Directors Report of Aditya Birla Fashion and Retail Ltd.

Mar 31, 2025

Your Company's directors hereby present the 18^th Annual Report in the form of 2^nd Integrated
Report together with the audited financial statements of the Company for the financial year
ended March 31, 2025 (“year under review/ FY 2024-25”).

MANAGEMENT DISCUSSION AND ANALYSIS
Overview

The year under review unfolded against a backdrop of moderate global economic recovery
amidst inflationary pressures and geo-political instability. While inflation showed signs of
easing; heightened geopolitical tensions, trade barriers, and policy uncertainties—exacerbated
by major election cycles in key economies —added layers of unpredictability. Monetary policy,
particularly interest rate adjustments, remained a central focus for several major economies.

According to the IMF's April 2025 World Economic Outlook, global GDP growth is projected at
2.8% for 2025 and at 3.0% for 2026, indicating a moderate but steady growth rate. Global inflation
is expected to continue its downward trend, but geopolitical tensions and trade uncertainties
remain significant risks to the global economy. Navigating this turbulent landscape shall
demand strategic agility and resilience, and a keen focus on delivering consistent growth
while adapting to shifting global currents.

Notably, India continues to outpace other major economies, reaffirming its position as the
world's fastest-growing large economy amidst global headwinds. It has seen rise in consumer
spending led by rate cuts, easing inflation and slew of government measures. However,
discretionary spending patterns remain uneven, reflecting shifts in consumer priorities at
different points in time and economic uncertainties.

Indian Economy Overview

India's economy exhibited strong resilience amid global headwinds, achieving an estimated
real GDP growth of 6.5% in FY 2024-25, according to the Ministry of Statistics and Programme
Implementation. Growth was primarily driven by robust expansion in the services and
construction sectors, alongside a recovery in manufacturing and domestic consumption.

India's economic outlook for FY 2025-26 remains broadly positive, with growth expected in
the range of 6-7%, supported by resilient domestic demand, government capital expenditure
and a strong services sector.

The broader sentiment continues to be positive, despite some moderation in urban
consumption and investment activity. Easing inflation, a positive monsoon outlook, and
recent personal tax cuts/rebates have boosted consumer confidence, which is likely to spur
household spending—a crucial driver of India's economic growth. Structural reforms and
accommodative monetary policy are also expected to play a supportive role in sustaining
economic momentum. In June 2025, the RBI cut the key repo rate to 5.5%, signaling a growth-
oriented stance. Coupled with liquidity infusion measures, the move is aimed at boosting
demand and encouraging investment. Ongoing reforms in infrastructure and labor markets,
along with the government's focus on capital expenditure, are expected to support long-term
growth.

Over time, rising urbanization, a growing middle class and increasing disposable incomes
are expected to drive sustained consumption growth in India. Continued improvements
in infrastructure, digital connectivity, and financial inclusion are expanding market access,
particularly in semi-urban and rural areas. Additionally, investments in education and skill
development are gradually enhancing productivity and supporting higher household incomes,
laying a strong foundation for broad-based consumption-led growth.

Despite global uncertainties, India's economic outlook remains promising, supported by
strategic policies, accommodative monetary measures and robust domestic demand.

Industry Review
Global Apparel Industry

The global apparel industry, valued at $1.84 trillion in 2025, demonstrated strong resilience,
successfully navigating a year of economic headwinds and geopolitical uncertainties. Brands
that embraced operational flexibility, diversified supply chains, and accelerated digital
expansion outperformed competitors. Consumer preferences shifted towards value-for-money
offerings, premiumization and multi-purpose apparel, fueling recovery across categories.

Looking ahead, the industry is projected to grow to $1.9 trillion by 2026, driven by:

•    New consumption hotspots emerging in regions like South Asia, Southeast Asia, and
South America

•    Sustained momentum in omni-channel retail

•    Rising demand for sustainable and ethically produced fashion

•    Increased preference for comfort-led, versatile designs

Brands that proactively align with these trends—prioritizing innovation, supply chain agility,
and customer-centric strategies—will be best positioned to capture future growth and
strengthen market leadership.

Indian Apparel Industry

The Indian apparel industry experienced a moderate recovery in FY 2024-25, aided by easing
inflation and a gradual uptick in consumption demand. However, the recovery remained
uneven, with the sector continue to grapple with challenges such as inconsistent footfalls,
reliance on occasion-driven purchases and subdued urban discretionary spending.

In response, retailers adopted a more structured approach to growth, focusing on store footprint
optimization, enhancing omni-channel capabilities and tightening inventory management to
preserve margins and reduce overstock risks. Consumer engagement strategies also evolved,
with brands investing in personalized and narrative-driven merchandising and curated
assortments to deepen brand affinity.

The Indian apparel market reached '9.3 lakh crore in FY 2025, registering a CAGR of 11% since
FY 2019. The market is expected to surpass 14 lakh crore by FY 2030, fueled by rising disposable
incomes, rapid urbanization, growing brand consciousness, and the continued expansion
of organized retail and e-commerce—particularly across semi-urban and lower-tier cities.
Technological advancements are also accelerating this growth trajectory. Innovations such as
virtual try-ons, AI-driven product recommendations, and personalized shopping experiences

are reshaping consumer interactions while helping brands improve operational efficiency,
reduce returns, and drive conversion rates. As digital adoption deepens and consumer
expectations evolve, brands that leverage technology, invest in innovation, and build agile
supply chains with robust inventory and demand management capabilities will be best
positioned to capture the next wave of growth in the Indian apparel sector.

The fashion industry can be categorized into five key themes, each driven by unique factors
and poised for significant growth.

 

1.    Western Wear: Sustained momentum driven by urbanization, rising workforce
participation and global fashion influence.

2.    Value Fashion: Strong relevance continues due to price-conscious consumers, wider
retail reach, and efficient sourcing.

3.    Ethnic Wear: Remains central to occasion-led demand, blending traditional preferences
with modern design.

4.    Luxury Fashion: Steady growth supported by rising affluence, aspirational buying, and
digital access to premium brands.

5.    Digital Fashion: Gaining early traction as virtual platforms evolve, with long-term potential
in immersive retail and brand engagement.

 

Key Trends in the Indian Apparel Industry
Shift to Organized Retail

Rising demand for quality, service consistency, and brand trust is accelerating the move from
unorganized to organized retail, especially in Tier II & III cities. Organized players are expanding
footprint aggressively, innovating better store formats, rolling outloyalty programs and driving
omnichannel integration. This shift is also formalizing supply chains, improving compliance
and driving higher customer lifetime value.

Gen-Z & Millennial Influence

Young consumers are driving trend-led, expressive fashion, pushing brands toward faster
product cycles, influencer collaborations, and cultural relevance. They demand authenticity,
inclusivity, and real-time trend adoption, reshaping how brands design and communicate.
Social commerce and creator-led content are now central to brand discovery and purchase
decisions.

Personalization & Experience

AI-powered recommendations, virtual try-ons, and personal shopping services are reshaping
retail, offering tailored experiences and deeper loyalty. Brands are blending digital convenience
with in-store personalization, creating hybrid experiences that drive engagement. Experiential
retail is emerging as a differentiator, making shopping more immersive and interactive.

End-to-End Digitization

Technology is streamlining design-to-delivery with digital sampling, 3D prototyping, and
demand forecasting—boosting agility and reducing waste. This enhances speed to market
and minimizes inventory risk, critical in a fast-evolving fashion landscape. Data-driven
merchandising is enabling smarter, more profitable decision-making at scale.

Digital-Led Brand Building

Brands are shifting from traditional marketing to story-driven, interactive digital engagement
via social media, influencers and communities. Content creation is now two-way, with
consumers co-creating trends and narratives alongside brands. Always-on digital marketing
keeps brands relevant and constantly connected with consumers.

Sustainability & ESG

Sustainability is now a core business priority, with brands adopting eco-friendly sourcing,
responsible production, and transparent ESG reporting. Consumers are actively choosing
brands with visible sustainability credentials, forcing the industry to take tangible decisive
steps towards sustainability.

Category Expansion

Apparel players are diversifying into innerwear, footwear, accessories, and beauty, building
broader lifestyle portfolios and unlocking new growth. This strategy enhances wallet share,
reduces category dependency and creates ecosystem stickiness. Cross-selling and bundling
are becoming integral to driving higher transaction values and customer retention.

Business Overview

A key strategic milestone in FY 2025 was the successful demerger of Aditya Birla Lifestyle
Brands Limited (ABLBL) from Aditya Birla Fashion and Retail Limited (ABFRL), effective
May 1, 2025. This transformative move resulted in the creation of two independent focused
entities - ABFRL and ABLBL - each enabled to pursue a clear and distinct strategy and unlock
differentiated value for stakeholders.

Together, the two entities comprehensively cover the entire fashion landscape—ABLBL driving
growth in the western wear category, while ABFRL expands its leadership across masstige/
value retail, ethnic, luxury, and digitally-led brands. This dual-entity structure allows the Aditya
Birla group to cater to diverse consumer segments, offering both established market-leading
and emerging fashion brands.

Both businesses are now at a strategic inflection point, supported by a proven and successful
playbook, with the following capabilities in place to drive their next phase of growth.

Aditya Birla Lifestyle Brand Limited (ABLBL)

ABLBL: Building a Lifestyle Powerhouse

Post-demerger, ABLBL operates a robust portfolio of lifestyle brands, including market¬
leading names such as Louis Philippe, Allen Solly, Van Heusen, Peter England, and Simon
Carter, alongside youth-focused American Eagle, sportswear brand Reebok, and innerwear
business under Van Heusen Innerwear. The company's strategy is centered on scaling core
brands, expanding product portfolios, and deepening distribution across channels—driving
sustainable, long-term growth in the premium lifestyle space.

History

In the years leading up to the 2000s, Louis Philippe, Van Heusen, Allen Solly, and Peter England
established a dominant presence in India's formal and premium office wear segment. Each
brand successfully carved out a unique niche, strategically catering to distinct consumer needs.

In 1999, the Aditya Birla Group (ABG) acquired Madura Garments, gaining ownership or
exclusive licensing rights for all four brands. By 2004, the business transitioned from a
wholesale-driven model to a retail-led strategy, rapidly expanding its exclusive brand outlet
network and deepening direct consumer engagement. Over time, the brands expanded
beyond their formalwear roots, entering casual wear, sportswear, kids wear, and women's
apparel, broadening their relevance in everyday fashion. The group further ventured into
the innerwear category with Van Heusen, building a trade-led distribution model, and later
diversified into youth western wear and sportswear by adding global brands like American
Eagle and Reebok to its portfolio.

A Robust, Scalable Business with Strong Fundamentals

Today, Aditya Birla Lifestyle Brands Limited (ABLBL) operates as a formidable premium lifestyle
platform, participating in a large and growing total addressable market (TAM) with a proven
and scalable operating model.

Over the years, the business has achieved a leadership position, consistently delivering:

•    Steady revenue growth

•    Strong and stable profitability

•    Positive cash flow

•    High Return on Capital Employed (ROCE)

In addition to its core categories, ABLBL has strategically expanded into high-growth segments
such as innerwear, sportswear, and youth casual wear, positioning itself for continued
momentum.

Post de-merger and listing, ABLBL is set for the next phase of growth, suitably funded by
internal cash generation. The Company is targeting to double its size over the next five years,
aiming for double-digit CAGR alongside improved profitability. Having consistently delivered
positive operating cash flows (pre-Ind AS), it now aspires to become a dividend-distributing
entity soon and plans to achieve a debt-free status within next 2-3 years.

A Future-Ready Premium Lifestyle Platform

ABLBL stands today as India's most formidable premium lifestyle brand platform—built on
the backbone of strong operational excellence perfected over years and powered by strong
brands, innovation led culture and industry leading talent.

FY25 ABLBL Performance Highlights

ABLBL continued to demonstrate a robust and profitable growth trajectory, with a marked
improvement in performance during the second half of the year. The business delivered mid
single-digit like-to-like retail growth, driven by consistently robust retail execution, continued
product innovation, and a sharp focus on enhancing customer experience. At the same time,
the company strategically rationalized low-margin channels and enhanced the overall quality
of its distribution network.

ABLBL reported normalized revenue of ' 7,830 crores with an normalized EBITDA margin of
16.2%, a 100-bps improvement over the previous year. Full year revenue under discontinued
operations stood at ' 7619 Cr.

As on March 31, 2025, ABLBL had a retail space spanning over 4.6 million sq.ft. across India,
further a strong network of 3,253 brand stores and presence across 38,000+ multi-brand
outlets and 7000+ shop-in-shop across departmental stores.

a) Lifestyle Brands

Your Company's Lifestyle Brands segment comprises four of India's most iconic apparel
brands — Louis Philippe, Van Heusen, Allen Solly, and Peter England. Each brand is
uniquely positioned to cater to diverse consumer preferences across formal and casual
wear categories, while consistently reinforcing their distinct value propositions:

•    Louis Philippe: Lead excellence in fashion, responsibly

•    Van Heusen: Empower achievers to build a better world

•    Allen Solly: Make dressing-up fun, responsibly

•    Peter England: Make High-Quality Fashion affordable

With one of the strongest and most versatile brand portfolios in the Indian fashion
industry, the Lifestyle Brands segment continues to set industry benchmarks and
redefine market standards. Spanning multiple categories, price points, and consumer

occasions, the brands have maintained deep-rooted consumer trust and aspirational
appeal, reaffirming their salience amongst Indian shoppers.

In FY25, the Lifestyle Brands delivered a revenue of '6,575 crore and an EBITDA margin
of 19.3%, reflecting both operational excellence and brand strength

Despite a challenging external environment, the Lifestyle Brands have retained leadership
across core categories, driven by:

•    Timeless design and innovation

•    Consistent product upgradation with modern blends and premium finishes

•    A differentiated brand identity and strong customer recall

The brands have strengthened their portfolio by catering to a broad spectrum of price
points, while actively pursuing product premiumization and category expansion. This
includes deeper plays in casual wear, wedding collections and non-apparel segments,
ensuring relevance across evolving consumer needs.

Aligned with a strategy of profitable expansion, the Lifestyle Brands undertook multiple
initiatives in FY25:

•    Product premiumization to drive higher value per transaction

•    Markdown management to protect margins and reduce discount dependency

•    Rationalization of low-profitability channels and selective network optimization

These measures have contributed to robust like-to-like sales growth while continuously
improving the profitability profile of the business.

As of March 31, 2025, the Lifestyle Brands network includes 2,900+ stores (including value
stores), a franchisee-led expansion model supporting scalable growth and a robust
omnichannel ecosystem, integrating offline and digital retail for seamless consumer
engagement.

The Lifestyle Brands continue to stand as a testament to the Company's legacy of
innovation, quality and customer-centricity. As India's fashion landscape evolves, these
brands are well-positioned to lead the next phase of growth—shaping consumer
preferences, redefining trends, and setting new standards for how India dresses.

Lifestyle brands (Retail KPIs)	FY19	FY20	FY21	FY22	FY23	FY24	FY25
LTL value growth	5%	5%	-20%	46%	40%	-8%	4%
No. of Stores*	1,980	2,253	2,379	2,522	2,650	2,679	2,489
Total Retail Area* (Mn. sq.ft.)	2.56	2.83	3.01	3.24	3.55	3.73	3.50

American Eagle has continued to strengthen its foothold in the Indian market, building
on its global reputation for trend-driven, comfortable casualwear. The brand's positioning
resonates deeply with India's young, aspirational demographic, quickly establishing it as
one of the top choices for premium denim and casual fashion in the country. In FY25, the
brand recorded impressive double-digit year-over-year growth, fueled by robust like-to-
like retail performance and an expanding distribution footprint.

Today, American Eagle operates 68 stores across 30+ cities, alongside a growing presence
in over 200 departmental stores and multi-brand outlets. This expanding geographic
footprint reflects the brand's rising popularity and increasing traction among Indian
consumers.

Reebok a globally recognized sportswear brand, continues to make strong strides in the
Indian market with its high-performance footwear, apparel, and accessories. Since its
acquisition in FY2022, Reebok has significantly strengthened the company's presence
in the youth-oriented activewear segment, complementing the lifestyle portfolio with
its rich heritage in fitness, innovation, and athleisure.

Operating on a well-established and profitable retail model, Reebok has witnessed
renewed consumer interest, fueled by the rising adoption of active lifestyles and the
growing focus on health and wellness across both urban and semi-urban markets. In
FY25, the brand expanded its footprint by opening 25 new stores, taking its total presence
to over 170 exclusive outlets nationwide.

Over the past year, Reebok has strategically diversified its product range across key
categories such as walking, running, training, and lifestyle wear, while reinforcing
its positioning in the fast-growing athleisure market. Innovations like MAXFOAM+,
SPACEFOAM for Women, ZIGNITION, FLOATZIG, and NANOGYM have further elevated
its appeal amongst India's fitness-conscious and style-driven youth.

Van Heusen Activewear, Athleisure and Innerwear

Your company's foray into the innerwear and athleisure segment through Van Heusen
Innerwear & Athleisure has witnessed noteworthy success since its launch in 2016. The
brand has rapidly scaled operations, driven by a sharp product strategy, continuous
innovation and strong channel execution. Today, Van Heusen's innerwear and athleisure
range is available across 36,500+ trade outlets and 100+ Exclusive Brand Outlets (EBOs),
with an additional 1,500+ new counters added in FY25. The brand also maintains a
strong presence across leading departmental stores and e-commerce platforms, driving
comprehensive consumer coverage across channels.

Van Heusen Innerwear offers a thoughtfully curated collection for men, women, and kids,
blending stylish designs with advanced product features that prioritize comfort, fit, and
everyday wearability. The brand continues to drive growth in this segment through fabric
innovation, ergonomic fits and category expansion. Key product innovations include
Classic+, Vitals, Layer Zero, and Invisibles, each catering to specific consumer needs while
maintaining the brand's hallmark of sophistication and quality.

Marketing efforts have been significantly scaled up, with national television campaigns
and strategic collaborations with influencers to amplify brand reach and deepen consumer
engagement. These initiatives are crafted to enhance Van Heusen's visibility in tis category
and strengthen its connect with India's evolving lifestyle-conscious audience.

By seamlessly combining style, comfort, and functionality, Van Heusen Innerwear &
Athleisure is well-positioned to capture the growing demand in India's premium athleisure
lifestyle and fitness apparel market.

Aditya Birla Fashion and Retail Limited (ABFRL)

Strategic Portfolio at an Inflection Point

The demerged Aditya Birla Fashion and Retail Limited (ABFRL) is at a pivotal growth phase,
with its diverse portfolio spanning both high-growth traditional categories such as ethnic and
western wear, and emerging, previously underpenetrated segments like Gen Z fashion and

luxury apparel. Each business vertical is steadily scaling towards its full potential, positioning
the company to capture significant market opportunities across India's evolving fashion
landscape.

In its new structure, ABFRL emerges as a high-growth fashion platform with a multi-vertical
architecture, targeting diverse consumer segments:

o Masstige & Value Fashion: Led by Pantaloons and Style Up, offering aspirational yet
affordable fashion to a broad customer base

o Ethnic Portfolio: India's most expansive ethnic wear collection—spanning everyday wear
to occasion wear—features exclusive collaborations with designers like Sabyasachi, Tarun
Tahiliani, House of Masaba, and Shantnu & Nikhil, along with premium brands such
as TCNS, TASVA, and Jaypore

o Luxury and Super Premium: Rapidly scaling through The Collective, a curated set of
luxury mono brands and the launch of Galeries Lafayette, marking a significant step
in building India's luxury fashion ecosystem

o TMRW: A pioneering digital-first platform nurturing a portfolio of emerging fashion and
lifestyle brands, targeting digitally native, modern consumers.

Building India’s Most Versatile Fashion Platform

With a sharpened brand portfolio, strong balance sheet, and consistent margin momentum,
ABFRL is evolving into one of India's most versatile and dynamic multi-format, multi-brand
fashion platforms.

In short span of time, we have successfully built

•    The largest ethnic wear portfolio

•    A leading luxury retail platform

•    A dominant masstige and value retail presence

•    The largest digital-first brands portfolio

The company's long-term vision is to achieve & strengthen its market leadership across all
key segments in the next 5-10 years, firmly positioning itself at the forefront of India's growing
fashion and lifestyle industry.

ABFRL Financial Highlights

Particulars	FY24	FY25
Revenue	13,996	7,355
EBITDA	1,703	854
EBIT	48	(312)
PBT	(829)	(880)
PAT*	(736)	(624)
EBITDA%	12.2%	11.6%
EBIT%	0.3%	-4.2%
PBT%	-5.9%	-12.0%
PAT%	-5.3%	-8.5%
Capital Employed	14,822	12,230
ROCE	0.3%	-2.6%
Net Debt Equity Ratio	0.6	(0.1)

1)    * FY25 PAT includes exceptional gain of Rs. 161.55 Crs.

2)    Also, please note FY24 and FY25 financials are not comparable on account of De-merger and Merger in
FY24 & FY25.

Corporate Action: Fund Raise

To support its ambitious growth plans and strengthen long-term financial health, ABFRL
successfully raised '4,239 Cr during the year. This included a preferential issue of '2,379 Cr,
led by the promoter group and a marquee foreign investor. The promoter's participation at a
significant premium underscore their strong conviction in ABFRL's value creation potential.
In addition, the Company raised 1,860 Cr through a Qualified Institutional Placement (QIP),
which saw an overwhelming response from leading domestic and international investors,
with the issue being ~2x oversubscribed. This reflects investors' confidence in both India's
fashion industry growth and ABFRL's distinctive leadership position. The capital is being
strategically deployed to drive business expansion and reduce debt, laying a strong foundation
for sustained growth.

Financial Performance in FY25

In FY25, ABFRL continued its strong growth trajectory, driven by a clear strategy of profitable
scale-up across multiple business formats. Operationally, ABFRL delivered solid results in
FY25, achieving revenues of ' 7,355 Cr, reflecting a 14% year-over-year increase. The company
also reported a significant comparable EBITDA margin expansion of 220 basis points to 10.3%,
despite navigating a challenging consumption environment. This improvement highlights
effective cost management, operational efficiency and focused execution.

a) Masstige Value and Retail

Pantaloons has cemented its position as one of India's most trusted and dynamic brands
in the masstige fashion segment, offering an extensive and diverse portfolio of apparel,
accessories, and footwear for men, women, and children. For over 25 years, the brand has
catered to India's growing middle-class consumers, delivering a combination of affordability,
fashion-forward designs, and quality across the length and breadth of the country.

In FY25, Pantaloons segment reported revenues of '4,373 crore, while delivering an EBITDA
margin of 16.9%, marking a robust ~400 basis point improvement over the previous year.
The Pantaloons format delivered an operating margin of 18%, underscoring the success
of disciplined retail execution, improved private label contribution, reduced markdowns,
and stringent cost optimization. This performance reflects the brand's consistent ability to
balance scale, affordability and fashion relevance in a dynamic and competitive market.

A core strength of Pantaloons lies in its robust portfolio of private labels, which span
multiple categories and deliver trend-led, value-rich products. These private brands
drive consumer loyalty, differentiation, and profitability, positioning Pantaloons as a one-
stop destination for aspirational yet accessible fashion. The brand continues to innovate
product offerings, enhance price-value propositions, and upgrade its retail identity to
remain aspirational for the evolving Indian consumer.

Pantaloons (Retail KPIs)	FY19	FY20	FY21	FY22	FY23	FY24	FY25
Walk-ins (Crore)	5.4	5.7	2.3	3.6	6.2	6.0	6.6
Conversion	24.3%	26.1%	31.5%	26.2%	21.6%	22.2%	21.2%
ASP	643	665	649	727	813	801	809
ABV	1,880	2,001	2,075	2,325	2,468	2,500	2,576
Items per bill	2.9	3.0	3.2	3.2	3.0	3.1	3.2
LTL volume growth	3%	-2%	-51%	18%	32%	-3%	-1%
LTL ASP growth	-2%	5%	-2%	13%	12%	-2%	1%
LTL value growth	1%	3%	-51%	33%	48%	-5%	0%
No. of Stores	308	342	346	377	431	417	405
Total Retail Area (Mn. sq.ft.)	4.02	4.36	4.46	4.92	5.72	5.72	5.71

As of March 31,2025, Pantaloons' loyalty program boasts a 16.7 Mn member base, reflecting
strong customer affinity and long-term engagement with the brand.

Pantaloons operates through a wide retail network of 405 stores across India. Over the past
two years, the brand has rationalized and optimized its store network to align with evolving
market dynamics, while recalibrating its growth strategy to focus on driving same-store
sales growth and selective store expansion in targeted markets. Simultaneously, it has
strengthened its supply chain and planning processes, resulting in improved inventory
management, enhanced customer experience and better operational agility. Through
digitized in-store experiences, the brand is creating a seamless, modern shoppingjourney
focused on convenience, engagement and consumer delight.

The brand's youthful, contemporary, and vibrant imagery further reinforces its
commitment to delivering accessible, stylish fashion to a broad and aspirational customer
base. With its wide assortment of merchandise across private label and complimentary
external brands, 16Mn+ strong loyalty members, agile supply chain, strong vendor base
and best in class planning processes, Pantaloons is well-positioned to consolidate its
leadership in India's masstige fashion segment.

Style Up, your company's strategic foray into the value fashion segment, continued to
gain strong traction in FY24-25, evolving into a key growth lever within ABFRL's diversified
brand portfolio. Targeted at aspirational, budget-conscious consumers, the brand bridges
the gap between affordability and contemporary fashion, offering trend-driven products
in a market space traditionally dominated by unorganized players. By combining sharp
price points, quality merchandise, and fashion relevance, Style Up aims to elevate the
value shopping experience, particularly for Gen Z and young consumers.

The brand's proposition is anchored in a carefully curated product range, delivered
through elevated retail formats that go beyond typical value retail environments. Style
Up leverages backend integration with Pantaloons to drive operational efficiency and
optimize supply chain processes, while a highly experienced team steers its execution
strategy. This combination allows the brand to maintain a nimble and scalable business
model focused on both customer experience and profitability.

In FY24-25, Style Up delivered a ~70% year-over-year growth, reflecting growing consumer
acceptance. The brand also reported steady improvements in key performance metrics,
including better sales per square foot, enhanced store-level profitability and an overall
improvement in operating efficiency.

With 40-50 additional stores planned for FY26, Style Up will continue to evaluate and refine
its operating model before pursuing aggressive expansion in the years following FY26.

b) Ethnic wear Brands

The ethnic wear market is India's largest apparel category, and the share of the organized
segment within this market is growing rapidly. Previously dominated by unorganized
players, this shift offers significant opportunities for branded players. Additionally, there
is a notable transition from tailored wear to ready-to-wear garments, which is driving
this segment. To capitalize on these trends, your company had implemented a clear and
distinct strategy for success in each segment. Consequently, your company built the
most comprehensive ethnic wear portfolio through both organic and inorganic means,
catering to various key occasions and price points. This comprehensive approach will
help build a strong leadership position in future.

Our ethnic wear business has firmly established itself as a powerful growth engine within
ABFRL's portfolio. Today, we house the largest and most comprehensive ethnic brand
portfolio in the Indian fashion industry, spanning designer led and premium segments.
This scale, combined with sharp execution and deep consumer resonance, has enabled
us to consistently deliver double-digit growth across quarters.

Sabyasachi continues to redefine Indian luxury by blending intricate heritage
craftsmanship with contemporary design, offering a curated portfolio of bridal
wear, men's wedding attire, occasion wear, jewelry, and accessories. In FY25, the
brand continued its strong growth momentum, delivering solid double-digit
profitability and reinforcing its dominant position in the luxury segment. The brand
also celebrated its 25th anniversary, unveiling a collection of western wear, jewelry,
and accessories—further evolving its portfolio with a more contemporary edge.
Domestically, Sabyasachi expanded its footprint with the launch of an exclusive
apparel and accessories store in Hyderabad. Internationally, the brand reinforced its
global luxury presence through collaborations with the MET Gala, Printemps Doha,
and Bergdorf Goodman, while also operating exclusive stores in New York and Dubai.
With this momentum, Sabyasachi continues to solidify its status as a leading Indian-
inspired global luxury brand, combining cultural authenticity with global aspiration.

Tarun Tahiliani, one of India's most celebrated designers, is renowned for blending
rich Indian craftsmanship with contemporary silhouettes, creating timeless
couture and occasion wear. ABFRL increased its stake to 51% in the brand, adding
another marquee name to its luxury ethnic portfolio, reinforcing its leadership in
India's premium and luxury fashion landscape. In FY25, the brand delivered ~40%
revenue growth over last year, along with strong double-digit profitability, further
strengthening its position in the luxury fashion segment. The couture collection is
available across six exclusive stores, while the brand expanded into the affordable
luxury space with the launch of its first pret label, ‘OTT by Tarun Tahiliani,' store in
Gurugram, capturing a broader aspirational audience.

 

while leveraging multiple growth channels including e-commerce and wholesale
to expand market reach. Strong brand storytelling focused on product excellence
and fashion-forward aesthetics continues to reinforce Shantnu & Nikhil's position as
leaders in India's contemporary and luxury fashion landscape.

ii) Premium Ethnic Wear Brands

TASVA introduced in FY22 through a strategic partnership with Tarun Tahiliani,
marked your Company's foray into the premium men's ethnic wear market. The
brand offers a distinctive blend of exquisite craftsmanship and contemporary
design, providing high-quality ceremonial wear for Indian men at accessible price
points. Since its inception, TASVA has rapidly scaled to around 70 stores across India,
achieving 44% growth over last year, driven by a strong 12% like-to-like growth. In
addition, TASVA has successfully established a strong foothold in the top wedding
markets across major metro cities and remains focused on expanding its presence
in key wedding destinations nationwide. Continuous product innovation, at the
back of customer feedback and market insights, has further enhanced TASVA's
value proposition. To build brand salience and deepen consumer engagement, the
brand launched high-impact multimedia campaigns, invested in targeted marketing
and actively collaborated with the broader wedding ecosystem. This has resulted in
growing preference of the brand amongst Indian consumers.

House of Masaba a young, aspirational, and digitally native brand, is rapidly redefining
the affordable luxury space across fashion and beauty. In FY25, the brand delivered
65% revenue growth. A strong digital-first strategy contributed to over 45% of total
sales, while the brand's retail footprint expanded with 5 new stores, taking the
total to 20. Bridal wear, launched recently, has been gaining steady traction and
now accounts for an increasing portion of brand's fashion portfolio. Its beauty and
personal care line, ‘Lovechild', scaled to 4x over the previous year as it continued to
broaden its portfolio with innovative products and significantly expanded its offline
presence, being available now in 40+ outlets/kiosks nationwide. House of Masaba
is growing quickly, attracting strong consumer interest and staying committed to
offering trendy, affordable luxury—making it a standout name in both fashion and
beauty.

Shantnu & Nikhil have established a strong presence in contemporary and luxury
fashion with a portfolio that spans designer ceremonial wear for men and women,
now available across 21 stores. Their couture line is complemented by S&N by Shantnu
Nikhil, an affordable luxury pret label recognized for its superior product quality and
value. Further diversifying their offering, the Shantnu Nikhil Cricket Club (SNCC)
introduces a unique sport-inspired lifestyle collection under the S&N brand, merging
fashion with athletic influence to engage a wider audience. Together, these brands
create a balanced aspirational ecosystem with clear brand and product segmentation,

TCNS Clothing Ltd became part of ABFRL in FY25, after ABFRL acquired a 51% controlling
stake in September 2023, significantly strengthening its position in the women's ethnic
and fusion wear market. TCNS houses a diverse portfolio of brands—W, Aurelia, Wishful,
Folksong, and Elleven—that collectively cater to a broad range of consumer needs,
from everyday ethnic wear to premium occasion-driven fashion. The company has also
extended into adjacent lifestyle categories such as footwear, jewelry, and cosmetics,
further strengthening its market relevance. Today, TCNS operates through a robust
retail network of around 500 exclusive brand outlets, along with extensive distribution
via large format stores, multi-brand outlets, and digital platforms. The business did face

 

certain operational and structural challenges during the transition; however, several of
these have already been resolved. While TCNS saw a revenue decline during the year
due to a planned distribution rationalization, the strategy is now nearing completion.
Despite the transitional phase, the business achieved 4% like-to-like growth, signaling
growing consumer acceptance for the brands. The business made a strategic pivot in
product development, introducing refreshed and updated merchandise. The launch
of new fusion and occasion wear collections for Spring-Summer 2025 has received a
positive market response, further reinforcing brand salience. With a revitalized portfolio,
optimized distribution and improving consumer momentum, TCNS is well-positioned to
deliver sustainable, profitable growth, with significant EBITDA improvement expected
in the years ahead.

Jaypore is India's leading premium artisanal brand, offering a curated collection of apparel,
jewelry, and accessories that celebrate the country's rich and diverse cultural heritage.
With a presence across 29 exclusive stores in 10+ cities, complemented by a robust
e-commerce platform, Jaypore provides a seamless omnichannel shopping experience,
blending tradition with modern retail convenience. In FY25, the brand delivered ~14% year-
over-year revenue growth, with retail sales rising over 20%, driven by expanding consumer
demand and improving store productivity. This growth, coupled with scale-driven
operating leverage, has led to steady improvements in profitability. To further strengthen
brand engagement, Jaypore launched influencer-led campaigns throughout the year,
significantly enhancing visibility and aspiration amongst its consumers. These initiatives
have reinforced Jaypore's leadership in the premium artisanal space, successfully housing
heritage craftsmanship within contemporary retail environment.

c) Super Premium and Luxury Retail

The super-premium and luxury market in India continues to expand, fueled by the rising
per capita, secular trend of premiumization and the rise of experience-driven consumer
purchases. Despite broader market fluctuations, demand for high-end products has
remained relatively resilient, as affluent consumers increasingly prioritize quality,
exclusivity and immersive retail experiences.

Your company's luxury portfolio includes The Collective, one of India's largest multi¬
brand luxury and bridge-to-luxury retailers, alongside select mono-brand partnerships
with global icons such as Ralph Lauren, Fred Perry, Ted Baker, and Hackett London.

As luxury consumption matures across new geographies, the total addressable market
for super premium and luxury fashion is poised for significant expansion.

The Collective continues to deliver sustainable and profitable growth, offering a curated
selection of exclusive global brands under one roof, supported by a best-in-class retail
experience. The brand's e-commerce platform, thecollective.in, is fast evolving into a
leading online destination for luxury and bridge-to-luxury fashion, expanding accessibility
and catering to a wider, digitally savvy audience. A comprehensive collection of
accessories—including watches, shoes, ties, belts, bags, wallets, jewelry, and sunglasses—
further enriches the portfolio, offering customers a complete luxury lifestyle experience.

In FY25, the super-premium and luxury segment grew by 13% year-on-year, driven by
strong e-commerce momentum (15%+ growth) and expansion into new cities and markets,
taking the total store count to 41. Strategic investments in novelty styles, womenswear,
and accessories have further strengthened the brand's relevance and growth.

Your company remains focused on delivering exceptional customer experiences, from the
discovery and trial journey to personalized service and relationship-building, reinforcing
loyalty in this high-value segment.

ABFRL's partnership with Galeries Lafayette marks a significant new chapter in its luxury
strategy playbook. The upcoming flagship store in Mumbai, currently under development,
will feature over 200 global luxury brands, establishing itself as a world-class destination
for luxury shopping in India. The store is set to open to customers by the end of the year.

d) TMRW: A portfolio of digital-first brands

The Indian e-commerce market is on track to reach USD 350 billion by FY30, driven
by robust fundamentals such as a growing affluent consumer base, rising internet
and smartphone penetration fueled by low data costs, and cost-effective logistics
infrastructure. Further accelerating this growth are digital payments, easy credit access,
and the convenience of online shopping, all of which have led to the rise of numerous
digital-first brands across categories.

To capitalize on this rapidly expanding market, your company launched TMRW in April
2022, with the vision of building digital-native consumer brands tailored for Gen Z and
millennials. TMRW operates on a ‘Brand Builder' model, leveraging proprietary data
science-led technology to provide centralized growth platform for its brands. This platform
delivers end-to-end support in design, product innovation, operations, sourcing, branding,
marketing, and community building, ensuring that each brand is well-positioned for
scale and long-term success.

The TMRW portfolio not only targets large, established categories but also focuses on
emerging high-growth segments such as athleisure, activewear, expressive wear, and
accessories. In FY25, the portfolio achieved 55% growth year-over-year. The growth was
fueled by category and channel expansion, premiumization of offerings, and high-impact
marketing campaigns and collaborations.

A key growth driver has been the scaling of offline presence in select, curated locations.
Brands like Bewakoof, The Indian Garage Co (TIGC), and Nobero expanded into physical
retail. TMRW now operates 16 stores across 7 cities. Additionally, this year TMRW added
WROGN to its portfolio through a minority stake, diversifying its brand portfolio.

Operational excellence remains at the core of TMRW's strategy, with a tech-led on-ground
execution model driving continuous improvements in supply chain efficiency, sales
performance metrics, and customer experience. These efforts are gradually building a
scalable, next-generation platform poised to create dynamic, youth-centric brands that
cater to the evolving preferences of India's digital-first consumers.

Business Strategy

ABLBL

1.    Accelerate growth of core brands and expand market share

Our Lifestyle Brands continue to execute a multi-pronged growth strategy, expanding
across diverse product categories and consumer segments. While men's wear remains
the core, we've made strong strides into casual wear, women's wear, kids wear, wedding
wear, accessories, and non-apparel, broadening our portfolio to attract new consumers
and enhance customer lifetime value. A key focus remains on expanding into untapped
and high-potential markets, complemented by efforts to deepen consumer engagement
through compelling storytelling and community-building initiatives. Simultaneously,
investments in strengthening brand.com platforms with hyperlocal, personalized
experiences are set to elevate the digitaljourney, enabling stronger consumer connections
and driving sustained growth.

2.    Build Powerful Brands in targeted New High Growth Segments

Our strategic approach is aimed towards building a leadership position in large total
addressable markets and high growth segments through strong and distinct brands. We
have identified key growth areas including innerwear, sportswear and denim wear, where
we have already established a meaningful presence via brands Van Heusen, Reebok and
American Eagle.

Reebok is set to drive rapid retail expansion in India while continuously innovating in
high-performance products. American Eagle will prioritize expanding its distribution
network through Exclusive Brand Outlets (EBOs) and Large Format Stores (LFS). Van
Heusen Innerwear will continue to expand its trade network while scaling a profitable
retail model.

We are well-positioned to have a significant play in casual wear segment through our
diverse brand portfolio of leading brands.

3.    Expand our Distribution Footprint

We have built a comprehensive and robust distribution network that spans both offline
and online channels, ensuring widespread accessibility of our brands across the country.
Our offline presence is among the largest in the western branded apparel space, with a
growing number of exclusive brand outlets strategically located nationwide. As of March
2025, our retail network includes 3250 stores, covering ~4.6 Mn sq.ft. Additionally, our
brands are present in various multi-brand outlets and shop-in-shops within large-format
departmental stores, enabling deep market penetration and visibility.

Having established a strong footprint in our core markets, we are now focused on
expanding into newer geographies, particularly those with rising fashion aspirations and
growing consumer spending. Our brand equity, combined with high customer recall and
loyalty, serves as a strong foundation as we enter untapped regions. Tier II and III cities
represent a significant growth opportunity. These markets are benefiting from steady
improvements in infrastructure, lifestyle and digital adoption, making them increasingly
relevant to India's consumption story.

4.    Continue to Focus on Product Innovation and Upgradation in Established and
Emerging Categories

We continue to place strong emphasis on product innovation and enhancement to
ensure our offerings remain high-quality, trend-right, and aligned with evolving consumer
expectations. This focus spans both our well-established categories and high-growth
emerging segments, supported by consistent investments in research and development
to create functional, stylish, and comfort-driven products.

Our Lifestyle Brands are leading the way in introducing new, trend-forward product
extensions. For instance, Indo-fusion collections offer a fresh, modern reinterpretation of
traditional wedding attire—bridging the gap between ethnic aesthetics and contemporary
styling. Peter England has ventured into sports-inspired collections, seamlessly blending
athletic functionality with everyday fashion. Reebok, known for its performance-driven
apparel, continues to push boundaries with innovative gear tailored for both fitness
enthusiasts and casual wear. Van Heusen Innerwear's ‘Air Series' emphasizes lightweight,
breathable comfort. Across all our brands, there is a strong focus on youth-centric designs,
ensuring they remain relevant and appealing to today's fashion forward consumers.

From occasion wear to casual and formal apparel, every brand under ABLBL is committed
to offering something unique and tailored to its target market, ensuring they maintain
a leadership position across diverse fashion segments.

5.    Technology and Digital-Led Continual Improvement in Operating Efficiency

A core pillar of our growth strategy is the continued deployment of technology-driven
solutions to enhance operational efficiency and improve customer experience across
both retail and e-commerce ecosystems.

By leveraging predictive analytics and AI, we are automating critical functions such as
Assortment planning, Buying decisions and Markdown and pricing optimization. We are
investing in Product Lifecycle Management (PLM) systems to streamline operations, reduce
lead times, and improve supply chain agility. Our demand-driven auto-replenishment
models and next-generation warehouse management systems support the scalable
growth of offline & online operations and ensure prompt, omnichannel fulfillment.

We are scaling initiatives such as Buy Online, Ship-from-Store and multi-warehouse
fulfillment optimization, building a faster, more reliable and cost-effective delivery
network.

Through this ongoing digital transformation, we are creating a tech-enabled, customer¬
centric retail organization that is agile, scalable and well-positioned to thrive in the rapidly
evolving fashion and retail landscape.

ABFRL

1. Scale the well-crafted portfolio across key fashion consumption themes

We have established a strong presence across key themes in the fashion industry—
masstige and value fashion, digital, luxury and ethnic wear—each offering distinct
opportunities for growth. Backed by a diverse portfolio of brands and retail formats, we
are uniquely positioned to cater to a wide spectrum of consumer preferences and needs.

The time is now to capitalize on the strength of the portfolio and leverage the unique growth
drivers within each segment. By building market leadership across these themes, we can
unlock sustained growth, improve profitability and achieve higher market multiples.

2. Accelerate Growth of established brands within the portfolio

In the masstige segment, Pantaloons continues to be a powerful growth engine, serving
the evolving needs of aspirational and value-conscious consumers. The brand's refreshed
retail identity and the introduction of new private labels have further sharpened its appeal,
while its commitment to delivering trend-led, quality fashion at affordable price points
reinforces its position as a modern and accessible fashion destination for India's growing
middle class. Looking ahead, Pantaloons will focus on strategic store expansion, delivering
a seamless and distinctive store experience to elevate consumer engagement and
strengthen brand loyalty. At the same time, the brand is focused on optimizing processes
across the value chain, refining its revenue-cost model, and building a sustainable and
efficient business model poised for long-term success.

Our acquisition of TCNS Clothing has bolstered our leadership in premium women's ethnic
wear, where brands like W and Aurelia command strong consumer recall and distribution
strength. Following the acquisition, the business is undergoing a strategic transformation
aimed at building a strong foundation to unlock substantial growth opportunities in the
future.

3. Build Powerful Brands and Retail Concepts in Identified New High Growth Segments

Our growth strategy is anchored in building a strong presence across large, high-growth
addressable markets, backed by a portfolio of distinct and purpose-led brands. We are
actively expanding into key segments such as luxury fashion, ethnic wear, value retail
and the direct-to-consumer (D2C) ecosystem — all of which represent compelling long¬
term opportunities.

•    Ethnic and Occasion Wear

Ethnic wear accounts for approximately 27% of India's total apparel market, with the
organized segment expected to grow significantly faster than the overall category
(Source: Wazir Report). Our diversified ethnic wear portfolio is well-positioned to
capitalize on this trend. Through strategic partnerships with renowned Indian
designers and in-house brands, we are capturing demand across premium and value
formats.

o Our designer brands are well positioned to take advantage of the large and
growing luxury wedding and occasion wear market through its product offerings
across apparel, accessories, jewelry and beauty.

o Brands like Wishful, Folksong and Elleven within the TCNS portfolio are currently
focused on evaluating their respective markets and establishing a stable
foundation. Once this is achieved, they plan to scale and expand beyond their
current footprint.

o TASVA is poised for aggressive expansion with plans to reach 250+ stores by
2030, with a compelling value proposition centered on refined products offered
in an elevated retail environment. The brand is set to scale rapidly, aiming to
capture a significant share of the wedding and festive wear markets.

•    Value Segment

India's value segment is undergoing rapid formalization, driven by urbanization, rising
incomes, aspirational consumption and a growing preference for branded apparel,
where consumers increasingly seek premium design at accessible price points.

Style Up, our play in value fashion space, is gaining traction and is positioned for
faster scale-up. Our distribution capabilities, planning processes, focus on quality
and strong customer loyalty programs reinforce our ability to make branded fashion
accessible to millions across India.

•    TMRW: Direct to Consumer (D2C)

IThrough TMRW, we are building a house of digital-first brands that address both
emerging and large online-first categories in the fashion space. TMRW's portfolio

spans diverse consumer needs, with each brand sharply focused on evolving fashion
needs of young consumers.

TMRW's portfolio brands are expected to drive the next phase of growth through
continued channel and category expansion. The brands will scale further across
both D2C platforms and online marketplaces, complemented by a widening offline
retail presence. Growth will also be fueled by the launch of new product categories
and a premiumization strategy, focusing on high-value offerings to enhance brand
equity and margins.

To support this expansion, TMRW is expected to raise external funding ensuring it is
well-capitalized to meet the growth ambitions of both the platform and its portfolio
brands.

• Luxury and Super Premium Fashion

India's luxury market is witnessing robust growth, led by increasing disposable incomes
and a shift in lifestyle aspirations. Our premium and luxury portfolio has emerged as
one of our fastest-growing verticals, driven by both online and offline expansion.

o Our multi-brand retail format, The Collective, along with select mono-brand
stores, has achieved consistent double-digit growth with improved profitability.
Growth will be driven by the expansion of womenswear and accessories, a
stronger e-commerce presence and deepened consumer connections.

o To further strengthen our luxury presence, we have entered into a landmark
partnership with Galeries Lafayette, the iconic French department store chain.
This collaboration will see the launch of flagship stores in premium locations
across India, offering a curated multi-brand experience spanning fashion,
accessories, beauty and lifestyle.

Our strategic focus across these high-opportunity segments — supported by targeted
brand positioning, retail innovation and omnichannel engagement — reinforces our
ambition to build category-leading platforms and future-ready fashion businesses
at scale.

4. Expand our Distribution Footprint

We have a robust distribution network spanning both offline and online channels. As of
March 2025, the de-merged ABFRL network comprises 451 Masstige and Value Retail
Stores, 659 Ethnic Brand Stores, 41 Luxury Retail Stores and 16 TMRW Brand Stores
(excluding WROGN stores). In addition to these formats, the company maintains a
significant presence through 1,632 shop-in-shop counters in departmental stores and
276 multi-brand outlets (MBOs). ABFRL's total retail footprint has expanded to 7.3 million
sq. ft., reflecting its continued growth and strong presence across diverse retail formats.

Several of our brands are in the early stages of their growth journey and are poised for
expansion into new markets and geographies. These upcoming brands will be strategically
scaled to capture growth opportunities in both existing territories and untapped regions.

Following the completion of its distribution rationalization, TCNS is set to embark on its
next phase of expansion. The focus will be on strengthening its presence in the right

locations within current core markets, while also venturing into new markets, particularly
in semi-urban and lower-tier cities, to broaden its consumer base.

Similarly, both Style Up and TASVA are gearing up for accelerated growth. With rising
consumer traction and increasing brand loyalty, both brands are preparing for aggressive
store expansion to deepen market penetration and cater to evolving customer demand.
TMRW brands are gearing up for strategic offline expansion, with a focused approach to
entering key markets through select retail formats, aimed at deepening consumer reach
and strengthening brand presence across high-potential regions.

Additionally, our portfolio of designer and luxury brands will continue to expand their
footprint both in domestic and international markets, focusing on key high-potential
locations to reinforce their luxury positioning and capture global demand for Indian
luxury fashion.

5.    Leverage Synergies from our Portfolio

The strength of our portfolio lies in the seamless integration of interconnected capabilities,
enabling us to build a more agile and efficient operational framework. By harnessing
synergies across business divisions, we drive enhanced sourcing efficiency, cross¬
utilization of manufacturing facilities, streamlined planning, and stronger negotiation
leverage—allowing us to achieve cost-effectiveness and precision at scale. Additionally,
by leveraging enriched customer insights from a unified data ecosystem, we can make
smarter, real-time decisions and deliver personalized consumer experiences that foster
deeper engagement and long-term brand loyalty. This synergy-driven approach positions
us to deliver superior value, drive sustainable growth, and maintain a competitive edge
in an increasingly dynamic retail and fashion environment.

6.    Strategic capital allocation

De-merged ABFRL operates in multiple high-growth segments, featuring brands that are
still in the early stages of development. These emerging brands will require significant
capital investment to fuel their growth, scale operations, navigate the competitive
landscape and achieve their full potential. The objective is to nurture these brands
through, providing them with the resources needed to accelerate their growth journey.
By investing strategically in these high-growth opportunities, the goal is to transform
these developing brands into robust, cash-generating assets in the future. This balanced
capital allocation strategy not only will support the sustained growth of mature brands,
but also ensures that emerging brands are positioned to contribute significantly to the
portfolio's long-term financial health and value creation plans.

Road Ahead

A challenging consumption environment, our businesses have demonstrated strong resilience,
delivering on our strategy of driving profitable growth. With the demerger now complete, we
stand as two focused, well-capitalized entities, each strategically positioned to embark on its
own high-growth journey.

We remain highly optimistic about the future of India's fashion and apparel sector, supported
by a robust economic outlook, rising per capita GDP, growing discretionary spending, and the

accelerated shift from unorganized to organized retail. These powerful tailwinds will continue
to drive sustained sectoral growth in the years ahead.

Our “where to play” strategy is now fully in place, executed through a combination of organic
and inorganic initiatives, and centered around five high-growth consumption themes. We
have built a comprehensive portfolio that includes:

•    The largest western wear portfolio in India

•    The largest ethnic wear portfolio

•    A leading luxury retail platform

•    A dominant masstige and value retail presence

•    The largest digital-first brands portfolio

With meaningful presence across key strategic fashion spaces, our focus is now on “how to
win.” This entails driving organic growth, maintaining a strong balance sheet and improving
operating performance while reinforcing the foundational competitive strengths that will
help us create long-term value.

ABLBL, backed by a robust brand portfolio, a network of 3,200+ stores, and healthy free cash
flows, is well-positioned to double in scale and expand margins over the next few years.

Simultaneously, ABFRL, with a well-diversified brand portfolio, a comprehensive presence
across all key high-growth segments, and a gross cash balance of '2,350 crores, is set to
unlock its next phase of growth over the next five years.

Digital Transformation Roadmap

ABFRL continued on its overall digital and technology transformation roadmap during the
current FY25. The major projects include:

•    Consolidation of the Pantaloons earlier version of SAP instance along with the ABLBL SAP
instance into a single instance of S4 Hana Fashion Vertical Business (FVB) across ABFRL,
hosted on public cloud environment. This now enables the base platform to streamline
and optimize various supply chain and finance processes across the company

•    Completion of the systems standardization across all designer-wear subsidiaries on a
common ERP/ POS platform

•    D365 Point-of-sale (POS) is being implemented across all the newly added businesses
such as Reebok and TCNS

•    Ethnic wear brands Jaypore and Tasva launched their Ecommerce business with own
website and in marketplaces, on the ABFRL E-commerce platform

Building extensive data analytics and AI capabilities remains a top priority, with initiatives
including:

•    Implementing demand forecasting models to enhance merchandise planning and
sourcing efficiency.

•    Enhancing the markdown management system across brands to optimize discounting
strategies

•    Leveraging Generative AI models to assist designers in rapidly developing new product
designs, fostering greater design diversity and reducing time-to-market.

•    Automating attribute data generation and product descriptions for e-commerce
catalogues using Visual AI and Generative AI Language models.

•    Launching clienteling tools for store associates to engage effectively with customers,
leveraging insights into their profiles, past purchases, and personalized product
recommendations.

The focus going forward will be on leveraging the new generation technology platforms to
drive business process automation and optimization with focus on delivering business value.
The key initiatives planned include

•    Setting up the ERP/ POS/ E-commerce systems for the launch of the Galeries Lafayette
business with implementation of a new Product Life Cycle management and Supply
Chain management tools in the ABLBL business

•    Scaling down legacy on-premise data centre along with migration to public cloud and
scaling down support services

•    Enhancing omnichannel capabilities by enabling in-store services like hyperlocal quick-
commerce and self-service checkout

•    Focus on E-commerce growth and cost optimization by leveraging analytics, marketing
automation

•    Implementation of RFID for merchandise management in Pantaloons and international
business

Human Resources Strategy

Driven by the Group Purpose of building trust and enriching lives, our vision is “to passionately
fulfil consumer needs in fashion, style, and value across wearing occasions in apparel
and accessories through solid brands and a high-quality consumer experience, with the
ultimate purpose of delivering superior value to all our stakeholders”.

The corner stone of delivering the vision is to build an organisation and culture wherein people
are obsessed with delivering value to all stakeholders and live by the ABG Values.

Our People Vision is - ‘To nurture a trust and impact led culture that enriches lives’.

This vision inspires us to build a workplace where trust is the foundation, individuals feel
empowered, and every contribution drives meaningful impact. We are deeply committed to
building a workplace where talent thrives, ideas flourish, and individuals are empowered to
grow.

Key Impact Areas of HR

1.    Talent Management and Career Growth

o Internal Talent Mobility: Several of our employees transitioned to new roles & open
positions, reflecting our commitment to nurturing internal talent

o Young Talent Development: In line with our vision of nurturing emerging talent,
we welcomed 70 Striders on 24th June 2024 through our Stride Young Talent
Management Training Programme

o Talent Councils: These forums actively review our talent pipeline, succession plans,
and development interventions to ensure robust leadership development.

2.    Learning and Development

o At ABFRL, we are deeply committed to nurturing the potential of our people by
fostering a culture that prioritises employee experience, well-being, and continuous
learning. As part of this commitment, we follow Aditya Birla Group's dedicated
Continuing Education Policy (CEP) that supports our employees through continuous
learning. This initiative reflects our Employee Value Proposition offering “A World of
Opportunities” to our managerial cadre.

o    Capability Building Academy: Mentorship at ABFRL is structured as a developmental

journey, offering guided growth experiences for employees. Learning is further
anchored by our internal capability-building ecosystem. Our internal academy
supports learning through programs like ACE (Aligning Career Aspirations with
Functional Development) and Digital Academy (focusing on digital marketing, SEO,
and AI). These platforms host a variety of leadership development programmes
tailored to different career stages.

