March 31, 2025, every percentage appreciation/depreciation in the exchange rate between the
Indian rupee and USD, would increase/decrease the Company’s profit before tax by approx. INR 0.32 Million (INR
0.02 Million for the year ended March 31, 2024) and increase/decrease in equity by INR 0.24 Million (INR 0.01
Million for the year ended March 31, 2024).

(2) For the year ended March 31, 2025, every percentage appreciation/depreciation in the exchange rate between the
Indian rupee and CAD, would increase/decrease the Company’s profit before tax by approx. INR 0.01 Million (INR
0.00 Million for the year ended March 31, 2024) and increase/decrease in equity by INR 0.00 Million (INR 0.00
Million for the year ended March 31, 2024).

(3) For the year ended March 31, 2025, every percentage appreciation/depreciation in the exchange rate between the
Indian rupee and GBP, would increase/decrease the Company’s profit before tax by approx. INR 0.00 Million (INR
0.00 Million for the year ended March 31, 2024) and increase/decrease in equity by INR 0.00 Million (INR 0.00
Million for the year ended March 31, 2024).

Derivative Financial Instruments

The Company uses derivative instruments as part of its management of exposure to fluctuations in foreign currency
exchange rates. The Company does not acquire or issue derivative financial instruments for trading or speculative
purposes. The Company does not enter into complex derivative transactions to manage the treasury risks. Treasury
derivative transactions are in the form of forward contracts and these are subject to the Company’s guidelines and
policies.

All derivative financial instruments are recognized as assets or liabilities on the balance sheet and measured at fair
value, generally based on quotations obtained from banks. The accounting for changes in the fair value of a derivative
instrument depends on the intended use of the derivative and the resulting designation. The fair values of all derivatives
are separately recorded in the balance sheet within current assets and liabilities.

48 Financial Risk Management (Contd.)

The Company uses derivative instruments as part of its management of exposures to fluctuations in foreign currency
exchange rates. The use of derivatives can give rise to credit and market risk. The Company tries to control credit risk
as far as possible by only entering into contracts with reputable banks and financial institutions. The use of derivative
instruments is subject to limits, authorities and regular monitoring by appropriate levels of management. The limits,
authorities and monitoring systems are periodically reviewed by management. The market risk on derivatives is
mitigated by changes in the valuation of the underlying assets, liabilities or transactions, as derivatives are used only
for risk management purposes.

Commodity Price Risk

The Company is affected by price volatility of its key raw materials and traded goods. Its operating activities requires a
continuous supply of key material for manufacturing products. The Company’s procurement department continuously
monitor the fluctuation in price and take necessary action to minimize its price risk exposure.

Interest rate Risk

The Company is debt-free and the exposure to interest rate risk from the perspective of Financial Liabilities is negligible.
Further, treasury activities, focused on managing investments in debt instruments, are centralised and administered
under a set of approved policies and procedures guided by the tenets of safety, liquidity and returns. This ensures that
investments are only made within acceptable risk parameters after due evaluation.

Price Risk

The Company’s businesses are subject to certain risks and uncertainties including financial risks. Company has invested
in bonds, debentures and mutual funds. To manage its price risk arising from investments, the Company diversifies
its portfolio. The investments are susceptible to market price risk, mainly arising from changes in the interest rates or
market yields which may impact the return and value of such investments.

b) Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum
exposure to the credit risk at the reporting date is primarily from trade receivables amounting to INR 6,186.12 Million
and INR 5,645.21 Million as at March 31, 2025 and March 31, 2024 respectively. Trade receivable includes both
secured and unsecured receivables and are derived from revenue earned from domestic and overseas customers.
Credit risk has always been managed by the Company through taking security deposits and bank guarantees from
customers, credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers
to which the Company grants credit terms in the normal course of business. An impairment analysis is performed at
each reporting date on an individual basis based on historical data of credit losses.

Credit risk on cash and cash equivalents including other bank balances, investment in mutual funds and debt securities
is limited as the Company generally invest in deposits with banks, financial institutions and counterparties with high
credit ratings assigned by international and domestic credit rating agencies.

For ageing analysis of the trade receivables, refer Note 12.

Credit risk exposure

The allowance for lifetime expected credit loss on customer balances amounts to INR 50.85 million and INR 44.26
million as at year ended March 31, 2025 and March 31, 2024 respectively.

c) Liquidity Risk

The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from
operations as well as investment in mutual funds, fixed deposits, bonds and debentures. The Company believes that
the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

54. Critical estimates and judgements in applying accounting policies

The management believes that the estimates used in preparation of the financial statements are prudent and
reasonable. Information about estimates and judgements made in applying accounting policies that have the most
significant effect on the amounts recognized in the financial statements are as follows:

i) Revenue Recognition

Management applies following criteria to determine the point of revenue recognition:

(a) The Company has a present right to payment for the product if a Customer/ Franchisee is presently obliged to pay
for an product in accordance with the terms of the agreement.

(b) The Customer/ Franchisee has legal title to the product

(c) The Company has transferred physical possession of the product

(d) The Customer/ Franchisee has the significant risks and rewards of ownership of the product

(e) The Customer/ Franchisee has accepted the product

Based on the evaluation of the aforementioned criteria, the Company recognises revenue when the good are delivered
to the Customer/ Franchisee.

The Company updates its assessment of expected returns based on the best estimates and judgements and the
refund liabilities are adjusted accordingly. Estimates of expected returns are sensitive to changes in circumstances
& judgements and the Company’s past experience regarding returns may not be representative of customers’ actual
returns in the future. As at March 31, 2025, the amount recognised as refund liabilities for the expected returns is INR
1,099.22 Million and corresponding right of return asset is INR 363.30 Million (March 31, 2024: expected returns was
INR 1,083.20 Million and corresponding right of return asset is INR 358.91 Million).

ii) Property, plant and equipment and useful life of property, plant and equipment and intangible assets

The carrying value of property, plant and equipment and intangible assets (excluding brand & goodwill) is arrived at by
depreciating the assets over the useful life of assets. The estimate of useful life is reviewed at the end of each financial
year and changes are accounted for prospectively.

iii) Impairment of non-financial assets (including intangible assets)

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which
is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation
is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable
market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted
cash flow model. The recoverable amount is sensitive to the discount rate used for the discounted cash flow model as
well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are
most relevant to the goodwill and brand.

iv) Estimation of provisions and contingencies

The assessments undertaken in recognising provisions and contingencies have been made in accordance with the
applicable Ind AS. A provision is recognized if, as a result of a past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to
settle the obligation. Where the effect of time value of money is material, provisions are determined by discounting the
expected future cash flows.

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company.
There are certain obligations which management has concluded, based on all available facts and circumstances, are not
probable of payment or are very difficult to quantify reliably, and such obligations are treated as contingent liabilities
and disclosed in the notes but are not reflected as liabilities in the financial statements. Although there can be no
assurance regarding the final outcome of the legal proceedings in which the Company is involved, it is not expected
that such contingencies will have a material effect on its financial position or profitability.

v) Defined benefit plan

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation 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 operated in India, the
management considers the interest rates of government bonds in currencies consistent with the currencies of the post¬
employment benefit obligation. The mortality rate is based on publicly available mortality table. 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. (Refer Note 42)

vi) Leases

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by
an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate
the lease, if it is reasonably certain not to be exercised. The Company has several lease contracts that include extension
and termination options. The Company applies judgement in evaluating whether it is reasonably certain to exercise
the option to renew or terminate the lease. It considers all relevant factors that create an economic incentive for it to
exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if
there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not
to exercise the option to renew or to terminate.

vii) Share-based payment

The Company uses the most appropriate valuation model depending on the terms and conditions of the grant, including
the expected life of the share option and volatility. The assumptions and models used for estimating fair value for
share-based payment transactions are disclosed in Note 51.

viii) Fair Value Measurements

Management applies valuation techniques to determine the fair value of financial instruments (where active market
quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with
how market participants would price the instrument. Management bases its assumptions on observable data as far as
possible but this is not always available. In that case management uses the best information available. Estimated fair
values may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.

ix) Recoverability of Deferred Tax Assets

Deferred tax assets are recognised for unused tax losses including capital losses to the extent it is probable that taxable
future profit/capital gains will be available against which applicable losses can be utilised. Significant management
judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely
timing and the level of future taxable profits together with future tax planning strategies.

