fabindia overseas pvt ltd Management discussions

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our Restated Financial Statements, which are included in this Draft Red Herring Prospectus.

Unless otherwise indicated or the context otherwise requires, the financial information as at and for Fiscals 2019, 2020 and 2021 and as at and for the six months ended September 30, 2021 included herein is derived from our Restated Financial Statements, which are prepared under Ind AS, in accordance with requirements of the Companies Act, and restated in accordance with the SEBI ICDR Regulations and the Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the ICAI, as amended from time to time, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries, and our assessment of the factors that may affect our prospects and performance in future periods. For further information, see "Financial Statements" beginning on page 257.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those described under "Risk Factors" and "Forward Looking Statements" on pages 37 and 21, respectively.

Our Companys Fiscal Year commences on April 1 and ends on March 31 of the immediately subsequent year, and references to a particular Fiscal are to the 12 months ended March 31 of that particular year. Unless otherwise indicated or the context otherwise requires, in this section, references to "the Company" or "our Company" are to FABINDIA LIMITED on a standalone basis, and references to "the Group", "we", "us", and "our" are to FABINDIA LIMITED on a consolidated basis.

Unless stated otherwise, industry and market data used in this section have been obtained or derived from publicly available information as well as industry publications and sources such as the "Fashion, Lifestyle and Organic Products Market in India" dated December 20, 2021 that has been prepared by EY, which report has been commissioned by our Company for the purposes of confirming our understanding of the industry in connection with the Offer. The EY Report forms part of the material contracts for inspection, and is accessible on the website of our Company at: https://www.fabindia.com/investor-relations.

Overview

We are a consumer lifestyle platform with an established 62-year legacy focused on authentic, sustainable and Indian traditional lifestyle products. Our brands, Fabindia and Organic India are well recognized brands in India, with focus on the core principles of "Celebrating India" and "Healthy Conscious Living", respectively. We offer a diverse portfolio of lifestyle products to our customers across Apparel and Accessories, Home and Lifestyle, Personal Care and Organic Food categories. We deliver an omnichannel experience with our pan- India network of 309 Fabindia stores and Experience Centers, 74 Organic India stores and a network of retail touchpoints for Organic India (including general trade stores, modern trade stores and chemists), as of September 30, 2021, and our online platforms www.fabindia.com, www.organicindia.com, our mobile application, ‘Fabindia and third party marketplaces. Our business model is focused on sustainability by design and we have sought to create a differentiated supply-side community through a model of engaging a network of artisans (through our arrangements with Contract Manufacturers who, in turn, engage with such artisans) and farmers across India.

Our Purpose-Driven Organization

We are focused on offering quality products to our customers while providing sustainable jobs and livelihoods to farmers, and through our Contract Manufacturers to artisans (including weavers and craftsmen). For our Fabindia products, we engage Contract Manufacturers (who in turn engage artisans). Our suppliers for our Organic India products include farmers that we engage directly as well as through associates. We consider the interests of the artisans (that we engage with through our Contract Manufacturers) and farmers as integral to our business model. We endeavor to offer natural, ethically sourced and environmentally friendly products while blending indigenous craft techniques with contemporary designs. We rely on our purpose-driven approach, curated product portfolio and engagement with our supplier, Contract Manufacturer and customer communities to differentiate our brand and our products.

Our Past and Our Future: Staying Relevant to a Changing Consumer

Our business is driven by our focus on India, its traditions, its people, and its environment. We consider craft to be one of Indias most significant traditions, and engage with artisans through our Contract Manufacturers, to help this cultural heritage endure. We rely on Contract Manufacturers for provisioning from artisans, with a majority of our products being made by artisans (through our Contract Manufacturers) and farmers as opposed to the organized sector with the intention of, among other things, limiting environmental impact of the manufacture of our products.

We have a two-pronged strategy to further strengthen our retail presence - with our Experience Centers that house our product offerings under a single umbrella, providing customers with an experiential and comprehensive Fabindia retail experience, and by building on our e-commerce channels and growing our shared values digital community which currently numbers 4 million members, as of September 30, 2021. For further details, see "Our Business- Our Strategies - Grow our omnichannel retail network on page 184.

Our Journey and Brands

Our business began in 1960 when John Bissell set up an Indian branch of an overseas company, Fabindia Inc., which was engaged in the export of home furnishings, and we subsequently entered the ethnic apparel category. Our Company was incorporated in 1976 and continued focusing on the ethnic apparel category, and we registered our brand Fabindia in 1997. We subsequently expanded our product offerings to include non-textile furnishings, organic food, personal care and jewelry, on our ongoing journey to become a sustainable consumer lifestyle platform. We acquired a 40.00% stake in Organic India in 2013.

Our Business Verticals

Our primary business verticals include the following:

Apparel and accessories, consisting of ethnic and western womenswear, menswear and kids wear, ethnic and western footwear, handcrafted apparel and accessories such as bags, jewelry, stoles, shawls and wraps; our portfolio includes both daily and occasion wear for customers wardrobe needs. We aim to blend indigenous craft techniques with contemporary designs, and we are focused on supporting cluster based indigenous provisioning for all apparel and accessories;

Home and lifestyle, consisting of furniture, soft home furnishings, home decor, giftware and an interior design studio feature, which is positioned to leverage hand-crafted curated designs in the home solutions space in India with an emphasis on use of natural fibers. Our product portfolio in this business vertical spans utility to niche decor;

Personal care, consisting of skin care, hair care and fragrances with naturally inspired ingredients. We operate in this vertical both directly and through our subsidiaries, Biome Life Sciences India Private Limited (in which our Company holds a 50.01% stake, as of the date of this Draft Red Herring Prospectus);

Organic food, consisting of infusions, teas, staples, healthy snacks, detox kits, preserves, agri-products, Ayurvedic supplements, and personal care. We operate in this vertical through our subsidiary Organic India (in which our Company holds a 63.79% stake, as of the date of this Draft Red Herring Prospectus). Through Organic India, we introduced the Tulsi leaf (i.e., Holy Basil) in various products and indigenized organic cultivation of various herbs, flowers, seeds and grains such as quinoa, chamomile and chia in India, prior to which these products were primarily available in India as imports.

In addition to the above primary business verticals, we also offer healthy dining with regionally inspired foods and beverages through our subsidiary, FabCafe. As of the date of this Draft Red Herring Prospectus, our Company holds a 68.46% stake in FabCafe.

Our Omnichannel Retail Network

We have a network of 309 Fabindia stores retailing our products across India, including 28 Experience Centers, 185 COCOs (including one flapgship store), and 96 FOFOs, as of September 30, 2021. We also have 74 Organic India stores (including six franchisee stores) and a network of retail touchpoints (including modern trade stores, general trade stores and pharmacies) for Organic India, as of September 30, 2021. We launched our first "Experience Center" in 2017. These Experience Centers are large format COCOs that house our product and service offerings under a single umbrella, providing customers with an experiential and comprehensive Fabindia retail experience.

We have built our digital presence to deliver an efficient and seamless customer experience. We sell our products through our websites, www.fabindia.com. www.organicindia.com. our mobile application, "Fabindia" and third party marketplaces. We have invested in strengthening our own online sales and customer experience by adding a separate and dedicated experience team. A majority of our online sales are through our own online channels (i.e., our own websites and app), which allows us to exercise greater control over the overall customer experience. Our Companys revenues through online sales (i.e., our own website, app and third party websites) amounted to Rs.931.74 million (on a standalone basis) during Fiscal 2021 which represented 16.00% of our total revenue from sales compared to Rs.458.16 million during Fiscal 2019 which represented 4.09% of our total revenue from sales during the same year, representing a CAGR of 42.61%. Revenues from online sales amounted to Rs.611.59 million (on a standalone basis) during the six months ended September 30, 2021, representing 17.75% of our total revenue from sales during the same period.

Our Founder and Team

William Nanda Bissell, our Executive Vice Chairman, joined our Companys Board in 1994. During his tenure with our Company, we have expanded our retail presence to 309 retail stores as of September 30, 2021 and have built a professional team to support our growth.

William is complemented by an experienced professional management team, including Viney Singh (our Managing Director), Subrata Dutta (Group Managing Director for Organic India), Mukesh Kumar Chauhan (Executive Director) and Gopal Mishra (Chief Financial Officer and Chief Operating Officer) who have several decades of experience across various industries and have been instrumental in the growth of our business.

As of September 30, 2021, our Company had 2,394 permanent employees, of which 28.15% were women. We endeavor to emphasize teamwork and collaboration across functions to ensure that our employees are able to suggest and implement ideas regardless of their role. We endeavor to motivate our employees with incentives and the ESPS 2021, enabling a strong alignment of their interests with our performance. As of September 30, 2021, 15% of our Companys outstanding issued share capital is held by employees.

Key Operating and Financial Metrics of our Company and Organic India

Metric	Unit	As at Fiscal Year			As at September 30,
		2019	2020	2021	2021
Number of stores / touchpoints
Fabindia stores (COCOs and FOFOs)	#	288	301	277	281
Experience Centers	#	10	27	29	28
Organic India stores	#	39	65	74	74

Fabindia*

Metric	Unit	During the Fiscal Year ended March 31,			During the six months ended September 30, 2021
		2019	2020	2021
Revenue from Sales	Rs. million	11,208.56	11,359.36	5,824.73	3,444.88
Total Revenue from operations	Rs. million	11,335.42	11,615.66	6,591.24	3,678.23
Gross Profit (Revenue from sales - COGS)	Rs. million	6,569.37	6,490.38	3,127.66	2,018.62
Gross Profit Margin	%	58.61%	57.14%	53.70%	58.60%
EBITDA	Rs. million	3,163.13	2,574.51	696.23	481.77
EBITDA Margin	%	27.90%	22.16%	10.56%	13.10%
Restated Profit / (Loss)	Rs. million	993.77	546.45	(1,114.89)	(494.96)
Restated Profit / (Loss) Margin	%	8.77%	4.7%	(16.91)%	(13.46%)
Net Debt	Rs. million	6,372.23	8,471.21	7,837.14	12,942.99
Net Worth	Rs. million	6,190.82	6,310.70	5,368.94	4,905.95
Adjusted Return on Capital Employed#	%	43.42%	26.46%	(11.42)%	(5.24)%
Adjusted Return on Equity##	%	17.18%	8.74%	(19.09)%	(9.63)%

*Data is on a standalone basis

# Adjusted Return on Capital Employed means EBIT/CE; CE means the aggregate of total assets (including ROU assets) less revaluation on fixed assets, total investments, total Current Liabilities, other non-current liabilities, Non Current financial Liabilities and Non Current provisions and lease liabilities. EBIT is profit before tax with the addition offinance cost (including lease interest) less income from investments and (gain)/loss from increase in fair value of investments. (The above figures are based on average capital employed i.e. (Opening CE + Closing CE)/2).

## Adjusted Return on Equity means Total Comprehensive Income/Net Worth; Total Comprehensive Income means Total Comprehensive Income/(Loss) for the period as appearing in the statement of Profit & Loss of the company. Net worth means the aggregate value of the paid-up share capital, all reserves created out of the profits and securities premium account and debit or credit balance of profit and loss account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, capital reserve, write-back of depreciation and amalgamation as on September 30, 2021 and 2020 and March 31, 2021, 2020 and 2019. (The above figures are based on average equity employed i.e. (Opening Equity + Closing Equity)/2).

Note: Our financial performance in Fiscal Year 2020 and Fiscal Year 2021 was impacted due to COVID-19. Additionally, Fiscal Year 2021 EBITDA and PAT impacted due to a one-off ageing inventory provision of Rs. 308.80 million.

Organic India *

Metric	Unit	During the Fiscal Year ended March 31,			During the six months ended September 30, 2021
		2019	2020	2021
Revenue from Sales	Rs. million	3,328.15	3,426.39	3,868.92	1,814.24
Total Revenue from operations	Rs. million	3,361.67	3,448.48	3,947.73	1,832.68
Gross Profit (Revenue from sales - cost of goods sold)	Rs. million	2,486.03	2,471.90	2,665.70	1,206.67
Gross Profit Margin	%	74.70	72.14	68.90	66.51
EBITDA	Rs. million	550.11	392.42	402.52	96.77
EBITDA Margin	%	16.36	11.38	10.20	5.28
Restated Profit / (Loss)	Rs. million	192.45	34.61	60.2	(26.32)
Restated Profit / (Loss) Margin	%	5.72	1.00	1.52	(1.44)
Net Debt	Rs. million	2,011.43	2,235.93	1,884.7	1,957.43
Net Worth	Rs. million	2,348.62	2,304.48	2,463.19	2,451.50
Return on Capital Employed#	%	14.86%	6.17%	6.16%	(0.24)%
Return on Equity##	%	9.17%	1.50%	2.55%	(1.08)%

*Data is on a standalone basis

Note: Our financial performance in Fiscal Year 2020 and Fiscal Year 2021 was impacted due to COVID-19.