3.    Rewards and Recognition

o Total Rewards Approach: We maintain a balanced approach to compensation
and benefits, incorporating fixed pay, variable incentives, long-term benefits and
recognition programs. Our performance appraisal process is supported by two
dedicated HRMS platforms, each tailored to the needs of distinct employee groups.

o Non-Discrimination: Ensuring fairness in pay decisions based on performance,
potential, and market standards, with specific measures for scenarios like maternity
leave and talent mobility.

o Employee Recognition Celebrating success through platforms like the Aditya Birla
Awards, ABFRL Awards and business specific awards, recognizing outstanding
contributions across the organization

4.    Enrich Your Life

o Work-Life Balance: Policies such as flexible work arrangements, work-from-home
options, and supportive leave policies contribute to a healthy work-life balance.

o Employee Wellness: Initiatives under the ABFRL Wellness Studio (ABW) promote
physical, mental and financial well-being. The ABW app ‘Multiply' offers a

comprehensive suite of wellness solutions such as Wellness Saver Cards, Active
Age programmes, stress assessments, free counselling services with doctors, and
complimentary gym memberships.

5. Communication and Engagement

o Social Media Engagement: Achieved 700k followers on LinkedIn and 24k on
Instagram (@lifeatabfrl), enhancing our digital presence and employee engagement

o Internal Communication: Utilizing platforms like town halls, internal journals, and
surveys to foster open communication and gather employee feedback

These initiatives underscore our commitment to creating a supportive and enriching workplace
environment at ABFRL, where every employee can thrive and contribute to our shared success.
Through continuous improvement and strategic HR initiatives, we aim to sustain our growth
momentum and reinforce our position as an employer of choice in the industry.

Sustainability Strategy

As a responsible consumer-centric organisation guided by the Aditya Birla Group's key
principles since its inception, sustainability has been deeply ingrained in your company
business strategy and is fundamental to ABFRL's endeavours. As the market leader, your
company prioritises meeting consumer demands by striving to deliver products with better
environmental and social footprints.

Your company believes that economic growth must be achieved in synergy with environmental
and societal interests. Thus in 2013, your company embarked on a structured sustainability
programme, ‘ReEarth for our Tomorrow' which comprised of 10 Missions namely Energy,
Carbon Footprint, Green Building, Water, Waste, WASH Pledge, Safety, CSR, Packaging and
Sustainable Products with annual targets, clear responsibilities and timelines. ReEarth is a
movement to give back more than we take from the ecosystem.

After achieving significant milestones in 2021, your company embarked on ‘ReEarth 2.0',
shifting focus from being process-led to product-led with a 2025 agenda that emphasises
product design and development, customer-centricity, and supply chain sustainability.

Your company has put in place a strong governance mechanism that effectively oversees
its sustainability agenda and goes beyond just meeting compliance requirements. The
Management Committee periodically reviews sustainability strategy and initiatives, while
the Risk Management and Sustainability Committee (RMSC) monitors and reviews the risk
management plan and other delegated functions related to sustainability. Organisational risk
and governance practices are mapped in-line with the Task Force on Climate-related Financial
Disclosures (TCFD) and Committee of Sponsoring Organisations (COSO), globally accepted
climate risk framework and Enterprise Risk Management framework respectively.

Your company is committed to transition to sustainable fashion by building adaptable and
flexible high-performance business models, promoting life cycle thinking, sourcing responsibly,
embracing circular economy principles, and ultimately mitigating or eliminating negative
impacts on the environment caused by the use of fossil fuels. ‘Zero Waste to Landfill' has been
achieved across operations and going forward, your company is exploring innovative ways to
reuse production line waste in inhouse products, thereby reducing ever increasing demand

for raw materials. ABFRL maintained the water positive status across our own operations
and 75% of water recycled in own facilities. In Occupational health and safety your company
archive zero fatality and successfully conducted 19,549 man-days of safety trainings. In Product
stewardship your company achieved 94% sustainable packaging and 93% of garments have
at least one sustainability attribute.

Your company also participates in and collaborates with various global platforms and ESG
indices, such as CAIF, UNEP, SAC, ZDHC, SU.RE, CII, FICCI, IACC, and S&P Global. These strategic
collaborations and participations have helped your company stay relevant by ensuring
alignment with global as well as national sustainability agendas.

Across the years, your company's sustainability journey has been widely appreciated and has
garnered global recognition and accolades. This year too, your company received accolades
from prominent forums and organisations. Some of the notable instances include:

•    Integrated Reporting: Released first Integrated Annual Report (IR), showcasing
commitment to transparency as per national and international standards. The IR undergo
third-party type II (Moderate) assurance of non-financial data through British Standards
Institution in line with Assurance Standard (AA1000AS) and Business responsibility and
Sustainability Report (BRSR) core with reasonable assurance.

•    S&P Global CSA Score: Achieved an S&P Global - DJSI CSA Score of 83, ranking highest
in India and 4th globally in the retail sector.

•    MSCI ESG rating upgraded from BBB to AA rating.

•    Circularity Leadership: Released a Circular Guideline and Manifesto through the GIZ-ABFRL
develoPPP project, focusing on sustainable textiles in India.

•    SBTi target Validation: Became the first Indian retail company with validated near-term
carbon reduction targets via SBTi.

•    ABFRL sustainability case study published in Harvard Business Publishing Education
‘Aditya Birla Fashion and Retail: Stitching Sustainability'.

•    Green Initiatives: Received CII-IGBC Gold Score for green village model

Transitioning to achieve net-zero emissions is an essential component of your company's 2030
and 2050 agenda. Over the years, adopting various initiatives across Scope 1 & 2 emissions and
initiating dialogues with stakeholders to mitigate Scope 3 emissions across the ecosystem
has been the prime focus.

Vision 2030 and Sustainability 3.0

Your company is near the conclusion of 2025 goals, the next phase is a future-facing, impact-
led framework designed to meet the scale and urgency of today's challenges. It sharpens the
strategic intent, deepens the ESG integration, and aligns transformation journey with global
imperatives. It will encourage to use sustainability thinking to explore opportunities, improve
operations, and support long-term value creation.

As your company transition to Sustainability 3.0, we are redefining boundaries, setting
ambitious goals, and embracing our responsibility to shape a sustainable future. Our vision for
2030 isn't just aligned with global climate goals—it is a bold declaration of our intent to lead

with purpose and impact, focusing on below key areas: Net-Zero & decarbonisation, Circularity
by design, empowered communities, Health safety & well-being, Technology & Digitisation.

At ABFRL, sustainability and fashion are not a paradox, and over the years, sustainability
has been integrated into the brand and embedded in the business core. Your company is
committed to maintain its unwavering focus on sustainable fashion and plans to leverage
innovation and technology as catalysts for the journey ahead.

Risk management

Your Company recognizes the importance of a robust governance structure and effective
risk management in ensuring sustained performance and growth. An integrated approach
has been adopted, combining the COSO framework with the Task Force on Climate-related
Financial Disclosures (TCFD), to strike a balance between financial, social, and environmental
priorities. This approach aligns risk management with performance and strategy, delivering
long-term value to stakeholders.

To oversee the identified risks and mitigation plans, a dedicated Risk Management and
Sustainability Committee (RMSC) has been established. The committee, supported by the Chief
Risk Officer, Head of Sustainability, and Risk Management Committees, continuously monitors
and evaluates risks from strategic, operational, financial, environmental, and compliance
perspectives. Internal and external business environments are carefully monitored to identify
potential risks and opportunities.

Periodic assessments by the established committees and internal functions ensure ongoing
evaluation of risks. Mitigation plans are implemented to manage key risks and minimize
residual risks, safeguarding the company's interests. This proactive risk management approach
provides the foundation for effective decision-making and resilience in the face of evolving
challenges.

1.    Navigating through a low demand phase

Fluctuations in domestic demand, coupled with inflationary pressures and rising
household debt, have impacted consumer sentiment and purchasing behavior.

Despite these headwinds, your company's diversified portfolio—spanning occasions,
categories, and price points—allows it to serve a wide customer base. Continuous
innovation and trend-driven designs keep offerings relevant and engaging, helping to
retain or grow market share even in a subdued economic environment.

2.    Adapting to Evolving Consumer Behavior

Changing consumer preferences, driven by shifting lifestyles and technological
advancements, are reshaping purchasing habits. The growing fashion consciousness
across diverse socio-economic segments is poised to significantly influence future
consumption trends.

In response, your company has expanded its portfolio by launching new product lines
and category extensions, tailored to different use-cases, consumer segments, and price
brackets—ensuring relevance across a wide spectrum of shoppers.

3.    Ensuring Data Security and Resilience

Greater reliance on digital technologies introduces risks such as cyberattacks, data
breaches, system downtime and other vulnerabilities, posing both financial and
reputational threats.

To mitigate these risks, your company has implemented robust measures including
Disaster Recovery (DR), Business Continuity Planning (BCP), Data Loss Prevention (DLP),
and Security Information and Event Management (SIEM) systems. Ongoing monitoring,
employee training, and a strong incident reporting framework further reinforce
cybersecurity.

4.    Building and Retaining a Thriving Workforce

As the company scales across multiple verticals—design, retail, marketing, e-commerce,
and more—there is an increasing need for skilled talent. In India's competitive fashion
retail sector, attracting and retaining top professionals is a key challenge.

To address this, your company has embraced industry-leading HR practices and developed
a structured talent strategy. Through focused retention programs and leadership
development initiatives, the company nurtures future leaders while maintaining a
motivated workforce.

5.    Managing Retail Space Constraints and Costs

The availability of premium retail spaces is increasingly constrained due to rising demand
from other retail sectors. This has led to higher rental costs and tougher negotiations.

Your company proactively builds strong partnerships with mall owners and developers
to secure long-term leases. Additionally, efforts to revamp retail identity, refresh stores
and improve customer navigation contribute to an enhanced in-store experience and
better space utilization.

6.    Competing in a Highly Dynamic Market

India's fashion market is characterized by intense competition from both domestic and
international brands, leading to pricing pressure, heavy discounting, and risks of market
share erosion.

To stay ahead, your company focuses on continuous product innovation, delivering
differentiated customer experiences, and strengthening brand equity. These efforts,
tailored to consumer needs, help build long-term relationships and secure a competitive
edge in the market.

Particulars	Standalone		Consolidated
Year Ended Year Ended Year Ended Year Ended March 31, 2025 March 31, 2024 March 31, 2025 March 31, 2024
Continuing Operations
Revenue from Operations	5,609	5,202	7,355	6,441
EBITDA (1)	958	642	854	520
Finance Costs	447	454	567	552
Depreciation	924	814	1,166	1,017
Profit/ (Loss) Before Tax (1)	(413)	(625)	(880)	(1,048)
Current Tax	-	-	33	35
Deferred Tax Charge/(Credit)	(109)	(139)	(127)	(176)
Net Profit/ (Loss) After Tax (1)	(304)	(487)	(785)	(907)
Discontinued Operations	Â	Â	Â	Â
Revenue from Operations	7,636	7,565	7,619	7,554
Profit/ (Loss) Before Tax *	336	225	329	219
Tax expense/ (credit)	61	50	63	48
Net Profit/ (Loss) After Tax*	275	175	267	171

* Includes other income of ' 77 Crore (Previous year: ' 100 Crore) in standalone Financial Statements ("FS") and
' 78 Crore (Previousyear ' 100 Crore) in consolidated FS and excludes exceptional items in both.

Standalone performance

Particulars	As at March 31, 2025	As at March 31, 2024
Net Working Capital (2) (A)	2,925	2,519
Net Fixed Assets (including Capital work-in-progress) (B)	2,170	3,190
Deferred Tax Asset (C)	104	146
Capital Employed (D = A + B + C)	5,199	5,855
Investments (3) (E)	2,327	1,811
Right-of-use assets (F)	2,175	3,692
Goodwill (4) (G)	1,995	2,687
Total Capital Employed (H = D + E + F + G)	11,695	14,045
Net Worth	8,298	5,653
Debt	758	3,836
Lease Liability	2,639	4,555

(!)    Includes other income of' 198 Crore (Previousyear:' 12! Crore) in standalone FS and ' 196 Crore (Previousyear:

' !38 Crore) in consolidated FS and excludes exceptional items in both.

(2) Net working Capital

Particulars	As at March 31, 2025	As at March 31, 2024
Inventory	1,776	3,954
Trade Receivables	148	1,022
Cash and Bank Balances	734	306
Other Assets	2,853	3,583
Less: Trade Payables	1,839	3,780
Less: Other Liabilities	747	2,566
Net Working Capital	2,925	2,519

(3)    Investments includes ' 2,302 Crore towards investments in Subsidiaries and Joint Venture (Previous year:
' !,790 Crore).

(4)    As on March 3!, 2025, goodwill (after testing for impairment in accordance with the Ind AS - 36 issued by the
Institute of Chartered Accountants of India) stands at' !,995 Crore.

(5)    In current year, Assets and Liabilities relating to discontinued operations have been transferred to Aditya Birla
Lifestyle Brands Limited. Hence, current year numbers are not comparable with previous year.

Revenue

During the financial year, your Company reported revenue of ' 5,609 Crore from Continuing
Operations (previous year ' 5,202 Crore), recording a growth of ~8% over the previous year.

Earnings before interest, tax, depreciation and amortization (“EBITDA”)

The EBITDA of the Company from Continuing Operations is ' 958 Crore (previous year ' 642
Crore). The EBITDA margin for the Company improved from 12.35% to 17.08% during the year.

Finance cost

The average borrowing cost for the Company increased to 7.55% (prior to demerger) as
compared to 7.42% in the previous year. The finance cost of the Company is ' 447 Crore
(previous year ' 454 Crore), marginal decline on account of repayment of borrowing towards
the end of financial year.

Dividend

In view of accumulated losses, your Directors have not recommended payment of any dividend
for the year under review.

Borrowings

Borrowings have decreased from ' 3,836 Crore in the previous year to ' 758 Crore. The Company
has raised ' 3,160 Crore through fresh borrowings and have repaid borrowings of ' 5,387 Crore

during the year. The Company has transferred ' 851 Crore to Aditya Birla Lifestyle Brands
Limited (“ABLBL”) during the year (pursuant to the Scheme of Arrangement between the
Company and ABLBL) with average borrowing cost at 7.55% (prior to demerger).

Credit Ratings

CRISIL Limited and ICRA Limited has assigned a new credit rating i.e. CRISIL AA+ and ICRA
AA+ respectively, on Non-Convertible Debentures. The details of Credit rating as on March 31,
2025 are disclosed in the ‘General Shareholder Information' forming part of this Integrated
Annual Report.

Non-Convertible Debentures (“NCDs”)

Redemption	Redeemed Series 8 NCDs of ' 400 Crore (Rupees Four Hundred Crores only).
Allotment	Issued and allotted 50,000 Listed, Unsecured, Rated, Redeemable Non-Cumulative, NCDs at face value of ' 1,00,000 (Rupees One Lakh only) each aggregating to ' 500 Crore (Rupees Five Hundred Crores only) with the coupon rate 7.86% p.a. on Private Placement Basis.
Buy Back	Buy Back of NCDs Series 11 of ' 500 Crore (Rupees Five Hundred Crore only) from the open market.
Transfer to ABLBL	After end of the financial year, pursuant to the effectivenss of Scheme of Arrangement between the Company and ABLBL, the Company has transferred Series 9 NCDs of ' 500 Crores to ABLBL.

The details of outstanding NCDs as on March 31,2025 are disclosed in the ‘General Shareholder
Information' forming part of this Integrated Annual Report.

Standalone Key financial ratios

The formulae used in the computation of the above ratios are as follows:

Ratio	Formula
Debtors Turnover Ratio	Revenue from Operations/Average of opening and closing Trade Receivables
Inventory Turnover Ratio	Revenue from Operations/Average of opening and closing Inventories
Interest Coverage Ratio	Earnings Before Interest* and Tax/Finance Costs*
Current Ratio	Current Assets/Current Liabilities (excluding Lease Liabilities accounted as per Ind AS 116)
Debt Equity Ratio	Debt#/(Net Worth+ Lease Liabilities - Right of use assets)
EBITDA Margin	EBITDA/Revenue from Operations
Operating Profit Margin	Earnings Before Interest and Tax/Revenue from Operations
Net Profit Margin	Profit After Tax/Revenue from Operations
Return on Net Worth	Profit After Tax/Average net worth
Return on Average Capital Employed	Earnings Before Interest and Tax/Average Capital Employed

*Finance cost/interest comprise of interest expense on borrowing and excludes interest on lease liabilities and
interest charge on fair value of financial institution.

#Debt = Borrowings (excluding Lease Liabilities accounted as per Ind AS 116) - Cash and Bank Balance (includes
FD) - Liquid Investments.

Particulars	As at March 31, 2025	As at March 31, 2024
Debtors Turnover Ratio (times)	22.63	13.75
Inventory Turnover Ratio (times)	4.62	3.31
Interest Coverage Ratio (times)	0.51	(0.13)
Current Ratio (times)	2.19	1.15
Debt Equity Ratio (times)	NA*	0.42
EBITDA Margin (%)	17.08	12.35
Operating Profit Margin (%)	4.90	2.96
Net Profit Margin (%)	-0.96	-2.44
Return on Net Worth	-1.83	-6.60
Return on Average Capital Employed (%)	5.80	3.22

*Company has excess liquid Investment and cash over Its debt.

**For the purpose of calculating ratios for the periods upto March 31, 2025, all relevant amounts pertaining to continuing and
discontinued operations have been considered.

Details of significant changes (i.e. change of 25% or more as compared to the immediately
previous financial year) in the key financial ratios:

Debtors Turnover Ratio, Inventory Turnover Ratio, Interest coverage ratio, Current Ratio,
EBITDA Margin, Operating Profit Margin, Net profit margin, Return on net worth, Return on
average capital employed has significantly changed due to variation in debt and profitability
on account of Scheme of Arrangement.

Consolidated performance

At consolidated level, your Company reported a revenue of ' 7,355 Crore (previous year ' 6,441
Crore) and EBITDA of ' 854 Crore with EBITDA margin at 11.62% (previous year ' 520 Crore
with EBITDA margin at 8.08%) from Continuing Operations.

DIRECTORS’ RESPONSIBILITY STATEMENT

The audited financial statements of your Company for the year under review (“financial
statements”) are in conformity with the requirements of the Companies Act, 2013 read with the
rules made thereunder (“Act”) and the Indian Accounting Standards. The financial statements
reflect the form and substance of transactions carried out during the year under review and
present your Company's financial condition and results of operations, fairly and reasonably

Your directors confirm that:

a)    in the preparation of the annual accounts, the applicable accounting standards have been
followed along with proper explanation relating to material departures, if any;

b)    accounting policies selected have been applied consistently and reasonable & prudent
judgments and estimates were made, so as to give a true and fair view of the state of affairs
of your Company as at the end of the year under review and the loss of your Company for
the year under review;

c)    proper and sufficient care has been taken for the maintenance of adequate accounting
records in accordance with the provisions of the Act, for safeguarding the assets of your
Company and for preventing and detecting fraud and other irregularities;

d)    the annual accounts of your Company have been prepared on a ‘going concern' basis;

e)    adequate internal financial controls were laid down & followed by your Company and
such internal financial controls were operating effectively;

f)    proper systems have been devised by your Company to ensure compliance with the
provisions of all applicable laws and such systems were adequate and operating effectively
and

g)    the Company has been in Compliance with the applicable Secretarial Standards issued
by the Institute of Company Secretaries of India.

SHADE CAPITAL

Equity share capital	Â	' in Crore
At the beginning of the year as on April 1, 2024	Â	1,015.01
Changes during the year:	Â	Â
Type of issuance	'in Crore	Â
ESOP	0.48	Â
Scheme of Amalgamation TCNS & ABFRL	55.74	205.25
Qualified Institutional Placement	68.58	Â
Preferential Issue	80.44	Â
Total	205.25	Â
At the end of the year as on March 31, 2025	Â	1,220.26

DISCLOSURES IN TERMS OF THE PROVISIONS OF THE ACT & SECURITIES AND
EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS)
REGULATIONS, 2015 (“SEBI Listing Regulations”)

A. Board of Directors (“Board”)

(i)    Number of meetings

The Board met 7 (Seven) times during the year under review. The details of such
meetings are disclosed in the Section ‘The Board of Directors' of the ‘Corporate
Governance Report' forming part of this Integrated Annual Report.

(ii)    Appointments and resignations

a) Appointments/Re - appointments/Cessation

Change in Directors during the year and as on the date this report:

Preference share capital*	' in Lakhs
At the beginning of the year as on April 1, 2024	1.20
Change during the year: Nil	-
At the end of the year as on March 31, 2025	1.20

 

b) Resignations/Retirement by Rotation

(i)    During the year under review, no Director has resigned.

(ii)    In accordance with the provisions of the Act and the Articles of Association
of the Company, Mr. Pankaj Sood, Non-Executive (Nominee) Director
(DIN: 05185378) and Ms. Ananyashree Birla, Non-Executive Director
(DIN: 06625036) are due to retire by rotation at the ensuing 18^th Annual General
Meeting and being eligible, has offered themseleves for re-appointment.

 

Name of Director	Effective Date	Appointment/ Re-appointment/Cessation
Ms. Sukanya Kripalu (DIN: 06994202)	October 12, 2024	Ceased as Independent Director (Completion of tenure).
Mr. Venkatesh Mysore (DIN: 01401447)	October 13, 2024	Appointed as Independent Director.
Mr. Sunirmal Talukdar (DIN: 00920608)	March 11, 2025	Re-appointed as Independent Director.
Mr. Nish Bhutani (DIN: 03035271)	June 5, 2025	Re-appointed as Independent Director.
Mr. Vishak Kumar (DIN: 09078653)	April 30, 2025	Consequent to effectiveness of the scheme of arrangement between the Company and Aditya Birla Lifestyle Brands Limited (“ABLBL”) w.e.f. May 1, 2025, Mr. Vishak Kumar, a Whole-time Director (“WTD”) who was an employee of the Company has been transferred to ABLBL and accordingly, his position as WTD stands relinquished in the Company from closure of business hours of April 30, 2025.

Resolution seeking their re-appointment alongwith their profiles as required
under Regulation 36(3) of SEBI Listing Regulations form part of the Notice of
18^th Annual General Meeting.

(iii) Annual evaluation

During the year under review, the Board undertakes an annual evaluation of its own
performance, the performance of individual Directors, and the effectiveness of its
Committees in Complaince with Act and SEBI Listing Regulations and the Nomination
Policy of the Company, as amended from time to time. The evaluation of Non¬
Independent Directors and the Board as a whole was carried out by the Independent
Directors. Furthermore, the performance of the Chairman of the Board is assessed,
taking into account the views expressed by the Executive Director, Non-Executive
Director and Independent Directors.

The evaluation process consisted of:

Board as a whole	The function of the Board as a whole is evaluated by all the Board Members including its experience, qualification, its structure, effectiveness, strategic guidance to management, long term interest, sustainability strategy and vision etc.
Individual Directors	The evaluation of Individual Director is done by Board members, excluding the Director who is being evaluated including the individual investing his/her time invested in Company, contribution, attendance, decision making, action-orientation, external knowledge Knowledge etc.
Chairman	The evaluation of Chairman of the Company is done by Board members considering his invaluable leadership role and encourangement to Board members.
Committees	The evaluation of Committee is done by Board members considering their mandate, composition, decision-making support and contribution to the Board's functioning etc.

The above evaluation is submitted to the Chairman of the Nomination and
Remuneration Committee and subsequently to the Board. Thereafter, the Board at
its meeting discussed the performance of the Board, as a whole, its Committees and
Individual Directors. The Board expressed satisfaction on the overall functioning of
the Board and its Committees. The Board was also satisfied with the contribution of
the Directors, in their respective capacities, which reflected the overall engagement
of the Individual Directors.

Further, pursuant to the applicable provisions of the Act, the performance evaluation
criteria for the Independent Directors is disclosed in the Section ‘Directors Details as
on March 31, 2025, of the Corporate Governance Report forming part of this Integrated
Annual Report.

(iv) Declaration of independence

The Company has received necessary declaration from each Independent Director
of the Company stating that:

(i)    they meet the criteria of independence as provided in Section 149(6) of the Act
and Regulation 16(1)(b) of the SEBI Listing Regulations (“said declarations”).

(ii)    they have registered their names in the Independent Directors' Databank.

Based on the said declarations received from the Directors, the Board confirms, that
the Independent Directors fulfill the conditions as specified under Schedule V of the
SEBI Listing Regulations and are independent of the management.

B.    Committees of the Board

The Board has constituted 5 (five) Statutory Committees, viz. Audit Committee, Corporate
Social Responsibility Committee, Risk Management and Sustainability Committee,
Nomination and Remuneration Committee and Stakeholders Relationship Committee
and is authorised to constitute other functional Committees, from time to time, depending
on business needs.

Details of all the Committees, along with their charters, composition and meetings held
during the year, are provided in the Section ‘The Board Committees' of the Corporate
Governance Report forming part of this Integrated Annual Report.

C.    Corporate Social Responsibility (“CSR”)

Pursuant to the Section 135 of the Act and Companies (Corporate Social Responsibility
Policy) Rules, 2014, Company has constituted Corporate Social Responsibility Committee
with a vision “to actively contribute to the social and economic development of the
communities in which your Company operates and in doing so, build a better, sustainable
way of life for the weaker sections of society and raise the country's human development
index, Be a force for good”. Company has adopted a CSR Policy which is available on the
website of the Company i.e. www.abfrl.com

The scope of the CSR Policy is as under:

i.    Planning Project or programmes which the Company plans to undertake falling
within the purview of Schedule VII of the Act and

ii.    Monitoring process of such project or programmes.

The CSR Policy of the Company inter alia includes the process to be implemented with
respect to the identification of projects and philosophy of the Company, along with key
endeavours and goals i.e.

•    Education - to spark the desire for learning and knowledge;

•    Health care - to render quality health care facilities to people living in the villages
and elsewhere through our hospitals;

•    Sustainable livelihood - to provide livelihood in a locally appropriate and
environmentally sustainable manner;

•    Infrastructure development - to set up essential services that form the foundation
of sustainable development and

•    Social cause - to bring about the social change we advocate and support.

CSR initiatives taken during the year

Your Company's CSR activities are mainly focused towards Education, Health and Sanitation,
Water, Digitisation, Sustainable livelihood, Institutional Building and Social Causes.
An annual report on CSR activities of the Company for the financial year 2024-25 is annexed as
Annexure I to this Report.

D.    Key Managerial Personnel (“KMP”)

Pursuant to Section 203 of the Act, the KMPs of the Company as on March 31, 2025 are as
follows:

a.    Mr. Ashish Dikshit, Managing Director;

b.    Ms. Sangeeta Tanwani, Whole-time Director;

c.    Mr. Vishak Kumar, Whole-time Director*;

d.    Mr. Jagdish Bajaj, Chief Financial Officer and

e.    Mr. Anil Malik, Company Secretary and Compliance Officer

*his position as Whole-time Director of the Company stands relinquished from closure
of business hours of April 30, 2025 pursuant to Scheme of Arrangement between the
Company and ABLBL.

E.    Remuneration of Directors and Employees

Disclosure comprising particulars with respect to the remuneration of Directors and
employees, as required to be disclosed in terms of the provisions of Section 197(12) of
the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, is annexed as Annexure II to this Report, containing names of
top ten employees in terms of remuneration drawn and the particulars of employees
as required under the Act. Further, the report and the accounts are being sent to the
Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said
annexure is open for inspection and any Member interested in obtaining a copy of the
same may write to the Company Secretary.

F.    Employee Stock Option Scheme (ESOS), Restricted Stock Units (RSU), and Stock
Appreciation Rights (SAR)

ESOS and RSU

Your Company regards employee stock options as instruments that would enable
the employees to share the value they create for the Company in the years to come.
Accordingly, in terms of the provisions of applicable laws and pursuant to the approval
of the Board and the Members of the Company, the Nomination and Remuneration
Committee (“NRC”) has duly implemented the:

a.    Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2017
(“Scheme 2017”)

b.    Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2019
(“Scheme 2019”)

c.    Aditya Birla Fashion and Retail Limited -TCNS Division Employee Stock Option Scheme
2024 (“Scheme 2024”)

to grant the stock options, in the form of Options and RSUs, to the employees of the
Company.

All the Schemes of the Company i.e. Scheme 2017, Scheme 2019 and Scheme 2024 are
governed by the Securities and Exchange Board of India (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021 (“SEBI SBEB & SE Regulations”) and in terms of the
approvals granted by the Shareholders of the Company, the NRC inter alia administers,
implements and monitors the aforesaid schemes, thereby governing the grant of share
based benefits to its employees, in the form of Options and RSUs.

The above Schemes are in line with the SEBI SBEB & SE Regulations. The details as required
to be disclosed under the SEBI SBEB & SE Regulations and the copy of above Schemes
can be accessed at www.abfrl.com.

A certificate from the Secretarial Auditor of the Company, confirming that the aforesaid
schemes have been implemented in accordance with the SEBI SBEB & SE Regulations
and will be open for inspection at the ensuing 18^th Annual General Meeting.

In terms of of the provisions of Regulation 14 and Part F of Schedule I of the SEBI SBEB & SE
Regulations, details of the aforesaid schemes is available on the website of the Company
i.e. www.abfrl.com.

SAR

Your Company has instituted Aditya Birla Fashion and Retail Limited Stock Appreciation
Rights Scheme 2019 (“SAR Scheme 2019”) in the year 2019 and Aditya Birla Fashion and Retail
Limited Stock Appreciation Rights Scheme 2024 (“SAR Scheme 2024”) in the year 2024.

The SAR Scheme 2019 and SAR Scheme 2024, do not give rise to any right towards any
equity share of the Company and hence, they are not covered under the provisions of
SEBI SBEB & SE Regulations. On exercise of the SARs granted under the said plan/scheme,
the employee exercising the SARs becomes entitled to receive cash, in terms of the SAR
Scheme 2019 and SAR Scheme 2024.

G. Related Party Transactions (“RPTs”)

All RPTs entered into during the year under review were approved by the Audit Committee,
from time to time and the same are disclosed in the financial statements of your Company
for the year under review. Pursuant to the provisions of the Act and the SEBI Listing
Regulations, the Board has, on recommendation of its Audit Committee, adopted a
Policy on RPT. During the year under review, the said policy was reviewed and amended
pursuant to the SEBI Listing Regulations, by the Board upon recommendation of the
Audit Committee. The updated policy is available on the website of the Company
i.e. www.abfrl.com.

Further, in terms of the provisions of Section 188(1) of the Act read with the Companies
(Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the SEBI Listing
Regulations, all contracts/arrangements/transactions entered into by the Company with
its related parties during the year under review were:

•    in “ordinary course of business” of the Company,

•    on “an arm's length basis” and

•    not “material”.

All transactions with related parties are in accordance with the policy on RPT formulated
by the Company.

Accordingly, Form No. AOC-2, prescribed under the provisions of Section 134(3)(h) of the
Act and Rule 8 of the Companies (Accounts) Rules, 2014, for disclosure of details of RPTs,
which are “not at arm's length basis” and also which are “material and at arm's length
basis”, is not applicable and hence does not form part of this Report.

H.    Dividend Distribution Policy

In terms of Regulation 43A of the SEBI Listing Regulations, your Company has formulated
a Dividend Distribution Policy, with an objective to provide the dividend distribution
framework to the Stakeholders of the Company. The policy sets out various internal and
external factors, which shall be considered by the Board in determining the dividend
pay-out. The policy is annexed as Annexure III to this Report and is also available on the
website of the Company i.e. www.abfrl.com

I.    Strategic Initiatives and significant development

AMALGMATION OF TCNS CLOTHING CO. LIMITED (“TCNS”) WITH COMPANY

Event Date	Matters
June’ 2024	•	The Scheme of Amalgamation between the Company and TCNS (“TCNS Amalgamation Scheme”), the joint company petition was filed with the Hon'ble National Company Law Tribunal, Mumbai Bench (“NCLT”).
August’ 2024	•	The TCNS Amalgamation Scheme was sanctioned by the NCLT on August 2, 2024, and the certified copy of the order was received on August 16, 2024.
September’	•	The TCNS Amalgamation Scheme became effective on
2024	Â	September 1, 2024 and consequently TCNS Clothing Co. Limited stood amalgamated into and with Company and dissolved without being wound up.
Â	•	The Company fixed Tuesday, September 3, 2024, as the record date to determine eligible shareholders of TCNS who shall be entitled to receive fully paid-up equity shares of Company, in accordance with the TCNS Amalgamation Scheme.
Â	•	On September 5, 2024, the Company allotted 5,57,43,053 fully paid-up equity shares of face value ' 10 each to TCNS shareholders as on record date in the approved share exchange ratio as set out in TCNS Amalgamation Scheme i.e 11 equity shares of the Company for every 6 equity shares of TCNS of face value ' 2 each.

DEMERGER OF MADURA FASHION AND LIFESTYLE BUSINESS

Event Date	Matters
April’ 2024	•	Board approved the Scheme of Arrangement amongst the Company and Aditya Birla Lifestyle Brands Limited (“Demerger Scheme”), subject to necessary statutory and regulatory approvals.
Â	•	The Company made an application to the Stock Exchanges for its “No Observation letter”.
October’ 2024	•	BSE Limited and National Stock Exchange of India Limited vide its No Observation letter dated October 30, 2024 and October 28, 2024, respectively approved the Demerger Scheme.
Novemeber’ 2024	•	The Company and Aditya Birla Lifestyle Brands Limited Jointly filed Company Application with Hon'ble National Company Law Tribunal, Mumbai Bench (“NCLT”).
January’ 2025	•	Demerger Scheme was approved by the majority of equity shareholders of the Company on January 21, 2025 and joint petition was subsequently filed with the Hon'ble National Company Law Tribunal, Mumbai Bench (“NCLT”).
March’ 2025	•	Demerger Scheme was sanctioned by NCLT on March 27, 2025.

FUND RAISING - QUALIFIED INSTITUTIONAL PLACEMENT

Event Date

Matters

January’ 2025

•    On January 15, 2025, the Board approved the the fund raising proposal through Qualified Institutional Placement (“QIP”) aggregating to an amount up to ' 2,500 crore. •    On January 16, 2025, QIP Committee of the Board of Directors approved the opening of issue date, Floor price ' 271.28 per equity share and preliminary placement document. •    On January 21, 2025, QIP Committee of the Board of Directors approved the closure of issue date, allocation of 6,85,83,059 equity shares at an issue price of ' 271.30 per equity share and placement document. •    On January 22, 2025, QIP Committee of the Board of Directors approved the issue and allotment of 6,85,83,059 Equity Shares to eligible qualified institutional buyers at the issue price of ' 271.30 and Company has received listing approval from BSE Limited and National Stock Exchange of India Limited on QIP.

FUND RAISING - PREFERENTIAL ISSUE

Event Date	Matters
January’ 2025	•	On January 15, 2025, Board approved the the fund raising proposal through issuance of equity shares on a preferential basis to Non-Promoter and Promoter Group category aggregating to an amount up to ~ ' 2,378.75 crore (“Preferential Issue”), subject to the shareholders approval at its Extra¬ Ordinary General Meeting to be held on February 13, 2025.
February’ 2025	•	On February 12, 2025, Company received In-principle approval from BSE Limited and National Stock Exchange of India Limited on Preferential Issue.
Â	•	On February 13, 2025, shareholders approved the Preferential Issue by passing Special Resolutions.
Â	•	On February 24, 2025, Preferential Issue Committee of Board of Directors approved the allotment of 4,08,33,990 fully paid-up equity shares of the Company at face value of ' 10 each at issue price of ' 317.75 (includes premium of ' 307.75) under promoter group category and 3,96,09,127 fully paid up equity shares of the Company for at face value of ' 10 at issue price of ' 272.98 (includes premium of ' 262.98) each under non-promoter category.
March’ 2025	•	Company received Listing approval on Preferential Issue from BSE Limited and National Stock Exchange of India Limited on March 6, 2025 and March 7, 2025, respectively.
Â	•	Company received Trading approval on Preferential Issue from BSE Limited and National Stock Exchange of India Limited on March 12, 2025.

J. Proceeds from Qualified Institutional Placement, Preferential Issue and Non-Convertible
Debentures:

The utilization of funds raised have been mentioned hereunder:

Mode	Object	Amount allocated	Amount utilized
Qualified Institutional Placement	Prepayment and / or repayment, in full or in part, of all or a portion of certain of the outstanding borrowings(including interest thereon) availed for the Remaining Business of our Company	1,400.00	1,304.77
Â	General corporate purpose	428.66	409.26

Mode	Object	Amount allocated	Amount utilized
Preferential Issue	Prepayment or repayment, in full or part, of all or a portion of certain of the outstanding borrowings availed by Demerged ABFRL as per their repayment schedule.	1,185.00	1,014.06
Â	Investment towards capex and opex across high growth businesses within proposed Demerged ABFRL in business segments of Value Retail (Pantaloons & Style Up), Ethnic (designer led & premium ethnic wear brands) and luxury retail (The Collective & Galeries Lafayette)	600.00	Â
Â	General corporate purposes	593.75	-
Non¬ Convertible Debentures	Refinancing of existing debt and General corporate purpose	500.00	500.00

During the year under review, there has been no deviation in the use of proceeds of the
Qualified Institutional Placement, Preferential Issue and Non-Convertible Debentures
(“aforesaid Issues”) from the objects stated in the respective Offer documents as per
Regulation 32 of SEBI Listing Regulations. The Company has been disclosing on a quarterly
basis to the Audit Committee, the uses/application of proceeds/funds raised from the
aforesaid Issues and also filed with the Stock Exchanges on a quarterly basis, as applicable.

K. Subsidiaries, Joint Ventures, Associate Companies

During the year under review:

•    On April 9, 2024, Aditya Birla Lifestyle Brands Limited, wholly owned subsidiary of the
Company was incorporated for the purpose of vertical demerger of Madura Fashion
& Lifestyle business from the Company;

•    On July 11,2024, Goodview Fashion Private Limited became subsidiary of the Company;

•    On September 1, 2024, TCNS Clothing Co. Limited was amalgamated into and with
Company and dissolved without being wound up pursuant to effectiveness of TCNS
Amalgamation Scheme and

•    On October 16, 2024, Wrogn Private Limited (formerly known as Universal Sportsbiz
Private Limited) became Associate Company of Aditya Birla Digital Fashion Ventures
Limited, a wholly owned subsidiary of the Company.

Pursuant to the provisions of Section 129(3) of the Act, read with the Companies (Accounts)
Rules, 2014 and in accordance with applicable accounting standards, a statement
containing the salient features of financial statements of your Company's subsidiaries
and associate in Form No. AOC-1 is annexed as Annexure IV to this Report.

In accordance with the provisions of Section 136 of the Act and the amendments thereto
and the SEBI Listing Regulations, the audited financial statements, including the
consolidated financial statements and related information of the Company and financial
statements of your Company's subsidiaries, joint ventures/associate companies have been
placed on the website of your Company viz. www.abfrl.com.

Your Company has formulated a Policy for determining Material Subsidiaries. The said
policy is available on the website of the Company i.e. www.abfrl.com. However, the
Company does not have any material subsidiary as defined under Regulation 16(1)(c) of
the SEBI Listing Regulations.

L.    Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Your Company consciously makes all efforts to conserve energy across all its operations.
A report containing details with respect to conservation of energy, technology absorption
and foreign exchange earnings and outgo, required to be disclosed in terms of Section
134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, is annexed as
Annexure V to this Report.

M.    Vigil Mechanism

The Board, on recommendation of its Audit Committee, has adopted a Vigil Mechanism/
Whistle Blower Policy and the details of which are provided in the ‘Corporate Governance
Report' forming part of this Integrated Annual Report.

Adequate safeguards are provided against victimization to those who avail the mechanism
and direct access to the Chairperson of the Audit Committee is provided to them. The
details of establishment of Vigil Mechanism is also available on the website of the Company
i.e. www.abfrl.com

N.    Risk Management

Your Company has framed and implemented a Risk Management Policy in terms of
the provisions of Regulation 21 of the SEBI Listing Regulations, for the assessment and
minimization of risk, including identification therein of elements of risk, if any, which may
threaten the existence of the Company.

The policy is reviewed periodically by the Risk Management and Sustainability Committee
along with the key risks and related mitigation plans. More details on risks and threats
have been disclosed hereinabove, as part of the Management Discussion and Analysis.

Further, in view of the ever-increasing size and complexity of the business operations,
your Company is exposed to various risks emanating from frauds. Accordingly, the Board,
on recommendation of the Audit Committee, has adopted an Anti-Fraud Policy and a
Whistle Blower Policy, to put in place, a system for detecting and/or preventing and/or
deterring and/or controlling the occurrence of frauds.

O.    Nomination Policy and Executive Remuneration Policy/Philosophy

In terms of Section 178 of the Act and Regulation 19 of the SEBI Listing Regulations, the
Board of your Company, on recommendation of the NRC, had adopted a Nomination
Policy, which inter alia enumerates the Company's policy on appointment of Directors,
KMPs and senior management. Further, the Board, on recommendation of NRC, had also
adopted a policy entailing Executive Remuneration Philosophy, which covers remuneration
philosophy covering the Directors, KMPs, senior management and other employees of
the Company.

Both the aforesaid policies, as amended from time to time pursuant to the amendments
in the applicable regulatory provisions, are available on the website of the Company i.e.
www.abfrl.com

Salient features of the aforesaid policies are as under:

(a)    Nomination Policy

The Nomination Policy is enacted mainly to deal with the following matters, falling
within the scope of the NRC to:

•    institute processes which enable the identification of individuals who are qualified
to become Directors and who may be appointed as key managerial personnel
and/or in senior management and recommend to the Board of Directors their
appointment and removal from time to time;

•    devise a policy on board diversity;

•    review and implement the succession and development plans for Managing
Director, Executive Directors and officers forming part of senior management;

•    formulate the criteria for determining qualifications, positive attributes and
independence of Directors;

•    establish evaluation criteria of Board, its committees and each Director and

•    recommend the Board, all remuneration, in whatever form, payable to senior
management.

(b)    Executive Remuneration Policy/Philosophy

This Policy supports the design of programmes that align executive rewards - including
incentive programmes, retirement benefit programmes, promotion and advancement
opportunities - with the long-term success of the Stakeholders of the Company.

The executive remuneration program of the Company is designed to attract, retain,
and reward talented executives who will contribute to our long-term success and
thereby build value for our shareholders and intends to:

•    provide for monetary and non-monetary remuneration elements to our executives
on a holistic basis and

•    emphasize “Pay for Performance” by aligning incentives with business strategies
to reward executives who achieve or exceed Group, business and individual goals.

P. Business Responsibility and Sustainability Report

Your Company's sustainability initiatives are aligned with the Aditya Birla Group's
sustainability vision and Sustainable Business Framework, we at ABFRL embarked on our
sustainability journey with the launch of the sustainability 1.0 programme ‘ReEarth - For
Our Tomorrow' in FY13.

Building on our commitment to foster a sustainable tomorrow and deliver sustainable
fashion, we have leapfrogged in our ReEarth programme with sustainability 2.0 and
defined milestones for 2025.

As your company transform to the journey Sustainability 3.0, we are redefining boundaries,
setting ambitious goals, and embracing our responsibility to shape a sustainable future.
Our vision for 2030 isn't just aligned with global climate goals—it is a bold declaration
of our intent to lead with purpose and impact, focusing on below key areas: Net-Zero &

decarbonization, Circularity by design, empowered communities, Health safety & well¬
being, Technology & Digitisation.

In accordance with our sustainability vision and in terms of Regulation 34(2)(f) of the SEBI
Listing Regulations, a ‘Business Responsibility and Sustainability Report' forms part of
this Integrated Annual Report.

Q. Auditors and Auditors Report

Auditor	Auditors Report
Statutory Auditor	•	Price Waterhouse & Co Chartered Accountants LLP (FRN: 304026E/E-300009), were appointed as the Statutory Auditors of the Company at the 14th Annual General Meeting (“AGM”), for a term of five consecutive years, till the conclusion of the 19th AGM to be held in the year 2026.
Â	•	Further, the Auditors' Report “with an unmodified opinion”, given by the Statutory Auditors on the financial statements of the Company for financial year 2024-25, forms part of this Integrated Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Statutory Auditors in their Report for the year under review.
Â	•	The notes to the financial statements are self-explanatory and do not call for any further comments.
Secretarial	•	The Board of Directors of the Company at its meeting held
Auditor	Â	on May 23, 2025, based on the recommendation of Audit Committee, approved the appointment of BNP & Associates, Company Secretaries (Firm registration no: P2014MH037400), as secretarial auditor of the Company to hold office for a term of 5 (five) consecutive years, i.e. from the ensuing 18th Annual General Meeting (“AGM”) until the conclusion of the 23rd AGM of the Company, subject to the approval of shareholders at ensuing AGM, as per Section 204 of the Act read with Rule 9 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, Regulation 24A of the SEBI Listing Regulations.
Â	•	The Secretarial Audit Report for financial year 2024-25 given by M/s. Dilip Bharadiya & Associates, Secretarial Auditor of the Company is annexed as Annexure VI to this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditor in his Report for the year under review.
Cost Auditor	•	During the year under review, your Company was not required to maintain cost records under Section 148(1) of the Act. Hence, the provisions related to appointment of Cost Auditor is not applicable on the Company.

Details in respect of frauds reported by auditors under Sub-Section (12) of Section 143 of
the Act

During the financial year under review, the Statutory Auditors have not reported any
instances of fraud committed against the Company by its officers or employees to the
Central Government under Section 143(12) of the Act.

R.    Material changes and commitment affecting financial position of the Company which
have occurred between the end of the Financial year, to which the financial statement
relates, and the date of the Report

•    On April 22, 2025, the Company received the certified copy of NCLT order dated March
27, 2025, sanctioning Demerger Scheme;

•    On May 1, 2025 Demerger Scheme became effective, being first day of the month
following the month in which all conditions precedents are satisfied. Appointed Date
as per the Demerger Scheme is April 1, 2024;

•    With effect from May 1, 2025, Mr. Vishak Kumar, a Whole-time Director (“WTD”) and
Key Managerial Personnel (“KMP”), who was an employee of the Company has been
transferred to Aditya Birla Lifestyle Brands Limited and accordingly, his position as
WTD and KMP of the Company stand relinquished from closure of business hours of
April 30, 2025;

•    With effect from May 1, 2025, Board of Directors of Aditya Birla Lifestyle Brands Limited
approved the appointment of Mr. Ashish Dikshit as its Managing Director (in addition
to his current position as Managing Director of the Company);

•    Aditya Birla Garments Limited ceased to be a wholly owned subsidiary of the Company
pursuant to the effectiveness of the Demerger Scheme;

•    The Company fixed Thursday, May 22, 2025, as the “Record Date” for the purpose of
ascertaining the equity shareholders of the Company who will be entitled to be issued
equity shares of ABLBL pursuant to the Demerger Scheme and

•    Pursuant to the Demerger Scheme, ABLBL shall issue & allot its equity shares to the
equity shareholders of the Company. As a result of this allotment, ABLBL will no longer
remain a wholly-owned subsidiary of the Company.

S.    Other Disclosures

In terms of the applicable provisions of the Act and SEBI Listing Regulations, your Company
additionally discloses that, during the year under review:

•    there was no change in the nature of business of your Company;

•    there was no revision in the financial statements;

•    it has not accepted any fixed deposits from the public falling under Section 73 of
the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on
March 31, 2025, there were no deposits which were unpaid or unclaimed and due for
repayment, hence, there has been no default in repayment of deposits or payment
of interest thereon;

•    it has not issued any shares with differential voting rights;

•    it has not issued any sweat equity shares;

•    no significant or material orders were passed by the regulators or courts or tribunals
which impact the going concern status operations of your Company in future;

•    it does not engage in commodity hedging activities;

•    it has not made application or no proceeding is pending under the Insolvency and
Bankruptcy Code, 2016 and

•    it has not made any one-time settlement for the loans taken from the Banks or
Financial Institutions.

It is further disclosed that:

•    there is no plan to revise the financial statements or directors' report in respect of
any previous financial year;

•    particulars of the loans, guarantees and investments as required under Section 186 of
the Act are disclosed in the financial statements of your Company for the year under
review and

•    details pertaining to unclaimed shares demat suspense account of your Company
are disclosed in the ‘Shareholders' Information' forming part of this Integrated Annual
Report.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance
and adheres to the Corporate Governance requirements set out by the SEBI. The report on
Corporate Governance as stipulated under the SEBI Listing Regulations forms part of this
Integrated Annual Report.

Your Company has duly complied with the Corporate Governance requirements as set out
under Chapter IV of the SEBI Listing Regulations and M/s. Dilip Bharadiya & Associates,
Company Secretaries, vide their certificate dated May 23, 2025, have confirmed that the
Company is and has been compliant with the conditions stipulated in the Chapter IV of the
SEBI Listing Regulations. The said certificate is annexed as Annexure VII to this Report.

ANNUAL RETURN

Pursuant to the provisions of Sections 92(3) and 134(3)(a) of the Act and the Companies
(Management and Administration) Rules, 2014, the Annual Return in Form no. MGT-7 is
available on the website of the Company i.e. www.abfrl.com

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has put in place adequate internal control systems that are commensurate
with the size of its operations. Internal Control system comprise of policies and procedures
are designed to ensure sound management of your Company's operations, safekeeping of its
assets, optimal utilisation of resources, reliability of its financial information, and compliance.

DISCLOSURES PURSUANT TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has in place a policy on Prevention of Sexual Harassment at Workplace, which
is in line with requirements of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 (“POSH Act”). The objective of this policy is to provide
an effective complaint redressal mechanism if there is an occurrence of sexual harassment.

This policy is applicable to all employees, irrespective of their level and it also includes ‘Third
Party Harassment' cases i.e. where sexual harassment is committed by any person who is not
an employee of the Company.

Your Company has also set up an Internal Complaints Committee at each of its administrative
office(s) which is duly constituted in compliance with the provisions of the POSH Act. Further,
the Company also conducts interactive sessions for all the employees, to build awareness
amongst employees about the policy and the provisions of POSH Act.

The details of complaints related to sexual harassment, during the financial year 2024-25:

Sr. no.	Particulars	Pending as on March 31, 2024	Received during the year	Disposed off during the year	Pending for more than 90 days	Pending as on March 31, 2025
1	Employees (On roll)	-	17	15	1	2
2	Others (Off roll/3rd party)	-	14	12	2	2
Â	Total	-	31	27	3	4

AWARDS AND RECOGNITIONS

Your Company has been a proud recipient of many awards and recognitions during the year
under review and significant ones amongst them are as under:

Sustainability Leadership	Brand & Marketing Accolades
ABFRL was recognized as a leading sustainable company at the 4th Edition of ‘India's Most Sustainable Companies' for its significant strides in environment and social impact.	LoveChild Masaba wins the ‘Beauty and Wellness Retailer of the Year' award at the Industry of Retail and eCommerce (IReC) Awards 2024.
ABFRL received CII-ITC Award for Significant Achievement in Social Impact/ CSR domain.	TASVA wins Gold at the BW Excel Awards 2024 for ‘Integrated PR Marketing Campaign' and the Campaign of the Year' for its partnership with the Olympic Association (IOA) as the ‘Official Ceremonial Dress Partner' for Team India at the Paris Olympics 2024.
ABFRL awarded Sustainable Business of the Year in Financial Express - Green Darathi Awards.	TASVA wins Silver at the ET Kaleido Awards 2024 for their campaign ‘TASVA Toh Banta Hai' in the ‘Fashion, Beauty and Lifestyle category.
ABFRL received ICC Social Impact Award 2025 under the category of Rural Development HAL and FCL certified for LEED - Zero Water Facility by USGC.	Jaypore wins Bronze at the ET Kaleido Awards 2024 for their campaign ‘Reclaim Your Roots' in the ‘Fashion, Beauty and Lifestyle category.
ABFRL participated and Top Performance in S&P - Dow Jones Sustainability Index CSA Score of 83 and secured a position in the 99th Percentile.	Jaypore's ‘Reclaim Your Roots, campaign won bronze at the Agency Reporter's PR & Communications Excellence Awards 2024.

Sustainability Leadership	Brand & Marketing Accolades
Transformative Movement in MSCI (Morgan	Louis Philippe has been honoured with one
Stanley Capital International) ESG Rating.	of the most prestigious retail awards for
Upgraded from BBB to AA Rating.	excellence in Visual Merchandising.
Â	We received the award for Innovation in Visual Merchandising for our ground breaking Kinetic Window Display, showcased across our exclusive Louis Philippe stores.
Completed GIZ-ABFRL Joint project	At the 11th DCX Conference presented by
DeveloPPP.	Salesforce & Locobuzz, Louis Philippe stood
Prepared and released ‘Circular Guideline & Manifesto' for textile and apparel industries in Bharat Tex 2025.	out among 300+ entries across industries, winning Best Customer Retention Strategy and Best Customer Experience Strategy.
Â	These awards recognise our end-to-end customer approach that brings together data, design, and service to deliver stronger relationships and better experiences.
ABFRL's sustainability case study published by Harvard Business Publishing Education “Aditya Birla Fashion and Retail: Stitching Sustainability” - well received case study in HBS nd Ivey Publishing.	Retail & Apparel Recognition: ABFRL honoured as ‘Omnichannel Retailer of the Year' at ET Retail's Great India Summit 2024.
Â	ABFRL named ‘Fashion Retailer of the Year' at the Industry of Retail and eCommerce (IReC) Awards 2024.
ABFRL's 3D Coffee Table Book, ‘Fashionabling	Employee Well-being & Safety:
Earth: A Decade of Sustainability' won Gold at the 14th PRCI Excellence Awards 2024.	ABFRL won Platinum Score in Arogya World Healthy Workplace Award 2024.
ABFRL's 3D Coffee Table Book, ‘Fashionabling	PR & Communication Excellence:
Earth: A Decade of Sustainability' won Gold at the FE Brandwagon's Ace Awards 2024.	ABFRL's Internal Newsletter ‘InTouch' won third prize at the PRSI National Awards 2024. ABFRL's Internal Newsletter ‘InTouch' won Silver at the Agency Reporter's PR & Communications Excellence Awards 2024.
Â	ABFRL won SAP ACE Award 2024 in the ‘Game Changer' category for the successful implementation of the S4 FVB project at MFL.

ACKNOWLEDGEMENT

We take this opportunity to thank all the customers, members, investors, vendors, suppliers,
business associates, bankers and financial institutions for their continuous support. We
also thank the Central and State Governments and other regulatory authorities for their co¬
operation.

We acknowledge the patronage of the Aditya Birla Group and above all, we place on record
our sincere appreciation for the hard-work, solidarity and contribution of each and every
employee of the Company in driving the growth of the Company.

For and on behalf of the Board of Directors

Ashish Dikshit    Sangeeta Tanwani

Place : Mumbai    Managing Director    Whole-time Director

Date : May 23, 2025    DIN: 01842066    DIN: 03321646

---

Mar 31, 2024

Your Company's directors hereby present the Seventeenth Annual Report together with the audited financial statements of the Company for the financial year ended March 31, 2024 (“year under review/ FY 2023-24”).

MANAGEMENT DISCUSSION AND ANALYSIS Overview

FY 2024 has been a year of resilience for the global economy. Despite challenges like the monetary policy tightening, banking sector stress, and regional conflicts, global GDP in 2023 exceeded initial expectations, growing 3.3% YoY.

In this global context, India has continued to outperform, driven by a strong recovery in the industrial sector, robust performance of India's banking and financial sectors, and significant government capital investments.

Global Economy Overview

Despite earlier pessimistic predictions, the world has avoided an immediate recession and is now transitioning to a new state of balance. While growth is slow, the economy remains resilient, fueling optimism for the future.