55. Consequent to the approval of the National Company Law Tribunal (NCLT), the Company on April 01, 2024, has
recorded the net assets (net asset represents assets, liabilities and reserves) of Manyavar Creations Private Limited.
The Company has accounted the acquisition in accordance with Appendix C to IND AS 103 being business combination
of entities under common control. Accordingly, the financial information in respect of prior year has been restated for
the amalgamation as if the business combination has occurred from the beginning of previous year. The Company
has recorded assets at carrying value of INR 267.65 million, liabilities at INR 20.87 million, reserves at INR 206.68
million and cancelled the investments held amounting to INR 200.10 million. The difference between the investment
cancelled and the net assets taken over on amalgamation of INR 160 million has been adjusted with retained earnings.

56. Subsequent event

There are no material non-adjusting events after the reporting period till the date of issue of these financial statements
(i.e. May 06, 2025) which require disclosure in financial statement.

In terms of our report attached of the even date

For B S R & Co. LLP Vedant Fashions Limited

Chartered Accountants For and on behalf of the Board of Directors

ICAI Firm registration number: 101248W/W-100022

Seema Mohnot Ravi Modi Shilpi Modi

Partner Chairman and Managing Director Wholetime Director

Membership No. 060715 DIN : 00361853 DIN : 00361954

Rahul Murarka Navin Pareek

Place: Kolkata Chief Financial Officer Company Secretary

Date: May 06, 2025 ICSI Membership No. F10672

---

Mar 31, 2024

q) Provisions for liabilities, contingent liabilities and contingent assets

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are determined based on best estimates of the amount required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. If the effect of time value of money is material, provisions are discounted. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. The Company does not recognize a contingent liability but discloses its existence in the standalone financial statements. A disclosure for a contingent liability is made when there is a possible obligation arising 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 it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent liabilities are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent asset is not recognised in standalone financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognized.

r) Declaration of Dividend

The Company recognises a liability to pay final dividend to equity holders when the distribution is authorised, and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a final dividend is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

s) Share capital

Equity shares

Incremental costs directly attributable to the issue of equity shares are recognised as a deduction from equity. Income tax relating to transaction costs of an equity transaction is accounted for in accordance with Ind AS 12.

t) Impairment of non-financial asset

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than biological assets, investment property, inventories, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

u) Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

An asset is treated as current when it is:

O Expected to be realized or intended to be sold or consumed in normal operating cycle;

O Held primarily for the purpose of trading;

O Expected to be realized within twelve months after the reporting period, or

O Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is treated as current when:

O It is expected to be settled in normal operating cycle;

O It is held primarily for the purpose of trading;

O It is due to be settled within twelve months after the reporting period, or

O There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has evaluated and considered its operating cycle as 12 months. Deferred tax assets/ liabilities are classified as non-current assets/ liabilities.

Nature and purpose of reserves

Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings is a free reserve available to the Company and eligible for distribution to shareholders.

Securities Premium: The amount received in excess of face value of the equity shares is recognised in Securities Premium as per the provision of Companies Act, 2013. This reserve is utilised in accordance with the provisions of the Act.

Capital Redemption Reserve: As per the provisions of section 68 of Companies Act, 2013, the Company has recognised Capital Redemption Reserve on buyback of equity shares from its securities premium and retained earnings. The amount in Capital Redemption Reserve is equal to nominal amount of the equity shares bought back.

18 Other equity (Contd.)

Capital Reserve: During amalgamation, the excess amount of the cancelled share capital of the Company over the investment by the amalgamating Company in the Company is treated as Capital Reserve in the Company’s financial statements.

Share options outstanding account: The fair value of the equity-settled share based payment transactions is recognised in Statement of Profit and Loss with corresponding credit to Share based payment reserve.The same is adjusted on ESOP allotment made by the Company.

(I) Defined contribution plan

In accordance with The Employees Provident Funds and Miscellaneous Provisions Act, 1952 employees are entitled to receive benefits under the provident fund. Both the employee and the employer make monthly contributions to the plan at a predetermined rate as per the provisions of applicable statute. Retirement benefit in the form of provident fund and employees’ state insurance (ESI) are defined contribution scheme and the contributions are charged to statement of profit and loss of the period when the employee renders the service. There are no obligations other than the contribution payable to the respective funds.

(II) Defined benefit plan - Unfunded

In accordance with the Payment of Gratuity Act, 1972, the Company contributes to a defined benefit plan (the “Gratuity Plan”) for employees who have completed 5 years of service. The Gratuity Plan provides a lump sum payment to vested

D Risk analysis

Company is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined benefits plans and management estimation of the impact of these risks are as follows:

(1) Salary growth risks

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. Salary increase considered at the rate of 7%. As such, an increase in the salary of the plan participants will increase the plan''s liability.

(2) Life expectancy / Longevity risks

The present value of the defined benefit plan liability is calculated by reference to the best estimates of the mortality of plan participants both during and after their employment. Mortality tables as per Indian Assured Lives Mortality (2006-08) Ult. is used for during the employment and post retirement respectively. An increase in the life expectancy of the plan participants will increase the plan''s liability.

(3) Interest rate risks

A decrease in the bond interest rate will increase the plan liability.

(4) Inflation risks

A decrease in the inflation rate will increase the plan''s liability.

E 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 and the final rules/interpretation have not yet been issued. 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.

43 Contingencies and commitments (Contd.)

interest upto the date of demand order) over and above the income tax obligations estimated by the Company for those assessment years had been raised by the department on account of disallowances of certain expenses. The Company had filed Appeals against these Orders after paying INR 46.51 million under protest.

Based on records maintained, management is confident that the Company will be able to prove that such expenses were incurred for the purpose of the Company’s business and are eligible for deduction which is duly supported by a legal opinion obtained in this regard and has been considered as contingent liability as on March 31, 2023. Also during the year, the Company has received order from Income Tax department in it’s favour, however the final effect order is still awaited and thus the matter continues to be reported as Contingent liability as on March 31, 2024.

# During the previous year March 31, 2023 Bank Guarantee amounting to Rs. 284.92 million given to National Stock Exchange of India Limited (NSE) in relation to Initial Public Offer (IPO), which has been released during the current financial year March 31, 2024.

47 Fair Value Hierarchy

The table shown below analyses financial instruments carried at fair value or net asset value, by valuation method. The different levels have been defined below:

Level 1: unquoted/quoted prices (unadjusted) in active markets and net asset value (NAV) for identical assets or liabilities

Level 2: inputs 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 for the asset or liability that are not based on observable market data (unobservable inputs)

48 Financial Risk Management

The Company’s activities expose it to variety of financial risks: market risk, credit risk and liquidity risk. The Company’s focus is to forsee the unpredictability of markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is commodity price risk. The Company uses forward contracts to mitigate foreign exchange related risk exposures.

48 Financial Risk Management (Contd.)

a) Market Risk

Market risk is the risk that changes in market prices - e.g. foreign exchange rates, interest rates and equity prices - will affect the company income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Currency Risk

The Company operates both in domestic and international market and consequently the Company is exposed to foreign exchange risk through its sales in overseas countries. The Company holds forward contracts such as foreign exchange contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

(1) For the year ended March 31, 2024, every percentage appreciation/depreciation in the exchange rate between the Indian rupee and USD, would increase/decrease the Company’s profit before tax by approx. INR 0.02 Million (INR 0.00 Million for the year ended March 31, 2023) and increase/decrease in equity by INR 0.01 Million (INR 0.00 Million for the year ended March 31, 2023).

(2) For the year ended March 31, 2024, every percentage appreciation/depreciation in the exchange rate between the Indian rupee and CAD, would increase/decrease the Company’s profit before tax by approx. INR 0.00 Million (INR 0.00 Million for the year ended March 31, 2023) and increase/decrease in equity by INR 0.00 Million (INR 0.00 Million for the year ended March 31, 2023).

Derivative Financial Instruments

The Company uses derivative instruments as part of its management of exposure to fluctuations in foreign currency exchange rates. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. The Company does not enter into complex derivative transactions to manage the treasury risks. Treasury derivative transactions are in the form of forward contracts and these are subject to the Company’s guidelines and policies.

