Notes to Accounts of Vishal Mega Mart Ltd.

Mar 31, 2025

r. Provisions, contingent liabilities and contingent
assets

The Company creates a provision when there is
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. A disclosure for a contingent
liability is made when there is a possible obligation
or a present obligation that may, but probably will
not, require an outflow of resources. When there
is a possible obligation or a present obligation
in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is
made.

Provisions are reviewed at each Balance Sheet
date and adjusted to reflect the current best
estimate. If it is no longer probable that an
outflow of resources would be required to settle
the obligation, the provision is reversed.

Contingent assets are not recognised in the
standalone financial statements. However,
contingent assets are assessed continually and
if it is virtually certain that an inflow of economic
benefits will arise, the asset and related income
are recognised in the period in which the change
occurs.

s. Impairment of non-financial assets

Assessment is done at each balance sheet
date as to whether there is any indication that
an asset may be impaired. For the purpose of
assessing impairment, the smallest identifiable
group of assets that generates cash inflows from
continuing use that are largely independent of
the cash inflows from other assets and group of
assets, is considered as a cash generating unit.
If any such indication exists, an estimate of the
recoverable amount of the asset/cash generating
unit is made. Assets whose carrying value
exceeds their recoverable amount are written
down to the recoverable amount. Recoverable
amount is higher of an assets or cash generating
unit''s selling price and its value in use. Value in
use is the present value of estimated future cash
flows expected to raise from continuing use of an
asset and from its disposal at the end of its useful
life. Assessment is also done at each balance
sheet date as to whether there is any indication
that an impairment loss recognised for an asset
in prior accounting periods may no longer exist or
may have decreased.

t. Segment reporting

Operating segments are reported in a manner
consistent with the internal reporting provided
to the chief operating decision maker. The chief
operating decision maker is considered to be the
Board of Directors who makes strategic decisions
and is responsible for allocating resources
and assessing performance of the operating
segments.

* Promoter here means promoter as defined in the Companies Act, 2013.

** Percentage change is computed with respect to the number at the beginning of the year or if issued during the
year for the first time then with respect to the date of issue.

f) No shares have been issued pursuant to contract without payment being received in cash, allotted as fully paid-
up shares by way of bonus issues nor has any bought back of shares happened during the period of five years
immediately preceding the reporting date.

g) Shares reserved for issue under options

Information relating to the Company''s Employee Stock Option Plan, including details of options issued, exercised
and lapsed during the financial year and options outstanding at the end of reporting period, is given in note 26.

h) The Company has completed its Initial Public Offer (IPO) of 1,02,56,41,025 equity shares of face value of '' 10 each
at an issue price of '' 78 per share and as a result the equity shares of the Company has been listed on National
Stock exchange of India Limited (NSE) and BSE Limited (BSE) on December 18, 2024. The issue comprised offer for
sale of 1,02,56,41,025 equity shares by promoter selling shareholders aggregating upto '' 80,000 million.

Nature of reserves:

Share options outstanding account

The Company has implemented a share option schemes under which options to subscribe for the Company''s share have
been granted to certain executives and senior employees. The reserves is used to recognise the value of equity settled
share options provided to such employees. See note 26 for further details.

Retained earnings

Retained earnings are the accumulated profits/ (losses) earned by the Company till date and it includes remeasurements
of defined benefit obligations.

Securities premium reserve

Security premium is used to record the premium received on issue of shares. It is utilised in accordance with the provision
of the Act.

26 SHARE BASED PAYMENTS

The Company established the Rishanth Employee Share Option Plan 2019 (amended as on March 22, 2024) ("the
Plan") in January 2019. Under the Plan, the Company has issued share options to eligible employees via ten schemes
("the Schemes") of the Plan. All options granted under the Schemes are equity settled and vest according to various
service conditions ranging upto 6 years and a performance condition linked to desired threshold earnings before interest,
depreciation and tax in the future. An exit event as defined in the Schemes can result in immediate vesting of all options.
Each option entitles the holder thereof to apply for and be allotted equity shares of '' 10 each of the Company, upon
payment of the exercise price on date of exercise.

Options under performance vesting typically vest equally over five years starting from the first anniversary of date of
grant. If the performance condition is not met, unvested options are carried forward to the next vesting date till the end
of fourth year starting from the first anniversary of date of grant. Such carry forward options will vest at liquidity event
described hereinafter. Options under exit vesting will vest after six years from date of grant, subject to liquidity event
conditions. Options under time vesting typically vest over five years starting from the first anniversary of date of grant.
Options granted can vest immediately on happening of a certain liquidity event, as determined by the shareholders, when
they realise a pre-determined rate of return on their investment.