Per International Monetary Fund (IMF), global growth is expected to be 3.2% in 2024. For 2024, GDP growth for developing economies is expected to be 4.3% against 1.7% for advanced economies.

Indian Economy Overview

India has been one of the best-performing market, showcasing strong economic growth, robust manufacturing activity, moderate inflation rates and increased foreign portfolio investment (FPI) inflows. The RBI has estimated GDP growth rate of around 8.2% for the fiscal year 2023-24, supported by rising PMIs in both the manufacturing and service sectors, high GST collections, and increasing credit uptake, all of which indicate positive business sentiments.

These favourable factors, combined with young demographics, have led to increased consumer spending over the last few years, with the retail sector being the biggest beneficiary. Per one of the largest global research & consulting firms, India ranks highest in the Global Retail Development¹Â Index, based on market attractiveness among the developing and emerging economies. The country is recognized as a “dynamically expanding modern market” with a growing demand for branded and premium products. Additionally, increased urbanization and rising prosperity in Tier 2, 3, and 4 cities are driving exponential growth in the retail sector, making India, particularly its retail industry, amongst others an increasingly attractive destination for investors.

Indian Economic Outlook: Sustained momentum and optimism

There is growing optimism that India is at the inflection point of a multi-year economic growth trajectory. Recent high-frequency indicators suggest an accelerating momentum in aggregate demand, driven by robust consumer spending, rising industrial output, and strong investment flows.

An anticipated rise in household consumption, coupled with strong private and government capital expenditure, is set to drive economic expansion. Continued urbanization and rising prosperity in lower tier cities are broadening the consumer base and fueling demand across sectors. Technological advancements and digital adoption are transforming industries, enhancing productivity, and creating new opportunities. Additionally, the government's focus on structural reforms, ease of doing business, and infrastructure development is fostering a favourable environment for sustained investment and economic resilience. Together, these factors position the economy for consistent progress and resilience.

Targeted economic policies will further shape India's trajectory, helping it achieve its aspiration of becoming the world's third-largest economy by 2027 and ensuring sustainable economic growth.

India's consumption has witnessed remarkable changes over the years. The proportion of non-food expenditure is increasing in both urban and rural areas, with rural areas witnessing an increase from 47% in 2011-12 to 54% in 2022-23, while for urban that share has increased to 61% from 57%.

The rapid growth of India's middle-income class has led to increased purchasing power and a shift in demand from unbranded products to branded products and experiences. India's discretionary spending has always been lower than that of other major economies, indicating headroom for further growth. Improved credit availability and financial inclusion have boosted demand, particularly in the organized sector. As incomes grow, consumer spending can support sustained growth in the consumption related sectors in the long run.

Industry Review Global Apparel Industry

In FY24, the fashion industry continued to face uncertainty, with consumer spending remaining volatile driven by subdued economic growth outlook, persistent inflation, and weak consumer confidence. Mid-priced brands struggled as consumers shifted towards more affordable options, while the luxury segment initially maintained growth, but it too faced challenges later in the year due to broader economic downturns. In response to these challenges, businesses have been compelled to identify pockets of value and uncover new drivers of performance.

As consumer lifestyles and spending patterns evolve, fashion retailers are being prompted to adapt their offerings. Shoppers are increasingly spending across a variety of occasions, which is driving them to explore multiple channels and brands. This shift has accelerated the industry's transition from a multi-channel approach to a comprehensive omnichannel strategy.

With 32% of global apparel and footwear sales now occurring online, the digital pivot in retail channels is becoming a dominant trend. As a result, Gen Z and Gen Alpha have emerged as the most significant target segments for the fashion industry. To cater to these digitally savvy consumers, brands are investing in innovative formats and concept stores that integrate technology, resulting in more digitally enabled offline stores. This fusion of online and offline experiences is reshaping the industry, positioning it to meet the demands of a rapidly changing market landscape. Companies are also now exploring addition of new consumer segments or occasions to their existing offerings to expand their customer base and enhance customer lifetime value.

The Indian Apparel Industry

After a strong recovery in consumption during initial months of FY23, the Indian apparel market growth began to slow down post the festive season of 2022. While urban consumption initially remained robust, rural and semi-urban areas faced significant economic challenges, leading to a decline in entry-level spending. Inflation and slow income growth caused the households to delay purchases, focusing on key occasions, while few increasingly down-traded. COVID-related fatigue led consumers to become more selective in certain product categories, including apparel. Also, the expansion of consumer credit is reshaping spending patterns, altering traditional purchasing behaviours as the industry adapts to new realities.

Over the past two years, the Indian apparel industry has experienced several notable trends. Shoppers now desire experiences beyond just purchasing products. Retailers are responding by creating immersive, interactive store environments, incorporating in-store events personalized services, and technology to elevate the overall shopping experience. Digitalization has taken centre stage, with a significant increase in online shopping and brands enhancing their e-commerce platforms to provide seamless shopping experiences. Social media and influencer marketing have become critical for brand visibility and consumer engagement. Additionally, there has been a noticeable shift towards personalization and customization, as consumers seek unique and tailored apparel options.

Outlook: Indian Apparel market

India's retail sector is poised for significant growth, bolstered by its vast population, accelerating urbanization, increasingly connected rural consumers, and rising economic activity. As the world's fourth-largest retail market, India presents immense potential, particularly in the fashion industry. With over half of its population under 30, the country's young demographic profile is a powerful driver of the fashion sector's growth.

A substantial portion of the Indian fashion industry remains unorganized, which presents a vast opportunity for organized players to step in. As Indian consumers become more brand-conscious and premiumize the overall purchasing experience, organized retail is well-positioned to capture a larger share of the market. The shift from unorganized to organized retail is expected to be a significant trend in the coming years, driven by consumers' increasing demand for quality, consistency, and brand assurance.

In 2023, per Euromonitor the Indian apparel and footwear market was valued at approximately INR 6 trillion. This market is projected to grow at a compound annual growth rate (CAGR) of around 13%, reaching an estimated INR 13.5 trillion by 2030. Organized retail, currently accounting for around 35% of overall market, is expected to surge past 50% by 2030. Among the categories & segments, sportswear, women western wear, Innerwear are set to outpace the overall market. For ethnic wear & value fashion the growth will be primarily driven by shift from unbranded to branded fashion.

The growth trajectory is largely fueled by the younger population's strong preference for casual wear, alongside a rising interest in sportswear—a trend driven by an increasing focus on physical fitness and health. Moreover, the growing participation of women in the workforce has significantly boosted consumption in the women's segment, driving sales of business formals, ethnic wear, and accessories.

Digital transformation is another key driver reshaping the Indian fashion landscape. The proliferation of e-commerce platforms, coupled with the widespread adoption of smartphones and internet connectivity, is making fashion more accessible to consumers across the country. This digital shift is not only expanding the reach of fashion brands but also enhancing the shopping experience, making it more personalized and convenient.

Despite near-term challenges, the long-term outlook for the Indian fashion industry remains extremely positive, driven by several key factors that are expected to drive growth over the coming years.

Key Trends in the Indian Apparel Industry

1.    Increased focus on customer experiences and omnichannel distribution

Customer convenience, both in-store and online, has become a key unique selling proposition. Brands now focus on providing a seamless experience from the initial purchase trigger to after-sales service. Striking the right balance between online ease and the tactile in-store experience is essential for a cohesive omnichannel strategy, ensuring a smooth and satisfying customer journey at every touchpoint.

2.    Increase in Premiumization and growth of luxury segment

The trend of premiumization and the growth of the luxury segment in India is accelerating; fueled by rising disposable incomes, social media influence, and easy access to credit. Consumers are increasingly willing to invest in high-quality, long-lasting products, perceiving them as valuable investments. This is particularly evident in the fashion industry, where premium and luxury brands are seeing significant growth. More consumers aspire to upgrade, own exclusive items that reflect their status and personal style. This shift is driving the expansion of luxury retail and the proliferation of premium brands in the Indian market.

3.    Value fashion

Value fast fashion caters to budget-conscious consumers who seek trendy, affordable clothing. This segment is experiencing rapid growth as it meets the demand for fashionable, pocket-friendly apparel, especially amongst the youth. By quickly adapting to the latest trends and offering competitive prices, value fast fashion brands attract a broader customer base. The increasing popularity of this segment highlights its potential for significant market expansion, driven by a consumer desire for stylish yet accessible clothing options. This trend underscores the importance of agility and affordability in the fast-paced fashion industry.

4.    Importance of social marketing and community building

Customer data and feedback are crucial in the highly competitive and often undifferentiated apparel market. The communities built by brands have become significant differentiators, fostering loyalty and enhancing customer retention. These communities not only increase the return on customer acquisition costs but also create a dedicated customer base. Leveraging customer data allows brands to make informed decisions on new designs, product launches, and cross-selling strategies. By understanding customer preferences and behaviour, brands can tailor their offerings to meet market demands more effectively, ensuring continuous engagement and satisfaction.

5.    Rising growth of Ecommerce, digital payments and credit availability

India's e-commerce sector is experiencing rapid growth, driven by the rising number of internet users, which now exceeds 75 crores¹. Tier II and III cities are major contributors, accounting for 60% of online retail orders. Per International Trade Administration², the value of the Indian e-commerce industry is projected to reach approximately $135 billion by 2026.

This expansion is supported by a robust digital payment ecosystem that has simplified cashless transactions and increased credit availability. Instant EMIs, no-cost EMIs, and attractive cashback offers make large purchases more accessible and appealing to consumers. Government initiatives like the Open Network for Digital Commerce (ONDC) further enhance the online business landscape and support partnerships.

6. Shift towards sustainable products

The shift towards sustainability is highlighted in both raw materials and production processes. Circular fashion is gaining momentum, emphasizing the importance of garments that can be recycled, upcycled, or easily decomposed at the end of their life cycle. This approach aims to reduce waste and environmental impact. Brands are integrating sustainability at every step, from sourcing eco-friendly materials to implementing ethical manufacturing practices and promoting the longevity of their products. This holistic shift is essential for addressing the critical challenges posed by the climate crisis.

Business overview

Your Company is India’s largest branded fashion and lifestyle entity with an elegant bouquet of leading fashion brands and retail formats.

Your Company’s consolidated revenue stood at INR 13,996 Crores against INR 12,418 Crores last year, demonstrating a 13% growth. Company’s EBITDA stood at INR 1,703 with margin of 12.2%. Your Company expanded its network to 4664 stores including 417 Pantaloons stores. Its total retail footprint increased to 11.9 million sq. ft vs 10.8 million sq.ft. last year.

In context of challenging demand environment, our established businesses comprising of Lifestyle Brands and Pantaloons, prioritized profitable growth. Focused interventions around costs, distribution network and markdown management structurally enabled the businesses to move towards a more profitable model in the long run.

Our new businesses — Ethnic, TMRW, and Reebok—significantly contributed to our growth this year, aligning with our long-term portfolio strategy and evolution in the market. The acquisition of TCNS has strategically filled the gap in our ethnic portfolio by expanding into premium women’s ethnic wear. These opportunities in the market across various categories, price points, and occasions are now effectively addressed through the comprehensive and diverse portfolio we have developed over the past few years.

Today, your Company encompasses a collection of widely recognized brands and retail formats that cater to a broad range of consumer needs.

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Your Company's board on 19^th April 2024 approved a vertical demerger of Madura Fashion and Lifestyle (MFL) business from Aditya Birla Fashion and Retail Limited (ABFRL) into a newly incorporated entity named as Aditya Birla Lifestyle Brands Limited (ABLBL).

This de-merger will enable creation of two separately listed entities as independent growth engines, possessing distinct capital structures and parallel value creation opportunities, thus unlocking significant value for the shareholders through independent market led valuation.

On receipt of necessary approvals, the demerger will be implemented through an NCLT scheme of arrangement. Upon completion of this demerger, as per the share entitlement ratio recommended by the independent valuer and opined on by fairness opinion advisor, the shareholders of ABFRL will get one share of ABLBL for every one share in ABFRL.

Aditya Birla Lifestyle Brands Limited (ABLBL) will consist of four lifestyle brands viz Louis Phillippe, Van Heusen, Allen Solly & Peter England along with casual wear brands viz. American Eagle & Forever 21, sportwear brand Reebok and the innerwear business under Van Heusen.

Post demerger, the remaining ABFRL will be an attractive portfolio comprising of multiple distinct high growth platforms in large addressable markets with significant value creation opportunities. The portfolio will comprise of following four segments -

•    Masstige & value fashion retail play under Pantaloons & Style Up

•    Ethnic Portfolio - One of India's most comprehensive ethnic wear portfolio covering multiple occasions, price points and consumer segments, including designer wear partnerships and recently acquired portfolio of TCNS brands

•    Luxury and Super Premium - A fast-growing bridge to luxury & luxury platform of The Collective, Galleries Lafayette and select luxury brands

•    TMRW - a leading portfolio of digital first fashion & lifestyle brands

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A) Proposed Aditya Birla Lifestyle Brands Limited

Robust business operating in a large total addressable market (TAM) and with an established operating model

• This business has established a leadership position over the years and has a proven track record of consistently delivering:

o    Steady revenue growth

o    Strong and stable profitability

o    Positive cash flow

o    High Return on Capital Employed (ROCE)

•    Additionally, the portfolio has expanded into emerging high growth segments such as innerwear, sportswear, and youth western categories that will drive further growth.

1. Lifestyle brands

Your Company's Lifestyle brands houses four of India's largest apparel brands, addressing diverse customer needs uniquely:

•    Louis Philippe: To inspire the quest for excellence

•    Van Heusen: To make professionals fashionable and trendy

•    Allen Solly: To encourage unconventional thinking in the workplace

•    Peter England: To bring alive authenticity and trust in relationships

Lifestyle Brands reported a revenue of ' 6,560 Crores and EBITDA margin of 19.6% with overall EBITDA at ' 1,284 Crores growing 17% over last year.

Our brands have consistently experienced steady growth over the years, achieving doubledigit CAGR for over a decade. This sustained success is driven by our relentless focus on strong consumer-centric product innovation, which keeps us ahead of market trends and customer needs. Additionally, we have strategically expanded into newer categories and geographies, continuously tapping into new growth opportunities.

Our operational excellence further supports this growth. We have built unparalleled back-end operations encompassing sourcing, manufacturing, design, branding, and retailing, ensuring a strong synergy across the value chain. This robust infrastructure allows us to maintain high standards of quality and deliver exceptional products to our customers consistently.

Moreover, our brands benefit from decades of successful collaborations through a strong franchise model. This model not only enhances our market presence but also ensures mutual growth and profitability. By focusing on strong store economics and providing robust support to our franchise partners, we have created a symbiotic relationship that drives value creation for all stakeholders.

In FY24, our brands enhanced their prominence by offering best-in-class products at every price point, focusing on premiumization, and introducing strong upgradations with modern blends, thereby enhancing brand identity and achieving strong customer recall. Additionally, the business continued to introduce newer products in casual wear, wedding, and non-apparel space. We also expanded our range with a wide assortment of utility-based and sustainable apparel as the brands stayed ahead at capturing trends.

The brands in this challenging environment, continued to prioritize growing profitably and hence through slew of measures such as product premiumization, markdown management and tapering down low profitability channels, lifestyle brands have been consistently working towards enhancing profitability. This year brands posted their highest ever EBITDA with a margin expansion of 300 bps vs last year.

Lifestyle business is now present across 2,679 stores with large part of the network being franchise led. Brands also have a strong digital presence via online marketplaces and

brand.com. The Buy Online Ship from Store (BOSS) network is facilitating rapid scale up of omnichannel capabilities. Brands are consistently strengthening their leadership position through targeted marketing & brand building initiatives.

Led by strong brands and asset light scalable model, Lifestyle brands are expected to consistently strengthen their leadership position in its segment.

Overview of Kev performance indicators ("KPIs"):

Lifestyle brands (Retail KPIs)	FY18	FY19	FY20	FY21	FY22	FY23	FY24
Walk-ins (Crore)	0.82	0.79	0.72	0.39	0.43	0.95	0.96
Conversion	46%	50%	55%	83%	89%	90%	90%
Average selling price (“ASP")	1,747	1,714	1,626	1,680	1,701	1,881	1,870
Average bill value (“ABV")	4,211	4,256	4,072	3,693	3,844	4,576	3,905
Items per bill	2.4	2.5	2.5	2.2	2.3	2.4	2.1
like-to-like ("LTL") volume growth	8%	4%	3%	-9%	25%	26%	-14%
LTL ASP growth	0%	1%	1%	-11%	16%	12%	6%
LTL value growth	9%	5%	5%	-20%	46%	40%	-8%
No. of Stores	1813	1980	2253	2379	2522	2650	2679
Total Retail Area (Mn. sq.ft.)	2.40	2.56	2.83	3.01	3.24	3.55	3.73

2.    Youth Western Wear

American Eagle has gradually solidified its position as one of the top choices for “Premium Denim” in India. In FY24, the brand achieved its highest-ever sales and EBITDA, driven by a strong focus on offering trendy apparel that resonates with younger consumers. Sales experienced an impressive 36% YoY growth in FY24, underscoring the brand's consumer appeal. This growth extends beyond denim, as American Eagle continued to expand its product offerings with a variety of premium quality apparel. In FY24, the options available in stores increased by 35%.

American Eagle's expanding retail footprint today includes 65 stores across 30+ cities, complemented by a presence in over 120 departmental stores. This extensive network ensures widespread accessibility and convenience for shoppers. The launch of its mobile app has further strengthened its accessibility, providing consumers with a seamless shopping experience and enhancing the brand's digital engagement.

The brand's strong appeal with its customers and scalability, positions it as a significant growth engine within your company's portfolio. With its continued focus on product upgradation, quality, and customer connect, American Eagle is well-poised to drive sustained growth and contribute substantially to the overall size & scale of this portfolio.

Forever 21 is developing a robust retail and scalable e-commerce model. The brand consistently delivers the latest trends, adapting swiftly to changing consumer demands. It offers a wide array of apparel and accessories, presenting a stylish and trendy collection targeted at the young customers. The model has faced headwinds which has led to corrective actions such as optimization of store network, re-sizing of stores, change in merchandise sourcing and product assortment to refine long term viability of the business.

3.    Sportswear

Reebok is an established global brand in the sports wear segment with a rich legacy. Reebok develops products with functionality that connects with the consumers' fitness

priorities - whether it's functional training, running, sports, walking, dance, yoga or aerobics.

In FY24, Reebok India successfully completed its first year with your Company, ahead of pre-acquisition levels of scale. In this initial year, Reebok achieved strong revenue growth and a positive EBITDA. The brand expanded its availability to more than 160 stores and 900+ trade outlets, including prominent departmental stores. Reebok also further strengthened its digital presence with the launch of the Reebok India mobile app.

Innovation remains at the core of Reebok's strategy, with continuous new product launches in high-performance footwear, walking shoes, and apparel categories. The brand's “I am the New” campaign, featuring new brand ambassadors, garnered an overwhelming response, reflecting its strong market resonance. Reebok remains focused towards expanding its distribution along with enhancing its digital presence, offering functionally superior, innovative, and comfortable footwear and apparel to meet the aspirations of its customers.

4. Van Heusen Activewear, Athleisure, and Innerwear

In 2016, your Company forayed into the innerwear and athleisure market through its brand, Van Heusen. Since 2016, the brand has consistently expanded its distribution network to over 35,000 trade outlets today. It is also available across key departmental stores and major e-commerce platforms. Its own e-commerce platform, Van Heusen Intimates, caters exclusively to women's lingerie, loungewear, athleisure, and activewear.

Overall sales remained flat in FY24 led by continued slowdown in athleisure, a trend that has sustained post COVID. Innerwear category sales grew by 7% led by growth in both retail as well as E-com channel.

Van Heusen Innerwear offers a diverse range of choices, prioritizing exceptional comfort and fit. Adhering to its consumer-centric philosophy, the brand continually introduces innovative products and styles for men, women, and kids, catering to diverse customer segments. Premiumization has become a key lever for growth, as brand significantly increased the contribution from premium products this fiscal year. The brand recently invested in its first-ever celebrity association to highlight the comfort and innovation of its newly launched “AIR” Series, with campaigns aired across prominent media channels. Innovative products, coupled with influencer-led campaigns, have consistently been building the salience of the brand in this category.

The brand remains focused towards enhancing the customer proposition by curating a diverse and relevant product assortment across both offline and online channels. It focuses on driving product innovation and expanding its categories, positioning itself strategically to lead the brand's growth and market presence.

B) Demerged Aditya Birla Fashion and Retail Limited:

The demerged ABFRL has constituents that operate in several high-growth segments and the portfolio is at inflection point. The company has play in both traditional categories (Ethnic and Western) and new, previously unaddressed segments (GenZ and Luxury). As each component is still gradually developing towards its full potential, the business will require capital investment in the medium term to fuel growth. The vision is to leverage the

strong brand portfolio to achieve a market leadership position in each of its constituents over next 5-10 years. To fund the growth needs of this portfolio, your Company will raise 2,500 Crs capital.

1. Masstige & Value Retail

Pantaloons is amongst the prominent players in the masstige segment of the Indian fashion retail industry, delivering trendy fashion products at attractive prices. In FY24, the segment reported annual revenue of ' 4,328 Crore and EBITDA of ' 561 Crore.

The brand has made significant moves in premiumizing its retail experience with its new retail identity, now updated across 150+ stores. Pantaloons is now accessible through 417 stores nationwide. Also, Pantaloons launched its first experiential store in Bengaluru called Pantaloons OnLoop, offering a diverse array of over 50 fashion brands across apparel, footwear, cosmetics, and accessories. This store elevates the customer experience with smart trial rooms and several customization options.

Pantaloons expanded its product offerings with the launch of new private label brands such as Peregrine for men's formals and Honey Curvytude for plus-sized western wear. The brand also ventured into the fragrance category with 10 variants under its private label. Pantaloons is committed to continually strengthening its product portfolio by driving innovations and enhancing the utility quotient across a wide range of products through better fabrics and fits.

The brand is on track to build truly ‘Phygital stores' through a revamped loyalty program and an improved digitized shopping experience at stores. Pantaloons aims to focus on convenience and personalization, ensuring a seamless shopping experience for its customers.

With robust store economics, extensive distribution across multiple tiers, and a strong private label portfolio, Pantaloons is poised to lead the differentiated masstige fashion segment. The brand's revamped, youthful, contemporary, and vibrant imagery further cements its position as a frontrunner in delivering accessible yet stylish fashion to a wide audience.

Overview of KPIs:

Pantaloons (Retail KPIs)	FY18	FY19	FY20	FY21	FY22	FY23	FY24
Walk-ins (Crore)	4.6	5.4	5.7	2.3	3.6	6.2	6.0
Conversion	22.4%	24.3%	26.1%	31.5%	26.2%	21.6%	22.2%
ASP	665	643	665	649	727	813	801
ABV	1,842	1,880	2,001	2,075	2,325	2,468	2,500
Items per bill	2.8	2.9	3.0	3.2	3.2	3.0	3.1
LTL volume growth	-3%	3%	-2%	-51%	18%	32%	-3%
LTL ASP growth	1%	-2%	5%	-2%	13%	12%	-2%
LTL value growth	-3%	1%	3%	-51%	33%	48%	-5%
No. of Stores	275	308	342	346	377	431	417
Total Retail Area (Mn. sq.ft.)	3.76	4.02	4.36	4.46	4.92	5.72	5.72

Pantaloons Private labels meeting needs of consumers across occasions and age groups.

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Style Up

The value segment presents a significant opportunity to cater to a large customer base with affordable clothing. India's vast market remains largely unorganized, providing ample room for organized players to expand. The country's large population and rapid economic growth create a conducive environment for the accelerated expansion of value and fast fashion, positioning it for substantial growth in the coming years.

Style Up's value proposition is uniquely crafted for value-conscious fashion shoppers, offering stylish and trendy everyday fashion at budget-friendly prices.

Style Up revitalized its identity with a new logo, refreshed product lines, and enhanced store layouts, significantly improving the in-store experience. This brand has received an overwhelmingly positive response from customers. The brand continues to introduce new and improved products across various categories, driving significant growth. Style Up achieved an impressive 170% YoY growth in FY24, with key top-performing stores completing a full year of profitable operations. As of March 2024, the brand is present in 27 stores.

Moving forward, the company will continue to evaluate existing and potential markets, with plans to add over 30 new stores in FY25, further expanding its reach and solidifying its position in the market.

2. Ethnic wear Brands

The ethnic wear market is India's largest apparel category, and the share of the organized segment within this market is growing rapidly. Previously dominated by unorganized players, this shift offers significant opportunities for branded players. Additionally, there is a notable transition from tailored wear to ready-to-wear garments, which is driving this segment.

To capitalize on these trends, your company had implemented a clear and distinct strategy for success in each segment. Consequently, your company built the most comprehensive ethnic wear portfolio through both organic and inorganic means, catering to various key occasions and price points. This comprehensive approach will help build a strong leadership position in future.

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Our ethnic portfolio operates within two distinct segments: designer led brands and premium brands.

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Designer led brands:

Sabyasachi curates bridal wear, men's wedding attire, occasion wear, jewelry, and accessories, blending traditional heritage crafts with stylish designs. Committed to establishing itself as a global Indian luxury brand, Sabyasachi achieved a remarkable 42% growth in FY24, with jewelry leading the growth trajectory. In a significant milestone, Sabyasachi launched its largest flagship store in a 100-year-old heritage building in Mumbai. Additionally, Sabyasachi collaborated with several global luxury brands like Estee Lauder & Morgenthal Frederics, showcasing the brand's art and craft. During the year, brand was selected as sole representative from India to mark 100th anniversary of Disney and was also invited to stage a jewelry exhibition in London for an event by Elephant Family, a charity supported by the British royal family. Sabyasachi's presence includes five exclusive domestic stores and two international stores in New York and Dubai, solidifying its status as a leading India inspired luxury global brand.

Shantnu and Nikhil offer contemporary designer occasion and ceremonial apparel for men and women, now boasting 21 stores, including 7 new additions in FY24. Their couture line is complemented by the affordable luxury pret line, S&N by Shantnu Nikhil, which has received accolades for its product quality and value. The Shantnu Nikhil Cricket Club (SNCC), a sport-inspired lifestyle category under the S&N pret label, uniquely merges fashion and sports, appealing to a diverse set of audience. These three brands have cultivated a balanced aspirational ecosystem with distinct brand and product segmentation. The growth strategy leverages multiple channels, including e-commerce and wholesale, to reach a broader market. Strong brand communication is centred around showcasing product excellence and fashion-forward aesthetics, solidifying Shantnu and Nikhil's position as leaders in contemporary and luxury fashion.

House of Masaba is a young, aspirational, and digital-led brand making waves in the affordable luxury segment across both fashion and beauty categories. In FY24, the brand achieved 40% revenue growth, with its beauty business expanding to four times of last year. The brand's retail footprint also grew, with the addition of 7 new stores, bringing the total to 15. FY24 saw the launch of House of Masaba's first bridal collection, marking a significant milestone in its fashion journey. Meanwhile, its beauty and personal care line, Lovechild, continues to expand its product portfolio with innovative offerings. Lovechild has successfully spread its offline distribution and is now available in over 20 outlets. This dynamic growth underscores House of Masaba's commitment to excellence and innovation in both fashion and beauty.

Premium wear brands:

In partnership with Tarun Tahiliani, your company ventured into the affordable premium men's ethnic wear market with the launch of TASVA in FY22. TASVA seamlessly blends exquisite craftsmanship with contemporary designs, catering to the ceremonial wear needs of Indian men with high-quality products at competitive price points. The brand has quickly expanded to 57 stores across India and doubled its sales revenue in FY24 crossing 100 Cr milestone. TASVA also received an enthusiastic response during its first full wedding and festive season, with Diwali sales doubling in several stores compared to the previous year. Product quality has seen consistent improvements based on customer feedback and insights. To boost brand visibility, TASVA launched several multimedia campaigns, invested in targeted marketing, and partnered with the wedding ecosystem. These efforts have significantly increased brand salience, establishing TASVA as a go-to brand for premium men's ethnic wear in India.

TCNS houses a diverse portfolio of women's ethnic wear brands, including W, Aurelia, Wishful, Folksong, and Elleven. These brands offer a unique blend of casual and occasion fusion wear, catering to a wide range of fashion preferences. In the current fiscal year, your company successfully completed the acquisition of TCNS brands, beginning the consolidation of its financials from October 1, 2023. This strategic acquisition aims to harness the strengths of both entities, optimizing synergies and enhancing operational efficiencies. Efforts are focused on process improvements and creating winning designs that leverage the combined expertise and creativity of the brands. Business transformation is moving forward at a great momentum, with dedicated efforts towards revenue enhancement and cost optimisation at each step. This includes improvement in store productivity, strengthening end to end merchandising, better inventory control, refining product offerings, expanding market reach and enhancing customer experiences. Your company's strategy is dedicated towards maximizing the potential of the integrated portfolio, bringing out the best in each brand. With a commitment to innovation and excellence, the portfolio is poised to set new benchmarks in the women's ethnic wear segment, driving growth and delivering exceptional value to customers.

Jaypore is India's leading premium artisanal brand, offering apparel, jewelry, and accessories that embrace the rich and diverse Indian culture. With 25 exclusive offline stores across 11 cities and a robust e-commerce platform, Jaypore offers a seamless shopping experience, both online and offline. The brand also relaunched its US website, expanding its global footprint, and upgraded its domestic website to enhance the customer experience. In FY24, Jaypore launched several influencer-led campaigns that significantly boosted brand visibility and engagement. These initiatives have solidified Jaypore's position in the premium artisanal led market, combining traditional craftsmanship with modern retail strategies.

3. Super Premium and Luxury Retail

The super-premium and luxury market has been steadily expanding, driven by the trend of premiumization. Demand for these high-end products remains relatively inelastic, as consumers increasingly prioritize experience-driven purchases. Also, the consumer segment for this category has remained less affected by COVID related implications.

Our portfolio includes ‘The Collective,' one of India's largest multi-brand retailers of luxury and bridge to luxury brands, alongside select mono brands such as Ralph Lauren, Fred Perry, Ted Baker, and Hackett London. As more markets mature for luxury, our total addressable market is poised for significant expansion.

‘The Collective' has demonstrated a sustainable and profitable growth trajectory, offering an unparalleled retail experience with an extensive collection of exclusive global brands under one roof. Our e-commerce platform, thecollective.in, is evolving into a premier destination for luxury fashion, making luxury more accessible and catering to a broader audience. The expansive collection of accessories, including watches, shoes, ties, belts, bags, wallets, jewelry, and sunglasses, creates a comprehensive premium portfolio.

In FY24, the super-premium segment continued its profitable growth, investing in novelty styles and high-potential categories like womenswear and accessories. The business grew by 18% over the previous year, driven by strong e-commerce growth, double-digit L2L growth, and expansion into new markets. Our total network now spans 39 stores, and we also launched our largest store in Mumbai this fiscal. E-commerce sales for this segment surpassed the milestone of ' 100 crore during this financial year.

Our focus remains on delivering a stellar customer experience—from the exploration journey and in-store experience to choosing from our unique collection and maintaining deep customer relationships.

The luxury portfolio has been further enhanced through our partnership with Galeries Lafayette. The flagship store in Mumbai will house over 200 luxury brands, creating a world-class destination for global luxury brands for Indian consumers. The first store in Mumbai is under development currently and is expected to be launched next year.

4. TMRW: A portfolio of digital-first brands

The Indian e-commerce market is projected to reach USD 135 billion by FY26, supported by robust fundamentals such as a large and increasingly affluent consumer base, growing internet and smartphone penetration facilitated by low data prices, and low shipment costs. Further boosting this growth are digital payments, ease of credit, and the convenience of online shopping. The evident opportunities in e-commerce and quick commerce have led to the emergence of numerous founders who have started many digital first brands.

To capitalize on this burgeoning market, your company established a new entity, TMRW, in April 2022 to build digital native brands targeting GenZ and millennials. These brands are prominently available on all major e-commerce platforms, and their own digital channels. TMRW adopts a ‘Brand Builder' approach, leveraging in-house developed data science backed technology to provide comprehensive central support to all brands, including design, operations, branding, sourcing, community building and product innovation. With a core focus on product and design innovation, TMRW is building the next generation of dynamic brands for GenZ and millennials.

The TMRW portfolio not only addresses large market categories but also targets emerging high-growth segments like athleisure, activewear, expressive wear, and accessories. In FY24, TMRW launched and scaled differentiated product lines with a focus on premiumization, resulting in portfolio revenue growing to four times that of the previous year. Additionally, TMRW acquired The Indian Garage Co. (TIGC), further enhancing its portfolio. Continuous operational improvements are being driven by tech-led on-ground execution, leading to better performance metrics that will help drive scale in these brands.

A healthy mix of brands with D2C and marketplace footprint

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Business strategy:

1.    Accelerate growth of core businesses to capture large market opportunity in existing segments

Lifestyle brands are actively diversifying into new categories and consumer segments. In addition to womens wear, they are expanding into non-apparel, kids wear and accessories, which are important for building robust product portfolio & driving growth through acquisition of new customers. These brands are also building enduring customer relationships through effective go-to-market strategies, distinctive brand identities, and compelling storytelling.

Masstige fashion is driven by the appeal of affordable yet aspirational products, emphasizing perceived quality, unique design, and a brand image associated with status. With the enhanced store experience through the new Retail Identity rollout, product enhancements (launch of new Private Labels) & improved operations, Pantaloons is strategically positioned to acquire a substantial share of the opportunity, especially for the middle-class family looking for high quality and trendy fashion at affordable prices. Persistently focused on enhancing product aesthetics & providing elevated retail experience, Pantaloons aims to consistently upgrade its a superior value proposition.

2.    Building powerful brands & retail concepts in identified new high growth segments

Our strategy is a brand led strategy, where we want to have leadership play in large TAM, high growth segments through strong & distinct brands. We identified luxury, ethnic, value and D2C as key segments for growth and already built a meaningful play in these high growth segments.

•    Ethnic wear constitutes about 30% of the overall apparel market, with branded ethnic wear expected to grow significantly faster. We are well-positioned to capitalize on this trend with our diverse portfolio of brands and partnerships with leading Indian designers.

o Our designer brands are well positioned to capitalize on the large and growing luxury wedding market and occasion wear through its product offerings across clothing, accessories, jewelry and beauty product range.

o Tasva is establishing itself as a strong player in premium men's wedding wear segment and Jaypore is positioned as authentic craft-based artisinal product led brand. The portfolio of TCNS brands are market leaders in the premium women's ethnic wear category and occupy leadership position in the market.

•    The shift from unorganized to organized segments is driven by increasing urbanization, rising consumer incomes, increased demand for branded products and premiumization. Consumers seek a balance between elevated aesthetics and accessible pricing. We cater to these value-conscious consumers through Pantaloons and Style Up. Our extensive distribution network, high-quality products, and strong customer loyalty, support this aim of ours to make fashion accessible to everyone. We shall grow Style Up significantly faster to be a leading player in the segment.

•    TMRW has swiftly built a portfolio of strong brands addressing both large and emerging categories. Your Company is dedicated to building TMRW brands into respective segment & category leader, with a strong focus on youth-centric offerings. By capitalizing on the rapid growth of e-commerce and leveraging data science

led technology, we will continue to expand our reach and influence in this dynamic market, positioning TMRW brands at the forefront of the digital first industry.

• The Indian luxury market is evolving rapidly, driven by rising income levels and the growing aspirations of the middle and upper class. The Super Premium brand portfolio has become one of the fastest-growing segments with consistently improving profitability. This is due to the expanded reach of e-commerce, entry into newer markets, and enhanced consumer engagement. To further its luxury footprint, your Company has partnered with the renowned French department store chain, Galeries Lafayette. This collaboration will see the opening of two flagship stores in prime locations in Mumbai and Delhi, offering a multi-brand format that consists all luxury categories.

3.    Accelerating customer experience - offline and online

At the core of our strategy is enabling a seamless customer journey, both online and offline, with continuous upgrades to enhance this experience. Your company is already on course towards creating an integrated experience that ensures customer convenience at every stage, from pre-purchase to post-purchase.

Your Company is committed to curating the perfect product assortment, expanding to key markets, optimizing store layouts and providing a wide range of choices with personalized options. By prioritizing tech-enabled solutions, we shall enhance customer convenience, efficiency, and overall effectiveness. Besides this, improved social media content helps build a strong community, emphasizing direct consumer connections, maintaining engagement, and driving omni-channel integration.

Innovation is key to delivering a distinctive and consistent Phygital experience across our network. Pantaloons and Style Up remain focused on enhancing product aesthetics and providing an elevated retail experience through their new retail identity. Lifestyle brands through its small-town format is well-equipped to capture a significant portion of the opportunity presented by tier II, III and below cities, thus driving its overall growth and market leadership. The Super App, already featuring eight ABLBL brands, is developing a digital ecosystem to meet all customer needs under one roof. Newly opened Sabyasachi store and proposed Galeries Lafayette, with their latest stores set in heritage buildings, exemplify enhanced retail experience in line with the respective philosophy of the brand.

4.    Leverage synergies from the rich portfolio

Each segment of your company's portfolio boasts unique features and strengths that complement one another, positioning the company to leverage synergies and build a more agile structure. The extensive network, improved planning, sourcing synergies, cross-utilization of manufacturing facilities, better negotiation terms, and enriched customer engagement facilitated by comprehensive customer data are some of the many advantages that optimize expertise and resources.

This integrated approach allows for the optimal use of the portfolio strengths and diversity, offering an exhaustive range of products that fulfill large consumer needs. This strategic alignment not only enhances individual brand strengths but also maximizes overall portfolio value.

The synergies will be preserved and further strengthened with the proposed demerger. This demerger will allow each business to benefit from these synergies while also

implementing strategies uniquely tailored to their specific needs, paving the way for distinct growth trajectories for each entity.

5. Strategic capital allocation

When it comes to capital allocation, a tailored approach is essential to balance the distinct needs of two entities within the portfolio. The first entity that is ABLBL comprises well-established brands that are already strong cash generators. These brands, having reached a stage of self-sufficiency, do not require further capital infusion.

The second entity that is de-merged ABFRL operates in multiple high-growth segments, featuring brands that are still in the early stages of development. These emerging brands will require significant capital investment to fuel their growth, scale operations, navigate the competitive landscape and achieve their full potential. The objective is to nurture these brands through, providing them with the resources needed to accelerate their growth journey.

By investing strategically in these high-growth opportunities, the goal is to transform these developing brands into robust, cash-generating assets in the future. This balanced capital allocation strategy not only will support the sustained growth of mature brands, but also ensures that emerging brands are positioned to contribute significantly to the portfolio's long-term financial health and expansion.

Restructuring to propel growth - Demerger of Madura business into separate listed entity

The Board of Directors has approved the proposal of vertical demerger of Madura Fashion and Lifestyle business (MFL Business) from ABFRL into a newly incorporated company named as Aditya Birla Lifestyle Brands Ltd. (ABLBL), which will be listed separately on completion of the demerger.

Post de-merger, ABLBL will consist of lifestyle brands (Louis Phillippe, Van Heusen, Allen Solly, Peter England, Simon Carter), casual wear brands (American Eagle & Forever 21), Reebok and innerwear business under Van Heusen brand. Remaining businesses in ABFRL will be a portfolio of multiple high growth platforms - Pantaloons and Style Up, ethnic portfolio, super premium/luxury and digital first brands.

This strategic demerger of ABFRL is paving the way for the creation of two separate growth engines, each with a clear capital allocation strategy and unique path for value creation. Both entities will focus on specific growth areas aligned with their individual business models with a clear focus on maximizing stakeholder returns. This shall allow the participation of the right set of investors and strategic partners, aligned with the appropriate risk profiles of the two companies and their differentiated business models.

Post demerger, ABFRL will raise fresh capital of ~ ' 2,500 Crores to strengthen its balance sheet and support the growth needs of its constituent businesses.

Digital Transformation Roadmap

Enhancement of digital and e-commerce capabilities across brands continued to remain the focus, leveraging the inhouse developed ecommerce platform, which enables having separate brand websites, mobile-sites, mobile apps and virtual stores along with seamless integration with over 10 different marketplaces, providing omni-channel fulfilment across warehouses

and stores. Some of the key initiatives include:

•    Launching a multi-brand website/app featuring eight ABLBL brands, allowing customers to shop across brands with a unified cart and checkout for enhanced cross-selling and upselling opportunities.

•    Establishing a common customer identity across Lifestyle brands, enabling single-sign-on and providing a consolidated view of transactions and loyalty.

•    Introducing a new website for ‘The Collective' with personalized features such as hyperlocal recommendations and in-store returns.

•    Relaunching the ‘Jaypore' e-commerce brand website with advanced personalization based on consumer behavior and past engagements.

•    Launching a mobile app for order booking in the trade and department store segments, significantly reducing time-to-market and supporting agile introduction of new styles.

•    Strengthening digital marketing capabilities across brands with a focus on Search Engine Optimization (SEO)/ Search Engine Marketing (SEM), real-time web/app notifications, and WhatsApp nudges to drive higher conversions.

•    Initiating early adoption of the Open Network for Digital Commerce (ONDC) platform with the launch of the Peter England brand, paving the way to access new markets.

Building extensive data analytics and AI capabilities remains a top priority, with initiatives

including:

•    Implementing demand forecasting models to enhance merchandise planning and sourcing efficiency.

•    Enhancing the markdown management system across brands to optimize discounting strategies throughout the season and during end-of-season sales.

•    Leveraging Generative AI models to assist designers in rapidly developing new product designs, fostering greater design diversity and reducing time-to-market.

•    Automating attribute data generation and product descriptions for e-commerce catalogues using Visual AI and Generative AI Language models.

•    Launching clienteling tools for store associates to engage effectively with customers, leveraging insights into their profiles, past purchases, and personalized product recommendations.

Significant progress has been made in modernizing core IT systems, including:

•    Implementing the latest SAP ERP solution (‘S4 Hana FVB') in Q2 FY24 on a public cloud platform, consolidating three legacy SAP instances previously used by the MFL division.

•    Deploying Dynamics 365 Software-as-a-Service ERP and Point-of-Sale platforms for designer wear businesses, laying the groundwork for future scalability and growth.

•    Migrating the data and analytics platform from on-premise legacy hardware (Teradata) to a public cloud environment, enabling agility and leveraging cutting-edge data technologies including AI and Generative AI.

Human Resources

At your company, ‘People Vision' is to ‘Drive a High Performing and Customer Centric Culture with Happy and Value Oriented Employees’. It is especially proud of its performance as it is expertly anchored by advanced capabilities and enhanced productivity. Through a strong service orientation, it fosters a culture that puts customers first. It focuses on creating happiness through purpose-driven behaviour and delivering high quality. All of these objectives are accomplished through its dedicated talent that is value-oriented with a deep commitment to the ethics of the Aditya Birla Group.

The ‘Best Brands and Best People’ fuels your company to give its best. It acknowledges the fact that while it has several well-known brands under our umbrella, it is the people behind the brands who have made it. Your company's unique Employee Value Proposition (EVP) - ‘A World of Opportunities’ makes it a preferred employer for professionals in the industry.

FY24 Human Resource Achievements

In FY24, our Human Resources initiatives at ABFRL have focused on enhancing employee experience, fostering talent growth, and driving a culture of continuous learning and development. Here are some key achievements:

1.    Talent Management and Career Growth

o Internal Talent Mobility: 14.78% of our employees transitioned to new roles, reflecting our commitment to nurturing internal talent.

o Young Talent Development: We engaged 3,500+ students across 13 campuses through our “Ticket to Meet ABFRL Leaders” program, resulting in 3,357 applications for our Young Talent Program - STRIDE.

o Talent Councils: These forums actively review our talent pipeline, succession plans, and development interventions to ensure robust leadership development.

2.    Learning and Development

o Capability Building Academy: Our internal academy supports learning through programs like ACE (Aligning Career Aspirations with Functional Development) and Digital Academy (focusing on digital marketing, SEO, and AI).

o 70:20:10 Learning Model: Emphasizing hands-on experience (70%), mentorship (20%), and classroom training (10%) to develop future-ready leaders.

3.    Rewards and Recognition

o Total Rewards Approach: We maintain a balanced approach to compensation and benefits, incorporating fixed pay, variable incentives, long-term benefits, and recognition programs.

o Non-Discrimination: Ensuring fairness in pay decisions based on performance, potential, and market standards, with specific measures for scenarios like maternity leave and talent mobility.

o    Employee Recognition: Celebrating success through platforms like the Aditya Birla

Awards, recognizing outstanding contributions across the organization.

4.    Enrich Your Life

o Work-Life Balance: Policies such as flexible work arrangements, work-from-home options, and supportive leave policies contribute to a healthy work-life balance.

o Employee Wellness: Initiatives under the ABFRL Wellness Studio promote physical, mental, and financial well-being, including programs like Finspiration and Finance Fiesta.

5.    Communication and Engagement

o Social Media Engagement: Achieved a 25% growth in new Instagram followers (@ LifeAtABFRL) and 34% on LinkedIn, enhancing our digital presence and employee engagement.

o Internal Communication: Utilizing platforms like town halls, internal journals, and surveys to foster open communication and gather employee feedback.

These achievements underscore our commitment to creating a supportive and enriching workplace environment at ABFRL, where every employee can thrive and contribute to our shared success. Through continuous improvement and strategic HR initiatives, we aim to sustain our growth momentum and reinforce our position as an employer of choice in the industry.

Sustainability

Sustainability is a cornerstone of our business strategy, deeply ingrained in our operations and guided by the principles of the Aditya Birla Group. As a market leader, we prioritize meeting consumer demands while striving to deliver products with enhanced environmental and social footprints.

In 2013, we launched our structured sustainability program, ‘ReEarth for our Tomorrow', comprising 10 missions focused on energy, carbon footprint, green building, water, waste, WASH pledge, safety, CSR, packaging, and sustainable products. This initiative embodies our commitment to giving back more to the ecosystem than we take.

Building on the significant milestones achieved under ‘ReEarth for our Tomorrow' in 2021, we have embarked on ‘ReEarth 2.0'. This evolution shifts our focus from process-led to product-led sustainability strategies with a 2025 agenda emphasizing product design, customer-centricity, and supply chain sustainability. Our 2025 roadmap sets ambitious targets aligned with business goals, balancing risks and opportunities across all relevant Environmental, Social, and Governance (ESG) initiatives.

We have established robust governance mechanisms to oversee our sustainability agenda, including periodic reviews by the Management Committee and oversight by the Risk Management and Sustainability Committee (RMSC). Our practices are aligned with global standards such as the Task Force on Climate-related Financial Disclosures (TCFD) and the Committee of Sponsoring Organizations (COSO) framework for Enterprise Risk Management.

Transitioning to sustainable fashion is a key priority. We are committed to adopting adaptable, high-performance business models that promote life cycle thinking, responsible sourcing, and circular economy principles. Waste management remains critical, and we have achieved ‘Zero Waste to Landfill' across our operations, with all non-hazardous waste recycled, reused, or composted. Our collaborations with organizations like ICCE, CAIF, and GIZ underscore our commitment to advancing circularity in the fashion industry.

We actively participate in global platforms and collaborate with ESG indices to benchmark our sustainability performance against peers. This engagement ensures alignment with global and national sustainability agendas, positioning us as a leader in sustainable practices.

Throughout our sustainabilityjourney, ABFRL has received global recognition and accolades, underscoring our commitment to excellence. Recent awards include recognition from Sustainalytics, the Financial Times FT Climate Leadership Award 2023, and the Arogya World Healthy Workplace 2023 Award, among others.

Looking ahead, achieving net-zero emissions is integral to our sustainability agenda. We have validated our climate and emission-related targets through the Science Based Targets initiative (SBTi), aligning with international efforts to limit global temperature rise.

Sustainability is not just a commitment but an integral part of our brand and business strategy. We remain dedicated to advancing sustainable fashion through innovation and technology, ensuring a positive impact on both the environment and society as we continue to grow responsibly.

Notable Achievements:

¦    Achieved a score of 13.1 (Low Risk Category) under Textiles & Apparel sector from Sustainalytics

¦    Received Financial Times FT - Climate Leadership Award 2023

¦    Received Arogya World Healthy Workplace 2023 Award

¦    Received International Safety Award from British Safety Council for Pantaloons South DC and Little England Apparels Factory

¦    Received CSR - ESG leadership award in the 15^th Annual Global CSR & ESG Summit 2023

¦    Received Grow Getters Awards at the 7th ABG Sustain-Ability Conference 2024 for the CSR Publication ‘Dhaage'

Risk management

Your Company recognizes the importance of a robust governance structure and effective risk management in ensuring sustained performance and growth. An integrated approach has been adopted, combining the COSO framework with the Task Force on Climate-related Financial Disclosures (TCFD), to strike a balance between financial, social, and environmental priorities. This approach aligns risk management with performance and strategy, delivering long-term value to stakeholders.

To oversee the identified risks and mitigation plans, a dedicated Risk Management and Sustainability Committee (RMSC) has been established. The committee, supported by the Chief Risk Officer, Head of Sustainability, and Risk Management Committees, continuously monitors and evaluates risks from strategic, operational, financial, environmental, and compliance perspectives. Internal and external business environments are carefully monitored to identify potential risks and opportunities.

Periodic assessments by the established committees and internal functions ensure ongoing evaluation of risks. Mitigation plans are implemented to manage key risks and minimize residual risks, safeguarding the company's interests. This proactive risk management approach provides the foundation for effective decision-making and resilience in the face of evolving challenges.

Key Risks

1.    Evolving consumer

A dramatic shift in consumer preferences and behaviours, fueled by evolving habits and new technologies, is transforming how Indians buy and consume goods. Growing fashion consciousness across socio-economic strata is set to significantly influence future consumption patterns.

Your company has undertaken several initiatives to diversify its offerings. This includes creating new innovative product lines, category extensions and corporate actions (JVs, acquisitions & licensing agreements) to cater to different occasions, segments and price points.

2.    Navigating through a low demand phase

Post-COVID normalization has led to volatile domestic markets and potentially dampened consumer spending. Additionally, inflationary pressures and rising household debt have particularly affected consumer sentiments.

With a diverse portfolio spanning various occasions, categories, and price points, we reach a broad consumer base. Our innovative, appealing designs keep offerings fresh, helping maintain or grow market share, even in a slowing economy.

3.    Data Security

Reliance on digital technologies introduces risks such as cyberattacks, security breaches, data leaks, and system downtime, threatening financial stability and brand reputation pose a significant threat to a company. These incidences not only lead to substantial financial losses but can also severely damage its brand reputation.

Your Company has implemented Disaster Recovery (DR), Business Continuity Planning (BCP), Data Loss Prevention (DLP), and Security Information and Event Management (SIEM) technologies. Regular monitoring, training to employees and incident reporting help address these vulnerabilities effectively.

4.    Thriving Work Force

The company's rapid multi-pronged expansion drives a high demand for talent in design, retail, marketing, e-commerce, and more. The competitive fashion retail landscape makes finding skilled professionals challenging. These individuals are essential for understanding consumer needs and staying ahead of trends.

To address this, your Company has prioritized leading industry employment practices, ensuring a well-structured approach to develop, encourage, and retain top talent. Your Company's comprehensive retention strategy includes targeted interventions to foster leadership growth within the organization.

5.    Quality and Cost of retail space

Securing quality retail spaces has become increasingly challenging due to heightened demand from various other retail entities and limited availability of good spaces, causing rental costs to increase.

Your company builds strong relationships with mall owners and developers to secure longterm leases. We also enhance store appeal through retail identity refreshes, renovations, rebranding, and improved customer navigation for a better shopping experience.

6. Highly Competitive Market

Intense competition from domestic and international players in India's fashion market leads to loss of market share, volatile pricing and heavy markdowns.

Your company is deeply committed to product innovation, delivering exceptional customer experiences, and building a strong brand identity. By tailoring strategies to meet consumer needs, we not only drive demand but also cultivate lasting customer relationships, positioning ourselves for sustained success in the market.

Road Ahead

We continue to look at a very strong future for fashion apparel sector in this country. Robust economic outlook, rise in per capital GDP, increasing discretionary spending, and shift from un-organized to organized, will continue to be the strong tailwinds that will drive this sector. ABFRL is well poised to to build substantial expansion in scale and market leadership over the coming years.

Over the past few years, your Company has undergone significant transformation by establishing multiple high-growth platforms across various categories and segments. Broadly, these platforms have been created to address large addressable markets with higher growths through a brand led strategy as we plan to build large iconic brands & winning retail formats within these spaces. These five key areas are:

•    Western Brands

•    Masstige & Value Retail

•    Ethnic Brands

•    Luxury Retail

•    Digital-First Brands

Our diverse and comprehensive portfolio of brands built over wide distribution & deep backend capabilities equips us to build businesses for scale. A relentless focus on innovation, customer orientation, driving distribution expansion and rigor on operational excellence, enables us to cement our leadership position in fashion apparel space.

This strategic step of restructuring ABFRL through the recently announced de-merger, has been thoughfully planned to strengthen the growth aspirations of the business, delivering strong stakeholder value in the long term. De-merger will create two focused growth engines, each with distinct capital allocation strategies and unique value creation opportunities.

Leveraging our strong repertoire of well-known brands, retail formats and our comprehensive play across meaningful opportunities, we are well-prepared to capitalize the growth potential within the fashion apparel sector, driving exceptional consumer value and creating enduring long-term shareholder value.

Financial Performance and Analysis

R in Crore)

Particulars	Standalone		Consolidated
Â	Year Ended March 31, 2024	Year Ended March 31, 2023	Year Ended March 31, 2024	Year Ended March 31, 2023
Revenue from Operations	12,351	11,737	13,996	12,418
EBITDA (1)	1,870	1,705	1,703	1,617
Finance Costs	741	424	877	472
Depreciation	1,364	1,114	1,655	1,227
Profit / (Loss) Before Tax (1)	(235)	166	(829)	(82)
Current Tax	-	(2)	35	14
Deferred Tax Charge / (Credit)	(57)	36	(128)	(37)
Net Profit / (Loss) After Tax (1)	(178)	133	(736)	(59)

Standalone Performance

R in Crore)

Particulars	As at March 31, 2024	As at March 31, 2023
Net Working Capital (2) (A)	2,223	1,357
Net Fixed Assets (including CWIP and Other Intangible Assets) (B)	1,661	1,488
Deferred Tax Asset (C)	374	317
Capital Employed (D = A + B + C)	4,258	3,162
Investments (3) (E)	3,437	1,401
Right-of-use assets (F)	3,279	3,043
Goodwill (4) (G)	1,860	1,860
Total Capital Employed (H = D + E + F + G)	12,834	9,466
Net Worth	5,049	3,787
Debt	3,708	2,030
Lease Liabilities	4,077	3,649

Notes:

(1) Includes other income of ' 214 Crore (Previousyear: ' HQ Crore).

f? in Crore)

Particulars	As at March 31, 2024	As at March 31, 2023
Inventory	3,626	3,764
Trade Receivables	880	835
Cash and Bank Balances	304	643
Other Assets	3,431	2,123
Less: Trade Payables	3,563	3,663
Less: Other Liabilities	2,456	2,345
Net Working Capital	2,223	1,357

(3)    Investments includes ' 3,416 Crore towards investments in Subsidiaries and Joint Venture (Previous year: ' 1,391 Crore).

