Aditya Birla Fashion & Retail Ltd

(INCLUDING MANAGEMENT DISCUSSION AND ANALYSIS)

Dear Members,

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

MANAGEMENT DISCUSSION AND ANALYSIS

Overview

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

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

Global Economy Overview

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

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

Indian Economy Overview

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

These favourable factors, combined with young demographics, have led to increased consumer spending over the last few years, with the retail sector being the biggest beneficiary. Per one of the largest global research & consulting firms, India ranks highest in the Global Retail Development1 Index, based on market attractiveness among the developing and emerging economies. The country is recognized as a "dynamically expanding modern market" with a growing demand for branded and premium products. Additionally, increased urbanization and rising prosperity in Tier 2, 3, and 4 cities are driving exponential growth in the retail sector, making India, particularly its retail industry, amongst others an increasingly attractive destination for investors.

Indian Economic Outlook: Sustained momentum and optimism

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

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

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

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

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

Industry Review Global Apparel Industry

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

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

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

The Indian Apparel Industry

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

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

Outlook: Indian Apparel market

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

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

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

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

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

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

Key Trends in the Indian Apparel Industry

1. Increased focus on customer experiences and omnichannel distribution

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

2. Increase in Premiumization and growth of luxury segment

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

3. Value fashion

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

4. Importance of social marketing and community building

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

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

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

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

6. Shift towards sustainable products

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

Business overview

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A) Proposed Aditya Birla Lifestyle Brands Limited

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

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

o Steady revenue growth

o Strong and stable profitability

o Positive cash flow

o High Return on Capital Employed (ROCE)

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

1. Lifestyle brands

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

• Louis Philippe: To inspire the quest for excellence

• Van Heusen: To make professionals fashionable and trendy

• Allen Solly: To encourage unconventional thinking in the workplace

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

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

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

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

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

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

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

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

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

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

Overview of Key performance indicators ("KPIs"):

2. Youth Western Wear

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

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

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

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

3. Sportswear

Reebok is an established global brand in the sports wear segment with a rich legacy. Reebok develops products with functionality that connects with the consumers' fitness priorities - whether it's functional training, running, sports, walking, dance, yoga or aerobics.

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

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

4. Van Heusen Activewear, Athleisure, and Innerwear

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

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

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

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

B) Demerged Aditya Birla Fashion and Retail Limited:

The demerged ABFRL has constituents that operate in several high-growth segments and the portfolio is at inflection point. The company has play in both traditional categories (Ethnic and Western) and new, previously unaddressed segments (GenZ and Luxury). As each component is still gradually developing towards its full potential, the business will require capital investment in the medium term to fuel growth. The vision is to leverage thestrong brand portfolio to achieve a market leadership position in each of its constituents over next 5-10 years. To fund the growth needs of this portfolio, your Company will raise 2,500 Crs capital.

1. Masstige & Value Retail

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

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

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

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

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

Overview of KPIs:

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

Style Up

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

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

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

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

2. Ethnic wear Brands

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

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

Designer led brands:

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

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

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

Premium wear brands:

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

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

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

3. Super Premium and Luxury Retail

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

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

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

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

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

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

4. TMRW: A portfolio of digital-first brands

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

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

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

A healthy mix of brands with D2C and marketplace footprint

Business strategy:

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

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

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

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

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

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

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

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

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

• TMRW has swiftly built a portfolio of strong brands addressing both large and emerging categories. Your Company is dedicated to building TMRW brands into respective segment & category leader, with a strong focus on youth-centric offerings. By capitalizing on the rapid growth of e-commerce and leveraging data scienceled technology, we will continue to expand our reach and influence in this dynamic market, positioning TMRW brands at the forefront of the digital first industry.

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

3. Accelerating customer experience - offline and online

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

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

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

4. Leverage synergies from the rich portfolio

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

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

The synergies will be preserved and further strengthened with the proposed demerger. This demerger will allow each business to benefit from these synergies while alsoimplementing strategies uniquely tailored to their specific needs, paving the way for distinct growth trajectories for each entity.

5. Strategic capital allocation

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

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

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

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

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

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

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

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

Digital Transformation Roadmap

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Human Resources

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

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

FY24 Human Resource Achievements

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

1. Talent Management and Career Growth

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

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

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

2. Learning and Development

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

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

3. Rewards and Recognition

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

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

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

Awards, recognizing outstanding contributions across the organization.

