Accounting Policies of Aditya Birla Lifestyle Brands Ltd. Company

Mar 31, 2025

1. Corporate information

Aditya Birla Lifestyle Brands Limited (the “Company"), a public company domiciled in India and incorporated
under the provisions of the Companies Act, 2013. The registered office of the Company is located at Piramal
Agastya Corporate Park, Building ‘A'', 4th and 5th Floor, Unit No. 401, 403, 501, 502, L.B.S. Road, Kurla,
Mumbai - 400 070.

The Company is engaged in the business of manufacturing and retailing of branded apparels/accessories and
runs a chain of apparels and accessories retail stores in India.

The standalone financial statements, as reviewed and recommended by the Audit Committee, have been
approved by the Board of Directors in their meeting held on May 23, 2025.

2. Basis of preparation

2.1 Compliance with Ind AS and historical cost convention

The standalone financial statements of the Company have been prepared in accordance with Indian Accounting
Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended),
read with Section 133 of the Companies Act, 2013 (“the Act") and presentation requirements of Division
II of Schedule III of the Act and other relevant provisions of the Act as applicable. The financial statements
have been prepared on accrual basis under the historical cost convention, except the following assets and
liabilities, which have been measured at fair value as required by the relevant Ind AS:

• Certain financial assets and liabilities (refer accounting policy regarding financial instruments);

• Defined employee benefit plans;

• Share-based payment; and

• Derivative financial instruments.

2.2 Functional and Presentation Currency:

The financial statements are presented in Indian Rupee (?) which is the functional currency of the Company.
All amounts are rounded to two decimal places to the nearest Crore, unless otherwise stated. ('' 1 Crore is
equal to '' 10 Million)

2.3 Current versus non-current classification

The Company presents assets and liabilities in the Standalone Balance Sheet based on current/ non-current
classification.

An asset is treated as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle;

• Held primarily for the purpose of trading;

• Expected to be realised within twelve months after the reporting period; or

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

All other assets are classified as non-current.

A liability is treated as current when:

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

• It is held primarily for the purpose of trading;

• It is due to be settled within twelve months after the reporting period; or

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

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash
and cash equivalents. The Company has identified twelve months as its operating cycle.

1.4 Critical Accounting Judgements, Estimates And Assumptions

The preparation of the Company''s financial statements requires the management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, the
accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions
and estimates could result in outcomes that require a material adjustment to the carrying amount of assets
or liabilities affected in future periods. Estimates and assumptions are reviewed on periodic basis. Revisions
to accounting estimates are recognised in the period in which the estimates are revised.

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

(a) Impairment of non-financial assets including Goodwill

Impairment exists when the carrying value of an asset or Cash-Generating Unit (CGU) exceeds its
recoverable amount, which is higher of its fair value less costs of disposal and its value in use. The
fair value less costs of disposal calculation is based on available data from binding sales transactions,
conducted at arm''s length, for similar assets or observable market prices less incremental costs for
disposing off the asset. The value in use calculation is based on Discounted Cash Flow (DCF) model. The
cash flows are derived from the budget for the next three years and next 2 years have been extrapolated
to demonstrate the tapering of growth rate for computation of perpetual cash flows. These cashflows
are considered as a base to arrive at the value of perpetuity. The budget do not include restructuring
activities that the Company is not yet committed to or significant future investments that will enhance
the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount
rate used for the DCF model as well as the expected future cash inflows and the growth rate used for
extrapolation purposes. These estimates are most relevant to goodwill recognised by the Company. The
key assumptions used to determine the value in use for the different CGUs, are disclosed and further
explained in Note - 5a

(b) Share-based payment

The Company uses the most appropriate valuation model depending on the terms and conditions of
the grant, including the expected life of the share option, volatility and dividend yield. For cash-settled
transactions, the liability needs to be remeasured at the end of each reporting period upto the date of
settlement, with any changes in fair value recognised in the Standalone Statement of Profit and Loss.
The assumptions and models used for estimating fair value for share-based payment transactions are
disclosed in Note - 42.

(c) Provision on inventories

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

(d) Provision for discount and sales return

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

(e) Leases

The Company determines the lease term as the non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods
covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

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

2.5 New and amended standards adopted by the Company:

The Ministry of Corporate Affairs has vide notification dated May 7, 2025 notified Companies (Indian Accounting
Standards) Amendment Rules, 2025 (the ‘Rules'') which amended the following accounting standards. These
amendments are effective from April 01, 2025. a) Ind AS 21, “The Effects of Changes in Foreign Exchange
Rates b) Ind AS 101, First-time Adoption of Indian Accounting Standards. The above amendments are not
likely to have any material impact on the financial statements of the Company.

