Terms/rights attached to equity shares

The Company has equity shares having par value of ' 1 per share. Each holder of Equity Shares is entitled to one vote per share. The shareholders have the right to receive interim dividends declared by the Board of Directors and final dividends proposed by the Board of Directors and approved by the shareholders. In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive any of the remaining assets of the Company,after distribution of Preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. The equity shareholders have all other rights as available to the equity shareholders as per the provisions of Companies Act, 2013 read together with the Memorandum of Association and Articles of Association of the Company as applicable.

Commitments and Contingencies

a)    Capital Commitments

Estimated amount of contracts remaining to be executed on capital account (tangible and intangible assets) and not provided for ' 112.59 crore (2022-23: ' 140.15 crore).

b)    Certain key arrangements of the Company

The Company has agreements in respect of the following and the parties inter-se have certain rights and obligations, also covering certain affirmative and shareholding related provisions, commensurate with arrangements of this nature:

1.    Association with Inditex Group for Zara & Massimo Dutti stores in India. Sourcing of merchandise is required only from the Inditex Group subject to the latter's discretion. Also, the permit for use of the brands in India is at the latter's discretion.

2.    Joint venture with Tesco PLC UK, with respect to Trent Hypermarket Private Limited.

3.    Association with Tesco PLC UK, with respect to Booker India Limited

4.    Joint venture with MAS Amity Pte Ltd., with respect to Trent MAS Fashion Private Limited.

c)    Contingent Liabilities

(i)    Contingent    Liability in respect of Sales tax, Excise, Customs and Other Indirect Tax matters:    '    0.37 crore

(2022-23: '    0.04 crore) net of tax ' 0.28 crore (2022-23: ' 0.03 crore).

(ii)    Contingent    Liability in respect of Income-Tax matters : ' 47.09 crore (2022-23: ' 47.09 crore).

(iii)    Contingent    Liability in respect of Claims filed against the Company ' 8.84 crore (2022-23: ' 8.61    crore).

(iv)    Claims made against the Company not acknowledged as debts ' 0.91 crore (2022-23: ' 0.40 crore).

Note 36

36 (a) Remuneration to Executive Directors: The Company has paid/provided for the remuneration of Mr. P. Venkatesalu as approved by Shareholders.

36 (b) Remuneration to the Non-Executive Directors: The Board of Directors have approved commission upto 1% of eligible profits for F.Y. 2023-24, computed as per the provisions of the Companies Act, 2013.

“Trade payables” include the balances payable to suppliers under vendor financing arrangements with banks. These balances are classified as Acceptances under Trade Payables schedule and the related payments as cash flows from operating activities, since the payments are made to the banks under the same conditions as those agreed with the supplier, the Company bound by the obligation to make payment does not agree an extension with the banks beyond the due dates agreed with the supplier, and there are no special guarantees to secure the payments to be made.

37 (e)    There are no amounts due and outstanding to be credited to Investor Education and Protection Fund as at

31^st March 2024 except ' 0.09 crore (2022-23: ' 0.09 crore) which is held in abeyance due to legal cases pending.

37 (f)    Details on Derivatives Instruments and Unhedged Foreign Currency Exposures

(i) There are no forward exchange contract outstanding as at 31^st March 2024.

37 (g) Segment Reporting

The Company is into the business of retailing / trading of merchandise predominantly in India which in the context of Indian Accounting Standards 108 - “Segment Information” represents single reportable business segment. The accounting policies of the reportable segment are same as accounting policies disclosed in (Note 2, Page 182). Information reported to The Chief Operating Decision Maker, for the purposes of resource allocation and assessment of segment performance focuses on the types of services delivered / provided / business conducted. The revenues, total expenses and net profit as per the statement of the profit and loss represents the revenue, total expenses and the net profit of the sole reportable segment.

37 (h) During the F.Y. 2021-22, the Company had issued 5000 Redeemable Non-Convertible Debentures of ' 10 lakhs each on private placement basis. These Debentures carry an interest @ 5.78 % p.a and are redeemable on 29^th May 2026. The Company has utilised entire proceeds towards the objects of the issue.

37 (i) DISCLOSURE RELATED TO LARGE CORPORATE ENTITIES

The Company is a large Corporate as per applicability criteria given under the SEBI circular dated 10^th August 2021. The related disclosure of fund raising through debt securities by the Company is as follows:

(I) Defined Benefit Plan

(a) Gratuity benefit (As per Actuarial valuation as on 31^st March 2024)

Funding arrangements and policy:

The trustees of the plan have outsourced the investment management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it is not possible to explicitly follow an asset-liability matching strategy to manage risk actively.

There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Company's philosophy is to fund the benefits based on its own liquidity and tax position as well as level of under funding of the plan.