4. Enrich Your Life

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

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

5. Communication and Engagement

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

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

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

Sustainability

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

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

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

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

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

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

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

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

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

Notable Achievements:

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

* Received Financial Times FT - Climate Leadership Award 2023

* Received Arogya World Healthy Workplace 2023 Award

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

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

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

Risk management

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

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

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

Key Risks

1. Evolving consumer

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

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

2. Navigating through a low demand phase

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

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

3. Data Security

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

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

4. Thriving Work Force

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

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

5. Quality and Cost of retail space

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

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

6. Highly Competitive Market

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

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

Road Ahead

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

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

• Western Brands

• Masstige & Value Retail

• Ethnic Brands

• Luxury Retail

• Digital-First Brands

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

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

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

Financial Performance and Analysis

Standalone Performance

Notes:

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

(2) Net working Capital

ft in Crore)

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

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

Revenue

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

Earnings before interest, tax, depreciation and amortization ("EBITDA")

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

Finance cost

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

Dividend

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

Borrowings

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

Credit Ratings

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

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

Non-Convertible Debentures ("NCDs")

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

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

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

Standalone Key financial ratios

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

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

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

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

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

Consolidated performance

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

DIRECTORS' RESPONSIBILITY STATEMENT

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

Your Directors confirm that:

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

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

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

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

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

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

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

SHARE CAPITAL

a) Equity share capital

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

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

b) Preference Share Capital

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

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

A. Board of Directors ("Board")

(i) Number of meetings

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

(ii) Appointments/Re-appointments and resignations

a) Appointments/Re - appointments

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

b) Resianations/Retirement by Rotation

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

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

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

(iii) Board evaluation

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

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

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

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

(iv) Declaration of independence

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

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

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

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

B. Committees of the Board

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

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

C. Corporate Social Responsibility ("CSR")

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

The scope of the CSR Policy is as under:

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

ii. Monitoring process of such project or programmes.

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

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

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

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

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

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

CSR initiatives taken during the year

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

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

D. Key Managerial Personnel ("KMP")

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

i. Mr. Ashish Dikshit, Managing Director;

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

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

iv. Mr. Jagdish Bajaj, Chief Financial Officer and

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

E. Remuneration of Directors and Employees

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

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

F. Employee Stock Option Scheme and Share Based Employee Benefits

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

Employee Stock Option Scheme and Restricted Stock Units

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

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

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

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

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

Stock Appreciation Rights

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

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

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

G. Related Party Transactions ("RPTs")

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

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

• in "ordinary course of business" of the Company,

• on "an arm's length basis" and

• not "material".

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

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

H. Dividend Distribution Policy

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

I. Strategic Initiatives during the year

a) Acquisition of TCNS Clothing Co. Ltd ("TCNS"):

b) Conversion of Warrants in Equity Shares:

On March 11,2024, the Board had approved the allotment of 6,58,00,866 equity shares of face value of ' 10/- each at issue price of ' 288.75/- per equity share (including a premium of ' 278.75 per equity share), aggregating to 1,425 Crore (being 75% of the warrant issue price), to Caladium Investment Pte. Ltd on preferential basis, pursuant to the conversion of warrants in the ratio of 1 equity shares in lieu of 1 warrant.

c) Strategic partnership with Christian Louboutin SAS

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

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

The utilization of funds raised have been mentioned hereunder:

C in Crore)

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

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

K. Subsidiaries, Joint Ventures, Associate Companies

During the year under review:

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

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

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

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

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

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

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

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

M. Vigil Mechanism

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

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

N. Risk Management

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

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

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

O. Nomination Policy and Executive Remuneration Policy/Philosophy

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

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

Salient features of the aforesaid policies are as under:

(a) Nomination Policy

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

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

• devise a policy on board diversity;

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

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

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

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

(b) Executive Remuneration Policy/Philosophy

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

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

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

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

P. Business Responsibility and Sustainability Report

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

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

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

Q. Auditors and Auditors Report

(i) Statutory Auditor

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

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

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

(ii) Secretarial Auditor

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

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

(iii) Cost Auditor

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

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

R. Material changes and commitment affecting financial position of the Company which have occurred between the end of the Financial year, to which the financial statement relates, and the date of the Report Demerger of Madura Fashion & Lifestyle business of the Company:

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

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

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

S. Other Disclosures

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

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

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

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

• it has not issued any sweat equity shares;

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

• it has not transferred any amount to the Reserves;

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

• it does not engage in commodity hedging activities;

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

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

It is further disclosed that:

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

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

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

CORPORATE GOVERNANCE

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

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

ANNUAL RETURN

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

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

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

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

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

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

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

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

AWARDS AND RECOGNITIONS

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

Retail & Apparel Recognition:

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

Brand & Marketing Accolades:

• Pantaloons:

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

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

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

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

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

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

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

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

Sustainability Leadership:

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

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

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

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

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

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

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

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

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

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

Employee Well-being & Safety:

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

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

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

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

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

PR & Communication Excellence:

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

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

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

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

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

ACKNOWLEDGEMENT

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

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