# Return on Capital Employed is CE means the aggregate of total assets (including ROU assets) less revaluation on fixed assets, total investments, total Current Liabilities, other non-current liabilities including lease liabilities. EBIT is profit before tax with the addition of finance cost (including lease interest) less income from investments and (gain)/loss from increase in fair value of investments.

## Return on Equity means Total Comprehensive Income/Net Worth; Total Comprehensive Income means Total Comprehensive Income/(Loss) for the period as appearing in the statement of Profit & Loss of the company. Net worth means the aggregate value of the paid-up share capital, all reserves created out of the profits and securities premium account and debit or credit balance of profit and loss account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, capital reserve, write-back of depreciation and amalgamation as on September 30, 2021 and 2020 and March 31, 2021, 2020 and 2019

Resilience through COVID-19

Our revenue from operations declined from Rs.15,080.47 million in Fiscal 2020 to Rs.10,596.43 million in Fiscal 2021, due to disruptions caused by COVID-19 at our retail stores and FabCafes, which included a decline in footfalls and sales along with temporary or permanent closures of certain retail stores and FabCafes. Pursuant to the notification issued by the Government of India, establishments in India, including our retail stores and FabCafes were temporarily shut down during the 21-day nationwide lockdown with effect from March 24, 2020. To deal with such unprecedented circumstances, we conceptualized several projects managed by our cross functional teams. We set up a structured, rigorous project management schedule to monitor our performance and to ensure execution as per plan. Some of the key projects were:

- Leveraging e-commerce channel: We revamped our online business with respect to organization structure, technology, contract manufacturing and provisioning chain, marketing and other related functions. We set up infrastructure and tools to allow interaction with customers online, home delivery, digital or cash-on- delivery payment.

- Staff and customer safety: We prepared COVID-19 compliant protocols at stores and offices to ensure safety of staff and to give confidence to customers that Fabindia stores are a safe place to shop. Keeping our customer-centric approach and employee safety in mind, we devised a new White Gloves service. Through this service, customers could contact us through a dedicated toll-free service and using customized digital catalogues. In addition, the cost of two doses of vaccine for all our employees has been paid / reimbursed by our Company. We aim to have all of our employees fully vaccinated by January 31, 2022 based on current scheduled dates.

- Securing contract manufacturing and provision chains: We focused on securing relationships with third parties such as Contract Manufacturers that provide us with Fabindia branded products. Amongst others, our aims were to minimize deferments and release payments to our providers, as early as possible. We also provided masks, personal protective equipment kits for front line workers using special variants of cloth provided by our Contract Manufacturers. Not only did it help us secure the working conditions for our frontline workers, this also helped our contract manufacturers gain some business to sustain themselves.

- Cost optimization: We actively negotiated rental waivers and reduced administration costs.

We began reopening our stores through a phased approach commencing June 2020 and completed the reopening process over the course of several months, by August 2020. In December 2021, with the onset of the "Omicron" variant of COVID-19 in India, state governments implemented various safety measures including weekend curfews, closures of malls and shopping centres and reduced operating hours of stores, which has impacted the performance of our retail stores.

For further details on the impact of COVID-19 on our results of operations, see "Managements Discussion and Analysis of Financial Condition and Result of Operations - Significant Factors Affecting our Financial Condition and Results of Operations- Impact of COVID-19" on page 368.

Significant Factors Affecting our Financial Condition and Results of Operations Impact of COVID-19

The COVID-19 pandemic and the measures imposed to contain this pandemic have disrupted and are expected to continue to impact our business.

The World Health Organization declared the outbreak of COVID-19 as a public health emergency of international concern on January 30, 2020, and a pandemic on March 11, 2020. The Government of India had announced a nationwide lockdown on March 24, 2020. We faced significant disruptions at our retail stores and FabCafes resulting in temporary and permanent closures of certain retail stores and FabCafes, including due to decline in footfalls and sales, closure of malls where our stores are located, and reduced operating hours as mandated by regulatory bodies. Pursuant to the notification issued by Government of India, establishments in India, including our retail stores and FabCafes were temporarily shut down during the 21-day nationwide lockdown with effect from March 24, 2020.

Further, our operating expenses did not decrease at the same rate as revenues, resulting in an adverse impact on our sales, profitability and growth rates. Many of our expenses are less variable in nature and may not correlate to changes in revenues, such as rent expenses, depreciation, employee benefit expenses and other costs associated with operating and maintaining our stores and FabCafes. Rental expenses and leave and license fees account for a significant portion of our cash outflows, as a result, we entered into renegotiations under various rental arrangements with mall developers, landlords and lessors during the onset of the COVID-19 pandemic in India. While we have re-negotiated certain of our rental arrangements including by receiving certain waivers, there can be no assurance that they would agree to any complete or partial waiver or reduction of rent expenses for the remaining term of the relevant lease. There can also be no assurance that we will be able to obtain such waivers or successfully further renegotiate these arrangements in the future. A continued decline or fluctuation in footfalls, particularly as a result of the any subsequent waves in India, may also affect our ability to manage our expenses, particularly rental expenses and employee benefit expenses.

Due to the impact of the COVID-19 pandemic, our revenue from operations declined by 29.73% from Rs.15,080.47 million in Fiscal 2020 to Rs.10,596.43 million in Fiscal 2021. We opened 10 new retail stores (including FOFOs) and closed 32 stores (including FOFOs) in Fiscal 2021 due to decline in footfalls on account of COVID-19 and business usual store relocation strategy. Store sales in particular were adversely affected due to lockdowns, restrictions in timings on account of curfews which were implemented across various states in India and, limitations placed on the number of persons allowed to enter shopping malls further to government directives and a general concern among customers fearing exposure. During this time, to offer customers the ability to undertake contactless, digital transactions, we focused on building our e-business by investing in frontend and backend upgrade to enhance the customer experience. Revenues from online (from third party websites and our own website and through app sales grew by 37.72% between Fiscal 2020 and Fiscal 2021.

In December 2021, with the onset of the "Omicron" variant of COVID-19 in India, state governments have implemented a variety of safety measures including weekend curfews, closures of malls and shopping centres and reduced operating hours of stores. As a result, we have witnessed a decline in footfall at our retail stores, and consequently expect a decrease in sales in the fourth quarter of Fiscal 2022. It is also possible that we may experience disruptions to our obtainment process. Any increase in infection rates due to the Omicron variant and the consequent restrictions imposed by state governments, may result in our revenue from operations being adversely impacted. The magnitude of the impact of the COVID-19 pandemic on our productivity, results of operations and financial position, and its disruption to our business and our capital expenditure plans, will depend, in part, on the length and severity of these restrictions and on our ability to conduct business in the ordinary course. We will continue to assess the potential impact of the COVID-19 pandemic on our business, financial condition, and results of operations.

Economic environment and consumer purchasing patterns

Our revenue and growth are influenced by the general economic environment and consumer purchase patterns in India and abroad. We are impacted by economic growth in India and abroad, rising levels of disposable income and consumer sentiment, which, in turn, drives consumer spending and demand for our products.

The World Economic Forum projects India to emerge as the third largest consumer market (after the USA and China) by Fiscal 2030, fueled by strong underlying fundamentals. This is expected to be driven by a large base of young population, urbanization, employment opportunities and increasing female participation in the workforce. The ethnic apparel market is expected to grow to Rs.1,879 billion by Fiscal 2026 in India, and the large number of festivals, weddings and celebrations provide a strong base for ethnic apparel demand. The residential furniture market was Rs.1,278 billion in Fiscal 2020, having grown at a CAGR of 12% over Fiscal 2015 to Fiscal 2020 and is expected to grow to Rs.2,037 billion by Fiscal 2026. The Indian organic food market is expected to reach Rs.38.7 billion by Fiscal 2026. Consumer approaches towards managing health have been centred around active lifestyle and balanced diets. The COVID-19 pandemic has brought an increased focus to risks posed by hygiene and immunity related concerns. 94% of surveyed consumers (as part of EY Future Consumer Index Survey, 2021) in India were concerned about family health, 80% saw health as an important buying factor, 32% were willing to pay a premium for healthy products. In addition, consumers are increasingly becoming conscious towards products that drive sustainability and address environmental and social inclusiveness. (EY Report) We expect this customer sentiment to drive our revenues and result of operations.

Our products, including in particular, our apparel and food products are consumer discretionary products and are subject to changing consumer preferences. Our results of operations and profitability are therefore dependent on our ability to anticipate, gauge and respond to changes in customer preferences.

Cost of materials consumed and cost of contract manufactured goods

We have established long-standing relationships with our Supplier Community, including our Contract Manufacturers (and the artisans engaged by them) and farmers. We obtain products through our Contract Manufacturers, (and the artisans engaged by them) and farmers located across India. We typically entered into long term contract manufacturing agreements with such Contract Manufacturers.

We do not have any formal arrangements or contracts with the farmers we directly engage with. Our cost of materials consumed and cost of contract manufactured goods are impacted by the amount of raw materials/contract manufactured goods procured and the price at which we procure such materials, which may fluctuate from time to time. Our cost of materials consumed amounted to Rs.2,917.45 million, Rs.3,159.89 million, Rs.1,821.72 million and Rs.1,550.15 million in Fiscals 2019, 2020, 2021 and the six months ended September 30, 2021, respectively and the cost of contract manufactured goods amounted to Rs.2,935.49 million, Rs.2,987.15 million, Rs.1,352.63 million and Rs.1,586.91 million in Fiscals 2019, 2020, 2021 and the six months ended September 30, 2021.

The availability and price of our raw materials and contract manufactured goods may be subject to a number of factors beyond our control, including economic factors, seasonal factors, environmental factors and changes in Government policies and regulations.

Personnel costs

A principal component of our ability to compete effectively is our ability to attract and retain qualified employees. Employee benefit expenses constitute a significant portion of our operating expenses. Our employee benefit expenses amounted to Rs.2,119.74 million, Rs.2,330.87 million and Rs.1,963.15 million, Rs.1,129.34 million, for Fiscals 2019, 2020, 2021 and for the six months ended September 30 2021, respectively, accounting for 15.95%, 15.70%, 15.90%, and 17.68%, respectively, of our total expenses in the same periods. While the number of full-time employees decreased from 2,657 as of March 31, 2019 to 2,394 as of September 30, 2021 due to the effects of COVID-19, we expect our employee benefit expenses to increase in the future as retaining the services of our employees and investing in upskilling our employees, is a high priority and competition to retain skilled employees will likely result in increased personnel expenses. Employee benefit expenses primarily includes salaries, wages and bonus, staff welfare expenses, contribution provident and other funds, employee stock option compensation expense and gratuity expense. These costs are subject to certain factors that are out of our control, including amendments to the minimum wage laws and other employee benefit laws in India. Rising wages in India may have a material impact on our net revenues. If we are unable to efficiently manage our personnel costs, it could have a significant impact on our results of operations and financial condition.

Growth of distribution channels

Our revenues are impacted by the scale and growth of retail network through which we sell our Fabindia products, namely ECs, Flagship Stores, COCOs and FOFOs as well as through online retailers and our website and mobile app.

As of March 31, 2018, we sold our Fabindia products through 213 COCOs, 57 FOFOs and two ECs and have grown our presence, such that as of September 30, 2021, we sold our products through 185 COCOs, 28 ECs and 96 FOFOs located in 29 states and union territories in India. Revenues from our Fabindia retail stores amounted to Rs.4,680.12 million for Fiscal 2021 and Rs.2,728.69 million in the six months ended September 30, 2021.

As of March 31, 2018, we sold our Organic India products through two Wellness Stores and 23 exclusive Organic India stores and have grown our presence, such that as of September 30, 2021, we sold our products through 36 wellness stores, 32 exclusive Wellness Stores and six franchisee stores. Revenues from our Organic India retail stores amounted to Rs.146.91 million for Fiscal 2021 and the Rs.59.86 million for the six months ended September 30, 2021.

Correspondingly, we incur expenses in order to maintain and expand our presence across these retail channels. We incur rent charges primarily towards payment of rent for our leased COCOs and ECs, warehouse and offices. Expenses incurred in relation to our retail channels (comprising rent expenses, security, housekeeping and manpower) accounted for Rs.2,034.54 million, Rs.2,352.34 million, Rs.1,594.50 million, and Rs.1,417.28 million, representing 20.72% and 23.61%, 35.02%, and 54.80% respectively, of our revenue from operations, for Fiscals 2019, 2020, 2021 and the six months ended September 30, 2021. For further details of the different store formats, see "Our Business - Retail Stores on page 194.