(4)    As on March 31,2024, goodwill (after testing for impairment in accordance with the Indian Accounting Standard (Ind AS) 36 issued by the Institute of Chartered Accountants of India) stands at' 1,860 Crore.

Revenue

Your Company reported revenue of ' 12,351 Crore during the financial year, recording a growth of 5% over the previous year.

Earnings before interest, tax, depreciation and amortization (“EBITDA”)

The EBITDA of the Company is ' 1,870 Crore (previous year ' 1,705 Crore). The EBITDA margin for the Company improved from 14.53% to 15.14% during the year.

Finance cost

The average borrowing cost for the Company reduced to 7.42% as compared to 7.66% in the previous year. The finance cost of the Company is ' 741 Crore (previous year ' 424 Crore) as a result of higher average borrowings primarily on account of in term loans, working capital loans, non-convertible debentures and commercial paper during the year.

Dividend

In view of accumulated losses, your directors have not recommended payment of any dividend for the year under review.

Borrowings have increased from ' 2,030 Crore in the previous year to ' 3,708 Crore. The Company has raised ' 2,281 Crore through fresh borrowings and have repaid borrowings of ^ 604 Crore during the year with average borrowing cost at 7.42%.

Credit Ratings

India Ratings and Research has improved their credit rating to IND AA+/Stable for long term borrowing, CRISIL Limited and ICRA Limited has reaffirmed their credit rating for short term and long term borrowing and ICRA Limited has assigned a new credit rating for NonConvertible Debenture.

The details of Credit rating as on March 31, 2024 are disclosed in the ‘General Shareholder Information' forming part of this Annual Report.

Non-Convertible Debentures (“NCDs”)

During the year under review, the Company has issued and allotted 75,000 Listed, Unsecured, Rated, Redeemable NCDs at face value of ' 1,00,000 (Rupees One Lakh only) aggregating to ' 750 Crore (Rupees Seven Hundred Fifty Crore only) on Private Placement Basis, under Series 10.

During the year, the Company has repaid Series 7 NCDs of ' 325 Crore (Rupees Three Hundred and Twenty Five Crore only).

The details of outstanding NCDs as on March 31, 2024 are disclosed in the ‘General Shareholder Information' forming part of this Annual Report.

Standalone Kev financial ratios

Particulars	As at March 31, 2024	As at March 31, 2023
Debtors Turnover Ratio (times)	14.40	14.77
Inventory Turnover Ratio (times)	3.34	3.62
Interest Coverage Ratio (times)	0.31	2.25
Current Ratio (times)	1.13	1.13
Debt Equity Ratio (times)	0.44	0.28
EBITDA Margin (%)	15.14	14.53
Operating Profit Margin (%)	4.10	5.03
Net Profit Margin (%)	(1.44)	1.13
Return on Net Worth (%)	(4.02)	3.97
Return on Average Capital Employed (%)	4.54	7.30

The formulae used in the computation of the above ratios are as follows:

Ratio	Formula
Debtors Turnover Ratio	Revenue from Operations/Average of opening and closing Trade Receivables
Inventory Turnover Ratio	Revenue from Operations/Average of opening and closing Inventories
Interest Coverage Ratio	Earnings Before Interest* and Tax/Finance Costs*
Current Ratio	Current Assets/Current Liabilities (excluding Lease Liabilities accounted as per Ind AS 116)
Debt Equity Ratio	Debt#/(Net Worth+ Lease Liabilities - Right of use assets)
EBITDA Margin	EBITDA/Revenue from Operations
Operating Profit Margin	Earnings Before Interest and Tax/Revenue from Operations
Net Profit Margin	Profit After Tax/Revenue from Operations
Return on Net Worth	Profit After Tax/Average net worth
Return on Average Capital Employed	Earnings Before Interest and Tax/Average Capital Employed

*Finance cost/interest comprise of interest expense on borrowing and excludes interest on lease liabilities and interest charge on fair value of financial institution.

#Debt = Borrowings (excluding Lease Liabilities accounted as per Ind AS 116) - Cash and Bank Balance (includes Fixed Deposit) - Liquid Investments.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in the key financial ratios:

1. Interest coverage ratio, Debt Equity ratio, Net profit margin, Return on net worth, Return on average capital employed has significantly changed due to variation in debt and profitability.

Consolidated performance

At consolidated level, your Company reported a revenue of ' 13,996 Crore (previous year” ' 12,418 Crore) and EBITDA of ' 1,703 Crore with EBITDA margin at 12.17% (previous year ' 1,617 Crore with EBITDA margin at 13.02%).

DIRECTORS’ RESPONSIBILITY STATEMENT

The audited financial statements of your Company for the year under review (“financial statements”) are in conformity with the requirements of the Companies Act, 2013 read with the rules made thereunder (“Act”) and the Accounting Standards. The financial statements reflect the form and substance of transactions carried out during the year under review and present your Company's financial condition and results of operations, fairly and reasonably.

Your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b)    accounting policies selected have been applied consistently and reasonable & prudent judgements and estimates were made, so as to give a true and fair view of the state of affairs of your Company as at the end of the year under review and the loss of your Company for the year under review;

c)    proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d)    the annual accounts of your Company have been prepared on a ‘going concern' basis;

e)    adequate internal financial controls were laid down and followed by your Company and such internal financial controls were operating effectively;

f)    proper systems have been devised by your Company to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively and

g)    the Company has been in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

SHARE CAPITAL

a) Equity share capital

Details of changes in paid-up share capital during the year under review, are as below:

Paid-up Equity Share Capital	' in Crore
At the beginning of the year, i.e., as on April 1, 2023	948.79
Changes made during the year: Allotments made pursuant to:
1.1. Employee Stock Option Scheme, 2013 & 2017	0.42
1.2. Preferential Issue*	65.80
At the end of the year, i.e., as on March 31, 2024	1,015.01

*During the year under review, the Company has received the balance 75% of the Warrant Issue Price aggregating to ' 1,425 crore.

b) Preference Share Capital

Details of changes in paid-up share capital during the year under review, are as below:

Paid-up Preference Share Capital	' in Lakhs
At the beginning of the year, i.e., as on April 1, 2023	50.50
Changes made during the year:
1. Redemption of Preference Shares
A. 5,00,000 8% Redeemable Cumulative Preference Shares of ' 10 each	(50.00)
B. 500 6% Redeemable Cumulative Preference Shares of ' 100 each	(0.50)
2. Allotment of Preference Shares
A. 11,10,000, 8% Non-Cumulative Non-Convertible Redeemable Preference Shares of ' 10/- each	111.00
At the end of the year, i.e., as on March 31, 2024	111.00

DISCLOSURES IN TERMS OF THE PROVISIONS OF THE ACT & SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 (“SEBI Listing Regulations”)

A. Board of Directors (“Board”)

(i)    Number of meetings

The Board met 5 (five) times during the year under review. The details of such meetings are disclosed in the Section ‘The Board of Directors' of the ‘Corporate Governance Report' forming part of this Annual Report.

(ii)    Appointments/Re-appointments and resignations

a)    Appointments/Re - appointments

During the year under review, no Director has been appointed/re-appointed.

b)    Resianations/Retirement by Rotation

(i)    During the year under review, no Director has resigned.

(ii)    In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Kumar Mangalam Birla, Non-Executive Director (DIN: 00012813), is due to retire by rotation at the ensuing Seventeenth Annual General Meeting and being eligible, has offered himself for re-appointment.

Resolution seeking his re-appointment alongwith his profile as required under Regulation 36(3) of SEBI Listing Regulations form part of the Notice of Seventeenth Annual General Meeting.

(iii)    Board evaluation

Your Company has revised the framework for performance evaluation of Board, its committees and individual directors in terms of the provisions of the Act, SEBI Listing Regulations and the Nomination Policy of the Company.

During the year under review, the Board carried out the evaluation of its own performance and that of its committees and the individual directors. The performance evaluation of Non-Independent Directors and the Board as a whole was carried out by the Independent Directors.

The evaluation process consisted of structured questionnaires covering various aspects of the functioning of the Board and its committees, such as composition, experience and competencies, performance of specific duties and obligations, governance issues etc. The Board also carried out the evaluation of the performance of individual directors based on criteria such as contribution of the Director at the meetings, strategic perspective or inputs regarding the growth and performance of the Company etc.

Further, pursuant to the applicable provisions of the Act, the performance evaluation criteria for the Independent Directors is disclosed in the Section ‘Directors Details as on March 31, 2024' of the Corporate Governance Report forming part of this Annual Report.

(iv) Declaration of independence

The Company has received necessary declaration from each Independent Director of the Company stating that:

(i)    they meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations (“said declarations”) and

(ii)    they have registered their names in the Independent Directors' Databank.

Based on the said declarations received from the Directors, the Board confirms, that the Independent Directors fulfill the conditions as specified under Schedule V of the SEBI Listing Regulations and are independent of the management.

B.    Committees of the Board

The Board has constituted five Committees, viz. Audit Committee, Corporate Social Responsibility Committee, Risk Management and Sustainability Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and is authorised to constitute other functional Committees, from time to time, depending on business needs.

Details of all the Committees, along with their charters, composition and meetings held during the year, are provided in the Section ‘The Board Committees' of the Corporate Governance Report forming part of this Annual Report.

C.    Corporate Social Responsibility (“CSR”)

The Board has, pursuant to the recommendation of the CSR Committee, with a vision “to actively contribute to the social and economic development of the communities in which your Company operates and in doing so, build a better, sustainable way of life for the weaker sections of society and raise the country's human development index”, adopted a CSR Policy and the same is available on the website of the Company i.e. www.abfrl.com

The scope of the CSR Policy is as under:

i.    Planning Project or programmes which the Company plans to undertake falling within the purview of Schedule VII of the Act and

ii.    Monitoring process of such project or programmes.

The CSR Policy of the Company inter alia includes the process to be implemented with respect to the identification of projects and philosophy of the Company, along with key endeavours and goals i.e.

•    Education - to spark the desire for learning and knowledge;

•    Health care - to render quality health care facilities to people living in the villages and elsewhere through our hospitals;

•    Sustainable livelihood - to provide livelihood in a locally appropriate and environmentally sustainable manner;

•    Infrastructure development - to set up essential services that form the foundation of sustainable development and

•    Social cause - to bring about the social change we advocate and support.

CSR initiatives taken during the year

Your Company's CSR activities are mainly focused towards Education, Health and Sanitation, Water, Digitisation, Sustainable livelihood, Institutional Building and Social Causes.

An annual report on CSR activities of the Company for the financial year 2023-24 is annexed as Annexure I to this Report.

D.    Key Managerial Personnel (“KMP”)

Pursuant to Section 203 of the Act, the KMPs of the Company as on March 31, 2024 are as below:

i.    Mr. Ashish Dikshit, Managing Director;

ii.    Ms. Sangeeta Tanwani, Whole-time Director;

iii.    Mr. Vishak Kumar, Whole-time Director;

iv.    Mr. Jagdish Bajaj, Chief Financial Officer and

v.    Mr. Anil Malik, Company Secretary and Compliance Officer.

E.    Remuneration of Directors and Employees

Disclosure comprising particulars with respect to the remuneration of Directors and employees, as required to be disclosed in terms of the provisions of Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure II to this Report.

The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary.

F.    Employee Stock Option Scheme and Share Based Employee Benefits

Grant of share-based benefits to employees is a mechanism to align the interest of the employees with those of the Company, to provide them with an opportunity to share the growth of the Company and also to foster long-term commitment.

Employee Stock Option Scheme and Restricted Stock Units

Your Company regards employee stock options as instruments that would enable the employees to share the value they create for the Company in the years to come. Accordingly, in terms of the provisions of applicable laws and pursuant to the approval of the Board and the members of the Company, the Nomination and Remuneration Committee (“NRC”) has duly implemented the following Schemes to grant the Employee Stock Options (“Options”) and Restricted Stock Units (“RSUs”), to the employees of the Company:

(a) ‘Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2017' (“Scheme 2017”) and

(b) ‘Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2019' (“Scheme 2019”).

All the Schemes of the Company i.e. Scheme 2017 and Scheme 2019 are governed by the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“SEBI SBEB & SE Regulations”) and in terms of the approvals granted by the shareholders of the Company. The NRC inter alia administers, implements and monitors the aforesaid Schemes, thereby governing the grant of share based benefits to its employees, in the form of Options and RSUs.

A certificate from the Secretarial Auditor of the Company, confirming that the aforesaid Schemes have been implemented in accordance with the SEBI SBEB & SE Regulations and will be open for inspection at the ensuing Annual General Meeting.

Stock Appreciation Rights

Your Company has also instituted Aditya Birla Fashion and Retail Limited Stock Appreciation Rights Scheme 2019' (“SAR Scheme 2019”) in the year 2019.

The SAR Scheme 2019, do not give rise to any right towards any equity share of the Company and hence, they are not covered under the provisions of SEBI SBEB & SE Regulations. On exercise of the SARs granted under the said plan/scheme, the employee exercising the SARs becomes entitled to receive cash, in terms of the SAR Scheme 2019.

In terms of the provisions of Regulation 14 and Part F of Schedule I of the SEBI SBEB & SE Regulations, details of Scheme 2017 and Scheme 2019 are available on the website of the Company i.e. www.abfrl.com.

G. Related Party Transactions (“RPTs”)

All RPTs entered into during the year under review were approved by the Audit Committee, from time to time and the same are disclosed in the financial statements forming part of this Annual Report. Pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board has, on recommendation of its Audit Committee, adopted a Policy on RPT and the said policy is available on the website of the Company i.e. www.abfrl.com.

Further, in terms of the provisions of Section 188(1) of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the SEBI Listing Regulations, all contracts/arrangements/transactions entered into by the Company with its related parties, during the year under review, were:

•    in “ordinary course of business” of the Company,

•    on “an arm's length basis” and

•    not “material”.

All transactions with related parties are in accordance with the RPT Policy formulated by the Company.

Accordingly, Form No. AOC-2, prescribed under the provisions of Section 134(3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, for disclosure of details of RPTs, which are “not at arm's length basis” and also which are “material and at arm's length basis”, is not applicable and hence does not form part of this Report.

H.    Dividend Distribution Policy

In terms of Regulation 43A of the SEBI Listing Regulations, your Company has formulated a Dividend Distribution Policy, with an objective to provide the dividend distribution framework to the Stakeholders of the Company. The policy sets out various internal and external factors, which shall be considered by the Board in determining the dividend pay-out. The policy is annexed as Annexure III to this Report and is also available on the website of the Company i.e. www.abfrl.com

I.    Strategic Initiatives during the year

a) Acquisition of TCNS Clothing Co. Ltd (“TCNS”):

c) Strategic partnership with Christian Louboutin SAS

On September 12, 2023, the Company had incorporated a new entity, CLI Footwear and Accessories Private Limited (“CLI Footwear”), in partnership with Christian Louboutin SAS to build formidable luxury brand portfolio and footwear, supplementing fashion apparel in its portfolio. The Company invested ' 6.83 Crore during the year under review in CLI Footwear.

J. Proceeds from Rights Issue, Preferential Issue and NCDs:

The utilization of funds raised have been mentioned hereunder:

R in Crore)

Event Date	Details
May 5, 2023	the Board had approved the: •    acquisition of TCNS through a combination of transactions, involving secondary acquisition from the former promoters/ members of the promoter group of TCNS by way of entering into a Share Purchase Agreement with them and Conditional Open Offer (“Open Offer”). •    draft Scheme of Amalgamation by way merger (by absorption) of TCNS with the Company (“Schem”), subject to the completion of above transactions and necessary approvals.
June 27, 2023	Competition Commission of India has accorded its approval for the above acquisition.
September 26, 2023	Completed the acquisition of 29% of the Expanded Share Capital under Open Offer and 22% under Share Purchase Agreement, thereby TCNS became the subsidiary of the Company.
March 14, 2024 & March 15, 2024	Received “No Observation letters” from BSE Limited and National Stock Exchange of India Limited on March 14, 2024 and March 15, 2024 respectively on draft Scheme.
April 26, 2024	National Company Law Tribunal, Mumbai (“NCLT”) has directed both the companies to convene the meeting of equity shareholders for seeking approval on the Scheme.
May 3, 2024	Notice was dispatched to the shareholders for convening the meeting of equity shareholders on June 5, 2024 at 11:30 a.m.

b) Conversion of Warrants in Equity Shares:

On March 11,2024, the Board had approved the allotment of 6,58,00,866 equity shares of face value of ' 10/- each at issue price of ' 288.75/- per equity share (including a premium of ' 278.75 per equity share), aggregating to    1,425 Crore (being 75% of the

warrant issue price), to Caladium Investment Pte. Ltd on preferential basis, pursuant to the conversion of warrants in the ratio of 1 equity shares in lieu of 1 warrant.

Mode	Object	Amount allocated	Amount utilized
Rights Issue	Repayment of certain borrowings of the Company	745.00	745.00
Â	General corporate purpose	244.26	242.51
Preferential Issue	Strengthening the balance sheet, pursue growth in existing business, expand new lines of business, strengthen digital and omni-channel	2,195.00	770.00 1,425.00*
NCDs	Refinancing of existing debt and General corporate purpose	750.00	750.00

*Amount received pursuant to conversion of warrants into equity shares on March H, 2024.

There has been no deviation in the use of proceeds of the Rights Issue, Preferential Issue and NCDs (“aforesaid Issues”) from the objects stated in the respective Offer documents as per Regulation 32 of SEBI Listing Regulations. The Company has been disclosing on a quarterly basis to the Audit Committee, the uses/application of proceeds/funds raised from the aforesaid Issues and also filed with the Stock Exchanges on a quarterly basis, as applicable.

K. Subsidiaries, Joint Ventures, Associate Companies

During the year under review:

•    TCNS Clothing Co. Limited became subsidiary of the Company w.e.f. September 26, 2023 and

•    Styleverse Lifestyle Private Limited became step down subsidiary of the Company w.e.f. October 30, 2023.

After end of the financial year, on April 9, 2024, Aditya Birla Lifestyle Brands Limited has been incorporated as wholly owned subsidiary of the Company.

Pursuant to the provisions of Section 129(3) of the Act, read with the Companies (Accounts) Rules, 2014 and in accordance with applicable accounting standards, a statement containing the salient features of financial statements of your Company's subsidiaries and associate in Form No. AOC-1 is annexed as Annexure IV to this Report.

In accordance with the provisions of Section 136 of the Act and the amendments thereto and the SEBI Listing Regulations, the audited financial statements, including the

consolidated financial statements and related information of the Company and financial statements of your Company's subsidiaries, joint ventures/associate companies have been placed on the website of your Company viz. www.abfrl.com.

Your Company has formulated a Policy for determining Material Subsidiaries. The said policy is available on the website of the Company i.e. www.abfrl.com. Your Company has One material subsidiary i.e TCNS Clothing Co. Limited. The details of material subsidiary are disclosed in the ‘General Shareholders Information' forming part of this Annual Report.

L.    Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Your Company consciously makes all efforts to conserve energy across all its operations. A report containing details with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed in terms of Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, is annexed as Annexure V to this Report.

M.    Vigil Mechanism

The Board, on recommendation of its Audit Committee, has adopted a Vigil Mechanism/ Whistle Blower Policy and the details of which are provided in the Corporate Governance Report forming part of this Annual Report.

Adequate safeguards are provided against victimization to those who avail the mechanism and direct access to the Chairperson of the Audit Committee is provided to them. The details of establishment of Vigil Mechanism is also available on the website of the Company i.e. www.abfrl.com

N.    Risk Management

Your Company has framed and implemented a Risk Management Policy in terms of the provisions of Regulation 21 of the SEBI Listing Regulations, for the assessment and minimization of risk, including identification therein of elements of risk, if any, which may threaten the existence of the Company.

The policy is reviewed periodically by the Risk Management and Sustainability Committee along with the key risks and related mitigation plans. More details on risks and threats have been disclosed hereinabove, as part of the Management Discussion and Analysis.

Further, in view of the ever-increasing size and complexity of the business operations, your Company is exposed to various risks emanating from frauds. Accordingly, the Board, on recommendation of the Audit Committee, has adopted an Anti-Fraud Policy and a Whistle Blower Policy, to put in place, a system for detecting and/or preventing and/or deterring and/or controlling the occurrence of frauds.

O.    Nomination Policy and Executive Remuneration Policy/Philosophy

In terms of Section 178 of the Act and Regulation 19 of the SEBI Listing Regulations, the Board of your Company, on recommendation of the NRC, had adopted a Nomination Policy, which inter alia enumerates the Company's policy on appointment of directors, KMPs and senior management. Further, the Board, on recommendation of NRC, had also adopted a policy entailing Executive Remuneration Philosophy, which covers Remuneration Philosophy covering the directors, KMPs, senior management and other employees of the Company.

Both the aforesaid policies, as amended from time to time pursuant to the amendments in the applicable regulatory provisions, are available on the website of the Company i.e. www.abfrl.com

Salient features of the aforesaid policies are as under:

(a)    Nomination Policy

The Nomination Policy is enacted mainly to deal with the following matters, falling within the scope of the NRC to:

•    institute processes which enable the identification of individuals who are qualified to become Directors and who may be appointed as KMPs and/or in senior management and recommend to the Board of Directors their appointment and removal from time to time;

•    devise a policy on board diversity;

•    review and implement the succession and development plans for managing director, executive directors and officers forming part of senior management;

•    formulate the criteria for determining qualifications, positive attributes and independence of directors;

•    establish evaluation criteria of Board, its committees and each director and

•    recommend the Board, all remuneration, in whatever form, payable to senior management.

(b)    Executive Remuneration Policy/Philosophy

This Policy supports the design of programmes that align executive rewards - including incentive programmes, retirement benefit programmes, promotion and advancement opportunities - with the long-term success of the Stakeholders of the Company.

The executive remuneration program of the Company is designed to attract, retain, and reward talented executives who will contribute to our long-term success and thereby build value for our shareholders and intends to:

•    provide for monetary and non-monetary remuneration elements to our executives on a holistic basis and

•    emphasize “Pay for Performance” by aligning incentives with business strategies to reward executives who achieve or exceed Group, business and individual goals.

P. Business Responsibility and Sustainability Report

Your Company's sustainability initiatives are aligned with the Aditya Birla Group's sustainability vision, which mainly comprises of responsible stewardship, stakeholder engagement and future-proofing. Accordingly, under the aegis of the Aditya Birla Group's sustainability vision, your Company is strengthening its ‘ReEarth' programme, to design a roadmap, which will align with the group level sustainability policies and international frameworks.

Through this mission, we hope to create a future ready organisation, which can pre-empt imminent challenges and address the needs of all stakeholders.

In accordance with our sustainability vision and in terms of Regulation 34(2)(f) of the SEBI Listing Regulations, a ‘Business Responsibility and Sustainability Report' forms part of this Report.

Q.    Auditors and Auditors Report

(i)    Statutory Auditor

Price Waterhouse & Co Chartered Accountants LLP (FRN: 304026E/E-300009), were appointed as the Statutory Auditors of the Company at the 14^th Annual General Meeting (“AGM”), for a term of five consecutive years, till the conclusion of the 19^th AGM to be held in the year 2026.

Further, the Auditors' Report “with an unmodified opinion”, given by the Statutory Auditors on the financial statements of the Company for financial year 2023-24, forms part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Statutory Auditors in their Report for the year under review.

The notes to the financial statements are self-explanatory and do not call for any further comments.

(ii)    Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act, M/s. Dilip Bharadiya & Associates, Company Secretaries (FRN: P2005MH091600), were appointed as the Secretarial Auditor of the Company, to conduct secretarial audit for the year under review.

The Secretarial Audit Report given by the Secretarial Auditor of the Company is annexed as Annexure VI to this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditor in his Report for the year under review.

(iii)    Cost Auditor

During the year under review, your Company was not required to maintain cost records under Section 148(1) of the Act. Hence, the provisions related to appointment of Cost Auditor is not applicable.

Further, no fraud in terms of the provisions of Section 143(12) of the Act, has been reported by the Auditors in their reports for the year under review.

R.    Material changes and commitment affecting financial position of the Company which have occurred between the end of the Financial year, to which the financial statement relates, and the date of the Report

Demerger of Madura Fashion & Lifestyle business of the Company:

a.    On April 19, 2024, the Board have considered and approved the Scheme of Arrangement amongst the Company (“Demerged Company”) and Aditya Birla Lifestyle Brands Limited (“Resulting Company”) and their respective shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 (“Scheme”), subject to necessary statutory and regulatory approvals.

b.    The Scheme, inter alia, provides for demerger, transfer and vesting of the Madura Fashion and Lifestyle Business from the Demerged Company into the Resulting Company on a going concern basis and issue of equity shares by the Resulting Company to the equity shareholders of the Demerged Company, in consideration thereof.

c.    The Company has made application to the Stock Exchanges for its “No Observation” letter.

S. Other Disclosures

In terms of the applicable provisions of the Act and SEBI Listing Regulations, your Company

additionally discloses that, during the year under review:

•    there was no change in the nature of business of your Company;

•    it has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2024, there were no deposits which were unpaid or unclaimed and due for repayment, hence, there has been no default in repayment of deposits or payment of interest thereon;

•    it has not issued any shares with differential voting rights;

•    it has not issued any sweat equity shares;

•    no significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status operations of your Company in future;

•    it has not transferred any amount to the Reserves;

•    it has not raised any funds through qualified institutions placement as per Regulation 32(7A) of SEBI Listing Regulations;

•    it does not engage in commodity hedging activities;

•    it has not made application or no proceeding is pending under the Insolvency and Bankruptcy Code, 2016 and

•    it has not made any one-time settlement for the loans taken from the Banks or Financial Institutions.

It is further disclosed that:

•    there is no plan to revise the financial statements or directors' report in respect of any previous financial year.

•    particulars of the loans, guarantees and investments as required under Section 186 of the Act are disclosed in the financial statements of your Company for the year under review and

•    details pertaining to unclaimed shares demat suspense account of your Company are disclosed in the ‘General Shareholders' Information' forming part of this Annual Report.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the SEBI. The report on Corporate Governance as stipulated under the SEBI Listing Regulations forms part of this Annual Report.

Your Company has duly complied with the Corporate Governance requirements as set out under Chapter IV of the SEBI Listing Regulations and M/s. Dilip Bharadiya & Associates, Company Secretaries, vide their certificate dated May 28, 2024, have confirmed that the Company is and has been compliant with the conditions stipulated in the Chapter IV of the SEBI Listing Regulations. The said certificate is annexed as Annexure VII to this Report.

ANNUAL RETURN

Pursuant to the provisions of Sections 92(3) and 134(3)(a) of the Act and the Companies (Management and Administration) Rules, 2014, the Annual Return in Form no. MGT-7 is available on the website of the Company i.e. www.abfrl.com

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has put in place adequate internal control systems that are commensurate with the size of its operations. Internal Control system comprise of policies and procedures, which are designed to ensure sound management of your Company's operations, safekeeping of its assets, optimal utilisation of resources, reliability of its financial information, and compliance.

DISCLOSURES PURSUANT TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has in place a policy on Prevention of Sexual Harassment at Workplace, which is in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”). The objective of this policy is to provide an effective complaint redressal mechanism if there is an occurrence of sexual harassment.

This policy is applicable to all employees, irrespective of their level and it also includes ‘Third Party Harassment' cases i.e. where sexual harassment is committed by any person who is not an employee of the Company.

Your Company has also set up Internal Complaint Committee(s) at each of its administrative office(s) which are duly constituted in compliance with the provisions of the POSH Act. Further, the Company also conducts interactive sessions for all the employees, to build awareness amongst employees about the policy and the provisions of POSH Act.

During the year under review, the Committee has received 24 complaints, all of which were resolved with appropriate action.

AWARDS AND RECOGNITIONS

Your Company has been a proud recipient of many awards and recognitions during the year under review and significant ones amongst them are as under:

Retail & Apparel Recognition:

•    National Retailer and Apparel Retailer of the Year (IRec Awards 2023), organized by IndianRetailer.com.

Brand & Marketing Accolades:

•    Pantaloons:

a.    Won Best Loyalty Program, Best Brand to Brand Partnerships in Loyalty and Best Offer and Incentive Design in Loyalty at the Customer Fest Awards 2024.

b.    Won Gold for Retail Advertising & Bronze for Best OOH Activation at the E4M NEON Awards.

c.    Won Excellence Award - Adult Fashion at the Disney India Showcase 2024.

d.    Won The Images Most Admired Experiential Retail Concept at the India Fashion Forum 2024.

•    Van Heusen Innerwear won Best Innerwear Brand at Tech Threads 2023.

•    Allen Solly was featured as the Most Trusted Formalwear Brand in the TRA's Brand Trust Report 2024.

•    Mr. Sabyasachi Mukherjee was honored as “Designer of the Decade” at the India Fashion Award organized by FDCI.

•    Mrs. Masaba Gupta was the Winner at the Vogue Forces of Fashion 2023 and won a Fortune 40 Under 40 Award 2023.

Sustainability Leadership:

•    Achieved the rank of Asia's Most Sustainable Company and 8th Rank on a Global Level in the Textiles, Apparel and Luxury Goods category at the S&P DJSI-Corporate Sustainability Assessment (CSA).

•    Won a special mention at the Grow Getters Award 2024 as part of the ABG SustainAbility Conference 2024 for the Coffee Table Book “Dhaage” detailing our CSR journey.

•    Runner-Up for the “Waste To Wealth” Campaign at the Grow Getters Awards 2024 as part of the ABG Sustain-Ability Conference 2024.

•    Won the CSR - ESG Leadership Award at the 15^th Global CSR & ESG Summit 2023.

•    Little England Apparels and the Pantaloons South Warehouse achieved an International Safety Award each from the British Safety Council for ‘demonstrating a strong commitment to good health and safety management.'

•    Haritha Apparels Ltd. won the Gold Award issued by the International Research Institute for Manufacturing India in May 2023 as part of the India Green Manufacturing Challenge.

•    Crafted Clothing Ltd. (CCL) and Haritha Apparels Ltd. (HAL) achieved the LEED Platinum certification with a score of 81, winning a ‘Zero Water Award'along with becoming certified green businesses under the LEED Green Building standards in October 2023.

•    Crafted Clothing Ltd. (CCL) won awards for “Most Innovative Project” and “Most Useful Project.” at the CII National Award for Environmental Best Practices.

•    Europa Garments Ltd. (EGL) received the “Sustainable Winner Award” from SuperDry on May 11, 2023, recognizing EGL as the “Most Sustainable Company” for its outstanding performance and initiatives.

•    Madura Clothing won 40 Chapter Conventional on Quality Concept (CCQC) Awards for its “Kaizen & Poka Yoke Concepts” at Quality Circle Forum of India (QCFI) in 2023 -24

Employee Well-being & Safety:

•    Madura Manufacturing won the EFI-CII National Award on Excellence in Employee Relations 2023 in December 2023 from the Employer Federation of India and Confederation of Indian Industries (EFI-CII) for prioritizing people in its policies, systems, and processes.

•    Fashion Crafted Ltd. (FCL) and Haritha Apparels Ltd. (HAL) Units were certified as one of the “Top 25 Safest Places to Work in India” by KelpHR POSH Awards 2023 for ensuring a safe workplace for all.

•    Alpha Garments Ltd. (AGL) was awarded second place in the Best Garment Industry Award from the Department of Factories and Boilers during the 53rd National Safety Day Celebration on March 4, 2024.

•    Classical Menswear Ltd. (CML) & Little England Apparels Ltd. (EGL) won the Uttama Surasksha Puraskara Safety Award from the National Safety Council Karnataka & Tamil Nadu Chapter Safety Award 2023 for their excellent management systems and safety performance.

•    Best Welfare Officer Award given to Ms. Ankitha JK, Employee Welfare Officer at Europa Garments Ltd (EGL), from the Government of Karnataka on March 4, 2024, for her exceptional empathy and dedication to creating a supportive workplace.

PR & Communication Excellence:

•    Silver in Best Public Relations - ASSOCHAM Awards 2024, for Jaypore's “Reclaim Your Roots” campaign.

•    Platinum In-House Journal (Print) - PRCI Excellence Awards 2023, for ABFRL's “In Touch” Newsletter.

•    Platinum in Purpose Driven Communication Campaign, won at the 13th Public Relations Council of India (PRCI) Excellence Awards 2023, for ABFRL's CSR Coffee Table Book, “Dhaage”.

•    First Prize at the PRSI National Awards 2023 at the International Public Relations Festival 2023, for ABFRL's CSR Coffee Table Book, “Dhaage”.

•    Silver in Best Storytelling at the 3rd STAKES Awards for PR & Communication 2023, for ABFRL's CSR Coffee Table Book, “Dhaage”.

ACKNOWLEDGEMENT

We take this opportunity to thank all the customers, members, investors, vendors, suppliers, business associates, bankers and financial institutions for their continuous support. We also thank the Central and State Governments and other regulatory authorities for their cooperation.

We acknowledge the patronage of the Aditya Birla Group and above all, we place on record our sincere appreciation for the hard-work, solidarity and contribution of each and every employee of the Company in driving the growth of the Company.

For and on behalf of the Board of Directors

Ashish Dikshit    Sangeeta Tanwani

Place : Mumbai    Managing Director    Whole-time Director

Date : May 28, 2024    DIN: 01842066    DIN: 03321646

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Mar 31, 2021

The Company's directors hereby present the Fourteenth Annual Report together with the audited financial statements of the Company for the financial year ended March 31,2021 ("year under review/ FY 2020-21").

MANAGEMENT DISCUSSION AND ANALYSIS

Overview

This year began with the advent of the pandemic, where most of the businesses had to face challenges brought upon by lockdowns, human distress and deeply impacted consumer confidence. In view of the imminent challenges at hand, the top near-term priorities for policy makers became:

(i)    Controlling the spread of COVID-19 and;

(ii)    Ensuring rapid and widespread vaccine deployment.

It is expected that aggressive vaccination rollout may contain the virus' spread and allow governments worldwide to ease restrictions; encouraging a gradual but definite return to regular economic activities. As experienced in other parts of the world such as US and UK, rapid vaccinations that started in late December 2020 had a direct impact on stimulating the consumption economy. Though there were pockets of COVID resurgence in the interim all across the globe, swift actions by the governments helped curb the spread. As we look forward, markets would expect to see a boom in consumption and spending post this phase, as has been the case, historically, post every global recession.

Global Economy Overview

According to the IMF's April 2021 World Economic Outlook, the global economy is projected to grow 6% in 2021, up from its 5.5% forecast in January 2021. Similarly, as per OECD economic outlook global economic growth is now expected to be 5.8% this year, a sharp upwards revision from the December 2020 Economic Outlook projection of 4.2% for 2021. Differences in the strength of economic recovery across countries are being driven by the extent of government support towards public health and vaccination policies, along with coordinated multi-pronged aggressive monetary policy response across the world; given most of the economies were comfortable in terms of inflation prior to this pandemic.

Indian Economy Overview

A strong rebound in economic activity is likely in India soon. India's GDP was initially anticipated to fall by 8%, which ended up declining by 7.3% in FY21. India's focus on implementing stringent measures towards saving lives and livelihoods has helped the Indian economy rebound faster than the other emerging markets. In 2020, monetary easing, supportive financial regulation and

fiscal support were deployed to counter the recessionary effects of the lockdown. CPI Inflation was expected to touch 5% in Q4 FY21 but ended up crossing the 5.5% mark and is expected to stabilise at 5.3% in Q4 FY22.

India has an advantage that its domestic consumption share (measured as Private Final Consumption Expenditure - PFCE) in its GDP is ~60%. This high share of private consumption in the GDP not only insulates India from the vagaries of global economy, but it also implies that a sustainable high economic growth in India directly translates to a sustained consumer demand for merchandise and services. Furthermore, with the Government enhancing capital expenditure, vaccination drive and relentlessly pushing forward on long-pending reform measures, improvement and strengthening of industrial activities should follow.

Outlook: Cautious Optimism, as we step into FY22

India's economy has shown signs of a strong recovery towards the end of 2020. The economy was poised to head towards rapid economic recovery in the medium to long-term. However, a combination of sharp handling of the lockdown and a regulated fiscal stimulus has allowed a quick resumption of economic activity. Risks to this recovery are inflation, unemployment and sluggish pace of vaccinations.

India's long-standing fundamentals continue to be robust, with a predominantly young population, growing urbanization, increasing participation of women in the workforce, rising disposable income, discretionary spending and growing middle-class. This is further fuelled by exploring untapped business potential in the semi-urban and rural economy, reform focused governance, and improving ease of doing business in the country. The Government's continued focus on infrastructure creation and enhancing indigenous expertise are other big positives.

India's growth forecast for FY22 is pegged at a spectacular 9.9% as observed by the Organisation for Economic Co-operation and Development ("oecd"), one of the highest among major economies. The Economic Survey 2020-21 projected the economy to grow 11.5% in the fiscal year FY22, higher than the RBI's projection of 9.5%.

Global Apparel Industry

Amidst shifting consumer behaviours and accelerating digital demand, the fashion industry is gearing for the next normal, while bringing in transformation and innovation at the core of its business strategy. Agility and flexibility would be the key change management principle for fashion retailers with operational resilience being another.

Digital channels will continue to be the primary driver of growth in the apparel retail industry. Brands are rethinking store formats to make them Omni-channel enabled, leveraging data and analytics to predict footfall, managing assortments and building personalized offerings. Armed with fresh customer insights, companies have reset their long-term strategies and are redirecting investment into opportunities that have sprouted during the outbreak of the pandemic. However, the underlying principle on consumer centricity remains the same, and brands will need to evolve with consumers, while staying true to their identity.

Global apparel market is close to 2.3% of world GDP with Europe, USA and China being the largest markets. Global apparel market shrunk during the last year and is expected to reach to pre-Covid levels soon.

The Indian Apparel Industry

The Indian textiles and apparel industry is the 6^th most prominent globally, with an estimated size of USD 70 Billion, and contributing nearly 4% to the global pie. It employs over 45 million people and is the 5^th largest exporter of textile and apparel in the world with exports worth USD 36.4 billion. The pandemic has accelerated many trends in this space. The apparel retail industry's shift from unorganised to organised has become quicker, as aspirations for better fashion and brands is being coupled with wider and deeper supplies.

As pandemic forced people to stay at home, online apparel sales surged during the first half of the year, prompting many brands to fast-track digitization and offer e-commerce solutions. Moreover, brands leveraging technology would boost the overall industry with supply-side innovations, enhanced manufacturing capabilities, and efficient warehousing and distribution. Furthermore, going forward, aspects such as sustainability will continue to be one of the key points of differentiation that will drive aspirations back for brands.

Outlook: Indian Apparel Segment

The Indian apparel market is the 2^nd largest retail market after food and grocery. Domestic apparel players are expected to start seeing recovery towards the latter part of FY22. Growth in all apparel segments such as athleisure, active wear, casual wear and innerwear will gain aggressive momentum and provide opportunities to scale branded play.

Key Trends in the Indian Apparel Industry1. Digitalization is creating new opportunities across the value chain

In the new world, digital ecosystem will become increasingly crucial for brands to keep in touch

with consumers and understand their requirements. The adoption of digital technologies would help tackle multiple challenges and strengthen several aspects of the industry. Digitalisation will sweep through sourcing, designing, warehousing, cataloguing, transportation and all other touch points in the value chain of online commerce.

Brands are now exploring multiple channels to maximize sales, whether through brick and mortar and pop-up stores, smartphone apps, or desktop websites. The idea is to provide a seamless experience across various platforms, while building continued engagement. Omnichannel models are built around this thesis and they will gradually become the mainstay of business models across consumer businesses, not just fashion and apparel.

As e-commerce extends itself, fashion retailers are focusing on leveraging technologies to provide a seamless virtual shopping experience. These initiatives are designed to track their consumer journey and offer multitude of influencing and transaction avenues. Furthermore, automation methods, such as using sales CRM software, can improve the efficiency of customer management initiatives by sending more personalized and relevant communications to customers. Digital marketing expenditures are expected to increase and a considerable thrust would be put to leverage all possible digital channels to attract customers, drive sales, and, most importantly, continue building the brand.

2. The Indian ethnic wear market is rapidly evolving

In last 4 -5 years, the rising Indian diaspora to a rise in Indian pride and trust within products of Indian origin is driving the Indian ethnic wear market, that is expected to reach ' 1.70 trillion by 2023 from a market size of ' 925 billion in 2018. Other than impetus on overall premiumization of category, this boost can also be attributed to the recession-proof wedding wear market, further augmented by increased consumption of ethnic wear for special occasions, traditional festivals and even work wear.

Ethnic wear comprises the largest segment in the women's apparel category, accounting for more than 74% market share. Interestingly, more than 75% of this sector is currently unorganized. Another interesting shift visible in the ethnic wear segment is the rise of men's ethnic wear. While Ethnic wear accounts for 70.7% of the total womenswear market of USD 21.2 billion, the same accounts for only 6.6% of USD 23.5 billion in menswear, leaving a significant headroom for expansion of this category. This consumption pattern will be driven by rising disposable incomes, awareness through social media, and increased number of special occasions.

3.    Active wear & athleisure is the new trend

India has the largest youth population, with the lowest median age across developed and developing nations. This, aided with a general propensity towards healthier lifestyles and engagement with activities related to fitness, athleisure and active wear have emerged as a new apparel category across segments and price points. The category has also gained prominence due to the new "work from home" setting brought upon by the impact of the pandemic. The growth in this category will continue long after the impact of the pandemic recedes and hence it's a permanent shift that way.

4.    Reaching the wider India: The 'Bharat' opportunity

For decades, metro cities have attracted small town shoppers, given the prevalence of trends; quality of retail and creation of popular shopping destinations. However, with increasing social media influence, the demand for better quality products and latest fashion trends is continuously increasing in the smaller towns along with rising aspirations for branded merchandise. Looking at tremendous untapped potential, brands are now foraying into these markets aggressively.

5.    Rising Youth fashion

The new generation of consumers, have the desire, passion and want for fashionable lifestyle that exudes confidence and style. They display a strong willingness to spend and are highly discerning about "best-in-class" offerings in every consumption category. Catering to these new consumers is a great Opportunity.

6.    Women's Wear and Kid's wear as growth driver

The global women's apparel market is expected to grow at 5% between 2021-2025. An increase in the number of working women, their higher say in decision making and higher ability to spend are driving growth in women's fashion and lifestyle categories.

Kids wear is a significant part of the fashion industry and is presently growing at a CAGR of 5.9% in India. The kids wear segment accounting for almost 18% of India's total apparel market, provides an enormously lucrative opportunity for the Indian kids' apparel industry. The increased spending-capacity of the average Indian parent, affinity towards brands and online shopping are fundamental reasons for this growth.

7.    Value fashion - the largest growth opportunity

Value fashion is a promising segment in fashion retail, spreading across a broader customer base and varied geographies driven by aspirational consumers who are price conscious. Popular and mass-priced products constitute over 75% of the total fashion market in India. This is one of the fastest growing segments and as unorganised fashion shifts much more swiftly towards organised, this segment is expected to gain heavily. The drivers for this category are quality and value-for-money products that can cater to the regional choices.

Business overview

Your Company is India's largest pure-play fashion and lifestyle entity with an elegant bouquet of leading fashion brands and retail formats.

A) Madura Segments

Madura Fashion and Lifestyle ("mfl") segment includes Lifestyle Brands, Youth Western Fashion, Active Athleisure Innerwear and Super Premium Brands. MFL reported a revenue of ' 3,405 Crore down by 37% the previous year. The EBITDA margin was positive 10.7% at ' 365 Crore compared to ' 746 Crore in FY20. MFL continued with expansion of its presence in the retail channel by opening new stores and ends the year with 2,866 exclusive brand outlets.

Lifestyle brands

Your Company's Lifestyle brands house four of India's iconic apparel brands, addressing diverse customer needs in a unique way:

•    Louis Philippe: To inspire the quest for excellence

•    Van Heusen: To make professionals fashionable and trendy

•    Allen Solly: To encourage unconventional thinking in your workplace

•    Peter England: To bring alive authenticity and trust in our relationships

Each of the brands continued to dominate in their respective segments. The Business added around 380 new stores last year. The brands also expanded their loyal customer base to include over 22.4 million satisfied customers, gaining their trust by providing high-quality products and superb retail experience.

Lifestyle business, at the back of its strong brand portfolio, has gained share from its competition. With revamping its back-end operations through digitalization, the business has not only innovated on how to reach customers, but also has made significant stretches from its core proposition to create contextual fashion products such as WFH wear.

E-Commerce sales continued to rise significantly for the division; with the brands being available across all leading e-commerce platforms. Your Company's deep partnership with E-Commerce platforms, along with significant fillips to its own website, is expected to sharply improve the overall share of ecommerce channel.

Overview of Key performance indicators ("KPis"):

Lifestyle brands	FY17	FY18	FY19	FY20	FY21
Walk-ins (Crore)	0.79	0.82	0.79	0.72	0.39
Conversion	44%	46%	50%	55%	83%
Average selling price (“asp")	1,639	1,747	1,714	1,626	1,680
Average bill value ("abv")	3,701	4,211	4,256	4,072	3,693
Items per bill	2.3	2.4	2.5	2.5	2.2
like-to-like (“ltl") volume growth	-7%	8%	4%	3%	-9%
LTL ASP growth	2%	0%	1%	1%	-11%
LTL value growth	-5.7%	8.6%	5.3%	4.5%	-19.6%

The new growth levers identified by the Business, i.e., women's wear and kids wear businesses, and the Peter England small town format made a significant mark during the year. After successfully crossing the 300+ stores milestone for PE small town format, the Lifestyle Brands Business has now piloted a similarly modelled small town format for Allen Solly across select markets. This aggressive expansion into newer Indian towns and cities has further augmented your Company's strong distribution network.

Lifestyle aspires to become a significant portfolio of iconic brands spread across all important occasions and price points.

VH Active wear, Athleisure and Innerwear

Your Company forayed into the innerwear and athleisure space in 2016 through its iconic lifestyle brand Van Heusen. The brand has gained a strong foothold, with the product now selling across more than 23,000 outlets, key departmental stores, and large e-commerce platforms. The brand is known distinctively for its innovative products, premium imagery, and wide range. Market leading product innovations in both men's and women's segments have resulted in greater acceptance among consumers. The post-pandemic recovery has been one of the best in this category as demand for loungewear, athleisure and innerwear grew rapidly in cities and towns. This was driven by increasing number of people working from homes and fuelling the demand for casual comfortable attire all day long.

Innerwear and Athleisure saw volumes grow at a higher pace and continued their aggressive growth despite the pandemic. Furthermore, your Company has made significant investments in digitizing back-end operations and supply chain to enhance distributor relationship. Trade outlets significantly increased from 20,000 to over 23,000 this year. Exclusive Brand Outlet ("ebo") expansion as well has accelerated over FY20 in FY21. The e-commerce channel in these categories grew by 153% over last year. This was possible with an increased acceptance of Men's wear and Women's wear in these categories.

Women's innerwear has scaled well in FY21, creating a strong brand equity with its innovative products and superior quality. It is emerging as one of the most popular choices for customers in branded women's innerwear and loungewear category.

Through a strong brand extension to both men and women segments, laying down the large and deep trade network, continuous product innovation that led to customer winning products, your Company has created a strong foundation of future business growth.

Youth Western Fashion

Forever 21 continues to remain a preferred brand for young, fashionable consumers through its high fashion, sharply priced merchandise.

During the year, your company worked closely with its global parent entity to roll out favourable terms of operations and ensured alignment towards quicker profitability for the business. The brand has redesigned its business model by moving to 100% local sourcing, making it easily scalable in India.

American Eagle is on the path to become a formidable player in the denim category, given its rising brand prominence and product excellence. The brand constantly focussed on product freshness and taking merchandise online through e-commerce channel, which has led to a strong growth and acceptance among its consumers. It has established itself as a premium denim brand, growing both offline and online on the strength of its excellent product.

Super Premium Brands

The Global brands portfolio includes 'The Collective', one of India's largest multi-brand retailer of luxury brands and select mono brands such as the super-premium brand Ralph Lauren and the iconic British brands Fred Perry, Ted Baker and Hackett London.

The business in premium and super premium segment remained most resilient during the year. This year, The Collective has significantly transformed its e-commerce operations through a focused improvement in this channel, resulting in its e-commerce revenue increasing to more than ten-times of previous year, at the back of a revamped supply chain strategy and distribution. The category showed increased traction among consumers online and would continue to enhance its appeal in future as well.

B) Pantaloons

Pantaloons has been one of the strongest brand in the Indian fashion retail industry over the past two decades. The brand offers fashionable clothing and accessories with superior quality and freshness to the Indian middle class consumers across the length and breadth of the country. It has built one of India's widest retail network with more than 340 large format stores. This year, Pantaloons focused on growing Pantaloons.com, its online store. With good design capabilities, innovative product development, agile supply chain and customercentric processes, Pantaloons delivers an enhanced Omni-channel shopping experience to its customers.

Pantaloons reported an annual revenue of ' 1859 Crore, down by 47% from last year, while the EBITDA stands at ' 276 Crore compared to ' 563 Crore last year. The EBITDA margin was a positive 14.8% for FY21.

In line with its strategy to increase its private label share, Pantaloons launched new categories including Home, Sarees, Bags and other Accessories and has also unveiled exclusive brands in women's ethnic wear.

Pantaloons exited FY21 with a total of 346 stores, adding 19 new stores in the year.

Overview of KPIs¹:

Pantaloons	FY17	FY18	FY19	FY20	FY 21
Walk-ins (Crore)	4.7	4.6	5.4	5.7	2.3
Conversion	22.6%	22.4%	24.3%	26.1%	31.5%
ASP	668	665	643	665	649
ABV	1,725	1,842	1,880	2,001	2,075
Items per bill	2.6	2.8	2.9	3.0	3.2
LTL volume growth	6.4%	-3.3%	3.1%	-2.1%	-50.5%
LTL ASP growth	-2.9%	0.8%	-1.7%	4.9%	-1.7%
LTL value growth	3.3%	-2.6%	1.4%	2.7%	-51.3%

Pantaloons e-commerce has grown significantly, recording 2.3 times of sales over last year, with Pantaloons.com growing by four times over FY20, in revenue terms. Inventory for e-commerce was managed innovatively to make a wider variety available online. Alternate revenue channels of PopShop and ChatShop leveraged Omni-channel play.

Despite a challenging operating environment, Pantaloons opened 19 new stores and unveiled a New Retail Identity in 5 stores in FY21. It is planning to expand its network with ~ 60 new stores in the next fiscal with its new retail identity that will match the fast-changing consumer interests in fashion. The brand continually redesigns its product strategy to meet the changing fashion needs of consumers and is well placed to continue to grow aggressively in FY22.

Ethnic wear

This category accounts for about 28% of the overall apparel fashion in the country and is growing with a CAGR over 10% with no international competition. A large part of this market remains unorganized and unbranded. Consumers are now increasingly shifting to branded and organised segment, thus increasing the pie for organised players. FY20 was the turning point in the ethnic strategy when your company took definitive steps in this space by acquiring Jaypore brand and forging partnering with Shantanu and Nikhil for occasion wear brand. In FY21, with two fresh partnerships with Tarun Tahiliani and Sabyasachi, your company now boasts of the most comprehensive portfolio of iconic ethnic wear brands across price points.

Jaypore is an ethnic apparel and lifestyle retailer, making its products available in domestic and international markets through its e-commerce channel. Shantanu & Nikhil caters to contemporary luxury shoppers by curating design for the millennials' sartorial choices. Furthermore, your Company announced new strategic investments in luxury couture Sabyasachi, and men's ethnic and ceremonial wear by Tarun Tahiliani.

Sabyasachi aspires to establish itself as a global Indian luxury brand, offering bridal wear, ethnic wear, handcrafted jewellery, and accessories. It has gradually built a strong play at the back of inspiration that is deeply rooted in the rich Indian heritage. It aspires to become India's first global luxury fashion brand.

Tarun Tahiliani is a renowned couturier in the Indian ethnic wear category. In partnership with him, Your Company is foraying into affordable premium men's ethnic wear by launching a new brand by the festive of FY22.

In the section below, we are covering the broad business strategy of Your Company and how it plans to build its leadership position in its competitive landscape.

Business strategy:1.    Digitalization

Your Company is reinventing its business model in line with changing consumer preferences. Digital is one such pivot that Your Company has accelerated on, as it has launched an aggressive digital transformation program across its businesses. On the front end, this is focused around driving e-commerce, customer experience and customer engagement. For e.g. Mobile apps have been launched for all your flagship brands for ensuring deeper connects with the consumers of the brands. Innovative Customer loyalty programs are being run on robust data warehouse in the back-end. Hyper-local commerce model has been piloted this year and will be ramped up across more markets, while WhatsApp commerce is also gaining momentum.

On the back end, your Company has recently rolled out new initiates including Distributor Management Platform, Salesforce automation mobile App and retailer mobile App for

forging closer operating partnerships with our distributors and retailers, leveraging digital. We see the digitally enabled hyper-local model as the next wave of innovation in fashion retail, which Your Company is well-placed to capitalize on, leveraging its strong brands, loyal customer base and a wide physical distribution network.

2.    Scaling brands through newer categories

Your Company has consistently evolved and grown its brands through expansion into newer categories and products in line with shifting consumer tastes and lifestyles. In the last few years, our brands have successfully extended themselves into fast growing categories such as athleisure, loungewear, kids wear, ethnic wear, etc.

3.    Strengthen Portfolio play through new brands

Your Company has been enhancing its brand portfolio by entering into newer and attractive segments, in line with evolving consumer needs. With strong legacy brands, enriched with deep understanding of consumer markets across geographies and patronized by strong consumer loyalty, Your Company is confident of its portfolio play. Our branded play is across multiple price points, multiple occasions and multiple customer demographic and psychographic segments. Through its rich brand portfolio, your Company is able to cater to a diverse set of consumers making it the best placed company in fashion industry to benefit from the consumption growth of this decade.

4.    Agile Design & supply chain

Your Company works relentlessly towards driving agility in the design and supply chain functions to be able to respond quickly to consumer response to our designs and fast-changing fashion trends. The industry leading shift to a 12-season cycle has been helping Your Company

manage its inventory efficiently, thereby providing agility & flexibility to its buying process and infusing freshness into its inventory. Your Company built on its Digital Trade Show platform, replacing seasonal tradeshows, which have been the mainstay of the industry. This has helped completely transform the product development lifecycle, right from the design stage.

5.    Multi-channel Distribution

Your Company deploys a highly scalable, asset-light distribution model. The franchisee-led EBO expansion has made it faster and easier to scale up. These franchisee models have been built over last many years and their continued success is a testament of the strength of our brands. Pantaloons, our Large Format Store ("lfs") brand has also proven its store economics across various store sizes as well as store locations in towns, cities and metros.

Your Company also scaled its ecommerce more than three times in just FY21, both driven by partnered ecommerce as well as own brand.com, leveraging its strong loyal customer base. This supplemented our continuous offline expansion, making us an increasingly multi-channel business going forward. With an aim to serve the customer in a unified mode, with enhanced digital coverage, more than 1000 stores across our business will deliver a truly Omni-channel experience to our customers.