NOTE: 3a

PROPERTY, PLANT AND EQUIPMENT

Accounting Policy

Freehold land is carried at historical cost. Property, plant and equipment is stated at historical cost net of accumulated
depreciation and accumulated impairment losses, if any.

Depreciation methods, estimated useful lives and residual value

Depreciation on property, plant and equipment is calculated on a straight-line basis over the useful life of the
asset estimated by the management. Depreciation on additions is provided on a pro rata basis from the month
of installation or acquisition. Depreciation on deletions/ disposals is provided on a pro rata basis upto the month
preceding the month of deletions/ disposals. The management believes that the estimated useful lives below reflect
fair approximation of the period over which the assets are likely to be used.

NOTE: 4

RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

Accounting Policy

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time
in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified
asset, the Company assess whether:

• The contract involves the use of an identified asset - this may be specified explicitly or implicitly and should
be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier
has a substantive substitution right, then the asset is not identified;

• The Company has the right to obtain substantially all of the economic benefits from the use of the asset
throughout the period of use; and

• The Company has the right to direct the use of the asset. The Company has the right when it has the decision¬
making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases
where the decision about how and for what purpose the asset is used is predetermined, either the Company
has the right to operate the asset; or the Company designed the asset in a way that predetermines how and
for what purpose it will be used.

At inception or on reassessment of a contract that contains a lease component, the Company allocates the
consideration in the contract to each lease component on the basis of their relative stand-alone prices.

Where the Company is the lessee

Right-of-use assets

The Company recognises a right-of-use asset and a lease liability at the lease commencement date except for
short-term leases which are less than 12 months and leases of low value assets. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability plus any initial direct costs incurred
less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the lease commencement
date to the end of the lease term. If ownership of the leased asset transfers to the Company at the end of the lease
term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful
life of the asset. Right-of-use assets are generally depreciated over the shorter of the asset''s useful life and the
lease term on a straight-line basis. In addition, the right-of-use asset is periodically reduced by impairment losses,
if any, adjusted for certain remeasurements of the lease liability.

Right-of-use assets taken over pursuant to the Scheme of Arrangement from Aditya Birla Fashion and Retail Limited
have been depreciated over their remaining estimated useful lives.

Lease liabilities

The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date. The lease payments are discounted using the interest rate implicit in the lease, if that
rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental
borrowing rate.

Lease payments included in the measurement of the lease liability comprise of fixed payments, including
in-substance fixed payments. The lease liabilities are measured at amortised cost using the effective interest
method.

In addition, the carrying amount of lease liabilities is re-measured if there is a modification arising due to change
in the lease term, change in the lease payments or a change in the assessment of an option to purchase the
underlying asset. When the lease liability is re-measured in this way, a corresponding adjustment is made to the
carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use
asset has been reduced to zero and there is a further reduction in measurement of the lease liability.

The Company presents right-of-use assets that do not meet the definition of investment property, and lease
liabilities, separately in the Standalone Balance Sheet.

Short-term leases and leases of low value assets

The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that
have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It
also applies the lease of low-value assets recognition exemption to leases that are considered to be low value.
Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line
basis over the lease term.

Where the Company is the lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset is
classified as an operating lease. Assets subject to operating leases are included in the property, plant and equipment.
Rental income on an operating lease is recognised in the Standalone Statement of Profit and Loss on a straight-line
basis over the lease term. Costs, including depreciation, are recognised as an expense in the Standalone Statement
of Profit and Loss.

NOTE: 5a

IMPAIRMENT TESTING OF GOODWILL

Goodwill acquired through various business combinations have been allocated to the two Cash-Generating Units
(CGUs) as below:

1. Madura Fashion & Lifestyle CGU

2. Forever 21 CGU

Goodwill relating to Madura Fashion & Lifestyle and Forever 21 undertakings were taken over pursuant to acquisition
upon aprrovel of the Scheme of Arrangement between the Company and Aditya Birla Fashion and Retail Limited
by the NCLT on March 27, 2025. (Refer note 48)

Madura Fashion & Lifestyle CGU

Madura Undertaking is a leading premium branded apparel player in India with brands like Louis Philippe, Van Heusen,
Allen Solly and Peter England and having licences to retail various international brands like Reebok, American Eagle
and Simon Carter. The Madura Garments division is invloved in manufacturing of garments.

