Variable lease payments

Some store leases contain variable payment terms that are linked to sales generated from such stores. For some individual stores, up to 100% of lease payments are on the basis of variable payment terms with percentages generally ranging from 5% to 20% of sales. Variable payment terms are used for a variety of reasons, including minimising the fixed costs base for newly established stores. Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those payments occurs.

A 10% increase in sales across all stores in the Company with such variable lease contracts would increase total lease payments by approximately INR 13.37 million (31st March 2024: INR 13.32 million).

Extension and termination options

Extension and termination options are included in a number of property leases of the Company. These are used to maximise operational flexibility in terms of managing the assets used in the Company's operations. The majority of extension and termination options held are exercisable only by the Company and not by the respective lessor.

Expenses relating to short-term leases (included in other expenses) (refer note 25) and expenses relating to variable lease payments not included in lease liabilities (included in other expenses) (refer note 25) were INR 875.65 million (31st March 2024: INR 801.83 million) and INR 132.75 million (31st March 2024: INR 114.28 million) respectively.

On 1st February 2024, the Board of Directors of the Company accorded its in-principle approval for monetizing the Company's freehold industrial land admeasuring approximately 11.54 acres situated in Faridabad, subject to necessary process / formalities being completed. The above land classified as held for sale continued to be measured at carrying amount since the fair value less costs to sell at the time of reclassification was higher. Consequently, no gain or loss had been recognised in standalone statement of profit and loss pursuant to this.

During the year ended 31st March 2025, the Board of Directors of the Company approved the sale of the freehold industrial land to an unrelated party for a consideration of INR 1,560.00 million. The sale deed had been executed and the total consideration also received on the same date. There is a gain on sale of aforesaid land (net of related expenses) of INR 1,339.52 million which has been disclosed as an exceptional item. (refer note 39).

Except for trade or other receivables due from fellow subsidiaries disclosed in Note 33, no trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person, nor from firms or private companies respectively in which any director is a partner, a director or a member. Trade receivables are non-interest bearing and are generally on terms of 15 to 120 days. For explanations on the Company's credit risk management processes, refer to Note 35.

B. Rights, preferences and restrictions attached to equity shares

Equity shares have a par value of INR 5 per share. They entitle the holder to participate in dividends, and to share in the proceeds of winding up of the Company in proportion to the number of and amounts paid on the shares held. Every holder of equity shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll, each share is entitled to one vote.

28 Employee benefit obligations a. Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn salary per month computed proportionately as per the Payment of Gratuity Act, 1972 for 15 days salary multiplied for the number of years of service. The scheme is funded through the Company's own trust.

The following tables summarise the components of net benefit expense recognised in the standalone statement of profit and loss and the funded status and amounts recognised in the standalone balance sheet for the gratuity plan:

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

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

c. Provident fund

Provident fund benefits provided under plan wherein contributions are made to an irrevocable trust set up by the Company to manage the investments and distribute the amounts entitled to employees are treated as a defined benefit plan as the Company is obligated to provide the members a rate of return which should, at the minimum, meet the interest rate declared by Government administered provident fund. A part of the Company's contribution is transferred to Government administered pension fund. The contributions made by the Company and the shortfall of interest, if any, are recognised as an expense in standalone statement of profit and loss under employee benefits expense. In accordance with an actuarial valuation of provident fund liabilities based on guidance issued by Actuarial Society of India and based on the assumptions as mentioned below, there is no deficiency in the interest cost as the present value of the expected future earnings of the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of Government administered provident fund.

Risk Exposures for defined benefit obligation- Gratuity

Interest Rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability.

Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to non availability of enough cash / cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g. Increase in the maximum limit on gratuity).

Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

The category wise brief description of major contingent liabilities has been given below:

Excise, customs and service tax: The claim for excise duty pertain to demand in respect of concessional duty on sale of goods in domestic tariff area. The customs demand pertain to non-availability of concessional duty in respect of import of moulds and the service tax demand relate to restriction on availment of credit on certain input services.

Sales tax and entry tax: The claim pertains to levy of interest on delay in payment of taxes.

Employee state insurance: The claim pertains to demand by the department for payment of contributions for the period during which the Company had applied for exemption before the concerned authority.

Note:

(a) It is not practicable for the Company to estimate the timing of cash outflow, if any, in respect of the above pending resolution of the respective proceedings.

(b) The Company does not expect any reimbursements in respect of the above contingent liabilities.

B Commitments

Estimated amount of contracts remaining to be executed for capital expenditure and not provided for amounting to INR 361.51 million (31st March 2024 INR 270.89 million).

30 Fair value measurements

The carrying amount of financial assets and liabilities are considered to be same as their fair values.

31 Capital Management

The Company's objective when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return capital to shareholders, issue new shares or buy back issued shares. As at 31st March 2025, the Company has only one class of equity shares and has no borrowings from banks or financial institutions. Consequent to the above capital structure, there are no externally imposed capital requirements

The Company is having borrowings amounting to Nil (31st March 2024 Nil).

The Company has agreed to ensure appropriate financial support only if and to the extent required by its subsidiary -Way Finders Brands Limited.

Terms and Conditions:

Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.

The loan to subsidiary is repayable on demand at interest rates of 8% per annum (31st March 2024- 8% per annum).

Goods were sold to related parties during the year based on the price lists in force and terms that would be available to third parties. Management services were rendered to the group companies on a cost-plus basis, allowing a margin ranging from 8% to 15% (31st March 2024 - 8% to 15%). All other transactions were made on normal commercial terms and conditions and at market rates.

All outstanding balances are unsecured and receivable / payable in cash.

35 Financial risk management objectives and policies

The Company's principal financial liabilities comprise trade and other payables and lease liabilities. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include loans, security deposits, bank deposits, trade and other receivables, and cash and cash equivalents that it derives directly from its operations.

The Company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company's focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

The Company's risk management is predominantly controlled by a central treasury department under policies approved by the Board of Directors. Central treasury identifies, evaluates and hedges financial risks in close cooperation with the Company's operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

A) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. The primary market risk to the Company is foreign exchange risk. Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities (when revenue or expense is denominated in a foreign currency) primarily with respect to USD and EURO.

The Company manages foreign currency risk by hedging its transactions using foreign currency forward contracts. The foreign exchange forward contracts are not designated as cash flow hedges, and are entered into for periods consistent with foreign currency exposure of the underlying transactions. The Company's exposure to unhedged foreign currency risk as at 31st March 2025 and 31st March 2024 has been disclosed as below :

B) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and deposits to landlords) and from its investing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

a) Trade receivables

Sales to retail customers are required to be settled in cash or using major credit cards, mitigating credit risk. There are no significant concentrations of credit risk, whether through exposure to individual customers, specific industry sectors and/or regions. For non-retail customers, the Company assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings by the management. The compliance with credit limits by customers is regularly monitored by line management.

To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The credit risk to the Company is limited in cases of retail sales since they are in nature of cash and carry and for non-retail sales, the Company's exposure to customers is diversified and there is no concentration of credit risk with respect to any particular customer.

b) Loans and other financial assets

With regards to all the financial assets with contractual cashflows other than trade receivables, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from which these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible. The maximum exposure to credit risk at the reporting date in each class of financial assets is disclosed in note 5, 10 and 11.

C) Liquidity risk

The Company's principal source of liquidity is cash and cash equivalents and the cash flow that is generated from operations. The Company has no outstanding bank borrowings. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As at 31st March 2025, the Company had a working capital of INR 7,720.21 million (31st March 2024: 8,100.31 million) including cash and cash equivalents of INR 2,001.22 million (31st March 2024: 490.77 million).

36 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

(a) The Company's Managing Director & CEO has been identified as the Chief Operating Decision Maker ('CODM') and he is responsible for all major decision with respect to the preparation and execution of business plan, preparation of budget and other key decisions.

The Managing Director & CEO reviews the operating results at the company level to make decisions about the Company's performance. Accordingly, management has identified the business as single operating segment i.e. Footwear & Accessories. Accordingly, there is only one reportable segment for the Company which is "Footwear and Accessories”, hence no specific disclosures have been made.