Volatility was determined using historical data for comparable companies for corresponding term, excluding companies
that did not have sufficient historical data. The risk free interest rates are determined based on current yield to maturity
of Government of India Bonds with similar residual maturity equal to expected life of the options.

The related compensation cost has been calculated using fair value method as described above and the Company has
recorded an expense of '' 558.49 million during the year (March 31, 2024: '' 30.74 million) under ''employee benefits
expense''. This expense is net of '' 33.97 million (March 31,2024: '' 0.40 million) recoverable from Airplaza Retail Holdings
Private Limited (subsidiary company) with respect to share options issued to the employees of the subsidiary company.
Further, certain employees have exercised options amounting to '' 380.87 million during the year ended March 31, 2025
(March 31,2024: Nil) which has been accounted for in line with the provisions of Ind AS 102-Shared Based Payments.

B. Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial
instruments that are:

(a) recognised and measured at fair value and

(b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the Company has
classified its financial instruments into the three levels prescribed under Ind AS 113. An explanation of each
level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes
listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity
instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at
the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded
bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of
observable market data and rely as little as possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3. This is the case for unlisted equity securities. There have been no transfers between any of
the above levels for the years ended March 31, 2025 and March 31, 2024.

II. Financial risk management

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

(i) Credit risk;

(ii) Liquidity risk; and

(iii) Market risk

Risk management framework

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s
risk management framework. The Board of Directors has authorised the business managers to establish the
processes, who ensures that executive management controls risks through the mechanism of properly defined
framework.

The Company''s risk management policies are established to identify and analyse the risks faced by the Company,
to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed by the business managers periodically to reflect changes in market conditions and
the Company''s activities. The Company, through its training and management standards and procedures, aims
to maintain a disciplined and constructive control environment in which all employees understand their roles and
obligations.

(i) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers
and investments in mutual funds.

The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit
risk very closely in the market. The management''s impact analysis shows credit risk and impact assessment
as low.

The carrying amounts of trade receivables, trade payables, cash and cash equivalents, bank balances other
than cash and cash equivalents and other financial assets and liabilities are considered to be the same as their
fair values, due to their short-term nature. Other financial assets represents security deposits, bank deposits
and interest accrued but not due on bank deposits, the carrying value of which approximates the fair values
as on the reporting date. For other financial liabilities/assets that are not measured at fair value, the carrying
amounts are considered equal to their respective fair values.

Trade and other receivables

Credit risk on cash and cash equivalents and bank balances other than cash and cash equivalents is limited as
the Company generally invests in deposits with banks/ financial institutions with high credit ratings assigned
by credit rating agencies. Investments include investment in liquid mutual fund units. The other financial
assets primarily represents security deposits given to landlords of premises taken on leases. Such deposits
will be returned to the Company on returning the possession of premises as per the contract. The credit risk
associated with such security deposits is relatively low. The Company''s credit risk is primarily due to the
amount due from Airplaza Retail Holdings Private Limited (subsidiary company). The Company maintains
a defined credit policy and monitors the exposures to these credit risks on an ongoing basis. The carrying
amount of financial assets represents the maximum credit exposure. The management impact analysis
shows credit risk and impact assessment as low as majority of its trade receivables are from a single party

(ii) Liquidity risk

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

The Company''s financial liabilities mainly comprises of borrowings, lease liabilities, trade payables and
accrued bonus/expenses. The Company''s credit period with buyers is higher than the credit period provided to
customers, and the payments are generally settled within credit period, hence the Company''s liquidity risk is
low.

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because
of changes in market prices. Market risk comprises three types of risk: currency rate risk, interest rate risk and
other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market
risks include loans and borrowings, deposits and foreign currency receivables and payables. The sensitivity
analysis in the following sections relate to the position as at March 31, 2025. The sensitivity of the relevant
profit and loss item is the effect of the assumed changes in the respective market risks. This is based on the
financial assets and financial liabilities held as of March 31, 2025.

(a) Foreign currency risk

The Compnay has certain import purchases for which payments are made in foreign exchange and hence
exposes the Company to foreign exchange risk arising from foreign currency transactions. However, there is
no outstanding foreign currency payable at the end of current and the previous reporting period. Further, the
gain/(loss) on such foreign currency transactions during the current and the previous year is not material.