Forever 21 CGU

Forever 21 business comprises operating retail stores in India for the sale of clothing, artificial jewellery, accessories
and related merchandise under the brand name “Forever 21" (“F21"), and is considered as a separate CGU. At
September 30, 2024, management has restructured the operations of Forever 21 CGU and re-estimated the
recoverable amount of the Forever 21 CGU, using the value-in-use (VIU) method. On the basis of evaluation,
management has recognised an impairment provision of '' 64.38 crores on September 30, 2024.

ending March 31, 2028 and cash flow projections for financial years 2029 and 2030 has been extrapolated to
demonstrate the tapering of growth rate for computation of perpetual cash flows. The Company has considered a
terminal growth rate of 5% to arrive at the value in use to perpetuity beyond March 31,2030. The post-tax discount
rate is applied to discounted future cash flow projections. It is concluded that the carrying value of goodwill does not
exceed the value in use. As a result of this analysis, the management did not identify impairment for these CGUs.

Key assumptions used for value in use calculations
Discount rates:

Discount rates represent the current market assessment of the risks specific to the CGU, taking into consideration
the time value of money and individual risks of the underlying assets that have not been incorporated in the cash
flow estimates. The discount rate calculation of the CGU is derived from its Weighted Average Cost of Capital
(WACC). The WACC takes into account both cost of debt and equity. The cost of equity is derived from the expected
return on investment by the Company''s investors. The cost of debt is based on the interest-bearing borrowings of
the Company. Adjustments to the discount rate are made to factor in the specific amount and timing of the future
tax flows in order to reflect a post-tax discount rate.

Growth rate estimates:

Rates are based on published industry research. Growth rate is based on the Company''s projection of business and
growth of the industry in which the CGU is operating. The growth rate is in line with the long-term growth rate
of the industry . The growth rate of the CGU considers the Company''s plan to launch new stores, expected same
store growth and change in merchandise.No reasonable possible change in key assumptions are likely to result in
the recoverable amount of the CGU being less than their carrying amount.

NOTE: 31

REVENUE FROM OPERATIONS

Accounting Policy

(I) Revenue from contracts with customers

Revenue from contracts with customers is recognised upon transfer of control of promised goods/ services to
customers at an amount that reflects the consideration to which the Company expect to be entitled for those
goods/ services.

To recognize revenues, the Company applies the following five-step approach:

• Identify the contract with a customer;

• Identify the performance obligations in the contract;

• Determine the transaction price;

• Allocate the transaction price to the performance obligations in the contract; and

• Recognise revenues when a performance obligation is satisfied.

Revenue from sale of products

Revenue from sales of products is measured at the amount of transaction price (net of returns, customer incentives,
discounts, variable consideration and other similar charges offered by the Company) allocated to that performance
obligation.

Goods and Service Tax (GST) is not received by the Company on its own account. Rather, it is tax collected on
behalf of the government. Accordingly, it is excluded from revenue.

Assets and liabilities arising from right to return

The Company has contracts with customers which entitles them an unconditional right to return.

Right to return assets

A right of return gives an entity a contractual right to recover the goods from a customer (right to return asset),
if the customer exercises its option to return the goods and obtain a refund. The asset is measured at the carrying
amount of the inventory, less any expected costs to recover the goods, including any potential decreases in the
value of the returned goods.

Refund liabilities

A refund liability is the obligation to refund part or all of the consideration received (or receivable) from the
customer. The Company has therefore recognised refund liabilities in respect of customer''s right to return. The
liability is measured at the amount the Company ultimately expects it will have to return to the customer. The
Company updates its estimate of refund liabilities (and the corresponding change in the transaction price) at the
end of each reporting period.

The Company has presented its right to return assets and refund liabilities under other current assets and other
current liabilities, respectively.

Income from gift voucher

Gift voucher sales are recognised when the vouchers are redeemed, and the goods are sold to the customer.
Loyalty points programme

The Company operates a loyalty programme which allows customers to accumulate points on purchases made
in retail stores. The points give rise to a separate performance obligation as it entitles them for redemption as
settlement of future purchase transaction price. Consideration received is allocated between the sale of products
and the points issued, with the consideration allocated to the points equal to their fair value. Fair value of points
is determined by applying statistical techniques based on the historical trends.