Critical Accounting Policies

Basis of Consolidation

The Restated Financial Statements comprise the financial statements of our Company and Subsidiaries (collectively, the "Group") as listed below:

Name of entity	Country*	Ownership in % (either directly or through subsidiaries)
		As of September 30, 2021	As of March 31, 2021	As of March 31, 2020	As of March 31, 2019
Fabindia International Pte. Ltd. ( FIPL)	Singapore	100.00	100.00	100.00	100.00
Indigo Origins Pte. Limited (subsidiary through FIPL)	Singapore	100.00	100.00	100.00	100.00
East Limited (subsidiary through FIPL) (Dissolved on December 3, 2019)	United Kingdom	-	-	-	100.00
Organic India Private Limited (OIPL)	India	63.79	51.39	53.00	53.00
Fabcafe Foods Private Limited (with effect from October 20, 2017)	India	68.46	68.46	69.14	70.00
Biome Life Sciences India Private Limited (with effect from August 01,2020)	India	50.01	50.01	-	-
Organic India USA, LLC (subsidiary through OIPL i.e., 63.79%, 51.39%, 53.00%, 53.00% of 100.00% as at September 30, 2021, March 31, 2021, 2020 and 2019 respectively)	United States of America	63.79	51.39	53.00	53.00
Composite Interceptive Med-Science Laboratories Private Limited (subsidiary through OIPL i.e., 53.00% of 80.00% as at March 31,2020 and 2019) *	India	Nil	Nil	42.40%	42.40%
The Clean Program Corp. (with effect from April 25, 2018) (subsidiary through OIPL i.e., 63.79%, 51.39%, 53.00%, 53.00% of 50.01% September 30, 2021, March 31, 2021, 2020 and 2019 respectively)	United States of America	31.90	25.70	26.51	26.51
Godwar Farmers Collective Private Limited (subsidiary up to August 31, 2019 through OIPL i.e. 53.00% of 84.21%)	India				44.63%

*Considered as a Discontinued operation as per Ind AS-105 as the said investment has been held for sale in pursuance of the agreement entered by OIPL on March 12, 2020for sale of the entire shareholding held in the subsidiary and the said sale has been executed on April 04, 2020.

And the following associates

Name of entity	Country*	Ownership in % (either directly or through subsidiaries)
		As of September 30, 2021	As of March 31, 2021	As of March 31, 2020	As of March 31, 2019
FABINDIA S.r.l. (associate through FIPL)	Italy	45.00	45.00	45.00	45.00
Weavers India General Trading, LLC (associate through FIPL)	Dubai (UAE)	49.00	49.00	49.00	49.00
Rangsutra Crafts India Limited	India	31.77	31.77	32.30	32.30
Orissa Artisans and Weavers Limited	India	33.55	33.55	33.55	33.55
East Lifestyle Limited (associate through FIPL i.e., 100% of 20%)	United Kingdom	20.00	20.00	20.00	20.00
Nutriwel Health (India) Private Limited (with effect from March 6, 2019) (associate through OIPL i.e., 63.79%, 51.39%, 53.00%, 53.00% of 11.00% September 30, 2021, March 31,2021, 2020 and 2019 respectively) *	India	7.02	5.65	5.83	5.83

*Deemed Associate by way of exercising of significant influence through representation of one third of voting power on the board ofNutriwel Health (India) Private Limited.

Control is achieved when the Company is exposed to or has rights to the variable returns of the entity and the ability to affect those returns through its power over the entity.

The results of subsidiaries and associates acquired or disposed off during the period/years are included in the Restated Consolidated Financial Statements of profit and loss from the effective date of acquisition or up to the effective date of disposal, as appropriate. Wherever necessary, adjustments are made to the financial statements of subsidiaries and associates to bring their accounting policies in line with those used by other members of the Group.

For further details see "Restated Consolidated Financial Statements" on page 257

Summary of Significant Accounting Policies

Set out below is a summary of the significant accounting policies applied by the Company. For further details, see

"Restated Consolidated Financial Statements - Significant Accounting Policies" on page 277.

Significant accounting estimations, judgements, and assumptions

The preparation of Restated Consolidated Financial Statements in conformity with Ind AS requires Management to make judgements, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Although these estimates are based upon managements best knowledge of current events and actions, actual results coulddiffer from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods.

Estimation of uncertainties relating to the global health pandemic from COVID-19:

The World Health Organization announced a global health emergency because of a new strain of coronavirus ("COVID-19") and classified its outbreak as a pandemic on March 11, 2020. In response, the Indian government have taken various actions and ensured many precautionary measures which posed significant disruption to business operations and adversely impacting most of the industries which has resulted in global slowdown.

On March 24, 2020, the Indian government announced a strict 21-day lockdown across the country to contain the spread of the virus. This pandemic and response thereon have impacted most of the industries. Consequent to the nationwide lock down on March 24, 2020, our operations were scaled down in compliance with applicable regulatory orders. Subsequently, during the period, our operations have been scaled up in a phased manner taking into account directives from various Government authorities. The impact on future operations would, to a large extent, depend on how the pandemic further develops and its resultant impact on our operations. The advent of second wave of COVID- 19 in April 2021- May 2021 resulted in further lockdowns. We continue to monitor the situation and will take appropriate action as considered necessary in due compliance with the applicable regulations as the situation normalizes.

Current vs non-current classification

We present assets and liabilities in the balance sheet based on current/ non-current classification.

An asset is treated as current when it is:

• Expected to be realized or intended to be sold or consumed in normal operating cycle

• Held primarily for the purpose of trading,

• Expected to be realized within twelve months after the reporting period,

• Cash or cash equivalent unless restricted from being exchanged or used to settle aliability for at least twelve months after the reporting period.

All other assets are classified as non-current. A liability is current when:

• It is expected to be settled in normal operating cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at leasttwelve months after the reporting period

The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

We classify all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. We have identified twelve months as our operating cycle.

Business combinations

Acquisition of subsidiaries and businesses are accounted for using the purchase method. The consideration transferred in each business combination is measured at the aggregate of the acquisition date fair values of assets given, liabilities incurred by us to the former owners of the acquiree, and equity interests issued by us in exchange for control of the acquiree.

Acquisition related costs are recognized in the restated consolidated statement of profit and loss.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed.

Property, plant and equipment

(i) Property, plant and equipment are stated at cost less accumulated depreciation and impairment, if any. Cost comprises of all cost of purchase, construction and expenditure that is directly attributable to bringing the asset to the location and condition necessary for its intended use. Subsequent expenditures relating to property, plant and equipment are capitalized only when it is probable that future economic benefits associated with these will flow to us and the cost of the item can be measured reliably. The cost and related accumulated depreciation are eliminated from the restated consolidated financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss. Repairs and maintenance costs are recognized in the Statement of Profit and Loss when incurred.

(ii) We have adopted component accounting, wherever applicable, and identifies and determines cost of each component/ part of the asset separately, if the component/ part has a cost which is significant to the total cost of the asset having useful life that is materially different from that of the remaining asset. These components are depreciated over their useful lives; the remaining asset is depreciated over the life of the principal asset.

(iii) Depreciation is recognized on a straight-line basis except in case of buildings where writtendown value method is used, over the useful life as specified under Schedule II of the Act, and given below:

Particulars	Useful life
Building	60 Years
Building non-RCC structure	30 Years
Leasehold Premises / Right of Use Assets	Over the period of lease
Furniture and fixtures	10 Years
Plant and equipment	3 Years to 15 Years
Office equipments	5 Years
Electrical installation and equipments (including Air conditioner and cooling equipments)	10 Years
Vehicle	8 Years
Computers	3 Years
Servers	6 Years

Double shift depreciation is provided for the eligible assets as per Schedule II of the Act asthe factory is being operated on double shift basis.

(iv) The residual value of all depreciable assets, except in case of building, being negligible, is estimated at Nil. The residual value of building is considered at 5% of cost.

(v) The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period and the effect of any changes in estimate is accounted for prospectively.

(vi) Cost of property, plant and equipment not ready for intended use on the date of balance sheet are disclosed as "capital work-in-progress".

(vii) Leasehold land includes land acquired under finance lease from Delhi Development Authority on July 07, 1992 for a period of 99 years and land acquired under finance lease from Uttar Pradesh State Industrial Development Corporation for a period of 90 years which have been reclassified as right-of-use assets as per Ind AS 116 "Leases". The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period and the effect of any changes in estimate is accounted for prospectively.

(viii) The present value of the expected cost for the de-commissioning of an asset after its use isincluded in the cost of the respective asset if the recognition criteria for a provision are met. Refer to significant accounting judgements, estimates and assumptions and provisions for further information about the recorded asset retirement obligation.

Intangible assets

(i) Intangible assets are recognized if it is probable that the future economic benefits attributable to the assets will flow to the enterprise and cost of the asset can be measuredreliably in accordance with the notified Ind AS- 38 on "Intangible Assets".

(ii) Intangible assets acquired separately are measured on initial recognition at cost. Followinginitial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses (if any).

(iii) Intangible assets with finite lives are amortized over the useful economic life on a straight-line basis, from the date that they are available for use and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Amortization methods and useful lives are reviewed at the end of each reporting period and the effect of any changes in estimate is accounted for prospectively.

(iv) Amortization is calculated using straight line method to allocate cost over the useful economic life of the assets mentioned below:

Particulars	Useful life
Computer software	5 years
Trademarks (except for Patents which has been taken as infinite)	10 years (i.e. from the date of application for registration of brand name as specified on the registration certificate)
Brand Value, Formulas and Other Intangible Rights / Information	30 Years (i.e. from the date of acquisition)

Impairment of non-financial assets- property, plant and equipment and intangible assets

We assess at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, we estimate the assets recoverable amount. An assets recoverable amount is the higherof an asset or cash-generating units (CGU) fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is consideredimpaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

We base our impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of our CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash flow projections beyond periods covered by the most recent budgets/ forecasts, we extrapolate cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the products, industries, or country or countries in which we operate, or for the market in which the asset is used.

Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(i) Financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit orloss.

In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI) on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that arenot SPPI are classified and measured at fair value through profit or loss, irrespective of thebusiness model.

Our business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, orboth. Financial assets classified and measured at amortized cost are held within a businessmodel with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling of financial assets.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) is recognized on the trade date, i.e., the date that we commit to purchase or sell theasset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in two categories:

• Financial assets at amortized cost (debt instruments)

• Financial assets at fair value through profit or loss

Financial assets at amortized cost (debt instruments)

A ‘financial asset is measured at the amortized cost if both the following conditions aremet:

• The asset is held within a business model whose objective is to hold assets forcollecting contractual cash flows, and

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the statement of profitand loss. The losses arising from impairment are recognized in the statement of profit and loss. Our financial assets at amortized cost includes trade receivables, and loan toan associate and loan to a director included under other non-current financial assets.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are carried in the balance sheet at fair value with net changes in fair value recognized in the statement of profit and loss.

Derecognition

A financial asset is primarily derecognized when:

• The rights to receive cash flows from the asset have expired, or ^•

• We have transferred our rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through arrangement; and either (a) We have transferred substantially all the risks and rewards of the asset, or (b) We have neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When we have transferred its rights to receive cash flows from an asset or has enteredinto a pass-through arrangement, we evaluate if and to what extent we have retained the risks and rewards of ownership. When we have neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, we continuesto recognize the transferred asset to the extent of our continuing involvement. In that case, we also recognize an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that we have retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that we could be required to repay.

Investment in subsidiaries and associates

We have elected to account for its equity investments in subsidiaries and associates under Ind AS 27 on "Separate Financial Statements", at cost. At the end of each reporting period we assess whether there are indicators of diminution in the value of its investments and provides for impairment loss, where necessary.

Other investments

All other investments are measured at fair value, with value changes recognized inStatement of Profit and Loss, except for those equity investments for which we have elected to present the value changes in ‘Other Comprehensive Income.

Impairment of financial assets

We recognize an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that we expect to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables and contract assets, we apply a simplified approach in calculating ECLs. Therefore, we do not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. We have established a provision that is based on its historical credit loss experience, adjusted for forwardlooking factors specific to the debtors and the economic environment.

(ii) Financial liabilities

Initial recognition and measurement

All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognized in the Statement of Profitand Loss as finance cost.

Subsequent measurement

For purposes of subsequent measurement, financial liabilities are classified in twocategories:

• Financial liabilities at fair value through profit or loss

• Financial liabilities at amortized cost (loans and borrowings)

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by us that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109 "Financial Instruments". Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Financial liabilities at amortized cost (loans and borrowings)

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in statement of profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisitionand fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.

This category generally applies to borrowings. For more information refer note no. 18.

Financial guarantee contracts

Financial guarantee contracts issued by us are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtorfails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 "Financial Instruments" and the amount recognized less, when appropriate, the cumulative amount of income recognized inaccordance with the principles of Ind AS 115 "Revenue from Contracts with Customers".

(iii) Treasury shares

The Holding Company and Organic India Private Limited (OIPL), its Indian Subsidiary company, have created FOPL Employees Benefit Trust and Organic India Employees WelfareTrust, respectively, for the administration of providing share-based payment to the eligibleemployees, and thus the Trust(s) have been treated as their extension(branch) and accordingly, all the assets and liabilities of the Trust(s) are accounted as assets and liability of the Holding Company and OIPL after eliminating the treasury shares of the Holding Company and OIPL held by the Trust(s), respectively, on the basis that the Trust(s) are merely acting as an agent of the Holding Company and OIPL.