(b) Interest rate risk

The Company''s interest rate risk arises from bank deposits which are made at market rate of interest at the
time of deposit. This exposes the Company to cash flow interest rate risk. However the variation in market
rate of interest is not significantly high and the Company''s interest bearing assets is also not significantly high,
hence the impact of the same has been assessed as insignificant.

(c) Price risk

Exposure from investments in mutual funds:

The Company had exposure to price risk arises from investments in mutual funds held by the Company
and classified in the balance sheet as fair value through profit or loss. To manage its price risk arising from
investments in mutual funds, the Company diversifies its portfolio. Diversification of the portfolio is done in
accordance with the limits set by the Company.

Sensitivity

The sensitivity to profit or loss (after tax) and equity in case of an increase in price of the instrument by 5%
keeping all other variables constant would have resulted in corresponding impact on profits by March 31,2025:
'' 144.90 million (March 31,2024: Nil).

28 CAPITAL MANAGEMENT

For the purposes of the Company''s capital management, capital includes equity attributable to the equity holders of the
Company and all other equity reserves. The primary objective of the Company''s capital management is to ensure that
it maintains an efficient capital structure and maximise shareholder value. The Company manages its capital structure
and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.
To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue
new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the
objectives, policies or processes for managing capital during the year ended March 31,2025 and March 31, 2024.

An actuarial valuation of compensated absences has been carried out by an independent actuary using the Projected
Unit Credit method. The amount recognised as an expense towards compensated absences for the year amounts to
'' 2.13 million (March 31, 2024: '' 3.52 million). As at March 31, 2025, provision for compensated absences amounts to
'' 18.98 million (March 31, 2024: '' 17.44 million) presented as provision for employee benefits in note 14A and 14B -
Provisions.

The compensated absences cover the Company''s liability for earned leaves. The Company does not have an unconditional
right to defer the settlement for obligation classified as current provision balance. However, based on past experience,
the Company does not expect all the employees to avail the entire outstanding leaves within next twelve months,
therefore, based on the independent actuarial report, only a certain amount of provision has been presented as current
and remaining as non-current.

Refer note 36 for reconciliation of liabilities arising from financing activities pursuant to Ind AS 7- Statement of Cash
Flows.

The Company has executed lease arrangements for office and business premises. With the exception of short-term
leases, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability.

Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublet the
asset to another party, the right-of-use asset can only be used by the Company. Leases are either non-cancellable
or may only be cancelled by incurring a substantive termination fee. Some leases contain an option to extend the
lease for a further term. The Company is prohibited from selling or pledging the underlying leased assets as security
against the Company''s other debts and liabilities. For leases over office buildings and warehouse premises the
Company must keep those properties in a good state of repair and return the properties in their original condition
at the end of the lease. Further, the Company is required to insure items of property, plant and equipment and incur
maintenance fees on such items in accordance with the lease contracts.

The Company has considered automatic extension option available for the property leases in lease period
assessment since the Company can enforce its right to extend the lease beyond the initial lease period as the
Company is likely to be benefited by exercising the extension option.

The Company has elected not to recognise a lease liability tor short-term leases (leases with an expected term of
12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight¬
line basis. The expense relating to payments not included in the measurement of the lease liabilities for short-term
leases is '' 28.88 million (March 31, 2024: '' 245.73 million).

iv) At March 31,2025 and March 31,2024, the Company was not committed to any liability towards short-term leases.

v) Total cash outflow for leases for the year ended March 31, 2025 was '' 180.27 million (March 31, 2024: '' 350.29
million) [including '' 28.88 million (March 31,2024 - '' 245.73 million) paid towards the aforementioned short-term
leases].

c) Other contingencies

There are some other income tax litigations for few assessment years wherein income tax authorities have made
certain disallowances, however, there is no demand raised by them due to losses. In view of the management, these
matters would be decided in favour of the Company and accordingly, chances of liability materializing are remote.

* Represents demand raised by Income tax authorities on account of disallowance of certain expense, after netting
off the amount deposited under protest.

** Represents demand raised by central sales tax, value added tax and goods and service tax authorities, after
netting off the amount deposited under protest.

*** Includes various other claims made by vendors, ex-employees and various government authorities.

It is not practicable for the Company to estimate the timings of the cash flows, if any, in respect of the above
pending resolution of the respective proceedings. The Company has assessed that it is only possible, but not
probable, that outflow of economic resources will be required in respect of the above proceedings.