Transaction price allocated to reward points is deferred and recognised when points are redeemed or when the
points expire. The amount of revenue is based on the value of points redeemed/ expired.

Income from services

Income from services is recognised as they are rendered based on agreements/ arrangements with the concerned
parties, and recognised net of goods and services tax/ applicable taxes.

Export incentives income

Export incentives under various schemes notified by government are accounted for in the year of exports based
on eligibility and when there is no uncertainty in receiving the same.

Licence fees and royalties

Royalty and licensing revenue is received from customers for usage of the Cpmpany''s brand name. Revenue is
recognised over time based on the terms of contracts with the customer

Commission income

In case of sales of goods, where the Company is an agent in the transaction, the difference between the revenue
and the cost of the goods sold is disclosed as commission income in other operating income.

ihv/ it. jia

EXCEPTIONAL ITEMS

Exceptional items for the period ended March 31, 2025 includes provision for impairment of goodwill, right-of-
use assets, franchisee rights and Inventory Obsolescence amounting to '' 98.33 Crore pursuant to restructuring of
operations of a business unit.

NOTE: 38

INCOME TAX EXPENSE

The major components of income tax (income)/ expense are:

In Standalone Statement of Profit and Loss:

Profit or loss section

NOTE: 39

EARNINGS PER SHARE (EPS)

Basic EPS amounts are calculated by dividing the profit/(loss) for the year attributable to equity holders of the
Company by the weighted average number of equity shares outstanding during the period.

Diluted EPS amounts are calculated by dividing the profit/(loss) attributable to equity holders of the Company
by the weighted average number of equity shares outstanding during the year plus the weighted average number
of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

The following reflects the profit/(loss) and equity share data used in the basic and diluted EPS computations:

NOTE - 41

GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Company operates a gratuity plan through a Trust wherein certain employees are entitled to the benefit
equivalent to fifteen days salary last drawn for each completed year of service as per the Payment of Gratuity Act,
1972. In case of some employees, the Company''s scheme is more favourable as compared to the obligation under
Payment of Gratuity Act, 1972. The benefits are payable on termination of service or retirement, whichever is earlier.
The benefits vests after five years of continuous service. A part of the gratuity plan is funded and another part is
unfunded, hence the liability has been bifurcated into funded and unfunded. The gratuity plan in the Company
funded through annual contribution to Insurer Managed Fund (managed by Life Insurance Corporation of India)
under its Gratuity Scheme. Post demerger Management will initiate appropriate steps towards transferring of the
said fund maintained with LIC in the name of Company.

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

Defined contribution plans

Provident Fund: Contributions are made mainly to provident fund in India for employees at the rate of 12%
of basic salary as per regulations. The contributions are made to registered provident fund administered by the
government. The obligation of the Company is limited to the amount contributed and it has no further contractual
nor any constructive obligation.

Employees'' State Insurance: Employees'' State Insurance is a state plan applicable to employees of the Company
whose salaries do not exceed a specified amount. The contributions are made on the basis of a percentage of
salary to a fund administered by government authority. The obligation of the Company is limited to the extent of
contributions made on a monthly basis.

Superannuation Fund: Certain executive staff of the Company participate in Superannuation Fund, which is a
voluntary contribution plan.The Company has no further obligations to the plan beyond its monthly contributions
to the Superannuation Fund, the corpus of which is administered by a Trust belonging to demerged company and
is invested in insurance products.

National Pension Scheme: Certain executive staff of the Company participate in National Pension Scheme, which is
a voluntary contribution plan. The Company has no further obligations to the plan beyond its monthly contributions

I. Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2017

On July 25, 2017, the Nomination and Remuneration Committee (“NRC") and the Board of Directors (“Board") of Aditya Birla
Fashion and Retail Limited (‘ABFRL'') approved the introduction of a Employee Stock Option Scheme, viz. Aditya Birla Fashion
and Retail Limited Employee Stock Option Scheme 2017 (“Scheme 2017") for issue of Stock Options in the form of Options
(“Options") and/or Restricted Stock Units (“RSUs") to the identified employees, subject to the approval of the Shareholders.
Shareholders of ABFRL, vide a resolution passed at the Tenth Annual General Meeting of the Company, held on August 23, 2017,
approved the introduction of the Scheme 2017 and authorised the Board/ NRC to finalise and implement the Scheme 2017.