All derivative financial instruments are recognized as assets or liabilities on the balance sheet and measured at fair value, generally based on quotations obtained from banks. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation. The fair values of all derivatives are separately recorded in the balance sheet within current assets and liabilities.

The Company uses derivative instruments as part of its management of exposures to fluctuations in foreign currency exchange rates. The use of derivatives can give rise to credit and market risk. The Company tries to control credit risk as far as possible by only entering into contracts with reputable banks and financial institutions. The use of derivative instruments is subject to limits, authorities and regular monitoring by appropriate levels of management. The limits, authorities and monitoring systems are periodically reviewed by management. The market risk on derivatives is mitigated by changes in the valuation of the underlying assets, liabilities or transactions, as derivatives are used only for risk management purposes.

Commodity Price Risk

The Company is affected by price volatility of its key raw materials and traded goods. Its operating activities requires a continuous supply of key material for manufacturing products. The Company’s procurement department continuously monitor the fluctuation in price and take necessary action to minimize its price risk exposure.

Interest rate Risk

The Company is debt-free and the exposure to interest rate risk from the perspective of Financial Liabilities is negligible. Further, treasury activities, focused on managing investments in debt instruments, are centralised and administered under a set of approved policies and procedures guided by the tenets of safety, liquidity and returns. This ensures that investments are only made within acceptable risk parameters after due evaluation.

Price Risk

The Company’s businesses are subject to certain risks and uncertainties including financial risks. Company has invested in bonds, debentures and mutual funds. To manage its price risk arising from investments, the Company diversifies its portfolio. The investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments.

b) Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to INR 5,647.75 Million and INR 4,728.40 Million as at March 31, 2024 and March 31, 2023 respectively. Trade receivable includes both secured and unsecured receivables and are derived from revenue earned from domestic and overseas customers. Credit risk has always been managed by the Company through taking security deposits and bank guarantees from customers, credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. An impairment analysis is performed at each reporting date on an individual basis based on historical data of credit losses.

Credit risk on cash and cash equivalents including other bank balances, investment in mutual funds and debt securities is limited as the Company generally invest in deposits with banks, financial institutions and counterparties with high credit ratings assigned by international and domestic credit rating agencies.

For ageing analysis of the trade receivables, refer Note 12.

Credit risk exposure

The allowance for lifetime expected credit loss on customer balances amounts to INR 34.19 million and INR 32.58 million as at year ended March 31, 2024 and March 31, 2023 respectively.

c) Liquidity Risk

The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations as well as investment in mutual funds, fixed deposits, bonds and debentures. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

54 Critical estimates and judgements in applying accounting policies

The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Information about estimates and judgements made in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are as follows:

i) Revenue Recognition

Management applies following criteria to determine the point of revenue recognition:

(a) The Company has a present right to payment for the product if a Customer/ Franchisee is presently obliged to pay for an product in accordance with the terms of the agreement.

(b) The Customer/ Franchisee has legal title to the product

(c) The Company has transferred physical possession of the product

(d) The Customer/ Franchisee has the significant risks and rewards of ownership of the product

(e) The Customer/ Franchisee has accepted the product

Based on the evaluation of the aforementioned criteria, the Company recognises revenue when the good are delivered to the Customer/ Franchisee.

The Company updates its assessment of expected returns based on the best estimates and judgements and the refund liabilities are adjusted accordingly. Estimates of expected returns are sensitive to changes in circumstances & judgements and the Company’s past experience regarding returns may not be representative of customers’ actual returns in the future. As at March 31, 2024, the amount recognised as refund liabilities for the expected returns is INR 1,083.20 Million and corresponding right of return asset is INR 358.91 Million (March 31, 2023: expected returns was INR 1,070.49 Million and corresponding right of return asset is INR 364.45 Million).

ii) Property, plant and equipment and useful life of property, plant and equipment and intangible assets

The carrying value of property, plant and equipment and intangible assets (excluding brand & goodwill) is arrived at by depreciating the assets over the useful life of assets. The estimate of useful life is reviewed at the end of each financial year and changes are accounted for prospectively.

iii) Impairment of non-financial assets (including intangible assets)

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The recoverable amount is sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to the goodwill and brand.

iv) Estimation of provisions and contingencies

The assessments undertaken in recognising provisions and contingencies have been made in accordance with the applicable Ind AS. A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Where the effect of time value of money is material, provisions are determined by discounting the expected future cash flows.

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. There are certain obligations which management has concluded, based on all available facts and circumstances, are not probable of payment or are very difficult to quantify reliably, and such obligations are treated as contingent liabilities and disclosed in the notes but are not reflected as liabilities in the financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings in which the Company is involved, it is not expected that such contingencies will have a material effect on its financial position or profitability.

54 Critical estimates and judgements in applying accounting policies (Contd.)

v) Defined benefit plan

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation 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 operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the postemployment benefit obligation. The mortality rate is based on publicly available mortality table. 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. (Refer Note 42)

vi) Leases

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain to exercise the option to renew or terminate the lease. It considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.

vii) Share-based payment

The Company uses the most appropriate valuation model depending on the terms and conditions of the grant, including the expected life of the share option and volatility. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 51.

viii) Fair Value Measurements

Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.

ix) Recoverability of Deferred Tax Assets

Deferred tax assets are recognised for unused tax losses including capital losses to the extent it is probable that taxable future profit/capital gains will be available against which applicable losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Deferred tax assets on Long term capital loss have not been recognised in the absence of certainity of availability of adequate future long term capital gains for set off. Further details on taxes are disclosed in Note 22.

55 The Company has one wholly owned subsidiary i.e. Manyavar Creations Private Limited (principal place of business is in India) which is accounted at cost in these standalone financial statements of the Company.

56 The Board of Directors of the Company at it’s meeting held on January 25, 2024 approved a scheme of amalgamation of Manyavar Creations Private Limited (“the Transferor Company), a wholly owned subsidiary, with the Company (“the Transferee Company”). The Company is in the process of obtaining necessary approvals for amalgamation from relevant regulatory authority.

57 Subsequent event

There are no material non-adjusting events after the reporting period till the date of issue of these financial statements (i.e. April 30, 2024) which require disclosure in standalone financial statement.

In terms of our report attached of the even date

For B S R & Co. LLP Vedant Fashions Limited

Chartered Accountants For and on behalf of the Board of Directors

ICAI Firm registration number: 101248W/W-100022

Seema Mohnot Ravi Modi Shilpi Modi

Partner Chairman and Managing Director Wholetime Director

Membership No. 060715 DIN : 00361853 DIN : 00361954

Place: Kolkata Rahul Murarka Navin Pareek

Date: April 30, 2024 Chief Financial Officer Company Secretary

ICSI Membership No. F10672

---

Mar 31, 2023

8.1 During a prior year, the Company had entered into an agreement with a reputed real estate developer for joint development of a parcel of land acquired by the Company under long term lease of 99 years from West Bengal Housing Infrastructure Development Corporation Limited. Consequent to such agreement, the Company had transferred possession of such land parcel in lieu of which the Company was entitled to a share of the area/space to be constructed thereon. Accordingly, the Company had derecognised such leasehold land from property, plant and equipment and considered its cost as capital advance pending possession of its share of constructed area/space. Cost of the land transferred was considered more reliably measurable pending commencement of construction. Based on valuation exercise conducted by an external valuer, fair value of the leasehold land was considered equivalent to the cost of land transferred. Subsequently, the Company had exercised an exclusive and irrevocable option, granted by the aforesaid developer, to convert such area/space sharing arrangement into the revenue sharing arrangement in terms of which the Company is entitled to receive certain agreed percentage of proceeds from sale of the constructed area/space to third parties. Share of sale proceeds received from developer will be adjusted against capital advance on transfer of control of the respective constructed space which will coincide with handover of possession to customers. Pending such handover of possession, advances towards sales proceeds received till March 31, 2023 aggregating INR 500.94 Million (net of GST) [March 31, 2022 - INR 449.95 Million (net of GST)] has been considered as “Advance from customer”.

i) During the previous year, pursuant to a resolution passed by the Board of Directors and a resolution passed by the Company’s equity shareholders in the Extra-ordinary General Meeting held on July 16, 2021, the Company had split face value of its equity shares from INR 2 per equity share to INR 1 per equity share. Consequently, total number of authorised equity shares increased from 15,05,00,000 to 30,10,00,000 and total number of issued equity shares increased from 12,12,16,127 to 24,24,32,254 (after adjustment of buyback as mentioned in Note 17(ii)).

ii) During the previous year, the Board of Directors of the Company, at its meeting held on June 25, 2021 and Shareholders of the Company in the Extra-ordinary General Meeting held on June 26, 2021, approved buyback of the Company’s 27,17,172 fully paid-up equity shares of face value of INR 2 each from the equity shareholders of the Company, at a price of INR 990 per equity share under the Companies Act, 2013, and Rules thereunder. The Maximum buyback size was less than 25% of aggregate of the Company’s paid up equity capital and free reserves based on the audited financial statements of the Company for the year ended March 31, 2021.