35 SEGMENT INFORMATION

The Company primarily operates in the contract manufacturing and wholesale trading. Based on the "management
approach" as defined in Ind AS 108 - Operating Segments, the Chief Operating Decision Maker (''CODM'') does the
evaluation of the Company''s performance at an overall company level as one segment, i.e., "Contract Manufacturing and
Wholesale Trading".

The Company''s Board of Directors have been identified as the CODM, since they are responsible for all major decisions
with respect to the preparation and execution of business plan, preparation of budget, planning, directing and business
expansions.

The Company is domiciled in India and derives its entire revenue from trading of goods and rendering of services in India.
Moreover, all the assets/ liabilities are located in the Company''s country of domicile, i.e., India.

Refer note 18 for details of product and services.

In view of the same, separate segment information is not required to be given as per the requirements of Ind AS 108 on
"Operating Segments".

II. During the year, a contribution of '' 12.10 million (March 31, 2024 : '' 18.03 million) has been made to Vishal
Mega Mart CSR Trust (entity over which the Company exercise control), which is the implementation agency for
undertaking the CSR activities of the Company, with the main objective of working in areas of eradicating hunger,
poverty and malnutrition, promoting education, including special education and employment enhancing vocation
skills, promoting gender equality, empowering women and undertaking measures for reducing inequalities faced by
socially and economically backward groups, ensuring environmental sustainability, ecological balance, protection
of flora and fauna, animal welfare, agroforestry conservation of natural resources and maintaining quality of soil,
air and water, protection of national heritage, contributions to public funded universities, disaster management,
including relief, rehabilitation and reconstruction activities. Out of the aforesaid contribution, Nil (March 31, 2024:

41 OTHER STATUTORY INFORMATION

(i) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets
during the year ended March 31,2025 and for the year ended March 31,2024.

(ii) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and
the rules made thereunder.

(iii) The Company has not been declared wilful defaulter by any bank or other lenders.

(iv) The Company had no transactions with companies whose name has been struck off under section 248 of the
Companies Act, 2013 or section 560 of the Companies Act, 1956.

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

(vi) The Company has complied with number of layers prescribed under clause (87) of section 2 of the Act read with
Companies (Restriction on number of Layers) Rules, 2017.

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

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

- provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

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

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

- provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

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

(x) The Company has not traded or invested in crypto currency or virtual currency during the current and the preceding
financial year.

(xi) The Company has not entered nto the scheme of arrangement in the current year and preceding financial year.

(xii) The Company does not hold any immovable properties during the current and preceding financial year.

(xiii) The Company has made preferential allotment of shares during the current year and the same has been utilised by
the Company for the purposes for which these funds were raised.

42 There are no significant events or transactions occurring after the balance sheet which would require any adjustment in
the standalone financial statements.

43 In pursuance with the requirement under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted
by the Companies (Accounts) Amendment Rules 2021, the Company uses an accounting software for maintaining its
books of account which has a feature of recording audit trail of each and every transaction, creating an edit log of each
change made in the books of account along with the date when such changes were made and ensuring that the audit
trail cannot be disabled.

However, the audit trail (edit logs) feature for any direct changes made at the database level is not enabled for the
accounting software used for maintenance of accounting records.

Further, accounting software used for payroll processing of the Company is operated by a third party software service
provider and the availability of audit trail (edit logs) at the database levels are not covered in the ''Independent Service
Auditor''s Assurance Report on the Description of Controls, their Design and Operating Effectiveness'' (''Type 2 report''
issued in accordance with AICPA Standards of Attestation Engagement SSAE 18 : Service organisation).

Furthermore, the audit trail records except for the database-level changes as mentioned above, have been preserved by
the Company as per the statutory requirements for record retention.

This is the summary of material accounting policies and other explanatory information referred to in our report of even
date.