Pursuant to the approved Scheme of arrangement between Company and ABFRL, the employees of the Madura undertaking
continue to be entitled to ESOPs issued by ABFRL.

The weighted average remaining contractual life for the share Options and RSUs outstanding as at March 31,2025
is 1 year.

II. Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2019

On July 26, 2019, the Nomination and Remuneration Committee and the Board of Directors (“Board") of ABFRL,
approved introduction of Employee Stock Option Scheme, viz. Aditya Birla Fashion and Retail Limited Employee
Stock Option Scheme 2019 (“Scheme 2019"), for issue of Stock Options in the form of Options (“Options") and/
or Restricted Stock Units (“RSUs") to the identified employees. Pursuant to the approved Scheme of arrangement
between Company and ABFRL, the employees of the Madura undertaking continue to be entitled to ESOPs issued
by ABFRL.

I. Aditya Birla Fashion and Retail Limited Stock Appreciation Rights Scheme 2019

On February 04, 2019, the NRC and the Board of ABFRL, at their respective meetings had approved the “Aditya
Birla Fashion and Retail Limited Stock Appreciation Rights Scheme 2019" (“SARs Scheme 2019"), to grant Stock
Appreciation Rights (SAR) in the form of “Option SARs" and “RSU SARs", from time to time, to the eligible employees
(as defined in the SARs Scheme 2019). Pursuant to the approved Scheme of arrangement between Company and
ABFRL, the employees of the Madura undertaking continue to be entitled to SARs issued by ABFRL.

The initial non-cancellable period of the lease agreement pertaining to stores are upto 3 years, beyond which
there is an option for the Company to continue the lease, which the Company expects to continue for a period
of 2 years after the initial non-cancellable period, accordingly 5 years has been considered as the lease term
of the stores. Post such period, the Company has the option to exit the lease by giving a notice period and
the Company assesses its intention to continue considering location and other economic factors associated
with the lease arrangement.

Total cash outflow for leases for the year ended March 31,2025 is '' 1,494.26 Crore.

In accordance with its capital expenditure strategy, the Demerged Company engaged in a sale and leaseback
transaction involving certain assets, including furniture and fixtures, and office equipment, pertaining to the
Demerged undertaking. These assets and liabilities were assumed as part of the Business Combination (Refer
Note 48). The lease agreement spans a duration of 4-5 years, and the transaction has been recorded as right-
of-use assets with corresponding lease liabilities.

Variable lease payments

Some property leases contain variable payment terms that are linked to sales generated from a store. For
certain individual stores, upto 100% of lease payment are on the basis of variable payment terms. Variable
payment terms are used for a variety of reasons, including minimising the fixed cost base for newly established
stores. Variable lease payments that depend on sales are recognised in profit or loss in the period in which
the condition that triggers those payments occur.

The Company''s pending litigations comprise of claims against the Company primarily for excise duty, comprising
various cases demanding duty on reversal of CENVAT credit on sale of capital goods and for commercial
taxes, comprising various cases in respect of short fall in submission of Forms F, H, I and C, disallowance of input
credit, etc.

The Company has reviewed all its pending litigations and proceedings, and has adequately provided for where
provisions are required and disclosed the contingent liabilities in its standalone financial statements where financial
outflow is not probable. The Company does not expect the outcome of these proceedings to have a materially
adverse effect on its standalone financial statements. In respect of litigations, where the management''s assessment
of a financial outflow is probable, the Company has a provision of '' 50.02 Crore as at March 31, 2025
(Refer Note: 29).

The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable
losses. The Company has made provision as required under the accounting standards for material foreseeable losses
on derivative contracts as at March 31, 2025.Note :- As per the approved Composite Scheme of Arrangement,
the Company has assumed contingent liabilities specifically related to the Madura division of the Demerged
Company.

Note:-

(a) The above amounts are classified as trade receivables and trade payables (Refer Notes:15 and 27 respectively).

(b) No amounts in respect of the related parties have been written off/ back during the year.

(c) Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s
length transactions. Amount owed to and by related parties are unsecured and interest free and settlement
occurs in cash. There have been no guarantees received or provided for any related party receivables or payables.
For the year ended March 31, 2025, the Company has not recorded any impairment of receivables relating to
amounts owed by related parties. This assessment is undertaken each financial year through examining the
financial position of the related party and the market in which the related party operates.

