Notes to Accounts of Campus Activewear Ltd.

Mar 31, 2025

(xi) Provisions (other than employee
benefits)

A provision is recognized if, as a result of a past event,
the Company has a present legal or constructive
obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are
determined by discounting the expected future
cash flows (representing the best estimate of the
expenditure required to settle the present obligation
at the balance sheet date) at a pre-tax rate that
reflects current market assessments of the time
value of money and the risks specific to the liability.
The unwinding of the discount is recognised as
finance cost. Expected future operating losses are
not provided for.

Decommissioning liability

Decommissioning costs are provided at the present
value of expected costs to settle the obligation using
estimated cash flows and are recognised as part of
the cost of the particular asset. The cash flows are
discounted at a current pre-tax rate that reflects the
risks specific to the decommissioning liability. The

unwinding of the discount is expensed as incurred
and recognised in the statement of profit and
loss as a finance cost. The estimated future costs
of decommissioning are reviewed annually and
adjusted as appropriate. Changes in the estimated
future costs or in the discount rate applied are added
to or deducted from the cost of the asset.

Contingencies

Provision in respect of loss contingencies relating to
claims, litigation, assessment, fines, penalties, etc.
are recognized when it is probable that a liability has
been incurred, and the amount can be estimated
reliably.

(xii) Operating segments

Operating segments are defined as components
of an entity where discrete financial information is
evaluated regularly by the chief operating decision
market (“CODM”) in deciding allocation of resources
and in assessing performance. The Board of Director’s
is its CODM. The Company’s CODM reviews financial
information presented on a consolidated basis for the
purposes of making operating decisions, allocating
resources, and evaluating financial performance. As
such, the Company has determined that it operates
in one operating and reportable segment.

(xiii) Employee benefits

Short-term employee benefits

Short-term employee benefit are measured on an
undiscounted basis and are expensed as the related
service is provided. A liability is recognised for the
amount expected to be paid e.g. under short-term
cash bonus, if the Company has a present legal or
constructive obligation to pay this amount as a result
of past service provided by the employee and the
amount of obligation can be estimated reliably.

Share-based payment transactions

The grant date fair value of equity settled share-
based payment awards granted to employees is
generally recognised as an employee expense, with
a corresponding increase in equity, over the vesting
period of the awards. The amount recognised as an
expense is based on the estimate of the number of
awards for which the related service and non-market
vesting conditions are expected to be met, such that
the amount ultimately recognised as an expense is
based on the number of awards that do meet the
related service and non-market conditions at the
vesting date. For share-based payment awards with
non-vesting conditions, the grant date fair value of
the share-based payment is measured to reflect such
conditions and there is no true-up for differences
between expected and actual outcomes.

Defined contribution plans

A defined contribution plan is a post-employment
benefit plan under which an entity pays specified
contributions to a separate entity and has no
obligation to pay any further amounts. The Company
makes specified monthly contributions towards
Government administered provident fund scheme.
The Company’s contribution is recognized as an
expense in the Statement of Profit and Loss during
the period in which the employee renders the related
service.

Prepaid contributions are recognised as an asset to
the extent that a cash refund or a reduction in future
payments is available.

Defined benefit plans

A defined benefit plan is a post-employment benefit
plan other than a defined contribution plan. The
Company’s gratuity benefit scheme is a defined
benefit plan. The Company’s net obligation in respect
of a defined benefit plan is calculated by estimating
the amount of future benefit that employees have
earned in return for their service in the current and
prior periods; that benefit is discounted to determine
its present value. The fair value of plan assets is
reduced from the gross obligation under the defined
benefit plans, to recognise the obligation on net
basis. The calculation of the Company’s obligation is
performed annually by a qualified actuary using the
projected unit credit method.

Remeasurements of the net defined benefit liability,
which comprise actuarial gains and losses, the return
on plan assets (excluding interest), are recognised
in OCI. The Company determines the net interest
expense (income) on the net defined benefit liability
(asset) for the period by applying the discount rate,
determined by reference to market yields at the
end of the reporting period on government bonds,
used to measure the defined benefit obligation at
the beginning of the annual period to the then-net
defined benefit liability (asset), taking into account
any changes in the net defined benefit liability
(asset) during the period as a result of contributions
and benefit payments. Net interest expense and
other expenses related to defined benefit plans are
recognised in statement of profit and loss.

When the benefits of a plan are changed or when
a plan is curtailed, the resulting change in benefit
that relates to past service (‘past service cost’ or ‘past
service gain’) or the gain or loss on curtailment is
recognised immediately in statement of profit and
loss. The Company recognises gains and losses on
the settlement of a defined benefit plan when the
settlement occurs.

Other long-term employee benefits -
compensated absences

Accumulated absences expected to be carried
forward beyond twelve months is treated as long¬
term employee benefit for measurement purposes.
The Company’s net obligation in respect of other
long-term employee benefit of accumulating
compensated absences is the amount of future
benefit that employees have accumulated at the end
of the year. That benefit is discounted to determine
its present value. The obligation is measured annually
by a qualified actuary using the projected unit
credit method. Remeasurements are recognised in
statement of profit and loss in the period in which
they arise.

The obligations are presented as current liabilities
in the balance sheet if the Company does not have
an unconditional right to defer the settlement for at
least twelve months after the reporting date.

Termination benefits

Termination benefits are expensed at the earlier of
when the Company can no longer withdraw the offer
of those benefits and when the Company recognises
costs for a restructuring. If benefits are not expected
to be settled wholly within 12 months of the reporting
date, then they are discounted.

(xiv) Income taxes

Income tax comprises current and deferred tax. It is
recognised in statement of profit and loss except to
the extent that it relates to a business combination,
or an item recognised directly in equity or in Other
comprehensive income.

Current tax

Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable
in respect of previous years. The amount of current
tax payable or receivable is the best estimate of the
tax amount expected to be paid or received that
reflects uncertainty related to income taxes, if any. It
is measured using tax rates enacted or substantively
enacted at the reporting date.

Current tax assets and current tax liabilities are offset
only if there is a legally enforceable right to set off
the recognised amounts, and it is intended to realise
the asset and settle the liability on a net basis or
simultaneously.

Deferred tax

Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets

and liabilities for financial reporting purposes and the
corresponding amounts used for taxation purposes.
Deferred tax is also recognised in respect of carried
forward tax losses and tax credits. Deferred tax is not
recognised for:

- temporary differences arising on the initial
recognition of assets or liabilities in a transaction
that is not a business combination and affects
neither accounting nor taxable profit or loss at
the time of the transaction;

- taxable temporary differences arising on the
initial recognition of goodwill.

Deferred tax is recognized based on the expected
manner of realization or settlement of the carrying
amount of assets and liabilities using tax rates
enacted, or substantially enacted at the reporting
period.

Deferred tax assets are recognized only to the extent
that is probable that future taxable profits will be
available against which the assets can be utilized.
Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer
probable that the related tax benefits will be realized.

Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes
levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend
to settle current tax liabilities and assets on a net
basis or their tax assets and liabilities will be realised
simultaneously.

(xv) Earnings per share

Basic earnings per share is calculated by dividing
the net profit (or loss) for the year attributable to
the equity shareholders by the weighted average
number of equity shares outstanding during the
year. The weighted average numbers of equity shares
outstanding during the year are adjusted for events
such as bonus issue and share split.

Diluted earnings per share is computed by dividing
the profit (considered in determination of basic
earnings per share) after considering the effect of
interest and other financing costs or income (net of
attributable taxes) associated with dilutive potential
equity shares by the weighted average number of
equity shares considered for deriving basic earnings
per share adjusted for the weighted average number
of equity shares that would have been issued upon
conversion of all dilutive potential equity shares.

(xvi) Cash and cash equivalents

Cash and cash equivalents in the balance sheet
comprise cash at banks and on hand and short term
deposits with ‘original maturities’ of three months
or less, which are subject to an insignificant risk of
changes in value.