Total cash outflow on account of buyback was INR 3,313.31 Million (including tax of INR 621.93 Million and buyback related expense of INR 1.38 Million). Out of the said amount, nominal value of shares bought back INR 5.43 Million, was reduced from share capital and Securities premium account was utilised to the extent of the amount of INR 1,298.87 Million and retained earning was utilised to the extent of the balance amount of INR 2,009.01 Million. A sum equal to the nominal value of the shares so bought back i.e INR 5.43 Million was transferred from retained earnings to the capital redemption reserve as per requirement of Companies Act, 2013. The shares were extinguished as on July 20, 2021.

vi) Rights, preferences and restrictions attached to shares

The Company has only one class of equity shares having par value of INR 1 each (March 31, 2022: INR 1 each). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the general meeting. The above shareholding represents legal ownership of shares.

In the event of liquidation of the Company, the equity shareholders shall 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

Nature and purpose of reserves

Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings is a free reserve available to the Company and eligible for distribution to shareholders.

Securities Premium: The amount received in excess of face value of the equity shares is recognised in Securities Premium as per the provision of Companies Act, 2013. This reserve is utilised in accordance with the provisions of the Act.

Capital Redemption Reserve: As per the provisions of section 68 of Companies Act, 2013, the Company has recognised Capital Redemption Reserve on buyback of equity shares from its securities premium and retained earnings. The amount in Capital Redemption Reserve is equal to nominal amount of the equity shares bought back.

Capital Reserve: During amalgamation, the excess amount of the cancelled share capital of the Company over the investment by the amalgamating Company in the Company is treated as Capital Reserve in the Company’s financial statements.

Share based payment reserve: The fair value of the equity-settled share based payment transactions is recognised in Statement of Profit and Loss with corresponding credit to Share based payment reserve.The same is adjusted on ESOP allotment made by the Company.

22.2 Income tax expenses for the current year and previous year represents charge for respective year, Income tax for earlier year included in the charge amounts to INR Nil.

22.3 The Company is having expected long term capital loss (LTCL) of INR 62.02 Million (March 31, 2022 - INR 52.66 Million), subject to income tax return filing /pending assessment, on which deferred tax assets has not been recognized in the absence of certainity regarding availability of future long term capital gains against which aforesaid LTCL can be set off. The LTCL of INR 52.66 million can be carried forward till assessment year 2028-29 and LTCL of INR 9.36 million can be carried forward to AY 2031-32.

42 Employee benefits

(I) Defined contribution plan

In accordance with The Employees Provident Funds and Miscellaneous Provisions Act, 1952 employees are entitled to receive benefits under the provident fund. Both the employee and the employer make monthly contributions to the plan at a predetermined rate as per the provisions of applicable statute. Retirement benefit in the form of provident fund and employees'' state insurance (ESI) are defined contribution scheme and the contributions are charged to statement of profit and loss of the period when the employee renders the service. There are no obligations other than the contribution payable to the respective funds.

(II) Defined benefit plan - Unfunded

In accordance with the Payment of Gratuity Act, 1972, the Company contributes to a defined benefit plan (the “Gratuity Plan”) for employees who have completed 5 years of service. The Gratuity Plan provides a lump sum payment to vested employees at retirement, disability or termination of employment being an amount based on the respective employee’s last drawn salary and the number of years of employment with the Company.

A Principal actuarial assumptions

Principal actuarial assumptions used to determine the present value of the defined benefit obligation as at and for the year ended are as follows:

The above sensitivity analysis may not be representative of the actual benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

In presenting the above sensitivity analysis, the present value of defined benefit obligation has been calculated using the projected unit credit method at the end of reporting period, which is the same as that applied in calculating the defined obligation liability recognized in the balance sheet.

D Risk analysis

Company is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined benefits plans and management estimation of the impact of these risks are as follows:

(1) Salary growth risks

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. Salary increase considered at the rate of 7%. As such, an increase in the salary of the plan participants will increase the plan’s liability.

(2) Life expectancy / Longevity risks

The present value of the defined benefit plan liability is calculated by reference to the best estimates of the mortality of plan participants both during and after their employment. Mortality tables as per Indian Assured Lives Mortality (2006-08) Ult. is used for during the employment and post retirement respectively. An increase in the life expectancy of the plan participants will increase the plan’s liability.

(3) Interest rate risks

A decrease in the bond interest rate will increase the plan liability.

(4) Inflation risks

A decrease in the inflation rate will increase the plan’s liability.

43 Contingencies and commitments (To the extent not provided for) (i) Contingent liabilities
	As at March 31, 2023	As at March 31, 2022
Demands/claims by various government authorities and other claims not acknowledged as debts:
- Commercial sales tax of various states	0.99	0.99
- Income Tax demands*	232.56	232.56
- Bank Guarantee given#	284.92	284.92
- Demand for employee state insurance (including interest)	7.49	7.15
Total	525.96	525.62
Payment made under protest against the above
- Commercial sales tax of various states	0.43	0.43
- Demand for Income tax	46.51	46.51
- Demand for employee state insurance	0.84	0.84
Total	47.78	47.78

* The Income Tax department had carried out a search and seizure operation at the premises of the Company in November 2018. During the previous year, the department has issued assessment orders dated September 21, 2021 for Assessment Years 2013-14 to 2018-19 under Section 153A of the Income Tax Act, that were subsequently revised vide Orders dated November 30, 2021 and December 01, 2021. Tax demands aggregating INR 232.56 million (including interest upto the date of demand order) over and above the income tax obligations estimated by the Company for those assessment years has been raised by the department on account of disallowances of certain expenses. The Company has filed Appeals against these Orders after paying INR 46.51 million under protest.

Based on records maintained, management is confident that the Company will be able to prove that such expenses were incurred for the purpose of the Company’s business and are eligible for deduction which is duly supported by a legal opinion obtained in this regard and has been considered as contingent liability as on March 31, 2023.

# Bank Guarantee amounting to Rs. 284.92 million given to National Stock Exchange of India Limited (NSE) in relation to Initial Public Offer (IPO).

(ii) Commitments
	As at March 31, 2023	As at March 31, 2022
Capital Commitments
Estimated amount of contracts remaining to be executed on capital account	3.94	8.95
44 Leases (a) The right of use assets comprise of buildings taken on lease. The effective interest rate for lease liabilities is 8.09% as on March 31, 2023 (March 31, 2022 - 8.40%).
	As at March 31, 2023	As at March 31, 2022
(b) Carrying value of right of use assets at the end of the reporting period (Refer Note 4)	2,782.71	2,519.06

44.1 The Ministry of Corporate Affairs vide notification dated July 24, 2020, issued an amendment to Ind AS 116 - Leases, by inserting a practical expedient w.r.t. "Covld-19-Related Rent concessions" effective from the period beginning on or after April 01, 2020 as amended till June 30, 2022. As a practical expedient, a lessee may elect not to assess whether a rent concession that meets the conditions in paragraph 46B of Ind AS 116 is a lease modification. Pursuant to the notification, the Company has applied the practical expedient in financial year ended March 31, 2022 and hence rent concession received during the financial year 202122 aggregating INR 137.48 Million has been accounted for as reversal of liability and disclosed in Other Income.

46 Financial Instruments

Financial risk management objectives and policies

This section gives an overview of the significance of financial instruments for the Company and provides additional information on the Balance Sheet. Details of 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 assets and financial liabilities are disclosed in Note 3.