Sensitivity analysis:

Sensitivity for significant actuarial assumption is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant. The following table summarizes the impact in percentage and absolute amount terms on the reported defined benefit obligation at the end of the reporting period arising out of changes in the below three key parameters.

Towards Pension and Medical Benefits, during the year the discount rate had changed from 7.30% to 7.20%.

(c) Amount provided for Compensated Absence liability as on 31^st March 2024 is ' 28.57 crore (2022-23: ' 18.24 crore) recognised as Expense /(Gain) for the year is ' 10.33 crore (2022-23: ' 5.59 crore). The above is based on the Actuarial Valuation Report. The report considers assumptions with respect to discount rates, salary escalation, retirement age, mortality, rates of leaving service, leave availment pattern, disability and other relevant factors. The method used is Projected Unit Credit Method.

The estimates of future pension will be reviewed as per the Consumer Price Index data every three years. Medical inflation rate takes into account estimated future changes in the cost of medical services, resulting from both inflation and specific changes in medical costs.

Towards Retirement benefits, during the year the discount rate had changed from 7.30% to 7.20 %. The discount rate is based on the prevailing market yields of Indian government securities as at 22 March 2024 for the estimated term of the obligation.The government security yields for the relevant tenure of the obligations have been derived from the rates published by Financial Benchmarks India Pvt. Ltd. (FBIL).

Nature of benefits:

The retirement benefit payable to the employees are based on the employee's service and last drawn salary at the time of leaving. The employees do not contribute towards this plan and the full cost of providing these benefits are met by the Company.

Inherent risks:

The plan is of a defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, there is a risk for the Company that any adverse increase in salary increases for serving employees / retirement benefit increase for retirement benefit or adverse demographic experience can result in an increase in cost of providing these benefits to employees in future. In this case the retirement benefit is paid directly by the Company (instead of retirement benefit being bought out from an insurance company) during the lifetime of the retirement benefit / beneficiaries and hence the plan carries the longevity risk.

Funding arrangements and policy:

There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Company's philosophy is to not to externally fund these liabilities but instead create an accounting provisions in its books of accounts and pay the retirement benefit to the beneficiary from its own resources as and when they fall due.

Sensitivity analysis:

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant. The following table summarizes the impact in percentage and absolute amount terms on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 /100 basis points.

Note 40

Leases

Company as Lessee

The Company has entered into certain arrangements in the form of leases for its retail business. As per terms, the Company's obligation could be fixed or purely variable or variable with minimum guarantee payment for use of property.

During the year the Company has paid fixed lease rent of ' 531.24 crore which has been considered in the calculation of lease liabilities and right of use assets as per Ind AS 116. In addition to fixed rent the Company has paid variable lease rentals (primarily w.r.t properties), rentals relating to lease of low value assets & certain services which are short term in nature amounting to ' 1129.32 crore which has not been considered in calculation right of use asset and lease liabilities under Ind AS 116.

Company as Lessor

The Company has entered into certain arrangements in the form of Operating Lease in respect of some of its properties. As per terms of the arrangements, the Company has right to receive regular payment for use of property. Some of the arrangements include minimum lock in period clause for regular receipts of lease rent or receipts of similar nature. Certain arrangements also include renewal and escalation clause for the mutually agreed periods between the parties.

These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analysis.

d) The Company has not received any funds from any persons or entities, with the understanding that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever or (b) provide any guarantee, security.

During the year, the Company has invested an amount of ' 37.19 crore in Booker India Limited, who in turn further invested in their subsidaries in compliance with the applicable provisions of relevant laws and regulations. The investments have been made in accordance with and for the purposes for which they were intended and were in the ordinary course of business.

Further no funds have been advanced or loaned or invested by the Company to or in any other persons or entities, that the Company as an Intermediary has, directly or indirectly lent or invested in other persons or entities identified in any manner whatsoever by or on behalf of the Company or provided any guarantee or security.

Note 44

Earnings per share (EPS)

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

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

Note 46

Financial risk management objectives and policies

The Company's financial risk management is an integral part of how to plan and execute its business strategies. The Company's risk management policy is approved by the Board and Risk Management Committee.

The Company's principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company's operations and to provide guarantees to support its operations in select instances. The Company's principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations and Investment.

The Company is exposed to market risk, credit risk , liquidity risk, equity risk, currency risk, interest rate risk and other price risk. The Company's senior management oversees the management of these risks. The Company's senior management is overseen by the risk management committee with respect to risks and facilitates appropriate financial risk governance framework for the Company. Financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. All derivative activities, if any, for risk management purposes are carried out by specialist persons that have the appropriate skills, experience and supervision. It is the Company's policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing key risks, which are summarised below.