For the purpose of the statement of cash flows, cash
and cash equivalents consist of cash as defined
above, net of outstanding bank overdrafts as they are
considered an integral part of the Company’s cash
management.

(xvii) Cash flow statement

Cash flows are reported using the indirect method,
whereby profit before tax is adjusted for the effects
of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or
payments and item of income or expense associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities of
the Company are segregated.

(xviii) Contingent liabilities

A contingent liability is a possible obligation that
arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly
within the control of the Company or a present
obligation that arises from past events but is not
recognized because it is not probable that an outflow
of resources embodying economic benefits will be
required to settle the obligation or the amount of
the obligation can not be measured with sufficient
reliability. The Company does not recognize a
contingent liability but discloses its existence in the
financial statements.

Contingent Assets

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

Provisions, contingent liabilities and contingent
assets are reviewed at each Balance Sheet date.

(xix) Dividends

Provision is made for the amount of any dividend
declared, being appropriately authorized and no
longer at the discretion of the entity, on or before
the end of the reporting period but not distributed
at the end of the reporting period. The final dividend

on shares is recorded as a liability on the date of
approval by the shareholders and interim dividends
are recorded as a liability on the date of declaration by
the Company''s Board of Directors. Company declares
and pays dividends in Indian rupees. Companies are
required to pay/distribute dividend after deducting
applicable taxes.

(xx) Material accounting policy information

The Company adopted Disclosure of Accounting
Policies (Amendment to Ind AS 1) from 1 April
2023. Although the amendments did not result
in any changes in accounting policies themselves,
they impacted the accounting policy information
disclosed in the financial statements.

The amendments require the disclosure of ‘material”
rather than ‘significant’ accounting policies.
The amendments also provide guidance on the
application of materiality to disclosure of accounting
policies, assisting entities to provide useful, entity-

specific accounting policy information that users
need to understand other information in financial
statements.

(xxi) Recent Accounting Pronouncements

Ministry of Corporate Affairs ("MCA”) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. On 7^th May 2025,
MCA issued the Companies (Indian Accounting
Standards) Amendment Rules, 2025, which made
certain amendments to Ind AS 21 The Effects
of Changes in Foreign Exchange Rates, effective
from 1 April 2025. These amendments define
currency exchangeability and include guidance on
estimating spot exchange rates when a currency is
not exchangeable. The Company does not expect
this amendment to have any significant impact on
its financial statements.

Aggregate number of shares issued for consideration other than cash during the period
of five years immediately preceding the reporting date:

During the five year ended 31 March 2025:

Bonus issues:

The shareholders of the Company at its general meeting held on 27 September 2019 approved the allotment
of bonus shares in the ratio of 1:1541 as on the record date of 27 September 2019 to each of the equity
shareholders of the Company. Subsequently, 14,99,87,071 Bonus Shares of 10 each amounting to INR 149.99
crore, were allotted on 26 October 2019 in the ratio of 1:1541 to the eligible equity shareholders^

Shares reserved for issue under options:

Information relating to the Company’s share based payment plans, including details of options issued,
exercised and lapsed during the financial year and options outstanding at the end of the reporting year, is set
out in note 41.

b. The Company had imported plant and
machinery in 2015-16 under EPCG scheme. An
export obligation (''EO'') amounting to INR 2.39
crore was placed on the Company which was to
be fulfilled in a period of 8 years from the date
of Inspection of Licence. Duty saved under EPCG
Scheme amounting to INR 0.37 crore. During
the previous year, the Company has paid INR
0.01 crore along with interest of INR 0.02 crore
being the shortfall in meeting the obligation
with Directorate General of Foreign Trade and
closed this matter vide letter dated on 04 April
2024.

:. Pursuant to judgement by the Honourable
Supreme Court dated 28 February 2019, it
was held that basic wages, for the purpose of
provident fund, to include special allowances
which are common for all employees. However,
there is uncertainty with respect to the
applicability of the judgement and period from
which the same applies.

Owing to the aforesaid uncertainty and pending
clarification from the authorities in this regard,
the Company has not recognised any provision
till F.Y. 2018-2019. Further, management also
believes that the impact of the same on the
Company will not be material.

(ii) Defined benefit plan:

Gratuity

The Company operates a post-employment defined benefit plan for Gratuity. This plan entitles an employee
to receive 15 day''s salary for each year of completed service at the time of retirement/exit.The present value of
obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognize
each period of service as giving rise to additional employee benefit entitlement and measures each unit
separately to build up the final obligation.

The most recent actuarial valuation of the present value of the defined benefit obligation for gratuity was
carried out as at 31 March 2025. The present value of the defined benefit obligations and the related current
service cost and past service cost, were measured using the Projected Unit Credit Method.

A. Based on the actuarial valuation obtained in this respect, the following table sets out the status of the
gratuity plan and the amounts recognised in the Company’s financial information as at reporting date:

(a) The Company''s borrowings have fair values
that approximate to their carrying amounts
as they are based on the net present value of
the anticipated future cash flows using rates
currently available for debts on similar terms,
credit risk and remaining maturities.

(b) The carrying amount of loans, trade receivables,
cash and cash equivalents, bank balances other
than those included in cash and cash equivalents,
other current financial assets, trade payable and
other current financial liabilities approximates
the fair values, due to their short term nature.

(c) The carrying value of non-current financial
assets and Other non-current financial liabilities
approximate the fair values as on the reporting
date, as these are carried at amortised cost
and are based on the net present value of the
anticipated future cash flows using applicable
discount rate.

(d) The carrying value of lease liabilities approximates
the fair values as on the reporting date, as these
are carried at amortised cost and are based on
the net present value of the anticipated future
cash flows using applicable discount rate.

There are no transfer between Level 1, Level 2 and
Level 3 during the year ended 31 March 2025 and
31 March 2024.

II. Financial risk management

Risk Management Framework

The Company''s Board of directors has overall
responsibility for the establishment and oversight
of the Company''s risk management framework and

also responsible for developing and monitoring the
Company''s risk management policy.

The Company''s risk management policies are
established to identify and analyse the risk faced
by the Company, to set appropriate risk limits and
controls and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed
regularly to reflect changes in market conditions
and the Company''s activities. The Company,
through its training and management standards
and procedures, aims to maintain a disciplined
and constructive control environment in which all
employees understand their roles and obligations.
The Board of directors with top management oversee
the formulation and implementation of the risk
management framework. The risks are identified at
business unit level and mitigation plans are identified,
deliberated and reviewed at appropriate forums.

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

- Credit risk;

- Liquidity risk; and

- Market risk"

i. Credit risk

Credit risk is the risk of financial loss to the Company if
a customer or counterparty to a financial instrument
fails to meet its contractual obligations resulting
in a financial loss to the Company. Credit risk arises
principally from trade receivables, loans, advances,
cash and cash equivalents and deposits with banks.
The carrying amounts of financial assets represent
the maximum credit risk exposure.

Trade receivables

The Company exposure to credit risk is influenced
mainly by the individual characteristics of each
customer. However, management also considers
the factors that may influence the credit risk of its
customer base, including the default risk of the
industry and country in which customers operate.

The management has established a credit policy
under which each new customer is analysed
individually for creditworthiness before the
standard payments and delivery terms and
conditions are offered. The average credit period
provided to customers varies from 0 to 90 days.
For new customers, in addition to feedback from

retail traders, they start doing the business with
Company on advance payment terms. Post a
business for 3 months and a successful payment
track record, the customers are then converted to
business with standard credit terms.

An impairment analysis is performed for all the
customers at each reporting date on an individual
basis. According to the analysis done, the Company
establishes an allowance for impairment that
represents its expected credit losses in respect of
trade and other receivables. The management
uses a simplified approach for the purpose of
computation of expected credit loss for trade
receivables. An impairment analysis is performed
at each reporting date.

Interest rate risk

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management,
hence the Company has not taken any swaps to hedge the 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 market interest rates. The Company''s exposure to the risk changes in market interest relates
primarily to the Company’s long term debt obligations with floating interest rates. The Company is carrying its
borrowings primarily at variable rate.