(b) The non-current assets of the Company are located in the country of domicile i.e. India. Hence no specific disclosures have been made.

(c) There are no major customer having revenue greater than 10% of turnover of the Company.

38 Additional regulatory information required by Schedule III to the Act:

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

(ii) The Company has not been declared as willful defaulter by any bank or financial Institution or government or any government authority.

(iii) The Company has complied with the number of layers prescribed under the Act.

(iv) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(v) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries), with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

a) 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

b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

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

a) 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

b) provide any guarantee, security or the like from or on behalf of the ultimate beneficiaries.

(vii) There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of accounts.

(viii) The Company has not traded or invested crypto currency or virtual currency during the current or previous year.

(ix) 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.

(x) There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period except for below-

The Company had entered into a Development Agreement with Riverbank Developers Pvt. Ltd. (RDPL) in 2010 pursuant to which certain land was contributed by the Company for the development of housing apartments. RDPL obtained a loan of Rs. 3,000 million against the land from Housing Development Finance Corporation Limited ("HDFC Limited”). A charge of INR 3,000 million was created in favour of HDFC, under the said agreement and the same is still appearing in the records of ROC, West Bengal. The said charge is not yet satisfied due to the non receipt of the appropriate documents from HDFC Limited/RDPL.

(xi) The Company has not been sanctioned any working capital limits from its banks or financial institutions on the basis of security of current assets.

(xii) Title deeds of immovable properties not held in the name of the Company:

39 Exceptional items

Exceptional items are those which are considered for separate disclosure in the financial statements considering their size, nature or incidence.

During the year ended 31st March 2024, a scheme for voluntary retirement (VRS) was introduced by the Company at one manufacturing unit and INR 409.00 million was incurred for the same and was disclosed as an exceptional item. Further, during the year ended 31st March 2025, another scheme for voluntary retirement was introduced at another manufacturing unit and INR 107.84 million was incurred for the same and is disclosed as an exceptional item.

During the year ended 31st March 2025, the Board of Directors of the Company approved the sale of the freehold industrial land to an unrelated party for a consideration of INR 1,560.00 million. The sale deed has been executed and the total consideration also received on the same date. There is a gain on sale of aforesaid land (net of related expenses) of INR 1,339.52 million which has been disclosed as an exceptional item.

40 Acquisition of license rights

During the year ended 31st March 2024, the Company had entered into a license agreement with Authentic Brands Group LLC and obtained exclusive rights to manufacture, market and distribute Nine West footwear and accessories across India. As part of the license agreement, the Company is required to pay royalty for the above rights including a minimum contractual royalty payable over the life of the agreement. The Company had recognised "License Rights” under intangible assets at the present value of the minimum royalty payable amounting to INR 151.70 million with a corresponding financial liability at the date of inception of the agreement. The said asset will be amortised over the term of agreement.

During the year ended 31st March 2025 the Company has renewed another license agreement with Wolverine World Wide, Inc. and has obtained exclusive rights to manufacture, sale, purchase, market and distribute Hush Puppies footwear, apparel and accessories across India. As part of the license agreement, the Company is required to pay royalty for the above rights including a minimum contractual royalty payable over the life of the agreement. The Company has recognised "License Rights” under intangible assets at the present value of the minimum royalty payable amounting to INR 2,577.95 million with a corresponding financial liability at the date of inception of the agreement. The said asset will be amortised over the term of agreement.

Reason for variance of more than 25%

Increase in net profit ratio (%) is due to exceptional item (gain on sale of land) during the year.

* Profit for the year Depreciation and amortisation expense Finance costs Allowance for doubtful debts and other financial assets Allowance for loan and other financial assets in subsidiary (net of reversals) Loss on sale/ disposal of property, plant and equipment (net)

** Total equity Non current lease liabilities

"'"Average of opening and closing other balances with banks, Deposits with original maturity of less than 3 months and Deposits having remaining maturity of more than 12 months.

#Current assets- Current liabilities

## Cost of raw materials and components consumed Purchases of stock-in-trade Changes in inventories of finished goods, stock-in-trade and work in progress

###Profit before tax Exceptional items Net finance charges.