47 Fair Value Hierarchy

The table shown below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined below:

Level 1: unquoted/quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2: inputs 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)

a) Financial assets and liabilities at fair value are reported at amounts that would be received from sale of an asset and amount of resource to be utilised for settlement of a liability respectively in an orderly transaction between market participants.

b) Derivative instruments - Forward Rate Contracts: The fair value is determined using Level 2 inputs. The Company uses derivative instruments as part of its management of exposure to fluctuations in foreign currency exchange rates. All derivative financial instruments are measured at fair value, generally based on quotations obtained from banks.

c) Trade receivables, cash and cash equivalents, other bank balances, other financial assets, non current deposits, trade payables, lease liabilities and other financial liabilities: Approximate their carrying amounts largely due to the short-term maturities of these instruments. Fair value of investments in mutual funds are on the basis of net asset value as declared by mutual fund house as on the Balance Sheet date.

d) There has been no transfer between level 1, level 2 and level 3 during the above period.

48 Financial Risk Management

The Company’s activities expose it to variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to forsee the unpredictability of markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is commodity price risk. The Company uses forward contracts to mitigate foreign exchange related risk exposures.

a) Market Risk

Market risk is the risk that changes in market prices - e.g. foreign exchange rates, interest rates and equity prices - will affect the company income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Currency Risk

The Company operates both in domestic and international market and consequently the Company is exposed to foreign exchange risk through its sales in overseas countries. The Company holds forward contracts such as foreign exchange contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

(1) For the year ended March 31, 2023 and March 31, 2022, every percentage appreciation in the exchange rate between the Indian rupee and USD, would increase the Company''s profit before tax by approx. INR 0.00 Million and INR 0.42 Million and increase in equity by INR 0.00 Million and INR 0.32 Million respectively.

(2) For the year ended March 31, 2023 and March 31, 2022, every percentage depreciation in the exchange rate between the Indian rupee and USD, would decrease the Company''s profit before tax by approx. INR (0.00) Million and INR (0.42) Million and decrease in equity by INR (0.00) Million and INR (0.32) Million respectively.

Derivative Financial Instruments

The Company uses derivative instruments as part of its management of exposure to fluctuations in foreign currency exchange rates. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. The Company does not enter into complex derivative transactions to manage the treasury risks. Treasury derivative transactions are in the form of forward contracts and these are subject to the Company’s guidelines and policies.

All derivative financial instruments are recognized as assets or liabilities on the balance sheet and measured at fair value, generally based on quotations obtained from banks. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation. The fair values of all derivatives are separately recorded in the balance sheet within current assets and liabilities.

The Company uses derivative instruments as part of its management of exposures to fluctuations in foreign currency exchange rates. The use of derivatives can give rise to credit and market risk. The Company tries to control credit risk as far as possible by only entering into contracts with reputable banks and financial institutions. The use of derivative instruments is subject to limits, authorities and regular monitoring by appropriate levels of management. The limits, authorities and monitoring systems are periodically reviewed by management. The market risk on derivatives is mitigated by changes in the valuation of the underlying assets, liabilities or transactions, as derivatives are used only for risk management purposes.

Commodity Price Risk

The Company is affected by price volatility of its key raw materials and traded goods. Its operating activities requires a continuous supply of key material for manufacturing products. The Company''s procurement department continuously monitor the fluctuation in price and take necessary action to minimize its price risk exposure.

Interest rate Risk

The Company is debt-free and the exposure to interest rate risk from the perspective of Financial Liabilities is negligible. Further, treasury activities, focused on managing investments in debt instruments, are centralised and administered under a set of approved policies and procedures guided by the tenets of safety, liquidity and returns. This ensures that investments are only made within acceptable risk parameters after due evaluation.

Price Risk

The Company’s businesses are subject to certain risks and uncertainties including financial risks. Company has invested in bonds, debentures and mutual funds. To manage its price risk arising from investments, the Company diversifies its portfolio. The investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments.

b) Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to INR 4,728.40 Million and INR 3,947.99 Million as at March 31, 2023 and March 31, 2022 respectively. Trade receivable includes both secured and unsecured receivables and are derived from revenue earned from domestic and overseas customers. Credit risk has always been managed by the Company through taking security deposits and bank guarantees from customers, credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. An impairment analysis is performed at each reporting date on an individual basis based on historical data of credit losses.

Credit risk on cash and cash equivalents including other bank balances, investment in mutual funds and debt securities is limited as the Company generally invest in deposits with banks, financial institutions and counterparties with high credit ratings assigned by international and domestic credit rating agencies.

For ageing analysis of the trade receivables, refer Note 12.

Credit risk exposure

The allowance for lifetime expected credit loss on customer balances amounts to INR 32.58 million and INR 22.58 million as at year ended March 31, 2023 and March 31, 2022 respectively.

c) Liquidity Risk

The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations as well as investment in mutual funds, fixed deposits, bonds and debentures. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

The table below provides details regarding the contractual maturities of significant financial liabilities.

53 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

54 Critical estimates and judgements in applying accounting policies

The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Information about estimates and judgements made in applying accounting policies that have the most significant effect on the amounts recognized in the interim financial statements are as follows:

i) Revenue Recognition

Management applies following criteria to determine the point of revenue recognition:

(a) The Company has a present right to payment for the product if a Customer/ Franchisee is presently obliged to pay for an product in accordance with the terms of the agreement.

(b) The Customer/ Franchisee has legal title to the product

(c) The Company has transferred physical possession of the product

(d) The Customer/ Franchisee has the significant risks and rewards of ownership of the product

(e) The Customer/ Franchisee has accepted the product

Based on the evaluation of the aforementioned criteria, the Company recognises revenue when the good are delivered to the Customer/ Franchisee.

The Company updates its assessment of expected returns based on the best estimates and judgements and the refund liabilities are adjusted accordingly. Estimates of expected returns are sensitive to changes in circumstances & judgements and the Company’s past experience regarding returns may not be representative of customers’ actual returns in the future. As at March 31, 2023, the amount recognised as refund liabilities for the expected returns is INR 1,070.49 Million and corresponding right of return asset is INR 364.45 Million (March 31, 2022: expected returns was INR 837.23 Million and corresponding right of return asset is INR 292.44 Million).

ii) Property, plant and equipment and useful life of property, plant and equipment and intangible assets

The carrying value of property, plant and equipment and intangible assets (excluding brand & goodwill) is arrived at by depreciating the assets over the useful life of assets. The estimate of useful life is reviewed at the end of each financial year and changes are accounted for prospectively.

iii) Impairment of non-financial assets (including intangible assets)

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The recoverable amount is sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to the goodwill and brand.

iv) Estimation of provisions and contingencies

The assessments undertaken in recognising provisions and contingencies have been made in accordance with the applicable Ind AS. A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Where the effect of time value of money is material, provisions are determined by discounting the expected future cash flows.

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. There are certain obligations which management has concluded, based on all available facts and circumstances, are not probable of payment or are very difficult to quantify reliably, and such obligations are treated as contingent liabilities and disclosed in the notes but are not reflected as liabilities in the financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings in which the Company is involved, it is not expected that such contingencies will have a material effect on its financial position or profitability.

54 Critical estimates and judgements in applying accounting policies (Contd..)

v) Defined benefit plan

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation 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 operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The mortality rate is based on publicly available mortality table. 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. (Refer Note 42)

vi) Leases

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain to exercise the option to renew or terminate the lease. It considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.

vii) Share-based payment

The Company uses the most appropriate valuation model depending on the terms and conditions of the grant, including the expected life of the share option and volatility. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 51.

viii) Fair Value Measurements

Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.

ix) Recoverability of Deferred Tax Assets

Deferred tax assets are recognised for unused tax losses including capital losses to the extent it is probable that taxable future profit/capital gains will be available against which applicable losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Deferred tax assets on Long term capital loss have not been recognised in the absence of certainity of availability of adequate future long term capital gains for set off. Further details on taxes are disclosed in Note 22.