Security deposits

The Company has furnished security deposits to its lessors for obtaining the premises on lease. The Company
considers that its deposits have low credit risk or negligible risk of default as the parties are well established
entities and have strong capacity to meet the obligations. Also, where Company expects that there is an
uncertainty in the recovery of deposit, it provides for suitable impairment on the same.

During the year, trade receivable with a contractual amount of INR 5.43 crore were written off (31 March 2024:
INR 5.44 crore) and the Company does not expect to receive future cash flows or recoveries from collection of
receivables previously written off. The Company''s management also pursues all legal options for recovery of
dues, wherever necessary, based on its internal assessment.

The Company has used a practical expedient by computing the expected credit loss allowance for trade
receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience
and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the
days the receivables are due and the rates as per Company''s policy.

For trade receivables balance from related parties, there are no indications at the period/year end for default in
payments. Accordingly, the Company does not anticipate risk of recovery and expected credit loss in respect
thereof.

ii. Liquidity risk

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

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
cash flow generated from operations to meet obligations when due and to close out market positions. Due
to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by
maintaining availability under committed credit lines.

iii. Market risk

Market risk is the risk that changes in market
prices such as foreign exchange rates will affect the
Company''s income or the value of its holdings of
financial instruments. The objective of market risk
management is to manage and control market
risk exposures within acceptable parameters, while
optimising the return.

The Company’s business activities are exposed to a
variety of market risks, namely:

• Currency risk;

• Commodity risk

Currency risk

The Company is exposed to foreign currency risk
to the extent that there is a mismatch between
the currencies in which sales and purchases are
denominated and the functional currency of
the Company, hence exposure to exchange rate
fluctuations arises. The risk is that the functional
currency value of cash flows will vary as a result
of movements in exchange rates. The functional
currency of the Company is INR and the currency in
which these transactions are primarily denominated
is USD and CNY.

The Company is exposed to foreign currency risk
to the extent that there is a mismatch between
the currencies in which sales and purchases are
denominated and the functional currency of
the Company, hence exposure to exchange rate
fluctuations arises. The risk is that the functional
currency value of cash flows will vary as a result
of movements in exchange rates. The functional
currency of the Company is INR.

For assets and liabilities denominated in foreign
currencies, the Company''s policy is to ensure that its
net exposure is kept to an acceptable level by buying
or selling foreign currencies at spot rates when
necessary to address short-term imbalances.

Commodity Risk

Exposure of the Company to Commodity and Commodity Risks faced by the Company throughout the year.

Commodities form a major part of the raw materials required for Company’s products portfolio and hence
commodity price risk is one of the important market risk for the Company. The Company is exposed to the risk
of changes in commodity prices in relation to its purchase of raw materials. The Company’s price arrangements
with its suppliers are typically linked to the spot prices of such raw materials, and any increase in the spot prices
may result in an increase in the price of such raw materials procured from its suppliers.

The Company has adequate risk assessment and minimization system in place including for Commodities. The
risk is hedged through additional and strategic buying from time to time. Further, the Company typically pass
on some portion of the change in the raw material price to the customers.

Purchases sensitivity analysis

A reasonably possible change of 1% in prices of purchases during the year, would have increased/(decreased)
equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain

rnncta nt

45. CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued equity capital, securities
premium and all other equity reserves attributable to the equity holders of the Company. The primary objective
of the Company’s capital management is to maximise the shareholder value. Management monitors the return
on capital, as well as the level of dividends to ordinary shareholders.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions
and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company
may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The
Company monitors capital using a gearing ratio, which is net debt divided by equity. Net debt is calculated as
total liabilities (as shown in the balance sheet) less cash and cash equivalents and other bank balances. The
Company’s net debt to adjusted equity ratio i.e. capital gearing ratio is as follows:

46. SEGMENT REPORTING

Segment information is presented in respect of the Company’s key operating segments. The operating
segments are based on the Company’s management and internal reporting structure.

Operating segments

The Company has identified the business as single operating segment i.e. Footwear and Accessories. Accordingly,
there is only one Reportable Segment for the Company which is "Footwear and Accessories”, hence no specific
disclosures have been made.

c. The Company has not been declared as wilful
defaulter by any bank or financial institution or
government or any government authority.

d. The Company does not have any transactions
with companies struck off.

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

f. There are no charges or satisfaction yet to be
registered with ROC beyond the statutory period.

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

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

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

h. The Company has not received any fund from
any person(s) or entity(ies), including foreign

entities (Funding Party) with the understanding
(whether recorded in writing or otherwise) that
the Company shall:

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

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

i. The Company (as per the provisions of the
Core Investment Companies (Reserve Bank)
Directions, 2016) does not have any CIC as part
of the Company.

j. The Company does not have any subsidiary,
hence clause (87) of Section 2 of the Act read
with Companies (Restriction on number of
Layers) Rules, 2017 is not applicable to the
Company.

k. The Company has not revalued its property, plant
and equipment (including right-of-use assets) or
intangible assets or both during the current or
previous year.

50. EVENTS OCCURRING AFTER THE
REPORTING PERIOD

Refer to note 20 for the final dividend recommended
by the directors which is subject to the approval of
shareholders in the ensuing annual general meeting.

For B S R and Co For and on behalf of the Board of Directors of

Chartered Accountants Campus Activewear Limited

ICAI Firm Registration Number: 128510W

Sandeep Batra Hari Krishan Agarwal Nikhil Aggarwal

Partner Chairman and Managing Director Whole Time Director and Chief Executive Officer

Membership Number: 093320 DIN: 00172467 DIN: 01877186

Place: Gurugram Place: Gurugram

Date: 29 May 2025 Date: 29 May 2025

Sanjay Chhabra Archana Maini

Chief Financial Officer General Counsel and Company Secretary

Place: Gurugram Membership No.: A16092

Place: Gurugram Date: 29 May 2025 Place: Gurugram

Date: 29 May 2025 Date: 29 May 2025

---

Mar 31, 2024

(xi) Provisions (other than employee benefits)

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate

of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for.

Decommissioning liability

Decommissioning costs are provided at the present value of expected costs to settle the obligation using estimated cash flows and are recognised as part of the cost of the particular asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is expensed as incurred and recognised in the statement of profit and loss as a finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to or deducted from the cost of the asset.

Contingencies

Provision in respect of loss contingencies relating to claims, litigation, assessment, fines, penalties, etc. are recognized when it is probable that a liability has been incurred, and the amount can be estimated reliably.

(xii) Operating segments

Operating segments are defined as components of an entity where discrete financial information is evaluated regularly by the chief operating decision market (“CODM”) in deciding allocation of resources and in assessing performance. The Board of Director’s is its CODM. The Company’s CODM reviews financial information presented on a consolidated basis for the purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one operating and reportable segment.

(xiii) Employee benefits

Short-term employee benefits

Short-term employee benefit are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g. under short-term cash bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the amount of obligation can be estimated reliably.

Share-based payment transactions

The grant date fair value of equity settled share-based payment awards granted to employees is generally recognised as an employee expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is based on the estimate of the number of awards for which the related service and nonmarket vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company makes specified monthly contributions towards Government administered provident fund scheme. The Company’s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s gratuity benefit scheme is a defined benefit plan. The Company’s net obligation in respect of a defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of plan assets is reduced from the gross obligation under the defined benefit plans, to recognise the obligation on net basis. The calculation of the Company’s obligation is performed annually by a qualified actuary using the projected unit credit method.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest), are recognised in OCI. The Company determines the net interest expense (income) on the net defined benefit liability

(asset) for the period by applying the discount rate, determined by reference to market yields at the end of the reporting period on government bonds, used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Other long-term employee benefits -compensated absences

Accumulated absences expected to be carried forward beyond twelve months is treated as longterm employee benefit for measurement purposes. The Company’s net obligation in respect of other long-term employee benefit of accumulating compensated absences is the amount of future benefit that employees have accumulated at the end of the year. That benefit is discounted to determine its present value. The obligation is measured annually by a qualified actuary using the projected unit credit method. Remeasurements are recognised in profit or loss in the period in which they arise.