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors

Chartered Accountants

Firm Registration No.: 001076N/N500013

Neeraj Goel Gunender Kapur Nishant Sharma

Partner Managing Director & CEO Non-executive Director

Membership No.: 099514 DIN : 01927304 DIN : 03117012

Place: Gurugram Amit Gupta Rahul Luthra

Date: April 29, 2025 Chief Financial Officer Company Secretary

Membership No.: F9588

---

Mar 31, 2024

Notes:

(i) The Company has leased out some of its assets (primarily furniture and fixtures and computers) under operating lease arrangements to its franchisee (which is also the subsidiary of the Company), Airplaza Retail Holdings Private Limited. During the year ended 31 March 2024, an amount of Rs 77.21 crores (31 March 2023: Rs 67.95 crores) has been recognised as a equipment lease rental in the statement of profit and loss (refer note 19). Depreciation on such assets amounts to Rs 72.87 crore (31 March 2023: Rs 64.76 crore) which has been charged off in the statement of profit and loss (refer note 23).

(ii) Refer note 34(a) for disclosure of contractual commitments for the acquisition of property, plant and equipment.

(iii) Includes depreciation of Rs. 4.22 crores (31 March 2023: Nil) on right-of-use assets which has been capitalised in leasehold improvements.

(iv) Refer note 14A(i) for details of property, plant and equipments pledged as security.

The Company has identified its reportable segments, i.e. ''Wholesale Trading'' as the only Cash Generating Unit (CGUs). The total carrying amount of goodwill as at 31 March 2024 is Rs. 3,614.23 crores (31 March 2023: Rs. 3,614.23 crores). The same was acquired upon the merger with the erstwhile Vishal Mega Mart Private Limited.

In accordance with Ind AS 36 "Impairment of Assets", management tests goodwill for impairment annually and as the recoverable amount exceeds the carrying amount, no impairment loss has been recognised during the year.

The recoverable amount of goodwill for impairment testing is determined based on value-in-use calculations which uses cash flow projections based on financial budgets approved by management covering a five-year period, as the management believes this to be the most appropriate timescale for reviewing and considering annual performance before applying a fixed terminal value multiple to the final year cash flows.

Management has performed sensitivity analysis around the key assumptions and have concluded that no reasonable change in any key assumptions would cause the recoverable amount of the goodwill to be less than its carrying value.

(i) The Company''s exposure to financial risk and fair value measurements related to these financial instrument is disclosed in note 28.

(ii) Fixed deposits amounting to Rs. 0.03 crores (31 March 2023 : Rs. 0.11 crores) are pledged with the banks against overdraft limit and as security to government department.

i) The Group exposure to financial risk and fair value measurement related to these financial instruments is disclosed in note 28.

ii) Fixed deposits amounting to Rs. 21.94 crores (31 March 2023 : Nil) are pledged with the banks against overdraft limit and letter of credit.

Note: There are no restrictions with regard to cash and cash equivalents as at the year end of the reporting year and previous year except for the balance with banks in current accounts amounting to Rs. 0.94 crores (31 March 2023 : Nil) held in Unspent Corporate Social Responsibility account to be spent towards corporate social

c) Terms/rights attached to equity shares

The Company has one class of equity shares having at par value of Rs. 10 per share. Each shareholder is entitled to one vote per share with a right to receive per share dividend declared by the Company. In the event of liquidation, the equity shareholders are entitled to receive remaining assets of the Company (after distribution of all preferential amounts) in the proportion of equity shares held by the shareholders.

* Promoter here means promoter as defined in the Companies Act, 2013.

** Percentage change is computed with respect to the number at the beginning of the year or if issued during the year for the first time then with respect to the date of issue.

f) No shares have been issued pursuant to contract without payment being received in cash, allotted as fully paid-up shares by way of bonus issues nor has any bought back of shares happened during the period of five years immediately preceding the reporting date.

g) Shares reserved for issue under options

Information relating to the Company''s Employee Stock Option Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of reporting period, is given in note 27.

Nature of reserves:

Share options outstanding account

The Company has implemented a share option schemes under which options to subscribe for the Company''s share have been granted to certain executives and senior employees. The reserves is used to recognise the value of equity settled share options provided to such employees. See note 27 for further details.

Retained earnings

Retained earnings are the accumulated profits/ (losses) earned by the Company till date and it includes remeasurements of defined benefit obligations.

Securities premium reserve

Security premium is used to record the premium received on issue of shares. It is utilised in accordance with the provision of the Act.

(i) The term loans (including current maturities) were secured by all the movable property plant and equipments, current assets, and receivables of the Company and its subsidiary, Airplaza Retail Holdings Private Limited, all rights, title and interest in relation thereto, both present and future.

(iii) There has been no default in servicing of loan during the year.

(iv) The term loans have been used for the specific purpose for which they were availed.

(v) The Company has complied with the relevant financial covenants under the terms of borrowings throughout the reporting period.