Own equity instruments that are re-acquired (treasury shares) are recognized at cost and deducted from equity. No gain or loss is recognized in Statement of Profit and Loss on the purchase, sale, issue or cancellation of the Holding Companys and OIPLs own equity instruments. Any difference between the carrying amount and the consideration, if re- issued, is recognized in general reserve. Share options exercised during the period/years are satisfied with treasury shares.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition ofthe original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss.

Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carryingamounts approximate fair value due to the short maturity of these instruments.

(iv) Offsetting of financial instruments

Financial assets and liabilities are offset, and the net amount is reported in the balance sheet where there is legally enforceable right to offset the recognized amounts and there isan intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvencyor bankruptcy of our or the counterparty.

Inventories

Inventories (including stock-in-transit) are stated at lower of cost or net realizable value. Cost is determined on ‘Weighted Average basis. Due to a large number and diverse nature of inventoryitems, cost is estimated as near as possible for each stock keeping unit including freight and applicable taxes, etc.

Net realizable value represents the estimated selling price less all estimated costs necessary tomake the sale.

No valuation is done for damaged stock since its realizable value, if any, is negligible.

An inventory provision is recognized for cases where the realizable value is estimated to be lowerthan the inventory carrying value. The inventory provision is estimated taking into account various factors, including prevailing sales prices of inventory item, the seasonality of the itemssales profile and losses associated with obsolete/ slow-moving inventory items.

In the Restated Consolidated Financial Statements unrealized profit on unsold stock at the period/year-end lying with the subsidiaries and associates have been adjusted.

Foreign currency transactions

The functional currency of the Holding Company is the Indian Rupee. These Restated Consolidated Financial Statements are presented in Indian Rupee.

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.

Foreign currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the Balance Sheet date. The gains and losses resulting from such translations are included in net profit in the Statement of Profit and Loss.

Non-monetary assets and non-monetary liabilities denominated in a foreign currency andmeasured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of the transaction. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change infair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in Other Comprehensive Income or Statement of Profit or Loss are also recognized inOther Comprehensive Income or Statement of Profit or Loss, respectively).

Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.

Revenue recognition

Effective April 1, 2018, we had adopted Ind AS 115: Revenue from Contracts with Customers using the cumulative catch-up transition method, applied to contracts that were not completed as on the transition date i.e. April 1, 2018. Accordingly, the comparative amounts ofrevenue and the corresponding contract assets / liabilities had not been retrospectively adjusted.

Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government such as Goods and Services Tax, etc. Revenue is recognized on satisfaction of performance obligation upon transfer of control of promised goods or services to customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services.

(i) Sales of goods: Revenue from sale of goods is recognized at the point in time when control of the goods istransferred to the customer, generally on delivery of the goods. We consider whether there are other promises in the contract in which there are separate performance obligations, to which a portion of the transaction price needs to be allocated (e.g., warranties, customer loyalty points). In determining the transaction price for the sale of goods, we consider the effects of variable consideration, the existence of significant financing components, non-cash consideration, and consideration payable to the customer (if any).

(ii) Loyalty points programme: The Holding Company has a loyalty points programme, "Fabfamily", which allows customers to accumulate points that can be redeemed for future purchase, or any other experience as specified under the loyalty points programme policy. The loyalty points will have a validity of 36 months from the time of earning. The loyalty points give rise to a separate performance obligation as they provide a material right to the customer. A portion of the transaction price is allocated to the loyalty points awarded to customers based on relative stand-alone selling price and recognized as a contract liability until the points are redeemed.

Presently, in the absence of historical trend/ experience of 36 months, the Holding Company on conservative basis provides for 100% in respect of the accumulated loyalty points as on September 30, 2021, March 31, 2021, March 31, 2020 and March 31, 2019. In future, post 36 months experience the provisioning to be considered would be based on the actual trend and industry standards.

(iii) Leases in which we do not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arisingis accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.

(iv) Insurance claims/ government claims, as disclosed under miscellaneous income, are accounted for as and when processed and accepted by the insurance companies/ government authorities.

(v) Dividend income from investments is recognized when our right to receive payment is established.

(vi) Interest income is accounted for by using effective interest rate (EIR) method. EIR is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial assets. When calculating the EIR, we estimate the expected cash flow by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.

(vii) Right of return asset represents our right to recover the goods expected to be returned by customers. The asset is measured at the former carrying amount of the inventory and a corresponding adjustment is made in cost of sales. We update the measurement of the asset recorded for any revisions to our expected level of returns, as well as any additional decreases in the value of the returned products.

(viii) A refund liability is the obligation to refund some or all of the consideration received (or receivable) from the customer and is measured at the amount we ultimately expect we will have to return to the customer. We update our estimates of refund liabilitiesat the end of each reporting period.

Employee benefits

(i) Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized as an expense during the period when the employees render the services.

(ii) Post-employment benefits Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which the Holding Company and its Indian Subsidiary Companies pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts.

The Holding Company and its Indian Subsidiary Companies makes specified monthly contribution towards provident fund. The contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

Defined benefit plan

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.

All employees are covered under employees Gratuity Scheme which is a defined benefit plan. The Holding Company and its Indian Subsidiary Company contributes to an approved Employees Gratuity Fund maintained on behalf of the Holding Company and its Indian Subsidiary Company which is subsequently paid by the fund to the Future Generali India Life Insurance Company Limited and Life Insurance Corporation (LIC) respectively as per actuarial valuation. The shortfall in payment, if any, from actuarial valuation is provided for in the accounts.

The liability in respect of gratuity is calculated using the projected unit credit method and spread over the period during which the benefit is expected to be derived from employees services. The fair value of any plan assets is deducted from the present value of the defined benefit obligation to determine the amount of deficit or surplus. The net defined benefit liability/(asset) is determined as the amount of the deficit or surplus, adjusted for any effect of limiting a net defined benefit asset to the asset ceiling. The net defined benefit liability/(asset) is recognized in the balance sheet.

Defined benefit costs are recognized as follows:

a) Service cost in the Statement of Profit and Loss

b) Net interest on the net defined benefit liability/ (asset) in the Statement of Profit and Loss

c) Remeasurement of the net defined benefit liability/ (asset) in Other Comprehensive Income Compensated leave of absence

Accrual for leave encashment benefit is based on actuarial valuation as on the date of balance sheet in pursuance of the Holding Company and its Indian Subsidiary Companys leave rules. The Holding Company contributes to the Future Generali India Life Insurance Company Limited as per actuarial valuation. The shortfall in payment, if any, from actuarial valuation is provided for in the accounts.

Share-based payments

i. Fabindia Overseas Private Limited Employee Stock Option Plan (ESOP) 2016:

Equity-settled share-based payments to eligible employees are measured at the fair value of the equity instruments at the grant date in accordance with Ind AS 102, "Share-Based Payment". The details regarding determination of the fair value of equity-settled share- based payments transactions are set out in note no. 48(b).

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on our estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, we revise our estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in the Statement of Profit and Loss such that the cumulative expenses reflect the revised estimate, with a corresponding adjustment to the stock option outstanding account.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

ii. Fabindia Overseas Private Limited Employee Share Purchase Scheme 2021 (FOPL ESPS):

These are in the nature of employee benefit wherein the select employees shall be allowed to purchase the Companys equity shares at the fair value on the grant cum allotment date on an upfront basis subject to certain performance conditions to be fulfilled by the said employees subsequent to the share(s) purchased. These are recognized at fair value of shares granted and allotted as employee benefit expense over the period of employee serving relevant period. The details regarding determination of the fair value of equity- settled share-based payments transactions are set out in note no. 48(a).

Tax expense

The income tax expense or credit for the period is the tax payable on the current periods taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Tax expense comprises current and deferred tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized in the Other Comprehensive Income or in Equity. In which case, the tax is also recognized in Other Comprehensive Income or Equity.

Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from orpaid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the balance sheet date.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

We determine whether to consider each uncertain tax treatment separately or togetherwith one or more uncertain tax treatments and uses the approach that better predicts the resolution of uncertainty, we have considered, for example;

(a) How it prepares its income tax filings and supports tax treatments; or

(b) How the entity expects the taxation authority to make its examination and resolve issues thatmight arise from that examination.

We determined, based on its tax compliance, that it is probable that its tax treatments will be accepted by the taxation authorities.

Deferred tax

Deferred tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Restated Consolidated Financial Statements except when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. In respect of taxable temporary differences associated with investments in subsidiaries and associates, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Deferred tax assets are recognized for the future tax consequences to the extent it is probable that future taxable profits will be available against which the deductible temporary differences can be utilized.

Earnings per share

Basic earnings per equity share are computed by dividing the net profit or loss attributable to the equity shareholders of the Holding Company by the weighted average number of equity shares outstanding during the period.

Diluted earnings per equity share are computed by dividing the net profit or loss attributable to the equity shareholders of the Holding Company as adjusted by the after tax amount of dividends and interest recognized in the period in respect of dilutive potential equity shares by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

Provisions and contingent liabilities

Provisions

Provisions are recognized when we have a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. These estimates are reviewed at each reporting date and adjusted to reflect thecurrent best estimates. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Sales returns provision

We have developed a statistical model for forecasting sales returns. The model used the historical return data to come up with expected return percentages. These percentages are applied to determine the expected value of the variable consideration. Any significant changes in experience as compared to historical return pattern will impact the expected return percentages estimated by us.

Assets retirement obligation liability (ARO)

We record a provision for assets retirement obligation costs towards store/ shop restoration activity. ARO costs are provided at the present value of future expenditure using a current pre-tax rate expected to be incurred to fulfill ARO and are recognized as part of the costof the underlying assets. Any change in the present value of the expenditure, other than unwinding of discount on the provision, is reflected as adjustment to the provision and the corresponding asset. The change in the provision due to the unwinding of discount is recognizedin the Statement of Profit and Loss.

Gift voucher provision

The liability for gift vouchers represents the value of outstanding gift vouchers not yet redeemed.

Contingent liabilities

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within our control or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation, or a reliable estimate of the amount cannot be made.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, cheques on hand, cash in transit, balance with banks in current accounts, balance in deposit accounts with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown under short-term borrowings in the balance sheet but netted off against cash and cash equivalent in cash flow statement.

Dividend distribution

The final dividend on shares is recorded as a liability on the date of approval by the shareholders, and interim dividends are recorded as a liability on the date of declaration by the Holding Companys Board of Directors.

Government grants

Grants received from Government are recognized when there is a reasonable assurance that the grant will be received upon by us complying with the conditions attached to the grant.

Accordingly, government grants:

(a) related to or used for assets, are deducted from the carrying amount of the asset.

(b) related to incurring specific expenditures are taken to the Statement of Profit and Loss on the same basis and in the same periods as the expenditures incurred.

Leases

Ministry of Corporate Affairs ("MCA") through Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies (Indian Accounting Standards) Second Amendment Rules, has notified Ind AS 116 "Leases" which replaces the existing lease standard, Ind AS 17 "Leases", and other interpretations. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. Ind AS 116 introduces a single lease accounting model for lessee and requires the lessee to recognize right of use assets (ROU assets) and lease liabilities for all leases with a term of more than twelve months, unless the underlying asset is low value in nature.

As a lessee

Effective April 01, 2019, we adopted Ind AS 116 "Leases" and applied the standard to all lease contracts existing on April 01, 2019 using the Modified Retrospective Approach under which the Lease liabilities are recognized based on incremental borrowing rate on the initial application date i.e., April 01, 2019 and same amount is recognized for ROU assets. We have used a single discount rate to a portfolio of leases with similar characteristics. For the purpose of preparing Restated Consolidated Financial Statement, Ind AS 116 has been applied using the modified retrospective method with effect from April 01, 2018.

For transition, we elected not to apply the requirements of Ind AS 116 to leases which are expiring within 12 months from the date of transition by class of asset and leases for which the underlying asset is of low value on a lease-by lease basis. We recognized the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

We have applied the practical expedient by not reassessing whether a contract is, or contains, a lease at the date of initial application. Instead applied the standards only to contracts that were previously identified as leases under Ind AS 17. We determine the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if we are reasonably certain to exercise that option; and periods covered by an option to terminate the lease if we are reasonably certain not to exercise that option. In assessing whether we are reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for us to exercise the option to extend the lease, or not to exercise the option to terminate the lease. We revise the lease term if there is a change in the non-cancellable period of a lease.

The lease liability is initially measured at the present value of the lease payments to be made over the lease term. The lease payments are discounted using the incremental borrowing rate. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest on the lease liability and reduced for the lease payments made and remeasured (with a corresponding adjustment to the related ROU asset) when there is a change in future lease payments in case of renegotiation, changes of an index or rate or in case of reassessment of options.

Variable lease payments that do not depend on an index or rate are not included in the measurement the lease liability and the ROU asset. The related payments are recognized as an expense in the period in which the event or condition that triggers those payments occurs and are included in the line "other expenses" in the statement of profit or loss.