The obligations are presented as current liabilities in the balance sheet if the Company does not have an unconditional right to defer the settlement for at least twelve months after the reporting date.

Termination benefits

Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of those benefits and when the Company recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.

(xiv) Income taxes

Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination, or an item recognised directly in equity or in Other comprehensive income.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred tax is not recognised for:

- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction;

- taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax is recognized based on the expected manner of realization or settlement of the carrying amount of assets and liabilities using tax rates enacted, or substantially enacted at the reporting period.

Deferred tax assets are recognized only to the extent that is probable that future taxable profits will be available against which the assets can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

(xv) Earnings per share

Basic earnings per share is calculated by dividing the net profit (or loss) for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average numbers of equity shares outstanding during the year are adjusted for events such as bonus issue and share split.

Diluted earnings per share is computed by dividing the profit (considered in determination of basic earnings per share) after considering the effect of interest and other financing costs or income (net of attributable taxes) associated with dilutive potential equity shares by the weighted average number of equity shares considered for deriving basic earnings per share adjusted for the weighted average number of equity shares that would have been issued upon conversion of all dilutive potential equity shares.

(xvi) Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short term deposits with ‘original maturities’ of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company’s cash management.

(xvii) Cash flow statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expense associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

(xviii) Contingent liabilities

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events

not wholly within the control of the Company or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation can not be measured with sufficient reliability. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

Contingent assets

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

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

(xix) Material accounting policy information

The Company adopted Disclosure of Accounting Policies (Amendment to Ind AS 1) from 1 April 2023. Although the amendments did not result in any changes in accounting policies themselves, they impacted the accounting policy information disclosed in the financial statements.

The amendments require the disclosure of ‘material’ rather than ‘significant’ accounting policies. The amendments also provide guidance on the application of materiality to disclosure of accounting policies, assisting entities to provide useful, entity-specific accounting policy information that users need to understand other information in financial statements.

(xx) Recent Accounting

Pronouncements

Ministry of Corporate Affairs ("MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

(ii) Defined benefit plan

Gratuity

The Company operates a post-employment defined benefit plan for Gratuity. This plan entitles an employee to receive 15 day’s salary for each year of completed service at the time of retirement/exit.The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognize each period of service as giving rise to additional employee benefit entitlement and measures each unit separately to build up the final obligation.

The most recent actuarial valuation of the present value of the defined benefit obligation for gratuity was carried out as at 31 March 2024. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

(a) The Company’s borrowings have fair values that approximate to their carrying amounts as they are based on the net present value of the anticipated future cash flows using rates currently available for debts on similar terms, credit risk and remaining maturities.

(b) The carrying amount of loans, trade receivables, cash and cash equivalents, bank balances other than those included in cash and cash equivalents, other current financial assets, trade payable and other current financial liabilities approximates the fair values, due to their short term nature.

(c) The carrying value of non-current financial assets and Other non-current financial liabilities approximate the fair values as on the reporting date, as these are carried at amortised cost and are based on the net present value of the anticipated future cash flows using applicable discount rate.

(d) The carrying value of lease liabilities approximates the fair values as on the reporting date, as these are carried at amortised cost and are based on the net present value of the anticipated future cash flows using applicable discount rate.

There are no transfer between Level 1, Level 2 and Level 3 during the year ended 31 March 2024 and 31 March 2023.

II. Financial risk management

Risk management framework

The Company’s Board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework and also responsible for developing and monitoring the Company’s risk management policy.

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

oversee the formulation and implementation of the risk management framework. The risks are identified at business unit level and mitigation plans are identified, deliberated and reviewed at appropriate forums.

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

- Credit risk;

- Liquidity risk; and

- Market risk

i. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans, advances, cash and cash equivalents and deposits with banks. The carrying amounts of financial assets represent the maximum credit risk exposure.

Trade receivables

The Company exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The management has established a credit policy under which each new customer is analysed individually for creditworthiness before the standard payments and delivery terms and conditions are offered. The average credit period provided to customers varies from 0 to 90 days. For new customers, in addition to feedback from retail traders, they start doing the business with Company on advance payment terms. Post a business for 3 months and a successful payment track record, the customers are then converted to business with standard credit terms.

An impairment analysis is performed for all the customers at each reporting date on an individual basis. According to the analysis done, the Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables. An impairment analysis is performed at each reporting date.

ii. Liquidity risk

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

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the cash flow generated from operations to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out in accordance with practice and limits set by the Company. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

iii. Market risk

Market risk is the risk that changes in market prices such as foreign exchange rates will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Company’s business activities are exposed to a variety of market risks, namely:

• Currency risk;

• Commodity risk

Currency risk

The Company is exposed to foreign currency risk to the extent that there is a mismatch between the currencies in which sales and purchases are denominated and the functional currency of the Company, hence exposure to exchange rate fluctuations arises. The risk is that the functional currency value of cash flows will vary as a result of movements in exchange rates. The functional currency of the Company is INR and the currency in which these transactions are primarily denominated is USD and CNY.

For assets and liabilities denominated in foreign currencies, the Company’s policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

Commodity risk

Exposure of the Company to Commodity and Commodity Risks faced by the Company throughout the year.

Commodities form a major part of the raw materials required for Company’s products portfolio and hence commodity price risk is one of the important market risk for the Company. The Company is exposed to the risk of changes in commodity prices in relation to its purchase of raw materials. The Company’s price arrangements with its suppliers are typically linked to the spot prices of such raw materials, and any increase in the spot prices may result in an increase in the price of such raw materials procured from its suppliers.

The Company has adequate risk assessment and minimization system in place including for Commodities. The risk is hedged through additional and strategic buying from time to time. Further, the Company typically pass on some portion of the change in the raw material price to the customers.

43. CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximise the shareholder value. Management monitors the return on capital, as well as the level of dividends to ordinary shareholders.

47. OTHER NOTES

a. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

b. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

c. The Company has not been declared as wilful defaulter by any bank or financial institution or government or any government authority.

d. The Company does not have any transactions with companies struck off.

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

f. There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.

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

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

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

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

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

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

i. The Company (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016) does not have any CIC as part of the Company.

48. Company had completed its Initial Public Offering (IPO) of its equity shares which have been listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) with effect from 9 May 2022 on offer for sale basis.

For B S R and Co For and on behalf of the Board of Directors of

Chartered Accountants Campus Activewear Limited

ICAI Firm Registration Number: 128510W (formerly known as Campus Activewear Private Limited)

Sandeep Batra Hari Krishan Agarwal Nikhil Aggarwal

Partner Chairman and Whole-Time Director and

Membership Number: 093320 Managing Director Chief Executive Officer

DIN: 00172467 DIN: 01877186

Place: Gurugram Place: Gurugram

Date: 28 May 2024 Date: 28 May 2024

Sanjay Chhabra Archana Maini

Chief Financial Officer General Counsel and

Place: Gurugram Company Secretary

Date: 28 May 2024 Membership No.: A16092

Place: Gurugram Place: Gurugram

Date: 28 May 2024 Date: 28 May 2024

---

Mar 31, 2023

Rights, preferences and restrictions attached to equity shares

(a) The Company has only one class of equity shares having par value of INR 5 per share. Each holder of equity shares is entitled to one vote per share.

(b) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by shareholders.

Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:

During the five year ended 31 March 2023:

Bonus issues:

The shareholders of the Company at its general meeting held on 27 September 2019 approved the allotment of bonus shares in the ratio of 1:1541 as on the record date of 27 September 2019 to each of the equity shareholders of the Company. Subsequently, 149,987,071 Bonus Shares of 10 each amounting to INR 1,499.87 Million, were allotted on 26 October 2019 in the ratio of 1:1541 to the eligible equity shareholders^

Shares reserved for issue under options:

Information relating to the Company''s share based payment plans, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting year, is set out in note 39.