(i) The cash credit facilities and working capital demand loan are secured by hypothecation of all inventories including those in transit, receivables, book debts on pari passu basis, equitable mortgage. As on reporting date, no balance is outstanding under cash credit facilities and working capital demand loan. The rate ofinterest ranges between 8.00% to 8.10% (31 March 2023: 8.25% to 8.80%) per annum for cash credit and working capital demand loan.

(ii) The cash credit facilities and working capital demand loans have been used for the specific purpose for which they are taken as at the year end.

(iii) Refer note 37 for reconciliation of liabilities as per Ind AS 7- Statement of Cash Flows.

(iv) Details of quarterly statements of current assets filed by the Company with the banks and reasons of material discrepancies:

Provisions for possible sales return

This represents provisions made for sales returns by the customers for sales made by the Company, as estimated on the basis of past trend.

Provision for customer discount

This represents provisions made for possible customer discounts to the customers for sales made by the Company, as estimated on the basis of past trend.

Other provisions

This represents provisions made for possible vendor liabilities with regard to service tax on rent paid to the service vendors on the basis of ongoing vendor settlement process undertaken by the Company.

27 Share based payments

The Company established the Rishanth Employee Share Option Plan 2019 (amended as on 22 March 2024) (“the Plan”) in January 2019. Under the Plan, the Company has issued share options to eligible employees via eight schemes (“the Schemes”) of the Plan. All options granted under the Schemes are equity settled and vest according to various service conditions ranging upto 6 years and a performance condition linked to desired threshold earnings before interest, depreciation and tax in the future. An exit event as defined in the Schemes can result in immediate vesting of all options. Each option entitles the holder thereof to apply for and be allotted equity shares of Rs 10 each of the Company, upon payment of the exercise price on date of exercise.

Options under performance vesting typically vest equally over five years starting from the first anniversary of date of grant. If the performance condition is not met, unvested options are carried forward to the next vesting date till the end of fourth year starting from the first anniversary of date of grant. Such carry forward options will vest at liquidity event described hereinafter. Options under exit vesting will vest after six years from date of grant, subject to liquidity event conditions. Options under time vesting typically vest over five years starting from the first anniversary of date of grant. Options granted can vest immediately on happening of a certain liquidity event, as determined by the shareholders, when they realise a pre-determined rate of return on their investment.

The fair value of the options granted during the year, calculated by an external valuer, was estimated on the date of grant by an independent valuer using the Black Scholes option pricing model with the following significant assumptions. For measuring the impact of the exit and the liquidity event, monte carlo simulations were used in the below calculations.

Volatility was determined using historical data for comparable companies for corresponding term, excluding companies that did not have sufficient historical data. The risk free interest rates are determined based on current yield to maturity of Government of India Bonds with similar residual maturity equal to expected life of the options.

The related compensation cost has been calculated using fair value method as described above and the Company has recorded an expense of Rs. 3.07 crores during the year (31 March 2023: Rs. 7.41 crores) under ''employee benefits expense''. This expense is net of Rs. 0.40 crore recoverable from Airplaza Retail Holdings Private Limited (subsidiary company) with respect to share options issued to the employees of the subsidiary company.

B. Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are:

(a) recognised and measured at fair value and

(b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under Ind AS 113. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

There have been no transfers between any of the above levels for the years ended 31 March 2024 and 31 March 2023.

The carrying amounts of trade receivables, trade payables, current borrowings, cash and cash equivalents, other bank balances and other financial assets and liabilities are considered to be the same as their fair values, due to their short-term nature. Other financial assets represents security deposits, bank deposits and interest accrued but not due on bank deposits, the carrying value ofwhich approximates the fair values as on the reporting date. For other financial liabilities/assets that are not measured at fair value, the carrying amounts are considered equal to their respective fair values.

II. Financial risk management

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

(i) Credit risk;

(ii) Liquidity risk; and

(iii) Market risk

Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has authorized respective business managers to establish the processes, who ensures that executive management controls risks through the mechanism of properly defined framework.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed by the business managers periodically to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

(i) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investments in mutual funds.

The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit risk very closely in the market. The management''s impact analysis shows credit risk and impact assessment as low.