The ROU asset is initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses. The ROU asset is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of the ROU asset. The estimated useful lives of the ROU assets are determined on the same basis as those of property and equipment. In addition, the ROU asset is periodically reduced by impairment losses, if any, and adjusted for certain re- measurements of the lease liability.

As a lessor

Leases for which we are a lessor is classified as finance or operating lease. Leases in which we do not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms.

Effective April 01, 2019, we have adopted Ind AS 116 "Leases" and applied the standard to all sub-lease contracts existing on April 01, 2019 using the Modified Retrospective Approach under which the Lease receivables are recognized based on incremental borrowing rate on the initial application date i.e., April 01, 2019 and ROU assets created on the original lease are derecognized proportionately on the carpet area basis. We have used a single discount rate to a portfolio of leases with similar characteristics. For the purpose of preparing Restated Consolidated Financial Statement, Ind AS 116 has been applied using the modified retrospective method with effect from April 01, 2018.

For transition, we have elected to apply the requirements of Ind AS 116 to sub-leases covering the substantial period of the original lease term and considered as finance lease. We have elected not to apply the requirements of Ind AS 116 to short-term sub-leases of all assets that have a lease term of 12 months or less and sub leases for which the underlying assetis of low value.

As on the date of sub-lease, any difference between the Lease Receivable recognized and ROU assets eliminated shall be charged/ credited to statement of profit and loss respectively. Depreciation charged on the ROU assets created on original lease shall be reduced to the extent of ROU assets eliminated due to sub-lease of the original lease.

The lease receipts are discounted using the incremental borrowing rate. After the commencement date, the amount of lease receivables is increased to reflect the accretion of interest on the lease receivable and reduced for the lease receipts made.

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an or derly transaction between market participants at the measurement date.

The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either -

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by us.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

We use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

Key Components of our Statement of Profit and Loss

The following descriptions set forth information with respect to the key components of our profit and loss statement. Income

Total income consists of revenue from operations and other income.

Revenue from Operations

Revenue from operations primarily comprises revenue from contracts with customers through the sale of products and sale of food and beverages.

Revenue from operations are disaggregated based on product type, comprise sale of bed linen, bath linen, table linen, garments, personal care, floor coverings, curtains, furniture, organic foods, upholstery, herbal infusions, ayurvedic medicines (formulations), psyllium, dehydrated fruits and vegetables, personal care products, food and beverages and miscellaneous.

For the purposes of revenue by product vertical, we have considered details of revenue from operations disaggregate based on product type, as set out below:

(i) Apparel - comprise of revenues from garments

(ii) Home and Lifestyle - comprise of revenue from bed linen, bath linen, table linen, furniture, floor coverings, curtains and upholstery

(iii) Personal Care - comprise of revenues from personal care and body care

(iv) Organic Food-comprise of organic food, herbal infusions, ayurvedic medicines, psyllium, dehydrated fruits and vegetables

(v) Food and Beverages - comprise of revenues from food and beverages

(vi) Others - comprise of revenues from miscellaneous products.

For further details, see "Restated Consolidated Financial Statements - Note 30 - Disaggregation of revenue based on products" on page 319.

Additionally, revenue from operations includes other operating revenue, which primarily includes provisions/liabilities no longer required to be written back, government grants, rental income relating to operations, royalty income and miscellaneous operating income.

Other income

Other income primarily includes interest income on bank deposits, loans, debentures, leased deposits measured at amortized cost, lease receivables and others, gain on right-of-use assets, gain arising on investments measured at FVTPL and other miscellaneous income.

Expenses

Total expenses consist of cost of materials consumed, cost of contract manufactured goods, changes in inventories of finished goods and stock-in-trade, employee benefits expense, finance costs, depreciation and amortization expense, impairment losses and other expenses.

Cost of materials consumed

Cost of materials consumed primarily includes cost of purchase of products such as fabric, garments, personal care products and agricultural produce in relation to the products that we manufacture and job work charges in relation to contract manufacturing of our products.

Cost of contract manufactured goods

Cost of contract manufactured goods primarily consist of purchase of finished goods on contract manufacture basis, including goods such as garments, organic foods, personal care products in relation to our contract manufactured goods.

Changes in inventories of finished goods and stock-in-trade

Changes in inventories of finished goods, work-in-progress, stock-in-trade and stock-in transit reflects the difference between our inventories at the start of the year and the end of the year.

Employee benefits expense

Employee benefits expense primarily consists of salaries, wages and bonuses, contribution to provident and other funds, staff welfare expenses and employee stock option compensation expense.

Finance costs

Finance costs primarily consist of interest expenses on lease liabilities, banking facilities, foreign currency term loans and term loans, among others.

Depreciation and amortization expense

Depreciation and amortization expense primarily relates to depreciation of our property, plant and equipment, right to use assets (leases) and amortization of intangible assets.

Impairment losses

Impairment losses primarily relate to assets deployed by us for running and supporting the business operations as well as investment in subsidiaries and associates.

Other expenses

Other expenses primarily consist of rent, sales promotion, advertisement and publicity, legal and professional fees, IT support service charge, security and housekeeping charges, packing freight, clearing and forwarding charges, repair and maintenance expenses, amongst others.

Results of Operations

The following table sets forth certain information with respect to our results of operations on a consolidated basis for Fiscals 2019, 2020, 2021 and September 30, 2021:

	Fiscal						Six Months ended September 30,
Particulars	2019		2020		2021		2021
	(Rs. million)	% of total income	(Rs. million)	% of total income	(Rs. million)	% of total income	(Rs. million)	% of total income
Income
Revenue from Operations	14,743.07	99.51%	15,080.47	98.93%	10,596.43	97.45%	5,560.40	98.23%
Other income	71.87	0.49%	163.73	1.07%	277.70	2.55%	100.28	1.77%
Total income	14,814.94	100.00%	15,244.20	100.00%	10,874.13	100.00%	5,660.68	100.00%
Expenses
Cost of materials consumed	2,917.45	19.69%	3,159.89	20.73%	1,821.72	16.75%	1,550.15	27.38%
Cost of contract manufactured goods	2,935.49	19.81%	2,987.15	19.60%	1,352.63	12.44%	1,586.91	28.03%
Changes in inventories of finished goods and stock-in-trade	-402.25	-2.72%	-453.34	-2.97%	628.34	5.78%	1,148.62	-20.29%
Employee benefits expense	2,119.74	14.31%	2,330.87	15.29%	1,963.15	18.05%	1,129.34	19.95%
Finance costs	467.14	3.15%	629.55	4.13%	733.08	6.74%	396.32	7.00%
Depreciation and amortization expense	1,580.64	10.67%	1,864.10	12.23%	2,022.09	18.60%	975.88	17.24%
Impairment losses	-	0.00%	-	0.00%	18.82	0.17%	3.60	0.06%
Other expenses	3,671.52	24.78%	4,332.48	28.42%	3,807.25	35.01%	1,892.60	33.43%
Total expenses	13,289.73	89.70%	14,850.70	97.42%	12,347.08	113.55%	6,386.18	112.82%
Profit before exceptional items and tax from operations	1,525.21	10.30%	393.50	2.58%	-1,472.95	-13.55%	-725.50	-12.82%
Share of accumulated profit/ (loss) in associate companies	3.08	0.02%	0.41	0.00%	1.95	0.02%	4.58	0.08%
Profit/ (loss) before exceptional items and tax	1,528.29	10.32%	393.91	2.58%	-1,471.00	-13.53%	-720.92	-12.74%
Exceptional items	-29.07	-0.20%	-34.56	-0.23%	-15.03	-0.14%	-	0.00%
Tax expense
Current tax	-775.85	-5.24%	-321.09	-2.11%	-44.91	-0.41%	-26.30	-0.46%
Tax related to earlier periods	-3.02	-0.02%	0.92	0.01%	-36.26	-0.33%	-	0.00%
Deferred tax expense/ (credit)	123.29	0.83%	267.73	1.76%	395.83	3.64%	229.97	4.06%

	Fiscal						Six Months ended September 30,
Particulars	2019		2020		2021		2021
	(Rs. million)	% of total income	(Rs. million)	% of total income	(Rs. million)	% of total income	(Rs. million)	% of total income
Total tax expense	-655.58	-4.43%	-52.44	-0.34%	314.66	2.89%	203.67	3.60%
Profit/ (loss) after tax	843.64	5.69%	306.91	2.01%	-1,171.37	-10.77%	-517.25	-9.14%
Other comprehensive income/ (loss)
Items that will not be reclassified to profit or loss
Re-measurement of net defined benefit obligation	2.28	0.02%	10.86	0.07%	2.48	0.02%	-62.74	-1.11%
Income-tax effect on above	-0.78	-0.01%	-2.70	-0.02%	-0.64	-0.01%	13.97	0.25%
Share of other comprehensive income/ (loss) in associates	0.03	0.00%	-0.02	0.00%	0.04	0.00%	-0.22	0.00%
Items that will be reclassified to profit or loss
Foreign currency translation differences	-20.77	-0.14%	7.85	0.05%	37.03	0.34%	0.29	0.01%
Income tax relating to items that will be re-classified to statement of profit and loss	-	0.00%	-9.64	-0.06%	-8.42	-0.08%	-0.50	-0.01%
Share of other comprehensive (loss) in associates	-1.05	-0.01%	-1.77	-0.01%	-0.75	-0.01%	-2.26	-0.04%
Total other comprehensive Income/ (loss)	-20.29	-0.14%	4.58	0.03%	29.74	0.27%	-51.46	-0.91%
Total comprehensive income/(loss)	823.35	5.56%	311.49	2.04%	-1,141.63	-10.50%	-568.71	-10.05%

Six months ended September 30, 2021

Total Income. Our total income was Rs.5,660.68 million in the six months ended September 30, 2021. Revenue from operations contributed to 98.23% of our total income and other income contributed to 1.77% of our total income, in the six months ended September 30, 2021.

Revenue from operations. Our revenue from operations was Rs.5,560.40 million in the six months ended September 30, 2021. Revenue from sale of products amounted to Rs.5,219.00 million and contributed to 93.86% of the revenue from operations in the six months ended September 30, 2021. Sale of food and beverages amounted to Rs.88.68 million and contributed to 1.59% of the revenue from operations in the six months ended September 30, 2021.

Other operating revenue was Rs.252.72 million in the six months ended September 30, 2021 and primarily consisted of provisions/ liabilities no longer required written back amounted to Rs.199.38 million.

The following table sets forth the contribution of each of our business verticals to our revenue from operations for the periods indicated:

	September 30, 2021
	(Rs. million)	% of total revenue from sales
Apparel	2,466.86	46.48%
Home and lifestyle	692.93	13.06%
Personal care	152.74	2.88%
Organic Food	1,458.57	27.48%
Food and Beverages	88.68	1.67%
Others (including accessories)	447.90	8.44%

Other income. Other income was Rs.100.28 million for the six months ended September 30, 2021, which primarily consisted of interest income from bank deposits amounting to Rs.19.04 million, leased deposits measured at amortized cost amounting to Rs.21.57 million and gain arising on investments measured at FVTPL amounting to Rs.10.23 million.

Expenses. Total expenses were Rs.6,386.18 million in the six months ended September 30, 2021. Expenses primarily comprised cost of materials consumed, cost of contract manufactured products, depreciation and amortization expense, employee benefit expenses and other expenses.

Materials and related costs. Materials and related costs consisting of cost of materials consumed, cost of contract manufactured goods and changes in inventories of finished goods and stock-in-trade amounted to Rs.1,988.44 million in the six months ended September 30, 2021, contributing to 31.14% of our total expenses. Our cost of materials consumed was Rs.1,550.15 million the six months ended September 30, 2021. Our cost of contract manufactured goods was Rs.1,586.91 million the six months ended September 30, 2021. Our changes in inventories of finished goods and stock-in-trade amounted to Rs.(1148.62) million the six months ended September 30, 2021.

Employee benefits expenses. Our employee benefits expenses amounted to Rs.1,129.34 million in the six months ended September 30, 2021, consisting primarily of salaries, wages and bonus of Rs.970.48 million in the same period.

Finance costs. Our finance costs were Rs.396.32 million in the six months ended September 30, 2021, primarily consisting of interest expense on banking facilities of Rs. 130.80 million and interest on lease liabilities of Rs.223.30 million.

Depreciation and amortization expense. Depreciation and amortization expenses were Rs.975.88 million in the six months ended September 30, 2021.

Impairment losses. Impairment losses amounted to Rs.3.60 million in the six months ended September 30, 2021.

Other expenses. Other expenses amounted to Rs.1,892.60 million in the six months ended September 30, 2021. In the six months ended September 30, 2021, other expenses primarily comprised (i) rent, which amounted to ^113.29 million and contributed to 5.99% of other expenses; (ii) advertisement and publicity fees, which amounted to Rs.104.93 million and contributed to 5.54% of other expenses; (iii) legal and professional charges, which amounted to Rs.217.69 million and contributed to 11.50% of other expenses; (iv) travelling and conveyance expenses, which amounted to Rs.40.79 million; (v) power and fuel expenses which amounted to Rs.91.07 million; and (vi) security and housekeeping charges, which amounted Rs.155.46 million.