6.    Small town opportunity

Branded apparel has largely been restricted to bigger cities - Metros and Tier 1 & 2 towns - in India. Increasingly, our brands are now tapping the "Bharat" opportunity across small towns through exclusive formats catering to needs of these geographies. With merchandise customized for local needs and providing quality products at value, brands are set to scale through in small town India through an asset-light growth model. The brands' focus on fostering local entrepreneurship would drive quick on-boarding of partners leading to rapid scale up. Your company plans to tap this opportunity through such specialized small-town formats under Peter England, Allen Solly and Pantaloons & Style Up brands.

Digital Transformation Roadmap

Your Company follows a brand-led e-commerce strategy that aligns with its offline business model, building on the strength of our brands and also enhancing them. The e-commerce stack includes own web portals and mobile-sites for each brand and the capability to integrate seamlessly with over 10 different marketplace partners. This has been developed on a common technology platform that is robust, flexible and integrated with Your Company's offline enterprise technology in warehouses and stores, enabling seamless Omni-channel capabilities. Your Company has launched brands on multiple marketplace platforms and also built in inventory across all warehouses and majority of stores, to be available on web sites and marketplaces, providing customers a large assortment and depth of merchandise.

Your Company has launched mobile Apps for flagship brands, such as Louis Philippe and Van Heusen. The Company would be launching mobile Apps for Pantaloons, Allen Solly, Peter England and Jaypore, over the next few months. While e-commerce functionality is standard in the Apps, your Company is also adopting digital for enabling customers to virtually shop in nearby stores and directly interact with store associates for planning visits, scheduling pickups or alterations. This would also enable 'endless aisle' capability for store visitors, giving them access to the entire range of merchandise that may not be in the store, but is available in warehouses or other stores.

All your Company's brands have Customer Loyalty programs that are amongst some of the highly acclaimed in the industry. These programs give access to each brand to a loyal customer base and an ability to track customer shopping habits over the years. In the last 5 years, your Company has also rolled out an NPS (Net promoter score) program called 'Mission Happiness' in all major brands, which tracks customer satisfaction in store and post purchase. In the last financial year, your Company has put in place a Customer 360 program, where a data warehouse has been set up for all customer transactions and interaction data for the entire base of over 30 million customers across brands. The Company has set up the Machine Learning capability to analyse customer behaviour data and come up with personalized recommendations at a customer-segment-of-one, which can be used to run effective personalized campaigns. Your Company has also set up a multi-channel campaign automation platform that enables communicating with customers on email, SMS, web/ app notifications, social and WhatsApp, so that customers can be engaged on their most preferred channels. Your Company is now implementing capabilities to personalize the online browsing journey of consumers visiting brand websites, in real time, based on their past transactions as well as the browsing behaviour in current session. This will include personalization of product listings, recommendations, category pages, search and checkout.

Your Company is focussing on hyper-local customer engagement and fulfilment, enabling a store associate to reach out to loyal customers on platforms such as WhatsApp, showcasing preferred merchandise available in the store, book orders and take payments online and arrange for quick delivery directly from the store. Solutions for POS at offline stores and faster delivery through hyperlocal channels are being implemented to improve the consumer experience across touchpoints.

Although Direct-to-consumer is the major part of your Company's business, there is also a significant distributor-retailer network, particularly in the innerwear business.

While the focus is clearly on digital, your Company has taken several initiatives in streamlining backend operations as well, mainly by leveraging advanced analytics algorithms. Last year, your Company rolled out a platform across all our businesses, for automatically replenishing inventory from warehouses to stores by tracking rate-of-sale and inventory on a daily basis, across the entire store network.

Human Resources

ABFRL's People Vision is "To drive a High Performing and Customer Centric Culture with Happy and Value Oriented Employees". Your Company's performance is anchored on its capabilities and productivity; customer-centric culture through a strong service orientation; happiness through purposeful behaviour by high quality talent; value-oriented through a deep commitment to the values of the Aditya Birla Group.

FY21 saw the most unprecedented challenges due to the onset of COVID. Apparel, being a discretionary spend item, has been extremely impacted due to COVID and the unprecedented crisis highlighted the need to:

•    Survive, revive and grow your Company's business despite the pandemic and beyond

•    Respond to the health and safety needs of employees/customers

•    Enable alternative methods of organizational coping through Work from Home ("WFH"), training and wellness initiatives

Your Company's People priorities were revisited and it embarked on a series of initiatives focused on ensuring, employee wellbeing and safety, business continuity, cost and cash conservation, and accelerating digital initiatives. An Emergency Response Team was formed. This team was formed much before lockdown and focused on:

•    Implementation of the advisories issued

•    Plan scenarios, response and execution actions

•    Monitor local (environment and situation) conditions in business locations on ongoing basis

•    Adhere to government advisories and local health authority's circulars

•    Maintain active communication and awareness across business operations

Your Company's teams have reacted admirably to this. Their proactive approach in dealing with complexity, breaking through existing structures, working with conflicting scenarios have ensured that Your Company has emerged stronger and better prepared. This would not have been possible but for the tremendous resilience, robust relationships, close collaboration and leadership exhibited.

Your Organization's core values of Seamlessness, Passion, Speed, Commitment, and Integrity

have always guided our actions and are the key to why Your Company attracts the best talent. It gives us immense pride to announce ABFRL's recognition by Great Place to Work, as one of India's Best Workplaces in 2021 in the Retail industry!

Your Company has a diverse workforce of 25,000+ permanent employees, consisting of a mix of people from diverse social, economic and geographic backgrounds, and building a huge knowledge capital with varied educational and industry experience. Your Company continues to build an inclusive environment for your diverse workforce. Your Company is proud to be represented by women across levels and comprising of 52% of the overall workforce.

Your Company has maintained healthy, cordial and harmonious industrial relations at all levels through Proactive ER, Development Initiatives, Gender Diversity and Community Development.

Employee Wellness:

Your Company pioneered a one-of-its-kind program that comprehensively addresses employee and employee's family wellness needs in this new context. Your Company's COVID Assistance and Emergency Response ("caer") Program is an industry-first program done by a Corporate. CAER aims to offer access to resources and information for responding to a situation with quality care and empathy.

The program offers below facilities to employees:

•    Prevention and Awareness around COVID

•    Online Doctor Consultation

•    COVID Testing and related Consultation

•    Basic Life Support / Ambulance Service

•    Hospitalisation / Quarantine information & coordination

•    Home Isolation Support Program

•    Voluntary Additional Insurance Cover

•    Temporary financial assistance

•    COVID Vaccination Support

4,450+ lives have benefited so far through the CAER programme's services. As part of the benefit program this year, medical insurance coverage was reviewed for the entire Frontline Retail staff. Special financial assistance in case of medical emergency was made available for your Company's Retail and Manufacturing employees.

Your Company adopted 100% Work from Home for a large part of the office-based workforce; Last year, your Company launched Enrich Your Life @ ABFRL; a comprehensive program to focus on wholesome wellbeing by encompassing four key dimensions - physical, mental, financial and social wellness. Your Company provides annual comprehensive health check-up for employees with focus on preventive healthcare.

Delivering 'Employee Value Proposition' ("EVP") through People strategy:

"The Biggest Brands and Best People" is the philosophy that drives your Company. Your Company has well-known brands; however, it is the people behind the brands who have made us what we are. Our unique Employee Value Proposition - "A World of Opportunities" makes Your Company a preferred employer for professionals in the industry.

1.    Talent Management and Career Growth

Your Company has institutionalized Talent Councils that actively reviews the Organization's talent pipeline, succession planning for key roles and requisite development interventions.

Succession Planning for all critical roles was reviewed and validated with Management Team to ensure readiness assessment of key talent. All critical contributors across the Organization were identified and focused talent retention measures have been initiated to ring fence them.

Your Company invests in early careers of bright young students from premier institutes across the country to create a future talent pipeline. The Company has developed structured programs for campus hires, by giving them meaningful business stints and exposure to senior leadership. The Young Talent Program includes hires across multiple streams such as Business Management, Fashion Management, Chartered Accountancy and Retail Operations.

2.    Learning and Development

Your Company's People's development is focused on behavioural and functional learning to develop future-ready leaders. This learning is anchored by the internal capability-building academy, ABFRL University as well as Gyanodaya, Aditya Birla Group Global Centre for Leadership.

ABFRL University - Your Company's in-house structured learning initiative has expanded to other Lines of Businesses.

With the onset of the pandemic, there has been a major focus on e-learning through Gyanodaya Virtual Campus (GVC) App, clocking total of 1,00,000+ learning hours and increase in unique users from 22% to 89%.

Your Company has launched Digital Capability Building series to build digital, as a core capability required for the business. The entire organisation raised its learning bar of being digitally adept and from leadership team to our front end staff everyone built their digital capability. This was done by curating an application-oriented Digital Marketing Program. Your Company launched the Digital Capability Program for the Senior Leadership Team to equip them for Digital Transformation in the business.

Your Company takes pride in launching India's Finest Store Manager ("ifsm") Program, an industry-best learning and development practice for grooming Store Managers to take up senior roles in the Organization. In addition to this, Your Company is part of the 'A World of Opportunities' (AWOO) Foundation, which supports the funding of education for children of workmen and store associates.

3.    Rewards and Recognition Remuneration and Benefits

Your Company has a comprehensive, agile, balanced and inclusive approach towards remunerations and benefits. Your Company takes a total rewards approach, which essentially covers both monetary (Fixed Compensation, Variable Pay and Long Term Incentive Plan) and non-monetary rewards (Benefits Program, Recognition Programs, and Work-life effectiveness program). Your Company strives to ensure absolute non-discrimination in pay because of gender, age, and experience of the individual.

Your Company has also put in place fairness measures in certain scenarios such as maternity leave, inter or intra business transfers.

Organization productivity plans were reviewed closely and set of actions were deployed to prepare the Organization to be future-ready in the context of changes happening at work, workplace and workforce.

4.    Recognition

There are multiple platforms for recognition for employees and teams - at the Company as well as the business level.

In FY21, the ABFRL Awards celebrated the achievements and milestones of all the hard work put in from all employees from all corners of the country. A special category of awards was instituted to celebrate the brilliance, grit, determination and innovation to highlight the exemplary work that these testing times have inspired. These included Innovation in Lockdown Awards, Digital Acceleration Awards and Resilience and Grit Awards.

Your Company's recognition programs also include PACE, GEMS, etc. across various lines of businesses that celebrate and recognise team and individual achievements, value champions and feats achieved by employees beyond the call of duty.

5.    Enrich Your Life

Your Company's vision is to provide a fulfilling workplace to employees, where every employee feels valued and supported as an individual. Your Company is consistently working towards creating a supportive, friendly and happy workplace.

Your Company's leave policies, flexible work arrangements, and employee wellness programs aim to maintain a healthy work-life balance and better manage their professional and personal commitments.

Communicate:

Your Company encourages informal and direct communication in line among teams, which in turn, creates a friendly and open work atmosphere. Additionally, your Company has systematic and established set of platforms, such as town halls, internal journals and emailers, for structured and important communication with employees.

A comprehensive employee outreach program- Employee feedback sessions and town halls by CEOs were conducted to ensure a healthy two-way communication between leadership and staff.

Employee Engagement:

Your Company believes that people who are engaged and involved with its purpose can only build an organisation this large, collectively. During the process of unlock, wherein the retail stores, manufacturing units and offices were in the resumption phase, in order to boost morale of the workforce, the leadership team shared positive and reassuring communications in both print and video format addressing all employees.

Sustainability

Aditya Birla Group (ABG) has laid an ambitious vision to become the leading Indian conglomerate in sustainable business practices across operations. Towards this objective, a rigorous ABG Sustainability Framework is developed, which guides your Company's businesses to perform in the resource-constrained world and be resilient in a face of uncertainties such as the COVID pandemic. People, Planet and Prosperity have been the key drivers of our long term goals.

Your Company is one of the early adopters of ESG framework and created a comprehensive sustainability programme - 'ReEarth', which focused on the pressing needs of the fashion and retail sector in India. Over the past decade, your Company, has been a pioneer in driving sustainability to the forefront of the Fashion and Retail Industry. A Risk Management Committee ("rmc") was set up by the board for identification, evaluation and mitigation of operational, strategic and external risks but taking a forward-looking step, your Company has evolved its RMC to Risk Management and Sustainability Committee ("rmsc").

Your Company also provides leadership and allocates resources to materialize the Sustainability Policy across owned business operations. While the Company celebrates a leadership position in the fashion segment and continues to grow brand equity and consumer base, your Company is always working towards giving back to the environment through 'ReEarth' sustainability philosophy.

Your Company is a customer-centric and future-focused organization, recognising that consumers in India are increasingly demanding products with better environmental and social footprints. The ReEarth sustainability program is a movement to give back to our planet what we've taken from it over the years. It is a construct that goes beyond conservation and encourages rejuvenation.

Your Company's sustainability commitment towards people and planet has helped in doing some exceptional work that has won global recognition in FY21.

•    Achieved highest score in Asia for S&P Global - Corporate Sustainability Assessment in textile, apparel and luxury good sector in 2020 cycle. Received 8th rank globally in sector and 1st rank in emerging market for DJSI assessment.

•    Received outstanding achievement in CII - ITC Sustainability Award 2020 in corporate excellence and got highest score in the assessment in among Indian Industry.

•    Received the award as winner for Golden Peacock Award for Sustainability 2020.

•    Positioned among the most sustainable companies in India for sustainability assessment in joint research of Business World India and Sustain Lab Paris.

Today, your Company is at the cusp of a strategic shift of its mission's from process-centric to product-centric approach from 2020 to 2025, where products will be the fulcrum of the Company's sustainability strategy. The product-centric approach will help identify key focus areas for improvement and develop interventions for each life cycle stage of the product, including upstream and downstream operations. From product design and product development, to supply chain and customer-centricity through use and end-use, this approach lets your Company pivot sustainability into becoming the everyday norm, which ultimately, will centre around achieving overall product sustainability.

Your Company's venture into the newer avenues, exploring possibilities and global collaborations helped it to move ahead of your peers and industries in looking for an innovative solution and advocate the issues such as the Circular Economy. The dominant idea that is shaping your sustainability roadmap is that of a Circular Economy. The benefits of a Circular Economy include, high resource efficiency, reduced waste and responsible waste management, extended product life, reduced environmental impacts and extended producer responsibilities.

While your Company has an existing collaboration with the Ellen McArthur foundation, it has also made a large stride in its circularity journey through your collaboration with the Circular Apparel Innovation Factory ("caif"). CAIF will be an innovation facilitator to help your Company develop and test circular innovations. This collaboration will bring together various stakeholders from the Circular Economy ecosystem. Your Company plans to leverage this collaboration to build, operate and scale circular innovations over the next few years. Through this initiative, your Company will demonstrate its commitment to shift the industry from its current 'take-make-dispose' approach to one that encourages the use of sustainable material, maximises utilisation of clothing and textile, thereby promoting recycling.

Your Company also made strategic collaboration and participated in various forum discussions with GIZ, UNEP, S&P Global, DJSI, GRI, SDG, OECD, SU.RE, which provide opportunities to benchmark our sustainability performance with your domestic and global peers. Your Company has collected and analysed for gaps against international standards, performance of peers in the apparel sector, along with Group sustainability standards. With this unwavering commitment, your Company is strategically shifting towards a product-centric sustainability approach and has fuelled this approach with innovation, usage of alternate materials, sustainable sourcing and resource neutral operations.

Sustainability will always remain a priority and your Company as a responsible organization is committed to contributing towards National goals and progression.

Risk management

Effective governance and risk management forms the bedrock of a Company's sustained performance. Your Company has a robust Enterprise Risk Management framework which helps in identifying, evaluating, mitigating and reporting of risks. Your Company has adopted a Risk Management Policy in line with provisions of the Companies Act and Listing Regulations. Your Company has constituted a Risk Management and Sustainability Committee to monitor risks on a continuous basis which is supported by internal risk management committee comprising of experts from various business processes and segments including subsidiaries. The internal risk management committee also reviews developments in the socio-economic environment and identifies internal threats and opportunities, updates the framework and refines processes and systems for mitigation. The Company has also laid down procedures wherein the committee on a periodic basis informs the Audit Committee as well as the Board of Directors about risk assessment and effectiveness of mitigation plans defined. Your Company has reviewed major Business and Corporate Risks in light of the COVID-19 pandemic outbreak which may or has affected its operations, employees, customers, vendors and other stakeholders and has managed to effectively mitigate, transfer or accept the risks identified. Details of the composition of the RMSC and the Risk Management Policy, adopted by the board, have been disclosed separately.

Key Risks

1.    Inability to keep pace with changing fashion and consumer needs

Rapidly changing fashion, deeply influenced by social & electronic media is a challenge to apparel business models. Going forward, the offerings must be highly nuanced to meet the ever-changing fashion needs of consumers, globally. Also, with changing consumer needs, new categories keep gaining relevance from business perspective.

To mitigate this, your Company has undertaken various supply chain and digital initiatives, to run an agile model, ensuring merchandize freshness by introducing the 12-season model, and utilizing analytics based planning tools for smarter merchandize management. Also, in line with its broader strategy, extending the brand into relevant categories, your company has evolved its product portfolio, mirroring the changing consumer needs.

2.    Subsequent waves of the pandemic

Subsequent waves of COVID may further disrupt the Indian apparel industry's operations and may impact, in the short-term, as follows. Firstly, restrictions on people's movement to contain the spread of the infection will impact offline sales. Secondly, the economic impact may be significantly more on discretionary spends and hence may soften sales.

Alongside ongoing efforts around building digital channels of sales to enable consumers to shop from wherever they are, this impact may also have to be mitigated through cost and cash flow improvement measures.

3.    Disruption of established business model

Deep discounts on e-commerce channels that are built around only building scale may hurt the overall fashion retail market in India. With increasing consumer traffic on e-commerce looking for fashion at value, the demand is growing for cheaper merchandise, which is in turn growing a market for low quality apparel, cannibalising the market for quality fashion.

The mitigation strategy will be built around enhancing the price-value equation of products, offering superior quality of consumer services that would help us in building stronger and more desirable brands. Working towards better sourcing management and efficient fulfilment model, will enable us to deliver on the above brand promise.

4.    Intensifying competitive landscape

The penetration of technology and growing e-retail space in the entire value chain has enabled start-ups to enter the fashion industry with a much larger aggression. Major international

apparel brands also have forayed into the Indian apparel market, realizing the growth potential of the Indian market. The fashion and apparel industry is highly competitive as large numbers of retailers sell similar looking products at similar price points. It is becoming increasingly important to develop brand equity at the back of better quality products and service that could create differentiation.

Your Company will continue to build its capability in product quality, designs, merchandising and distribution required to strengthen its portfolio of brands, enabling it to maintain a leadership position in the fashion and apparel space. Your company will also keep diversifying its portfolio to tap into newer areas of growth leveraging its expertise in its core businesses, refined to gain profitability.

5.    Inability to attract and retain talent

The apparel industry has been facing difficulty in attracting quality talent, due to a highly competitive market ecosystem. The demand for talent exceed supply in critical areas such as analytical thinking, technical competency, and leadership skills. The above two factors have made talent development and management an extremely crucial part of business strategy.

Your Company has a well-crafted and structured approach towards talent retention and development along with leadership grooming of internal talent with focused interventions.

6.    Inadequate supply of quality retail space

Commercial real estate in India has seen a slowdown in the past few years. Lack of prime retail land, high-property rates in prime areas and COVID related uncertainties in recent times have further discouraged developers from investing in commercial spaces.

To address this issue, your Company is in regular connect with most prominent mall owners and real estate developers across the country to remain a preferred partner of choice in any new ventures. Your Company has also kept a keen eye out for prime retail locations which have opened up over the past year, in wake of exits of other brands that have faced financial pressures due to the pandemic.

7.    Information Technology Risk

Leakage or loss of confidential business information and consumer data is a risk aggravated by higher dependence on digital platforms.

To mitigate IT risks your company ensures employees handling sensitive and critical data are covered with all information security and data leakage prevention controls alongside implementation of Information Rights management ("irm") tool. Your company's data centre is run by world class professional service providers and is supported by well managed backup systems and protocols to avoid any unforeseen disruption.

COVID Resurgence Impact

While most other major world economies have marked the third quarter of the recession between October and December, India's economy rebounded quickly. The aggregate economic activity mostly recovered to the pre-pandemic level by the end of 2020, thanks to the Government's relentless war against the virus. However, with the resurgence of COVID second wave towards March 2021, lockdowns across the country were brought in again, to control the spread of the virus, affecting consumer mobility and spends. The second wave peaked by May 2021 and then subsided subsequently, leading to recovery again.

Going forward, contingent on the availability and administration of vaccine, we expect a growth bounce-back.

Learning from the past, Your Company has been adapting itself to handle such temporary disruptions. Your company has trained its workforce to be much better prepared going forward. Your company has relooked at its cost structure and tried to align them with the scale of business. In line with it, Your Company has started discussing with its real estate partners, vendors and other service providers on a possible reinstatement of certain concessions given last year during first wave of COVID. Your Company has also aggressively expanded itself in e-commerce and extended into new alternate channels of sales to reach customers within the confines of their homes. It has made fresh investments into its own brand.coms to enhance the consumer experience and ensure that they come back again and again.

Your Company has also worked more closely with its ecommerce partners making the operations seamless, while collaborating well on the front end side in terms of creating new merchandise lines more suited for ecommerce platforms, along with co-investing on building the marketing play. This has led to a significant jump in our partnered ecommerce sales, which is expected to only go upwards going forward. We have also strengthened our ethnic portfolio by investing in key partnerships with ethnic players like Sabyasachi and Tarun Tahiliani this year, making our portfolio more comprehensive and complete for our customers. Strong brands, desirable products, integrated channel play and a sharp focus on costs will keep us in good stead to pass through this global crisis.

Road Ahead

The recovery trend observed in third quarter of this fiscal is testimony to the temporary nature of the impact of the pandemic and the resilient consumer sentiment, which is pointing towards getting back to the stores and shopping, as soon as it is safe to move outside. The future for the Indian apparel industry looks promising, buoyed by strong domestic consumption and export demand. The per capita consumption of apparel will grow swiftly in the times ahead fuelled by aspirational buying and an organised market play. As digital consumption continues to build its dominance, your company will continue investing in building its digital capabilities at front and back end to make it intrinsic to its business model going forward.

Your Company firmly believes that its formidable branded play across categories will drive rapid growth. The post pandemic phase is expected to boost demand, as Indians from all age groups begin moving out for work and travel, leading to sharp recovery of consumption led sectors. As the recovery happens, at the back of its bouquet of strong brands, your company will reinforce its leadership position in Indian fashion and apparel sector.

Financial performance and analysis		Â	Â	(Amount in ' Crore)
Particulars	Standalone		Â	Consolidated
Â	Year Ended	Year Ended		Year Ended	Year Ended
March 31, 2021		March 31, 2020 March 31, 2021			March 31, 2020
Revenue from Operations	5,181	Â	8,743	5,249	8,788
EBITDA (1)	667	Â	1,290	628	1,277
Finance Costs	498	Â	423	503	425
Depreciation	945	Â	877	963	885
Profit/ (Loss) Before Tax (1)	(776)	Â	(9)	(838)	(33)
Current Tax	-	Â	-	40	-
Deferred Tax Assets /	196	Â	(6)	211	(2)
(Liabilities)	Â	Â	Â	Â	Â
Deferred Tax Assets /	(69)	Â	(130)	(69)	(130)
(Liabilities) - One time (2) (3)	Â	Â	Â	Â	Â
Net Profit/ (Loss) After Tax (1)	(650)	Â	(145)	(736)	(165)

(Amount in ' Crore)
Particulars	Standalone (Comparable)*		Consolidated (Comparable)*
Â	Year Ended March 31, 2021	Year Ended March 31, 2020	Year Ended March 31, 2021	Year Ended March 31, 2020
Revenue from Operations	5,181	8,743	5,249	8,788
EBITDA (1)	(222)	518	(271)	500
Finance Costs	274	212	275	213
Depreciation	221	249	231	254
Profit/ (Loss) Before Tax (1)	(717)	57	(778)	33
Current Tax	-	-	40	-
Deferred Tax Assets / (Liabilities)	196	(6)	211	(2)
Deferred Tax Assets / (Liabilities) - One time (2) (3)	(69)	(130)	(69)	(130)
Net Profit/ (Loss) After Tax (1)	(590)	(79)	(676)	(99)
*Comparable refers to Pre Ind AS 116 numbers.

Standalone performance	Â	(Amount in ' Crore)
Particulars	As at	As at
Â	March 31, 2021	March 31, 2020
Net Fixed Assets (including CWIP)	614	738
Right-of-use assets	2,067	2,174
Goodwill (4)	1,860	1,860
Deferred Tax Asset (2) (3)	321	195
Investments (5)	690	170
Net Working Capital (6)	636	1,193
Capital Employed	6,188	6,330
Net Worth	2,685	1,086
Debt 2	1,118	2,776
Lease Liability	2,386	2,467

Notes:

(1)    Includes other income of' 73 Crore (Previous year:' 65 Crore).

(2)    One-time impact of reversal of deferred tax assets of ' 130 Crore as at March 31, 2020 is on account of adoption of lower tax rate as permitted under section 115BAA of Income Tax Act, 1961 and also based on review of components of deferred tax assets/ liabilities leading to a reassessment of estimates compared to earlier periods.

(3)    One-time impact of creation of deferred tax liability of' 69 Crore as at March 31,2021 is on account of amendment to section 32 of the Income Tax Act, 1961, whereby Goodwill of a business will not be considered as a depreciable asset and depreciation on goodwill will not be allowed as deductible expenditure effective April 1, 2020.

(4)    As on March 31, 2021, goodwill (after testing for impairment in accordance with the Ind AS - 36 issued by the Institute of Chartered Accountants of India) stands at' 1,860 Crore.

(5)    Investments includes ' 683 Crore towards investments in Subsidiaries and Joint Venture (Previous year:' 163 Crore).

(6)    Net working Capital

(Amount in ' Crore)
Particulars	As at March 31, 2021	As at March 31, 2020
Inventory	1,743	2,349
Trade Receivables	722	840
Cash and Bank Balances	164	265
Other Assets	1,581	1,098
Less: Trade Payables	2,334	2,273
Less: Other Liabilities	1,241	1,086
Net Working Capital	636	1,193

Earnings before interest, tax, depreciation and amortization ("ebitda")

EBITDA of the Company, including other income, has seen a negative growth to ' 222 Crore on comparable basis from ' 518 Crore of previous year. The reported EBITDA of the Company is ' 667 Crore (previousyear ' 1290 Crore) factoring impact of Ind AS 116. The EBIDTA margin for the Company dropped from 14.8% to 12.9% due to COVID-19 impact on the industry during the year.

Finance cost

Finance cost for the year was ' 274 Crore on a comparable basis, increased from ' 212 Crore in previous year, in line with the increase in average borrowings of your Company during the year. The average borrowing cost for the Company is at 7.36% as compared to 7.27% in the previous year. The reported finance cost of the Company is ' 498 Crore (previousyear '423 Crore) due to the impact of Ind AS 116.

Depreciation

Depreciation during the year reduced from ' 249 Crore in the previous year to ' 221 Crore on comparable basis. The reported depreciation of ' 945 Crore (previousyear ' 877 Crore) includes the impact of Ind AS 116.

Dividend

In view of accumulated losses of previous years, no amount is proposed to be transferred to reserves and your directors have not recommended payment of any dividend for the year under review.

Borrowings

Borrowings has reduced from ' 2,776 Crore in the previous year to ' 1,118 Crore. The Net Debt has reduced from ' 2,511 Crore in the previous year to ' 654 Crore, further to raising fresh capital through Rights/ Preferential Issue and reduction in net working capital.

Standalone Key financial ratios

Particulars	As at	As at
Â	March 31, 2021	March 31, 2020
Debtors Turnover Ratio (1)	6.63	10.79
Inventory Turnover Ratio (1)	2.53	4.09
Interest Coverage Ratio (1)	(1.83)	0.96
Current Ratio	1.07	0.83
Debt Equity Ratio (2)	0.24	2.31
EBITDA Margin	12.9%	14.8%
Operating Profit Margin (1)	-5.4%	4.7%
Net Profit Margin (1)	-12.5%	-1.7%
Return on Net Worth (1)	-10.4%	38.1%
Return on Average Capital Employed (1)	-4.4%	8.7%

The formulae used in the computation of the above ratios are as follows:
Ratio	Formula
Debtors Turnover Ratio	Revenue from Operations / Average of opening and closing Trade Receivables
Inventory Turnover Ratio	Revenue from Operations / Average of opening and closing Inventories
Interest Coverage Ratio	Earnings Before Interest and Tax*/ Finance Costs (Pre Ind AS 116)
Current Ratio	Current Assets / Current Liabilities (excluding Lease Liabilities accounted as per Ind AS 116)
Debt Equity Ratio	Debt#/ Net Worth
EBITDA Margin	EBITDA / Revenue from Operations
Operating Profit Margin	Earnings Before Interest and Tax / Revenue from Operations
Net Profit Margin	Profit After Tax / Revenue from Operations
Return on Net Worth	Earnings Before Interest and Tax / Net Worth
Return on Average Capital Employed	Earnings Before Interest and Tax / Average Capital Employed

*    Earnings Before Interest and Tax = Net Profit/(Loss) After Tax + Tax + Interest Expense (excludes Interest accounted as per Ind AS 116 and interest on other than Borrowings)

#    Debt = Borrowings (excluding Lease Liabilities accounted as per Ind AS 116) - Cash and Bank Balance (includes FD) - Liquid Investments

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in the key financial ratios:

(1)    Debtors Turnover Ratio, Inventory Turnover Ratio, Interest Coverage Ratio, Operating Profit Margin, Net Profit Margin, Return on Net Worth, Return on Average Capital Employed - Ratios have been impacted due to decline in revenue and profitability on account of COVID-19.

(2)    Debt Equity Ratio - Ratios have improved due to reduction in borrowings as the Company had raised the funds during the year by way of Rights and Preferential Issue and reduction in net working capital.

Consolidated performance

At consolidated level, your Company reported a revenue of ' 5,249 Crore (previous year ' 8,788 Crore) and EBITDA of ' 628 Crore with EBITDA margin at 12% (previousyear ' 1,277 Crore with EBITDA margin at 14.5%). This year's performance was impacted by COVID-19.

DIRECTORS' RESPONSIBILITY STATEMENT

The audited financial statements of your Company for the year under review ("financial statements") are in conformity with the requirements of the Companies Act, 2013 read with the rules made thereunder ("Act") and the Accounting Standards. The financial statements reflect the form and substance of transactions carried out during the year under review and present your Company's financial condition and results of operations, fairly and reasonably.

Your directors confirm that:

a)    in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b)    accounting policies selected have been applied consistently and reasonable & prudent judgments and estimates were made, so as to give a true and fair view of the state of affairs of your Company as at the end of the year under review and the profit & loss of your Company for the year under review;

c)    proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d)    the annual accounts of your Company have been prepared on a 'going concern' basis;

e)    adequate internal financial controls were laid down and followed by your Company and such internal financial controls were operating effectively; and

f)    proper systems have been devised by your Company to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

g)    the Company has been in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

SHARE CAPITALa) Equity share capital

Details of changes in paid-up share capital during the year under review, are as under:

Paid-up Equity Share Capital	'in Crore
At the beginning of the year, i.e., as on April 1, 2020	773.95
Changes made during the year: Allotments made pursuant to:
1.1. Employee Stock Option Scheme, 2013	0.04
1.2. Employee Stock Option Scheme, 2017	0.46
1.3. Preferential Issue	73.17
1.4. Rights Issue
(i) Receipt of money on application	45.14
(ii) Receipt of 1st call money	22.48
(iii) Forfeiture due to non-payment of 1st call money	(0.19)
At the end of the year, i.e., as on March 31, 2021	915.05

b) Preference share capital

The paid-up preference share capital of your Company as at the end of the year under review stood at ' 50.50 Lakh (same as at the end of previous year).

The Board of Directors of the Company has varied the terms of the preference shares to the extent of extending their respective redemption dates by a period of 5 years, more particularly as under:

Class of preference shares	Redemption date
5,00,000, 8% Redeemable Cumulative Preference Shares of ' 10/- each	March 29, 2024
500, 6% Redeemable Cumulative Preference Shares of ' 100/- each	October 12, 2024

DISCLOSURES IN TERMS OF THE PROVISIONS OF THE ACT & SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 ("SEBI Listing Regulations")A. Board of Directors ("Board")(i) Number of meetings

The Board met 11 (eleven) times during the year under review. The details of such meetings are disclosed in the Section "The Board of Directors" of the Corporate Governance Report forming part of this Annual Report.

(ii) Appointments and resignations

a)    Resignations/ Retirements/ Retirement by Rotation

(i)    Mr. Arun Thiagarajan, Independent Director completed his tenure on May 10, 2020.

(ii)    Mr. Sanjeeb Chaudhuri, Independent Director resigned w.e.f. closing hours of June 5, 2020, due to personal reasons.

(iii)    Mr. Sushil Agarwal, Non-Executive Director, resigned w.e.f. closing hours of March 31, 2021, due to personal reasons.

The Board appreciates the valuable contribution made by Mr. Thiagarajan,

Mr. Chaudhuri and Mr. Agarwal during their tenure.

(iv)    In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Himanshu Kapania, Non-executive Director of the Company, is due to retire by rotation at the ensuing Fourteenth Annual General Meeting and being eligible, has offered himself for re-appointment.

Resolution seeking his re-appointment alongwith his profile as required under Regulation 36(3) of SEBI Listing Regulations forms part of the Notice of Fourteenth Annual General Meeting.

b)    Appointments

(i)    Mr. Nish Bhutani, Independent Director was appointed w.e.f. June 5, 2020. His appointment was approved by the Shareholders at the last Annual General Meeting held on September 7, 2020.

(ii)    Further, the Board of Directors, on recommendation of the Nomination and Remuneration Committee and subject to Shareholder's approval at the ensuing Annual General Meeting, appointed:

Director	Category/ Designation	Appointment date
Mr. Kumar Mangalam Birla	Chairman and Non-Executive Director	February 24, 2021
Ms. Sangeeta Pendurkar Mr. Vishak Kumar	Whole-time Director
Mr. Vikram Rao	Non-Executive Director	March 17, 2021
Mr. Yogesh Chaudhary	Independent Director
Ms. Preeti Vyas	Independent Director	March 31, 2021
Mr. Arun Adhikari	Independent Director	May 19, 2021

Resolutions seeking their appointment alongwith their profile as required under Regulation 36(3) of SEBI Listing Regulations form part of the Notice of Fourteenth Annual General Meeting.

(iii) Board evaluation

The Company has devised a framework for performance evaluation of Board, its committees and individual directors in terms of the provisions of the Act, SEBI Listing Regulations and the Nomination Policy of the Company.

During the year under review, the Board carried out the evaluation of its own performance and that of its committees and the individual directors. The performance evaluation of NonIndependent Directors and the Board as a whole was carried out by the Independent Directors.

The evaluation process consisted of structured questionnaires covering various aspects of the functioning of the Board and its committees, such as composition, experience and competencies, performance of specific duties and obligations, governance issues etc. The Board also carried out the evaluation of the performance of Individual Directors based on criteria such as contribution of the director at the meetings, strategic perspective or inputs regarding the growth and performance of the Company etc.

Further, pursuant to the applicable provisions of the Act, the performance evaluation criteria for the Independent Directors is disclosed in the Section "Directors Details as on March 31, 2021" of the Corporate Governance Report forming part of this Annual Report.

(iv) Declaration of independence

The Company has received necessary declaration from each Independent Director of the Company stating that:

(i)    they meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations (“said declarations").

(ii)    they have registered their names in the Independent Directors' Databank.

Based on the declarations received from the Directors, the Board confirms, that the Independent Directors fulfill the conditions as specified under Schedule V of the SEBI Listing Regulations and are independent of the management.

B.    Committees of the Board

The Board has constituted five committees, viz. Audit Committee, Corporate Social Responsibility Committee, Risk Management and Sustainability Committee, Nomination and Remuneration Committee, Stakeholders' Relationship Committee and is authorised to constitute other functional Committees, from time to time, depending on business needs.

Details of all the committees, along with their charters, composition and meetings held during the year, are provided in the Section "The Board Committees" of the Corporate Governance Report forming part of this Annual Report.

C.    Corporate Social Responsibility ("CSR")

The Board has, pursuant to the recommendation of the CSR Committee, with a vision "to actively contribute to the social and economic development of the communities in which your Company operates and in doing so, build a better, sustainable way of life for the weaker Sections of society and raise the country's human development index", adopted a CSR Policy and the same is available on the website of the Company i.e. www.abfrl.com

The scope of the CSR Policy is as under:

i.    Planning Project or programmes which the Company plans to undertake falling within the purview of Schedule VII of the Act;

ii.    Monitoring process of such project or programmes.

The CSR Policy of the Company inter alia includes the process to be implemented with respect to the identification of projects and philosophy of the Company, alongwith key endeavours and goals i.e.

•    Education - to spark the desire for learning and knowledge;

•    Health care - to render quality health care facilities to people living in the villages and elsewhere through our hospitals;

•    Sustainable livelihood - to provide livelihood in a locally appropriate and environmentally sustainable manner;

•    Infrastructure development - to set up essential services that form the foundation of sustainable development; and

•    Social cause - to bring about the social change we advocate and support.

CSR initiatives taken during the year

Your Company's CSR activities are mainly focused towards Education, Health Sanitation, Water, Digitisation, Sustainable livelihood, Institutional Building and Social Causes.

An annual report on CSR activities of the Company for the financial year 2020-21 is annexed as Annexure I to this Report.

D.    Key Managerial Personnel

Pursuant to Section 203 of the Act, the key managerial personnel ("KMP") of the Company are:

i.    Mr. Ashish Dikshit, Managing Director;

ii.    Ms. Sangeeta Pendurkar, Whole-time Director;

iii.    Mr. Vishak Kumar, Whole-time Director;

iv.    Mr. Jagdish Bajaj, Chief Financial Officer; and

v.    Ms. Geetika Anand, Company Secretary & Compliance Officer.

E.    Remuneration of directors and employees

Disclosure comprising particulars with respect to the remuneration of directors and employees, as required to be disclosed in terms of the provisions of Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure II to this Report.

The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary.

F.    Employee stock option scheme and share based employee benefits

Grant of share based benefits to employees is a mechanism to align the interest of the employees with those of the Company, to provide them with an opportunity to share the growth of the Company and also to foster long-term commitment.

Employee Stock Option Scheme and Restricted Stock Units

Your Company regards employee stock option as instruments that would enable the employees to share the value they create for the Company in the years to come. Accordingly, in terms of the provisions of applicable laws and pursuant to the approval of the Board and the members of the Company, the NRC has duly implemented the:

(a)    'Employee Stock Option Scheme - 2013' ("Scheme2013");

(b)    'Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2017' ("Scheme 2017") and;

(c)    'Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2019' ("Scheme 2019"), to grant the stock options, in the form of Options and Restricted stock units ("RSUs"), to the employees of the Company.

All the Schemes of the Company i.e. Scheme 2013, Scheme 2017 and Scheme 2019 are governed by the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("SEBISBEB Regulations") and in terms of the approvals granted by the shareholders of the Company, the NRC inter alia administers, implements and monitors the aforesaid schemes, thereby governing the grant of share based benefits to its employees, in the form of RSUs.

Stock Appreciation Rights

Your Company has also instituted a 'Plan for Stock Appreciation Rights Plan, 2013' ("SAR Plan 2013") in the year 2013, which is a cash based plan linked to the actual stock price movement over the plan tenure. Further, pursuant to the enforcement of SEBI (SBEB) Regulations, in the event of transfer of employee to any Group Company ("said transfer"), all the options and RSUs granted to an employee under the employee stock option scheme of the Company, if not exercised by such employee before the last working day in the Company shall lapse as on the date of said transfer.

In view of the above, in order to compensate the loss to an employee due to the lapse of options and RSUs in the event of said transfer, your Company has instituted and implemented the 'Aditya Birla Fashion and Retail Limited Stock Appreciation Rights Scheme 2019' ("SAR Scheme 2019"), to grant SARs in the form of 'Option SARs' (in place of options) and 'RSU SARs' (in place of the RSUs), to such employees.

The SAR Plan 2013 and SAR Scheme 2019, do not give rise to any right towards any equity share of the Company and hence, they are not covered under the provisions of SEBI (SBEB) Regulations. On exercise of the SARs granted under the said plan/ scheme, the employee exercising the SARs becomes entitled to receive cash, in terms of the respective plan/ scheme.

In terms of the provisions of Regulation 14 of the SEBI SBEB Regulations, details of the aforesaid schemes can be accessed at www.abfrl.com

A certificate from the Statutory Auditor of the Company, confirming that the aforesaid schemes have been implemented in accordance with the SEBI SBEB Regulations, will be open for inspection at the ensuing Fourteenth Annual General Meeting.

G.    Related party transactions

All related party transactions entered into during the year under review were approved by the Audit Committee and the board, from time to time and the same are disclosed in the financial statements of your Company for the year under review. Further, pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board has, on recommendation of its Audit Committee, adopted a Policy on Related Party Transactions and the said policy is available on the website of the Company i.e. www.abfrl.com

Further, in terms of the provisions of Section 188(1) of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the SEBI Listing Regulations, all contracts/ arrangements/ transactions entered into by the Company with its related parties, during the year under review, were

•    in "ordinary course of business" of the Company,

•    on "an arm's length basis" and

•    not "material".

All transactions with related parties are in accordance with the policy on related party transactions formulated by the Company.

Accordingly, Form No. AOC-2, prescribed under the provisions of Section 134(3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, for disclosure of details of related party transactions, which are "not at arm's length basis" and also which are "material and at arm's length basis", is not provided as an annexure to this Report.

H.    Dividend Distribution Policy

In terms of Regulation 43A of the SEBI Listing Regulations, your Company has formulated a Dividend Distribution Policy, with an objective to provide the dividend distribution framework to the Stakeholders of the Company. The policy sets out various internal and external factors, which shall be considered by the Board in determining the dividend pay-out. The policy is annexed as Annexure III to this Report and is also available on the website of the Company i.e. www.abfrl.com

I. Strategic initiatives during the year

Rights Issue:

During the year under review, the Company raised capital by way of a Rights Issue as detailed below:

Event date	Â	Details
May 27, 2020	Â	Approved fund raising of ' 1,000 Crore by way of a Rights Issue
Jun 25, 2020	Â	Approved the Issue:
Â	Â	• of 9.05 Crore equity shares of face value of ' 10 each ("Rights Equity Shares");
Â	Â	• at a price of ' 110 per Rights Equity Share (including premium of ' 100 per Rights Equity Share), aggregating to ' 995.12 Crore
Â	Â	• in the ratio of 9 Rights Equity Shares for every 77 existing fully-paid shares held by the eligible equity shareholders as on the Record Date i.e. July 1, 2020.
Jul 28, 2020	Â	(i) Approved allotment of:
Â	Â	• 9.03 Crore partly paid-up Rights Equity shares ("partly paid shares") to the eligible applicants;
Â	Â	• at a price of ' 55 per share received on application (of which ' 5 was towards face value and ' 50 towards premium)
Â	Â	(ii) 0.02 Crore Rights Equity Shares has been kept in abeyance pending regulatory/ other clearances
Jan 8, 2021	Â	Approved various matters with respect to the first call on partly paid shares
Jan 11,2021	Â	Issuance of the notice for the 1st call money of ' 27.50 per partly paid share (of which ' 2.50 is towards face value and ' 25 towards premium)
Jan 15 to Feb 23, 2021		Amount received on 8,99,09,500 partly paid shares
Mar 24, 2021	Â	3,67,542 partly paid shares forfeited due to non-payment of the 1st call money (in accordance with the Articles of Association of the Company)
May 28, 2021	Â	Approved calling of 'Final Call of ' 27.50 per partly paid share (of which ' 2.50 is towards face value and ' 25 towards premium)', in respect of 8,99,09,500 outstanding partly paid-up shares of face value of ' 10 each, issued by the Company, on a rights basis, pursuant to the Letter of Offer dated June 28, 2020
Preferential Issue:		Â
During the year under review, the Company raised capital by way of a Preferential Issue as detailed below:
Event date	Details	Â
Oct 23, 2020	Approved issuance of equity shares on a preferential basis to Flipkart Investments Private Limited ("Flipkart") aggregating to ' 1,500 Crore
Nov 22, 2020	Received approval of shareholders by way of Postal Ballot

Jan 20, 2021	Flipkart received approval of Competition Commission of India for its proposed acquisition in your Company
Jan 28, 2021	• Approved allotment of 7.32 Crore fully paid-up equity shares to Flipkart at ' 205 per Equity Share (of which ' 10 is towards face value and ' 195 towards
Â	premium)
Â	• Post approval Flipkart holds 7.8% equity stake in the Company on a fully diluted basis

Acquisition of 51% stake in Sabyasachi Calcutta LLP:

On January 27, 2021, the Board of Directors have approved entering into a Framework Agreement with Sabyasachi Calcutta LLP [formerly M/s. Sabyasachi Couture, a partnership firm] ("Sabyasachi") which is engaged in the business of manufacturing, distribution and sale of designer apparels, jewellery and accessories under its own brand "Sabyasachi". On February 24, 2021, post completion of the customary closing conditions under the said Agreement, the Board of Directors approved acquisition of 51% stake in Sabyasachi. Consequently, Sabyasachi is a Subsidiary of the Company [w.e.f. February 24, 2021].

Strategic partnership with 'Tarun Tahiliani':

On February 24, 2021, the Board of Directors approved a strategic partnership with the brand 'Tarun Tahiliani' for its couture business, as well as launch of a new line of affordable premium men's ethnic wear.

The said partnership was executed through:

(i)    Acquisition of 33.5% stake in Goodview Fashion Private Limited [formerly known as Goodview Properties Private Limited] ("GFPL") by way of entering into a 'Share Purchase and Subscription agreement' ("SPSA") along with a 'Shareholders Agreement' ("SHA"). As a part of the transaction, the couture business under the brand 'Tarun Tahiliani', which was erstwhile residing in the entity named Tahiliani Design Private Limited was transferred to GFPL.

(ii)    Acquisition of 80% stake in Indivinity Clothing Retail Private Limited ("ICRPL") by way of entering into 'Share Subscription and Shareholders Agreement' ("SSSA") to develop and launch a new brand of apparel and accessories, in the affordable premium ethnic wear segment in collaboration with Tarun Tahiliani.

On March 26, 2021, post completion of the customary closing conditions under the said SPSA, SHA and SSSA, the Board of Directors approved the effectiveness of the said acquisitions. Consequently, GFPL is an Associate [w.e.f. March 19, 2021] and ICRPL is a Subsidiary of the Company [w.e.f. March 26, 2021].

J. Proceeds from Rights Issue and Preferential Issue:

The utilization of funds raised have been mentioned hereunder:

(< in Crore)

Mode    Object    Amount    Amount

allocated utilised

Rights Issue    Repayment of certain borrowings of the    Company    745.00    736.17

General corporate purpose    244.26    6.52

Preferential    Strengthening the balance    sheet,    pursue    growth    1499.99    1499.99

Issue    in existing business, expand new lines of business,

strengthen digital and omni-channel

There has been no deviation in the use of proceeds of the Rights Issue and Preferential Issue from the objects stated in the Offer document as per Regulation 32 of SEBI Listing Regulations. The Company has been disclosing on a quarterly basis to the Audit Committee, the uses / application of proceeds / funds raised from Rights issue and Preferential Issue and also filed with the Stock Exchanges on a quarterly basis, as applicable.

K.    Subsidiaries, joint ventures, associate companies

As on March 31, 2021, the Company has 5 (five) subsidiaries and 1 (one) associate company.

Following were the additions during the year under review:

(i)    Sabyasachi became a subsidiary of the Company w.e.f. February 24, 2021;

(ii)    GFPL became an associate of the Company w.e.f. March 19, 2021;

(iii)    ICRPL became a subsidiary of the Company w.e.f. March 26, 2021;

Further, Jaypore Inc., USA ceased to be subsidiary of the Company w.e.f. September 21, 2020; No company has ceased to be an associate/ Joint venture of the Company.

Pursuant to the provisions of Section 129(3) of the Act, read with the Companies (Accounts) Rules, 2014 and in accordance with applicable accounting standards, a statement containing the salient features of financial statements of your Company's subsidiaries and associate in Form No. AOC-1 is annexed as Annexure IV to this Report.

In accordance with the provisions of Section 136 of the Act and the amendments thereto, and the SEBI Listing Regulations, the audited Financial Statements, including the consolidated financial statements and related information of the Company and financial statements of your Company's subsidiaries, joint ventures/ associate companies have been placed on the website of your Company viz. www.abfrl.com

Your Company has formulated a Policy for determining Material Subsidiaries. The said policy is available on the website of the Company i.e. www.abfrl.com. However, the Company does not have any material subsidiary as defined under Regulation 16(1)(c) of SEBI Listing Regulations.

L.    Conservation of energy, technology absorption, foreign exchange earnings and outgo

Your Company consciously makes all efforts to conserve energy across all its operations. A report containing details with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed in terms of Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, is annexed as Annexure V to this Report.

M.    Vigil Mechanism

The Board, on recommendation of its audit committee, has adopted a Vigil Mechanism/ Whistle Blower Policy and the details of which are provided in the Corporate Governance Report forming part of this Annual Report.

Adequate safeguards are provided against victimization to those who avail of the mechanism and direct access to the Chairperson of the audit committee is provided to them. The details of establishment of vigil mechanism is also available on the website of the Company i.e. www.abfrl.com

N.    Risk Management

Your Company has framed and implemented a Risk Management Policy in terms of the provisions of Regulation 17 of the SEBI Listing Regulations, for the assessment and minimization of risk, including identification therein of elements of risk, if any, which may threaten the existence of the Company.

The policy is reviewed periodically by the Risk Management and Sustainability Committee along with the key risks and related mitigation plans. More details on risks and threats have been disclosed hereinabove, as part of the Management Discussion and Analysis.

Further, in view of the ever-increasing size and complexity of the business operations, your Company is exposed to various risks emanating from frauds. Accordingly, the Board, on recommendation of the Audit Committee, has adopted an Anti-Fraud Policy and a Whistle

Blower Policy, to put in place, a system for detecting and/or preventing and/or deterring and/ or controlling the occurrence of frauds.

O.    Nomination Policy and Executive Remuneration Policy/Philosophy

In terms of Section 178 of the Act and Regulation 19 of the SEBI Listing Regulations, the Board of your Company, on recommendation of the Nomination and Remuneration Committee ("NRC"), had adopted a Nomination Policy, which inter alia enumerates the Company's policy on appointment of directors, KMP and senior management. Further, the Board, on recommendation of NRC, has also adopted a policy entailing Executive Remuneration Philosophy, which covers remuneration philosophy covering the directors, KMP, senior management and other employees of the Company.

Both the aforesaid policies, as amended from time to time pursuant to the amendment in the applicable regulatory provisions, are available on the website of the Company i.e. www.abfrl.com

Salient features of the aforesaid policies are as under:

(a)    Nomination Policy

The Nomination Policy is enacted mainly to deal with the following matters, falling within the scope of the NRC:

•    To institute processes which enable the identification of individuals who are qualified to become directors and who may be appointed as key managerial personnel and/or in senior management and recommend to the Board of Directors their appointment and removal from time to time;

•    To devise a policy on board diversity;

•    To review and implement the succession and development plans for managing director, executive directors and officers forming part of senior management;

•    To formulate the criteria for determining qualifications, positive attributes and independence of directors;

•    To establish evaluation criteria of board, its committees and each director.

(b)    Executive Remuneration Policy/ Philosophy

This Policy supports the design of programmes that align executive rewards - including incentive programmes, retirement benefit programmes, promotion and advancement opportunities - with the long-term success of the Stakeholders of the Company.

The executive remuneration program of the Company is designed to attract, retain, and reward talented executives who will contribute to our long-term success and thereby build value for our shareholders and intends to:

•    Provide for monetary and non-monetary remuneration elements to our executives on a holistic basis.

•    Emphasize "Pay for Performance" by aligning incentives with business strategies to reward executives who achieve or exceed Group, business and individual goals.

P.    Sustainability and Business Responsibility Report

Your Company's sustainability initiatives are aligned with the Aditya Birla Group's sustainability vision, which mainly comprises of responsible stewardship, stakeholder engagement and future-proofing. Accordingly, under the aegis of the Aditya Birla Group's sustainability vision, your Company is strengthening its 'ReEarth' programme, to design a roadmap, which will align with the group level sustainability policies and international frameworks.

Through this mission, we hope to create a future ready organisation, which can pre-empt imminent challenges and address the needs of all stakeholders.

In accordance with our sustainability vision and in terms of Regulation 34(2)(f) of the SEBI Listing Regulations, a Sustainability and Business Responsibility Report forms part of this Annual Report.

Q.    Auditors and Auditors report

(i)    Statutory Auditor

As per the provisions of the Act, the period of office of M/s. S R B C & CO LLP, Chartered Accountants (ICAI Registration No. 324982E/E30003), expires at the conclusion of the ensuing Annual General Meeting.

The Board has recommended the appointment of Price Waterhouse & Co Chartered Accountants LLP (FRN: 304026E/E-300009), as the Statutory Auditors of the Company in their place, for a term of five consecutive years, from the conclusion of the 14^th AGM of the Company scheduled to be held in the year 2021 till the conclusion of the 19^th AGM to be held in the year 2026, for approval of shareholders of the Company, based on the recommendation of the Audit Committee.

They have confirmed their eligibility and qualification required under the Act for holding the office, as Statutory Auditors of the Company.

Further, the Auditors' Report "with an unmodified opinion", given by the Statutory Auditors on the financial statements of the Company for financial year 2020-21, is disclosed in the financial statements forming part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Statutory Auditor in their Report for the year under review.

The notes to the financial statements are self-explanatory and do not call for any further comments.

(ii)    Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act, M/s. Dilip Bharadiya & Associates, Company Secretaries, were appointed as the Secretarial Auditor of the Company, to conduct secretarial audit of the board processes for the year under review.

The Secretarial Audit Report given by the Secretarial Auditor of the Company is annexed as Annexure VI to this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditor in his Report for the year under review.

(iii)    Cost Auditor

During the year under review, your Company was not required to maintain cost records under sub- Section (1) of Section 148 of the Act. Hence, the provisions related to appointment of Cost Auditor is not applicable.

Further, no fraud in terms of the provisions of Section 143(12) of the Act, has been reported by the Auditors in their report for the year under review.

R.    Material changes and commitment affecting financial position of the company

The outbreak of corona virus (COVID-19) pandemic globally and in India is causing significant disturbance and slowdown of economic activity. Operations and revenue have been impacted due to COVID-19.

S.    Other Disclosures

In terms of the applicable provisions of the Act and SEBI Listing Regulations, your Company additionally discloses that, during the year under review:

•    there was no change in the nature of business of your Company;

•    your    Company has not accepted any fixed deposits from the public    falling under    Section

73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2021, there were no deposits which were unpaid or unclaimed and due for repayment, hence, there has been no default in repayment of deposits or payment of interest thereon;

•    your Company has not issued any shares with differential voting rights;

•    your Company has not issued any sweat equity shares;

•    no significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status operations of your Company in future.