Trade and other receivables

Credit risk on cash and cash equivalents and other bank balances is limited as the Company generally invests in deposits with banks/ financial institutions with high credit ratings assigned by credit rating agencies. Investments include investment in liquid mutual fund units. The other financial assets primarily represents security deposits given to landlords of premises taken on leases. Such deposits will be returned to the Company on returning the possession of premises as per the contract. The credit risk associated with such security deposits is relatively low. The Company''s credit risk is primarily due to the amount due from Airplaza Retail Holdings Private Limited (subsidiary company). The Company maintains a defined credit policy and monitors the exposures to these credit risks on an ongoing basis. The carrying amount of financial assets represents the maximum credit exposure. The management impact analysis shows credit risk and impact assessment as low as majority of its trade receivables are from a single party which makes it easier to analyse receivables from a control perspective. Further, the Company also obtains the balance confirmation as at year end from Airplaza Retail Holdings Private Limited in which the receivable amount is confirmed by the party and therefore, there is no expected credit loss on outstanding receivables.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company''s financial liabilities mainly comprises ofborrowings, lease liabilities, trade payables and accrued bonus/expenses. The Company''s credit period with buyers is higher than the credit period provided to customers, and the payments are generally settled within credit period, hence the Company''s liquidity risk is low.

(iii) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at 31 March 2024. The sensitivity ofthe relevant profit and loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of 31 March 2024.

(a) Foreign currency risk

The Group has certain import purchases for which payments are made in foreign exchange and hence exposes the Group to foreign exchange risk arising from foreign currency transactions. However, there is no outstanding foreign currency payable at the end of current and the previous reporting period. Further, the gain/(loss) on such foreign currency transactions during the current and the previous year is not material.

(b) Interest rate risk

The Company’s interest rate risk arises from bank deposits which are made at market rate of interest at the time of deposit. This exposes the Company to cash flow interest rate risk. However the variation in market rate of interest is not significantly high and the Company''s interest bearing assets is also not significantly high, hence the impact of the same has been assessed as insignificant. Further, the interest rate on Company''s borrowings is variable. Thus, there is no impact of change in interest rate on Company''s borrowings.

Fair value sensitivity analysis for fixed-rate instruments

The Company’s fixed rate instruments are carried at amortised cost. They are, therefore, not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

(c) Price risk

Exposure from investments in mutual funds:

The Company had exposure to price risk arises from investments in mutual funds held by the Company and classified in the balance sheet as fair value through profit or loss. To manage its price risk arising from investments in mutual funds, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

Sensitivity

The sensitivity to profit or loss (after tax) and equity in case of an increase in price of the instrument by 5% keeping all other variables constant would have resulted in corresponding impact on profits by Nil (31 March 2023: Rs 1.31 crores).

29 Capital management

For the purposes of the Company’s capital management, capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company’s capital management is to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended 31 March 2024 and 31 March 2023.

Sensitivities due to mortality and withdrawals are not material. Hence, impact of change is not calculated above.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting year. This analysis may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous year.

(iii) Other long-term benefits:

An actuarial valuation of compensated absences has been carried out by an independent actuary using the Projected Unit Credit method. The amount recognised as an expense towards compensated absences for the year amounts to Rs. 0.35 crores (31 March 2023: Rs. 0.27 crores). Asat 31 March 2024, provision for compensated absences amounts to Rs. 1.74 crores (31 March 2023: Rs. 1.45 crores) presented as provision for employee benefits in note 15A and 15B - Provisions.

The Company has executed lease arrangements for office and business premises. With the exception of short-term leases, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability.

Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublet the asset to another party, the right-of-use asset can only be used by the Company. Leases are either non-cancellable or may only be cancelled by incurring a substantive termination fee. Some leases contain an option to extend the lease for a further term. The Company is prohibited from selling or pledging the underlying leased assets as security against the Company''s other debts and liabilities. For leases over office buildings and warehouse premises the Company must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease. Further, the Company is required to insure items of property, plant and equipment and incur maintenance fees on such items in accordance with the lease contracts.

The Company has considered automatic extension option available for the property leases in lease period assessment since the Company can enforce its right to extend the lease beyond the initial lease period as the Company is likely to be benefited by exercising the extension option.

The Company has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less) or for leases oflow value assets. Payments made under such leases are expensed on a straight-line basis. The expense relating to payments not included in the measurement of the lease liabilities for short-term leases is Rs 24.57 crores (31 March 2023: Rs 20.07 crores).

iv) At 31 March 2024 and 31 March 2023, the Company was not committed to any liability towards short-term leases.

v) Total cash outflow for leases for the year ended 31 March 2024 was Rs 35.03 crores (31 March 2023: Rs 25.93 crores).