(d) Also refer note 48 for disclosure ordering to transfer Madura undertaking from Aditya Birla Fashion and Retail
Limited pursuant to a scheme of arrangement.

(e) For the year ended March 31,2025, the remuneration for Key Managerial Personnel (KMP) has been paid by
Aditya Birla Fashion and Retail Limited (‘ABFRL'') and allocated to the Madura division on an overall basis.
Additionally, KMP are entitled to Employee Stock Options (ESOPs), Stock Appreciation Rights (SARs), and
Restricted Stock Units (RSUs) issued by ABFRL.

Key inputs for level 1 and 3 fair valuation techniques

a) Derivative contracts:

i) Forward contracts: Fair value of forward foreign exchange contracts is determined using forward exchange

rates as provided by banks to the Company (level 2). Forward contracts were entered into by ABFRL,
prior to demerger, to hedge against risk of fluctuations in foreign exchange rates on financial assets
and liabilities relating to Madura division. Accordingly the forward contracts have been transferred to
the Company, pursuant to the demerger.

b) Investment:

i) Quoted investments: Valuation has been done based on market value of the investment i.e. fair value
(level 1)

B. Risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and
other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The
Company''s principal financial assets include trade and other receivables and cash and cash equivalents that
arise directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management
oversees the management of these risks. It is the Company''s policy that no trading in derivatives for speculative
purposes may be undertaken. The Board of Directors review and agree policies for managing each of these
risks, which are summarised below:

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because
of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and price
risk.

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in the market interest rates. The Company''s exposure to the risk of changes in market
interest rates relates primarily to the Company''s debt obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans
and borrowings. As at March 31, 2025, approximately 58% of the Company''s borrowings are at a fixed rate
of interest.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that
portion of loans and borrowings taken at floating rates. With all other variables held constant, the Company''s
profit/ (loss) before tax is affected through the impact on floating rate borrowings, as follows:

ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because
of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange
rates relates primarily to the Company''s operating activities denominated in foreign currency.

The Company manages foreign currency risk by hedging its transactions using foreign currency forward
contracts. The foreign exchange forward contracts are not designated as cash flow hedges, and are entered
into for periods consistent with foreign currency exposure of the underlying transactions, generally from 2
to 6 months. As at March 31,2025, the Company has not hedged its receivables in foreign currency and has
hedged 98% of its payables in foreign currency.

b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. To manage this, the Company periodically assesses financial reliability
of customers and other counterparties, taking into account the financial condition, current economic trends,
and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically
reviewed on the basis of such information. Credit risk from balances with banks and financial institutions
is managed by the Company''s treasury department in accordance with the Company''s policy. Investments
of surplus funds are made only with approved counterparties and within credit limits assigned to each
counterparty.

The Company only deals with parties which has good credit rating given by external rating agencies or based
on the Company''s internal assessment.

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor
failing to engage in a repayment plan with the Company. Where loans or receivables have been written off,
the Company continues to engage in enforcement activity to attempt to recover the receivable dues where
recoveries are made, these are recognised as income in the Standalone Statement of Profit and Loss.

The Company is exposed to credit risk from its operating activities (primarily trade receivables and security
deposits).

Trade receivables

Customer credit risk is managed by each business unit, subject to the Company''s established policy, procedures
and control relating to customer credit risk management. Credit quality of a customer is assessed, and
individual credit limits are defined in accordance with this assessment. Outstanding customer receivables
are regularly monitored. As at March 31, 2025, the Company has 24 customers that owed the Company more
than '' 5.00 Crore each and account for approximately 75% of all the receivables outstanding. There are 158
customers with balances greater than '' 0.50 Crore each and account for approximately 12% of the total
amounts receivable.

An impairment analysis is performed at each reporting date on the basis of sales channel. In addition, a large
number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively.
The calculation is based on losses from historical data.

The Company''s maximum exposure to credit risk for the components of the Standalone Balance Sheet as at
March 31, 2025 , is the carrying amount as provided in Note - 15.

Credit risk from balances with banks is managed by the Company''s treasury department in accordance with
the Company''s policy. Investments of surplus funds are made only with approved counterparties and within
credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of
Directors on an annual basis. The limits are set to minimize the concentration of risks and therefore mitigate
financial loss through counterparty''s potential failure to make payments.

c) Liquidity risk

The Company monitors its risk of shortage of funds. The Company''s objective is to maintain a balance between
continuity of funding and flexibility through the use of bank overdrafts, bank loans, debentures, preference
shares and commercial papers. Approximately, 99.88% of the Company''s debt will mature in less than one
year based on the carrying value of borrowings reflected in the financial statements. The Company assessed
the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has
access to various sources of funding.