(Loss)/Profit before exceptional items and tax. We had a loss before tax of Rs.720.92 million in the six months ended September 30, 2021.

Total tax expenses. Total tax expenses amounted to Rs.203.67 million in the six months ended September 30, 2021.

(Loss)/Profit after tax. Our loss after tax was Rs.517.25 million in the six months ended September 30, 2021.

Other comprehensive income/(loss) for the year. Our other comprehensive loss was Rs.51.46 million in the six months ended September 30, 2021.

Total comprehensive income/(loss) for the year. Our total comprehensive loss was Rs.568.71 million in the six months ended September 30, 2021.

Fiscal 2021 compared to Fiscal 2020

Total Income. Our total income decreased by 28.67% from Rs.15,244.20 million in Fiscal 2020 to Rs.10,874.13 million in Fiscal 2021 primarily due to a decrease in revenue from operations.

Revenue from operations. Our revenue from operations decreased by 29.73% from Rs.15,080.47 million in Fiscal 2020 to Rs.10,596.43 million in Fiscal 2021, primarily due to a decrease in sale of products. Sale of products decreased by 33.97% from Rs.14,602.24 million in Fiscal 2020 to Rs.9,641.72 million in Fiscal 2021 and sale of food and beverages decreased by 32.22% from Rs.243.15 million in Fiscal 2020 to Rs.164.80 million in Fiscal 2021 primarily on account of retail store closures due to COVID-19.

Other operating revenue increased by 236.02% from Rs.235.08 million in Fiscal 2020 to Rs.789.91 million in Fiscal 2021 primarily due to an increase in write back of provisions/liabilities no longer required. Writeback of provisions/liabilities not required increased by 741.17% from Rs.74.74 million in Fiscal 2020 to Rs.628.69 million in Fiscal 2021 primarily due to our ability to decrease lease rentals with our landlords due to the COVID-19 pandemic.

The following table sets forth the contribution of each of our business verticals to our revenue from operations for the periods indicated

	Fiscal
	2020		2021
	(Rs. million)	% of total revenue from sales	(Rs. million)	% of total revenue from sales
Apparel	8,867.83	59.73%	4,074.31	41.55%
Home and lifestyle	1,534.87	10.34%	1,238.02	12.62%
Personal care	247.42	1.67%	244.64	2.49%
Organic Food	2,811.77	18.94%	3,046.50	31.07%
Food and Beverages	243.15	1.64%	164.80	1.68%
Others (including accessories)	1,140.35	7.68%	1,038.25	10.59%

Other income. Other income increased by 69.61% from Rs.163.73 million in Fiscal 2020 to Rs.277.70 million in Fiscal 2021, primarily due to increase in interest income on bank deposits by 227.88% from Rs.8.68 million in Fiscal 2020 to Rs.28.46 million in Fiscal 2021 on account of securing loans and keeping in fixed deposits to ensure liquidity during the COVID-19 pandemic, gain on right-of-use assets (net) from nil in Fiscal 2020 to Rs.47.40 million in Fiscal 2021 on account of negotiations with landlords for reduction in lease payments that resulted in gain on right to use assets and other miscellaneous income from nil in Fiscal 2020 to Rs.67.00 million in Fiscal 2021 on account of implementation of Ind AS 116 on lease modification for rent concessions arising as a direct consequence of the COVID 19 pandemic.

Expenses. Total expenses decreased by 16.86% from Rs.14,850.70 million in Fiscal 2020 to Rs.12,347.08 million in Fiscal 2021 primarily due to a decrease in cost of materials consumed and cost of contract manufactured goods and the reduction employee benefit expenses.

Cost of materials consumed. Our cost of materials consumed decreased by 42.35% from Rs. 3,159.89 million in Fiscal 2020 to Rs. 1,821.72 million in Fiscal 2021. The decrease in cost of materials was primarily on account of a decrease in materials consumed in line with the decrease in revenue from operations and consistent with the change in our strategy to drive simplification in our product obtainment process by moving towards outright purchases i.e., where the purchase of fabric and other raw materials are done directly by Contract Manufacturers.

Cost of contract manufactured goods. Our cost of contract manufactured goods decreased by 54.72% from Rs. 2,987.15 million in Fiscal 2020 to Rs. 1,352.63 million in Fiscal 2021. The decrease in cost of contract manufactured goods was in line with the decrease in sale of our products due to COVID-19.

Changes in inventories of finished goods and stock-in-trade. Our changes in inventories of finished goods and stock- in-trade changed by Rs.1,081.68 million from decrease of Rs.453.34 million in Fiscal 2020 to increase of Rs.628.34 million in Fiscal 2021 primarily on account of increase in outright purchase of finished goods from our Contract Manufacturers and honoring the purchase orders given to smaller Contract Manufacturers (in terms of scale of operations) before prior to the first wave of the COVID-19 pandemic in India, i.e., prior to March 31, 2021.

Employee benefits expenses. Our employee benefits expenses decreased by 15.78% from Rs.2,330.87 million in Fiscal 2020 to Rs.1,963.15 million in Fiscal 2021 primarily on account of a decrease in salaries, wages and bonus, which decreased by 16.01% from Rs.2,007.45 million in Fiscal 2020 to Rs.1,686.12 million in Fiscal 2021. This decrease resulted from a combination of factors including salary and bonus reductions and head count rationalization, primarily due to the impact of COVID-19.

Finance costs. Our finance costs increased by 16.45% from Rs.629.55 million in Fiscal 2020 to Rs.733.08 million in Fiscal 2021. This was primarily due to an increase in interest expense on banking facilities by 94.40% from Rs.125.49 million in Fiscal 2020 to Rs.243.95 million in Fiscal 2021 in line with our strategy to avail of extra borrowing to manage liquidity during the COVID-19 pandemic and to ensure a minimal spread between borrowing and deposits.

Depreciation and amortization expense. Depreciation and amortization increased by 8.48% from Rs.1,864.10 million for Fiscal 2020 to Rs.2,022.09 million for Fiscal 2021 primarily due to leasehold improvements in (i) plant, property and equipment; and (ii) right to use assets (opening of new stores in the Fiscal 2020 before the first wave of the COVID 19 in March 2020.

Impairment losses. Impairment losses increased from nil in Fiscal 2020 to Rs.18.82 million in Fiscal 2021 primarily due to recognition of an impairment loss of Rs.15.46 million relating to leasehold improvements and Rs.3.36 million relating to electrical installations by Fabcafe Foods Private Limited, one of our Subsidiaries. We have estimated the recoverable amount as "nil" considering these would be discarded/demolished at the time of handover of the cafes.

Other expenses. Other expenses decreased by 12.12% from Rs.4,332.48 million in Fiscal 2020 to Rs.3,807.25 million in Fiscal 2021 primarily on account of a decrease in rent, advertisement and publicity fees, legal and professional charges, travelling and conveyance expenses, power and fuel expenses, and security and housekeeping charges. Rent decreased by 53.30% from Rs.393.27 million in Fiscal 2020 to Rs.183.66 million in Fiscal 2021 primarily on account of reduction of rent pursuant to negotiations with certain landlords for a few months during the first wave of the COVID-19 pandemic in India. Advertisement and publicity fees decreased by 67.20% from Rs.257.58 million in Fiscal 2020 to Rs.84.49 million in Fiscal 2021 primarily on account of rationalization of media budgets and campaigns, from April 2020 to August 2020, considering that the decrease in footfalls due to COVID-19. Legal and professional fees decreased by 12.09% from Rs.420.86 million in Fiscal 2020 to Rs.369.98 million in Fiscal 2021 in line with our strategy to cutting down on discretionary expenses. Travelling and conveyance expenses decreased by 58.85% from Rs.161.85 million in Fiscal 2020 to Rs.66.60 million in Fiscal 2021 primarily on account of decrease in travel by employees during from April 2020 to August 2020 due to travel restrictions on account of COVID-19. Power and fuel expenses decreased by 30.56% from Rs.245.20 million in Fiscal 2020 to Rs.170.26 million in Fiscal 2021 and security and housekeeping charges decreased by 32.58% from Rs.427.93 million in Fiscal 2020 to Rs.288.53 million in Fiscal 2021 largely attributed to the decrease in the number of days in which our retail stores and offices operated in Fiscal 2021. In Fiscal 2021, efforts were made to optimize our expenses and cut down on discretionary expenses. There was also a one-time impact of Rs.305.15 million in Fiscal 2021 due to provision taken for slow moving inventory. We witnessed an increase in aged inventory due to store closures and restricted store timing for portion of the year, (on account of COVID-19).

(Loss)/Profit before exceptional items and tax. For the various reasons discussed above, we had a loss before tax of Rs.1,471.00 million in Fiscal 2021 while we recorded a profit before tax of Rs.393.91 million in Fiscal 2020.

Total tax expenses. Total tax expenses increased by Rs.262.22 million from Rs.52.44 million in Fiscal 2020 to Rs.314.66 million in Fiscal 2021. Consistent with a decrease in revenue from operations on account of the COVID-19 pandemic.

(Loss)/Profit after tax. For the various reasons discussed above, our loss after tax was ^1,171.37 million in Fiscal 2021 while we recorded a profit after tax of Rs.306.91 million in Fiscal 2020.

Other comprehensive income for the year. Our other comprehensive income was Rs.29.74 million in Fiscal 2021 compared to other comprehensive income of Rs.4.58 million in Fiscal 2020. This was driven mainly by foreign currency translation differences.

Total comprehensive (loss)/income for the year. As a result of the factors above, our total comprehensive loss was Rs.1,141.63 million in Fiscal 2021 compared to a total comprehensive income of ^311.49 million in Fiscal 2020.

Fiscal 2020 compared to Fiscal 2019

Total Income. Our total income increased by 2.90% from Rs.14,814.94 million in Fiscal 2019 to Rs.15,244.20 million in Fiscal 2020 primarily due to an increase in revenue from operations.

Revenue from operations. Our revenue from operations increased by 2.29% from Rs.14,743.07 million in Fiscal 2019 to Rs.15,080.47 million in Fiscal 2020, primarily due to an increase in sale of food and beverages. Sale of food and beverages increased by 223.12% from Rs.75.25 million in Fiscal 2019 to Rs.243.15 million in Fiscal 2020 primarily on account of an increase in revenues due to the expansion of Fabcafes in our ECs, and in line with an increase in sales through our e-commerce channels. Sale of products increased by 0.76% from Rs.14,492.21 million in Fiscal 2019 to Rs.14,602.24 million in Fiscal 2020 primarily on account of a 4.06% growth in sale of apparels/garments.

Other operating revenue increased by 33.86% from Rs.175.61 million in Fiscal 2019 to Rs.235.08 million in Fiscal 2020 primarily due to an increase in, rental income relating to operations, write back of doubtful advances and miscellaneous operating income. Miscellaneous operating income increased by 31.91% from Rs.62.90 million in Fiscal 2019 to Rs. 82.97 million in Fiscal 2020 on account of an increase in rental income relating to operations by 158.50% from Rs.11.47 million in Fiscal 2019 to Rs. 29.65 million in Fiscal 2020 on account of an increase in rental income received due to the sublease of space in ECs to Fabcafe and Organic India.

The following table sets forth the contribution of each of our business verticals to our revenue from operations for the periods indicated.

	Fiscal
	2019		2020
	(Rs. million)	% of total revenue from sales	(Rs. million)	% of total revenue from sales
Apparel	8,521.92	58.50%	8,867.83	59.73%
Home and lifestyle	1,516.01	10.41%	1,534.87	10.34%
Personal care	271.36	1.86%	247.42	1.67%
Organic Food	2,928.54	20.10%	2,811.77	18.94%
Food and Beverages	75.25	0.52%	243.15	1.64%
Others (including accessories)	1,254.38	8.61%	1,140.35	7.68%

Other income. Other income increased by 127.81% from Rs.71.87 million in Fiscal 2019 to Rs.163.73 million in Fiscal 2020, primarily due to a gain arising on investments measured at FVTPL by 521.33% from Rs.12.05 million in Fiscal

2019 to Rs.74.87 million in Fiscal 2020 on account of investments in two of our associate companies, i.e. Nutriwel Health (India) Private Limited and Tugbug Creative Private Limited, through optionally convertible debentures and an increase in interest income from debentures from nil million in Fiscal 2019 to Rs.10.72 million in Fiscal 2020 on account of the aforementioned investment in associate companies in Fiscal 2020.

Expenses. Total expenses increased by 11.75% from Rs.13,289.74 million in Fiscal 2019 to Rs.14,850.70 million in Fiscal

2020 primarily due to an increase in cost of materials consumed, finance costs, depreciation and amortization expenses and other expenses. Expenses increased by 11.75% mainly due to an increase in other expenses by Rs. 660.96 million, depreciation and amortization by Rs.283.46 million and interest cost by Rs.162.41 million.

Cost of materials consumed. Our costs of materials consumed increased by 8.31% from Rs.2,917.45 million in Fiscal 2019 to Rs.3,159.89 million in Fiscal 2020, primarily on account of inflation in raw material prices.