Notes:

(i) Term loans, cash credit and Working capital demand loan from HDFC bank are secured by:

1. Movable fixed assets: Exclusive charge on all movable fixed assets (present and future, excluding Ganuar and Sonepat Unit & other movable fixed assets as excluding specifically charged to any lender).

Only for Ganaur, Sonepat unit, Axis bank will have exclusive charge on movable fixed assets.

2. Stock and book debt: First pari-passu charge on all current assets (present and future)

3. Factory land and building: Exclusive charge on properties:

(a) Plot C-9, Dehradun

(b) Plot C-10, Dehradun

(c) Plot no. 61, Baddi

4. Factory land and building: Exclusive charge on (1) Factory land and building at plot no 39-40,

Sector-8A, IIE BHEL, Haridwar, Uttarakhand, (2) Property bearing No J-17, Udyog Nagar, Rohtak Road, New Delhi - 110041.

(ii) Cash Credit/Working capital demand loan from Axis Bank are secured by:

Primary - First pari passu charge on the current assets of the Company, present and future.

Collateral - Extension of charge over property including equitable mortgage on project land and building and moveable fixed assets of the Sonepat facility located at Village Panchi Gujran, Tehsil Ganaur, District Sonepat.

Term loan from Axis bank is secured by Exclusive charge over property including EM on project Land & Building and movable fixed assets of the Sonepat facility located at Village Panchi Gujran, Tehsil Ganaur, District Sonepat.

(iii) Working capital facilites from CTBC bank are secured by first pari-passu charge over current assets both present and future and are repayable on demand.

(iv) The Company has entered into an arrangement of bill discounting facility with ICICI Bank Limited for the purpose of providing revolving line of credit to the vendor(s) for discounting the bills of exchange drawn by the vendors and accepted by the Company towards the goods or services received. The overall limit of this facility is restricted to INR 250 Million.

(v) Working capital facilities from ICICI bank is secured by first pari passu charge on all current assets, exclusive charge on movable fixed assets situated at Mauja Tokiyan, Sub Tehsil Majara, Tehsil Paonta Sahib District Sirmour, H.P. and first pari passu charge on all movable fixed assets, both present & future excluding those movable fixed assets which have been specifically charged to other lenders.

***It excludes fees paid to statutory auditor of INR Nil (31 March 2022: INR 32.47 Million) and reimbursement of expenses amounting INR Nil (31 March 2022: INR 3.56 Million) for IPO related expenses which are recoverable by the Company from the selling shareholders in proportion to the shares offered to the public in offering (refer note 49).

##It includes INR 2 Million paid during the year (31 March 2022: Nil) on account of revision of Financial Statements for the year ended 31 March 2022 pursuant to the scheme of merger.

37. CONTINGENT LIABILITIES, CONTINGENT ASSETS AND COMMITMENTS

A. Commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for

INR 228.41 Million (31 March 2022: INR 61.67 Million)

B. Contingent liabilities

Other money for which the Company is contingently liable:

a. The Company had imported plant and machinery in 2015-16 under EPCG scheme. An export obligation (''EO'') amounting to INR 23.87 Million (31 March 2022: INR 23.87 Million) was placed on the Company which was to be fulfilled in a period of 8 years from the date of Inspection of Licence. Duty saved under EPCG Scheme amounting to INR 3.98 Million (31 March 2022: INR 3.98 Million ).

b. Pursuant to judgement by the Honourable Supreme Court dated 28 February 2019, it was held that basic wages, for the purpose of provident fund, to include special allowances which are common for all employees. However, there is uncertainty with respect to the applicability of the judgement and period from which the same applies.

Owing to the aforesaid uncertainty and pending clarification from the authorities in this regard, the Company has not recognised any provision till F.Y. 2018-2019. Further, management also believes that the impact of the same on the Company will not be material.

38. EMPLOYEE BENEFITS

The Company contributes to the following post-employment defined benefit plans in India.

(i) Defined contribution plans:

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund which is defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue.

(ii) Defined benefit plan:

Gratuity

The Company operates a post-employment defined benefit plan for Gratuity. This plan entitles an employee to receive 15 day''s salary for each year of completed service at the time of retirement/exit. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognize each period of service as giving rise to additional employee benefit entitlement and measures each unit separately to build up the final obligation.

The most recent actuarial valuation of the present value of the defined benefit obligation for gratuity was carried out as at 31 March 2023. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

also responsible for developing and monitoring the Company''s risk management policy.

The Company''s risk management policies are established to identify and analyse the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The Board of Directors with top management oversee the formulation and implementation of the risk management framework. The risks are identified at business unit level and mitigation plans are identified, deliberated and reviewed at appropriate forums.

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

- Credit risk;

- Liquidity risk; and

- Market risk.

i. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans, advances, cash

(a) The Company''s borrowings have fair values that approximate to their carrying amounts as they are based on the net present value of the anticipated future cash flows using rates currently available for debts on similar terms, credit risk and remaining maturities.

(b) The carrying amount of loans, trade receivables, cash and cash equivalents, bank balances other than those included in cash and cash equivalents, other current financial assets, trade payable and other current financial liabilities approximates the fair values, due to their short term nature.

(c) The carrying value of non-current financial assets and Other non-current financial liabilities approximate the fair values as on the reporting date, as these are carried at amortised cost and are based on the net present value of the anticipated future cash flows using applicable discount rate.

(d) The carrying value of lease liabilities approximates the fair values as on the reporting date, as these are carried at amortised cost and are based on the net present value of the anticipated future cash flows using applicable discount rate.

There are no transfer between Level 1, Level 2 and Level 3 during the year ended 31 March 2023 and 31 March 2022.

II. Financial risk management Risk Management Framework

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework and

and cash equivalents and deposits with banks. The carrying amounts of financial assets represent the maximum credit risk exposure.

Trade receivables

The Company exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The management has established a credit policy under which each new customer is analysed individually for creditworthiness before the standard payments and delivery terms and conditions are offered. The average credit period provided to customers varies from 0 to 90 days. For new customers, in addition to feedback from retail traders, they start doing the business with Company on advance payment terms. Post a business for 3 months and a successful payment track record, the customers are then converted to business with standard credit terms.

An impairment analysis is performed for all the customers at each reporting date on an individual basis. According to the analysis done, the Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables. An impairment analysis is performed at each reporting date.

Interest rate risk

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

Cash and cash equivalents and deposits with banks

Cash and cash equivalents of the Company are held with banks which have high credit rating. The Company considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties.

Security deposits

The Company has furnished security deposits to its lessors for obtaining the premises on lease. The Company considers that its deposits have low credit risk or negligible risk of default as the parties are well established entities and have strong capacity to meet the obligations. Also, where Company expects that there is an uncertainty in the recovery of deposit, it provides for suitable impairment on the same.

During the year, trade receivable with a contractual amount of INR 4.43 Million were written off (31 March 2022: INR 44.53 Million) and the Company does not expect to receive future cash flows or recoveries from collection of receivables previously written off. The Company''s management also pursues all legal options for recovery of dues, wherever necessary, based on its internal assessment.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per Company''s policy.

ii. Liquidity risk

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

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the cash flow generated from operations to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

iii. Market risk

Market risk is the risk that changes in market prices such as foreign exchange rates will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Company''s business activities are exposed to a variety of market risks, namely:

• Currency risk;

• Commodity risk

Currency risk

The Company is exposed to foreign currency risk to the extent that there is a mismatch between the currencies in which sales and purchases are denominated and the functional currency of the Company, hence exposure to exchange rate fluctuations arises. The risk is that the functional currency value of cash flows will vary as a result of movements in exchange rates. The functional currency of the Company is INR and the currency in which these transactions are primarily denominated is USD and CNY.

For assets and liabilities denominated in foreign currencies, the Company''s policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

Commodity Risk

Exposure of the Company to Commodity and Commodity Risks faced by the Company throughout the year.

