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.

(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.

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.