Cost of contract manufactured goods. Our cost of contract manufactured goods increased by 1.76% from Rs.2,935.49 million in Fiscal 2019 to Rs.2,987.15 million in Fiscal 2020, primarily on account of an increase in purchase of finished goods from Rs.2,801.89 million in Fiscal 2019 to Rs.2,921.83 million in Fiscal 2020.

Changes in inventories of finished goods and stock-in-trade. Our changes in inventories of finished goods and stock- in-trade increased by 12.70% from Rs.402.25 million in Fiscal 2019 to Rs.453.34 million in Fiscal 2020 primarily on account of COVID-19 related lockdowns in the second half of March 2020, due to stockpiling of products.

Employee benefits expenses. Our employee benefits expenses increased by 9.96% from Rs.2,119.74 million in Fiscal 2019 to Rs.2,330.87 million in Fiscal 2020 primarily on account of an increase in salaries, wages and bonus, which increased by 9.12% from Rs.1,839.71 million in Fiscal 2019 to Rs.2,007.45 million in Fiscal 2020. This increase resulted from a combination of factors i.e. an increase in the salaries of employees and addition of employee headcount for the new stores which were opened in Fiscal 2021.

Finance costs. Our finance costs increased by 34.77% from Rs.467.14 million in Fiscal 2019 to Rs.629.55 million in Fiscal 2020. This was primarily due to an increase in interest expense on banking facilities by 78.38% from Rs.70.35 million in Fiscal 2019 to Rs.125.49 million in Fiscal 2020 on account of working capital facilities availed in Fiscal 2020 and an increase in interest expense on foreign currency term loans by 124.83% from Rs. 18.69 million in Fiscal 2019 to Rs.42.02 million in Fiscal 2020 on account of capitalization of interest expenses in Fiscal 2019 on CWIP.

Depreciation and amortization expense. Depreciation and amortization increased by 17.93% from Rs.1,580.64 million for Fiscal 2019 to Rs.1,864.10 million for Fiscal 2020 primarily due to the opening of 47 new stores in Fiscal 2020.

Other expenses. Other expenses increased by 18.0% from Rs.3,671.52 million in Fiscal 2019 to Rs.4,332.48 million in Fiscal 2020 primarily on account of an increase in sales promotion, packing, freight, clearing and forwarding expenses, security and housekeeping charges and power and fuel expenses, consistent with the growth in our business. Rent increased by 18.81% from Rs.331 million in Fiscal 2019 to Rs.393.27 million in Fiscal 2020 primarily on account of addition in space. Sales promotion fees increased by 16.74% from Rs.593.9 million in Fiscal 2019 to Rs.693.29 million in Fiscal 2020 consistent with our marketing strategy. Packing, freight, clearing and forwarding expenses increased by 63.56% from Rs.190.74 million in Fiscal 2019 to Rs.311.98 million in Fiscal 2020. Power and fuel expenses increased by 27.24% from Rs.192.71 million in Fiscal 2019 to Rs.245.20 million in Fiscal 2020 and security and housekeeping charges increased by 29.98% from Rs.329.22 million in Fiscal 2019 to Rs.427.93 million in Fiscal 2020 consistent with the growth of our business.

(Loss)/Profit before exceptional items and tax. For the various reasons discussed above, we had a profit before exceptional items and tax of Rs.393.91 million in Fiscal 2020 compared with a profit before exceptional items and tax of Rs.1,528.29 million in Fiscal 2019.

Total tax expenses. Total tax expenses decreased by 92.00% from Rs.655.58 million in Fiscal 2019 to Rs.52.44 million in Fiscal 2020. This was largely due to decrease in our operating profits.

Profit after tax. For the various reasons discussed above, our profit after tax was Rs.306.91 million in Fiscal 2020 while we recorded a profit after tax of Rs.843.61 million in Fiscal 2019.

Other comprehensive income/ (loss) for the year. Our other comprehensive income was Rs. 4.58 million in Fiscal 2020 compared to other comprehensive loss of Rs.20.29 million in Fiscal 2019.

Total comprehensive (loss)/income for the year. As a result of the factors above, our total comprehensive income for the year was Rs.311.49 million in Fiscal 2020 compared to a total comprehensive income of Rs.823.32 million in Fiscal 2019.

Liquidity and Capital Resources

Historically, our primary liquidity requirements have been to finance our capital expenditure, investment in subsidiaries and working capital needs for our operations. We have met these requirements through cash flows from operations, equity infusions from shareholders and borrowings. As of September 30, 2021, we had Rs.1,072.44 million in cash and cash equivalents and ^101.89 million in other bank balances other than cash and cash equivalents. We believe that, after considering the expected cash to be generated from operations, our borrowings and the proceeds from the Offer, we will have sufficient liquidity for our present requirements and anticipated requirements for capital expenditure and working capital for the next 12 months.

Cash Flows

The following table sets forth our cash flows for the periods indicated:

Particulars	Fiscal			Six months ended September 30,
	2019	2020	2021	2021
	(Rs. million)
Net cash generated from/ (used in) operating activities	1,953.13	2,301.69	1,251.48	(174.82)
Net cash generated from/ (used in) investing activities	(949.73)	(778.63)	(291.77)	(2,893.35)
Net cash generated from financing activities	(1,329.03)	99.12	(2,177.99)	3,562.37
Net increase in cash and cash equivalents	(325.62)	1,622.18	(1,218.28)	494.19
Cash and cash equivalents at the end of the year	91.18	1,713.36	495.08	989.27

Operating Activities

Net cash used in operating activities was Rs.174.82 million in the six months ended September 30, 2021. Our loss before tax was Rs.720.92 million in in the six months ended September 30, 2021, which was primarily adjusted for depreciation and amortization expense of Rs.975.88 million, interest expense on lease liabilities of Rs.223.30 million, interest expense of Rs.166.18 million, provision on impairment of investments Rs.2.77 million, provision for impairment on property, plant and equipment of Rs.3.59 million and provision movement and non-cash expenses by ^(115.68) million. Cash used in operating activities amounted to Rs.109.35 million and net cash generated from operating activities also included income taxes paid (net of refund received of Rs.65.47 million) in the six months ended September 30, 2021.

Net cash generated from operating activities was Rs.1251.48 million in Fiscal 2021. Our loss before tax was Rs.1,471.00 million in Fiscal 2021, which was primarily adjusted for depreciation and amortization expense of Rs.2,022.09 million, interest expense on lease liabilities of Rs.441.01 million, interest expense of Rs.289.93 million , provision on impairment of investments Rs.43.88 million, provision for impairment on property, plant and equipment of Rs.18.82 million and provision movement and non-cash expenses (including one time provision on slow moving inventory) of Rs.(252.02) million. Cash generated from operating activities amounted to Rs.1,342.29 million and net cash generated from operating activities also included income taxes paid (net of refund received of Rs.90.81 million) in Fiscal 2021.

Net cash generated from operating activities was Rs.2,301.69 million in Fiscal 2020. Our profit before tax was ^393.91 million in Fiscal 2020, which was primarily on account of depreciation and amortization expense of Rs.1,864.10 million, interest expense on lease liabilities of Rs.433.48 million, interest expense of Rs.196.50 million, movements in other provisions and non-cash expenses by Rs.49.81 million. Cash generated from operating activities amounted to Rs.2,846.40 million and net cash generated from operating activities also included income taxes paid (net of refund received of Rs.544.71 million) in Fiscal 2020.

Net cash generated from operating activities was Rs.1,953.13 million in Fiscal 2019. Our profit before tax was Rs.1,528.28 million in Fiscal 2019, which was primarily on account of interest expense on lease liabilities of Rs.359.50 million, interest expense of Rs.107.60 million, movements in other provisions and non-cash expenses by Rs.78.68 million. Cash generated from operating activities amounted to Rs.2,975.20 million and net cash generated from operating activities also included income taxes paid (net of refund received of Rs.842.07 million) in Fiscal 2019.

Investing Activities

Net cash used in investing activities was Rs.2,893.35 million in the six months ended September 30, 2021, primarily on account of purchase of non-current investments of Rs.2,637.93 million and proceeds and purchase of property, plant and equipment and intangible assets of Rs.307.49 million which was marginally offset by interest received of Rs.22.88 million.

Net cash used in investing activities was Rs.291.77 million in Fiscal 2021, primarily on account of purchase of property, plant and equipment and intangible assets of Rs.255.26 million and investments in bank deposits of Rs.95.85 million, which was marginally offset by interest received of Rs.32.45 million and proceeds from sale of property, plant and equipment and intangible assets.

Net cash used in investing activities was Rs.778.63 million in Fiscal 2020, primarily on account of purchase of property, plant and equipment and intangible assets of Rs.876.96 million and purchase of non-current investments of Rs.45 million, which was marginally offset by proceeds from bank deposits of Rs.93.93 million and government grant received in relation to subsidy of Rs.23 million given by the Government of Uttar Pradesh to Organic India.

Net cash used in investing activities was Rs.949.73 million in Fiscal 2019, primarily on account of purchase of property, plant and equipment, purchase of non-current investment of Rs.1,129.09 million and investment in bank deposits of ^31.95 million, which was marginally offset by proceeds from sale of non-current investments of Rs.92.06 million and proceeds from bank deposits of Rs.76.94 million.

Financing Activities

Net cash from financing activities was Rs.3,562.37 million in the six months ended September 30, 2021, primarily on account of proceeds from short term borrowings of Rs.4,408.94 million and proceeds from the issue of shares (including share premium) of ^31.53 million, which was marginally offset by principal payment of lease liabilities Rs.278.50 million and repayment of long term borrowings of Rs.233.97 million.

Net cash used in financing activities was Rs.2,177.99 million in Fiscal 2021 on account of repayment of short-term borrowings of Rs.7,395.96 million due to the maturity dates of working capital demand loans and bank overdrafts, principal payment of lease liabilities of Rs.431.02 million and interest paid on lease liabilities of Rs.441.01 million due to the landlords primarily towards the retail rentals. This was primarily offset by proceeds from short-term borrowings of Rs.4,983.92 million.

Net cash generated from financing activities was Rs.99.12 million in Fiscal 2020 on account of proceeds of short -term borrowings of Rs.2,346.83 million. This was primarily offset by principal payment of lease liabilities of Rs.820.46 million.

Net cash used in financing activities was Rs.1,329.03 million in Fiscal 2019 on account of principal payment of lease liabilities of Rs.751.44 million and interest paid on lease liabilities of Rs.359.50 million primarily due to retail outlet rentals. This was primarily offset by proceeds from short-term borrowings of Rs.395.84 million.

Capital Expenditures

Our capital expenditures primarily comprised expenditures relating to building, leasehold improvement, furniture and fixtures, air conditioners and cooling equipment, computers, software, brands, trade marks and right to use asset. In Fiscal 2019, Fiscal 2020, and Fiscal 2021 and in the six months ended September 30, 2021, our capital expenditure towards additions to fixed assets (property, plant and equipments and intangible assets) were Rs.1,323.44 million, Rs.1,040.92 million, Rs.220.54 million and Rs.168.84 million respectively. The following table sets forth our fixed assets for the periods indicated:

	Fiscal 2019	Fiscal 2020	Fiscal 2021	Six months ended September 30, 2021
		(Rs. million)
Property, plant and equipment (including CWIP)	3,970.34	4,234.47	3,872.03	3,713.38
Right to use Asset	4,982.00	5,837.47	4,975.72	5,437.05
Intangible Assets (including intangible assets under development)	5,544.34	5,398.95	5,182.46	5,143.72
Total	14,496.68	15,470.89	14,030.21	14,294.15

For more information, see "Restated Consolidated Financial Statements" on page 257.

Indebtedness

As of September 30, 2021, we had total borrowings (consisting of current and non-current borrowings) of Rs.7,075.27 million. Our gross debt to equity ratio was 95.90% as of September 30, 2021. For further information on our indebtedness, see "Financial Indebtedness" on page 405.

The following table sets forth certain information relating to our outstanding indebtedness as of September 30, 2021, and our repayment obligations in the periods indicated:

	As at September 30, 2021
	(Rs. million)
Non-Current Borrowings	1,764.44
Current Borrowings	6,033.82
Current maturities of long-term debts	(722.99)
Total borrowings	7,075.27

Contractual Obligations, Contingent Liabilities and Commitments

Contractual Obligations

We have continuing payment obligations under borrowings, commercial contracts and finance leases. The following table sets forth our contractual obligations as of September 30, 2021:

	As at September 30, 2021
	Less than 1 year	1 to 5 years	More than 5 years	Total
	(Rs. million)
Non-derivatives
Borrowings	6,033.82	1,041.45	_-	7,075.27
Trade payables	1,919.80	_-	_-	1,919.80
Other financial liabilities	1,314.99	3,324.90	1,420.32	6,060.21
Derivative not designated as hedges
Foreign exchange forward contracts	2.61	9.07	_-	11.68
Total	9,271.22	4,375.42	1,420.32	15,066.96

Contingent Liabilities

As of September 30, 2021, our Restated Consolidated Financial Statements disclosed the following contingent liabilities that have not been provided for were as follows:

Particulars	Amount
	(Rs. million)
Claims against our Company not acknowledged as debts
Income Tax demands under appeal	108.42
Value Added Tax demands under appeal	17.78
Employees Provident Fund demands under appeal	0.12
FSSAI Demands not provided for	3.00
Labour laws demands under appeal	6.17
Central Excise/ Service Tax demand under appeal	1.31
Others	7.40

For more information, see "Financial Statements - Note 44: Contingent Liabilities and Commitments" on page 346.