•    your    Company has not transferred any amount to the Reserves;

•    your    Company has not raised any funds through qualified institutions    placement as per

Regulation 32(7A) of SEBI Listing Regulations.

•    Your Company does not engage in commodity hedging activities.

•    Your Company has not made application or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).

•    Your Company has not made any one-time settlement for the loans taken from the Banks or Financial Institutions.

It is further disclosed that:

•    There is no plan to revise the financial statements or directors' report in respect of any previous financial year.

•    Particulars of the loans, guarantees and investments as required under Section 186 of the Act are disclosed in the financial statements of your Company for the year under review.

•    Details pertaining to unclaimed shares demat suspense account of your Company are disclosed in the General Shareholder Information forming part of this Annual Report.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the SEBI. The report on Corporate Governance as stipulated under the Listing Regulations forms part of the Annual Report.

Your Company has duly complied with the Corporate Governance requirements as set out under Chapter IV of the SEBI Listing Regulations and the M/s. Dilip Bharadiya & Associates, Company Secretaries, vide their certificate dated May 28, 2021, have confirmed that the Company is and has been compliant with the conditions stipulated in the chapter IV of the SEBI Listing Regulations. The said certificate is annexed as Annexure VII to this Report.

ANNUAL RETURN

Pursuant to the provisions of Sections 92(3) and 134(3)(a) of the Act and the Companies (Management and Administration) Rules, 2014, the Annual Return in Form no. MGT-7 can be accessed on the website of the Company i.e. www.abfrl.com

DISCLOSURES PURSUANT TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has in place a policy on Prevention of Sexual Harassment at Workplace, which is in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSHAct"). The objective of this policy is to provide an effective complaint redressal mechanism if there is an occurrence of sexual harassment.

This policy is applicable to all employees, irrespective of their level and it also includes 'Third Party Harassment' cases i.e. where sexual harassment is committed by any person who is not an employee of the Company.

Your Company has also set up an Internal Complaints Committee at each of its administrative office, which is duly constituted in compliance with the provisions of the POSH Act. Further, the Company also conducts interactive sessions for all the employees, to build awareness amongst employees about the policy and the provisions of POSH Act.

During the year under review, no cases were filed under the POSH Act.

AWARDS AND RECOGNITIONS

Your Company has been proud recipient of many awards and recognitions during the year under review and significant ones amongst them are as under:

•    Asia's Most Sustainable Company' in the Textile, Apparel & Luxury Goods Industry by S&P Global CSA 2020

•    Golden Peacock Award for Sustainability 2020 in the Textile and Apparel Sector.

•    India's most Sustainable Companies 2020 by BW Business World.

•    CII-ITC Sustainability Award 2020 for 'Outstanding Accomplishment in Corporate Excellence'.

•    ICC Social Impact Award for FY2021 under the 'Empowering the Rural Population' category by the Indian Chamber of Commerce.

•    Recognized as one of India's Best Workplaces in Retail for 2021 by Great Place to Work, India

•    Third prize for Best Communication Campaign (Internal Publics) at The Public Relations Society of India (PRSI) National Awards 2020.

•    Manufacturing teams at ABFRL won the 'Excellence Award' and 'Distinguished Award' at the National Convention on Quality Concepts (NCQC) 2020 by Quality Circle Forum of India.

•    Internal Magazine "InTouch" awarded with Third prize for Best Newsletter (English) at The Public Relations Society of India (PRSI) National Awards 2020.

ACKNOWLEDGEMENT

We take this opportunity to thank all the customers, members, investors, vendors, suppliers, business associates, bankers and financial institutions for their continuous support. We also thank the Central and State Governments and other regulatory authorities for their co-operation.

We acknowledge the patronage of the Aditya Birla Group and above all, we place on record our sincere appreciation for the hard-work, solidarity and contribution of each and every employee of the Company in driving the growth of the Company.

For and on behalf of the Board of Directors

Place : Bengaluru    Ashish Dikshit    Vishak Kumar

Date : May 28, 2021    Managing Director Whole-time Director

1

Basis of previous years', numbers have been adjusted to make it comparable with FY21.

Strong demand resurgence during the festive period combined with focused efforts towards driving alternative channels such as e-commerce, WhatsApp commerce etc. brought the business back on track quite significantly until early March 2021, when it was again disrupted by the second wave and the lockdowns that followed.

2

Comprises of non-current borrowings, current borrowings, current maturities of long-term borrowings.

Revenue

Your Company reported revenue of ' 5,181 Crore during the financial year, recording a de-growth of 41% over the previous year. The growth was impacted due to COVID-19.

---

Mar 31, 2019

REPORT OF THE BOARD OF DIRECTORS

(INCLUDING MANAGEMENT DISCUSSION AND ANALYSIS)

Dear Members,

Your Company''s directors hereby present the Twelfth Annual Report of the Company together with the audited financial statements of the Company for the financial year ended March 31, 2019 ("year under review/ FY 2019").

MANAGEMENT DISCUSSION AND ANALYSIS Overview

The global economic outlook has weakened as compared to the forecast in 2017. The 3.6% growth in 2018 was due to significantly weaker performance in some economies in the second half of 2018. International Monetary Fund (IMF) projects the global economy growth to decelerate to 3.3% in 2019 and return to 3.6% in 2020. The decline in forecast is majorly due to US-China trade tensions, tighter credit policies in China, macro-economic stress in Argentina and Turkey and financial tightening alongside the normalization of monetary policy in the larger advanced economies.

IMF, however, expects a strong growth in Indian economy while the rest of the world reels under the effects of high trade uncertainty, which threatens to disrupt global supply chains. The Indian economy is estimated to recover from mild slowdown experienced in 2018 to grow by 7.3% in 2019 and 7.5% in 2020, supported by continued recovery of investment. The future forecast of low oil prices continuing has eased inflationary pressures, causing the RBI to ease the pace of monetary tightening.

Industry structure and developments

Global apparel market

Global apparel market is close to 2.3% ⁽¹⁾ of world GDP with Europe, USA and China being the largest markets, expected to grow at a compound annual growth rate (CAGR) of 5% by the year 2025. With the shift of economic growth from mature regions in West to emerging markets in South and East Asia, more than half of apparel and footwear sales will originate outside of traditional markets of Europe and North America. This hints at the large opportunity available in these regions, which local and global apparel players will chase in the coming years.

In 2017, India and China collectively accounted for a market of ~ 16% with 36% of the world population. Currently, India and China are expected to grow at a higher steady CAGR of 12% and 10% respectively vis-a-vis overall world average of 5%. The growth in apparel markets in these countries is being driven by continued high economic growth and rise in per capita income. As a result, China will be the largest apparel consumer in the world by 2025 while India will topple Japan to become the fourth largest.

Global consumer trends

As customers globally embrace multiple modes of shopping, consumer footfall to physical stores continues to remain under pressure. This is driving most of the brands and retailers across market segments to develop an omni-channel play to address customers across channels. In the last few years, social media has played a key role in shaping the conversation around fashion and will continue to make fashion more democratic, accessible and aligned with the aspirations of evolving consumers.

At the back end, speed in production will be increasingly more critical to every fashion label and retailer. With new technologies such as robotics and 3D printing, companies will be able to deal with time pressures and offer customers greater personalization at the same time. Taking cue from some of the widely successful fast fashion models, several apparel players are moving to digitize their supply chain for speed and flexibility.

The trend of digital adoption by consumers is now mainstream and it will continue to be the biggest driver of change in the global fashion industry. The consumer''s interaction with fashion is changing fast, with discovery moving online. Digital media and content now influences the way consumers perceive fashion trends and how they transact. This creates a need for the fashion brands to create strong online presence to assist and guide the customers in their non-linear exploration and consumption patterns.

Indian market

The apparel market for India is expected to grow at CAGR of 12% ⁽¹⁾ during the period 2017 to 2025. This growth is backed by greater purchasing power leading to higher discretionary spends; majorly riding on increase in youth population, shift to inspirational buying, higher brand affinity, urbanization and increased penetration of technology.

Similarly, from the supply side, the factors driving growth are innovation in retail experience with digital marketing displays and improved check out mechanisms and investment by large organized players. Innovation on products and services has benefitted the consumers in improved product quality, product availability, competitive pricing and pleasant shopping experience. These changes have been driving growth for the organized apparel business in our country, wherein still majority of the market remains unorganized.

The share of organized retailing in the apparel space is expected to increase from 23% in FY 2017 to 28% ⁽¹⁾ by FY 2020. This growth would be aided by improved investments, new stores roll out and increased aggression by online players. Increased penetration of organized players in tier 2 and 3 cities, along with the higher disposable income levels are expected to contribute to the growth story. This also shows the magnitude of the opportunity available for the organized apparel and retail players in India.

While the current share of women''s wear in the overall apparel market is 37% ⁽¹⁾, it is expected to outpace the men''s wear category and occupy a majority market share of 41% ⁽¹⁾ by 2025. This trend is led by an increase in the number of working women, higher disposable income, more experiential lifestyle and higher autonomy in decision making.

The industry continued with its rapid growth this year, led by aggressive expansion in value and mass segments, rise of women''s and kid''s categories and continued scale up of e-commerce.

On e-commerce side, due to clearer reinforcement of Foreign Direct Investment (FDI) policy, the top e-commerce players had to re-evaluate their business models and strategic partnerships. The industry was also forced to focus more on convenience and service as the key driver with minor reductions in discounting and promotions. Despite few initial hiccups, e-commerce continued to build upon its strength of providing rapid scale and deep access to markets and consumers. However, with increased focus on profitability, the disruptive impact that the sector had on brick and mortar players few years back has diminished; creating a conducive ecosystem for offline and online players in India to partner and grow the market together.

With the developments in e-commerce policy and resulting business model, omni-channel or online-to-offline (O2O) has started emerging as a more suitable model for both online and offline players to test. Both new as well as established players are testing out different models of engaging an O2O framework for their products and services.

Business overview

Your Company is India''s largest pure-play fashion and lifestyle entity with an elegant bouquet of leading fashion brands and retail formats.

Lifestyle brands

Lifestyle brands reported revenue of '' 4,304 Crore during the year, recording a growth of 11% over the previous year (comparable Ind AS and GST adjusted growth rate of 13%). The growth is fuelled by new store additions, growth in e-commerce channel, product innovation and expansion in newer categories. Lifestyle brands recorded a like-to-like growth of 5.3% for the full year. The EBITDA has improved to Rs,519 Crore, a growth of 15% over previous year. Higher profitability is achieved despite more than 60% increase in brand building spends as compared to the previous year.

Louis Philippe, Van Heusen, Allen Solly and Peter England continue to be leaders within their respective segments. The brands expanded its loyal consumer base to approximately 15 Million this year providing high quality products and services to the consumers. With a deeply penetrated distribution network across India, these brands are synonymous with high quality fashion and top-notch consumer experience. The growth in women''s and kids sub-brands has strengthened the overall performance of Lifestyle brands. With three of its brands having revenue of more than Rs,1,000 Crore, Lifestyle brands constitutes the strongest brand portfolio in the industry.

These brands have created very strong equity amongst its loyal customers through years of persistent focus on product innovation, design development, consumer satisfaction and brand building.

During this year, the business further expanded its scale through new store openings in untapped markets. The business focused on integrating consumer feedback into product design and planning, aiming at improving the product satisfaction score amongst consumers. Lifestyle brands business took significant strides towards adopting digital ways of working, both, in terms of consumer engagement and brand building.

Your Company has expanded Peter England deep into tier 3 and 4 towns, providing these markets, an access to high quality branded products and consistent retail experience. High decibel and localised marketing launches with robust operational execution has ensured tremendous customer response across all stores.

Pantaloons

This has been a turnaround year for Pantaloons, with revenue of Rs,3,194 Crore during the year, a growth of 12% over the previous year (comparable Ind AS and GST adjusted growth rate of 15%). This growth was driven by significant improvement in product freshness, design and quality and improved assortment. The EBITDA improved to Rs,231 Crore, a growth of 35% over the previous year. EBITDA margins have improved by 120 basis points to 7.2% despite more than 60% increase in brand building spends as compared to the previous year.

Pantaloons is a continuously growing retailer in the value fashion segment with a network of 308 stores across the country, spanning over 4 Million square feet. During the year under review, Pantaloons added 40 new stores to its network and entered many new towns and markets. It also launched its B2C e-commerce platform (www.pantaloons.com) during the year and plans to build it in the coming years. Through focused interventions on understanding key customer needs and applying those insights to enhance product quality and assortment, Pantaloons was able to increase its share in private label and ethnic wear.

It also increased spends on marketing to strengthen the brand and create greater brand visibility. Pantaloons has a pool of over 15 Million deeply engaged customers, which is one of the key drivers of the growth, contributing to more than 90% of its sales.

Fast fashion

Your Company has created and is working towards revamping its fast fashion segment. Forever 21 is one of the most iconic fast fashion brands globally, providing trendy fashion apparel and accessories to girls, women and men.

This year, your Company showed unwavering focus on improving the business model and reducing losses by store rationalization and cost optimization. Retail store models were calibrated further to establish proof of success, which will allow for future expansion in Forever 21.

Further, in line with its continued focus on prudent capital allocation, your Company has decided not to pursue "People" brand as a standalone retail format going forward. Considering the brand equity of "People" brand amongst young consumers, it is being transitioned into a private label brand within Pantaloons.

Innerwear

The Innerwear category is evolving from being a basic commodity to a need, which has more involvement by the customer who wants both; styling without compromising on comfort. Van Heusen (VH) innerwear for men has made significant scale and established itself as a rapidly growing brand in two years'' time. In the mid of FY 2019, the Company also launched VH innerwear for women and encouraged to receive extremely positive customer and partner feedback.

During this year, innerwear segment aggressively added more than 6,000 points of distribution through pan India launches. The business also launched its own e-commerce platform for women innerwear (www.vanheusenintimates.com), which gives the consumer a personalized and engaging experience. It is a one-stop solution for all lingerie fit concerns. An in-depth consumer research across 1,800 respondents gave insight into the key consumer pain points and each of the product is crafted to address the same. Riding on product strategy focused on fit, fashion and innovation and favorable engagement models with channel partners, your Company considers this segment to become an important growth driver in coming years.

Global brands

Global brands portfolio comprises of ''The Collective'', one of India''s largest multi-brand retailer of luxury brands and select mono brands. The mono brands portfolio includes Hackett, Ted Baker, Simon Carter, American Eagle, Ralph Lauren and Polo Ralph Lauren. In this financial year, your Company expanded the mono brands foot print by launching new stores of Polo Ralph Lauren, Ralph Lauren, American Eagle and Ted Baker. American Eagle has created a strong brand imagery amongst its target segment, striving to become the most exciting denim-led casual brand for the youth.

With the addition of these brands in its portfolio, your Company will continue on its trajectory on building a strong but selective play in the emerging super premium and bridge to luxury segments.

Others

Your Company continuously explores growth opportunities in identified white spaces. In FY 2019, the Company has launched a new retail format "Style Up" to address the large opportunity in mass segment for small town India. Your Company is also evaluating various options to increase its presence in ethnic market. Both these opportunities offer tremendous long-term growth potential.

Business strategy

Your Company will continue to build on its leadership position through investments in key strategic themes. Building strong brands

In order to maintain its leadership position, your Company will continue to invest in building strong vibrant brands that evolve with the changing customer needs. The brand focus will be extended into enhanced product design and a refreshed store experience. The focus on product innovation will continue to drive the differentiation, supplemented with initiatives to interact with customers continuously. The Company will continue to test and implement latest methods of engagement with the customers and create strong associations to strengthen its brands. The organization’s consumer-centricity framework is based on continuous research, big data analytics, real-time feedback from retail outlets and an engaged customer loyalty programme.

Enhancing portfolio

Your Company has laid out a clear growth path to create value by strengthening its existing businesses and accelerating play in emerging business segments. The Company continuously identifies emerging segments in the market and seeks to enhance its play through a combination of brand extensions, new product launches and strategic acquisitions.

In the last few years, your Company expanded its presence in casual wear through brand extensions and also gained a strong position in the fast growing value fashion segment through Pantaloons. The portfolio has been strengthened with inclusion of Forever 21 in women''s fast fashion and men''s and women''s innerwear under the brand Van Heusen. The Company has also enhanced focus on women''s and kids wear through strengthening the play in these segments through its Lifestyle brands.

Moving forward, your Company will continue to explore further growth opportunities in fast growing segments such as ethnic wear, casual and super-premium categories.

Building agile design and supply chain

Design and product development is at the core of the apparel business and your Company will continue to invest in these functions. It will drive product innovation by incorporating customer feedback in the design cycle. From a 4-season model, the Company will move to a 12-season model allowing it to reduce lead times significantly. This will enable the Company to continue with the journey of being closer to market in terms of identifying and addressing latest fashion trends. It is a significant shift that is enabling your Company to offer greater freshness and latest fashion in line with the changing consumer trends.

Expanding distribution footprint

Your Company has been growing rapidly through its multi-channel distribution strategy and is now present in more than 750 cities.

With the expansion of retail opportunity across India, the Company intends to continue building reach and penetration through physical stores, along with strong omni-channel play. Together with increasing its penetration in existing territories, the Company has identified markets for further expansion. It sees tremendous opportunity in the vast tier 2, 3 and 4 towns of the country and plans to expand presence through appropriate business models. This will help in gaining strong position across markets to meet the growing demand for high-quality ready-made branded apparel.

Digital transformation

Digital, as a way of life, is emerging as a key theme for organizations of tomorrow. The Company needs to embrace digital not only to enhance the customer experience side of it, but also internally to enhance processes and ways of working. Your Company has taken some key steps in this direction and internal and external focused digital transformation interventions will be a core strategy parameter for it.

Digital transformation is significantly disrupting the fashion retail industry. In India, e-commerce players have rapidly grown over the last 5 years, creating new business models, which are both, an opportunity and a threat to the business. Your Company has been a front-runner in adoption of transformational digital and analytics technology. While working closely with leading e-commerce players to extend the reach of its brands, the Company continue to focus on developing the online focus of its own brands. The omni-channel initiatives are rapidly scaling up by leveraging the Company''s unique strength of a large store network along with online e-commerce capabilities. Your Company has also launched an initiative to design products digitally using advanced 3D design technology, which will enable digital commerce across trade and retail channels.

Your Company recognizes the need for adoption of digital to ensure internal transformation and external market readiness. Significant investments are made in data analytics capabilities by setting up a central data warehouse for aggregating all customer transactions and interactions, both in-store and online. It''s focus is on enabling personalized consumer campaigns leveraging the rich data that it has from the loyalty programs and building single-view of customer data models. This has been successfully piloted in Pantaloons and is now being scaled up to extend across brands as well. While analytics led customer engagement is a key priority, the Company has also initiated pilots to knowledge enable core business processes including design, merchandising, allocation and markdown management. The customer-shopping journey is not linear, thus, there is a significant focus to drive transformation using digital platforms, as the Company continue on its journey to build a future-ready organization.

(Amount in Rs,Crore)

Particulars	Year ended	Year ended
	March 31, 2019	March 31, 2018
Revenue from operations (1)	8,118	7,181
EBITDA (2)	619	501
Finance costs	187	172
Depreciation	282	281
Earnings before tax	149	49
Current tax	22	-
Deferred tax assets/ (liabilities) (3)	194	69
Net profit/ (loss) (2)	321	118

Particulars	As at March 31, 2019	As at March 31, 2018
Net fixed assets (including CWIP)	718	769
Goodwill (4)	1,860	1,860
Deferred tax asset (3)	263	69
Net working capital	291	256
Capital employed	3,132	2,954
Net worth	1,429	1,093
Debt (5)	1,703	1,861

Notes:

(1) Revenue from operations for the year ended March 31, 2019 are not comparable with previous period corresponding figures of March 31, 2018 due to:

a. GST: Effective July 1, 2017, sales are recorded net of GST whereas earlier the same was recorded gross of excise duty which formed part of expenses.

b. Ind AS 115: Sales is lower by Rs,84 Crore for the year ended March 31, 2019, on account of impact of purchases on ''sales or return basis'' arrangements.

(2) Includes other income of Rs,65 Crore (Previous year: Rs,33 Crore).

(3) Recognized deferred tax assets as at March 31, 2019 of Rs,194 Crore (Previous year: Rs,69 Crore) on brought forward accumulated losses and deductible temporary differences based on reasonable certainty in coming years.

(4) As on March 31, 2019, goodwill (after testing for impairment in accordance with the Ind AS - 36 issued by the Institute of Chartered Accountants of India) stands at Rs,1,860 Crore.

(5) Comprises of non-current borrowings, current borrowings and current maturities of long-term borrowings.

Net working capital

(Amount in Rs,Crore)

Particulars	As at	As at	As at
	March 31, 2019	March 31, 2019	March 31, 2018
	(As reported)	(Adjusted)	(As reported)
Inventories	1,921	1,788	1,691
Trade receivables	787	536	552
Cash and bank balances	57	57	73
Other assets	1,016	893	721
Less: Trade payables	2,399	2,143	2,009
Less: Other liabilities	1,091	840	772
Net working capital	291	291	256

Notes on adjustment:

(1) Revision of agreements with vendors pursuant to change in model from sale or return (SOR) basis to outright (OR) basis has resulted in increase in inventory and trade payables - Impact of Rs,256 Crore.

(2) Impact of Ind AS 115 on provision for sales return:

(i) Provision for sales return (refund liabilities) - was netted off from trade receivables, now reclassified in other liabilities and trade receivables is reflected at a gross level - Rs,251 Crore;

(ii) COGS value of sales return (return assets) - which was earlier part of Inventories is now required to be reduced from Inventories and reflected in Other assets - Rs,123 Crore.

Overall impact is that both assets and liabilities has gone up by Rs,507 Crore.

Revenue

Your Company reported revenue of Rs,8,118 Crore during the year, recording a growth of 13% over the previous year (comparable Ind AS and GST adjusted growth rate of 15%), due to overall improved performance in both segments.

Your Company has implemented Ind AS 115 - "Revenue from Contracts with Customers" which became mandatory for reporting periods beginning on or after April 1, 2018, replacing the existing revenue recognition requirements. Accordingly, the Company has applied the modified retrospective approach and the revenue for the year ended March 31, 2019 are not comparable with the previous years. However, this does not have any impact on the profitability of the Company.

Segment performance: Madura Fashion and Lifestyle

Madura Fashion and Lifestyle (MFL) segment includes lifestyle brands, fast fashion and other businesses. MFL reported revenue of Rs,5,032 Crore recording growth of 13% over the previous year (comparable Ind AS and GST

adjusted growth rate of 14%).

MFL is expanding its presence in the retail channel by opening new stores and exits the year with 2,161 exclusive brand outlets (EBOs) and 245 value stores. MFL''s share of revenue from retail channel has increased to ~ 43% from ~ 35% in the previous year.

Segment performance: Pantaloons

Pantaloons reported a revenue of Rs,3,194 Crore recording growth of 12% over the previous year (comparable Ind AS and GST adjusted growth rate of 15%). During the year, it added 40 stores taking the total number of stores to 308 spanning 4 Million square feet. Pantaloons reaches out to large middle class Indian households with its diversified offerings for men, women and kids

Earnings before interest, tax, depreciation and amortization (EBITDA)

EBITDA of the Company, including other income is Rs,619 Crore (previous year Rs,501 Crore) and grew by 24%. The EBIDTA margin for the Company improved from 7.0% to 7.6% in FY 2019 with a continuous improvement in both the segments.

Finance cost

Finance cost for the year was Rs,187 Crore as compared to Rs,172 Crore in the previous year. The increase is mainly on account of increase in market interest rates. The average borrowing cost for the Company is at 8.0% as compared to 7.7% in the previous year.

Depreciation

Depreciation during the year remains at Rs,282 Crore as compared to Rs,281 Crore in the previous year Dividend

The Board of Directors of your Company, after considering holistically the relevant circumstances and keeping in view the Company''s Dividend Distribution Policy, has decided that it would be prudent, not to recommend any dividend for the year under review.

Borrowings

In order to ensure greater financial flexibility and an optimal financing structure, the Company, at the Eleventh Annual General Meeting held on August 28, 2018, obtained approval of the shareholders by way of a special resolution, to raise funds by issuance of non-convertible debentures for an amount of up to Rs,1,250 Crore, on private placement basis, within the overall borrowing limits of the Company as approved by the shareholders from time to time.

Particulars	As at March 31, 2019	As at March 31, 2018
Debtors turnover ratio (1)	12.13	14.31
Inventory turnover ratio (2)	4.49	4.60
Interest coverage ratio	1.80	1.29
Current ratio	0.81	0.84
Debt equity ratio	1.19	1.70
EBITDA margin	7.6%	7.0%
Operating profit margin	4.1%	3.1%
Net profit margin	4.0%	1.6%
Return on net worth	23.6%	20.2%
Return on average capital employed	11.1%	7.4%

Notes:

(1) Adjusted debtors turnover ratio for FY 2019 -14.93 (FY18 -14.31)

(2) Adjusted inventory turnover ratio for FY 2019 - 4.67 (FY18 - 4.60)

The formulae used in the computation of the above ratios are as follows:

Ratio	Formula
Debtors turnover ratio	Revenue from operations/ Average of opening and closing trade receivables
Inventory turnover ratio	Revenue from operations/ Average of opening and closing inventories
Interest coverage ratio	Earnings before interest and tax/ Finance costs
Current ratio	Current assets/ Current liabilities
Debt equity ratio	Debt/ Net worth
EBITDA margin	EBITDA/ Revenue from operations
Operating profit margin	Earnings before interest and tax/ Revenue from operations
Net profit margin	Profit after tax/ Revenue from operations
Return on net worth	Earnings before interest and tax/ Net worth
Return on average capital employed	Earnings before interest and tax/ Average capital employed

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in the key financial ratios:

(1) Interest coverage ratio and Operating profit margin - Ratios have improved due to better operational performance by the Company.

(2) Debt equity ratio, Net profit margin and Return on average capital employed - Ratios have improved due to better operational performance and higher deferred tax asset recognition for the period.

SWOT analysis

Strengths

Ability to build strong timeless brands

Your Company has been able to create many of the most iconic apparel and lifestyle brands in the country. This was achieved through continuous efforts in marketing, building an evolving distribution network and product innovation. The Company''s brands are its strongest and most fundamental strategic asset, enabling it to maintain a differentiated and competitive position in the domestic apparel industry. The hallmark of success of the Company has been to transform these brands with the change in customer behavior. Your Company ensures that the brands it build are not only the leaders in their core segment but evolve and extend to cater needs of new customers and changing market.

The Company will continue to selectively add and build new brands, further strengthening its brand portfolio and expanding its presence across untapped segments.

Deep expertise in design, product development and sourcing

Your Company''s brands derive the strength from the products it creates. Hence, the Company has invested deeply in building robust design and product development capabilities. Our teams are transforming the way we think about fashion cycles by aiming to improve towards closer-to-market creation. Your Company has enabled itself to swiftly and appropriately respond to ever-changing fashion trends by delivering innovative products satisfying consumer needs. This is supported by adoption of global sustainability practices.

Large distribution network

Your Company runs a wide and extensive distribution network of 2,714 stores and 23,000 points of sale; making it one of the largest distribution networks of any apparel business in the country. The Company is also at the forefront of expansion into tier 3 and 4 markets, as it aim to expand the brands to travel even further and deeper, creating a distribution network that will become its dominant competitive advantage.

Strong people processes

Your Company is the preferred choice for talent in the industry due to its focused efforts on building a people focused, meritocratic, professional and progressive organisation. People development is at the core of the business strategy reflected in its extensive management trainee programs with top design and business schools across the country. The Company has also lead many initiatives on people development, individual career mapping, mentoring for young women leaders and employee engagement.

Leadership capability and corporate governance

Home to some of the finest talent in the industry, most of the leadership team in the Company is home grown and has contributed to many important milestones in its long journey of more than two decades. Your Company is governed by a board comprising of industry stalwarts with rich experience across diverse consumer facing industries and multiple geographies.

Weaknesses

Sub-optimal presence in some high growth segments

Over the last few years, the Indian apparel industry has witnessed rapid growth in the casual, denim and women''s segments. Due to its strong legacy of men''s formal wear brands, the Company has been able to extend its offering to some of these opportunities but with moderate success. Company''s portfolio still needs more strength in growing categories such as womenswear and kidswear; and across wearing occasions such as casual wear, denims etc. In order to build a strong and balanced portfolio that addresses these gaps and is aligned to the future configuration of the apparel market, your Company is taking aggressive actions to enhance the business.

Opportunities

Large, fast growing market

Organized retail in India is experiencing rapid transformation and growth. This has been aided by robust demand due to rising incomes, aspiring middle class population and democratisation of fashion aided by easy access to digital medium for the masses. Certain categories such as women and kids are expected to grow much faster due to a lot of new brand, proliferation and discretion-based purchase replacing need-based buying.

The other big story for Indian market is the tremendous opportunity that exists in tier 2 and 4 towns. These towns have a high propensity to spend, are witnessing urbanisation and have an increasing aspiration to use branded products. The exposure to digital has greatly changed the aspirations and expectations of consumers in these markets. These markets will also see rise of high grade retail space, driving entry of numerous brands trying to address the needs of brand seeking consumers in better quality shopping space.

Rising affluence and increasing global exposure have led to growth in premium international brands business in India.

Digital influence

Digital has emerged as the biggest force powering B2C businesses by creating digitally influenced and enabled transactions. Your Company has embraced the digital revolution, upgrading the consumer shopping experience through omni-channel play, blending post purchase consumer feedback in its product design process and digitally enabling the brick and mortar stores to offer more efficient and holistic shopping experience. Your Company is also creating an engaged digital presence across all media channels, which have become a primary source of brand discovery for customers.

Threats and risks

Increased markdown in industry

E-commerce growth across the industries created a huge change in customer expectations from brands and now they seek even higher value for every rupee spent. This has forced organisations to either provide more value in the product or use high discounts to compete in the market. EOSS, led by big sale days by online and offline players heavily encourages discount seeking behaviour and shifted a large portion of sales to discounting season; adversely impacting margins.

Year-on-year discount increases are a big risk for the apparel industry. Many players are working on improving the core customer proposition comprising of innovative product, sharp pricing and delightful pre- and post- purchase experience, to shift consumers back to a full price sale regime.

Commoditisation of fashion

Many regional and national players have rapidly expanded value fashion formats in untapped new markets. These towns are experiencing quality retail for the first time and the nature of these retail offerings might commoditise fashion for the customer. There is a need to create brands and propositions that provide access to high value products but create a customer connect to the brand identity as well.

Inadequate supply of good quality retail space

With larger part of FDI in real estate focusing on residential development in the last few years, commercial real estate development had slowed down. This has led to most of the cities having insufficient supply of grade A malls and good quality commercial space, translating into higher rentals and unviable economics for retail companies.

Limited availability of talent

Apparel industry experiences the demand for talent exceeding supply in many critical areas of analytical thinking, technical competency and leadership skills. Growth of e-commerce companies and advent of international players in India has also created tremendous challenge in terms of retaining key talent. The above two factors have made talent development and management an extremely crucial component of business strategy.

Outlook - Way forward

As per economic survey, India continues to be amongst the fastest growing economies in the world and is expected to continue to remain so in FY 2020 as well.

The policy environment is expected to be stable with a focus on reviving credit and investment in the economy. The government will continue its focus on enhancing ease of doing business, infrastructure development and digital India programs. These investments will help the economy recover back to past levels of growth. The improving economic scenario is expected to translate into positive consumer sentiments. The key factors that are driving the India consumption story are large proportion of young population, rising urbanisation, growing affluence, increasing discretionary spending and deeper penetration of digital content and processes.

However, the sector outlook is expected to be cautiously optimistic basis recent economic indicators on growth. Your Company is well positioned to leverage the opportunity in this growing market with its diverse offerings across varied market segments, price points and portfolio of strong brands.

Risk management

Effective governance and risk management form the bedrock of a company''s sustained performance. The framework revolves around rigorous implementation of standardised policies and processes and development of strong internal control systems.

Your Company has constituted a Risk Management Committee (RMC) for identification, evaluation and mitigation of operational, strategic and external risks. RMC is supported by an internal committee, which consists of experts from various business processes and segments. The internal committee assists the RMC in defining the framework for risk management and compliance and undertakes assessment of risks, adopts the risk mitigation plans and regularly monitors them in a structured and controlled environment. It also reviews the developments in socio-economic environment and identifies internal threats and opportunities, updates the framework and refines processes and systems for mitigation. Details of the composition of the RMC and the Risk Management Policy, adopted by the Board, have been disclosed separately.

The key identified risks are covered as part of threats in SWOT analysis.

Internal control systems and their adequacy

The Company''s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. Internal control systems comprising policies and procedures are designed to ensure sound management of your Company''s operations, safekeeping of its assets, optimal utilisation of resources, reliability of its financial information and compliance. Systems and procedures are periodically reviewed and these are routinely tested and certified by statutory as well as internal auditors and cover all functions and business areas. The audit committee reviews adequacy and effectiveness of the Company''s internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company''s risk management policies and systems.

Human resources

Your Company''s People Vision is "To drive a High Performing and Customer Centric Culture with Happy and Value Oriented Employees". The Company''s performance is anchored on its capabilities and productivity; customer-centric culture through a strong service orientation; happiness through purposeful behaviour by high quality talent; value-oriented through a deep commitment to the values of the Aditya Birla Group.

The Company has a diverse workforce of 23,000 employees consisting of mix of people from diverse backgrounds, educational experience and wealth of experience from various industries. It also has a healthy gender diversity with 52% of the workforce comprising of women employees. 55% of the employees of the Company are in less than 30 years of age group.

Your Company has maintained healthy, cordial and harmonious industrial relations at all levels through proactive employee relation, development initiatives, gender diversity and community development.

Delivering ''Employee Value Proposition'' (EVP) through people strategy

"The Biggest Brands and Best People" is the philosophy that drives ABFRL. The Company has well-known brands and it is the people behind the brands who have made the brands what they are. The unique EVP of the Company - "A World of Opportunities" makes it a preferred employer for professionals in the industry. Your Company is committed to strengthen its employee value proposition in every aspect - career growth, learning & development, rewards & recognition, enrichment of life through healthy work environment and well-being programs.

- Career growth

Your Company believes in harnessing the leadership and people capabilities through sharp focus and initiatives on talent development. The Company has institutionalized an active talent review process to take stock of succession planning for key roles of the business. The talent is reviewed based on the performance and potential to assess their readiness for future role of high scale and complexity. The Company has created a strong ownership and governance on careers through talent council which run at both apex and business unit level and are chaired by business leaders and meet at periodic intervals. It also invests in hiring bright entry level talent through the Company''s young talent management program (striders) from B-Schools and fashion institutes (such as National Institute of Fashion Technology) to create a strong future pipeline.

- Learning and development

The Company''s initiatives equip its employees to develop taller leadership capabilities armed with strong management capabilities in both domain specific and behavioral disciplines.

The Company invests in multiple initiatives such as Gyanodaya, Aditya Birla Group Global Centre for Leadership Learning, for its leaders and management development programs on various managerial capabilities. In-house structured learning program (ABFRL university) has also strengthened and it has also expanded its wings to other lines of businesses.

There are also significant opportunities for on the job development through various business and functional projects. Apart from classroom and on the job training modules, employees are also provided opportunity to self-learning through digital interface, which hosts a variety of content. These not only help employees perform to their potential in the current roles, but also prepare them for higher responsibilities.

- Rewards and recognition

The Company''s initiatives are aligned to drive the culture of meritocracy and ensuring market competitiveness. They celebrate successes and also help in raising the bar on performance and achievement.

Celebrating success through recognition programme are at the core of building vibrant ABFRL culture. Well-entrenched annual engagement events are forums where it celebrates and recognizes team and individual achievements, value champions and feats achieved by employees beyond the call of duty.

Your Company has various forums where it recognizes outstanding performance of the employees in the stores, warehouse, manufacturing facilities and offices.

- Enrich the life of employees

Your Company embarks on multiple initiatives to create a wholesome approach for its employees. These include retail Olympics focused on sports events leading to employee bonding and competitiveness. It also encourages the employees to volunteer in various CSR initiatives of the Company, offering them an opportunity to work together for the common good of the community. The Company''s initiatives also focus on the physical and mental well-being of its employees. It also offer flexible working arrangements for the employees to encourage them to balance their work, family and personal commitments & priorities.

DIRECTORS'' RESPONSIBILITY STATEMENT

The audited financial statements of your Company for the year under review ("financial statements") are in conformity with the requirements of the Companies Act, 2013 read with the rules made there under ("Act") and the Accounting Standards. The financial statements fairly reflect the form and substance of transactions carried out during the year under review and reasonably present your Company''s financial condition and results of operations.

Your directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b) accounting policies selected have been applied consistently and reasonable & prudent judgments and estimates were made, so as to give a true and fair view of the state of affairs of your Company as at the end of the year under review and the profit & loss of your Company for the year under review;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts of your Company have been prepared on a ''going concern'' basis;

e) adequate internal financial controls were laid down & followed by your Company and such internal financial controls were operating effectively; and

f) proper systems have been devised by your Company to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

Compliance with Secretarial Standards

Your directors confirm that during the year under review, the Company has been in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

SHARE CAPITAL Equity share capital

The paid-up equity share capital of your Company as at the end of the year under review stood at Rs,773.48 Crore vis-a-vis Rs,771.69 Crore as at the end of previous year.

Details of shares allotted during the year under review, are as under:

(i) Allotment to non-resident shareholders of Aditya Birla Nuvo Limited (now Grasim Industries Limited) ("ABNL") holding shares on repatriation basis.

In terms of clause 21 of the Composite Scheme of Arrangement amongst the Company, ABNL and Madura Garments Lifestyle Retail Company Limited and their respective shareholders and creditors, under sections 391 to 394 of the Companies Act, 1956 ("Composite Scheme"), allotment of 37,82,178 equity shares ("said shares") to 3,475 non-resident shareholders, including 4 overseas corporate bodies ("OCBs") of ABNL ("NRE shareholders") was kept pending until receipt of applicable regulatory approvals. Thereafter, from time to time, the Company has allotted 20,71,265 equity shares to 1,407 NRE shareholders who held accounts in India on non-repatriation basis and provided such valid details.

During the period under review, in view of the amended provisions of the "Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017" ("FEMA Regulations") and the authority granted by the Board of Directors (on February 4, 2019), 16,94,060 equity shares were allotted to 2,064 NRE shareholders of ABNL (excluding OCBs) on March 19, 2019.

Further, post this allotment, out of the said shares, 16,853 equity shares held by 4 OCBs shall remain pending for allotment until receipt of regulatory approvals. Your Company continues to evaluate various options for settling the matter with respect to the pending allotment to 4 OCBs, in terms of the applicable FEMA Regulations and any further development in this regard will be separately intimated to such OCBs.

(ii) Allotment made pursuant to the Employee Stock Option Scheme - 2013 ("Scheme 2013") 51,435 equity shares of Rs,10/- each were allotted to the eligible employees of the Company, pursuant to the exercise of stock options granted to them under the Scheme 2013.

(iii) Allotment made pursuant to the Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2017 ("Scheme 2017") 41,981 equity shares of Rs,10/- each were allotted to the eligible employees of the Company, pursuant to the exercise of stock options granted to them under the Scheme 2017.

Preference share capital

Details of preference share capital of the Company as at March 31, 2019

(Amount in Rs,Lakh)

Particulars	As at March 31, 2019
A Authorized preference share capital
1,00,00,000 8% Redeemable Cumulative Preference Shares of Rs,10/- each	1,000.00
15,000 6% Redeemable Cumulative Preference Shares of Rs,100/- each	15.00
Total	1,015.00
B Issued, subscribed and paid-up share capital
5,00,000 8% Redeemable Cumulative Preference Shares of Rs,10/- each	50.00
500 6% Redeemable Cumulative Preference Shares of Rs,100/- each	0.50
Total	50.50

Details of redemption/ variation in terms of preference shares issued by the Company

Pursuant to the terms of issuance, the due dates for redemption of 8% Redeemable Cumulative Preference Shares and 6% Redeemable Cumulative Preference Shares, were March 30, 2019 and October 13, 2019, respectively.

While the Company had net profits for the year, it did not have distributable profits in terms of section 123 of the Act as it had past accumulated losses.

Accordingly, pursuant to the unanimous consent of all the preference shareholders and in terms of the applicable provisions of the Act, the Board of Directors of the Company, vide a circular resolution dated April 11, 2019, approved the variation in terms of the preference shares to the extent of extending their respective redemption dates by a period of 5 years, more particularly as under:

Class of preference shares	Revised redemption date
5,00,000, 8% Redeemable Cumulative Preference Shares of Rs,10/- each	March 29, 2024
500, 6% Redeemable Cumulative Preference Shares of Rs,100/- each	October 12, 2024

DISCLOSURES IN TERMS OF THE PROVISIONS OF THE ACT & SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

A. Board of Directors ("Board")

(i) Number of meetings

The Board met 5 (five) times during the year under review. The details of such meetings are disclosed in the Corporate Governance Report forming part of this Annual Report. The maximum gap between any two consecutive meetings was less than 120 (one hundred and twenty) days, as stipulated under section 173(1) of the Act and regulation 17(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and the Secretarial Standards issued by the Institute of Company Secretaries of India.

(ii) Appointments/ resignations

During the year under review, no directors were appointed or have resigned.

Further, in accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Pranab Barua, Non-executive Director of the Company, is due to retire by rotation at the ensuing 12^th AGM and being eligible, he has offered himself for re-appointment. Business with respect to his re-appointment forms part of the notice of the ensuing AGM of the Company.

In addition to the above re-appointment, business with respect to following matters also forms part of the notice of the ensuing AGM of the Company:

(a) re-appointment of Ms. Sukanya Kripalu, an Independent Director of the Company, whose tenure will expire during the year; and

(b) continuation of directorship of Mr. Arun Thiagarajan, an Independent Director of the Company, who will attain the age of 75 years during the year.

As required under regulation 36(3) of the SEBI Listing Regulations, particulars of directors seeking appointment/ re-appointment at the ensuing 12^th AGM are given in the annexure to the notice of the AGM.

(iii) Board evaluation

The Company has devised a framework for performance evaluation of Board, its committees and individual directors in terms of the provisions of the Act, SEBI Listing Regulations and the Nomination Policy of the Company.

During the year under review, the Board carried out the evaluation of its own performance and that of its committees and the individual directors. The performance evaluation of non-independent directors and the Board as a whole was carried out by the independent directors.

The evaluation process consisted of structured questionnaires covering various aspects of the functioning of the Board and its committees, such as composition of the Board and committees, experience and competencies, performance of specific duties and obligations, governance issues etc. The Board also carried out the evaluation of the performance of individual directors based on criteria such as contribution of the director at the meetings, strategic perspective or inputs regarding the growth and performance of the Company etc.

Further, pursuant to the applicable provisions of the Act, the performance evaluation criteria for the independent directors is disclosed in the Corporate Governance Report forming part of this Annual Report.

Outcome of the evaluation

The Board of your Company was satisfied with the functioning of the Board and its committees. The committees are functioning well and besides the committee''s terms of reference, as mandated by law and important issues are brought up and discussed in the committee meetings. The Board was also satisfied with the contribution of directors, in their respective capacities, which reflects the overall engagement of the individual directors.

(iv) Declaration of independence

The Company has received necessary declaration from each independent director of the Company stating that they meet the criteria of independence as provided in section 149(6) of the Act and regulation 16(1)(b) of the SEBI Listing Regulations ("said declarations").

Based on the said declarations received from independent directors, in the opinion of the Board of Directors, the independent directors of the Company, fulfill the conditions of independence and are independent of the management.

B. Committees of the Board

(i) Audit committee

Your Company has a duly constituted audit committee, with its composition, quorum, powers, role and scope in accordance with section 177 of the Act and regulation 18 of the SEBI Listing Regulations. Details regarding the composition of the audit committee along with the dates of meeting and the terms of reference of the committee, are disclosed in the Corporate Governance Report forming part of this Annual Report.

The recommendations made by the audit committee to the Board, from time to time during the year under review, have been accepted by the Board.

Vigil mechanism

The Board has, on recommendation of its audit committee, duly adopted a Vigil mechanism/ Whistle Blower Policy and the details of which are provided in the Corporate Governance Report forming part of this Annual Report.

Adequate safeguards are provided against victimization to those who avail of the mechanism and direct access to the Chairperson of the audit committee is provided to them. The details of establishment of vigil mechanism is also available on the website of the Company i.e. www.abfrl.com.

(ii) Nomination and Remuneration Committee ("NRC")

Your Company has a duly constituted NRC, with its composition, quorum, powers, role and scope in accordance with section 178 of the Act and regulation 19 of the SEBI Listing Regulations. Details regarding the composition of the NRC along with the dates of meeting and the terms of reference of the committee are disclosed in the Corporate Governance Report forming part of this Annual Report.

Nomination Policy and Executive Remuneration Policy/Philosophy

In terms of section 178 of the Act and regulation 19 of the SEBI Listing Regulations, the Board of your Company had, on recommendation of the NRC, adopted a Nomination Policy, which inter alia enumerates the Company''s policy on appointment of directors, KMP and senior management. Further, the Board has, on recommendation of NRC, also adopted a policy entailing Executive Remuneration Philosophy, which covers remuneration philosophy covering the directors, KMP, senior management and other employees of the Company.

Both the aforesaid policies, as amended from time to time pursuant to the amendment in the applicable regulatory provisions, are available on the website of the Company i.e. www.abfrl.com.

Salient features of the aforesaid policies along with the changes therein during the period under review, are as under:

(a) Nomination Policy

The Nomination Policy is enacted mainly to deal with the following matters, falling within the scope of the NRC:

- To institute processes which enable the identification of individuals who are qualified to become directors and who may be appointed as key managerial personnel and/or in senior management and recommend to the Board of Directors their appointment and removal from time to time;

- To devise a policy on board diversity;

- To review and implement the succession and development plans for managing director, executive directors and officers forming part of senior management

- To formulate the criteria for determining qualifications, positive attributes and independence of directors;

- To establish evaluation criteria of board, its committees and each director.

During the year under review, the Nomination Policy of the Company was amended to incorporate the change in evaluation process and the definition of Senior Management, pursuant to amendment in the SEBI Listing Regulations.

(b) Executive Remuneration Policy/ Philosophy

This Policy supports the design of programmes that align executive rewards - including incentive programmes, retirement benefit programmes, promotion and advancement opportunities - with the long-term success of the stakeholders of the Company.

The executive remuneration program of the Company is designed to attract, retain and reward talented executives who will contribute to our long-term success and thereby build value for our shareholders and intends to:

- Provide for monetary and non-monetary remuneration elements to our executives on a holistic basis.

- Emphasize "Pay for Performance" by aligning incentives with business strategies to reward executives who achieve or exceed Group, business and individual goals.

During the year under review, the Executive Remuneration Policy/ Philosophy of the Company was amended to incorporate the extended scope of NRC pursuant to amendment in the SEBI Listing Regulations, wherein the NRC has to recommend to the Board, all remuneration, in whatever form, payable to the senior management.

(iii) Risk Management Committee ("RMC")

Your Company has a duly constituted RMC, which is inter alia entrusted with the responsibility of monitoring and reviewing the risk management plan and the cyber security of the Company and such other functions as may be delegated by the Board from time to time.

The composition, quorum, powers, role and scope of the RMC are in accordance with the applicable provisions of the Act and regulation 21 of the SEBI Listing Regulations. Details regarding the composition of the RMC along with the dates of meeting and the terms of reference of the committee are disclosed in the Corporate Governance Report forming part of this Annual Report.

Mr. Jagdish Bajaj, Chief Financial Officer of the Company, is also the Chief Risk Officer of your Company. Risk Management Policy

Your Company has framed and implemented a Risk Management Policy in terms of the provisions of regulation 17 of the SEBI Listing Regulations, for the assessment and minimization of risk, including identification therein of elements of risk, if any, which may threaten the existence of the Company.

The policy is reviewed periodically by the RMC, along with the key risks and related mitigation plans. More details on risks and threats have been disclosed hereinabove, as a part of the Management Discussion and Analysis.

Further, in view of the ever increasing size and complexity of the business operations, your Company is exposed to various risks emanating from frauds. Accordingly, the Board has, on recommendation of the audit committee, also adopted an Anti-Fraud Policy and a Whistle Blower Policy, to put in place, a system for detecting and/or preventing and/or deterring and/or controlling the occurrence of frauds.

(iv) Corporate Social Responsibility Committee ("CSR committee")

Your Company has a duly constituted CSR committee, with its composition, quorum, powers, role and scope in accordance with section 135 of the Act. Details regarding the composition of the CSR committee along with the dates of meeting and the terms of reference of the committee are disclosed in the Corporate Governance Report forming part of this Annual Report.

Corporate Social Responsibility Policy ("CSR Policy")

The Board has, pursuant to the recommendation of the CSR committee, with a vision "to actively contribute to the social and economic development of the communities in which your Company operates and in doing so, build a better, sustainable way of life for the weaker sections of society and raise the country''s human development index", adopted a CSR Policy and the same is available on the website of the Company i.e. www.abfrl.com.

The scope of the CSR Policy is as under:

i. Planning project or programmes which a Company plans to undertake falling within the preview of schedule VII of the Act;

ii. Monitoring process of such project or programmes.

The CSR Policy of the Company inter alia includes the process to be implemented with respect to the identification of projects and philosophy of the Company, along with key endeavors and goals i.e.

- Education - to spark the desire for learning and knowledge;

- Health care - to render quality health care facilities to people living in the villages and elsewhere through our hospitals;

- Sustainable livelihood - to provide livelihood in a locally appropriate and environmentally sustainable manner;

- Infrastructure development - to set up essential services that form the foundation of sustainable development; and

- Social cause - to bring about the social change we advocate and support.

CSR initiatives taken during the year

Your Company''s CSR activities are mainly focused towards girl child education, skilling, health and sanitation.

An annual report on CSR activities of the Company for the financial year 2018-19 is annexed as Annexure I to this Report.

C. Key Managerial Personnel

Pursuant to section 203 of the Act, the key managerial personnel ("KMP") of the Company are:

i. Mr. Ashish Dikshit, Managing Director;

ii. Mr. Jagdish Bajaj, Chief Financial Officer; and

iii. Ms. Geetika Anand, Company Secretary.

Board had, at its meeting held on January 9, 2018, in terms of the applicable provisions of the Act and on recommendation of the NRC, appointed Mr. Jagdish Bajaj as the Chief Financial Officer of the Company with effect from April 1, 2018.

Further, Mr. Vishak Kumar, Chief Executive Officer of the Madura Finance and Lifestyle division ("CEO") of the Company, was appointed as a KMP of the Company with effect from November 24, 2016. Pursuant to the approval of the Board, he has ceased to be a KMP of the Company under the provisions of section 203 of the Act with effect from May 11, 2018. However, Mr. Kumar will continue to be the CEO of the Company.

Detailed profiles of the KMP and other key executives of your Company are available on the website of the Company i.e. www.abfrl.com.

D. Remuneration of directors and employees

Disclosure comprising particulars with respect to the remuneration of directors and employees, as required to be disclosed in terms of the provisions of section 197(12) of the Act and rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure II to this Report.

Further, a statement containing such particulars of employees as required in terms of the provisions of section 197(12) of the Act read with rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of the Annual Report. However, in line with the provisions of the first proviso to section 136(1) of the Act, the reports and accounts, as set out therein, are being sent to all shareholders of the Company, excluding the aforesaid information and the same is open for inspection at the registered office of the Company during working hours. Further, any shareholder interested in obtaining such information may write to the Company Secretary at the registered office of the Company.

E. Employee stock option scheme and share based employee benefits

Grant of share based benefits to employees is a mechanism to align the interest of employees, with those of the Company, to provide them with an opportunity to share the growth of the Company and also to foster the long-term commitment.

Your Company regards employee stock options as instruments that would enable the employees to share the value they create for the Company in the years to come. Accordingly, in the year 2013, the ''Employee Stock Option Scheme - 2013'' ("Scheme 2013") was instituted by the Company, to reward its employees for their past association and performance, as well as to motivate them to contribute in the Company''s future growth and profitability.

Further, pursuant to the approval of shareholders of the Company at the 10^th AGM held on August 23, 2017, the NRC, at its meeting held on September 8, 2017, instituted and implemented the ''Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2017'' ("Scheme 2017").

Both the Schemes of the Company i.e. Scheme 2013 and Scheme 2017, are governed by the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("SEBI SBEB Regulations") and in terms of the approvals granted by the shareholders of the Company, the NRC inter alia administers, implements and monitors the aforesaid schemes, thereby governing the grant of share based benefits to its employees, in the form of options and restricted stock units ("RSUs") (collectively referred to as "stock options").

A certificate from the Statutory Auditor of the Company, confirming that the aforesaid schemes have been implemented in accordance with the SEBI SBEB Regulations, will be open for inspection at the ensuing 12^th AGM.

Disclosure pursuant to the regulation 14 of the SEBI SBEB Regulations

In terms of the provisions of regulation 14 of the SEBI SBEB Regulations, details of the aforesaid schemes are available on the website of the Company i.e. www.abfrl.com and a summary of the stock options granted, vested and lapsed during the year under review, is as under:

Particulars	Scheme 2013		Scheme 2017
	Options	RSUs	Options	RSUs
No. of stock options granted	Nil	Nil	90,039	30,349
No. of stock options vested	Nil	Nil	8,65,024	Nil
No. of stock options exercised (1)	5,843	22,760	46,483	Nil
Total no. of equity shares of Rs,10/- each, arising as a result of exercise of stock options	5,843	22,760	41,981(2)	Nil
No. of stock options lapsed	5,843	Nil	4,79,678	1,96,655

Note:

(1) No loan was provided by your Company to exercise any of these stock options.

(2) 4,502 options were exercised during the year ended March 31, 2019. However, the consequent allotment of 4,502 equity shares was pending as on March 31, 2019 ("said shares"). The said shares were allotted on April 30, 2019.

The aforesaid details have been also disclosed in the financial statements of your Company for the year under review.

Stock Appreciation Rights ("SARs")

Your Company has also instituted a ''Plan for Stock Appreciation Rights Plan, 2013'' ("SAR Plan 2013") in the year 2013, which is a cash based plan linked to the actual stock price movement over the plan tenure.

Further, pursuant to the enforcement of SEBI SBEB Regulations, in the event of transfer of employee to any Group Company ("said transfer"), all the options and RSUs granted to an employee under the employee stock option scheme of the Company, if not exercised by such employee before the last working day in the Company shall lapse as on the date of said transfer.

In view of the above, in order to compensate the loss to an employee due to the lapse of options and RSUs in the event of said transfer and pursuant to the approval of the Board vide a resolution passed at its meeting held on February 4, 2019, the NRC, at its meeting held on May 15, 2019, instituted and implemented the ''Aditya Birla Fashion and Retail Limited Stock Appreciation Rights Scheme 2019'' ("SAR Scheme 2019"), to grant SARs in the form of ''Option SARs'' (in place of options) and ''RSU SARs'' (in place of the RSUs), to such employees.

The above SAR Plan 2013 and SAR Scheme 2019, does not give rise to any right towards any equity share of the Company and hence, they are not covered under the provisions of SEBI SBEB Regulations. On exercise of the SARs granted under the said plan/ scheme, the employee exercising the SARs becomes entitled to receive cash, in terms of the respective plan/ scheme.