55 Assets Held For Sale

During the previous year, the Company had received advance amounting to INR 13.24 Million against sale of an identified asset -building under right of use asset. Consequently, the carring value of such assets amounting to INR 13.26 Million (Gross block: INR 15.39 Million and Accumulated depreciation of INR 2.13 Million) has been disclosed as “Assets held for sale” as on March 31, 2022. The transaction is completed in financial year ended March 31, 2023. Recoverable value from the transaction was INR 26.36 million (including amount received till March 31, 2022).

56 The Company has one wholly owned subsidiary i.e. Manyavar Creations Private Limited (principal place of business is in India) which is accounted at cost in these standalone financial statements of the Company.

57 Subsequent event

There are no material non-adjusting events after the reporting period till the date of issue of these financial statements (i.e. April 28, 2023) which require disclosure in standalone financial statement.

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Mar 31, 2022

(1) On transition to Ind AS (w.e.f. April 1, 2016), the Company had elected to continue with carrying values of all intangible assets measured as per the previous Indian GAAP and had considered those carrying values as deemed cost of respective items of intangible assets.

(2) Based on the information provided to and used by the Chief Operating Decision Maker, the Company had identified that it''s only Cash Generating Unit (CGU) is "Branded fashion apparel and accessories", to which the goodwill and brand (with indefinite life) acquired in earlier years through acquisition of business, has been entirely allocated. The carrying amount of goodwill and brand as at the end of the each reported year is INR 157.11 Million and INR 1,505.83 Million respectively.

Following key assumptions were considered while performing impairment testing annually:

The projections cover a period of five years, as the Company believes this to be the most appropriate time period over which to review and consider annual performances and thereafter fixed terminal value has been considered. The estimated future projections are after considering past performance and expected normal future performance excluding disruption caused by the pandemic.

Weighted Average Cost of Capital % (WACC) = Risk free return ( Market risk premium x Beta for the Company).

The goodwill and brand (with indefinite life) are tested for impairment annually and based on such testing, no provision towards impairment has been considered necessary in each of the year presented.

The Company has performed sensitivity analysis around the base assumptions and has concluded that no reasonable change in key assumptions would result in the recoverable amount of the CGU to be less than the carrying value.

(3) Represents usage rights acquired under license arrangement from Kolkata Municipal Corporation as recorded permit holder.

(4) Represents applications made for various trademark registration in various countries.

6.1 The Company has sold its investment in Mohey Fashion Private Limited (MFPL), a wholly owned subsidiary, on August 20, 2021 to Ravi Modi & Shilpi Modi for a consideration equivalent to its book value of INR 1.00 million. Consequently, with effect from August 20, 2021, MFPL ceased to be a subsidiary of the Company (Refer Note 45).

(1) Represents bank deposits lodged with sales tax authorities which earns interest ranging from 4.50% to 5.10% (March 31, 2021 - 4.50% to 6.40%).

8.1 During a prior year, the Company had entered into an agreement with a reputed real estate developer for joint development of a parcel of land acquired by the Company under long term lease of 99 years from West Bengal Housing Infrastructure Development Corporation Limited. Consequent to such agreement, the Company had transferred possession of such land parcel in lieu of which the Company was entitled to a share of the area/space to be constructed thereon. Accordingly, the Company had derecognised such leasehold land from property, plant and equipment and considered its cost as capital advance pending possession of its share of constructed area/space. Cost of the land transferred was considered more reliably measurable pending commencement of construction. Based on valuation exercise conducted by an external valuer, fair value of the leasehold land was considered equivalent to the cost of land transferred. Subsequently, the Company had exercised an exclusive and irrevocable option, granted by the aforesaid developer, to convert such area/space sharing arrangement into the revenue sharing arrangement in terms of which the Company is entitled to receive certain agreed percentage of proceeds from sale of the constructed area/space to third parties. Share of sale proceeds received from developer will be adjusted against capital advance on transfer of control of the respective constructed space which will coincide with handover of possession to customers Pending such handover of possession, advances towards sales proceeds received till March 31, 2022 aggregating INR 449.95 Million (net of GST) [March 31, 2021 - INR 321.37 Million (net of GST)] has been considered as "Advance from customer.

1. As per terms of payment under agreements with majority of customers, sales consideration are receivable by the Company within a maximum period of 180 days from date of delivery of goods. In other cases, sales consideration are receivable within a periods ranging from 30 days to 90 days.

2. Generally, customers remit sales consideration without specifying particular invoices in respect of which such remittances are being made. Hence, such receipts from the customers are adjusted against their trade receivables on First in First out (FIFO) basis. In few cases, where identification is possible, such receipts are adjusted against applicable invoice.

3. There are no unbilled trade receivables as on each reporting date

4. There are no disputed trade receivables as on March 31, 2022 and March 31, 2021

14.1 Includes deposits of INR 0.25 Million (March 31, 2021 - INR 0.10 Million) lodged with sales tax authorities which earns interest ranging from 6% to 6.40% (March 31, 2021 - interest at the rate of 5.10%).

14.2 In order to attign classifications for all periods presented with those of the latest period, the Company has reclassified fixed deposits with financial institutions amounting to INR 325 Million from Other Bank Balances to Current Investments as on March 31, 2021. Management believes that the revised classification reflects the nature of the asset more appropriately. The Investments and Other Bank Balances for the previous year has been reclassified for comparative purposes. The aforesaid revision has no impact on the financial position and profits earned by the Company for the reported periods.

(1) Right of return asset represents the Company''s right to recover the goods expected to be returned by customers. A right of return asset (and corresponding adjustment to cost of sales) is recognised for the underlying goods expected to be returned for an amount equivalent to the cost which is lower than the net realisable value. The asset is measured at the carrying amount of the inventory and is updated for any revisions to its expected level of returns, as well as any additional decreases in the value of the returned products. A refund liability is recognized for the goods that are expected to be returned (i.e., the amount not included in the transaction price).

i) Pursuant to a resolution passed by the Board of Directors and a resolution passed by the Company''s equity shareholders in the Extra-ordinary General Meeting held on July 16, 2021, the Company has split face value of its equity shares from INR 2 per equity share to INR 1 per equity share. Consequently, total number of authorised equity shares have increased from 15,05,00,000 to 30,10,00,000 and total number of issued equity shares have gone up from 12,12,16,127 to 24,24,32,254 (after adjustment of buyback as mentioned in Note 17(iii)). The impact of split of shares has been retrospectively considered for the computation of Earnings Per Share as per the requirement of Ind AS 33.

ii) The Board of Directors of the Company, at its meeting held on April 11, 2020, had approved buyback of the Company''s 12,94,121 fully paid-up equity shares of face value of INR 2 each from the equity shareholders of the Company, at a price of INR 680 per equity share, for an aggregate amount of INR 880.00 Million under the Companies Act, 2013 and Rules thereunder. The actual buyback size was less than 10% of aggregate of the Company''s paid up equity capital and free reserves based on the audited financial statements of the Company as at March 31, 2019, which is in compliance with the maximum permissible limit of 10% of the total paid up equity share capital and free reserves in accordance with Section 68(2) of Companies Act, 2013.

Total cash outflow on account of buyback was INR 1,084.41 Million (including tax). Out of the said amount, nominal value of shares bought back INR 2.59 Million, was reduced from share capital and Securities premium account was utilised to the extent of the balance amount of INR 1,081.82 Million. A sum equal to the nominal value of the shares so bought back i.e INR 2.59 Million has been transferred from securities premium to the capital redemption reserve as per requirement of Companies Act, 2013.

iii) The Board of Directors of the Company, at its meeting held on June 25, 2021 and Shareholders of the Company in the Extraordinary General Meeting held on June 26, 2021, approved buyback of the Company''s 27,17,172 fully paid-up equity shares of face value of INR 2 each from the equity shareholders of the Company, at a price of INR 990 per equity share under the Companies Act, 2013, and Rules thereunder. The Maximum buyback size was less than 25% of aggregate of the Company''s paid up equity capital and free reserves based on the audited financial statements of the Company for the year ended March 31, 2021.