Commodities form a major part of the raw materials required for Company''s products portfolio and hence commodity price risk is one of the important market risk for the Company. The Company is exposed to the risk of changes in commodity prices in relation to its purchase of raw materials. The Company''s price arrangements with its suppliers are typically linked to the spot prices of such raw materials, and any increase in the spot prices may result in an increase in the price of such raw materials procured from its suppliers.

The Company has adequate risk assessment and minimization system in place including for Commodities. The risk is hedged through additional and strategic buying from time to time. Further, the Company typically pass on some portion of the change in the raw material price to the customers

43. CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value. Management monitors the return on capital, as well as the level of dividends to ordinary shareholders.

44. SEGMENT REPORTING

Segment information is presented in respect of the Company''s key operating segments. The operating segments are based on the Company''s management and internal reporting structure.

Operating segments

The Company has identified the business as single operating segment i.e. Footwear and Accessories. Accordingly, ^ there is only one Reportable Segment for the Company which is "Footwear and Accessories", hence no specific disclosures have been made.

47. OTHER NOTES:

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

(b) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(c) The Company has not been declared as wilful defaulter by any bank or financial institution or government or any government authority.

(d) The Company does not have any transactions with companies struck off.

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

(f) There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.

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

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

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

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

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

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

(i) The Company (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016) does not have any CIC as part of the Company.

48. SCHEME OF MERGER

The Board of Directors of the Company at its meeting held on 11 November 2020 had approved the Scheme of Arrangement (the ''Scheme'') for merger of its wholly owned subsidiary (transferor Company) with the Company (transferee Company) and adjustment of securities premium of the Transferee Company with the debit balance of Capital Reserve. Application seeking approval of the Scheme was subsequently filed with Hon''ble National Company Law Tribunal (NCLT), New Delhi Bench on 25 March 2021. The earlier standalone financial statements of the Company for the year ended 31 March 2022 were approved by the Board of Directors at its meeting held on 30 May 2022 without giving effect to the Scheme since the petition was pending before the NCLT.

NCLT, New Delhi Bench sanctioned the Scheme and pronounced its order on 11 August 2022, certified copy of which was received by the Company on 1 September 2022. As per the Order, it needed to be filed with ROC within 30 days from receipt of certified copy of it, which was filed subsequently.

Accordingly, to give effect to the Scheme from the appointed date i.e. 1 April 2020, the Company had revised the earlier approved standalone financial statements for the year ended 31 March 2022.

Pursuant to the Scheme, all the assets, liabilities, reserves and surplus of the transferor Company had been transferred to and vested in the Company with effect from the appointed date i.e. 1 April 2020 at their carrying values.

The revision to the earlier standalone financial statements had been carried out solely for the impact of above referred Scheme and no additional adjustments had been incorporated for any other events occurring after 30 May 2022 (being the date when the standalone financial statements were first approved by the Board of Directors of the Company).

Pursuant to the Scheme the merger had been accounted for as per the applicable accounting principles prescribed under relevant Indian Accounting Standards.

(a) Accounting treatment

(i) The Transferee Company had recorded all the assets, liabilities and reserves of the Transferor Company vested in it pursuant to this Scheme, at their book values and in the same form as appearing in the books of the Transferor

Company as on the Appointed Date, by applying the principles as set out in Appendix C of IND AS 103 ''Business Combinations'' and prescribed under Companies (Indian Accounting Standards) Rules, 2015 issued by the Institute of Chartered Accountants of India.

(ii) The revised standalone financial statements of the Transferee Company reflect the financial position on the basis of consistent accounting policies.

(iii) Any loans, advances or other obligations (including but not limited to any guarantees, letters of credit, letters of comfort or any other instrument or arrangement which may give rise to a contingent liability in whatever form) that are due between the Transferor Company and the Transferee Company, if any, ipso facto, stand discharged and come to end and the same is eliminated by giving appropriate elimination effect in the books of account and records of the Transferee Company.

(iv) Investments in shares of the Transferor Company held by the Transferee Company have been adjusted against Share Capital of the Transferor Company and the difference, between cost of investment of the Transferor Company in the books of the Transferee Company has been adjusted against balance of reserves and surplus of the Transferee Company post-merger.

The identity of the reserves has been preserved and appear in the Revised Standalone financial statements of the Transferee Company in the same form in which they appeared in the financial statements of the Transferor Company.

(v) Upon the Scheme becoming effective the Transferee Company had passed the following accounting entries for adjustment of securities premium with the debit balance of Capital Reserve:

a. The debit balance in the Capital Reserve INR. 1,567.87 Million (after giving effect of above accounting) in the books of the Transferee Company as on Effective Date i.e. 1 April 2020 has been adjusted/ set-off against the credit balance of Securities Premium.

b. This part of the Scheme did not involve reduction in the Issued, Subscribed, Paid-Up Share Capital of the Transferee Company and any payment of the Paid-Up share capital to the shareholders of the Transferee Company nor did it result in extinguishment of any liability or diminution. There was no outflow of/payout of funds from the Transferee Company and hence, the interest of the shareholders/ creditors was not adversely affected.

Notes:

(a) Pursuant to the Order, the difference between the book value of the assets and liabilities and reserves transferred to the Company and the carrying amount of investments in transferor Company cancelled being INR 49.24 Million had been credited to the other equity of the Company.

(b) Trade Payable includes INR 204.91 Million payable to Transferee Company which will be eliminated by the receivables in the Transferor Company.

(c) Unrealied Profit of INR 70.03 on stock unsold as at 1 April 2020 which was purchased by one entity from other had been debited in other equity.

(d) As the appointed date of the Scheme is 1 April 2020, the previous year''s numbers ie. for the year ended 31 March 2021 had been revised to include the financial information of the Transferor Company.

(e) The authorised share capital of the Transferee Company, automatically stands increased, by clubbing the authorised share capital of the Transferor Company which is INR 2.00 Million divided into 400,000 equity shares of INR 5 each (31 March 2021: INR 2.00 Million divided into 200,000 equity shares of INR 10 each).

(f) Further, pursuant to the approval of the Scheme from the specified retrospective appointed date of 1 April 2020, a revised return of income for the year ended 31 March 2021 after taking into consideration the overriding effect of the provision in the Scheme would be filed by the Company. The impact of such revised return on the current and deferred tax has been recognised in the profit or loss for the year ended 31 March 2022.

49. Company had completed its Initial Public Offering (IPO) of its equity shares which have been listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) with effect from 9 May 2022 on offer for sale basis.

---

Mar 31, 2022

Notes

(i) Term loans, cash credit and working capital demand loan from HDFC bank are secured by:-

1. Movable fixed assets - Exclusive charge on all movable fixed assets (present and future, excluding Ganuar, Sonipat Unit & other movable fixed assets as excluding specifically charged to any lender).

Only for Ganaur, Sonipat unit, Axis bank will have exclusive charge on movable fixed assets.

2. Stock and book debt- First Pari passu charge on all current assets (present and future)

3. Factory land and building: Exclusive charge on properties:-

(i) Plot C-9, Dehradun

(ii) Plot C-10 Dehradun

(iii) Plot no 61, Baddi

4. Factory land and building: Exclusive charge on (1) Factory land and building at plot no 39-40, Sector-8A, IIE BHEL, Haridwar, Uttarakhand, (2) Property bearing No J-17, Udyog Nagar, Rohtak Road, New Delhi - 110041.

(iii) Cash Credit, working capital demand loan from Axis Bank are secured by:-

Primary- First Pari passu charge on the current assets of the Company, present and future.

Collateral- Extension of charge over property including equitable mortgage on project land and building and moveable fixed assets of the Sonipat facility located at Village Panchi Gujran, Tehsil Ganaur, District Sonipat.

Term loan from Axis bank is secured by exclusive charge on the land and building, plant and machinery and other moveable fixed assets of the Ganaur, Sonipat property.

(iv) The Company has entered into guarantee agreement with Axis Bank Limited wherein the CAL has guaranteed the repayment of the amounts due by the authorised dealers to the bank under two schemes.