Details of the SARs granted by your Company under the SAR Plan 2013 and the SAR Scheme 2019 are available on the website of the Company i.e. www.abfrl.com.

F. Related party transactions

All related party transactions entered into during the year under review were approved by the audit committee and the board, from time to time and the same are disclosed in the financial statements of your Company for the year under review. Further, pursuant to the provisions of the Act and the SEBI Listing Regulations, the board has, on recommendation of its audit committee, adopted a Policy on Related Party Transactions and the said policy is available on the website of the Company i.e. www.abfrl.com. Also, during the year under review, pursuant to the amendments in the SEBI Listing Regulations, the aforesaid policy was reviewed and amended by the board.

Further, in terms of the provisions of section 188(1) of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and regulation 23 of the SEBI Listing Regulations, all contracts/ arrangements/ transactions entered into by the Company with its related parties, during the year under review, were:

- in "ordinary course of business" of the Company;

- on "an arm''s length basis"; and

- not "material".

All transactions with related parties are in accordance with the policy on related party transactions formulated by the Company.

Accordingly, Form no. AOC-2, prescribed under the provisions of section 134(3)(h) of the Act and rule 8 of the Companies (Accounts) Rules, 2014, for disclosure of details of related party transactions, which are "not at arm''s length basis" and also which are "material and at arm''s length basis", is not provided as an annexure of this Report.

G. Dividend Distribution Policy

In terms of regulation 43A of the SEBI Listing Regulations, your Company has formulated a Dividend Distribution Policy, with an objective to provide the dividend distribution framework to the Stakeholders of the Company. The policy sets out various internal and external factors, which shall be considered by the board in determining the dividend pay-out. The policy is annexed as Annexure III to this Report and is also available on the website of the Company i.e. www.abfrl.com.

H. Subsidiaries, joint ventures, associate companies

During the year under review, no company became/ ceased to be a subsidiary/ associate/ joint venture of the Company. Also, the Company did not become a part of any joint venture during the year.

Accordingly, as at the end of the year under review and also as on the date of this Report, your Company does not have any subsidiary and/or associate company and your Company is also not a part of any joint ventures.

I. Conservation of energy, technology absorption, foreign exchange earnings and outgo

Your Company consciously makes all efforts to conserve energy across all its operations. A report containing details with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed in terms of section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, is annexed as Annexure IV to this Report.

J. Sustainability and business responsibility report

Your Company''s sustainability initiatives are aligned with the Aditya Birla Group''s sustainability vision, which mainly comprises of responsible stewardship, stakeholder engagement and future-proofing. Accordingly, under the aegis of the Aditya Birla Group''s sustainability vision, your Company is strengthening its ''Reearth'' programme, to design a roadmap, which will align with the group level sustainability policies and international frameworks.

Through this mission, we hope to create a future ready organization, which addresses the needs of all stakeholders thereby securing a sustainable future for tomorrow.

In accordance with our sustainability vision and in terms of regulation 34(2)(f) of the SEBI Listing Regulations, a Sustainability and Business Responsibility Report forms a part of this Annual Report.

K. Auditors and auditor’s report

During the year under review, no frauds in terms of the provisions of section 143(12) of the Act, have been reported by the statutory auditor and secretarial auditor in their report for the year under review.

(i) Statutory auditor

M/s. S R B C & CO LLP, Chartered Accountants (ICAI registration no. 324982E/E30003), were appointed as the statutory auditor of the Company at the 9^th AGM, for a term of 5 years i.e. till the conclusion of the 14^th AGM, subject to the ratification of their appointment by the members at every AGM. Accordingly, business with respect to the same forms part of the notice of the ensuing 12^th AGM of the Company.

Further, the auditors'' report "with an unmodified opinion", given by the statutory auditor on the financial statements of the Company for FY 2018-19, is disclosed in the financial statements forming part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the statutory auditor in their report for the year under review.

The notes to the financial statements are self-explanatory and do not call for any further comments.

(ii) Secretarial auditor

Pursuant to the provisions of section 204 of the Act, M/s. Dilip Bharadiya & Associates, Company Secretaries, were appointed as the secretarial auditor of the Company, to conduct secretarial audit of the board processes for the year under review.

The Secretarial Audit Report given by the secretarial auditor of the Company is annexed as Annexure V to this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the secretarial auditor in his report for the year under review.

(iii) Cost auditor

During the year under review, your Company was not required to maintain cost records under sub-section (1) of section 148 of the Act. Hence, the provisions related to appointment of Cost auditor is not applicable.

L. Other disclosures

In terms of the applicable provisions of the Act and SEBI Listing Regulations, your Company additionally discloses that, during the year under review:

- there was no change in the nature of business of your Company;

- your Company has not accepted any fixed deposits from the public falling under section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2019, there were no deposits which were unpaid or unclaimed and due for repayment, hence, there has been no default in repayment of deposits or payment of interest thereon;

- your Company has not issued any shares with differential voting rights;

- your Company has not any sweat equity shares; and

- no significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status operations of your Company in future.

It is further disclosed that:

- There is no plan to revise the financial statements or directors'' report in respect of any previous financial year.

- There have been no material changes and commitments, which affect the financial position of the Company, which have occurred between the end of the financial year to which the financial statements relate and the date of this Report.

- Particulars of the loans, guarantees and investments as required under section 186 of the Act are disclosed in the financial statements of your Company for the year under review.

- Details pertaining to unclaimed shares demat suspense account of your Company are disclosed in the General Shareholder Information forming part of this Annual Report.

- Your Company does not engage in commodity hedging activities.

CORPORATE GOVERNANCE

Your Company is committed to follow the best practices of corporate governance and the Board is responsible to ensure the same, from time to time.

Your Company has duly complied with the corporate governance requirements as set out under chapter IV of the SEBI Listing Regulations and the M/s. Dilip Bharadiya & Associates, Company Secretaries, vide their certificate dated May 14, 2019, have confirmed that the Company is and has been compliant with the conditions stipulated in the chapter IV of the SEBI Listing Regulations. The said certificate is annexed as Annexure VI to this Report.

Further, a separate report on corporate governance forms part of this Annual Report.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of sections 92(3) and 134(3)(a) of the Act and the Companies (Management and Administration) Rules, 2014, an extract of the annual return in Form no. MGT-9 is annexed as Annexure VII to this Report and is also available on the website of the Company i.e. www.abfrl.com.

DISCLOSURES PURSUANT TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has in place a policy on Prevention of Sexual Harassment at Workplace, which is in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"). The objective of this policy is to provide an effective complaint redressal mechanism if there is an occurrence of sexual harassment.

This policy is applicable to all employees, irrespective of their level and it also includes ''third party harassment'' cases i.e. where sexual harassment is committed by any person who is not an employee of the Company.

Your Company has also set up an internal complaints committee at each of its administrative office, which is duly constituted in compliance with the provisions of the POSH Act. Further, the Company also conducts interactive sessions for all the employees, to build awareness amongst employees about the policy and the provisions of POSH Act.

During the year under review, no cases were filed under the POSH Act.

AWARDS AND RECOGNITIONS

Your Company has been proud recipient of many awards and recognitions during the year under review and significant ones amongst them are as under:

- ABFRL won the ''Retailer of the Year Award (Fashion & Lifestyle)'' conferred by ET Now Global Awards for Retail Excellence.

- ABFRL bagged ''Stars of the Industry Award 2018'' by ET Now for Excellence in CSR.

- ABFRL received a Social Impact Award from the Indian Chamber of Commerce (ICC) for Empowering the Rural Population, in the Mega Enterprise Category.

- ABFRL was recognized as a ''Leader in Employee Volunteer - 2018'' by iVolunteer Awards.

- ABFRL has been conferred a Silver Rating by IGBC (Indian Green Building Council) for its manufacturing unit, Crafted Clothing Limited.

- ABFRL received the First Prize at the Lean Six Sigma Excellence Awards 2018 conducted by Symbiosis Centre for Management and Human Resource Development in two categories such as ''DMAIC'' and ''Kaizen''.

- Van Heusen Innerwear was adjudged IMAGES Most Admired Fashion Brand of the Year for Innerwear (Men).

- Pantaloons was ranked amongst Top Two Most Trusted Brands in the Retail category by ET Brand Equity.

- Pantaloons was ranked amongst Top Twenty Most Trusted Brands in the Service category by ET Brand Equity.

- Pantaloons won the IMAGES Most Admired Retailer of the Year: Enterprise Solution Implementation in recognition of Excellence in Deployment of Technology in Retail.

- Pantaloons received the ''Segment of One - Top Project Award'' by Aditya Birla Group at its Quantum Jump Conference, 2018.

- Pantaloons won big in the Customer Loyalty Awards by Kamikaze. It won the ''Best use of Direct Marketing in a Loyalty Program'' Award.

- Pantaloons was awarded Merit Certificate in the Visual Merchandising and Retail Awards for ''Best Window Display - Festivals and EOSS - Kids Festive Fun''.

ACKNOWLEDGEMENT

We take this opportunity to thank all the customers, members, investors, vendors, suppliers, business associates, bankers and financial institutions for their continuous support. We also thank the central and state governments and other regulatory authorities for their co-operation.

We acknowledge the patronage of the Aditya Birla Group and above all, we place on record our sincere appreciation for the hard-work, solidarity and contribution of each and every employee of the Company in driving the growth of the Company.

For and on behalf of the Board of Directors

Place : Mumbai Ashish Dikshit Arun Thiagarajan

Date : May 15, 2019 Managing Director Independent Director

---

Mar 31, 2018

Dear Members,

The Company’s Directors hereby present the Eleventh Annual Report of the Company together with the Audited Financial Statements of the Company for the Financial Year ended March 31, 2018 (“year under review/ FY 2017-18”).

DIRECTORS’ RESPONSIBILITY STATEMENT

The Audited Financial Statements of your Company for the year under review (“financial statements”) are in conformity with the requirements of the Companies Act, 2013 read with the rules made thereunder (“Act”) and the Accounting Standards. The financial statements fairly reflect the form and substance of transactions carried out during the year under review and reasonably present your Company’s financial condition and results of operations.

Your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b) accounting policies selected have been applied consistently and reasonable & prudent judgments and estimates were made, so as to give a true and fair view of the state of affairs of your Company as at the end of the year under review and the profit & loss of your Company for the year under review;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts of your Company have been prepared on a ‘going concern’ basis;

e) adequate internal financial controls were laid down & followed by your Company and such internal financial controls were operating effectively; and

f) proper systems have been devised by your Company to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

Further, your Directors confirm that during the year, the Company has been in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

SHARE CAPITAL

The paid-up Equity Share Capital of your Company as at the end of the year under review stood at Rs.771.69 Crore vis-a-vis Rs.770.53 Crore as at the end of previous year.

Details of Shares allotted during the year under review, are as under:

(i) Allotment to Non-Resident Shareholders of Aditya Birla Nuvo Limited (“ABNL”) holding shares on repatriation basis (“NRE Shareholders”)

In terms of Clause 21 of the Composite Scheme of Arrangement amongst the Company, ABNL and Madura Garments Lifestyle Retail Company Limited and their respective shareholders and creditors, under Sections 391 to 394 of the Companies Act, 1956 (“Composite Scheme”), the allotment of 37,82,178 Equity Shares of Rs.10/- each (“said shares”), pertaining to the NRE Shareholders, was kept pending until the receipt of applicable regulatory approval(s).

Thereafter, your Company evaluated various options for settling the lawful entitlements of such NRE Shareholders in terms of the provisions of the applicable laws and had allotted 10,36,736 Equity Shares of Rs.10/- each to 273 NRE Shareholders, in terms of the provisions of applicable laws, during the previous Financial Year.

During the period under review, the Company allotted further 10,34,529 Equity Shares of Rs.10/- each to 1,134 NRE Shareholders. Hence, out of the said shares, allotment of 17,10,913 Equity Shares of Rs.10/- each to 2,068 NRE Shareholders (“pending allotment”) was pending as at the end of the period under review.

The NRE Shareholders, desirous of getting their respective entitlements allotted on Non-repatriation basis, may submit the details of their respective NRO account, vide a duly filled-in Consent Form, to the Company, in the manner as described in detail under the “Composite Scheme of Arrangement” tab in the “Investors” section on the website of the Company i.e. www.abfrl.com. Alternatively, they may get in touch with the Registrar and Transfer Agent of the Company i.e. Link Intime India Private Limited, at the details mentioned in the “General Shareholder Information” section forming part of this Annual Report.

Further, your Company continues to evaluate various options for settling the matter with respect to the pending allotment, more specifically in terms of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 (“New FEMA 20 Regulations”), notified by the Reserve Bank of India (“RBI”) on January 4, 2018 and any further development in this regard will be separately intimated to such NRE Shareholders.

(ii) Fractional Entitlements of NRE Shareholders

In terms of Clause 19(iii) of the Composite Scheme, 343 Equity Shares (out of the 10,34,529 Equity Shares allotted to the NRE Shareholders during the year under review), represent “Fractional Entitlements” arising out of the allotment of Equity Shares to 1,407 NRE Shareholders. The Company sold the said Fractional Entitlements in the Open Market on October 21, 2017, in terms of the Clause 19 of the Composite Scheme and the proceeds of the sale were distributed at a value of Rs.171.83/- per Equity Share amongst the NRE Shareholders, as per their respective entitlements, through demand drafts and other prescribed electronic modes of payments alongwith necessary intimations of such payments to each of them.

(iii) Allotment made pursuant to the Employee Stock Option Scheme - 2013 (“Scheme 2013”)

1,32,301 Equity Shares of Rs.10/- each were allotted to the employees of the Company, pursuant to the exercise of Stock Options granted to them in terms of the provisions of the Scheme 2013.

DISCLOSURES IN TERMS OF THE PROVISIONS OF THE ACT & THE SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

A. Board of Directors (“Board”)

(i) Number of Meetings

Board met 8 times during the year under review and the details of such meetings are disclosed in the Corporate Governance Report forming part of this Annual Report.

(ii) Appointments/ Resignations

Details of the Directors, who were appointed or have resigned during the year under review, are as under:

Name of the Director and DIN	Designation	Effective Date
		Appointment	Resignation
Mr. Sanjeeb Chaudhuri DIN: 03594427	Independent Director(1)	January 9, 2017	-
Mr. Pranab Barua	Managing Director	-	January 31, 2018
DIN: 00230152	Non-Executive Director(2)	February 1, 2018	-
Mr. Ashish Dikshit DIN: 01842066	Managing Director(3)	February 1, 2018	-

Notes:

(1) Appointed for a period of 5 consecutive years.

(2) Appointed as an Additional Director, proposed to be appointed as a Non-Executive Director, liable to retire by rotation, subject to the approval of the Members of the Company.

(3) Appointed for a term of 5 years, subject to the approval of the Members of the Company.

The aforesaid appointments were approved by the Board on recommendation of the Nomination and Remuneration Committee (“NRC”) and the business with respect to the same forms part of the Notice of the ensuing 11^th Annual General Meeting (“AGM”) of the Company.

The Board places its gratitude on record for the immense contribution of Mr. Barua towards the growth of the Company and for his leadership during his tenure as the Managing Director of the Company.

Further, in accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Sushil Agarwal, Non-Executive Director of the Company, is due to retire by rotation at the ensuing 11^th AGM and being eligible, he has offered himself for re-appointment. Business with respect to his re-appointment also forms part of the Notice of the ensuing AGM of the Company.

Brief profiles of the Directors proposed to be appointed/ re-appointed forms part of the Notice of the ensuing AGM of the Company.

(iii) Board Evaluation

In terms of the provisions of the Act, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”) and Nomination Policy of the Company, NRC and the Board have approved a framework, which lays down a structured approach, guidelines and processes to be adopted for carrying out an evaluation of the performance of the Board, its Committees and individual Directors.

During the year under review, the Board carried out the evaluation of its own performance and that of its Committees and the individual Directors.

The evaluation process focused on various aspects of the functioning of the Board and its Committees, such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, governance issues etc. The Board also carried out the evaluation of the performance of individual directors based on criteria such as contribution of the director at the meetings, strategic perspective or inputs regarding the growth and performance of the Company etc. Also, pursuant to the applicable provisions of the Act, the performance evaluation criteria for the Independent Directors is disclosed in the Corporate Governance Report forming part of this Annual Report.

Outcome of the Evaluation

The Board of your Company was completely satisfied with the functioning of the Board and its Committees. The Committees are functioning well and besides the Committee’s terms of reference, as mandated by law, and important issues are brought up and discussed in the Committee Meetings. The Board was also satisfied with the contribution of Directors, in their respective capacities, which reflects the overall engagement of the Individual Directors.

Further, in line with the familiarisation programme of the Company, during the year under review, Functional presentations covering methods of operation of specific functions of the Company were made to the Directors as a part of the Board Process. Going forward, it is proposed to continue with these presentations and a calendar drawing out the areas for such presentations has been outlined.

(iv) Declaration of Independence

All the Independent Directors of the Company have given their respective declarations stating that they meet the criteria of Independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations.

B. Committees of the Board

(i) Audit Committee

Your Company has a duly constituted Audit Committee comprising the following Members:

Name of the Members	Designation
Mr. Arun Thiagarajan (Chairperson)	Independent Director
Mr. Bharat Patel	Independent Director

Mr. Pranab Barua	Non-Executive Director
Ms. Sukanya Kripalu	Independent Director
Mr. Sanjeeb Chaudhuri	Independent Director
Mr. Sushil Agarwal	Non-Executive Director

The recommendations made by the Audit Committee to the Board, from time to time during the year under review, have been accepted by the Board.

Vigil Mechanism

The Board has, on recommendation of its Audit Committee, adopted a Policy thereby enumerating the Vigil/ Whistle Blower Mechanism, for Directors and Employees of your Company, to report concerns about unethical behaviour, actual or suspected fraud or violation of the Code of Conduct of the Company and to voice genuine concerns or grievances about unprofessional conduct without fear of reprisal. Adequate safeguards are provided against victimisation to those who avail of the mechanism and direct access to the Chairperson of the Audit Committee is provided to them. The Vigil Mechanism is also available on the website of the Company i.e. www.abfrl.com.

(ii) Nomination and Remuneration Committee

Your Company has a duly constituted NRC, with its composition, quorum, powers, role and scope in line with the applicable provisions of the Act and SEBI Listing Regulations. The detailed information with respect to the NRC is disclosed in the Corporate Governance Report forming part of this Annual Report.

Nomination Policy and Executive Remuneration Policy/ Philosophy

The Board has, on recommendation of the NRC, adopted a Nomination Policy, which enumerates your Company’s policy on appointment of Directors and Key Managerial Personnel (“KMP”), including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Act.

The Nomination Policy is enacted mainly to deal with the following matters, falling within the scope of the NRC:

- to institute processes which enable the identification of individuals who are qualified to become Directors and who may be appointed as KMP and/or in senior management and recommend to the Board of Directors their appointment and removal from time to time;

- to devise a policy on Board Diversity;

- to review and implement the succession and development plans for Managing Director, Executive Directors and Senior Managers;

- to formulate the criteria for determining qualifications, positive attributes and independence of Directors; and

- to establish evaluation criteria of Board, its Committees and each Director.

Further, the Board has, on recommendation of the NRC, also adopted a policy entailing Executive Remuneration Philosophy, which covers the Directors, KMP and employees included in Senior Management of the Company.

The Executive Remuneration Policy/ Philosophy supports the design of programmes that align executive rewards - including incentive programmes, retirement benefit programmes, promotion and advancement opportunities - with the long-term success of the Stakeholders of the Company.

The Executive Remuneration Programme is designed to attract, retain and reward talented executives who will contribute to the long-term success of your Company and thereby build value for the Shareholders. The programme is intended to:

- provide for monetary and non-monetary remuneration elements to our executives on a holistic basis; and

- emphasise “Pay for Performance” by aligning incentives with business strategies to reward executives who achieve or exceed Group, business and individual goals.

Both the aforesaid policies are available on the website of the Company i.e. www.abfrl.com.

(iii) Risk Management Committee (“RMC”)

Your Company has a duly constituted RMC, which inter alia evaluates significant risk exposures of your Company and assesses management’s actions to mitigate the exposures in a timely manner. The Committee also ensures that your Company is taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities.

Mr. Jagdish Bajaj, Chief Financial Officer of the Company, is also the Chief Risk Officer of your Company.

Risk Management Policy

Considering the susceptibility of your Company to the inherent business risks, the Board, on recommendation of RMC, has adopted a Risk Management Policy, to:

- develop and implement Risk Management procedure/ plan, including identification therein of elements of risk, if any, which may threaten the existence of the Company;

- enable the Company to proactively manage the uncertainty, changes in the internal and external environment to limit negative impacts; and

- capitalise on opportunities along with minimisation of identifiable risks, in compliance with the provisions of the Act and Regulations 4(2)(f)(ii)(7) and 17(9)(b) of the SEBI Listing Regulations, which require the Company to lay down procedure for risk assessment and procedure for risk minimisation.

The policy is reviewed periodically by the RMC, alongwith the key risks and related mitigation plans. More details on risks and threats have been disclosed hereinabove, as part of the Management Discussion and Analysis.

Further, in view of the ever increasing size and complexity of the business operations, your Company is exposed to various risks emanating from frauds. Accordingly, the Board has, on recommendation of the Audit Committee, also adopted an Anti-Fraud Policy and a Whistle Blower Policy, to put in place, a system for detecting and/or preventing and/or deterring and/or controlling the occurrence of frauds.

(iv) Corporate Social Responsibility Committee (“CSR Committee”)

In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company has a duly constituted CSR Committee comprising the following members:

Name of the Members	Designation
Mr. Bharat Patel (Chairperson)	Independent Director
Mr. Pranab Barua	Non-Executive Director
Mr. Sanjeeb Chaudhuri	Independent Director
Mr. Sushil Agarwal	Non-Executive Director

Mrs. Rajashree Birla - Chairperson, The Aditya Birla Centre for Community Initiatives and Rural Development and Dr. Pragnya Ram - Group Executive President, Corporate Communications & CSR are the Permanent Invitees to the CSR Committee Meetings, alongwith Mr. Ashish Dikshit, Managing Director.

Policy on Corporate Social Responsibility (“CSR”)

The Board has, with a vision “to actively contribute to the social and economic development of the communities in which your Company operates and in doing so, build a better, sustainable way of life for the weaker sections of society and raise the country’s human development index”, adopted a CSR Policy and the same is available on the website of the Company i.e. www.abfrl.com.

The CSR Policy of the Company also mentions the process to be implemented with respect to the identification of projects and philosophy of the Company, alongwith key endeavours and goals i.e.

- Education - to spark the desire for learning and knowledge;

- Health care - to render quality health care facilities to people living in the villages and elsewhere through our Hospitals;

- Sustainable Livelihood - to provide livelihood in a locally appropriate and environmentally sustainable manner;

- Infrastructure Development - to set up essential services that form the foundation of sustainable development; and

- Social Cause - to bring about the Social Change we advocate and support.

CSR initiatives taken during the year

Your Company’s CSR activities are mainly focused towards Girl Child Education, Skilling, Health and Sanitation.

As per the applicable provisions of Section 135 of the Act, your Company was not required to spend any amount towards the CSR activities. However, an Annual Report on CSR Activities of the Company for FY 201718 is annexed as Annexure I to this Report.

C. Key Managerial Personnel

Detailed profiles of the KMP and other key executives of your Company are disclosed in the Corporate Information forming part of this Annual Report.

Details of appointments/ resignations of KMP during the year under review are as under:

Name of the KMP	Effective Date
	Appointment	Resignation
A. Managing Director
Mr. Pranab Barua	-	January 31, 2018
Mr. Ashish Dikshit	February 1, 2018	-
B. Chief Financial Officer
Mr. S. Visvanathan	-	February 28, 2018
Mr. Jagdish Bajaj	April 1, 2018	-
C. Chief Executive Officer, Pantaloons
Mr. Shital Mehta	-	September 15, 2017

The aforesaid appointments were approved by the Board on recommendation of the NRC.

The Board places on record its deep appreciation and gratitude for the valuable contributions of Mr. Shital Mehta and Mr. S. Visvanathan, during their respective tenures as the KMP of the Company.

In addition to the above, Mr. Vishak Kumar, Chief Executive Officer of the Madura Fashion & Lifestyle Division of the Company (“MFL Division”), who was appointed as one of the KMP of the Company with effect from November 1, 2016, in terms of the provisions of the Act, ceased to be one of the KMP of the Company with effect from May 11, 2018. However, he will continue to be the Chief Executive Officer of the MFL Division.

D. Remuneration of Directors and Employees

Disclosure comprising particulars with respect to the remuneration of directors and employees, as required to be disclosed in terms of the provisions of Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure II to this Report.

Further, a statement containing such particulars of employees as required in terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of the Annual Report. However, in line with the provisions of the first proviso to Section 136(1) of the Act, the reports and accounts, as set out therein, are being sent to all Members of the Company, excluding the aforesaid information and the same is open for inspection at the Registered Office of the Company during working hours. Further, any Member interested in obtaining such information may write to the Company Secretary at the Registered Office of the Company.

E. Employee Stock Option Scheme and Share Based Employee Benefits

Grant of share based benefits to employees is a mechanism to align the interest of employees, with those of the Company, to provide them with an opportunity to share the growth of the Company and also to foster the longterm commitment.

Your Company regards Employee Stock Options as instruments that would enable the employees to share the value they create for the Company in the years to come. Accordingly, in the year 2013, the Employee Stock Option Scheme - 2013 (“Scheme 2013”) was instituted by the Company, to reward its employees for their past association and performance, as well as to motivate them to contribute in the Company’s future growth and profitability.

During the year under review, pursuant to the approval of Members of the Company at the 10^th AGM held on August 23, 2017, the NRC, at its meeting held on September 8, 2017, instituted and implemented the “Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2017” (“Scheme 2017”).

Both the Schemes of the Company i.e. Scheme 2013 and Scheme 2017, are governed by the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (“SEBI SBEB Regulations”) and in terms of the approvals granted by the Members of the Company, the NRC inter alia administers, implements and monitors the aforesaid Schemes, thereby governing the grant of share based benefits to its employees, in the form of Options and Restricted Stock Units (“RSUs”) (collectively referred to as “Stock Options”).

A certificate from the Statutory Auditor of the Company, confirming that the aforesaid Schemes have been implemented in accordance with the SEBI SBEB Regulations, will be placed at the ensuing Eleventh Annual General Meeting for inspection by the Members.

Disclosure pursuant to the Regulation 14 of the SEBI SBEB Regulations

Details of the Stock Options granted by the Company under the aforesaid Schemes are available on the website of the Company i.e. www.abfrl.com, in terms of the provisions of Regulation 14 of the SEBI SBEB Regulations and a summary of the same is as under:

Particulars	Scheme 2013		Scheme 2017
	Options	RSUs	Options	RSUs
No. of Stock Options granted	Nil	Nil	40,40,782	14,36,270
No. of Stock Options vested	1,50,146	5,000	Nil	Nil
No. of Stock Options exercised™	1,04,642	50,491	Nil	Nil
Total No. of Equity Shares of Rs.10/- each, arising as a result of exercise of Stock Options	1,04,642	50,491	Nil	Nil
No. of Stock Options lapsed	28,771	Nil	2,75,067	92,716

Note:

(1) No loan was provided by your Company to exercise any of these Stock Options.

The aforesaid details have been also disclosed in the Financial Statements of your Company for the year under review. Stock Appreciation Rights (“SARs”)

Your Company has also instituted a “Stock Appreciation Rights Plan - 2013” (“Plan 2013”), which is a cash based plan linked to the actual stock price movement over the plan tenure. This plan doesn’t give rise to any right towards any Equity Shares of the Company and hence, it is not covered under the provisions of SEBI SBEB Regulations. On exercise of the SARs granted under this plan, the employee exercising the SARs becomes entitled to receive Cash, in terms of the plan.

During the year under review, pursuant to the exercise of 95,665 SARs granted under the Plan 2013, your Company has credited Rs.61,66,376.85 (Rupees Sixty One Lakh Sixty Six Thousand Three Hundred Seventy Six and Eighty Five Paise only) to its employees and the same have been also disclosed in the Financial Statements of your Company for the year under review.

Details of the SARs granted by your Company under the Plan 2013 are also available on the website of the Company i.e. www.abfrl.com.

F. Related Party Transactions

All Related Party Transactions entered into during the year under review were approved by the Audit Committee and the Board, from time to time and the same are disclosed in the Financial Statements of your Company for the year under review. Further, pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board has, on recommendation of its Audit Committee, adopted a Policy on Related Party Transactions and the said policy is available on the website of the Company i.e. www.abfrl.com.

Further, in terms of the provisions of Section 188(1) of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the SEBI Listing Regulations, all contracts/ arrangements/ transactions entered into by the Company with its related parties, during the year under review, were

- in “ordinary course of business” of the Company,

- on “an arm’s length basis” and

- not “material”.

Accordingly, Form No. AOC-2, prescribed under the provisions of Section 134(3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, for disclosure of details of Related Party Transactions, which are “not at arm’s length basis” and also which are “material and at arm’s length basis”, is not provided as an annexure of the Directors’ Report.

G. Dividend Distribution Policy

In terms of the provisions of Regulation 43A of the SEBI Listing Regulations, your Company has formulated a Dividend Distribution Policy, with an objective to provide the dividend distribution framework to the Stakeholders of the Company. The policy sets out various internal and external factors, which shall be considered by the Board in determining the dividend pay-out. The policy is annexed as Annexure III to this Report and is also available on the website of the Company i.e. www.abfrl.com.

H. Subsidiaries, Joint Ventures, Associate Companies

During the year under review, no company became/ ceased to be a Subsidiary/ Associate/ Joint Venture of the Company. Also, the Company did not become a part of any Joint Venture during the year.

Accordingly, as at the end of the year under review and also as on the date of this Report, your Company does not have any Subsidiary and/or Associate Company and your Company is also not a part of any Joint Ventures.

I. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Your Company consciously makes all efforts to conserve energy across all its operations. A report containing details with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed in terms of Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, is annexed as Annexure IV to this Report.

J. Sustainability and Business Responsibility Report

Your Company’s sustainability initiatives are aligned with the Aditya Birla Group’s sustainability vision, which mainly comprises of Responsible Stewardship, Stakeholder Engagement and Future-proofing. Accordingly, under the aegis of the Aditya Birla Group’s sustainability vision, your Company is strengthening its ‘ReEarth’ programme, to design a roadmap, which will align with the group level sustainability policies and international frameworks.

Through this mission, we hope to create a future ready organisation, which addresses the needs of all stakeholders thereby securing a sustainable future for tomorrow.

In accordance with our sustainability vision and in terms of Regulation 34(2)(f) of the SEBI Listing Regulations, a Sustainability and Business Responsibility Report forms a part of this Annual Report.

K. Auditors and Auditors’ Report

(i) Statutory Auditor

M/s. S R B C & CO LLP, Chartered Accountants (ICAI Registration No. 324982E/E30003), were appointed as the Statutory Auditors of the Company at the 9^th AGM, for a term of 5 years i.e. till the conclusion of the 14^th AGM, subject to the ratification of their appointment by the Members at every AGM. Accordingly, business with respect to the same forms part of the Notice of the ensuing 11^th AGM of the Company.

Further, the Auditors’ Report “with an unmodified opinion”, given by the Statutory Auditors on the Financial Statements of the Company for FY 2017-18, is disclosed in the Financial Statements forming part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Statutory Auditor in their Report for the year under review.

Also, no frauds in terms of the provisions of Section 143(12) of the Act, have been reported by the Statutory Auditors in their report for the year under review.

The Notes to the Financial Statements are self-explanatory and do not call for any further comments.

(ii) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act, M/s. Dilip Bharadiya & Associates, Company Secretaries, were appointed as the Secretarial Auditor of the Company, to conduct Secretarial Audit of the Board processes for the year under review.

The Secretarial Audit Report given by the Secretarial Auditor of the Company is annexed as Annexure V to this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditor in his Report for the year under review.

L. Other Disclosures

In terms of the applicable provisions of the Act and SEBI Listing Regulations, your Company additionally discloses that, during the year under review:

- there was no change in the nature of business of your Company;

- your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2018, there were no deposits which were unpaid or unclaimed and due for repayment, hence, there has been no default in repayment of deposits or payment of interest thereon;

- your Company has not issued any shares with differential voting rights;

- your Company has not any Sweat Equity Shares; and

- no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status operations of your Company in future.

It is further disclosed that:

- There is no plan to revise the Financial Statements or Directors’ Report in respect of any previous financial year.

- No Material changes and commitments have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of the report affecting the financial position of the Company.

- Particulars of the loans, guarantees and investments as required under Section 186 of the Act are disclosed in the Financial Statements of your Company for the year under review.

- Details pertaining to Unclaimed Shares Demat Suspense Account of your Company are disclosed in the General Shareholder Information forming part of this Annual Report.

- Your Company does not engage in Commodity hedging activities.

CORPORATE GOVERNANCE

Your Company is committed to follow the best practices of Corporate Governance and the Board is responsible to ensure the same, from time to time.

Your Company has duly complied with the Corporate Governance requirements as set out under Chapter IV of the SEBI Listing Regulations, from time to time and the Statutory Auditors of the Company, vide their certificate dated May 11, 2018, have confirmed that the Company is and has been compliant with the conditions stipulated in the Chapter IV of the SEBI Listing Regulations. The said certificate is annexed as Annexure VI to this Report.

Further, a separate report on Corporate Governance forms part of this Annual Report.

EXTRACT OF ANNUAL RETURN

As required under the provisions of Sections 92(3) and 134(3)(a) of the Act and the Companies (Management and Administration) Rules, 2014, an Extract of the Annual Return in Form No. MGT-9 is annexed as Annexure VII to this Report and is also available on the website of the Company i.e. www.abfrl.com.

DISCLOSURES PURSUANT TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company is committed towards providing a work environment that is professional and mature, free from animosity and one that reinforces our value of ‘integrity’ that includes respect for the individual.

In line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”), your Company has adopted a Policy on Prevention of Sexual Harassment at Workplace. This policy is applicable to all employees, irrespective of their level and it also includes ‘Third Party Harassment’ cases i.e. where sexual harassment is committed by any person who is not an employee of the Company.

Your Company has also set up Internal Complaints Committee at each of its administrative office, which is duly constituted in terms of the provisions of the POSH Act. Further, the Company also conducts interactive sessions for all the employees, to build awareness amongst employees about the policy and the provisions of POSH Act.

During the year under review, no cases were filed under the POSH Act.

AWARDS AND RECOGNITIONS

Your Company has been proud recipient of many Awards and Recognitions during the year under review and significant ones amongst them are as under:

- Pantaloons was recognised as India’s ‘Most Trusted Fashion Retailer’ in the Brand Equity survey of The Economic Times.

- Pantaloons also bagged:

- the IMAGES Award for “Most Admired Affordable Fashion Retailer, 2017”, for second consecutive year and the IMAGES Award for “Best Turnaround Story, 2017”;

- awards for “Best Festive Window” and “Best Winter Window” at the VM&RD (Visual Merchandising and Retail Design) Awards 2018; and

- awards for “Best Use of Social Media to Enhance Loyalty” and “Best Regional Loyalty Marketing Campaign” at the Customer Loyalty Awards 2018.

- Simon Carter won the Awards for ‘Best In Store Visual Merchandising’ and ‘Best Retail Graphics’ at the VM&RD (Visual Merchandising and Retail Design) Awards 2018.

- The Company won the following awards for its Corporate Social Responsibility and Sustainability initiatives:

- ”Sustainable Business of the Year”, “Sustainable Leadership” and “Sustainable Professional of the Year”, by World Sustainability - a global not-for-profit organisation;

- ”Special Commendation” for Corporate Social Responsibility at the ‘Golden Peacock Awards 2017’, by the Institute of Directors; and

- ”Arogya World Platinum Award for Global Healthy Workplaces, 2017”.

- All the factories of MFL Division of your Company were certified as “Healthy Workplace” at Global Healthy Workplace Awards and 2 of them were also awarded with ‘Unnatha Suraksha Puraskara 2017’ by Karnataka Chapter of National Safety Council.

- Your Company was adjudged as winner of “PR Case Study” and “House Journal - In-House Magazine” Appreciation Awards at the 8^th Annual Corporate Collateral Awards, 2018, conferred by the Public Relations Council of India Awards.

ACKNOWLEDGEMENT

We take this opportunity to thank all the customers, members, investors, vendors, suppliers, business associates, bankers and financial institutions for their continuous support. We also thank the Central and State Governments and other Regulatory Authorities for their co-operation.

We acknowledge the patronage of the Aditya Birla Group and above all, we place on record our sincere appreciation for the hard-work, solidarity and contribution of each and every employee of the Company in driving the growth of the Company.

For and on behalf of the Board of Directors

Ashish Dikshit Arun Thiagarajan

Managing Director Independent Director

Place : Mumbai

Date : May 11, 2018

---

Mar 31, 2017

Dear Members,

The Company''s Directors hereby present the Tenth Annual Report of the Company together with the Audited Financial Statements of the Company for the Financial Year ended March 31, 2017 ("year under review/ FY 2016-17").

COMPOSITE SCHEME OF ARRANGEMENT

Allotment to Non-Resident Shareholders of Aditya Birla Nuvo Limited (“ABNL”) holding shares on Repatriation basis pursuant to the Effectiveness of the Composite Scheme of Arrangement amongst your Company, ABNL and Madura Garments Lifestyle Retail Company Limited (“MGLRCL”) and their respective Shareholders and Creditors, under Sections 391 to 394 of the Companies Act, 1956 (“Composite Scheme”)

In terms of Clause 21 of the Composite Scheme, the allotment of 37,82,178 Equity Shares ofRs,10/- each ("said shares"), pertaining to the Non-Resident Shareholders of ABNL holding shares on repatriation basis ("NRE Shareholders") was kept pending until receipt of applicable regulatory approval(s).

In terms of applicable FEMA Regulations and extant FDI Policy of the Government of India ("FDI Policy"), your Company was required to obtain an approval from the Foreign Investor Promotion Board ("FIPB") for allotment of Equity Shares to NRE Shareholders pursuant to the Composite Scheme. Accordingly, an application was made to the FIPB in that regard. However, the Department of Industrial Policy & Promotion of the Government of India conveyed that in view of the provisions of the extant FDI Policy, application of the Company could not be acceded to. Hence, the allotment of 37,82,178 Equity Shares, representing 0.49% of the total paid-up capital, to such NRE Shareholders was kept pending.

Thereafter, your Company evaluated various options for settling the lawful entitlements of such NRE Shareholders in terms of the provisions of the applicable laws and it was advised that the entitlements of NRE Shareholders can be credited to the accounts held by them on Non-repatriation basis in India ("NRO Account"), if any. Accordingly, out of the said shares, the Company has, till the date of this report, allotted 10,41,504 Equity Shares (including 4,768 equity shares post March 31, 2017) of Rs, 10/- each to 279 NRE Shareholders, who have provided their valid consent for allotment of their entitlements to their respective NRO account.

Further, in terms of the RBI Circular No. 6 dated October 20, 2016 [RBI/2016-17/88 A.P. (DIR Series)] and pursuant to a Legal Opinion obtained in that regard from M/s. Cyril Amarchand Mangaldas, Legal Counsel, on April 4, 2017, the Company allotted 9,90,911 Equity Shares of Rs, 10/- each to 1,078 NRE Shareholders holding shares in ABNL under the portfolio investment scheme, as on the record date fixed under the Composite Scheme.

The NRE Shareholders, who have not submitted the details of their respective NRO account vide a duly filled in Consent Form to the Company, have been informed that in absence of any communication from them and subject to any further communication from the Company in that regard, allotment to such NRE Shareholders will be kept pending till the time there is a favorable change in the applicable laws. The aforesaid Consent Form is available on the website of the Company i.e. www.abfrl.com.

Fractional Entitlements of NRE Shareholders

On April 4, 2017, your Company allotted 343 Equity Shares of Rs, 10/- each, in terms of Clause 19(iii) of the Composite Scheme, representing Fractional Entitlements arising out of aforesaid allotments to NRE Shareholders. The Company is in process of selling them in the Open Market in terms of the Clause 19 of the Composite Scheme, post which the proceeds of the sale will be distributed amongst the NRE Shareholders, as per their respective entitlements, through demand drafts and other prescribed electronic modes of payments along with necessary intimations of such payments to each of them.

ACQUISITION OF FOREVER 21, INDIA BUSINESS AND OTHER STRATEGIC ALLIANCES

With a view to create a strong foothold in the women swear business in the western wear segment, your Company acquired the exclusive online and offline rights of the global brand - "Forever 21" for the Indian market and its existing store network in India ("Forever 21") from its franchise i.e. Diana Retail Private Limited ("Diana Retail") ("said Acquisition") on a going concern basis, by means of a "slump sale" (as defined in Section 2 (42C) of the Income Tax Act, 1961), for a lump sum consideration. The Company also executed a Franchise Agreement with Forever 21, Inc., in terms of which the Company has acquired the exclusive franchise rights for the brand "Forever 21" for the Indian market.

Pursuant to the said Acquisition, Forever 21 forms part of Madura Fashion & Lifestyle division of your Company w.e.f. July 1, 2016. Accordingly the Financial Statements for year under review, include nine months results of Forever 21 (included in the Madura Fashion & Lifestyle segment of the Company).

In addition to above, during the year, your Company signed exclusive deals with:

- UK''s most successful brand "Ted Baker", world-renowned for its stylish and sophisticated menswear, women swear, accessories (and everything in between); and

- "Simon Carter" - London-based designer brand with a quirky English Touch, as part of the Company''s strategic intent to grow its international portfolio.

MANAGEMENT DISCUSSION AND ANALYSIS

To avoid repetition of information, the Management Discussion and Analysis, on performance of the Company, is presented below.

Overview

In 2016, the Global economy was subdued, as reflected in the IMF world economic growth numbers of 3.1% vs 3.4% in previous year. The slowdown was mainly on account of sluggish growth in advanced economies while the emerging markets and developing economies grew at a healthy 4.1%, despite both China and India experiencing a decelerated growth over previous year. Furthermore, financial markets witnessed a broad uptrend in 2016, notwithstanding events such as Brexit and the process of normalization of interest rates by the US Fed towards year-end.

India continued to be the fastest-growing major economy in the world. As per the advance estimates released by the Central Statistical Organization ("CSO"), in FY 2016-17, India''s GDP grew at 7.1%, slowing down from 7.9% growth in the previous year. Macro-economic fundamentals of the economy remained healthy - with moderation of inflation, fiscal deficit and current account deficit.

In November 2016, the country witnessed demonetization of higher denomination currency notes that created a temporary impact on consumer demand. However, by the end of the financial year, the economy got back to normal, as suggested by the high-frequency economic indicators.

India has implemented Goods and Services Tax ("GST") with effect from July 1, 2017. This will create a common market for goods and services, improved tax compliance and governance, thereby creating a favorable ecosystem for business growth.

Industry Structure and Developments

The apparel industry has evolved rapidly over the past few years driven by the entry of international brands, emergence of E-commerce players with deep pockets and rapid growth of value fashion category.

International players in the premium and mid-premium segments are pursuing a clear strategy of expansion and have even adjusted price points to suit the Indian market. Value Fashion players continue to expand aggressively, outpacing the industry growth.

E-commerce is witnessing rapid consolidation, creating unprecedented scale and gaining deep access to markets and consumers. This creates an opportunity for strong brands to partner with E-commerce players and enlarge the consumer base.

The industry continued to witness high discounting and promotions during the full price periods as players pursued growth in a soft environment.

Business Overview

Your Company, with a turnover of Rs, 6,633 Crore in FY 2016-17, has become India''s first billion-dollar pure play fashion powerhouse.

Lifestyle Brands

With over 9 million deeply engaged customers and the largest distribution network, our lifestyle brands -Louis Philippe, Van Heusen, Allen Solly and Peter England, continue to lead the market in their respective segment. Three out of the four brands have crossed the Rs, 1,000 Crore mark in consumer sales. The leadership position of our brands has been further strengthened with the roll-out of omni channel capabilities across 500 stores in the network, giving consumers unprecedented access to a wide variety and choice of our products. Our relentless focus on consumer experience, innovation and brand building has helped us build a strong equity with our consumers.

Pantaloons

Pantaloons, with a growth of 18.4%, is amongst the fastest growing retailers in the value fashion segment. During the year under review, Pantaloons opened 79 stores and ended the year with a total of 209 stores spanning over 3.2 million sq.ft. The share of exclusive brands in the portfolio grew from 62% to 67%. Pantaloons has moved from a two-season cycle to a four-season cycle, bringing freshness and constantly updated fashion to our stores.

Pantaloons has been awarded the IMAGES Most Admired Affordable Fashion Retailer of the year. Its customer relationship program with over 7 million deeply engaged customers is one of the key drivers of growth, contributing to almost 80% of sales.

Fast Fashion

Your Company has been first off the blocks in recognizing fashion segments of the future and has not only laid a strong foundation for it, but also taken definitive strides in responding to the opportunities. Youth fast fashion is one of the fastest growing segments and through its two Retail Brands - People and Forever 21 - the Company has made its foray into this segment. Forever 21 is an iconic global fast fashion brand that brings the latest global fashion to the Indian market, while People is a young and edgy brand that seeks to address the fashion aspirations of the youth of the country. These brands are poised for rapid scale up in the coming years.

Innerwear

Innerwear is an attractive growing market with few organized players. The Company entered this market with the launch of Van Heusen innerwear, loungewear and leisurewear for men. Initial results have been very encouraging and the company plans to steadily scale it up and build a large profitable business in the coming years.

International Brands

The Collective is India''s largest multi-brand retailer of international brands. In FY 2016-17, your Company signed up with international brands Simon Carter and Ted Baker for the Indian market. These brands will be launched in FY 2017-18. With the addition of these brands in its portfolio, your Company has a meaningful play in the emerging Super Premium and Bridge to Luxury Segment.

Demonetization

As with most other businesses in the country, your Company was also impacted by demonetization. While the retail channel recovered quickly, businesses like wholesale customers, suppliers, franchise operations took longer. Overall business returned to normalcy by end of financial year.

GST

Your Company has worked closely with its vendors and partners and is now fully prepared to ensure a smooth transition into the new GST regime.

Business Strategy

Your Company will continue to build on its leadership position through investments in key strategic themes. Building Strong Brands

In order to maintain its leadership position, your Company will continue to invest in brand building, product design and a refreshed store experience. It will sharpen the brand promise through differentiated merchandise and product innovation. Consumer experience is being upgraded through consumer centricity initiatives and digital transformation at stores. The consumer centricity framework is based on continuous consumer research, big data analytics, real-time consumer feedback from retail outlets and a constantly upgrading loyalty program.

Enhancing Portfolio

Your Company continuously identifies emerging segments in the market and seeks to enhance its play through a combination of brand extensions, new product launches and strategic acquisitions.

In the last few years, your Company expanded its presence in casual wear through brand extensions and gained a strong position in the fast growing value fashion segment through Pantaloons. In FY 2016-17 the portfolio has been further strengthened with the acquisition of rights of Forever 21 and launch of men''s innerwear under the brand Van Heusen.

As we move forward, your Company will continue to explore further growth opportunities in fast growing segments such as women swear, casual and super-premium categories.

Building agile Design and Supply Chain

Design and product development is at the core of the apparel business and your Company will continue to invest behind these functions. In FY 2016-17, your Company has shifted from a two-season cycle to a four-season cycle - Spring, Summer, Festive and Winter, thereby building an agile design and supply chain ecosystem. This is a significant internal transformation your Company has undertaken to offer greater freshness and latest fashion in line with changing consumer trends.

Expanding distribution footprint

Your Company has been growing rapidly through its multi-channel distribution strategy and is now present in more than 750 cities. It has identified markets in Tier II/ III cities for further expansion even while it increases its penetration in existing territories, thereby gaining strong position across these markets to meet the growing demand for high-quality ready-made branded apparel.

Financial Performance

Restatement of Financial Statements in terms of Indian Accounting Standards ("Ind AS")

The Financial Statements of the Company for the previous years (including the ones with respect to year ended March 31, 2016) were prepared in accordance with the applicable Accounting Standards, notified under Companies (Accounting Standard) Rule, 2006 (as amended) and other relevant provisions (hereinafter referred to as ''Previous GAAP'').

The Company has adopted Ind AS notified by the Ministry of Corporate Affairs ("MCA") w.e.f. April 1, 2016 - with a transition date of April 1, 2015, in view of the provisions of Section 133 of the Companies Act, 2013 (the "Act", which term shall include the Rules made there under) read with the Companies (Indian Accounting Standards) Rules, 2015.

Accordingly, the Financial Statements for the year under review have been prepared in accordance with the Ind AS.

Also, as per the provisions of Ind AS 101 with respect to "First-time Adoption of Indian Accounting Standards", all Ind AS and interpretations - that are applicable for the financial statements of the Company for the year under review, are applied retrospectively and consistently for all the financial years presented and accordingly, the comparative period figures has been restated to that extent and the impact of transition from Previous GAAP to Ind AS has been accounted for in opening reserves.

Statement of Profit and Loss

(Amount in Rs, Crore)

Particulars	As on March 31, 2017	As on March 31, 2016
Revenue	6,633	6,035
EBITDA*	476	405
Finance Cost	180	177
EBDT	296	228
Depreciation	242	338
Earnings Before Tax	54	(110)
Provision for Taxation	-	-
Net Profit / (Loss)*	54	(110)
Other Comprehensive Income	(9)	0
Total Comprehensive Income / (Loss)*	45	(110)

* Includes Other income of Rs, 22 Crore (Previous year: Rs, 5 Crore) and Finance income of Rs,16 Crore (Previous year: Rs, 21 Crore) Revenue

Your Company reported revenue of Rs, 6,633 Crore during the year under review, recording a growth of 9.9% over the previous year.

Segment: Madura Fashion & Lifestyle ("MFL")

MFL reported a revenue of Rs, 4,114 Crore recording growth of 3.4% over the previous year.

Its retail channel, which comprises 1,878 Exclusive Brand Outlets ("EBOs") and 174 value stores spanning 3 million square feet, accounts for Rs,45% of MFL''s revenue and reaches out to 10.4 million loyal consumers. Besides these EBOs, MFL is reaching customers through 7800 additional points of sales including Multi Brand Outlets ("MBOs") and Shop-In-Shops ("SISs") in Department Stores.

Segment: Pantaloons

Pantaloons reported a revenue of Rs, 2,552 Crore recording growth of 18.4% over the previous year. During the year, it added 79 stores taking the total number of stores to 209 spanning 3.2 million sq.ft. Pantaloons reaches out to large middle class Indian households with its diversified offerings for men, women and kids.

Operating Profit

Combined EBITDA of both the segments including other income and finance income is Rs, 476 Crore (7.2%), which grew by 17.5% over the previous year EBITDA of Rs, 405 Crore (6.7%).

Finance Cost

During the year under review, your Company reduced the average borrowing cost from Rs,9.3% in previous year to Rs,7.7% . Your Company explored various options for bringing down the cost of borrowings which included availing of short-term instruments like commercial paper and export packing credit and longterm instruments like Redeemable Non-Convertible Debentures. This was further aided by the reduction in the overall interest rates in the economy.

Depreciation

The depreciation cost was higher during the previous year as the Company had reassessed the useful life of leasehold improvements and immovable fixtures for its Pantaloons business, from the period of lease to six years, as the same better reflects the expected usage of such assets.

Balance Sheet

(Amount in Rs, Crore)

Particulars	As on March 31, 2017	As on March 31, 2016
Net Fixed Assets (Including Capital Advances and CWIP)	696	567
Goodwill*	1,860	1,795
Net Working Capital	509	424
Capital Employed	3,065	2,786
Net Worth	958	905
Code	2,107	1,881

Notes:

* Arising on account of transfer to the company of the following businesses -

- Pantaloons (Financial Year 2012-13) -Rs,1,168 Crore,

- Madura Fashion and Lifestyle (Financial Year 2015-16 -Rs,628 Crore

- Forever 21 (Financial Year 2016-17) -Rs,64 Crore ^A Includes interest accrued but not due on borrowings.

As on March 31, 2017, Goodwill (after testing for impairment in accordance with the Ind AS - 36 issued by the Institute of Chartered Accountants of India) stands atRs,1,860 Crore.

Net Working Capital as on March 31, 2017 includes Inventory ofRs,1,431 Crore, Trade Receivables ofRs,454 Crore, Cash and Bank Balance ofRs,44 Crore and Trade Payables ofRs,1,551 Crore.

Dividend

While the Company has made a profit for the year, in view of accumulated losses of previous years, no amount is proposed to be transferred to reserves and your Directors have not recommended payment of any dividend for the year under review.

Borrowings

In order to ensure greater financial flexibility and an optimal financing structure, your Company at the Ninth Annual General Meeting, obtained approval of the Members by way of a Special Resolution, to raise funds by issuance of Non-Convertible Debentures for an amount of uptoRs,1,250 Crore, on private placement basis, within the overall borrowing limits of the Company as approved by the Members from time to time. Pursuant to the said approval, during the year, your Company issued Non-Convertible Debentures ofRs,660 Crore.

SWOT Analysis

Strengths

Portfolio of strong brands

With its portfolio of established brands and large format fashion retail presence, your Company has a leading position in the Indian apparel market and caters to consumers across all segments, from Luxury to Value; including men, women and kids in the formal, casual and ethnic space.

Deep expertise in Design, Product Development and Sourcing

Your Company has invested deeply in building strong design and product development capabilities. This coupled with global sourcing capabilities and robust supply chain systems has helped in continuously bringing to the market innovative products in line with rapidly changing fashion trends.

Largest Distribution Network

Your Company has a wide distribution network spread across 750 cities through 2,261 stores, 3,300 SISs and 4,500 MBOs; making it the largest distribution network of any apparel business in the country.

Strong People Processes

Your Company attracts the best people in the apparel Industry and has strong systems of nurturing the talent backed by robust people development processes, mentoring, career development programs and employee engagement initiatives.

Weaknesses

Inadequate presence in fast growing segments

While the company has a strong presence and brands in menswear segment and has recently entered fast fashion and innerwear categories, it has a relatively lower presence in western women swear, casual wear, denims and kidswear segments. As part of its strategy, your Company is keenly focusing to quickly build capabilities in these segments as well.

Opportunities Large Growing Market

Rising incomes, increasing disposition towards fashion, greater access and awareness about brands is creating a large shift towards branded fashion across the country.

While consumers in larger cities still have access to brands and organized retailers, the overall market continues to remain under-penetrated. This offers growth opportunities in Tier II/III cities. Duly recognizing the opportunity, your Company has built its growth strategy around these key markets.

The company is also looking to tap the opportunity in the super-premium segment as more affluent consumers seek international brands and global experiences.

As consumers are shifting to online purchase, your Company sees an opportunity in building a substantial online business.

Threats and Risks

Scarcity of quality retail space

Retail space in India is limited to key markets and a few successful malls, leading to a scarcity of suitable retail spaces at the right rentals.

Emergence of E-commerce players with deep pockets

The share of online business is growing rapidly and will continue to disrupt the value proposition to customers through deep discounting and promotions.

Talent Retention

The company faces constant threat to its talent pool from competition; primarily from the new international players and E-commerce companies in the industry.