Total cash outflow on account of buyback was INR 3,313.31 Million (including tax of INR 621.93 Million and buyback related expense of INR 1.38 Million). Out of the said amount, nominal value of shares bought back INR 5.43 Million, has been reduced from share capital and Securities premium account has been utilised to the extent of the amount of INR 1,298.87 Million and retained earning has been utilised to the extent of the balance amount of INR 2,009.01 Million. A sum equal to the nominal value of the shares so bought back i.e INR 5.43 Million has been transferred from retained earnings to the capital redemption reserve as per requirement of Companies Act, 2013. The shares were extinguished as on July 20, 2021.

vii) Rights, preferences and restrictions attached to shares

The Company has only one class of equity shares having par value of INR 1 each (March 31, 2021: INR 2 each). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the general meeting. The above shareholding represents legal ownership of shares.

In the event of liquidation of the Company, the equity shareholders shall 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

x) The Board of Directors, at its meeting held on May 09, 2022 recommended final dividend of INR 5 per equity share (par value of INR 1 each) in accordance with section 123 of the Act to the extent it applies to declaration of dividend. This payment is subject to approval of shareholders at the ensuing Annual General Meeting (AGM) of the Company.

Nature and purpose of reserves

Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings includes re-measurement (loss) / gain on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. Retained earnings is a free reserve available to the Company and eligible for distribution to shareholders.

Securities Premium: The amount received in excess of face value of the equity shares is recognised in Securities Premium as per the provision of Companies Act, 2013. This reserve is utilised in accordance with the provisions of the Act.

Capital Redemption Reserve: As per the provisions of section 68 of Companies Act, 2013, the Company has recognised Capital Redemption Reserve on buyback of equity shares from its securities premium and retained earnings. The amount in Capital Redemption Reserve is equal to nominal amount of the equity shares bought back.

Capital Reserve: During amalgamation, the excess amount of the cancelled share capital of the Company over the investment by the amalgamating Company in the Company is treated as Capital Reserve in the Company''s financial statements.

Share based payment reserve: The fair value of the equity-settled share based payment transactions is recognised in Statement of Profit and Loss with corresponding credit to Share based payment reserve. The same is adjusted on the ESOP allotment made by the Company.

22.2The Company is carrying forward expected long term capital loss (LTCL) of INR 52.66 Million [March 31, 2021 - INR 102.11 Million (as per income tax return filed)], subject to income tax return filing /pending assessment, in respect of which deferred tax assets has not been recognized in the absence of certainity regarding availability of future long term capital gains against which aforesaid LTCL can be set off. The LTCL can be carried forward till assessment year 2028-29.

42 Employee benefits

(I) Defined contribution plan

In accordance with The Employees Provident Funds and Miscellaneous Provisions Act, 1952 employees are entitled to receive benefits under the provident fund. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (12% for period ended March 31, 2022 and March 31, 2021) of an employee''s basic salary. Retirement benefit in the form of provident fund and employees'' state insurance (ESI) are defined contribution scheme and the contributions are charged to statement of profit and loss of the period when the employee renders the service. There are no obligations other than the contribution payable to the respective funds.

(II) Defined benefit plan - Unfunded

In accordance with the Payment of Gratuity Act, 1972, the Company contributes to a defined benefit plan (the "Gratuity Plan”) for employees who have completed 5 years of service. The Gratuity Plan provides a lump sum payment to vested employees at retirement, disability or termination of employment being an amount based on the respective employee''s last drawn salary and the number of years of employment with the Company.

C Sensitivity analysis

Below is the sensitivity analysis determined for significant actuarial assumptions for the determination of defined benefit obligations and based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period while holding all other assumptions constant.

The above sensitivity analysis may not be representative of the actual benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

In presenting the above sensitivity analysis, the present value of defined benefit obligation has been calculated using the projected unit credit method at the end of reporting period, which is the same as that applied in calculating the defined obligation liability recognized in the balance sheet.

D Risk analysis

Company is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined benefits plans and management estimation of the impact of these risks are as follows:

(1) Salary growth risks

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. Salary increase considered at the rate of 7%. As such, an increase in the salary of the plan participants will increase the plan''s liability.

(2) Life expectancy / Longevity risks

The present value of the defined benefit plan liability is calculated by reference to the best estimates of the mortality of plan participants both during and after their employment. Mortality tables as per Indian Assured Lives Mortality (200608) Ult. is used for during the employment and post retirement respectively. An increase in the life expectancy of the plan participants will increase the plan''s liability.

(3) Interest rate risks

A decrease in the bond interest rate will increase the plan liability.

(4) Inflation risks

A decrease in the inflation rate will increase the plan''s liability.

E 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 and the final rules/interpretation have not yet been issued. 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.

* The Income Tax department had carried out a search and seizure operation at the premises of the Company in November 2018. During the year, the department has issued assessment orders dated September 21, 2021 for Assessment Years 2013-14 to 201819 under Section 153A of the Income Tax Act, that were subsequently revised vide Orders dated November 30, 2021 and December 01, 2021. Tax demands aggregating INR 232.56 million (including interest upto the date of demand order) over and above the income tax obligations estimated by the Company for those assessment years has been raised by the department on account of disallowances of certain expenses. The Company has filed Appeals against these Orders after paying INR 46.51 million under protest. Based on records maintained, management is confident that the Company will be able to prove that such expenses were incurred for the purpose of the Company''s business and are eligible for deduction which is duly supported by a legal opinion obtained in this regard and has been considered as contingent liability as on March 31, 2022.

^# Bank Guarantee amounting to INR 284.92 million given to National Stock Exchange of India Limited (NSE) in relation to Initial Public Offer (IPO) (Refer Note 45.1).

44 Leases

(a) The Company implemented Indian Accounting Standard for Leases ("Ind AS 116”) with effect from April 1, 2019 using the modified retrospective approach without adjusting the comparative period. The right of use assets comprise of buildings taken on lease. The effective interest rate for lease liabilities is 8.40% as on March 31, 2022 (March 31, 2021 - 8.91%)

44.1 The Ministry of Corporate Affairs vide notification dated July 24, 2020, issued an amendment to Ind AS 116 - Leases, by inserting a practical expedient w.r.t. "Covld-19-Related Rent concessions” effective from the period beginning on or after April 01, 2020. As a practical expedient, a lessee may elect not to assess whether a rent concession that meets the conditions in paragraph 46B of Ind AS 116 is a lease modification. Pursuant to the notification, the Company has applied the practical expedient in financial year ended March 31, 2021 and March 31, 2022 and hence rent concession received during the financial year 2020-21 and 21-22 aggregating INR 325.31 Million and INR 137.48 Million respectively has been accounted for as reversal of liability and disclosed in Other Income.

45.1 The Company has completed its Initial Public Offer (IPO) of 36,364,838 equity shares of face value of INR 1 each at an issue price of INR 866 per share (including a share premium of INR 865 per share) that were listed on National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE) on February 16, 2022. Entire IPO comprised of offer to sale of 36,364,838 equity shares by selling shareholders and hence details related to utilisation of IPO proceeds is not applicable to the Company.

During the year the Company has incurred expenses aggregating to INR 246.97 million towards various services availed in connection with aforesaid IPO under terms of agreements executed between the Company and respective service providers. Such expenses has been reimbursed by the selling shareholders during the year and the balance amount of INR 119.29 million is being reported in these financial results as recoverable from selling shareholders.

Certain IPO expenses paid/payable under the terms of the Offer Agreement jointly executed by the Company, the selling shareholders and Book Running Lead Managers (BRLMs) shall be borne by the selling shareholders and are being/wiU be paid out of the Public Offer Account directly and hence, not recognised in these financial results.

47 Fair Value Hierarchy

The table shown below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined below:

Level 1: unquoted/quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2: inputs 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 for the asset or liability that are not based on observable market data (unobservable inputs)

a) Financial assets and liabilities at fair value are reported at amounts that would be received from sale of an asset and amount of resource to be utilised for settlement of a liability respectively in an orderly transaction between market participants.

b) Other non-current financial assets and liabilities: Fair value is calculated using a discounted cash flow model with market assumptions, unless the carrying value is considered approximate to the fair value.

c) Trade receivables, cash and cash equivalents, other bank balances, other financial assets, non current deposits, trade payables, lease liabilities and other financial liabilities: Approximate their carrying amounts largely due to the short-term maturities of these instruments. Fair value of investments in mutual funds are on the basis of net asset value as declared by mutual fund house as on the Balance Sheet date.

d) There has been no transfer between level 1, level 2 and level 3 during the above period.

48 Financial Risk Management

The Company''s activities expose it to variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to forsee the unpredictability of markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is commodity price risk. The Company uses forward contracts to mitigate foreign exchange related risk exposures.

a) Market Risk

The Company operates both in domestic and international market and consequently the Company is exposed to foreign exchange risk through its sales in overseas countries. The Company holds forward contracts such as foreign exchange forwards to mitigate the risk of changes in exchange rates on foreign currency exposures.

(1) For the year ended March 31, 2022 and March 31, 2021, every percentage appreciation in the exchange rate between the Indian rupee and USD, would increase the Company''s profit before tax by approx. INR 0.81 Million and INR 0.24 Million respectively.

(2) For the year ended March 31, 2021, every percentage appreciation in the exchange rate between the Indian rupee and CAD, would increase the Company''s profit before tax by approx. INR 0.01 Million.

Derivative Financial Instruments

The Company uses derivative instruments as part of its management of exposure to fluctuations in foreign currency exchange rates. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. The Company does not enter into complex derivative transactions to manage the treasury risks. Treasury derivative transactions are in the form of forward contracts and these are subject to the Company''s guidelines and policies.

All derivative financial instruments are recognized as assets or liabilities on the balance sheet and measured at fair value, generally based on quotations obtained from banks. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation. The fair values of all derivatives are separately recorded in the balance sheet within current assets and liabilities.

The Company uses derivative instruments as part of its management of exposures to fluctuations in foreign currency exchange rates. The use of derivatives can give rise to credit and market risk. The Company tries to control credit risk as far as possible by only entering into contracts with reputable banks and financial institutions. The use of derivative instruments is subject to limits, authorities and regular monitoring by appropriate levels of management. The limits, authorities and monitoring systems are periodically reviewed by management. The market risk on derivatives is mitigated by changes in the valuation of the underlying assets, liabilities or transactions, as derivatives are used only for risk management purposes.

b) Commodity Price Risk

The Company is affected by price volatility of its key raw materials and traded goods. Its operating activities requires a continuous supply of key material for manufacturing products. The Company''s procurement department continuously monitor the fluctuation in price and take necessary action to minimize its price risk exposure.

c) Price Risk

The Company''s businesses are subject to certain risks and uncertainties including financial risks. Company has invested in bonds, debentures and mutual funds. To manage its price risk arising from investments, the Company diversifies its portfolio. The investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments.

d) Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to INR 3,947.99 Million and INR 3,663.79 Million as at March 31, 2022 and March 31, 2021 respectively. Trade receivable includes both secured and unsecured receivables and are derived from revenue earned from domestic and overseas customers. Credit risk has always been managed by the Company through taking security deposits and bank guarantees from customers, credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. An impairment analysis is performed at each reporting date on an individual basis based on historical data of credit losses.

For ageing analysis of the trade receivables, refer Note 12.

e) Liquidity Risk

The Company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations as well as investment in mutual funds, fixed deposits, bonds and debentures. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived

49 Capital Management

The Company''s capital management is driven by its policy to maintain a sound capital base to support the continued development of its business. The Board of Directors seeks to maintain a prudent balance between different components of the Company''s capital. The Company monitors capital using a gearing ratio, which is net debt divided by total capital. Net debt is defined as current and non- current borrowings (including current maturities of long term debt and interest accrued) and lease liabilities less cash and cash equivalents and current investments. Excess cash and bank balance has been invested by the Company in fixed deposits, bonds, debentures and mutual funds.

49.1 The Company is having cash credit facility and the same carries interest rate of 8.00% p.a as on March 31, 2022 (March 31, 2021 - 8.00% p.a to 8.95% p.a). Cash credit facility is unsecured. The facility is unutlised as on March 31, 2022 and March 31, 2021.

50 Segment Reporting :

Based on the Company''s operating structure and information provided to the Chief Operating Decision Maker (CODM) for his review of performance and allocation of resources, the company has only one reportable segment i.e. branded fashion apparel and assessories.

53 Critical estimates and judgements in applying accounting policies

The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Information about estimates and judgements made in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are as follows:

i) Revenue Recognition

Management applies following criteria to determine the point of revenue recognition:

(a) The Company has a present right to payment for the product if a Customer/ Franchisee is presently obliged to pay for an product in accordance with the terms of the agreement.

(b) The Customer/ Franchisee has legal title to the product

(c) The Company has transferred physical possession of the product

(d) The Customer/ Franchisee has the significant risks and rewards of ownership of the product

(e) The Customer/ Franchisee has accepted the product

Based on the evaluation of the aforementioned criteria, the Company recognises revenue when the good are delivered to the Customer/ Franchisee.

The Company updates its assessment of expected returns based on the best estimates and judgements and the refund liabilities are adjusted accordingly. Estimates of expected returns are sensitive to changes in circumstances & judgements and the Company''s past experience regarding returns may not be representative of customers'' actual returns in the future. As at March 31, 2022, the amount recognised as refund liabilities for the expected returns is INR 837.23 Million and corresponding right of return asset is INR 292.44 Million (March 31, 2021: expected returns was INR 727.70 Million and corresponding right of return asset is INR 257.50 Million).

ii) Property, plant and equipment and useful life of property, plant and equipment and intangible assets

The carrying value of property, plant and equipment and intangible assets (excluding brand & goodwill) is arrived at by depreciating the assets over the useful life of assets. The estimate of useful life is reviewed at the end of each financial year and changes are accounted for prospectively.

iii) Impairment of non-financial assets (including intangible assets)

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The recoverable amount is sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to the goodwill and brand.

iv) Estimation of provisions and contingencies

The assessments undertaken in recognising provisions and contingencies have been made in accordance with the applicable Ind AS. A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Where the effect of time value of money is material, provisions are determined by discounting the expected future cash flows.

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. There are certain obligations which management has concluded, based on all available facts and circumstances, are not probable of payment or are very difficult to quantify reliably, and such obligations are treated as contingent liabilities and disclosed in the notes but are not reflected as liabilities in the financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings in which the Company is involved, it is not expected that such contingencies will have a material effect on its financial position or profitability.

v) Defined benefit plan

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation 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 operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The mortality rate is based on publicly available mortality table. 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. (Refer Note 42)

vi) Leases

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain to exercise the option to

renew or terminate the lease. It considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.

vii) Share-based payment

The Company uses the most appropriate valuation model depending on the terms and conditions of the grant, including the expected life of the share option and volatility. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 51.

viii) Fair Value Measurements

Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm''s length transaction at the reporting date.

ix) Recoverability of Deferred Tax Assets

Deferred tax assets are recognised for unused tax losses including capital losses to the extent it is probable that taxable future profit/capital gains will be available against which applicable losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Deferred tax assets on Long term capital loss have not been recognised in the absence of certainity of availability of adequate future long term capital gains for set off. Further details on taxes are disclosed in Note 22.

x) Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

An asset is treated as current when it is:

- Expected to be realized or intended to be sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realized within twelve months after the reporting period, or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is treated as current when:

- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;

- It is due to be settled within twelve months after the reporting period, or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has evaluated and considered its operating cycle as 12 months. Deferred tax assets/ liabilities are classified as non-current assets/ liabilities.

54 Assets Held For Sale

During the year ended March 31, 2022, the Company had received advance amounting to INR 13.24 Million against sale of an identified asset - building under right of use asset. Consequently, the carring value of such assets amounting to INR 13.26 Million (Gross block: INR 15.39 Million and Accumulated depreciation of INR 2.13 Million) has been disclosed as "Assets held for sale” as on March 31, 2022. The transaction is expected to be completed in financial year ended March 31, 2023. Expected recoverable value from the transcation is INR 26.36 million (including amount received till March 31, 2022) which is more than the carring value.

55 The outbreak of COVID-19 has brought about disruptions to businesses and uncertainty in the economy. The Company is closely monitoring the impact of the pandemic on all aspects of its business. The management has made an initial assessment, based on the current situation of the likely impact of the COVID-19 on overall economic environment and on the Company, in particular, based on which it does not expect any challenge meeting its financial obligations. As the outbreak continues to evolve, the Company will continue to closely monitor any material changes to future economic condition.