Scheme 1: Post completion of six months of Scheme 2, the authorised dealer will be on boarded on Scheme 1, with the followings criteria:

Authorised dealers having a limit requirement of minimum of H2.5 million and maximum of H30 million.

Authorised dealers should have a vintage of more that 3 years with CAL and 5 years in same line of business.

Authorised dealers with a minimum dependency of 50% on CAL.

Authorised dealers who have profitability (profit after tax) record for the last two years.

Authorised dealers not appearing in the Company''s defaulter list and not having legal dispute with CAL and Campus AI Private Limited (CAIPL) in the past since inception of dealership with CAL/CAIPL in the past.

Authorised dealers not appearing in the defaulters'' lists checked by the bank.

CAL will provide First Loss Deficiency Guarantee to the extent of 30% of scheme limit i.e. H150 million, to be replenished annually.

Scheme 2: Scheme will be valid from date of first disbursement till a period of six months and will be utilised to take over existing program of CAL from Yes Bank. The authorised dealers to satisfy the following criteria:

Authorised dealers having a limit requirement of minimum of H2.5 million and maximum of H30 million.

Authorised dealers should have a vintage of more that 3 years with CAL and 5 years in same line of business.

Authorised dealers with a minimum dependency of 50% on CAL.

Authorised dealers who have profitability (profit after tax) record for the last two years.

Authorised dealers not appearing in the defaulters'' lists checked by the bank.

CAL will provide First Loss Deficiency Guarantee to the extent of 50% of scheme limit i.e. H250 million.

(iv) The Company has entered into an arrangement of bill discounting facility with ICICI Bank Limited for the purpose of providing revolving line of credit to the vendor(s) for discounting the bills of exchange drawn by the vendors and accepted by the Company towards the goods or services received. The overall limit of this facility is restricted to H250 million.

35 Earnings per share(EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

Diluted EPS are calculated by dividing the profit for the year attributable to the equity holders by 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.

1. The earnings per share reflects the impact of sub-division of 1 equity share having face value of H10 each into 2 equity shares having face value of H5 each (refer note 48).

2. For the year ended 31^st March, 2022, 2,349,237 options (31^st March, 2021: 291,438) are not considered in calculation of weighted average number of equity shares for calculation of diluted earnings per share, as their impact is anti- dilutive.

36 Contingent liabilities, contingent assets and commitments

A. Commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for H61.67 million (31^st March, 2021: H26.68 million)

B. Contingent liabilities

Other money for which the Company is contingently liable -

a. The Company had imported plant and machinery in 2015-16 under EPCG scheme. An export obligation (''EO'') amounting to H23.87 million (31^st March, 2021: H23.87 million) was placed on the Company which was to be fulfilled in a period of 8 years from the date of Inspection of Licence. Duty saved under EPCG Scheme amounting to H3.98 million (31^st March, 2021: H3.98 million ).

b. Pursuant to judgement by the Honourable Supreme Court dated 28 February 2019, it was held that basic wages, for the purpose of provident fund, to include special allowances which are common for all employees. However, there is uncertainty with respect to the applicability of the judgement and period from which the same applies.

Owing to the aforesaid uncertainty and pending clarification from the authorities in this regard, the Company has not recognised any provision till F.Y. 2018-2019. Further, management also believes that the impact of the same on the Company will not be material.

37 Employee benefits

The Company contributes to the following post-employment defined benefit plans in India.

(i) Defined contribution plans:

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund and employee state insurance (ESI) which are defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue.

(ii) Defined benefit plan:

Gratuity

The Company operates a post-employment defined benefit plan for Gratuity. This plan entitles an employee to receive 15 day''s salary for each year of completed service at the time of retirement/exit. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognize each period of service as giving rise to additional employee benefit entitlement and measures each unit separately to build up the final obligation.

The most recent actuarial valuation of the present value of the defined benefit obligation for gratuity was carried out as at 31^st March, 2022. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

A. Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Company''s financial information as at reporting date:

C. Actuarial assumptions a) Economic assumptions

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

D. Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

(a) The Company''s borrowings have fair values that approximate to their carrying amounts as they are based on the net

present value of the anticipated future cash flows using rates currently available for debts on similar terms, credit risk and remaining maturities.

(b) The carrying amount of loans, trade receivables, cash and cash equivalents, bank balances other than those included

in cash and cash equivalents, other current financial assets, trade payable and other current financial liabilities approximates the fair values, due to their short term nature.

(c) The carrying value of non-current financial assets approximate the fair values as on the reporting date, as these are carried at amortised cost and are based on the net present value of the anticipated future cash flows using applicable discount rate.

(d) The carrying value of lease liabilities approximates the fair values as on the reporting date, as these are carried at amortised cost and are based on the net present value of the anticipated future cash flows using applicable discount rate.

There are no transfer between Level 1, Level 2 and Level 3 during the year ended 31^st March, 2022 and 31^st March, 2021. II. Financial risk management Risk Management Framework

The Company''s Board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework and also responsible for developing and monitoring the Company''s risk management policy.

The Company''s risk management policies are established to identify and analyse the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The Board of directors with top management oversee the formulation and implementation of the risk management framework. The risks are identified at business unit level and mitigation plans are identified, deliberated and reviewed at appropriate forums.

41 Financial instruments - Fair values and risk management (Contd..)

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

- Credit risk;

- Liquidity risk; and

- Market risk

i. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans, advances, cash and cash equivalents and deposits with banks. The carrying amounts of financial assets represent the maximum credit risk exposure.

Trade receivables

The Company exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The management has established a credit policy under which each new customer is analysed individually for creditworthiness before the standard payments and delivery terms and conditions are offered. The average credit period provided to customers varies from 0 to 90 days. For new customers, in addition to feedback from retail traders, they start doing the business with Company on advance payment terms. Post a business for 3 months and a successful payment track record, the customers are then converted to business with standard credit terms.

An impairment analysis is performed for all the customers at each reporting date on an individual basis. According to the analysis done, the Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables. An impairment analysis is performed at each reporting date.

Interest rate risk

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

41 Financial instruments - Fair values and risk management (Contd..)

Cash and cash equivalents and deposits with banks

Cash and cash equivalents of the Company are held with banks which have high credit rating. The Company considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counter parties.

Security deposits

The Company has furnished security deposits to its lessors for obtaining the premises on lease and warehouses for storage of goods. The Company considers that its deposits have low credit risk or negligible risk of default as the parties are well established entities and have strong capacity to meet the obligations. Also, where Company expects that there is an uncertainty in the recovery of deposit, it provides for suitable impairment on the same.

During the year, trade receivable with a contractual amount of H44.53 million were written off (31^st March, 2021: H1.1 million) and the Company does not expect to receive future cash flows or recoveries from collection of receivables previously written off. Company''s management also pursues all legal options for recovery of dues, wherever necessary, based on its internal assessment.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per Company policy.

For trade receivables balance from related parties, there are no indications at the year end for default in payments. Accordingly, the Company does not anticipate risk of recovery and expected credit loss in respect thereof.

Additionally, the Company has also considered risk on account of delays and defaults due to COVID-19 in arriving at expected credit loss.

ii. Liquidity risk

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

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the cash flow generated from operations to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out in accordance with practice and limits set by the Company . In addition, the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Market risk is the risk that changes in market prices - such as foreign exchange rates - will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Company''s business activities are exposed to a variety of market risks, namely:

• Currency risk;

• Commodity risk

Currency risk

The Company is exposed to foreign currency risk to the extent that there is a mismatch between the currencies in which sales and purchases are denominated and the functional currency of the Company, hence exposure to exchange rate fluctuations arises. The risk is that the functional currency value of cash flows will vary as a result of movements in exchange rates. The functional currency of the Company is INR and the currency in which these transactions are primarily denominated is USD and CNY.

For assets and liabilities denominated in foreign currencies, the Company''s policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

Exposure of the Company to Commodity and Commodity Risks faced by the Company throughout the year.

