Aditya Birla Lifestyle Brands Ltd Management Discussions

RESULTS OF OPERATIONS

The following discussion is intended to convey managements perspective on the financial condition of our Company and the corresponding results of operations from the date of incorporation till March 31, 2025. You should read the following discussion and analysis of our financial condition and results of operations, and our assessment of the factors that may affect our prospects and performance in future periods, should be read together with the Financial Statements included in this Information Memorandum. For further information, see "Financial Statements" on page 128 and "Information Memorandum Summary - Financial Information " on page 19.

Some of the information in the following discussion, including information with respect to our plans and strategies, contain forward-looking statements that involve risks and uncertainties. You should read the section "Forward-Looking Statements " on page 16 and "Risk Factors " on page 24 for a discussion of the risks and uncertainties related to those statements. Our actual results may differ materially from those expressed in or implied by these forward-looking statements as a result of various factors, including those described below and elsewhere in this Information Memorandum.

Unless otherwise stated or unless the context otherwise requires, the financial information of our Company used in this section has been derived from the Financial Statements. Unless noted otherwise, some of the industry related information in this section is obtained or extracted from the Industry Reports (which are paid reports and were commissioned by us solely in connection with the Information Memorandum).

Our Financial Year ends on March of each year. Accordingly, unless otherwise stated, all references to a particular Financial year are to the 12-month period ended March 31 of that year.

OVERVIEW

For details in relation to the business of our Company, see "Our Business" on page 76.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Our results of operations have been, and will be, affected by many factors, some of which are beyond our control. Key factors affecting our results are discussed in the section "Risk Factors" beginning on page 24.

MATERIAL ACCOUNTING POLICIES

For details in respect of Statement of Significant Accounting Policies, please refer to page 199 of this Information Memorandum.

PRINCIPAL COMPONENTS OF REVENUE AND EXPENDITURE Income

Total income comprises revenue from operations and other income.

Revenue from operations

Revenue from operations includes (i) revenue from sale of products, which includes revenue from redemption of loyalty points; (ii) revenue from rendering of services; and (ii) other operating

income i.e., scrap sales, export incentives, licence fees and royalties, commission income and others.

Other income

Other income includes (i) interest income; (ii) net gain on investment in mutual funds (including on redemption); (iii) fair value gain on financial instruments at FVTPL; (iv) gain on retirement of right-of-use assets; and (v) miscellaneous income.

Expenses

Our total expenses include (i) cost of materials consumed; (ii) purchase of stock-in-trade; (iii) changes in inventories of finished goods, work-in-progress and stock-in-trade; (iv) employee benefits expense; (v) finance costs; (vi) depreciation and amortisation expense; (vii) rent expense; and (viii) other expenses.

Cost of materials consumed

Cost of materials consumed include purchase of fabric.

Purchase of stock in trade

Purchase of stock-in-trade includes purchases of ready-made garments.

Changes in inventories of finished goods, work-in-progress and stock-in-trade

Changes in inventories of finished goods, work-in-progress and stock-in-trade includes movement in stock of finished goods, work-in-progress and stock-in-trade.

Employee benefits expense

Employee benefits expense includes (i) salaries, wages and bonus; (ii) contribution to provident and other funds; (iii) share-based payment to employees; (iv) gratuity expense; and (v) staff welfare expenses.

Finance costs

Finance costs include (i) interest expense on borrowings; (ii) interest expense on lease liabilities; (iii) other borrowing costs; (iv) interest on unwinding of other financial liabilities.

Depreciation and amortisation expense

Depreciation and amortisation expense includes (i) depreciation on property, plant and equipment; (ii) depreciation on right-of-use assets; (iii) amortisation on intangible assets.

Other expenses

Other expenses include (i) advertisement and sales promotion, (ii) outsourcing, housekeeping and security (iii) repairs and maintenance on buildings, plant and machinery and others, (iv) transportation and handling charges, (v) electricity charges, (vi) legal and professional expenses,

(vii) information technology expenses, (viii) processing charges, and (ix) commission to selling agents, among others.

RESULTS OF OPERATIONS

The following table sets forth certain information with respect to our results of operations on a consolidated basis for the year ended March 31, 2025:

CASH FLOWS

The following table sets forth certain information relating to our cash flows in the periods indicated:

INDEBTEDNESS

As of March 31, 2025, our total indebtedness was Rs 781.36 crore which represented a net debt to equity ratio of 0.61. As of March 31, 2025, our total borrowings was Rs 952.19 crore.

CONTINGENT LIABILITIES AND OFF-BALANCE SHEET ARRANGEMENTS

The following table sets forth certain information relating to our contingent liabilities not provided for as of March 31, 2025:

* Pertains to claims made by third parties, pending settlement which are considered not tenable. RELATED PARTY TRANSACTIONS

For information relating to the Companys related party transactions, see the section titled "Financial Statements" on page 128.

CHANGES IN ACCOUNTING POLICIES

There have been no significant changes in the accounting policies of our Company, which had a material impact on us during Fiscal 2025.

UNUSUAL OR INFREQUENT EVENTS OR TRANSACTIONS

Except as described in Information Memorandum, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.

SIGNIFICANT ECONOMIC CHANGES THAT MATERIALLY AFFECT OR ARE LIKELY TO AFFECT INCOME FROM CONTINUING OPERATIONS

Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect income from continuing operations identified in the uncertainties described in "Risk Factors" on page 24 onwards.

KNOWN TRENDS OR UNCERTAINTIES

Our business has been affected, and we expect will continue to be affected by the uncertainties described in "Risk Factors" beginning on page 24. To our knowledge, except as discussed in this Information Memorandum, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

FUTURE RELATIONSHIP BETWEEN COST AND INCOME

Our business has been affected and we expect will continue to be affected by the uncertainties described in "Risk Factors" beginning on page 24. To our knowledge, except as described or anticipated in this this Information Memorandum, there are no known factors which we expect will have a material adverse impact on our revenues or income from continuing operations.

NEW PRODUCTS OR BUSINESS SEGMENTS

Except as set out in this this Information Memorandum, including in "Our Business" on page 76, we have not announced and do not expect to announce in the near future any new business segments other than in the normal course of business.

COMPETITIVE CONDITIONS

We operate in a competitive environment and expect competitive conditions in our industry to further intensify as new entrants emerge and as existing competitors seek to emulate our business model and offer similar products. See "Risk Factors", "Industry Overview", "Our Business" and on pages 24, 64 and 76, respectively, for further details on competitive conditions that we face across our various business segments.

SIGNIFICANT DEPENDENCE ON SINGLE OR FEW CUSTOMERS/SUPPLIERS

We do not have any material dependence on a single or few suppliers. We have a wide customer base and do not have any material dependence on any particular customer.

SEASONALITY/ CYCLICALITY OF BUSINESS

Our business is subject to seasonal variations, which include the holidays, festivals and wedding season in India. Seasonality can be expected to cause quarterly fluctuations in our revenues, profitability and margins.

SIGNIFICANT DEVELOPMENTS AFTER March 31, 2025 THAT MAY AFFECT OUR FUTURE RESULTS OF OPERATIONS

Except as set out elsewhere in this Information Memorandum document, to our knowledge, no circumstances have arisen since March 31, 2025 which have materially or adversely affected or are likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next 12 months.