Note 46

Financial risk management objectives and policies (cont.)

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments.

The Company manages market risk through a treasury department, which evaluate and exercises control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by senior management and the Audit/Investment committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposure, borrowing strategies, and ensuring compliance with market risk limit and policies.

The sensitivity analyses in the following sections relate to the position as at 31^st March 2024.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rate change does not affects significantly short term borrowing and current investment therefore the Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt and Non current investment.

If interest rates were to change by 100 bps from 31^st March 2024, changes in interest expense on long term borrowing would amount to approximately'17.38 crore. However, since the coupon rate is fixed, interest expense would not change. Further, given the portfolio of investments in mutual funds etc. the Company is also exposed to interest rate risk with respect to returns realised. It is estimated that a 25bps change in 10 year Govt. bond yield would result in a Profit and Loss impact of approximately ' 0.18 crore. This estimate is based key assumption including with respect to seamless transition of rates across debt instrument in the market and also basis the duration of debt instruments in turn held by mutual funds that the Company has invested in.

Foreign Currency Risk

The Company is exposed to foreign currency risk through its purchases of merchandise /receipt of services from overseas parties in various foreign currencies.

The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies,including the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.

Foreign Currency Sensitivity

The following tables demonstrates the sensitivity to a 5% increase/decrease in foreign currencies exchange rates, with all other variables held constant. The impact on the Company's profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives. The Company's exposure to foreign currency changes for all other currencies is not material.

Note 46

Financial risk management objectives and policies (cont.)

Equity Price Risk

The Company has very limited equity investment other than investment in subsidiaries', Joint ventures' and associates' equity instrument therefore related exposure is not material for Company.

Credit Risk

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

The Company is not exposed to significant concentrations of credit risk as policies are in place to cover retail sales where Collections are primarily made in cash or through credit card payments. The Company adopts prudent criteria in its investment policy, the main objectives of which are to reduce the credit risk associated with investment products and the counterparty risk associated with financial institutions.The Company considers the solvency, liquidity, asset quality and management prudence of the counter parties, as well as the performance potential of the counter parties in stressed conditions. In relation to credit risk arising from commercial transactions, impairment losses are recognized for trade receivables when objective evidence exists that the Company will be unable to recover all the outstanding amounts in accordance with the original contractual conditions of the receivables.

Liquidity Risk

The Company's Treasury department is responsible for liquidity, funding as well settlement management. In addition, the related policies and processes are overseen by senior management. Management monitors the Company's net liquidity position through rolling forecast on the basis of expected cash flows.

Capital Management

For the purpose of the Company's capital management, capital includes issued equity capital, convertible preference shares, share premium, non-convertible debentures and all other equity reserves attributable to the equity holders of the Company. The primary objectives of the Company's capital management is to maximise the shareholder value while providing stable capital structure that facilitate considered risk taking and pursued of business growth.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and business opportunities. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, raise/pay down debt or issue new shares. The Company monitors capital structure using a debt equity ratio, which is debt divided by equity.

Note 47

Reassessment of estimate on lease term:

The Company’s business model requires it to enter into a substantial number of lease contracts, primarily for its store operations. These lease agreements are for varying periods, and in respect of such leases, there is no committed economic obligation for the Company, beyond the lock in period Over the last few years, the Company has evolved its business model & strategy and has accelerated the launch of stores that are more appealing in respect of various attributes including look, feel, micro-market & experience. This strategy also involves a periodic review of store portfolio and consolidation / closure of existing stores that are not representative of the Company’s brand proposition. Consequently, estimates relating to the lease term under IND AS 116 involves exercise of significant judgement in congruence with store portfolio strategy and business model. Accordingly, it is considered appropriate to reassess estimates for recognizing the right of use asset (including related security deposits) & lease liabilities.

In this context, during the year the lease term of the leases has beenb reassessed, resulting in an exceptional gain of ' 543.35 crore (including ' 16.04 crore for related security deposit), tax impact thereon is ' 136.75 crore (Net of tax ' 406.60 crore) recognized in the Statement of Profit and Loss Account as an exceptional item. The Right of Use Asset and Lease Liabilities consequently stand reduced by ' 2719.73 crore and ' 3247.04 crore respectively. EPS without exceptional gain (net of tax) would be ' 28.95.

In the above context, the Company has also revised the useful life of the leasehold improvements in respect of such contracts. This has resulted in an incremental depreciation charge for the year amounting to ' 55.90 crore (Net of tax ' 41.83 crore).

The amount of the effect of this reassessment of lease term and depreciation of the leasehold improvements in future periods has not been disclosed because estimating the same is not practical.

Note 48

Code on Social Security, 2020 :

The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post- employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact after the Code becomes effective.