Outlook - Way Forward

With the government focused towards improving the investment environment and the consumer inflation well under check, the economy is poised for continued robust growth. This improving economic scenario should translate into increased consumer spend over time.

Your Company is well-positioned to exploit the potential in this growing market with its diverse product offerings across varied categories and price points for changing consumer needs.

Risk Management and Internal Controls

Effective governance and risk management form the bedrock of a company''s sustained performance and revolve around rigorous implementation of standardized policies and processes and development of strong internal control systems.

Your Board has constituted a Risk Management Committee ("RMC") for identification, evaluation and mitigation of operational, strategic and external risks. RMC has a defined role and overall responsibility for monitoring and reviewing the Risk Management Plan and associated practices of the Company. Details of the composition of the RMC have been disclosed as part of the Corporate Governance Report.

Your Company also has an Internal Committee to support and assist the RMC in identifying, evaluating and mitigating operational, strategic and external risks.

This internal committee is headed by the Chief Financial Officer of your Company who is also the Chief Risk Officer of the Company and it is supported by individual Risk Officers covering legal, supply chain, manufacturing, human resources, finance, business development, IT, sales and marketing functions. This internal committee assists the RMC in defining the framework for risk management and compliance and undertakes assessment of risks, adopts the risk mitigation plans and regularly monitors them in a structured, controlled environment. It also reviews developments in the socio-economic environment and identifies internal threats and opportunities, updates the framework and refines processes and systems for mitigation.

Further, your Company has set up internal controls and policies related to financial reporting of transactions and efficient business operations in compliance with relevant laws and regulations. Internal reporting systems are in place for effective measurement of various business parameters related to revenue, expenses and reporting, in line with the provisions of the Act. Internal Audit Reports are tabled and reviewed by the Audit Committee and corrective measures are taken up promptly to improve the systems and processes.

Details with respect to the Risk Management Policy adopted by the Board have been disclosed separately herein below.

Human Resources

Powered by a team of 19,397 employees, we believe that our employees provide us with a competitive edge.

Your Company believes in harnessing its leadership and people capabilities through sharp focus and initiatives on talent development. We have instituted an active talent review process to take stock of succession planning for key roles in the businesses. We review our talent based on their performance and potential to assess their readiness for future roles of higher scale and complexity. We also invest in hiring bright entry level talent through our Management Trainee Programs to create the future leadership pipeline.

We believe in developing our employees through multiple experiences requiring them to handle scale and complexity. We have instituted this through varied job rotation and project roles. We have also put in place knowledge integration through Function based Councils. This helps to share experience, best practices and collective learning across our brands, formats and regions. We have also started investing in digital capabilities and have created an omni-channel organization to drive our agenda forward. Plans are afoot to strengthen our capability in this area.

The Aditya Birla Centre for Retail Excellence (ABCRE) continues to focus on capability building in our customer facing roles across our wide network of Stores through a learning calendar and learning delivery teams. Working with the business teams, it curates learning needs, creates contents for program and delivers training through its trainers and retail operations teams for our store staff.

We have put in place various recognition initiatives for our employees to reward them on their noteworthy performance and contribution. This is accorded at various platforms such as CEO Town Hall, annual meets of employees and Store Manager Meets. Various events such as Retail Olympics infuse bonding and team work among our employees through competitive sports events.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Sections 134(3)(c) and 134(5) of the Act, the Directors, to the best of their knowledge and ability, confirm that:-

a) in the preparation of the annual accounts, the applicable accounting standards had been followed alongwith proper explanation relating to material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

OTHER DISCLOSURES UNDER THE ACT AND OTHER APPLICABLE LAWS, REGULATIONS ETC.

Details of Directors and Key Managerial Personnel who were appointed or have resigned during the year

A. Directors

During the year under review, Mr. Sanjeeb Chaudhuri was appointed as an Additional Independent Director of your Company for a period of 5 (five) consecutive years w.e.f. January 9, 2017, subject to the approval of the Members. Business with respect to his appointment is one of the agenda of the ensuing Tenth Annual General Meeting of the Company.

B. Key Managerial Personnel ("KMP")

During the year under review, pursuant to the Talent Development Policy of the Aditya Birla Group ("Group") and also in line with the provisions of the Nomination Policy of your Company:

a) Mr. Ashish Dikshit was re-designated as the "Business Head" of the Company (to continue to be one of the KMP of the Company) w.e.f. November 1, 2016, reporting to Mr. Pranab Barua -Managing Director of the Company; and

b) Mr. Vishak Kumar, Chief Executive Officer of Aditya Birla Retail Limited, a fellow ABG Company, was appointed as "Chief Executive Officer - Madura Fashion & Lifestyle" and one of the KMP of the Company w.e.f. November 1, 2016.

None of the KMP of your Company resigned from their respective positions in the Company.

The aforesaid appointments were based on the recommendation of the Nomination and Remuneration Committee of the Board ("NRC").

Further, in accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Sushil Agarwal - Non-Executive Director of your Company, is due to retire by rotation at the ensuing Tenth Annual General Meeting and being eligible, he has offered himself for re-appointment. Business with respect to his re-appointment is one of the agenda of the ensuing Tenth Annual General Meeting of the Company.

The list and profiles of the present Directors and KMP are disclosed as part of "Corporate Information".

Company’s policy on appointment and remuneration of Directors and KMP including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178 of the Act

Board has, on recommendation of the NRC, adopted a Policy, which inter alia enumerates your Company''s policy on appointment of Directors and KMP.

Further the Board has, on recommendation of the NRC, also adopted a policy entailing Executive Remuneration Philosophy, which covers the Directors, KMP and employees included in Senior Management of your Company.

Both the aforesaid policies are annexed as Annexure I and Annexure II to this report.

Familiarization Programme

Your Company has framed a Familiarization Programme for Independent Directors of the Company, which aims to provide significant insight into the business of the Company and to enable the Independent Directors to understand their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates and business of the Company. Strategic reviews are also carried out from time to time to update Independent Directors.

On appointment, a formal letter of appointment is given to the Independent Director being appointed, which inter alia explains the role, function, duties and responsibilities expected of him/ her as an Independent Director of your Company. By way of an introduction to your Company, the new Director is presented with an Induction Kit, essentially a set of documents which may enable him/ her to have an adequate idea of the Group and the Company, such as Snapshot of the Company along with its major activities in last three years, Corporate presentations along with other documents that can give him/ her broad idea of the Management of the Company, various Codes of Conduct and Policies applicable to the Company etc. The Director is also explained, in detail, the compliances required from him/ her under the applicable laws. Also, once appointed, the Directors are periodically updated on the new projects, activities or processes of the Company, industry scenario, changes in regulatory framework and the impact thereof on the working of the Company. Details of said Familiarization Programmes are also available on the website of the Company i.e. www.abfrl.com.

Number of Meetings of the Board

During the year under review, the Board met four times, on following occasions:

Sr. No.	Date of Meeting	Place
1	May 25, 2016	Bengaluru
2	August 31, 2016	Mumbai
3	November 24, 2016	Mumbai
4	February 3, 2017	Mumbai

Details of meetings of the Board and its Committees along with the attendance of the Directors therein have been disclosed as part of the Corporate Governance Report.

The intervening gap between the meetings was as prescribed under the Act and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations").

Manner of formal annual evaluation by the Board of its own performance and that of its Committees and Individual Directors

Pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board has to evaluate its own performance and that of its Committees and Individual Directors ("Evaluation").

To enable such evaluation, an evaluation framework has been adopted by all the companies of the Group, which is devised with a view to provide a more structured approach for the evaluation and which lays down overall guidelines and processes to be adopted for the evaluation of performance. NRC and the Board have, vide their respective Resolutions dated May 8, 2015 and May 13, 2015, approved the Evaluation Framework.

The evaluation framework for assessing the performance of Directors of your Company comprises criteria’s such as contribution of the Director at the meetings, strategic perspective or inputs regarding the growth and performance of the Company, among others.

Pursuant to the provisions of the Act and the SEBI Listing Regulations, the Directors have carried out the annual performance evaluation of the Board, Independent Directors, Non-Executive Directors, Executive Directors and the Committees of the Board. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Individual Directors, the Board as a whole and its Committees with the Company. Performance evaluation criteria for Independent Directors is disclosed as a part of the Corporate Governance Report.

Statement on declaration of Independence

All the Independent Directors of the Company have given their respective declarations stating that they meet the criteria of Independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations.

Composition of the Committees of the Board of Directors

Name of the Committee	Composition of Committee
Audit Committee	- Mr. Arun Thiagarajan, Independent Director (Chairperson) - Mr. Bharat Patel, Independent Director - Ms. Sukanya Kripalu, Independent Director - Mr. Sanjeeb Chaudhuri, Additional Independent Director - Mr. Sushil Agarwal, Non-Executive Director - Permanent Invitee - Mr. Pranab Barua, Managing Director
Stakeholders Relationship Committee	- Mr. Bharat Patel, Independent Director (Chairperson) - Ms. Sukanya Kripalu, Independent Director - Mr. Sushil Agarwal, Non-Executive Director
Nomination and Remuneration Committee	- Mr. Bharat Patel, Independent Director (Chairperson) - Ms. Sukanya Kripalu, Independent Director - Mr. Arun Thiagarajan, Independent Director - Mr. Sushil Agarwal, Non-Executive Director
Corporate Social Responsibility Committee	- Mr. Bharat Patel, Independent Director - Mr. Sushil Agarwal, Non-Executive Director - Mr. Pranab Barua, Managing Director - Mrs. Rajashree Birla, Chairperson, Aditya Birla Centre for Community Initiatives and Rural Development - Dr. Pragnya Ram, Group Executive President, Corporate Communication & CSR, Aditya Birla Group - Permanent Invitee
Risk Management Committee	- Mr. Bharat Patel, Independent Director (Chairperson) - Mr. Arun Thiagarajan, Independent Director - Mr. Sushil Agarwal, Non-Executive Director - Mr. Pranab Barua, Managing Director

Corporate Governance

Your Company is committed to follow the best practices of Corporate Governance, including the requirements under the SEBI Listing Regulations and the Board is responsible to ensure the same, from time to time. Your Company has duly complied with the Corporate Governance requirements as set out under Chapter IV of the SEBI Listing Regulations, from time to time and the Statutory Auditors of the Company viz. M/s. S R B C & CO LLP, Chartered Accountants (ICAI Registration No. 324982E/E30003), have vide their certificate dated May 12, 2017, confirmed that the Company is and has been compliant with the conditions stipulated in the Chapter IV of the SEBI Listing Regulations ("said certificate"). The said certificate is annexed as Annexure III to this report.

Further, a separate report on Corporate Governance forms part of this Annual Report.

Extract of Annual Return

Pursuant to the provisions of Sections 92(3) and 134(3)(a) of the Act and Companies (Management and Administration) Rules, 2014, an Extract of the Annual Return in Form No. MGT-9 is annexed as Annexure IV to this report.

Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made - (i) by the auditor in his report and (ii) by the company secretary in practice in his secretarial audit report

Statutory Auditor

M/s. S R B C & CO LLP, Chartered Accountants (ICAI Registration No. 324982E/E30003), were appointed as Statutory Auditors of your Company at the Ninth Annual General Meeting of the Company held on September 7, 2016, to hold office for a period of 5 (five) consecutive years i.e. from the conclusion of the Ninth Annual General Meeting until the conclusion of the Fourteenth Annual General Meeting of the Company, subject to the ratification of their appointment by Members at every Annual General Meeting.

Report given by the Statutory Auditors on the Financial Statements of the Company is disclosed as part of the "Financial Statements".

There has been no qualification, reservation, adverse remark or disclaimer given by the Statutory Auditors in their Report for the year under review. In terms of the guidelines issued by the Institute of Chartered Accountants ("ICAI"), the Statutory Auditors have emphasized on the matter that the acquisition of the Madura Undertaking of ABNL and MGL Retail Undertaking of MGLRCL ("demerged undertakings") has not been restated in accordance with the provisions of Ind AS 103, since the same has been accounted in accordance with the terms of the Composite Scheme of Arrangement as approved by the Hon''ble High Court of Gujarat and Bombay vide their respective orders.

The Notes to the Financial Statements are self-explanatory and do not call for any further comments. Secretarial Auditor

M/s. Dilip Bharadiya & Associates, Practicing Company Secretaries, were appointed as Secretarial Auditor of your Company, to conduct Secretarial Audit for the year under review, pursuant to the provisions of Section 204 of the Act.

There has been no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditor in his Report for the year under review. The Secretarial Audit Report given by the Secretarial Auditor of the Company is annexed as Annexure V to this report.

Particulars of loans, guarantees or investments under Section 186 of the Act

Particulars of the loans, guarantees and investments as required under Section 186 of the Act have been disclosed as part of the "Financial Statements".

Particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Act in the prescribed form

All contracts/ arrangements/ transactions entered into by your Company with its related parties, during the year under review, were:

- in "ordinary course of business" of the Company;

- on "an arm''s length basis"; and

- not "material",

as per the provisions of Section 188(1) of the Act read with Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the SEBI Listing Regulations.

Accordingly, Form AOC-2 prescribed under the provisions of Section 134(3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, for disclosure of details of Related Party Transactions, which are "not at arm''s length basis" and also which are "material and at arm''s length basis", is not provided as an annexure of this Report.

However, all Related Party Transactions entered into during the year under review were approved by the Audit Committee and Board, from time to time and the same are disclosed as part of the Financial Statements of your Company for the year under review, as per the applicable provisions of the Act and the SEBI Listing Regulations.

Further, pursuant to the provisions of the Act and the SEBI Listing Regulations, Board has, on recommendation of its Audit Committee, adopted a Policy on Related Party Transactions and the said policy is available on the website of the Company i.e. www.abfrl.com.

Details relating to deposits

During the year under review, your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2017, there were no deposits which were unpaid or unclaimed and due for repayment.

Names of companies which have become or ceased to be its Subsidiaries, Joint Ventures or Associate companies during the year

During the year, no Company became/ ceased to be a Subsidiary/ Associate of your Company. Also the Company did not become a part of any Joint Venture during the year.

As at the end of the year under review i.e. on March 31, 2017 and also as on the date of this report, your Company does not have any Subsidiary and/ or Associate Company and your Company is also not a part of any Joint Venture.

Details with respect to development and implementation of a Risk Management Policy

Considering the susceptibility of your Company to the inherent business risks, Board, on recommendation of RMC, has adopted a Risk Management Policy, to:

- develop and implement Risk Management procedure/ plan including identification therein of elements of risk, if any, which may threaten the existence of the Company;

- enable the Company to proactively manage the uncertainty, changes in the internal and external environment to limit negative impacts;

- capitalize on opportunities along with minimization of identifiable risks; and

- in compliance with the provisions of the Act and Regulations 4(2)(f) & 17(9)(b) of the SEBI Listing Regulations which require the Company to lay down procedure for risk assessment and procedure for risk minimization.

The policy is reviewed periodically by the RMC, along with the key risks and related mitigation plans. More details on risks and threats have been disclosed hereinabove, as part of the Management Discussion and Analysis.

Further, in view of the ever increasing size and complexity of the business operations, your Company is exposed to the various risks emanating from frauds. Accordingly, the Board has, on recommendation of the Audit Committee, adopted an Anti-Fraud Policy and a Whistle Blower Policy, to put in place, a system for detecting and/ or preventing and/ or deterring and/ or controlling the occurrence of frauds.

Details of establishment of Vigil Mechanism

Board has, on recommendation of the Audit Committee, adopted a Policy thereby enumerating the Vigil/ Whistle Blower Mechanism, for Directors and employees of your Company, to report concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct of the Company and to voice genuine concerns or grievances about unprofessional conduct without fear of reprisal. Adequate safeguards are provided against victimization to those who avail of the mechanism and direct access to the Chairperson of the Audit Committee is provided to them. The Vigil Mechanism is also available on the website of the Company i.e. www.abfrl.com.

Details about the policy developed and implemented by the Company on Corporate Social Responsibility (“CSR”) and the CSR initiatives taken during the year

In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board has constituted a CSR Committee. Details of the composition of the CSR Committee are disclosed hereinabove and have also been disclosed as part of the Corporate Governance Report.

Further, the Board has, with a vision "to actively contribute to the social and economic development of the communities in which your Company operates and in doing so build a better, sustainable way of life for the weaker sections of society and raise the country''s human development index", adopted a CSR Policy and the same is available on the website of the Company i.e. www.abfrl.com.

CSR Policy of the Company, enumerates the Vision of the Group and your Company, as a responsible corporate citizen. It also mentions the process to be implemented with respect to identification of projects and philosophy of the Company, along with key endeavors and goals viz.

- In Education - to spark the desire for learning and knowledge;

- In Health care - to render quality health care facilities to people living in the villages and elsewhere through our Hospitals;

- In Sustainable Livelihood - to provide livelihood in a locally appropriate and environmentally sustainable manner;

- In Infrastructure Development - to set up essential services that form the foundation of sustainable development; and

- to bring about Social Change, we advocate and support.

In line with the same, the CSR activities of the Company are mainly focused towards,

- Girl Child Education and Skilling; and

- Health and Sanitation.

In view of the losses during the three immediately preceding financial years (i.e. Financial Years 2015-16, 2014-15 and 2013-14), the Company was not required to spend any amount towards the CSR activities, as per the applicable provisions of Section 135 of the Act. However, a report on CSR Activities of your Company during the year under review is annexed as Annexure VI to this Report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

Your Company consciously makes all efforts to conserve energy across all its operations. Information on conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed pursuant to Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is given in Annexure VII to this Report.

Sustainability and Business Responsibility Report

Your Company''s sustainability initiatives are aligned with the Group''s sustainability vision, which mainly comprises Responsible Stewardship, Stakeholder Engagement and Future-proofing.

Accordingly, under the aegis of the Group''s sustainability vision, your Company is strengthening its ''ReEarth'' program, to design a roadmap which will align with the group level sustainability policies and international frameworks.

Through this mission, we hope to create a future ready organization, which addresses the needs of all Stakeholders thereby securing a sustainable future for tomorrow.

In accordance with our sustainability vision and in terms of Regulation 34(2)(f) of the SEBI Listing Regulations, a Sustainability and Business Responsibility Report forms a part of this Annual Report.

Dividend Distribution Policy

Your Company has, in compliance with SEBI Listing Regulations, formulated a Dividend Distribution Policy. Objective of this policy is to provide the dividend distribution framework to the Stakeholders of the Company and it sets out various internal and external factors which shall be considered by the Board in determining the dividend payout.

The policy is annexed as Annexure VIII to this report and is also available on the website of the Company

i.e. www.abfrl.com.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status operations of your Company in future.

Employee Stock Option Scheme and Share Based Employee Benefits

Grant of share based benefits to employees is a mechanism to align the interest of employees with those of the Company, to provide them with an opportunity to share the growth of the Company and also to foster the long-term commitment.

Grant of share based benefits to the employees of the Company, such as Employee Stock Options ("Options"), Restricted Stock Units ("RSUs"), Stock Appreciation Rights ("SARs") etc. is governed by the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("Regulations").

NRC inter alia administers, implements and monitors the Schemes and plans thereby governing the grant of Share Based Employee Benefits to the employees of the Company. Accordingly, administration and implementation of the "Employee Stock Option Scheme - 2013" ("Scheme") and "Stock Appreciation Rights Plan - 2013" ("Plan"), comes under the scope of NRC.

During the year under review, 2,79,544 (Two Lakh Seventy Nine Thousand Five Hundred Forty Four) RSUs were granted pursuant to the provisions of the Scheme and no Options and/ or SARs were granted.

Pursuant to the provisions of the Scheme and Plan, 1,78,910 (One Lakh Seventy Eight Thousand Nine Hundred Ten) Options, 51,974 (Fifty One Thousand Nine Hundred Seventy Four) SARs and 4,93,484 (Four Lakh Ninety Three Thousand Four Hundred Eighty Four) RSUs, respectively, were vested unto the eligible grantees. Also, your Company creditedRs,68,984.80 (Rupees Sixty Eighty Thousand Nine Hundred Eighty Four and Eighty Paise only) to one of the eligible grantee upon exercise of SARs.

Further, the Stakeholders Relationship Committee of the Board, allotted 2,62,925 (Two Lakh Sixty Two Thousand Nine Hundred Twenty Five) Equity Shares ofRs,10/- (Rupees Ten only) each credited as fully paid-up, upon exercise of Options by the eligible grantees and 3,84,767 (Three Lakh Eighty Four Thousand Seven Hundred Sixty Seven) Equity Shares ofRs,10/- (Rupees Ten only) each credited as fully paid-up, upon exercise of RSUs by the eligible grantees.

In terms of the provisions of the Regulations, the details of the Options and/ or RSUs and/or SARs already granted under the abovementioned Scheme and/or Plan are available on the website of the Company i.e. www.abfrl.com. Further, the same have been disclosed as part of the "Financial Statements".

A certificate from the Statutory Auditor confirming that the Scheme has been implemented in accordance with the Guidelines and the Regulations will be placed at the ensuing Tenth Annual General Meeting for inspection by the Members.

Particulars of Employees as per Section 197(12) of the Act and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Disclosures with respect to the remuneration of Directors and Employees as required under Section 197 (12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure IX to this Report.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("said rules") a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of the Annual Report. However, in line with the provisions of the first proviso to Section 136(1) of the Act, the reports and accounts as set out therein, are being sent to all Members of the Company, excluding the aforesaid information. The same is open for inspection at the Registered Office of your Company during working hours. Any member interested in obtaining such information may write to the Company Secretary at the Registered Office of the Company.

Disclosures as per the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company is committed towards providing a work environment that is professional and mature, free from animosity and one that reinforces our value of integrity that includes respect for the individual. Pursuant to the same, the Company has a Policy on Prevention of Sexual Harassment at Workplace, which is applicable to all employees of your Company, as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, no cases were filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and 26 complaints were received, out of which all the complaints have been investigated and resolved after taking an appropriate action and none of the complaints remain pending as on March 31, 2017.

AWARDS AND RECOGNITIONS

Your Company has been proud recipient of the following Awards and Recognitions during the year under review:

- The Company won the ''Best Customer Experience Award'' for Best Use of Insights to Enhance Customer Experience at the Customer Engagement Summit 2017 by Terragni Consulting, India;

- Madura Fashion & Lifestyle has been named as one of the ''Top 100 Best Companies for Women'' in India by Working Mother Media (US based leading firm for women) and AVTAR Group (Pioneer firm in India for providing career opportunities to women);

- Peter England won the ''Best Performing Brand in Men''s Formal / Casual Wear'' at The Flipkart Fashion Conclave 2017;

- Peter England won the ''Best Customer Relationship Management Program'' Award at the Customer Loyalty Summit 2017 by Kamikaze B2B Media (a leading marketing service organization in the B2B space);

- Forever 21 won the ''Most Popular Women''s Brand'' on e-commerce platform, Myntra in 2016;

- Pantaloons won the ''Most Admired Affordable Fashion Retailer of the Year'' at the IMAGES Fashion Awards 2017; and

- Pantaloons bagged 3 Awards in the categories of "Best Customer Centric Company", "Best Loyalty Program in Retail Sector - Large / Multi - Brand Format" and "Best Use of Customer & Data Analytics in Loyalty Program" at the Customer Loyalty Summit 2017 by Kamikaze B2B Media.

SAFETY

Safety has always been one of the key focus areas of your Company and our goal is to achieve ''zero severity level 5 incidents at workplace'' by year 2020. In order to ensure this, we have instituted various mechanisms to assess, manage and improve safety practices.

During the year, there were 5 lost time injuries with no fatalities in operations under our control.

OTHER DISCLOSURES

- There was no revision in the Financial Statements for the Financial Year, other than as necessitated in terms of the provisions of the Act.

- Your Company has not issued any shares with differential voting rights.

- During the year, there was no change in the nature of business of your Company.

- No Material changes and commitments have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of the report affecting the financial position of the Company.

- Your Company has not issued any Sweat Equity Shares.

- Details pertaining to Unclaimed Shares Demat Suspense Account of your Company, are disclosed as part of the "General Shareholder Information".

- Your Company does not have any Subsidiary as on the date of this report and accordingly, it does not have any policy for determining the "Material Subsidiary".

- Your Company does not engage in Commodity hedging activities.

ACKNOWLEDGEMENT

We place on record our sincere appreciation for the continued support which the Company has received from its customers, vendors, suppliers, business associates, bankers, financial institutions, investors, Central and State Governments, Promoters, Group Companies and above all, employees of the Company.

For and on behalf of the Board of Directors

Place: Mumbai Pranab Barua Bharat Patel

Date : May 12, 2017 Managing Director Independent Director

---

Mar 31, 2015

Dear Members,

The Company's Directors, hereby present the Eighth Annual Report of the Company together with the Audited Financial statements of the Company for the Financial Year ended March 31, 2015.

FINANCIAL PERFORMANCE

(Rs in Crore) Particulars As on As on March 31, 2015 March 31, 2014

Revenue 1,851 1,661

EBITDA 75 39

Finance Cost 120 117

EBDT 45 79

Depreciation 183 109

Earnings Before Tax (228) (188)

Provision for Taxation - -

Net Profit/ (Loss) (228) (188)

Revenue

Your Company reported a revenue of Rs. 1851 Crore in the year 2014-15 ("year under review"), recording a growth of 11.4% over 2013-14 ("previous year"). During the year under review, Company opened 25 new Pantaloons Stores and closed two stores. As at March 31,2015, the Company had 104 Pantaloons Stores and 30 Factory Outlet Stores.

Operating Profit

EBITDA excluding other income at 73 Crore grew by 118% over previous year. Focus on cost efficiencies, improved product mix and pricing has improved the EBITDA during the year under review.

Net Interest

Finance costs stood at Rs. 120 Crore with average borrowing cost of 10.17% versus 10.40 % in the previous year.

Depreciation

The depreciation cost was higher mainly due to accelerated depreciation provided on account of refurbishment and closure of stores.

Balance Sheet

Particulars As on As on March 31, 2015 March 31, 2014

Net Fixed Assets 422 496 (Including Capital Advances and CWIP)

Goodwill 1,168 1,168

Net Working Capital 67 (34)

Capital Employed 1,656 1,630

Net Worth 346 579

Debt 1,311 1,050

The Goodwill recognised on transfer of Pantaloons business to the Company was subsequently tested for impairment in accordance with the Accounting Standard - 28 issued by the Institute of Chartered Accountants of India and continues to stand at Rs. 1,168 Crore as on March 31, 2015.

Net Working Capital as on March 31, 2015, includes Inventory of Rs. 427 Crore, Trade Receivables of Rs. 3 Crore, Cash and Bank Balance of Rs. 7 Crore and Trade Payables of Rs 311 Crore.

The detailed analysis of the performance is included in the section Management Discussion and Analysis. DIVIDEND

In view of the loss for the year under review, no amount is proposed to be transferred to the reserve(s) and your Directors have not recommended payment of any dividend for the year under review.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Sections 134(3) (c) and 134(5) of the Companies Act, 2013, the Directors, to the best of their knowledge and ability, confirm that:-

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

Company consciously makes all efforts to conserve energy across all its operations.

a) Technology Absorption: Nil

b) Foreign Exchange Earnings and Outgo has been disclosed as part of the Financial Statements of the Company for the year under review.

c) The Company earned NIL (Previous Year: NIL) in foreign currency from Export of Goods and Foreign Exchange outgo was Rs. 16 Lakhs (Previous year: Rs.6 Lakhs).

Details w.r.t. development and implementation of a Risk Management Policy

Board has constituted a Risk Management Committee of the Board ("RMC"), to assist the Board with regard to the identification, evaluation and mitigation of operational, strategic and external risks. RMC has overall responsibility for monitoring and reviewing the Risk Management Plan and associated practices of your Company.

Further, considering the susceptibility of the Company to inherent business risks, Board of your Company, on recommendation of RMC, has adopted a Risk Management Policy, to

- develop and implement Risk Management procedure/ plan including identification therein of elements of risk, if any, which may threaten the existence of the company;

- enable the Company to proactively manage the uncertainty, changes in the internal &external environment to limit negative impacts; and

- capitalize on opportunities along with minimization of identifiable risks,

- in compliance with the provisions of the Act and Clause 49 of the Listing Agreement which requires the Company to lay down procedure for risk assessment and procedure for risk minimization.

More details on risks and threats have been disclosed above, in the section "Management Discussion and Analysis".

Further, in view of the technologically advanced operations, growing complexities of internal structures of the organizations, increasingly transient employees and such other reasons, all organisations, including the Company, are exposed to the risks emanating from fraud(s). Accordingly, the Board of your Company has, on recommendation of the Audit Committee, adopted an Anti-Fraud Policy, to put in place, a system for detecting and/or preventing and/or deterring and/or controlling the occurrence fraud(s).

Details about the policy developed and implemented by the Company on Corporate Social Responsibility ("CSR") initiatives taken during the year

Board has, with a vision "to actively contribute to the social and economic development of the communities and built a better sustainable way of life for weaker sections of society", adopted a CSR Policy and the same is available on your Company's website viz. www.pantaloons.com.

CSR Policy of your Company, enumerates the Vision of the Aditya Birla Group & the Company, as a responsible corporate citizen, and mentions the process to be implements w.r.t. Identification of projects and philosophy of the Company, alongwith key endeavors & goals viz.

- In Education - to spark the desire for learning and knowledge;

- In Health care - to render quality health care facilities to people living in the villages and elsewhere through our Hospitals;

- In Sustainable Livelihood - to provide livelihood in a locally appropriate and environmentally sustainable manner;

- In Infrastructure Development - to set up essential services that form the foundation of sustainable development; and

- to bring about Social Change we advocate and support.

In view of the losses for the year under review, your Company was not required to spend any amount towards the CSR activities, as per the applicable provisions of Section 135 of the Companies Act, 2013. Accordingly, the details of the CSR activities during the year under review are not provided in this Report.

Manner of formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors

Pursuant to the provisions of the Act and Listing Agreement, the Board has to evaluate its own performance and that of its committees and individual directors ("Evaluation").

To enable such evaluation, an evaluation framework has been adopted by all the companies of the Aditya Birla Group, which is devised with a view to provide a more structured approach for the evaluation and which lays down overall guidelines & processes to be adopted for the evaluation of performance. NRC and the Board have, vide their respective Resolutions dated May 8, 2015 and May 13, 2015, approved the Evaluation Framework.

Accordingly, the Board carried out the evaluation of its own performance and that of its committees and individual Directors w.r.t. the year under review. The exercise was carried out through a structured evaluation process covering various aspects of the functioning of the Board and its Committees. Individual Directors were evaluated separately on basis of their respective designations and roles. The manner in which the evaluation has been carried out has been enumerated in the Corporate Governance Report. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Individual Directors, the Board as a whole and its Committees with the Company.

Details of Directors and Key Managerial Personnel who were appointed or have resigned during the year

During the year under review, Dr. Rakesh Jain, Non-executive Director (DIN: 00020425) and Mr. P. Murari, Independent Director (DIN: 00020437), resigned from their respective Directorships of the Company w.e.f. December 15, 2014 and March 25, 2015 respectively.

Also, pursuant to the Talent Development Policy of the Aditya Birla Group, Mr. Manoj Kedia, Chief Financial Officer of the Company was transferred as the Chief Financial Officer of the "Textiles, Acrylic Fibre and Overseas Spinning" Business of the Aditya Birla Group and accordingly, he ceased to be the Chief Financial Officer of the Company w.e.f. November 4, 2014.

With a view to broaden the Board and pursuant to the provisions of the Act, following appointments were made, subject to the approval of the members of the Company at the ensuing Annual General Meeting-

Name Designation Term & Tenure

Ms. Sukanya Kripalu Additional Director of the For a period of 5 (five Company, proposed to be consecutive years w.e.f appointed as an Independent October 13, 2014 Woman Director

Mr. Arun Thiagarajan Additional Director of the For a period of 5 (five Company, proposed to be consecutive years w.e.f. appointed as an May 11, 2015 Independent Director

Resolutions for appointment of Ms. Kripalu and Mr. Thiagarajan, form part of the Notice for the ensuing Eighth Annual General Meeting of the Company, circulated to the members of the Company, separately.

Mr. Pranab Barua, was appointed as the Managing Director of the Company vide a Special Resolution passed by the members of the Company at the Seventh Annual General Meeting of the Company held on August 27, 2014, w.e.f. October 25, 2013.

Further, in accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Sushil Agarwal, Non- executive Director of the Company, will retire by rotation at the ensuing Annual General Meeting and being eligible for re-appointment, he seeks re-appointment as such. Resolution for his appointment also forms part of the Notice for the ensuing Eighth Annual General Meeting of the Company, circulated to the members of the Company, separately.

Also, on the recommendation of the Nomination and Remuneration Committee of the Board and pursuant to the Talent Development Policy of the Aditya Birla Group, Mr. S. Visvanathan was appointed as the Chief Financial Officer of the Company w.e.f. November 4, 2014.

Names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year

During the year, no Company became/ ceased to be a Subsidiary/ Associate/ Joint Venture of your Company.

As at the end of the year under review i.e. on March 31,2015 and also as on the date of this report, your Company does not have any subsidiary and/or Associate Company and the Company is also not a part of any Joint Venture(s).

Details relating to deposits

During the year under review, your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2015, there were no deposits which were unpaid or unclaimed and due for repayment. Further, as the Company had not accepted any deposit under Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975, in the previous year(s) and as there were no deposits which were unclaimed and due for repayment, as on March 31, 2014, there has been no default in repayment of deposits or payment of interest thereon during the year under review.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

Details in respect of adequacy of internal financial controls with reference to the Financial Statements

Company has established a system of internal controls and business processes, comprising of policies and procedures, with regards to efficiency of operations, financial reporting and compliance with applicable laws and regulations etc. commensurate with its size and nature of the business. Regular internal audit and checks are undertaken to ensure that systems and processes are followed effectively and systems & procedures are periodically reviewed to keep pace with the growing size and complexity of your Company's operations. Your Company also has a well-defined process for an on-going management reporting and periodic review of operations to ensure effective decision-making. During the year under review, proper internal financial controls were in place and the financial controls were adequate and were operating effectively.

Employee Stock Option Scheme and Share Based Employee Benefits

The grant of share based benefits to employees is a mechanism to align the interest of employees with those of the Company, to provide them with an opportunity to share the growth of the Company and also to foster the long-term commitment.

The Securities Exchange Board of India ("SEBI") enacted SEBI (Share Based Employee Benefits) Regulations, 2014 ("Regulations"), thereby repealing the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 ("Guidelines"). The regulations govern the grant of share based benefits to the employees of the Company, such as Employee Stock Options ("ESOPs"), Restricted Stock Units ("RSUs"), Stock Appreciation Rights ("SARs") etc.

During the year under review, the Board of Directors of the Company, merged its ESOP Compensation Committee with the Nomination and Remuneration Committee ("NRC") and accordingly, the functions and the scope of the erstwhile ESOP Compensation Committee i.e. mainly to administer, implement and monitor the Schemes and plans thereby governing the grant of Share Based Employee Benefits to the employees of the Company, are now included in the overall scope of the NRC. Accordingly, administration and implementation of the "Pantaloons Employee Stock Option Scheme 2013" ("Scheme") and "Pantaloons Stock Appreciation Rights 2013" ("Plan"), now comes under the scope of NRC.

During the year under review, no ESOPs and/or RSUs and/or SARs were granted pursuant to the provisions of the Scheme and/or plan. Further, no ESOPs and/or RSUs and/or SARs have vested in the grantees pursuant to the provisions of the Scheme and/or plan.

In terms of the provisions of the regulations, details of the ESOPs and/or RSUs and/or SARs already granted under the abovementioned Scheme and/or plan are available on your Company's website viz. www.pantaloons.com. Further, the same have been disclosed as part of the Financial Statements of the Company for the year under.

A certificate from the Statutory Auditor thereby confirming that the Scheme has been implemented in accordance with the Guidelines and the regulations will be placed at the ensuing Eighth Annual General Meeting for inspection by the Members.

Composition of the Committees of the Board of Directors

Name of the Committee Composition of Committee

Audit Committee Mr. Bharat Patel, Independent Director (Chairperson)

Ms. Sukanya Kripalu, Independent Director

Mr. Arun Thiagarajan, Independent Director

Mr. Sushil Agarwal, Non-executive Director

Permanent Invitee- Mr. Pranab Barua, Managing

Stakeholders Mr. Bharat Patel, Independent Director (Chairperson Relationship Committee Ms. Sukanya Kripalu, Independent Director

Mr. Sushil Agarwal, Non-executive Director

Nomination Remuneration Mr. Bharat Patel, Independent Director Committee Ms. Sukanya Kripalu, Independent Director

Mr. Sushil Agarwal, Non-executive Director

Mr. Pranab Barua, Managing Director

Corporate Social Mr. Bharat Patel, Independent Director Responsibility Committee Mr. Sushil Agarwal, Non-executive Director

Mr. Pranab Barua, Managing Director

Permanent Invitee - Dr. Pragnya Ram, Group Executive President,

Corporate Communication & CSR, Aditya Birla Group

Risk Management Mr.Bharat Patel, Independent Director (Chairperson) Committee Mr. Sushil Agarwal, Non-executive Director

Mr. Pranab Barua, Managing Director

Details of establishment of Vigil Mechanism Policy

Board has, on recommendation of its Audit Committee, adopted a Policy thereby enumerating the Vigil/ Whistle Blower mechanism, for Directors and employees of the Company, to report concerns about unethical behaviour, actual or suspected fraud or violation of your Company's Code of Conduct and to voice genuine concerns or grievances about unprofessional conduct without fear of reprisal. Adequate safeguards are provided against victimization to those who avail of the mechanism and direct access to the Chairman of the Audit Committee in exceptional cases is provided to them.

Particulars of Employees as per Section 197(12) & Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 (12) of the Act and Rule 5(1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided separately as Annexure V to this Report.

Details of employee remuneration as required under provisions of Section 197 (12) of the Act and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be made available at the Registered Office of the Company during working hours before 21 days of the Annual General Meeting, pursuant to the provisions of the first proviso to Section 136(1) of the Act and any member interested in obtaining such information may write to the Company Secretary and the same will be made available to any such member on request.

DISCLOSURES AS PER THE LISTING AGREEMENT "LISTING AGREEMENT"

Corporate Governance

Your Company is committed to follow the best practices of Corporate Governance, including the requirements under Clause 49 of the Listing Agreement and the Board is responsible to ensure the same, from time to time.

Company has duly complied with the Corporate Governance requirements as set out under Clause 49 of the Listing Agreement, from time to time and the Statutory Auditors of the Company viz. M/s. S R B C & Co LLP, Chartered Accountants, have, vide their certificate dated May 13, 2015 confirmed that the Company is and has been compliant with the conditions stipulated in the Clause 49 of the Listing Agreement. The said certificate is annexed to this report as Annexure VI.

Further, a separate report on Corporate Governance forms part of this Annual Report.

Familiarization programmes

Independent Directors, on their appointment, are issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. Interactive sessions with the members of Senior Management including Business and Functional Heads and KMPs of the Company are organised for the induction of the Independent Directors. Details of programmes for familiarisation of Independent Directors with the Company and related matters are put up on the website of your Company's viz. www.pantaloons.com and have been briefly disclosed as part of the Corporate Governance Report.

Material developments in Human Resources / Industrial Relations front, including number of people employed

Company believes that its people are one of its most valuable assets and therefore the Human Resource philosophy and strategy of your Company is structured to attract and retain the best talent that encourages innovation and creates a work environment of inspiration, creativity and passion. To ensure employee development and growth, training and development of the front end store staff, identifying leadership and key talent across the organization and executing individual development plans continue to be the key focus area of your Company. The total number of employees on rolls of the Company as on March 31,2015 was Rs.5,932.

DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION. PROHIBITION & REDRESSAL) ACT, 2013

Your Company is committed to providing a work environment that is professional and mature, free from animosity and one that reinforces our value of integrity that includes respect for the individual and in pursuance to the same, the Company has a Policy on Prevention of Sexual Harassment at Workplace, which is applicable to all employees of the Company, as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, no cases were filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and 16 complaints were received, out of which 16 complaints have been disposed of after taking an appropriate action and none of the complaints remain pending as of March 31, 2015.

AWARDS AND RECOGNITIONS

Your Company has been proud recipient of the following Awards/Recognitions during the year One of the "Most Trusted Retailer of India"- across categories and formats.

Nielsen, an independent agency which specialises in conducting nationwide surveys/ research projects, conducts an Independent survey for "Economic Times' Brand Equity" on annual basis, which is among the largest research project of its kind in India. The intention of the survey is to identify the "Most Trusted Brands and Retailers" and the Company is proud to have been recognised as one of the "Most Trusted Retailer ", as per the results of the survey conducted during the year under review.

Award for the "Best Direct Marketing Campaign of the Year"

Pantaloons' Greencard i.e. the loyalty program for the Customers of the Company, was awarded as the Best "Direct Marketing Campaign of the Year" at the 8th Loyalty awards presented by AIMIA, World's leading loyalty management organization with over 70 years of consulting expertise.

Award for the "Best Store Design"

Pantaloons' store located at the M. G. Road, Bangalore was awarded for the Best Store Design at the "VMRD-Retail Design Awards", which are among the most coveted awards given in the Indian Retail Industry and which turn a spotlight on exceptionally innovative retail designs initiative and projects taken by Architects, Designers, Visual Merchandisers, Suppliers and other retail solution providers.

OUTLOOK

In the short term, we expect the consumer sentiment and spending to remain muted. However, with the inflation projected to stabilise at lower levels and an anticipated improvement in GDP growth, the consumer spending is likely to improve in the medium term.

ACKNOWLEDGEMENT

We place on record our sincere appreciation for the continued support which your Company has received from its customers, suppliers, investors, promoters, bankers, group companies and above all, its employees.

For and on behalf of the Board of Directors,

Pranab Barua Sushil Agarwal Managing Director Non-executive Director

Place : Mumbai Date : May 13, 2015

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Mar 31, 2013

Dear Members,

The Directors are pleased to present the 6th Annual Report of your Company together with the Audited Statement of Accounts for the financial year ended 31st March 2013.

SCHEME OF ARRANGEMENT BETWEEN THE COMPANY AND FUTURE RETAIL LIMITED

In the year under review, your Board of Directors had approved acquisition of "Pantaloons Format Business" (Demerged Undertaking) of Future Retail Limited (FRL)(earlier known as Pantaloon Retail (India) Limited) by way of demerger through a Scheme of Arrangement under Sections 391-394 of the Companies Act, 1956 between FRL, the Company, and their respective shareholders and creditors and Indigold Trade and Services Limited(ITSL) (as the shareholder of the Company) ("the Scheme").

The demerger of the Demerged Undertaking will expand the variety of the Company''s offering in the market and complement its existing portfolio. Further, it will enable wider distribution of products and give a wider choice to the consumers and enable business to build on their systems and processes to improve efficiencies. The stores operating under the brand name Pantaloons and derivatives thereof would remain operational and the Company will carry the same brands.

Hon''ble Competition Commission of India and Hon''ble High Court of Bombay vide their order dated December 21, 2012 and March 1, 2013 respectively had approved the Scheme. On receipt of all the requisite approvals required and on completion of the Conditions Precedent listed in the Scheme, the Board of Directors of your Company in their meeting held on April 08, 2013 made Scheme effective on April 8, 2013 (Effective Date). Accordingly, the entire Demerged Undertaking was transferred to and vested in your Company w.e.f July 1, 2012 (Appointed Date).

CHANGE OF NAME

In terms of the Scheme, the name of the Company was changed from "Peter England Fashions and Retail Limited" to "Pantaloons Fashion & Retail Limited".

CHANGE IN REGISTERED OFFICE

The Registered office of the Company was changed from "A-4, Aditya Birla Centre, S.K.Ahire Marg, Worli , Mumbai, 400 030" to "701-704, 7th Floor, Skyline Icon Business Park, 86-92, Off. Andheri-Kurla Road, Marol Village, Andheri (East), Mumbai -400059, India."

CHANGES IN SHARE CAPITAL

Pursuant to the Scheme the Authorised Equity Share Capital of the Company was increased from Rs. 10 Crore to Rs. 100 Crore.

Upon this Scheme coming into effect, in consideration of the transfer of the Demerged Undertaking, your Company allotted 1 Equity Share of Rs. 10/- each credited as fully paid in the capital of the Company to all the Equity Shareholders whose name appeared in the records of FRL or as beneficiary in the records of the depositories of FRL in respect of the shares of FRL on April 18, 2013 (the Record Date), for every 5 (five) fully paid up FRL Equity Shares/FRL DVRs held by them in FRL (the "Share Entitlement Ratio"). Accordingly, total of 4,63,16,518 Equity Shares of the Company were allotted to the shareholders of FRL on April 19, 2013.

CONVERSION OF OPTIONALLY FULLY CONVERTIBLE DEBENTURES INTO EQUITY SHARES

During the period under review, the Board of Directors of the Company had approved issuance of 800 OFCDs of Rs. 1,00,00,000 each of the Company, to ITSL, convertible into 4,59,77,011 Equity shares of Rs. 10/- each on effectiveness of the Scheme.

Accordingly, on April 8, 2013, the said OFCDs were converted into 4,59,77,011 Equity shares of Rs.10/- each on effectiveness of the Scheme.

OPEN OFFER

As on March 31, 2013, the Company was a wholly-owned Subsidiary of Indigold Trade and Services Limited ("ITSL"), a wholly owned subsidiary of Aditya Birla Nuvo Ltd. ("ABNL"), a Aditya Birla Group Company with revenue size of US$ 4.5 billion.

Pursuant to the Scheme, ITSL and ABNL made Open Offer to shareholders of the Company for acquiring 23,114,868 Equity Shares representing 24.91% of Voting Capital of the Company.

On completion of Open Offer, ITSL along with ABNL acquired 1,65,79,185 Equity Shares of Rs.10/- each constituting 17.87% of post issue paid up capital of the Company. Accordingly, ITSL holds 67.95% Equity Share and Voting Capital of the Company as on date.

LISTING OF EQUITY SHARES OF THE COMPANY

Pursuant to the Scheme, the Equity Shares were proposed to be listed on the BSE Limited and National Stock Exchange of India Limited. Accordingly, the Company had made application for seeking exemption from SEBI under the SEBI Circular SEBI/CFD/SCRR/01/2009/03/09 dated September 3, 2009.The Company has received the Listing approval on July 15, 2013. Accordingly, the trading of the Equity Shares of the Company has commenced on July 17, 2013.

FINANCIAL PERFORMANCE

Your Company''s financials for FY 2012-13 include nine months financials of Pantaloons Format Business transferred to the Company with effect from the Appointed Date, i.e., July 1, 2012. Hence, to that extent, your Company''s performance is not comparable with that of previous year.

(Rs. Crore)

Particulars 2012-13 2011-12

Revenue 1285 18

EBITDA 129 2

Less : Finance Cost 144 0

EBDT (14) 2

Depreciation 54 0

Earnings before Tax (69) 2

Less : Provision for Taxation (Net) - 1

Net Profit / (Loss) (69) 1

REVIEW OF PERFORMANCE

Your Company reported revenue at Rs. 1285 Crore during fiscal 2012-13. The Company opened 6 new Pantaloons stores and 3 Pantaloons Factory Outlets during the nine months ending 31st March 2013.

Gross margin was sustained, however, moderated sales growth and higher retailing costs impacted EBITDA margin. Change in the accounting policy, for instance, with respect to Lease rental straight lining, also lowered profitability.

It is pertinent to note that in terms of the Scheme the conduct of the Demerged Undertaking was managed by FRL on behalf of the Company till the Effective Date (i.e April 8, 2013) in the ordinary course of business.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion and Analysis Report, is prepared in accordance with the requirements laid out in Clause 49 of the Listing Agreement and forms part of this Annual Report.

DIVIDEND

In view of the loss for the year under review, your Directors do not recommend payment of any dividend for the financial year 2012-13

FINANCE

Your Company continues with various initiatives for bringing down the cost of borrowings which includes application of short-term instruments like commercial paper, working capital demand loans within working capital borrowing, long term loans for expansion at competitive terms, so as to have funds at competitive cost.

Pursuant to the Scheme, debt of Rs. 1600 Crore at an interest rate of -13% was transferred to the Company. With a view to optimise the Finance Cost, it was decided to reshuffle the debt portfolio. Accordingly, post effectiveness of the Scheme, the Company raised term loans of Rs. 600 Crore and Non-convertible Debentures of Rs. 300 Crore and re-paid Rs. 800 Crore out of the transferred debt. The average interest rate of long term debt portfolio got reduced to ~ 10.2%.

FIXED DEPOSITS

During the year under review, the Company has not accepted any deposit under section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975.

As on 31st March 2013, there were no deposits which were unclaimed and due for repayment.

HOLDING COMPANY

As on March 31, 2013, the Company was a wholly-owned Subsidiary of Indigold Trade and Services Limited ("ITSL"), a wholly owned subsidiary of Aditya Birla Nuvo Ltd. (ABNL), a Aditya Birla Group Company with revenue size of US$ 4.5 billion.

Post-Scheme of Arrangement, the holding of ITSL in the Company stood at 50.09%.

Pursuant to the Scheme, ITSL and ABNL made Open Offer to shareholders of the Company for acquiring 23,114,868 Equity Shares representing 24.91% of Voting Capital of the Company.

On completion of Open Offer, ITSL along with ABNL acquired 1,65,79,185 Equity Shares of Rs.10/- each constituting 17.87% of post issue paid up capital of the Company.

Accordingly, ITSL holds 67.95% Equity Share and Voting Capital of the Company as on date.

SUBSIDIARY COMPANY

The Company does not have any subsidiary as on March 31, 2013 and as on date of this Report.

DIRECTORS

During the period under review, the Board inducted Mr. Anil Rustogi, Mr. Devendra Bhandari and Mr. Manoj Kedia as Additional Directors of the Company on April 30, 2012. They resigned from the office of Director w.e.f April 19, 2013. We place on record our deep sense of appreciation for the services rendered by them.

Further, on April 19, 2013, Mr. P Murari, Mr. Bharat Patel and Dr. Rakesh Jain were appointed as Additional Directors on the Board of the Company. They hold office upto the conclusion of the forthcoming Annual General Meeting. We seek your support in confirming their appointment as directors liable to retire by rotation.

As per Article 106 of the Articles of Association of the Company, Mr. Sushil Agarwal and Mr. Pranab Barua retire by rotation in the forthcoming General Meeting. Both of them being eligible seek re-appointment.

Brief particulars of Mr. Murari, Mr. Patel, Mr. Agarwal, Mr. Barua and Dr. Jain are annexed to the Notice of the Annual General Meeting in accordance with the Listing Agreement entered with the Stock Exchanges.

DIRECTORS'' RESPONSIBILITY STATEMENT

The financial statements are prepared in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India and the requirements of the Companies Act, 1956 to the extent applicable to us. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

The Board of Directors of the Company accepts responsibility for the integrity and objectivity of the financial statements. The Accounting Policies used in the preparation of the financial statements have been consistently applied except as otherwise stated in the notes to accounts accompanying relevant tables.

The estimates and judgements related to the financial statements have been made on a prudent and responsible basis, in order that the financial statements reflect in a true and fair manner the form and substance of transaction and responsibly present our state of affairs and accounts for the year.

We have taken sufficient care to maintain adequate Accounting records in accordance with the provisions of the Companies Act, 1956, to safeguard the assets of the company and to prevent and detect fraud and other irregularities.

CORPORATE GOVERNANCE REPORT

The Company has been adhering to Corporate Governance requirements as set out under Clause 49 of Listing Agreement. The Company has been following the best practices of good Corporate Governance and have taken adequate steps to ensure compliance with clause 49 of Listing Agreement as laid down by the Stock Exchanges.

The Report on Corporate Governance as stipulated under Clause 49 of Listing Agreement forms part of the Annual Report.

HUMAN RESOURCE

The Human Resource philosophy and strategy of your Company is structured to attract and retain the best talent that encourages innovation and creates a work environment of inspiration, creativity and passion. This strategy has, through strong alignment with your Company''s vision, mission and values successfully built and sustained your Company''s standing as one of India''s most admired and valuable corporations despite unrelenting competitive pressures.

EMPLOYEES STOCK OPTIONS (ESOPs)

The grant of stock options to employees is a mechanism to align the interest of employees with those of the Company, to provide them with an opportunity to share the growth of the Company and also to foster the long-term commitment.

Accordingly in terms of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 Guidelines, your Company has constituted a ESOP Compensation Committee comprising majority of independent directors for formulating the detailed terms and conditions of the scheme to be known as the "Pantaloons Employee Stock Option Scheme - 2013" (the "ESOS - 2013" or the "Scheme") and administering and supervising the implementation of the Scheme.

Vide its resolution dated July 22, 2013, your Company has formulated and designed Pantaloons Employees Stock Option Plan Scheme - 2013" for its employees and proposes to grant options in accordance with SEBI Guidelines, as amended.

Resolution seeking your approval for issue of ESOPs shall be placed in the forthcoming Annual General Meeting.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975, as amended, the names and other particulars of employees are set out in the Annexure to this Report. However, having regard to the provisions of Section 219(1 )(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The said information is available for inspection at the Registered office of the Company during its working hours. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

AUDITORS AND AUDITORS'' REPORT

M/s. S.R. Batliboi Co & LLP, Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of the forthcoming Annual General meeting and are eligible for re-appointment.

The Company has received letter from them to the effect that their re-appointment, if made, would be within the within the prescribed limits under Section 224(1 B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the Act.

The Notes to the Financial Statements are self-explanatory and do not call for any further comments.

SUSTAINIBILITY DEVELOPMENT AND BUSINESS RESPONSIBILITY REPORT

Sustainability Mission of your Company has been detailed in the "Sustainability Development Synergizing Growth with Responsibility" Section which forms part of this Annual Report.

In line with our Sustainability Mission, it is our continuous endeavour to evaluate steps towards responsible sustainability. The Company is in process of devising the Processes, in a manner that will take care of the social and environment concerns. Since, the Pantaloons Format Business has been transferred in the Company only on April 8, 2013; the Company shall take steps towards these Principles during the course of the Financial Year 2013-14.

In line with its Sustainability Mission and Clause 55 of the Listing Agreement, your Company has adopted Principles under all the enshrined Principles.

Accordingly, your Company shall publish detailed Business Responsibility Report from the next year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

The Pantaloons Format Business of the Company has been transferred to the Company w.e.f. July 1, 2012 on April 8, 2013. Therefore, the Company does not have anything to report in terms of steps taken during the period under review. However, the Company is in the continuous process of evaluating various energy conservation measures through improved operational and maintenance practices to conserve energy across all its operations.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign Exchange outgoing and earnings are stated on page 54 and 55 respectively in the notes to the Balance Sheet and Profit and Loss Account. The Company earned t 780 Lakhs in foreign currency from Export of Goods. Foreign Exchange outgo was Rs. 114 Lakhs.

ACKNOWLEDGEMENTS

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at our levels. Your Directors hereby state that the Company has devised proper system to ensure compliance of all laws applicable to the Company. Your Directors also place on record their gratitude for the continuing support of Shareholders, bankers and Business associates at all levels. Your Directors also appreciate the commitment of the executives, staff and workers of the Company.

For and on behalf of the Board of Directors,

Place : Mumbai Pranab Barua

Date : July 22, 2013 Director