The Company has a right to extend/terminate its leasing arrangements beyond the initial agreement/lock in period. For the assessment of lease term as per Ind AS 116, the management of the Company has considered the extension options and not considered the early termination options wherever available for its property leases in its lease period assessment since the Company is likely to benefit from a longer lease tenure.

34 Contingent liabilities and commitments
		As at	As at
		31 March 2024	31 March 2023
a)	Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of capital advances)	6.18	17.78
		6.18	17.78
b)	Others Corporate guarantee given on behalf of subsidiary company		50.00
		-	50.00
c)	Contingent liabilities Claims against the Company not acknowledged as debts to the extent not provided for- Income tax matters [amount paid under protest Rs. 0.19 crores (31 March 2023: Rs. 0.19 crores)]	0.02	0.02
	Sales tax matters [amount paid under protest Rs. 0.18 crores (31 March 2023: Rs. 0.18 crores)]	0.01	0.14
	Other matters*	9.53	6.07
		9.56	6.23
	* Includes various other claims made by vendors, ex-employees and various government authorities.

It is not practicable for the Company to estimate the timings of the cash flows, if any, in respect of the above pending resolution of the respective proceedings. The Company has assessed that it is only possible, but not probable, that outflow of economic resources will be required in respect of the above proceedings.

36 Segment information

The Company primarily operates in the trading of wholesale sales. Based on the “management approach” as defined in Ind AS 108 - Operating Segments, the Chief Operating Decision Maker (‘CODM’) does the evaluation of the Company’s performance at an overall company level as one segment, i.e., “Trading of wholesale sales".

The Company''s Board of Directors have been identified as the CODM, since they are responsible for all major decisions with respect to the preparation and execution of business plan, preparation of budget, planning, directing and business expansions.

The Company is domiciled in India and derives its entire revenue from trading of goods and rendering of services in India. Moreover, all the assets/ liabilities are located in the Company''s country of domicile, i.e., India.

Refer note 19 for details of product and services.

In view of the same, separate segment information is not required to be given as per the requirements of Ind AS 108 on “Operating Segments”.

III. During the year, a contribution ofRs 1.80 crores (31 March 2023 : Rs 2.25 crores) has beenmade to Vishal Mega Mart CSR Trust (entityover whichthe Companyexercise control), which is the implementation agency for undertaking the CSR activities of the Company, with the main objective of working in areas of eradicating hunger, poverty and malnutrition, promoting education, including special education and employment enhancing vocation skills, promoting gender equality, empowering women and undertaking measures for reducing inequalities faced by socially and economically backward groups, ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry conservation of natural resources and maintaining quality of soil, air and water, protection of national heritage, contributions to public funded universities, disaster management, including relief, rehabilitation and reconstruction activities. Out of the aforesaid contribution, Nil (31 March 2023: Nil) is remaining unspent by the implementation agency as at balance sheet date.

40 The Code ofSocial Security, 2020 (''Code'') relating to employee benefits during employment and post employment received Presidential assent in September 2020. Subsequently, the Ministry ofLabour and Employment had released the draft rules on the aforementioned Code. However, the same is yet to be notified. The Company will evaluate the impact and make necessary adjustments to the standalone statements in the period when the Code will come into effect.

41 Other statutory information

(i) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets during the year ended 31 March 2024.

(ii) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

(iii) The Company has not been declared wilful defaulter by any bank or other lenders.

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

(vi) The Company has complied with number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

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

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

- provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

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

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

- provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

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

(x) The Company has not traded or invested in crypto currency or virtual currency during the current and the preceding financial year.

(xi) The Company has not entered nto the scheme of arrangement in the current year.

42 The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books ofaccount, shall use only such accounting software whichhas a feature ofrecording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

During the current year, the audit trail (edit logs) feature for any direct changes made at the database level was not enabled for the accounting software used for maintenance of accounting records.

Further, accounting software used for payroll processing of the Company is operated by a third party software service provider and the availability of audit trail (edit logs) at the database levels are not covered in the ‘Independent Service Auditor’s Assurance Report on the Description of Controls, their Design and Operating Effectiveness’ (‘Type 2 report’ issued in accordance with AICPA Standards of Attestation Engagement SSAE 18 : Service organization).

This is the summary of material accounting policies and other explanatory information referred to in our report of even date.