The below tables summarises the maturity profile of the Company''s financial liabilities based on contractual
payments.

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities
in the same geographical region, or have economic features that would cause their ability to meet contractual
obligations, to be similarly affected by changes in economic, political or other conditions. Concentrations
indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

The Company is leader in apparels in the country and has a diversified portfolio of brands.

d) Price risk

The Company invests in debt mutual fund schemes of leading fund houses. Such investments are susceptible
to market price risks that arise mainly from changes in interest rate which may impact the return and
value of such investments. However, given the relatively short tenure of underlying portfolio of the mutual
fund schemes in which the Company has invested, such price risk is not significant.The sensitivity analysis
has prepared by the Management is based on the financial assets and financial liabilities held at
March 31, 2025.

NOTE - 47

CAPITAL MANAGEMENT

The Company''s objective, when managing capital is to ensure the going concern operation and to maintain an
efficient capital structure to reduce the cost of capital, support the corporate strategy and meet shareholder''s
expectations. The policy of the Company is to borrow funds through banks/ financial institutions supported by
committed borrowing facilities to meet anticipated funding requirements. The Company manages its capital
structure and makes adjustments in the light of changes in economic conditions and the requirement of financial
markets.

The capital structure is governed by policies approved by the Board of Directors, and is monitored by various metrics.
Funding requirements are reviewed periodically with any debt issuances.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure
that it meets financial covenants attached to the interest-bearing loans and borrowings.

During the year, the Company has not defaulted on any loans payable, and there have been no breach of any
financial covenants attached to the borrowings.

No changes were made in the objectives, policies or processes for managing capital during the year ended
March 31,2025.

NOTE 48: BUSINESS COMBINATION

DEMERGER OF MADURA FASHION & LIFESTYLE BUSINESS (“MFL BUSINESS")

The Board at its meeting held on April 19, 2024, subject to necessary approvals, considered and approved the
demerger of the Madura Fashion and Lifestyle (‘MFL'') Business under a Scheme of Arrangement between Aditya
Birla Fashion and Retail (‘Demerged Company'') and Aditya Birla Lifestyle Brands Limited (‘Resulting Company'').
The Scheme provided for demerger, transfer, and vesting of the MFL Business from the Demerged Company to
the Resulting Company on a going concern basis, with the Resulting Company issuing equity shares to the equity
shareholders of the Demerged Company as a consideration. The demerger was executed through an NCLT scheme of
arrangement. The Scheme provided that all shareholders of the demerged company will hold identical shareholdings
in both the companies, post the demerger. Pursuant to the NCLT''s directions, a meeting of the equity shareholders
of the Demerged Company was conducted on January 21, 2025, and the Scheme was approved by the requisite
majority of equity shareholders. The Demerged Company and the Resulting Company filed a joint petition with the
Hon''ble NCLT on January 25, 2025. The Scheme received sanction from the Hon''ble NCLT on March 27, 2025, and
a certified copy of the order was received on April 22, 2025 (“Order"). Subsequently, the Demerged and Resulting
Company filed the certified copy of the Order and the Scheme with the Registrar of Companies, Mumbai, making
the Scheme effective from May 1, 2025. The Record Date was set for May 22, 2025.

Management has evaluated that Promoter along with other promoter group companies (together referred to as
‘Promoters'') of the demerged company have de-facto control over the MFL division, both before and after the
demerger, on account of the factors described below:

1. The Company is a wholly owned subsidiary of Aditya Birla Fashion and Retail Limited (‘ABFRL'') on the date
of transfer;

2. Total cumulative shareholding of the Promoters relative to the size and dispersion of holding of other
shareholders;

3. Post issue of shares by the Company to the existing shareholders of the Demerged Company, there would be
no potential voting rights other than the equity shares. Further, none of the other shareholders would have
any contractual or legal veto rights.