Commodities form a major part of the raw materials required for Company''s products portfolio and hence commodity price risk is one of the important market risk for the Company. The Company is exposed to the risk of changes in commodity prices in relation to its purchase of raw materials. The Company''s price arrangements with its suppliers are typically linked to the spot prices of such raw materials, and any increase in the spot prices may result in an increase in the price of such raw materials procured from its suppliers.

The Company has adequate risk assessment and minimization system in place including for Commodities. The risk is hedged through additional and strategic buying from time to time. Further, the Company typically pass on some portion of the change in the raw material price to the customers

Purchases sensitivity analysis

A reasonably possible change of 1% in prices of purchases during the year, would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant

42 Capital management

The Company''s policy is to maintain a strong capital base so as to maintain investor and creditor to sustain future development of the business. Management monitors the return on capital on a yearly basis as well as the level of dividends to ordinary shareholders which is given based on approved dividend policy.

The Board of directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position."

Refer note 45 for information on ratios.

43 Segment reporting

Segment information is presented in respect of the Company''s key operating segments. The operating segments are based on the Company''s management and internal reporting structure.

Operating segments

The Company has identified the business as single operating segment i.e. Footwear and Accessories. Accordingly, there is only one Reportable Segment for the Company which is "Footwear and Accessories", hence no specific disclosures have been made.

46 During the Financial Year 2020-21, the Company''s financials got impacted due to COVID-19 declared as pandemic by world health organization (WHO). The Company had suspended operations in all the units during lockdown period to comply with COVID 19 related restrictions imposed by the Central and State governments. These restrictions though imposed to fight against COVID-19 had also impacted the normal business by way of interruption in store operations, disrupted supply chain, extended credit period etc.

However, the Company worked on plans to step up the distribution, increase marketing spends and partly offset the business impact by increasing the Online channel sales. The Company has maintained throughout lockdowns and subsequently a good cash position and has been able to meet its financial liabilities without utilizing moratorium.

Management believes that Company will continue its journey of profitable growth that will be driven by the strong fundamentals of operating model and continued focus on long term business plan.

47 On 9 February 2021, the Company had received approval from shareholders for re-classification of authorised share capital from redeemable preference shares amounting H1,530 million to equity share capital in Extra-ordinary General Meeting.

48 The Board of Directors and shareholders of the Company at their meeting held on 9 November 2021, have approved stock split of one equity share having face value of H10 each into two equity shares having face value of H5 each.

The impact of above mentioned stock split has been considered retrospectively for the purpose of calculation of basic and diluted earnings per share for previous year.

49 Other notes:

a. No proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

b. There are no transactions to report on Crypto Currency or Virtual Currency.

c. The Company has not been declared as wilful defaulter by any bank or financial Institution or other lender.

d. The Company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

e. There are no transaction which has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

f. There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.

g. There are no funds which have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

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

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

h. There are no funds which have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:

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

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

i. The Company (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016) does not have any CIC as part of the Company.

The Board of Directors of the Company at its meeting held on 11 November 2020 had approved the Scheme of Arrangement (the ''Scheme'') for merger of its wholly owned subsidiary (transferor Company) with the Company (transferee Company) and adjustment of securities premium of the Transferee Company with the debit balance of Capital Reserve. Application seeking approval of the Scheme was subsequently filed with Hon''ble National Company Law Tribunal (NCLT), New Delhi Bench on 25 March 2021. The earlier standalone financial statements of the Company for the year ended 31^st March, 2022 were approved by the Board of Directors at its meeting held on 30 May 2022 without giving effect to the Scheme since the petition was pending before the NCLT.

NCLT, New Delhi Bench sanctioned the Scheme and pronounced its order on 11 August 2022, certified copy of which was received by the Company on 1 September 2022. As per the Order, it needs to be filed with ROC within 30 days from receipt of certified copy of it.

Accordingly, to give effect to the Scheme from the appointed date i.e. 1st April, 2020, the Company has revised the earlier approved standalone financial statements for the year ended 31^st March, 2022.

Pursuant to the Scheme, all the assets, liabilities, reserves and surplus of the transferor Company have been transferred to and vested in the Company with effect from the appointed date i.e. 1st April, 2020 at their carrying values.

The revision to the earlier standalone financial statements have been carried out solely for the impact of above referred Scheme and no additional adjustments have been incorporated for any other events occurring after 30 May 2022 (being the date when the standalone financial statements were first approved by the Board of Directors of the Company).

Pursuant to the Scheme the merger has been accounted for as per the applicable accounting principles prescribed under relevant Indian Accounting Standards.

(a) Accounting treatment

(i) The Transferee Company has recorded all the assets, liabilities and reserves of the Transferor Company vested in it pursuant to this Scheme, at their book values and in the same form as appearing in the books of the Transferor Company as on the Appointed Date, by applying the principles as set out in Appendix C of IND AS 103 ''Business Combinations'' and prescribed under Companies (Indian Accounting Standards) Rules, 2015 issued by the Institute of Chartered Accountants of India

(ii) The revised standalone financial statements of the Transferee Company reflect the financial position on the basis of consistent accounting policies.

(iii) Any loans, advances or other obligations (including but not limited to any guarantees, letters of credit, letters of comfort or any other instrument or arrangement which may give rise to a contingent liability in whatever form) that are due between the Transferor Company and the Transferee Company, if any, ipso facto, stand discharged and come to end and the same is eliminated by giving appropriate elimination effect in the books of account and records of the Transferee Company.

(iv) Investments in shares of the Transferor Company held by the Transferee Company have been adjusted against Share Capital of the Transferor Company and the difference, between cost of investment of the Transferor Company in the books of the Transferee Company has been adjusted against balance of reserves and surplus of the Transferee Company post-merger.

The identity of the reserves has been preserved and appear in the Revised Standalone financial statements of the Transferee Company in the same form in which they appeared in the financial statements of the Transferor Company.

(v) Upon the Scheme becoming effective the Transferee Company had passed the following accounting entries for adjustment of securities premium with the debit balance of Capital Reserve:

a. The debit balance in the Capital Reserve H1,567.87 Million (after giving effect of above accounting ) in the books of the Transferee Company as on Effective Date i.e. 1st April, 2020 has been adjusted/ set-off against the credit balance of Securities Premium.

b. This part of the Scheme does not involve reduction in the Issued, Subscribed, Paid-Up Share Capital of the Transferee Company and any payment of the Paid-Up share capital to the shareholders of the Transferee Company nor does it result in extinguishment of any liability or diminution. There is no outflow of/ payout of funds from the Transferee Company and hence, the interest of the shareholders / creditors is not adversely affected.

(a) Pursuant to the Order, the difference between the book value of the assets and liabilities and reserves transferred to the Company and the Carrying amount of investments in transferor Company cancelled being H49.24 million has been credited to the other equity of the the Company.

(b) Trade Payable includes H204.91 million payable to Transferee Company which will be eliminated by the receivables in the Transferor Company.

(c) Unrealied Profit of H70.03 on stock unsold as at 1st April, 2020 which was puchased by one entity from other has been debited in other equity.

(d) As the appointed date of the Scheme is 1st April, 2020, the previous year''s numbers ie. for the year ended 31 March 2021 have been revised to include the financial information of the Transferor Company.

(e) The authorised share capital of the Transferee Company, automatically stands increased, by clubbing the authorised share capital of the Transferor Company which is H2.00 million divided into 400,000 equity shares of H5 each (31 March 2021: H2.00 million divided into 200,000 equity shares of H10 each)

(f) Further, pursuant to the approval of the Scheme from the specified retrospective appointed date of 1^st April, 2020, a revised return of income for the year ended 31 March 2021 after taking into consideration the overriding effect of the provision in the Scheme would be filed by the Company. The impact of such revised return on the current and deferred tax has been recognised in the profit or loss for the year ended 31^st March, 2022.

52 Events after the reporting period

Subsequent to the year end, the Company completed its Initial Public Offering (IPO) of its equity shares which have been listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) with effect from 9 May 2022.