Commitments

The following table sets forth our commitments as of September 30, 2021:

	As at September 30, 2021
	(Rs. million)
Capital commitments (total value)	251.38
Lease commitments	-
Sub-Lease commitments	128.98
Revenue commitments	153.10
Total commitments	533.46

For more information, see "Financial Statements - Note 44: Contingent Liabilities and Commitments" on page 346.

Non-GAAP Measures

EBITDA, EBITDA Margin, and other non-GAAP measures, (together, "Non-GAAP Measures"), presented in this Draft Red Herring Prospectus is a supplemental measure of our performance and liquidity that is not required by, or presented in accordance with, Ind AS, Indian GAAP, IFRS or US GAAP. Further, these Non-GAAP Measures are not a measurement of our financial performance or liquidity under Ind AS, Indian GAAP, IFRS or US GAAP and should not be considered in isolation or construed as an alternative to cash flows, profit/ (loss) for the years or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS, Indian GAAP, IFRS or US GAAP. In addition, such Non-GAAP Measures are not standardised terms, hence a direct comparison of these Non-GAAP Measures between companies may not be possible. Other companies may calculate these Non-GAAP Measures differently from us, limiting its usefulness as a comparative measure. Although such Non-GAAP Measures are not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that they are useful to an investor in evaluating us as they are widely used measures to evaluate a companys operating performance.

Reconciliation for the following non-GAAP financial measures included in this Draft Red Herring Prospectus are set out below for the periods indicated:

Reconciliation for EBITDA

Particulars	Fiscal 2019	Fiscal 2020	Fiscal 2021	September 30, 2021
	(Rs. million)
Restated profit for the period/ year (A)	843.64	306.91	(1,171.37)	(517.25)
Tax expense (B)	655.58	52.44	(314.66)	(203.67)
Finance costs (C)	467.14	629.55	733.08	396.32
Depreciation and amortization expense (D)	1,580.64	1,864.10	2,022.09	975.88
Exceptional items (E)	29.07	34.56	15.03	-
Other income (F)	(71.87)	(163.73)	(277.70)	(100.28)
EBITDA (G=A+B+C+D+E+F)	3,504.20	2,723.83	1,006.47	551.00

Reconciliation for EBITDA Margin

Particulars	Fiscal 2019	Fiscal 2020	Fiscal 2021	September 30, 2021
	(Rs. million)
EBITDA (A)	3,504.20	2,723.83	1,006.47	551.00
Revenue from operations (B)	14,743.07	15,080.47	10,596.43	5,560.40
EBITDA Margin (A/B)	23.77%	18.06%	9.50%	9.91%

Reconciliation for Return on Net Worth and Net Asset Value per Equity Share

Particulars	Fiscal 2019	Fiscal 2020	Fiscal 2021	September 30,2021
	(Rs. million)
Equity share capital (A)	23.90	144.66	147.36	147.78
Other equity (B)	8,601.90	8,358.22	7,424.90	5,055.40
Capital Reserve (C)	139.25	139.94	81.37	(1,823.91)
Revaluation Reserve (D)	1,053.43	1,008.83	1,008.83	1,008.83
*Net worth ( E= A+B-C-D)**	7,433.12	7,354.11	6,482.06	6,018.26
Restated profit attributable to equity shareholders of the parent company (F)	833.29	417.07	(1,078.95)	(456.46)
Return on net worth (%) (G=F/E)	11.21%	5.67%	(16.65)%	(7.58)%
Number of Equity Shares outstanding during the period/year (H)**	144,447,910	144,660,900	147,363,780	147,779,475

Particulars	Fiscal 2019	Fiscal 2020	Fiscal 2021	September 30,2021
	(Rs. million)
Net asset value per Equity Share (I=G/H)	51.46	50.84	43.99	40.72

* Net worth means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account and debit or credit balance of profit and loss account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, capital reserve, write-back of depreciation and amalgamation as on September 30, 2021 and 2020 and March 31, 2021, 2020 and 2019.

** Calculations for Fiscal 2019 have been adjusted for bonus issue and sub-division. Calculations for Fiscal 2020 and Fiscal 2021 have been adjusted for sub-division.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that we believe have or are reasonably likely to have a current or future material effect on our financial condition, change in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Related Party Transactions

We enter into various transactions with related parties in the ordinary course of business. These transactions principally include remuneration to Directors and Key Managerial Personnel. For further information relating to our related party transactions, see "Financial Statements - Note 42: Related Party Disclosures" on page 332.

Changes in Accounting Policies in the last three Fiscals

There have been no changes in the accounting policies of the Company during the last three financial years, except with respect to (i) Ind AS 116, which was effective for accounting periods beginning on or after April 1, 2019 (for further information in relation to the effect of adoption of Ind AS 116, see "Financial Statements - Note 1: Notes to Adjustments" on page 270.

Auditors Observation

The auditors have included a matter of emphasis related to the provision of Rs.308.80 million and Rs.1.80 million towards ‘provision for slow and non-moving stock and ‘allowance for credit losses, respectively, made by our Company in assessing the impact of COVID-19 on our operations, financial performance and position as at and for the Fiscal 2021.

Other than the above, there have been no reservations/ qualifications/adverse remarks/highlighted by our statutory auditors in their auditors reports on the audited financial statements as of and for the years ended March 31, 2019, 2020 and 2021 and as of and for the six months ended September 30, 2021.

Quantitative and Qualitative Disclosures about Market Risk

Our financial risk management is an integral part of how to plan and execute its business strategy. Our Board of Directors sets our financial risk management policy. Our business activities expose us to a variety of financial risks, namely, credit risk, liquidity risk and market risk. The key risks and mitigating actions are also placed before our Board of Directors. Our risk management policies are established to identify and analyze the risks faced by us, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and our activities.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from an adverse change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, receivables, payables and loans.

Foreign Currency Risk

Changes in foreign currency exchange rates influence our results of operations. Our reporting currency is the INR and we are exposed to foreign exchange risk arising from various currency exposures on account of borrowings, payables and sale of goods and services, primarily with respect to USD, Euro and AUD. In Fiscals 2019, 2020 and 2021 and in the six months ended September 30, 2021, 11.96%, 12.19%, 18.73% and 15.36% respectively, of our sales were denominated in currencies other than INR. In Fiscals 2019, 2020 and 2021 and in the six months ended September 30, 2021, 31.91%, 10.99%, 14.11% and 3.67%, respectively, of our borrowings were denominated in currencies other than INR.

If our operations in countries outside of the India continues to grow, our results of operations and cash flows will be subject to fluctuations due to changes in foreign currency exchange rates, which could harm our business in the future. In addition, because we conduct business in currencies other than INR, but report our results of operations in INR, we also face remeasurement exposure to fluctuations in currency exchange rates, which could hinder our ability to predict our future results and earnings and could impact our results of operations.

Our management regular review the currency risk and our exposure to currency risks are mitigated through the foreign currency risk management policy approved by our Board of Directors. We also enter into derivative financial instruments i.e. forward foreign exchange contracts for foreign currency risk mitigation.

The following table sets particulars of unhedged foreign currency exposures as of September 30, 2021:

	As at September 30, 2021
	USD	INR	Euro	AUD	SGD	NZD
	(million)
Trade receivables	1.92	211.92	0.58	0.31	_-	0.06
Cash and cash equivalents	0.76	84.70	0.04	-	0.46	-
Other receivables	0.15	11.05	_-	_-	_-	_-
Other financial assets	-	6.90	-	-	0.13	-

For more information, see "Financial Statements-Note: 40: Financial Risk Management-(d) Currency Risk" on page 326.

Liquidity Risk

Liquidity risk is the risk that we will face in meeting our obligations associated with our financial liabilities. Our approach to managing liquidity is to ensure that we will have sufficient funds through an adequate amount of credit facilities to meet our obligations when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to our reputation. A material and sustained shortfall in our cash flow could undermine our credit rating and impair investor confidence.

Our Board of Directors regularly monitors the rolling cash flow forecasts and maturity profiles of our financial assets and liabilities to ensure we have sufficient cash on an on-going basis to meet operational needs. This monitoring includes financial ratios and takes into account the accessibility of cash and cash equivalents and additional undrawn financing facilities. For more information regarding the exposure to liquidity risk, see "Financial Statements - Note: 40: Financial Risk Management and Capital Management - (b) Liquidity Risk" on page 325.

Market Risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices will affect our income or the value of our holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of investments. Thus, exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currency. Our interest rate risks are covered by interest rate swaps. The objective of market risk management is to avoid excessive exposure in foreign currency revenues and costs.

Credit Risk

Credit risk is the risk of financial loss to us if a customer or counter-party fails to meet its contractual obligations. Our highest exposure to credit risk is associated with the trade and other receivables.

Our exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, we also consider the factors that may influence the credit risk of our customer base, including the default risk of the industry and country in which our customers operate. If we determine that the credit risk exposure from a particular customer as high, we typically ensure that this is backed by either bank guarantee/ letter of credit or security deposits. In determining the recoverability of trade receivables, we consider any change in the credit quality of trade receivables from the date credit was initially granted up to the reporting date. Our concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, we believe that there is no further credit provision required in excess of the allowance for doubtful debts. For more information regarding the exposure to credit risk, see "Financial Statements-Note: 40: Financial Risk Management and Capital Management - (a) Credit Risk" on page 325.

Unusual or Infrequent Events or Transactions

Except as described in this Draft Red Herring Prospectus, there have been no other events or transactions that, to our knowledge, may be described as "unusual" or "infrequent".

Total Turnover of each Major Industry Segment

Our total turnover relation to the sale of products in Fiscal 2019, 2020 and 2021 and in the six months ended September 30, 2021 amounted to Rs.14,492.21 million, Rs.14,602.24 million, Rs.9,641.72 million and Rs.5,219.00 million, respectively.

Our total turnover in relation to the sale of food and beverages in Fiscal 2019, 2020 and 2021 and in the six months ended September 30, 2021 amounted to Rs.75.25 million, U243.15 million, Rs.164.80 million and Rs.88.68 million, respectively.

Known Trends or Uncertainties

Our business has been subject, and we expect it to continue to be subject, to significant economic changes. To our knowledge, except as discussed in this Draft Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on income from our continuing operations. For more information regarding trends and uncertainties, please see "—Significant Factors Affecting Our Financial Condition and Results of Operations" on page 368 and "Risk Factors" on page 37.

New Products or Business Segments

Except as disclosed in this Draft Red Herring Prospectus, we have not publicly announced any new products or business segments. For more information regarding new products, please see "Our Business" on page 172.

Future Relationship between Cost and Income

Except as disclosed in this Draft Red Herring Prospectus, there are no known factors that will have a material adverse impact on our operations and finances. For more information, see "Risk Factors", "Our Business" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 37, 172 and 364, respectively.

Seasonality of Business

Our business is subject to seasonal variations, which include the holidays and festivals.

Significant Dependence on a Single or Few Customers or Suppliers

We do not have any significant dependence on a single or few customers or suppliers.

Significant Economic Changes

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. See "Risk Factors" and "—Significant Factors Affecting Our Financial Condition and Results of Operations."

Competitive Conditions

We expect competition in our industry from existing and potential competitors to intensify. See "Risk Factors - We operate in highly competitive markets in each of our product segments in both the offline and online channels and an inability to compete effectively may adversely affect our business, results of operations and financial condition " on page 46.

Extent to which Material Increases in Net Sales or Revenue are due to Increased Sales Volume, Introduction of New Products or Services or Increased Sales Prices

Changes in revenue in the last three Fiscals are as described in "- Fiscal 2021 compared to Fiscal 2020" and "- Fiscal 2020 compared to Fiscal 2019 above on pages 391 and 393, respectively.

Significant Developments subsequent to September 30, 2021

Except as disclosed in this Draft Red Herring Prospectus, no circumstances have arisen since the date of the last financial statements as disclosed in this Draft Red Herring Prospectus which materially or adversely affect 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 twelve months.

fabindia overseas pvt ltd Management discussions

ATTENTION INVESTORS

Risk Disclosure on Derivatives

We are ISO 27001:2013 Certified.

MARKET

IDEAS

MUTUAL FUNDS

TRADING DOCUMENTATION

CALCULATOR

GLOSSARY (A-Z)

ATTENTION INVESTORS

Risk Disclosure on Derivatives

We are ISO 27001:2013 Certified.