Ratios have been computed as follows:

1. Current ratio = Current Assets / Current Liabilities (excluding Lease Liabilities accounted as per Ind AS 116)

2. Debt equity ratio = Debt / Equity

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

Equity = Equity share capital Other equity (excluding Ind AS 116)

3. Debt service coverage ratio = Earnings before interest* and tax / [Finance cost* Principal repayment of
non-current borrowings (netted off to the extent of non-current borrowings availed during the same period
for the repayments)]

4. Return on equity ratio = Profit after tax / Average of opening and closing Net Worth

5. Inventory turnover = Revenue from Operations for the period / Average of opening and closing Inventories

6. Debtors turnover = Revenue from Operations for the period / Average of opening and closing Trade Receivables

7. Trade payables turnover = Total Purchases / Average of opening and closing Trade Payables

8. Net capital turnover = Revenue from Operations for the period / Average of opening and closing Working
Capital

9. Net profit margin = Profit After Tax / Revenue from Operations

10. Return on Average Capital Employed = Earnings before interest and tax / Average of opening and closing
Capital Employed

11. Return on Investment = Earnings before interest and tax / Average of opening and closing Total Assets

* Finance cost/ interest comprises of Interest expense on borrowings and excludes interest expense on lease
liabilities and interest charge on fair value of financial instruments.

Note:-

1. The Ratio have been calculated considering the assets and liabilities acquired by the company pursuant to
the scheme of arrangement as opening assets and liabilities.

2. The Company was incorporated on April 09, 2024. This is the first financial statements of the Company.
Accordingly, explanation of reason for variance more than 25% is not applicable in the current year.

NOTE - 50

SEGMENT INFORMATION

Operating segment have been identified on the basis of nature of products and other quantitative criteria specified
in the Ind AS 108. Operating segments are reported in a manner consistent with the internal reporting provided
to the Chief Operating Decision Maker (“CODM") of the company. The company''s business activity falls within a
single operating business segment of Branded Apparels (Garments and Accessories).

NOTE 51:

SUMMARY OF OTHER ACCOUNTING POLICIES

(a) Fair value measurements and hierarchy

The Company measures financial instruments, such as investments (other than equity investments in
subsidiaries) and derivatives at fair value at each Standalone Balance Sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on
the presumption that the transaction to sell the asset or transfer the liability takes place either:

(a) In the principal market for the asset or liability; or

(b) In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their best economic interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate
economic benefits by using the asset in its highest and best use, or by selling it to another market participant
that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances, and for which sufficient
data are available to measure the fair value, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy based on its nature, characteristics and risks:

• Level 1 - inputs are quoted (unadjusted) market prices in active markets for identical assets or liabilities
that the entity can access at the measurement date;

• Level 2 - valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable; and

• Level 3 - valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization
(based on the lowest level of input that is significant to the fair value measurement as a whole) at the end
of each reporting period.

(b) Foreign currencies

Transactions and balances:

Transactions in foreign currency are recorded applying the exchange rate at the date of transaction. Monetary
assets and liabilities denominated in foreign currency, remaining unsettled at the end of the year, are translated
at the closing exchange rates prevailing on the Standalone Balance Sheet date.

Exchange differences arising on settlement or translation of monetary items are recognized in the Standalone
Statement of Profit and Loss.

Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the
rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in
terms of historical cost in a foreign currency are not retranslated. The gain or loss arising on translation of
non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the
change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognised
in Other Comprehensive Income (OCI) or the Standalone Statement of Profit and Loss are also reclassified
in OCI or the Standalone Statement of Profit and Loss, respectively).

(c) Government grants

Government grants are recognised where there is a reasonable assurance that the grant will be received and
all attached conditions will be complied with:

• When the grant relates to an expense item, it is recognised as income on a systematic basis over the
periods that the related costs, for which it is intended to compensate, are expensed.

• When the grant relates to an asset, it is recognised as income in Statement of Profit and Loss in equal
amounts over the expected useful life of the related asset.

When loans or similar assistance are provided by governments or related institutions, at a below-market
rate of interest, the effect of this favourable interest is treated as a government grant. The loan or assistance
is initially recognised and measured at fair value, and the government grant is measured as the difference
between the proceeds received and the initial carrying value of the loan. The loan is subsequently measured
as per the accounting policies applicable to financial liabilities.

(d) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of the
respective asset. All other borrowing costs are expensed in the period they occur in the Standalone Statement
of Profit and Loss.

Borrowing cost includes interest and other costs incurred in connection with the arrangement of borrowings.

Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the interest
costs.

(e) Taxes

Current tax

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

Income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount