Lenskart Solutions Ltd Management Discussions

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations in conjunction with our Restated Consolidated Financial Information included in this Draft Red Herring Prospectus as of and for the Financial Years 2025, 2024 and 2023, including the related notes, schedules and annexures on page 352. Our Restated Consolidated Financial Information is based on our audited financial statements, which have been prepared and presented in accordance with Ind AS and restated in accordance with Section 26 of the Companies Act, 2013, the SEBIICDR Regulations and the Guidance Note. Ind AS differs in certain material respects from IFRS and U.S. GAAP. See “Risk Factors - Significant differences exist between Ind AS used to prepare our financial information and other accounting principles, such as IFRS and U.S. GAAP, with which investors may be more familiar ” on page 92. In addition, please see the Unaudited Proforma Financial Information as of and for the Financial Years 2025, 2024 and 2023 on page 452, which has been prepared to illustrate the effects of the acquisition of Dealskart Online Services Private Limited, as if the acquisition had taken place on March 31, 2024 and March 31, 2023, respectively, for the purpose of the unaudited pro forma balance sheet, and on April 1, 2024, April 1, 2023 andApril 1, 2022, respectively, for the purpose of the unaudited proforma statement of profit and loss. See also, “Risk Factors - The Unaudited Proforma Financial Information included in this Draft Red Herring Prospectus which has been prepared to illustrate the effects of the acquisition of Dealskart Online Services Private Limited during the Financial Year 2025 on our Restated Consolidated Financial Information is not indicative of our expected results of operations in future periods or our future financial position or a substitute for our past results ” on page 79.

This discussion contains certain forward-looking statements that involve risks and uncertainties and reflect our current view with respect to future events and financial performance, many of which are beyond our control, which may cause the actual results to be different from those expressed or implied by the forward-looking statements. See “Forward-Looking Statements” and “Risk Factors ” on pages 28 and 53, respectively. Unless otherwise indicated, financial information is derived from our Restated Consolidated Financial Information. We have included certain non-Ind AS financial measures and other performance indicators relating to our financial performance and business in this Draft Red Herring Prospectus, each of which is a supplemental measure of our performance and liquidity and not required by, or presented in accordance with, Ind AS, Indian GAAP, IFRS or U.S. GAAP. Furthermore, such measures and indicators are not defined under Ind AS, Indian GAAP, IFRS, U.S. GAAP or other accounting standards, and therefore should not be viewed as substitutes for performance, liquidity, or profitability measures under such accounting standards. In addition, such measures, and indicators are not standardized terms and a direct comparison of these measures and indicators between companies may not be possible. Other companies may calculate these measures and indicators differently from us, limiting their usefulness as a comparative measure. Although such measures and indicators are not a measure of performance calculated in accordance with applicable accounting standards, our management believes that they are useful to an investor in evaluating our operating performance. See also, “Risk Factors - Certain non-generally accepted accounting principle financial measures and other statistical information relating to our operations andfinancial performance have been included in this Draft Red Herring Prospectus. These non-GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS and may not be comparable with those presented by other companies” on page 86.

Certain images and graphics included in this section are provided for illustrative purposes only. Unless otherwise indicated, the industry and market-related information contained in this Draft Red Herring Prospectus is derived from the Redseer Report. We officially engaged Redseer Management Consulting Private Limited in connection with the preparation of the Redseer Report pursuant to an engagement letter dated February 12, 2025. The Redseer Report will be available on the website of our Company at https://www.lenskart.com/corporate/investorrelations in compliance with applicable law and has also been included in “Material Contracts and Documents for Inspection - Material Documents” on page 722. The information included in this section includes excerpts from the Redseer Report and may have been reordered by us for the purposes of presentation. There are no parts, data or information (which may be relevant for the Offer), that have been left out or changed in any manner. For more information, see “Risk Factors - This Draft Red Herring Prospectus contains information from third parties, including an industry report prepared by an independent third-party research agency, Redseer Management Consulting Private Limited, which we have commissioned and paid for to confirm our understanding of our industry exclusively in connection with the Offer and reliance on such information for making an investment decision in the Offer is subject to inherent risks ” on page 85.

Overview

We are a technology-driven eyewear company with integrated operations spanning designing, manufacturing, branding and retailing of eyewear products. We primarily sell prescription eyeglasses, sunglasses, and other products such as contact lenses and eyewear accessories. India is our largest market, and we have expanded into international markets including Japan, Southeast Asia and the Middle East. We are a direct-to-consumer company that designs and sells a wide range of eyewear products under our own brands and sub-brands. We design our own eyewear, both frames and lenses, supported by our 105- member design and merchandising team, as of March 31, 2025. We offer products across a wide range of price points and age categories, catering to the requirements of an entire household. We are Indias largest, and in Asia, are amongst the two largest, organized retailers of prescription eyeglasses in terms of B2C eyeglasses sales volumes during the Financial Year 2025, according to the Redseer Report.

In line with our goal of making quality eyewear accessible and affordable, we have established presence across multiple distribution channels, including our websites, mobile applications and retail stores. Our websites and mobile applications are central to our omnichannel retailing presence, which is powered by our technology platform, providing customers with the ability to engage with our brands and sub-brands, purchase products across both online and offline touchpoints. As of March 31, 2025, our mobile applications had over 100 million cumulative app downloads and we operated our business through 2,723 stores globally (comprising 2,067 stores in India and 656 stores internationally). We own and operate frame and lens design and prescription eyeglass manufacturing facilities at two locations in India in Bhiwadi, Rajasthan and Gurugram, Haryana, supplemented by regional facilities in Singapore and the United Arab Emirates. This centralized supply chain and manufacturing in India has allowed us to deliver quality eyewear at low costs and at faster fulfilment time to our customers. We have also established in-house capabilities to manufacture both frames and lenses.

Our revenue from operations was Rs66,525.17 million for the Financial Year 2025, growing at a CAGR of 32.52% from Rs37,880.28 million in the Financial Year 2023. Our total income was Rs70,092.76 million for the Financial Year 2025, having grown from Rs39,279.74 million for the Financial Year 2023. Our EBITDA excluding other income for the Financial Year 2025 was Rs9,710.56 million, representing an EBITDA excluding other income margin of 14.60%. Further, our restated profit/(loss) for the year for the Financial Year 2025 was Rs2,973.40 million. In the Financial Year 2025, our segment total revenue as per Ind AS 108 for our India segment was Rs40,604.66 million, with India segment results pre-depreciation and amortisation margin of 12.05%. Similarly, our segment total revenue as per Ind AS 108 for our International segment was Rs26,387.29 million, with an International segment results pre-depreciation and amortisation margin of 17.38%. Our total assets were Rs104,710.19 million as of March 31, 2025, Rs95,310.21 million as of March 31, 2024, and Rs95,282.80 million as of March 31, 2023. Our total equity was Rs62,061.70 million as of March 31, 2025, Rs57,559.50 million as of March 31, 2024, and Rs55,697.86 million as of March 31, 2023. Our total liabilities were Rs42,648.49 million as of March 31, 2025, Rs37,750.71 million as of March 31, 2024, and Rs39,584.94 million as of March 31, 2023.

We acquired Dealskart Online Services Private Limited (“Dealskart”) on December 31, 2024. On a proforma basis, our revenue from operations amounting to Rs65,240.10 million for the Financial Year 2025, indicating a year-on-year growth of 22.55% from Rs53,234.36 million during the Financial Year 2024, and a year-on-year growth of 44.75% from Rs36,776.26 million during the Financial Year 2023. On a proforma basis, our EBITDA excluding other income for the Financial Year 2025 amounting to Rs11,156.91 million, representing an EBITDA excluding other income margin of 17.10%.

Financial Metrics

The following tables set forth certain of our financial metrics as at and for the Financial Years 2025, 2024 and 2023:

Particulars	Unit	Financial Year
		2025**	2024	2023
India
India - Segment Total Revenue as per Ind AS 108(1)	Rs million	40,604.66	32,062.08	23,920.49
India - Segment Total Revenue as per Ind AS 108 Growth(2)	%	26.64%	34.04%	NA*
India - Segment Product Margin (3)	Rs million	25,455.73	20,003.09	14,068.58
India - Segment Product Margin % (4)	%	62.69%	62.39%	58.81%
India - Segment Results Pre-Depreciation and Amortisation (5)	Rs million	4,894.76	3,034.14	1,054.51
India - Segment Results Pre-depreciation and Amortisation Margin (%) (6)	%	12.05%	9.46%	4.41%
International
International - Segment Total Revenue as per Ind AS 108(7)	Rs million	26,387.29	22,648.95	14,358.05
International - Segment Total Revenue as per Ind AS 108 Growth(8)	%	16.51%	57.74%	NA*
International - Segment Product Margin (9)	Rs million	19,639.17	16,483.46	10,110.93
International - Segment Product Margin % (10)	%	74.43%	72.78%	70.42%
International - Segment Results Pre-depreciation and Amortisation (11)	Rs million	4,584.94	3,444.37	1,411.21
International - Segment Results Pre-depreciation and Amortisation Margin (%) (12)	%	17.38%	15.21%	9.83%
Consolidated
Revenue from Operations (13)	Rs million	66,525.17	54,277.03	37,880.28
Revenue from operations Growth(14)	%	22.57%	43.29%	NA*
Product Margin (15)	Rs million	45,181.13	36,515.63	24,199.18
Product Margin % (16)	%	67.92%	67.28%	63.88%
EBITDA excluding other income (17)	Rs million	9,710.56	6,720.91	2,597.09
EBITDA excluding other income Margin (18)	%	14.60%	12.38%	6.86%
Restated profit/(loss) before tax (19)	Rs million	3,853.56	590.31	(1,011.76)
Restated profit/(loss) for the year (20)	Rs million	2,973.40	(101.54)	(637.57)
Net Working Capital Days (21)	DOS	25.64	34.52	30.35
Return on Capital Employed (22)	%	13.84%	5.08%	(0.48)%
Net Cash flow from Operating Activities (23)	Rs million	12,306.32	4,873.83	947.40

*Growth percentage for the Financial Year 2023 is not presented due to the non-inclusion of information for Financial Year 2022 in this Draft Red Herring Prospectus.

** Dealskart was acquired on December 31, 2024, following which Dealskart became a wholly owned subsidiary of the Company

Notes:

1. India - Segment Total Revenue as per Ind AS 108 Refers to India - segment revenue recognized in accordance with Ind AS on a pre-intersegment elimination basis.

2. India - Segment Total Revenue as per Ind AS 108 growth represents the percentage growth in India - Segment Total Revenue as per Ind AS 108 of the relevant financial year over the India - Segment Total Revenue as per Ind AS 108 of the previous financial year on a pre-intersegment elimination basis.

3. India — Segment Product Margin is defined as Segment Total Revenue as per Ind AS 108 less the sum of segment cost of raw material and components consumed, segment purchase of stock in trade and segment changes in inventory of traded and finished goods. This is computed on a pre-intersegment elimination basis.

4. India — Segment Product Margin % is computed by dividing Segment product margin by Segment Total revenue as per Ind AS 108 on a pre-intersegment elimination basis.

5. India — Segment Results Pre-depreciation and Amortisation is computed as the sum of Segment profit/ (loss) as per Ind AS 108 and Segment Depreciation and amortization expense. This is computed on a pre-intersegment elimination basis.

6. India — Segment Results Pre-depreciation and Amortisation Margin (%) is computed as the sum of Segment profit/ (loss) as per Ind AS 108 and Segment Depreciation and amortization expense divided by Segment Total revenue as per Ind AS 108. This is computed on a pre-intersegment elimination basis.

7. International - Segment Total Revenue as per Ind AS 108 Refers to International - segment revenue recognized in accordance with Ind AS on a pre-intersegment elimination basis

8. International - Segment Total Revenue as per Ind AS 108 growth represents the percentage growth in International - Segment Total Revenue as per Ind AS 108 of the relevant financial year over the International - Segment Total Revenue as per Ind AS 108 of the previous financial year. This has been computed before preintersegment elimination basis.

9. International — Segment Product Margin is defined as Segment Total Revenue as per Ind AS 108 less the sum of segment cost of raw material and components consumed, segment purchase of stock in trade and segment changes in inventory of traded and finished goods. This is computed on a pre-intersegment elimination basis.

10. International — Segment Product Margin % is computed by dividing Segment product margin by Segment Total revenue as per Ind AS 108 on a pre-intersegment elimination basis.

11. International — Segment Results Pre-depreciation and Amortisation is computed as the sum of Segment profit/ (loss) as per Ind AS 108 and International — Segment Depreciation and amortization expense. This is computed on a pre-intersegment elimination basis.

12. International — Segment Results Pre-depreciation and Amortisation Margin (%) is computed as the sum of Segment profit/ (loss) as per Ind AS 108 and Segment Depreciation and amortization expense divided by Segment Total revenue as per Ind AS 108. This is computed on a pre-intersegment elimination basis.

13. Revenue from operations refers to revenue recognized in accordance with Ind AS 115 Revenue from Contracts with Customers.

14. Revenue from operations Growth % represents the percentage growth in Revenue from Operations of the relevant financial year over Revenue from Operations of the previous financial year.

15. Product Margin is computed as revenue from operations less the sum of cost of raw material and components consumed, purchase of stock in trade and changes in inventory of traded and finished goods.

16. Product Margin % is computed by dividing Product Margin by revenue from operations.

17. EBITDA excluding other income is computed as the sum of restated profit / (loss) for the year, total tax expense / (credit), finance costs and depreciation and amortisation expense less other income.

18. EBITDA excluding other income Margin (%) is computed as EBITDA excluding other income divided by revenue from operations.

19. Restated profit/(Loss) before Tax is Restated Profit/ (loss) for the year before adjusting for tax expense/(credit)..

20. Restated profit/ (Loss) for the year after adjusting for tax expense/(credit)

21. Net Working Capital Days is computed as the ratio of the sum of closing trade receivables and inventories, less trade payables to revenue from operations for the relevant year, multiplied by 365.

22. Return on Capital Employed is computed as EBIT divided by capital employed with EBIT being computed as the sum of restated proft/(loss) for the year, tax expense/ (credit) and finance costs; capital employed being computed as the sum oftotal equity and current and non-current borrowings and deferred tax liabilities less goodwill and other intangible assets, intangible assets under development and deferred tax assets.

23. Net Cash flow from operating activities is considered from Summary of Restated Consolidated Cash Flows.

Particulars	Unit	Financial Year
		2025	2024	2023
For our Company (on a pro forma basis)
Revenue from Operations	Rs million	65,240.10	53,234.36	36,776.26
Revenue Growth	%	22.55%	44.75%	NA*
Product Margin (1)	Rs million	44,696.68	35,600.71	23,378.28
Product Margin % (2)	%	68.51%	66.88%	63.57%
EBITDA excluding other income (3)	Rs million	11,156.91	7,638.43	3,023.15
EBITDA excluding other income Margin (4)	%	17.10%	14.35%	8.22%
Profit/(Loss) before Tax	Rs million	4,584.08	528.65	(1,571.58)
Profit/(loss) for the Year	Rs million	3,713.83	(59.82)	(1,197.39)

Growth percentage for the Financial Year 2023 is not presented due to the non-inclusion ofinformation for Financial Year 2022 in this Draft Red Herring Prospectus.

Notes:

(1) Product Margin is computed as proforma revenue from operations less the sum ofproforma cost of raw material and components consumed, proforma purchase of stock in trade and proforma changes in inventory of traded and finished goods.

(2) Product Margin % is computed by dividing product margin by proforma revenue from operations.

(3) EBITDA excluding other income is computed as the sum of proforma profit / (loss) for the year, proforma total tax expense / (credit), proforma finance costs and proforma depreciation and amortisation expense, less proforma other income.

(4) EBITDA excluding other income Margin (%) is computed as proforma EBITDA excluding other income divided by proforma Revenue from Operations.

Significant Factors Affecting our Results of Operations

The graphics below illustrate the key revenue and cost drivers affecting our results of operations:

Market Opportunity - Demandfor Eyewear

The demand for eyewear in both domestic and international markets plays a pivotal role in driving our revenue, influencing the sales volume of eyewear. The demand for eyewear in both domestic and international markets plays a pivotal role in driving our revenue, influencing the sales volume of eyewear and the overall number of customer accounts we serve. According to the Redseer Report, refractive errors have become a major public health challenge globally due to evolving lifestyles (particularly increasing screen times, reduced outdoor time, higher air pollution in urban areas, and shorter sleep cycles) coupled with an ageing population. The incidence of refractive errors is approximately 4 billion (approximately 50% of the total population) in the Financial Year 2025 and is further projected to increase to approximately 4.7 billion (approximately 55% of the total population) by the Financial Year 2030. The number of individuals affected by refractive errors in India has increased from approximately 43% (approximately 590 million) in Financial Year 2020 to an estimated 53% (approximately 777 million) in Financial Year 2025 and is projected to rise to approximately 62% (approximately 943 million) by Financial Year 2030, according to the Redseer Report. In the Financial Year 2025, Asia accounts for the largest share of global population, with refractive error incidences of approximately 65% and approximately 68% in Southeast Asia and Japan respectively, which is expected to grow to 70% and 71%, respectively by Financial Year 2030, indicating a growing need for vision correction solutions across the region.

Further, the penetration of prescription eyewear in Asia is lower than in developed markets such as the United States with Southeast Asia at 40%, Middle East at 60%, and Japan at 69%, versus the United States at 88%, as of March 31, 2025, according to the Redseer Report. An increase in awareness, accessibility and affordability could lead to improvement in penetration. To increase awareness, as of March 31, 2025, we offered complementary eye tests across our 2,723 stores in our Indian and International markets. During the Financial Year 2025, we conducted approximately 13.45 million eye tests in India and 2.56 million eye tests outside India. We provided home eye tests and frame try-on services in 25 cities in India as of March 31, 2025, wherein our agent travels to the location of the customer to conduct eye tests and provide product trials. This is an additional level of convenience for our customers, especially senior citizens, corporate employees, and families.

According to the Redseer Report, the growth in global eyewear market has been complemented by a rapid shift from unorganized to organized retailers across geographies. The organized segment in India is projected to grow approximately 1.6x times faster than the unorganized segment, accounting for approximately 31% of the overall market by the Financial Year 2030. Similarly, in Japan, the share of organized retail is projected to increase from approximately 63% in the Financial Year 2025 to approximately 69% by the Financial Year 2030, 33-35% in the Financial Year 2025 to 40-45% by the Financial Year 2030 in Southeast Asia and approximately 59% in the Financial Year 2025 to approximately 70% in the Financial Year 2030 in Middle East.

According to the Redseer Report, in Japan, direct-to-consumer (or “D2C) market share has increased from 25% in the Financial Year 2020 to 31% in the Financial Year 2025 and is projected to reach to 43% in the Financial Year 2030. Similarly, in the Middle East, D2C market share has increased from 9% in the Financial Year 2020 to 14% in the Financial Year 2025 to 23% in the Financial Year 2030. We believe our D2C brands will continue to benefit from this trend.

See also, “Risk Factors - Our global operations expose us to management, legal, tax, political and economic risks, and our failure to address such risks could adversely affect our business, results of operations, financial condition and cash flows”, “Risk Factors - The global eyewear industry is subject to a range of threats and challenges, which if unaddressed by us, could adversely affect our business, results of operations, financial condition and cash flows” and “Risk Factors - Medical advancements in the eyecare industry may adversely affect the demand for our eyewear products” on pages 58, 73 and 65, respectively.

Our Reach - Omnichannel Retail Network

According to the Redseer Report, globally, digitally influenced spending has been increasing, driven by the growing penetration of internet and smartphone usage, rising engagement on digital platforms, and the increasing role of online search and discovery in purchase decisions. Driven by these tailwinds, omnichannel retail is growing rapidly, as consumers increasingly expect flexibility and convenience in their shopping journeys. Our omnichannel model, including our websites, mobile applications and retail stores position us well for this growing preference for omnichannel retail. Our mobile applications and websites are enabled by our technology platform, providing customers with the ability to engage with our brands and purchase products across both online and offline touchpoints. In the Financial Year 2025, 40.68% of all eyewear sold by us in India (excluding eyewear units collected over the counter) was shipped directly to our customers personal addresses, reducing the need for in - store collection. This approach enhances customer convenience, drives engagement, encourages repeat purchases and loyalty. Our mobile applications and websites have a large catalogue with details of our products, including recommendations, customer reviews and virtual try-ons, size measurement, and an AI-enabled frame recommendation facility used by customers shopping across channels. Our mobile applications and websites also allow existing customers to shop for similar styles with pre-selected sizes, lenses, and prescriptions, reducing friction for repeat transactions.

Our omnichannel model also facilitates higher customer conversion rates as compared to models relying exclusively on either the online or offline channel. As of March 31, 2025, we had more than 100 million mobile app downloads and operated our business through 2,723 stores globally, with 2,067 stores in India and 656 stores in international locations. In the Financial Year 2025, customers contributing 44.82% of our revenue from operations in India (on a proforma basis) engaged with us digitally through organic searches, social media or other online channels in the 90 days prior to completing their purchase.

As part of our strategy to increase geographic penetration and support our omnichannel growth, we opened 1,196 new stores in India cumulatively from the Financial Year 2023 to the Financial Year 2025 with 64.55% of such stores located outside metro cities. Our international markets are also a strategic focus area, and we intend to continue growing our presence in global markets both organically and inorganically. While we have increased the depth of our store network in the cities we have been operating, we have also added stores in 178 cities in India and 37 cities in international markets during the last three Financial Years.

The table below sets out the number of annual transaction customer accounts, number of eyewear units sold and total stores (India and International) for the Financial Years 2025, 2024 and 2023:

Particulars	Unit	Financial Year
		2025	2024	2023
India
Annual Transacting Customer Accounts(1)	million	9.94	8.06	6.29
Number of eyewear units sold(2)	million	22.91	17.65	13.69
Total Stores(3)	Number	2,067	1,785	1,416
International
Annual Transacting Customer Accounts?	million	2.47	2.14	1.41
Number of eyewear units sold(2)	million	4.29	3.58	2.26
Particulars	Unit	Financial Year
		2025	2024	2023
Total Stores?	Number	656	604	543
Consolidated
Annual Transacting Customer Accounts?	million	12.41	10.20	7.70
Number of eyewear units sold?	million	27.20	21.23	15.95
Total Stores?	Number	2,723	2,389	1,959

(1) Annual Transacting Customer Accounts are accounts which have transacted at least once on any of our online or offline channels in a given Financial Year.

(2) Number ofEyewear Units Sold refers to the total quantity of eyeglasses and contact lenses sold in a given Financial Year

(3) Total Stores include all store formats (i.e., CoCo, FoFo, CoFo)

Multiplicity - Eyewear as a Lifestyle Category

Consumers are increasingly using multiple pairs of prescription eyeglasses, not only for vision correction but also to elevate their personal style, similar to other fashion categories such as apparel, footwear, and accessories, albeit still in its nascent stages. This trend of function to fashion is driven by improving affordability and the influence of digital content and social media. We have managed to increase customer purchase frequency by launching new fashion and functional eyewear designs including:

• localized collections catering to festive occasions, such as Navratri in India, Ramadan in the Middle East, Lunar New Year in Southeast Asia;

• collaborations with celebrities and influencers; and

• introducing add-ons such as frame swaps, bitz (frame accessory), among others.

We have been improving the functionality of our eyewear products with targeted collections or upgrades catering to specific customer sections, for instance, Turban-edit collection, specialized for customers who wear turbans, Creatr, a durable range for children and Pro-fit, a range with adjustable temples for athletes. We have also recently launched our smart glasses category with the launch of “Phonic” audio-enabled smart eyeglasses. We have also made investments in lens research and development to enhance lens quality, functionality, and durability. Our focus on lens innovation, including myopia control powered lenses, powered sun lenses, and other advanced optical technologies, allows us to address a range of vision correction and lifestyle use cases.

We are able to share design collections across markets, helping us to launch innovative products that suit local preferences while maintaining a consistent global brand. In the Financial Year 2025, we launched 105 new in-house designed and engineered collections globally, including in collaboration with popular brands and celebrities. By offering a wide variety of eyeglasses with different styles, materials, and price points, we enable customers to own and wear multiple pairs of eyeglasses for different occasions and activities, similar to how customers engage with other product categories such as apparel and footwear. For instance, the two-year purchase frequency among new customer accounts acquired by us in the Financial Year 2023 was 3.62 eyeglasses as compared to an India average of 1.8 eyeglasses, according to the Redseer Report.

See also, “Risk Factors - Our success depends on our ability to identify market trends and meet evolving customer demands. If we are unable to do so, our business, results of operations, financial condition and cash flows could be adversely affected” and “Risk Factors - The launch of new brands, eyewear or designs and expansion plans for our business that prove to be unsuccessful could affect our growth plans, which could adversely affect our business, results of operations, financial condition, and cash flows” on pages 68 and 67, respectively.

Eyewear market opportunity, our omnichannel reach and multiplicity of eyewear enabling our volume and value focus

We are focused on driving the sales volume of eyewear, particularly through growing our annual transacting customer accounts through factors such as demand for eyewear in our current geographies of focus, expanding our omnichannel reach and growing multiplicity of eyewear purchases.

The increasing demand for prescription eyewear, growing omnichannel reach, our focus on improving customer experience, and the breadth and innovation of our collections allow us to attract new customers and help in the retention of our existing customers. The two-year order repeat rate from new customer accounts was 98.16%, 98.90% and 93.26% in the Financial Years 2023, 2022 and 2021, respectively. As of March 31, 2025, our “Lenskart Gold” membership program had 6.77 million members in India. In the Financial Year 2025, we acquired 0.95 million Lenskart Gold members. Our Annual Transacting Customer Accounts increased from 7.70 million customers in the Financial Year 2023 to 12.41 million customers in the Financial Year 2025. Additionally, our number of eyewear units sold increased from 15.95 million in Financial Year 2023 to 21.23 million in Financial Year 2024 to 27.20 million in Financial Year 2025.

Numbers of Eyewear Units Sold (in millions)	Financial Years
	2025	2024	2023
India	22.91	17.65	13.69
International	4.29	3.58	2.26
Consolidated	27.20	21.23	15.95

Our aim is to build our Company as a trusted consumer brand across India and the geographies that we operate in, that customers associate with consistent quality, functionality, delivered at scale and at accessible price points. We have curated a portfolio of sub-brands that caters to the economy, affordable premium and premium categories of customers. We believe we have built a brand that appeals to a wide range of customer categories. This is reflected in the diversity of our price points, with 18.13 % of our sales in India during the Financial Year 2025 from orders with a transaction value below Rs2,000 and 18.14% from products with transaction value above Rs10,000. During the Financial Year 2025, prices for our prescription eyeglasses in India ranged from Rs399 to Rs41,199, and outside India, from USD 48.41 (Rs4,142.93) to USD 670.06 (Rs57,343.73).

See also, "Risk Factors - The location, size and performance of our retail store network component of our omnichannel network are critical to our success. We cannot assure you that our retail store network will expand and operate as expected or that the current locations of our retail stores will continue to be attractive as demographic patterns change” on page 60.

Our Acquisitions and Pro forma Results

Our approach to expanding and diversifying our brand, product portfolio and offerings, and geographical presence includes both organic initiatives and selective brand collaboration, investments and acquisitions. We acquired a substantial stake in Owndays on August 10, 2022 to expand our footprint across Japan and Southeast Asia. We started selling Owndays-branded products in Lenskart stores in India within nine months of our acquisition, demonstrating our operational agility and integration capabilities. In 2024, we invested in French brand ‘Le Petit Lunetier and launched their products in Lenskart stores in India.

We initially entered into a master franchise agreement with Dealskart on November 1, 2018, which formalized the operation of Lenskart-branded FoFo stores managed by Dealskart, while our other franchisees continued to operate their respective stores independently. Under the master franchise arrangement, Dealskart operated Lenskart-branded stores with commercial terms primarily comprising a sales-based fee and a one-time franchise fee. As part of our broader restructuring efforts, we expanded our commercial arrangement with Dealskart, effective October 1, 2019, to include the grant of an exclusive license for online platform operations pursuant to a separate license agreement, along with the provision of fulfillment and logistics support services under a vendor agreement. Subsequently, beginning in October 2020, we adopted a revised store operating structure whereby we directly leased newly established retail locations and sub-leased them to Dealskart, which continued to manage day-to-day operations and reimbursed us for rent and associated capital expenditures. In order to consolidate our control over retail and fulfillment operations, we entered into a termination agreement with Dealskart on November 30, 2024, pursuant to which all existing commercial agreements were terminated and we assumed direct control and operation of all retail stores and platform operations managed by Dealskart.We have included the Unaudited Pro forma Financial Information in this Draft Red Herring Prospectus to illustrate the effects of the Dealskart Acquisition, assuming its completion as at April 1, 2024, April 1, 2023 and April 1, 2022. Dealskart operates exclusively in India, and as such, the difference between our pro forma results and our restated results are attributed to our acquisition of Dealskart and our India operations only. See also "Our Business - Recent Developments - The Dealskart Acquisition" on page 277.

The table below sets out our results, on a pro forma basis, for the Financial Years 2025, 2024 and 2023:

Particulars	Unit	Financial Year
		2025	2024	2023
Revenue from Operations	Rs million	65,240.10	53,234.36	36,776.26
Product Margin	Rs million	44,696.68	35,600.71	23,378.28
EBITDA excluding other income	Rs million	11,156.91	7,638.43	3,023.15

The table below sets out our results, on a restated basis, for the Financial Years 2025, 2024 and 2023:

Particulars	Unit	Financial Year
		2025	2024	2023
Revenue from Operations	Rs million	66,525.17	54,277.03	37,880.28
Product Margin	Rs million	45,181.13	36,515.63	24,199.18
EBITDA excluding other income	Rs million	9,710.56	6,720.91	2,597.09

The table below sets out our India Segment Total Revenue as per Ind AS 108, Segment Results Pre-Depreciation and Amortisation (pre-intersegment elimination) and India Segment Product Margin, on a restated basis, for the Financial Years 2025, 2024 and 2023:

Particulars	Unit	Financial Year
		2025	2024	2023
India Segment Total Revenue as per Ind AS 108	Rs million	40,604.66	32,062.08	23,920.49
India Segment Product Margin	Rs million	25,455.73	20,003.09	14,068.58
India Segment Results Pre-Depreciation and Amortisation	Rs million	4,894.76	3,034.14	1,054.51

Note: All the above segmental numbers are pre-intersegment elimination.

The graphic below sets out details of our revenue from operations, on a proforma basis, for the Financial Years 2023, 2024 and 2025:

See also, “Risk Factors - The Unaudited Proforma Financial Information included in this Draft Red Herring Prospectus which has been prepared to illustrate the effects of the acquisition of Dealskart Online Services Private Limited during the Financial Year 2025 on our Restated Consolidated Financial Information is not indicative of our expected results of operations in future periods or our future financial position or a substitute for our past results" on page 79. See also, “Risk Factors - We have pursued and are likely to continue to pursue acquisitions for inorganic growth. Our inability to successfully complete and integrate suitable acquisitions on acceptable terms in the future could adversely affect our business, results of operations, financial condition and cashflows” and “Risk Factors - Our global operations expose us to management, legal, tax, political and economic risks, and our failure to address such risks could adversely affect our business, results of operations, financial condition and cash flows"" on pages 69 and 58, respectively.

The Proposed Stellio Ventures Acquisition

Pursuant to a Share Purchase Agreement dated July 12, 2025, by and among our subsidiary Lenskart Solutions Pte. Ltd., Stellio Ventures S.L., investor shareholders of Stellio Ventures S.L. and founders of Stellio Ventures S.L., Lenskart Solutions Pte. Ltd has agreed to acquire 32,226 shares of Stellio Ventures S.L., representing 80% of its share capital on a fully diluted basis, for a total consideration of Rs4,063.93 million (assuming an exchange rate of €1 = Rs97.97), which will comprise Rs2,301.29 million payable to the investors shareholders of Stellio Ventures S.L. and Rs1,762.64 million payable to the founders of Stellio Ventures S.L., including a fixed and deferred component. The transaction is subject to completion.

Stellio markets a range of fashion sunglasses as well as related accessories direct-to-consumers under the “Meller” brand. Its products are sold mostly online through their website to customers across several countries. It also has a retail store located in Barcelona, Spain. Stellio was profit-making under Spanish GAAP for the Calendar Year 2024. The acquisition is expected to deliver the following strategic benefits to our Company:

• introduces a new sub-brand within our portfolio, focused on Gen Z and Millennial customers;

• strengthens our offering in the sunglasses category for our customers;

• augments our Lenskart brand by offering contemporary fashionable sunglass designs to our customers;

• further strengthen our social media brand building and online e-commerce capabilities; and

• provides cost synergies to our supply chain network.

See also, “History and Certain Corporate Matters"" and “Risk Factors - We have pursued and are likely to continue to pursue acquisitions for inorganic growth. Our inability to successfully complete and integrate suitable acquisitions on acceptable terms in the future could adversely affect our business, results of operations, financial condition and cash flows" on pages 299 and 69, respectively.

Our growth is expected to be complemented by our ability to replicate our successful operating model in new markets. Our entry into new international geographies, supported by our scalable manufacturing and supply chain infrastructure and proposed acquisitions, is expected to enhance our business and growth potential.

Materials Costs and Product Margin Optimization

Our cost of materials consumed is impacted by the volume of raw materials required for the manufacturing and delivery of our eyewear, and correspondingly the price at which we procure such materials. Furthermore, our ability to manage our inventory while maintaining and enhancing operational efficiency, impacts our ability to maintain or increase our product margins.

As of March 31, 2025, 75.37% of our eyewear inventory in India was centralised and stored at our manufacturing facilities, with only limited display inventory and limited for-sale-inventory maintained at individual stores. This centralised supply chain model allows us to offer customers a wide assortment of products, without being constrained by in-store SKU availability.

Further, it allows us to reduce inventory risk, improve demand forecasting, and improve inventory turnover.

We manufacture a wide range of frames in-house, spanning several designs and a range of materials. We commenced manufacturing frames in China through our joint venture in 2017 and extended these capabilities to our manufacturing facilities in India in 2021. Our in-house frame mould design and frame and lens manufacturing capabilities allows us to launch new original designs, frequently and with lower cost versus procuring these from other third-party vendors. During the Financial Year 2025, we manufactured 6.44 million frames at our own facilities in India and through our joint venture in China, as compared to 5.35 million in the Financial Year 2024 and 4.44 million in the Financial Year 2023. In India, we manufacture a wide range of lenses across all powers, including single-vision, bifocal, and progressive lenses, supported by advanced, automated technology and precision tooling. During the Financial Year 2025, we manufactured 4.06 million lenses in-house at our manufacturing facilities in India.

Following the acquisition of Owndays on August 10, 2022, we integrated procurement operations across both entities and established a centralized sourcing team. This integration has not only led to significant synergies, including improved vendor terms, higher order consolidation, and better price discovery, but also helped us in efficient inventory planning and streamlined supply chain coordination across markets. As a result, we are better positioned to drive margin improvements while maintaining product quality and availability. Our operations enable us to manufacture at scale, reduce reliance on intermediaries, and achieve better price realization from suppliers. This structure enables us to achieve economies of scale and generate operating leverage across our business. As per Redseer Report, the average cost incurred for frames and lenses sold by Lenskart in India in the Financial Year 2025 was 35-40% lower than the industry average. In addition, we are able to serve customers in Singapore and the United Arab Emirates from our facilities in India.

Set out below is our product margin, product margin %, India segment product margin, India segment product margin %, International segment product margin and International segment product margin %, on a restated basis, for the Financial Years 2025, 2024 and 2023:

Particulars	Financial Year
	2025		2024		2023
	Amount (Rs in millions)	%	Amount (Rs in millions)	%	Amount (Rs in millions)	%
India Segment Product Margin	25,455.73	62.69%	20,003.09	62.39%	14,068.58	58.81%
International Segment Product Margin	19,639.17	74.43%	16,483.46	72.78%	10,110.93	70.42%
Product Margin	45,181.13	67.92%	36,515.63	67.28%	24,199.18	63.88%

Note: All the above segmental numbers are pre-intersegment elimination.

The graphic below sets out our product margin and product margin %, on a proforma basis, for the Financial Years 2025, 2024 and 2023:

Cost-effectiveness and Operating Leverage

Our profitability depends on our ability to remain cost-effective, which depends on a number of factors such as product margin improvement, the efficiency of our sales and marketing initiatives, and the continued enhancement of our technology infrastructure to drive operational effectiveness. As our retail stores mature and customer cohorts deepen, we expect capital already deployed will yield stronger returns. Operating leverage will also play a meaningful role in enhancing ROCE. As fixed infrastructure, whether in retail, manufacturing, or technology, is utilized more efficiently, incremental growth is expected to contribute disproportionately to operating profit, improving key return ratios such as return on equity and return on capital employed.

Marketing and promotion expenses: We invest in marketing and advertisement initiatives to drive new customer acquisitions, customer retention and to increase awareness. While we have gained prominence as a lifestyle retail company by leveraging our core capabilities in content marketing, social media and influencer marketing, our cost effectiveness depends on our ability to attract and retain consumers at reasonable marketing expenses. On a restated basis, marketing and promotion expenses as a percentage of revenue from operations has decreased from 7.76% in the Financial Year 2023 to 6.74% in the Financial Year 2025. On a proforma basis, the marketing expenses as a percentage of revenue from operations has declined even further. Our omnichannel strategy offers cost advantages. In a single-channel setup, marketing tends to be expensive because every campaign must work harder to drive conversion through just one touchpoint. In contrast, our omnichannel approach creates marketing leverage. Promotions on one channel (such as digital) often drive engagement and footfall in others (such as stores or home visits). This overlap allows us to maximize the impact of our marketing investments, achieving better reach and conversion without proportionally increasing budgets.

Employee benefits expense : Our employees are critical to our success. As of March 31, 2025, we had 17,607 employees with 14,482 in India and 3,125 outside India. The consolidation of Dealskart subsequent to its acquisition on December 31, 2024 also resulted in an increase in our employee base. We took over Dealskart-operated stores and operations into our CoCo store network, thereby increasing the share of CoCo stores in our total store network. This has led to an increase in the number of employees in our payroll leading to higher employee benefits expenses. However, this was partially offset by the operating leverage resulting from a reduction in central employee costs, including head office payroll expenses. We continue to make investments in our manpower with the addition of stores and improving customer experience at our high-footfall stores. In addition, we continue to strengthen our technology team.

Commission and incentive expenses: We operate our store network across a range of formats: CoCo, FoFo and CoFo. In India, commission to franchise stores is based on the terms agreed with franchisee partners at the time of entering into agreement. See also, "-Our Business Relationships - Franchisees” on page 287 for a description of the general terms of our franchise arrangements. On a proforma basis, our commission and incentive expenses as a percentage of revenue from operations has declined over the last three years, consistent with the increasing percentage of our CoCo stores among out total stores, and effect of the acquisition of Dealskart.

Set out below is our segment results pre-depreciation and amortisation and segment results pre-depreciation and amortisation margin (India and International) and EBITDA excluding other income and EBITDA excluding other income margin, on a restated basis, as per Ind AS 108, for the Financial Years 2025, 2024 and 2023:

Particulars	Unit	Financial Year
		2025	2024	2023
India - Segment Results Predepreciation and Amortisation	Rs million	4,894.76	3,034.14	1,054.51
India - Segment Results Predepreciation and Amortisation Margin	%	12.05%	9.46%	4.41%
International - Segment Results Predepreciation and Amortisation	Rs million	4,584.94	3,444.37	1,411.21
International - Segment Results Predepreciation and Amortisation Margin (13)	%	17.38%	15.21%	9.83%
EBITDA excluding other income	Rs million	9,710.56	6,720.91	2,597.09
EBITDA excluding other income Margin	%	14.60%	12.38%	6.86%

Note: All the above segmental numbers are pre-intersegment elimination.

Set out below is our EBITDA excluding other income and EBITDA excluding other income margin for the Financial Years 2025, 2024 and 2023, on a proforma basis:

Capital Efficiency and Return on Capital Employed

Return on Capital Employed (“ROCE”) is a metric that reflects how efficiently our business converts its capital into profits. Our operations span omnichannel retail, in-house manufacturing, and technology-enabled processes in India, and we have recently commenced operations in select international markets. Efficient capital allocation across these areas is critical to maintaining and improving our ROCE.

Our revenue from operations for the Financial Years 2025, 2024 and 2023 was Rs66,525.17 million, Rs54,277.03 million and Rs37,880.28 million, respectively. As of March 31, 2025, our capital employed was Rs38,398.39 million. Capital employed comprises the sum of total equity of Rs62,061.70 million of, current liabilities - financial liabilities - borrowings of Rs1,344.09 million, non-current liabilities - financial liabilities - borrowings of Rs2,115.30 million and non-current liabilities - financial liabilities - deferred tax liabilities (net) of Rs1,514.97 million less non-current assets - goodwill of Rs18,755.94 million, noncurrent assets - intangible assets of Rs9,067.04 million and non-current assets - deferred tax assets (net) of Rs814.68 million. In the Financial Year 2025, our EBIT was Rs5,312.46 million which includes one-time benefit recorded as other income - FVTPL gain on deferred consideration for the acquisition of Owndays shares of Rs1,671.98 million. Our restated profit/(loss) before tax was Rs3,853.56 million, Rs590.31 million and Rs(1,011.76) million for the Financial Years 2025, 2024 and 2023, respectively, and our restated profit/(loss) for the year was Rs2,973.40 million, Rs(101.54) million and Rs(637.57) million for the Financial Year s 2025, 2024 and 2023, respectively. On a restated basis, our ROCE for the Financial Year 2025 was 13.84%. On a proforma basis, our ROCE in the Financial Year 2025 was 16.30%.

ROCE is positively influenced by scale up of our India and international business. In addition, higher manufacturing capacity utilization, improvement in profitability and working capital days are key drivers to improvement in ROCE. Giving effect to the acquisition of Dealskart, set out below is the Return on Capital Employed for the financial years indicated and the evolution of key drivers of ROCE.

The table below sets out details of our capital employed, earnings before interest and tax and return on capital employed during the Financial Years 2025, 2024 and 2023:

Particulars	Unit	Financial Year
		2025	2024	2023
Capital Employed	Rs in million	38,398.39	35,848.29	37,476.4 7
Earnings Before Interest and Tax (EBIT)	Rs in million	5,312.46	1,820.20	(178.98)
Return on Capital Employed (ROCE)	%	13.84%	5.08%	(0.48)%

Note: Return on Capital Employed is computed as EBIT divided by capital employed with EBIT being computed as the sum of restated profit /(loss) for the year, tax expense/(credit) and finance costs; capital employed being computed as the sum of total equity and current and non-current borrowings and deferred tax liabilities less goodwill and other intangible assets, intangible assets under development and deferred tax assets.

Material Accounting Policies

Functional and presentation currency

The Restated Consolidated Financial Information is presented in Indian Rupees (Rs or INR), which is also our functional currency. All amounts have been rounded-off to the nearest millions, unless otherwise indicated.

Basis of measurement

The Restated Consolidated Financial Information has been prepared on the historical cost basis except for the following items:

Items	Measurement basis
Investments in equity shares other than subsidiary, associate and joint venture	Fair value
Investments in mutual funds	Fair Value
Liabilities for share-based payment arrangements	Fair Value
Other financial assets and liabilities	Amortised cost

Use of estimates and judgements

In preparing the Restated Consolidated Financial Information, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Judgements

In the process of applying our accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the Restated Consolidated Financial Information:

Determining the lease term of the contract with renewal and termination option - Group as a lessee

We determine the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

We have several lease contracts that include extension and termination options. We apply judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, we reassess the lease term if there is a significant event or change in circumstances that is within our control and affects our ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

Leases - Estimating the incremental borrowing rate

We cannot readily determine the interest rate implicit in the lease, therefore, we use our incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that we would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what we ‘would have to pay, which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease.

Operating lease commitments - Group as a lessor

We have entered into commercial property leases on our investment property portfolio. We have determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a major part of the economic life of the commercial property and the fair value of the asset, that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. We have based our assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond our control. Such changes are reflected in the assumptions when they occur. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively.

Provision for employee benefits

The measurement of obligations and assets related to defined benefit / other long-term benefits plans makes it necessary to use several statistical and other factors that attempt to anticipate future events. These factors include assumptions about the discount rate, the rate of future compensation increases, withdrawal, mortality rates etc. The management has used the past trends and future expectations in determining the assumptions which are used in measurements of obligations.

Recognition of deferred tax assets

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is evidence that future taxable profit may not be available. Therefore, in case of a history of recent losses, we recognise a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realised.

Impairment of trade receivables

The impairment provisions for trade receivables disclosed are based on assumptions about risk of default and expected loss rates. We use judgement in making these assumptions and selecting the inputs to the impairment calculation, based on our history, existing market conditions as well as forward looking estimates at the end of each reporting period. Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on us and that are believed to be reasonable under the circumstances.

Provision for litigation

The management determines the estimated probability of outcome of any litigation based on our assessment supported by technical advice on the litigation matters, wherever required.

Provision for warranties

We offer one-year warranty on Eyeglasses and Sunglasses. Warranty costs on sale of goods are provided on the basis of managements estimate of the expenditure to be incurred during the unexpired period. Provision is made for the estimated liability in respect of warranty costs in the year of recognition of revenue and is included in the statement of profit and loss. The estimates used for accounting for warranty costs are reviewed periodically and revisions are made as and when required.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the statement of assets and liabilities cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

Impairment ofnon-financial assets

The carrying amounts of our non-financial assets, other than deferred tax assets, are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the assets recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit (‘CGU) is the greater of its value in use and its fair value less costs to sell. 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 or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (‘CGU).

Market related information and estimates are used to determine the recoverable amount. Key assumptions on which management has based its determination of recoverable amount include estimated long term growth rates, weighted average cost of capital and estimated operating margins. Cash flow projections take into account past experience and represent managements best estimate about future developments.

Measurement of fair values

A number of our accounting policies and disclosures require measurement of fair values, for both financial and non-financial assets and liabilities.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, we use observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

We recognise transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Current versus non-current classification

We present assets and liabilities in statement of assets and liabilities based on current / non-current classification.

An asset is classified as current when it is:

Expected to be realised or intended to be sold or consumed in normal operating cycle,

Held primarily for the purpose of trading,

Expected to be realised within twelve months after the reporting period, or

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

All other assets are classified as non-current.

A liability is classified as 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 least twelve months after the reporting period.

All other liabilities are classified as non-current.

All assets and liabilities have been classified as current or non-current as per our operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, we have ascertained our operating cycle as less than 12 months for the purpose of current and non- current classification of assets and liabilities.

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

Property, plant and equipment

Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and accumulated impairment losses, if any.

Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.

Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to us.

Depreciation

Depreciation is provided on a pro-rata basis under the straight-line method. The estimated useful lives of items of property, plant and equipment for the current and comparative periods are as follows:

Asset category	Estimated useful life (in years)
Building (Non RCC Structure)	30
Building (RCC Structure)	60
Roads	10
Plant and machinery (Other than MEI Auto lens cutting machine)	7#
Plant and machinery (MEI Auto lens cutting machine, ASRS)*	15
Furniture and fixtures	7-10
Office equipment	5-7
Computers and peripherals (including server)	3-6
Electrical fittings	10
Vehicles	6-10

# For these class of assets, based on internal technical evaluation, our management believes useful lives as given above best represent the period over which we expect to use these assets.

* Assets working in double shift and triple shift any time during the year, the depreciation has been increased by 50% and 100?%, respectively.

Leasehold improvements are depreciated over the useful life of individual assets or period of lease, whichever is lower.

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Based on technical evaluation and consequent advice, we believe that its estimates of useful lives as given above best represent the period over which management expects to use these assets.

Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (up to) the date on which asset is ready for use (disposed of).

Capital work-in-progress

The cost of property, plant and equipment not ready for their intended use is recorded as capital work-in-progress before such date. Cost of construction that relate directly to specific property, plant and equipment and that are attributable to construction activity in general and can be allocated to specific property, plant and equipment are included in capital work-in-progress.

Intangible assets

Recognition and initial measurement

Intangible assets represent computer software and trademarks. Intangible assets are stated at acquisition cost less accumulated amortization and impairment loss, if any. The cost of intangible asset comprises its purchase price, including any import duties and non-refundable taxes or levies and any directly attributable expenditure on making the asset ready for its intended use. Intangible assets are amortised in the statement of profit and loss on a straight-line basis in accordance with the estimated useful lives of respective assets. The managements estimates of the rate of amortisation of intangible assets are as follows:

Asset category	Life (in years)
Software	5 years
Trademarks	10 years
Brand	3.33 years
Other than Brand and Goodwill	Indefinite*
Non- Compete	As per agreement

* Brand and Goodwill are evaluated annually for impairment and adjusted if required.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred.

Amortisation

Amortisation expense is charged on a pro-rata basis for assets purchased during the year. Amortisation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

Inventories

Inventories which comprise of finished goods, traded goods, raw material, consumables, tools and stores and spares are carried at the lower of cost and net realisable value.

Cost of inventories comprises all costs of purchase and other expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their present location and condition.

The methods of determination of cost of various categories of inventories are as follows:

Particulars	Basis of Valuation
Raw Material	Weighted average cost except for certain raw materials including prescription lenses and frames which are carried at actual cost.
Consumables, tools and stores and spares	Weighted average cost
Traded goods	Actual cost
Work in progress	Weighted average cost

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

Raw materials and other supplies held for use in the production of finished products are not written down below cost except in cases where material prices have declined, and it is estimated that the cost of the finished products will exceed their net realisable value.

The comparison of cost and net realisable value is made on item by item basis.

Financial instruments Recognition and initial measurement

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. A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

Trade receivables are initially recognised at transaction value. All other financial assets and financial liabilities are initially recognised when we become a party to the contractual provisions of the instrument.

Classification and subsequent measurement

Financial assets

We classify our financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

• those measured at amortised cost.

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period, we change our business model for managing financial assets.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. On initial recognition, we may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets: Business model assessment

We make an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed, and information is provided to our management. The information considered includes:

the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether managements strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matchin g the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;

how the performance of the portfolio is evaluated and reported to our management;

the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

how managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with our continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal is defined as the fair value of the financial asset on initial recognition. ‘Interest is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, we consider the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, we consider: ^•

• contingent events that would change the amount or timing of cash flows;

• terms that may adjust the contractual coupon rate, including variable interest rate features;

• prepayment and extension features; and

• terms that limit our claim to cash flows from specified assets (e.g. non-recourse features).

Financial assets: Subsequent measurement and gains and losses

Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.

Financial assets at amortised cost: These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

Financial liabilities: Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held- for- trading, or it is a derivative or it is designated as such on initial recognition. Financial liab ilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down.

Derecognition

A financial asset is derecognised only when:

we have transferred the rights to receive cash flows from the financial asset; or

retains the contractual rights to receive the cash flows of the financial asset but assumes a contractual obligation to pay the cash flows to one or more recipients.

Where we have transferred an asset, we evaluate whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised.

Where we have not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.

Where we have neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if we have not retained control of the financial asset. Where we retain control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.

We derecognise a financial liability when its contractual obligations are discharged or cancelled or expire. We also derecognise a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.

Offsetting

Financial assets and financial liabilities are offset, and the net amount presented in the balance sheet when, and only when, we currently have a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Impairment of financial assets

We recognise loss allowances for expected credit losses on financial assets measured at amortised cost. At each reporting date, we assess whether financial assets carried at amortised cost are credit- impaired. A financial asset is ‘credit- impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit- impaired includes the following observable data:

• significant financial difficulty of the borrower or issuer; or

• a breach of contract such as a default or being past due.

We measure loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:

• bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

• Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.

Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument. 12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which we are exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, we consider reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on our historical experience and informed credit assessment and including forward-looking information.

Measurement of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to us in accordance with the contract and the cash flows that we expect to receive).

We follow ‘simplified approach for recognition of impairment loss allowance on trade receivable. Under the simplified approach, we do not track changes in credit risk for individual customers. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from initial recognition.

We use a provision matrix to determine impairment loss allowance on the portfolio of trade receivables. The provision matrix is based on our historically observed default rates and delays in realisations over the expected life of the trade receivable and is adjusted for forward looking estimates. At every balance sheet date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

Presentation of allowance for expected credit losses in the balance sheet

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery, and the amount of the loss is recognised in the Statement of Profit and Loss within other expenses. This is generally the case when we determine that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with our procedures for recovery of amounts due.

Impairment of assets

Assessment is done at each Balance Sheet date as to whether there is any indication that an asset (PPE and intangible) may be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets, is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of the asset/cash generating unit is made. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. Recoverable amount is higher of an assets or cash generating units fair value less cost of disposal and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

Assessment is also done at each statement of assets and liabilities date as to whether there is any indication that an impairment loss recognised for an asset in prior accounting periods may no longer exist or may have decreased.

Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand, demand deposits with banks with an original maturity of three months or less and short-term highly liquid investments that are readily convertible into known amount of cash and are subject to an insignificant risk of change in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, net of defined above, net of outstanding bank overdrafts as they are considered an integral part of our cash management.

Provisions (other than employee benefits)

A provision is recognized if, as a result of a past event, we have a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the legal or contractual obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for:

Contingencies. 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, or a reliable estimate of the amount cannot be made.

Revenue recognition

Revenue from contracts with customers

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer, at an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. We have generally concluded that it is the principal in its revenue arrangements because it typically controls the goods or services before transferring them to the customer.

a) Revenue from the sale of products is recognized upfront at the point in time when the product is delivered to the customer. Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.

b) Revenue from services is recognized in accordance with the terms of contract when the services are rendered, and the related costs are incurred, and the balance amount is recognised as deferred revenue.

c) Revenue from membership fees is recognised over the period of membership.

Contract balances

Trade receivables: A receivable represents our right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in financial instrument - initial recognition and subsequent measurement.

Contract liabilities: A contract liability is the obligation to transfer goods or services to a customer for which we have received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before we transfer goods or services to the customer, a contract liability is recognised when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when we perform under the contract.

Government grants

Government grants are recognised initially as deferred income at fair value when there is reasonable assurance that they will be received, and we will comply with the conditions associated with the grant; they are then recognised in profit or loss as other operating revenue on a systematic basis. Grants related to the acquisition of assets are recognised in profit or loss as other income on a systematic basis over the useful life of the asset.

Grants that compensate us for expenses incurred are recognised in profit or loss as other operating revenue on a systematic basis in the periods in which such expenses are recognised.

Employee benefits

Our obligation towards various employee benefits has been recognised as follows:

Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if we have a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

Share based payment transactions

The grant date fair value of equity settled share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as expense is based on the estimate of the number of awards for which the related service and nonmarket vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market vesting conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. If the entity elects to settle in cash, the cash payment shall be accounted for as the repurchase of an equity interest, i.e. as a deduction from equity.

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. We make specified monthly contributions towards Government administered provident fund scheme. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which the related services are rendered by employees.

Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. Our net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees hav e earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI. We determine the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (‘past service cost or ‘past service gain) or the gain or loss on curtailment is recognised immediately in profit or loss. We recognise gains and losses on the settlement of a defined benefit plan when the settlement occurs.

We treat accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the reporting date. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer the settlement for at least twelve months after the reporting date.

Other long-term employee benefits

Our net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual independent actuarial valuation using the projected unit credit method. Remeasurements gains or losses are recognised in profit or loss in the period in which they arise.

Termination benefits

Termination benefits are expensed at the earlier of when we can no longer withdraw the offer of those benefits and when we recognize costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.

Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of our Companies at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences are recognised in profit or loss.

Foreign operations

The assets and liabilities of foreign operations of its subsidiary, are translated into INR, the functional currency of the Holding Company, at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into INR at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.

Foreign currency translation differences are recognised in OCI and accumulated in equity (as exchange differences on translating the financial statements of a foreign operation), except to the extent that the exchange differences are allocated to NCI. These exchange differences are reclassified from equity to profit or loss on disposal of the net investment.

Leases

We assess at contract inception whether a contract is or contains a lease. That is if the contract conveys the right to control the use of an identified asset for a period of time in exchange of consideration.

Group as a lessee

We apply a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. We recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

Right of use asset

We recognise right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.

Lease Liabilities

At the commencement date of the lease, We recognise lease liabilities measured at the present value of the lease payment to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by us and payments of penalties for terminating the lease, if the lease term reflects us exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, we use its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

Short-term leases and leases of low value assets

We apply the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low value assets recognition exemption to leases of assets that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term.

Company as a lessor

At inception or on modification of a contract that contains a lease component, our Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

When our Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

To classify each lease, our Company makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, our Company considers certain indicators such as whether the lease is for a major part of the economic life of the asset.

When our Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which our Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, then our Company applies Ind AS 115 to allocate the consideration in the contract.

Our Company applies the derecognition and impairment requirements in Ind AS 109 to the net investment in the lease. Our Company further regularly reviews estimated unguaranteed residual values used in calculating the gross investment in the lease.

Our Company recognised lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income.

Income tax

Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to an item recognised directly in equity or in other comprehensive income.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred tax is not recognised for

- temporary differences arising on the initial recognition of assets or liabilities in a transaction that :at the time of transaction that neither affects neither accounting nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences.

- temporary differences related to investments in subsidiaries to the extent that our Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future;

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case of a history of recent losses, we recognise a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realised. Deferred tax assets - unrecognised or recognised, are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which we expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis, or their tax assets and liabilities will be realised simultaneously.

Borrowing cost

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Borrowing costs consist of interest and other costs that we incur in connection with the borrowing of funds (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs).

For general borrowing used for the purpose of obtaining a qualifying asset, the amount of borrowing costs eligible for capitalization is determined by applying a capitalization rate to the expenditures on that asset. The capitalization rate is the weighted average of the borrowing costs applicable to the borrowings that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs capitalized during a period does not exceed the amount of borrowing cost incurred during that period.

All other borrowing costs are expensed in the period in which they occur.

Earnings per share

Basic Earnings per share

Basic earnings/(loss) per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders

(after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.

Diluted Earnings per share

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. The dilutive potential equity shares are deemed to be converted as of the beginning of the period, unless they have been issued at a later date.

Segment Reporting

An operating segment is a component that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the other components, and for which discrete financial information is available. Our Company is engaged into designing, manufacturing, branding, and retailing of own-branded eyewear products. We sells prescription eyeglasses, sunglasses, and other products including contact lenses and eyewear accessories, which has been defined as one business segment. Accordingly, our activities/business are reviewed regularly by our Board of Directors from an overall business perspective, rather than reviewing its products/services as individual standalone components.

Investment Property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by us is classified as investment property.

Investment property also includes property that is being constructed or developed for future use as investment property.

Initial measurement

Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Investment property that is obtained through a lease is measured initially at the lease liability amount adjusted for any lease payments made at or before the commencement date (less any lease incentives received), any initial direct costs incurred by us, and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

Though we measure investment property using cost based measurement, the fair value of investment property is disclosed in the notes to the Restated Consolidated Financial Information.

Subsequent measurement (depreciation and useful lives)

Depreciation on investment properties comprising right-of-use held for sublease is provided on straight-line basis over the period of lease and other tangible assets as per the policy defined for same class of assets under property, plant and equipment. The residual values, useful lives and method of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.

Where during any financial year, any addition has been made to any asset, or where any asset has been sold, discarded, demolished or destroyed, or significant components replaced; depreciation on such assets is calculated on a pro rata basis as individual assets with specific useful life from the month of such addition or, as the case may be, up to the month on which such asset has been sold, discarded, demolished or destroyed or replaced.

De-recognition

Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of de-recognition.

Business Combination

Dividend income is recognised in profit or loss on the date on which our Companys right to receive payment is established. Interest income or expense is recognised using the effective interest method.

The ‘effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expec ted life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- the amortised cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

Recognition of dividend income, interest income or expense

Dividend income is recognised in profit or loss on the date on which our Companys right to receive payment is established. Interest income or expense is recognised using the effective interest method.

The ‘effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expec ted life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- the amortised cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

Key Components of our Restated Consolidated Statement of Profit and Loss

The key components of our Restated Consolidated Statement of Profit and Loss are described below:

Income

Income consists of (i) revenue from operations; and (ii) other income.

Revenue from operations. Revenue from operations comprises (i) revenue from sale of goods; (ii) revenue from sale of services; and (iii) other operating revenue. Revenue from the sale of goods comprises revenue from the sale of prescription eyewear, sunglasses, contact lenses and accessories. Revenue from sale of services comprises fees received from memberships, training, services and home eye check-ups. Other operating revenues primarily comprise lease income, customer support fees, sale of scrap and website licence fee.

The following table sets forth a breakdown of our segment total revenue as per Ind AS 108 (India and International) and revenue from operations, for the Financial Years 2025, 2024 and 2023:

Particulars	Financial Year
	2025	2024	2023
	(Rs in million, unless otherwise stated)
India Segment Total Revenue as per Ind AS 108	40,604.66	32,062.08	23,920.49
India Segment Total Revenue as per Ind AS 108 Growth (%)	26.64%	34.04%	NA
International Segment Total Revenue as per Ind AS 108	26,387.29	22,648.95	14,358.05
International Segment Total Revenue as per Ind AS 108 Growth (%)	16.51%	57.74%	NA
Revenue from Operations	66,525.17	54,277.03	37,880.28

Note: All the above segmental numbers are pre-intersegment elimination.

Our international segment revenue is mainly attributable to the sale of our products and services in Asia, the Middle East and other countries in which we offer our products.

Other income. Other income comprises interest income (which includes interest on fixed deposits, financial assets carried at amortised cost, income tax refund and others), gains on redemption/fair valuation of mutual fund units, gain on sale/fair value change of non-current investments carried at fair value through profit or loss (net), grant income, management support service fee, duty drawback, gain on termination of lease, rent concession and miscellaneous income. Other income also consists of foreign exchange gains and losses which comprises realized as well as translation effects of income, given our global operations across 14 countries.

Expenses

Expenses consist of cost of materials consumed, purchase of stock-in-trade, changes in inventory of traded goods, employee benefits expense, finance costs, depreciation and amortisation expense and other expenses.

Cost of materials consumed. Cost of material consumed comprise our costs of raw materials, consumables and tools consumed during the year and translation differences.

Purchases of stock-in-trade. Purchases of stock-in-trade relates to costs incurred for the purchase of traded goods.

Changes in inventory of traded and finished goods. Changes in inventory of traded and finished goods comprises net increases or decreases in stock of traded and finished goods.

Cost of materials consumed, purchases of stock-in-trade and changes in inventory of traded and finished goods have been discussed in a consolidated manner below, as “Materials Cost”.

Employee benefits expense. Employee benefits expense comprises salaries, wages and bonus, contribution to provident and other funds, gratuity, share based payments to employees and staff welfare.

Finance costs. Finance costs comprise interest expenses on long term borrowings, cash credit and short-term borrowings, lease liabilities and MSME payables.

Depreciation and amortisation expense. Depreciation and amortisation expense comprises depreciation of property, plant and equipment, depreciation of investment property, amortization of intangible assets and amortization and impairment of right of use assets.

Other expenses. The largest components of other expenses are commission and incentive expense, marketing and promotion expenses, information technology support expenses and rent expenses.

Other components of other expenses include postage and courier expenses, contractual labour, professional fees, payment and collection charges, travel and conveyance expenses, marketplace fee, electricity and water expenses, repair and maintenance - others, consumption of store and spares expenses, foreign exchange loss (net), communication expenses, staff recruitment and training expenses, office maintenance and security expenses, miscellaneous expenses, provision for warranty expenses, rates and taxes expenses, insurance expenses, loss on sale of property, plant and equipment expenses, printing and stationary expenses, loss on sale /fair value investments carried at fair value through profit or loss (net), bank charges, and loss allowance for doubtful debt and advances and trade receivables.

Share of (loss) of associates and joint ventures

Share of (loss) of associates and joint ventures represents our share of loss in Tango IT Solutions India Private Limited, Baofeng Framekart Technology Limited, QuantDuo Technologies Private Limited, Visionsure Services Private Limited and Le Petit Lunetier.

Tax expense

Tax expense consists of current tax, income tax (credit)/charge relating to previous year, and deferred tax charge / (credit).

Our Results of Operations

Set out below is select financial information for the Financial Years 2025, 2024 and 2023, the components of which are also expressed as a percentage of our total income for such years:

Particulars	For the Financial Year
	2025		2024		2023
	(Rs in million)	(% of total income)	(Rs in million)	(% of total income)	(Rs in million)	(% of total income)
Income
Revenue from operations	66,525.17	94.91%	54,277.03	96.75%	37,880.28	96.44%
Other income	3,567.59	5.09%	1,821.69	3.25%	1,399.46	3.56%
Total income (I)	70,092.76	100.00%	56,098.72	100.00%	39,279.74	100.00%
Expenses
Cost of raw materials and components consumed	17,603.27	25.11%	14,829.42	26.43%	11,328.03	28.84%
Purchase of stock in trade	4,573.45	6.52%	3,473.70	6.19%	2,673.82	6.81%
Changes in inventory of traded and finished goods	(832.68)	(1.19%)	(541.72)	(0.97%)	(320.75)	(0.82%)
Employee benefits expense	13,787.54	19.67%	10,864.91	19.37%	7,175.58	18.27%
Finance costs	1,458.90	2.08%	1,229.89	2.19%	832.78	2.12%
Depreciation and amortisation expense	7,965.69	11.36%	6,722.40	11.98%	4,175.53	10.63%
Other expenses	21,638.61	30.87%	18,917.34	33.72%	14,385.75	36.62%
Total expense (II)	66,194.78	94.44%	55,495.94	98.93%	40,250.74	102.47%
Restated profit/(loss) before tax and share of (loss) of associates and joint ventures (III=I - II)	3,897.98	5.56%	602.78	1.07%	(971.00)	(2.47%)
Share of (loss) of associates and joint ventures, net of tax	(44.42)	(0.06%)	(12.47)	(0.02%)	(40.76)	(0.10%)
Restated profit/(loss) before tax (IV)	3,853.56	5.50%	590.31	1.05%	(1,011.76)	(2.58%)
Current tax	1,023.64	1.46%	593.22	1.06%	242.25	0.62%

 

Particulars	For the Financial Year
	2025		2024		2023
	(Rs in million)	(% of total income)	(Rs in million)	(% of total income)	(Rs in million)	(% of total income)
Adjustment of tax relating to earlier periods	-	-	(26.04)	(0.05%)	8.47	0.02%
Deferred tax (credit) / charge	(143.48)	(0.20%)	124.67	0.22%	(624.91)	(1.59%)
Total tax expense/(credit) (V)	880.16	1.26%	691.85	1.23%	(374.19)	(0.95%)
Restated profit/(loss) for the year (VI = IV - V)	2,973.40	4.24%	(101.54)	(0.18%)	(637.57)	(1.62%)

Financial Year 2025 compared to Financial Year 2024

We acquired Dealskart on December 31, 2024 and hence our results of operations for the Financial Year 2025 consolidated Dealskarts results of operations for approximately three months.

Total income: Total income increased by 24.95% to Rs70,092.76 million for the Financial Year 2025 from Rs56,098.72 million for the Financial Year 2024 primarily due to an increase in revenue from operations.

Revenue from operations: Revenue from operations increased by 22.57% to Rs66,525.17 million for the Financial Year 2025 from Rs54,277.03 million for the Financial Year 2024 primarily due to:

• increase in revenue from operations from sales of goods by 23.10% to Rs63,599.39 million for the Financial Year 2025 from Rs51,662.99 million for the Financial Year 2024. This increase was primarily due to:

o India: our revenue growth was driven by an increase in the demand for our eyewear products across our

omnichannel network. Our annual transacting customer accounts increased by 23.33% from 8.06 million customer accounts during Financial Year 2024 to 9.94 million annual transacting customer accounts during Financial Year 2025. The number of eyewear units sold has also increased by 29.80% from 17.65 million during Financial Year 2024 to 22.91 million during Financial Year 2025. We added 282 stores during the Financial Year 2025; and

o International: our revenue growth was driven primarily by an increase in demand for our eyewear products across

our omnichannel network across international locations. Our annual transacting customer accounts increased by 15.73% from 2.14 million customer accounts during the Financial Year 2024 to 2.47 million customer accounts during the Financial Year 2025. The number of eyewear units sold has increased by 19.99% from 3.58 million during Financial Year 2024 to 4.29 million during Financial Year 2025. We added 52 new stores in the Financial Year 2025.

• increase in revenue from operations from sales of services by 26.95% to Rs1,327.43 million for the Financial Year 2025 from Rs1,045.65 million for the Financial Year 2024. The increase was primarily attributable to an increase in sale of membership fees on account of an increase in our Lenskart Gold memberships (including ‘Gold, ‘Gold Pro, and ‘Gold Pro Max) to 6.77 million members as of March 31, 2025 from 5.82 million members as of March 31, 2024; and

• increase in other operating revenue due to increase in customer support fees, sales of scrap and website licence fees aggregating by 57.75% to Rs165.72 million for the Financial year 2025 from Rs105.05 million for the Financial Year 2024 and decrease in lease income by 2.10% to Rs1,432.63 million for the Financial year 2025 from Rs1,463.34 million for the Financial Year 2024. We acquired Dealskart on December 31, 2024, following which Dealskart became a wholly owned subsidiary of our Company. Following the completion of this acquisition, all store leases were restructured as follows: (i) leases held by our Company (including those which were sub-leased to Dealskart, and these sub-leases were subsequently terminated as a part of the above transition) remained unchanged; (ii) store leases held by Dealskart directly were novated to our Company; and (iii) a limited number of store leases continue to remain with Dealskart, for which Dealskart continues to pay rent and is reimbursed by our Company under a cost-sharing arrangement. For CoCo stores in India, store-level manpower and services continue to be provided by Dealskart, our wholly owned subsidiary, under an operations and maintenance agreement (with effect from January 2025), while we now manage all retail and fulfillment activities under a single, consolidated brand.

Other income: Other income increased by 95.84% to Rs3,567.59 million for the Financial Year 2025 from Rs1,821.69 million for the Financial Year 2024, primarily due to (i) a significant increase in FVTPL gain on deferred consideration to Rs1,671.98 million for the Financial Year 2025 from nil for the Financial Year 2024, due to one-time benefit from FVTPL gain on deferred consideration for the acquisition of shares of Owndays; and (ii) an increase in gain on redemption/fair valuation of mutual fund units to Rs726.59 million for the Financial Year 2025 from Rs641.43 million for the Financial Year 2024, which was partially offset by a decrease in interest income on financial assets measured at amortised cost - on fixed deposits of Rs576.29 million for the Financial Year 2025 from Rs820.39 million for the Financial Year 2024, due to redemption of fixed deposits as part of our regular treasury operations.

Total expenses: Total expenses increased by 19.28% to Rs66,194.78 million for the Financial Year 2025 from Rs55,495.94 million for the Financial Year 2024, due to increases in cost of materials consumed, changes in inventories of traded goods, purchase of stock-in-trade, employee benefits expense, depreciation and amortisation expense, finance costs, and other expenses.

Material Cost: Our Material Cost increased due to increase in cost of raw materials and components consumed by 18.71% to Rs17,603.27 million for the Financial Year 2025 from Rs14,829.42 million for the Financial Year 2024, increase in purchase of stock in trade by 31.66% to Rs4,573.45 million for the Financial Year 2025 from Rs3,473.70 million for the Financial Year 2024, and increase in changes in inventory of traded and finished goods by 53.71% to Rs(832.68) million for the Financial Year 2025 from Rs(541.72) million for the Financial Year 2024. The changes in cost of raw materials and components consumed was consistent with the increase in revenue from sales of our products and services within and outside India. We also had an improvement in product margin % to 67.92% in the Financial Year 2025 from 67.28% in the Financial Year 2024, primarily due to integrated procurement operations and increase in in-house frame manufacturing of lenses and frames.

Employee benefits expense: Employee benefits expense increased by 26.90% to Rs13,787.54 million for the Financial Year 2025 from Rs10,864.91 million for the Financial Year 2024. In our India segment, as disclosed in segment disclosure as per Ind AS 108, employee benefits expense increased by 45.79% to Rs5,026.37 million in the Financial Year 2025 from Rs3,447.57 million in the Financial Year 2024, partially driven by the acquisition of Dealskart on December 31, 2024 while in our International segment, as disclosed in segment disclosure as per Ind AS 108, our employee benefits expense increased by 18.12% to Rs8,761.17 million in the Financial Year 2025 from Rs7,417.34 million in the Financial Year 2024.

The increases were primarily due to increases in (i) salaries, wages and bonus by 27.09% to Rs12,628.04 million for the Financial Year 2025 from Rs9,936.03 million for the Financial Year 2024; (ii) contribution to provident and other funds by 2 5.22% to Rs616.35 million for the Financial Year 2025 from Rs492.22 million for the Financial Year 2024; (iii) staff welfare expenses by 16.00% to Rs388.65 million for the Financial Year 2025 from Rs335.04 million for the Financial Year 2024; (iv) share based payments to employees by 39.64% to Rs88.95 million for the Financial Year 2025 from Rs63.70 million for the Financial Year 2024; and (v) gratuity expenses by 72.86% to Rs65.55 million for the Financial Year 2025 from Rs37.92 million for the Financial Year 2024. These increases were primarily attributable to annual employee compensation increments and an increase in our employee headcount. Our employee headcount stands at 17,607 as of March 31, 2025.

Depreciation and amortisation expense: Depreciation and amortisation expense increased by 18.49% to Rs7,965.69 million for the Financial Year 2025 from Rs6,722.40 million for the Financial Year 2024. This increase in depreciation and amortisation expense was attributable to increases in (i) depreciation of right-of-use assets by 28.46% to Rs4,371.82 million for the Financial Year 2025 from Rs3,403.32 million for the Financial Year 2024, primarily due to the opening of new stores during the Financial Year 2025; (ii) depreciation of property, plant and equipment by 34.36% to Rs2,041.34 million for the Financial Year 2025 from Rs1,519.25 million for the Financial Year 2024, due to additions to property, plant and equipment of Rs 3,112.35 million during the Financial Year 2025; (iii) depreciation on investment property by 7.77% to Rs1,292.62 million for the Financial Year 2025 from Rs1,199.43 million for the Financial Year 2024, partially offset by a decrease in amortization of intangible as sets by 56.71% to Rs259.91 million for the Financial Year 2025 from Rs600.40 million for the Financial Year 2024.

Finance costs: Finance costs increased by 18.62% to Rs1,458.90 million for the Financial Year 2025 from Rs1,229.89 million for the Financial Year 2024. This increase in finance costs was attributable to increases in (i) interest on lease liabilities by 40.43% to Rs1,245.67 million for the Financial Year 2025 from Rs887.04 million for the Financial Year 2024, primarily on account of the opening of new stores during the Financial Year 2025; and (ii) other interest to Rs17.36 million for the Financial Year 2025 from Rs3.43 million for the Financial Year 2024, which was partially offset by decreases in (a) interest on long term borrowings by 62.39% to Rs120.89 million for the Financial Year 2025 from Rs321.47 million for the Financial Year 2024, primarily on account of the repayment of term-loan facilities during the previous Financial Year, leading to reduced interest expense in the Financial Year 2025; and (b) interest on cash credit and short term borrowings by 19.28% to Rs14.49 million for the Financial Year 2025 from Rs17.95 million for the Financial Year 2024.

Other expenses: Other expenses increased by 14.39% to Rs21,638.61 million for the Financial Year 2025 from Rs18,917.34 million for the Financial Year 2024. Commission and incentive expenses, which are the largest component of our other expenses, decreased by 3.72% to Rs7,331.63 million for the Financial Year 2025 from Rs7,614.68 million for the Financial Year 2024, primarily on account of decreased commissions and incentives on sales paid to franchisees, attributable to reduced number of franchisee-operated and franchisee-owned stores (FoFo), as compared to total number of stores, aided by the acquisition of Dealskart. Other key components of our other expenses that increased were (i) marketing and promotion expenses by 27.35% to Rs4,484.13 million for the Financial Year 2025 from Rs3,521.06 million for the Financial Year 2024, primarily on account of increase in marketing and promotional activities; (ii) rent expenses by 29.32% to Rs1,397.71 million for the Financial Year 2025 from Rs1,080.83 million for the Financial Year 2024, primarily on account of increased rental expenditure such as variable rent, common area charges and common area maintenance associated with the opening of new stores during the Financial Year 2025; (iii) information technology support expenses by 8.16% to Rs1,107.02 million for the Financial Year 2025 from Rs1,023.47 million for the Financial Year 2024; (iv) postage and courier expenses by 59.75% to Rs1,272.22 million for the Financial Year 2025 from Rs796.39 million for the Financial Year 2024, primarily on account of increase in direct shipments to customers and expansion in the number of cities catered to as well as initiatives such as next day delivery; (v) contractual labour by 28.35% to Rs895.10 million for the Financial Year 2025 from Rs697.37 million for the Financial Year 2024; and (vi) professional fees by 50.01%, to Rs979.00 million for the Financial Year 2025 from Rs652.63 million for the Financial Year 2024.

Share of (loss) of associates and joint ventures, net of tax. Share of (loss) of associates or joint ventures, net of tax increased to Rs44.42 million in Financial Year 2025 from Rs12.47 million in Financial Year 2024.

Total tax expenses/(credit): Total tax expenses increased by 27.22% to Rs880.16 million for the Financial Year 2025 from Rs691.85 million for the Financial Year 2024, primarily due to higher profits earned during the year. For the Financial Year 2025, we had a current tax expense of Rs1,023.64 million and a deferred tax credit of Rs143.48 million. For the Financial Year 2024, we had a current tax expense of Rs593.22 million, income tax credit relating to the previous year of Rs26.04 million and a deferred tax charge of Rs124.67 million.

Restated vrofit/(loss) for the year: As a result of the foregoing, we reported a restated profit for the year of Rs2,973.40 million for the Financial Year 2025, compared to a restated loss for the year of Rs101.54 million for the Financial Year 2024.

Financial Year 2024 compared to Financial Year 2023

We acquired Owndays on August 10, 2022 and hence our results of operations for the Financial Year 2023 consolidated Owndays results of operations for approximately eight months.

Total income: Total income increased by 42.82% to Rs56,098.72 million for the Financial Year 2024 from Rs39,279.74 million for the Financial Year 2023 primarily due to an increase in revenue from operations.

Revenue from operations. Revenue from operations increased by 43.29% to Rs54,277.03 million for the Financial Year 2024 from Rs37,880.28 million for the Financial Year 2023 primarily due to:

• an increase in Revenue from operation from sale of goods by 43.12% to Rs51,662.99 million for the Financial Year 2024 from Rs36,098.18 million for the Financial Year 2023. This increase was primarily due to:

o India: growth was driven by an increase in the demand for our eyewear products across our omnichannel network in India. Our annual transacting customer accounts increased by 28.14% from 6.29 million customer accounts during the Financial Year 2023 to 8.06 million customer accounts during the Financial Year 2024. The number of eyewear units sold has increased by 28.91% from 13.69 million during Financial Year 2023 to 17.65 million during Financial Year 2024. We added 369 new stores during the Financial Year 2024;

o International: growth was driven by an increase in demand for our eyewear products across our omnichannel network across international locations. During this year, the number of stores increased by 61. Further, our annual transacting customer accounts increased by 50.67% from 1.41 million customer accounts during the Financial Year 2023 to 2.14 million customer accounts during the Financial Year 2024. This was accompanied by our expansion into the Kingdom of Saudi Arabia leading to higher sales volumes. The number of eyewear units sold has increased by 58.65% from 2.26 million during Financial Year 2023 to 3.58 million during Financial Year 2024. We added 61 new stores during Financial Year 2024; and

• Our acquisition of Owndays on August 10, 2022, and our results of operations for the Financial Year 2023 reflects the sales attributable to Owndays since the acquisition, with sales being consolidated for a period of approximately eight months during the Financial Year 2023 and the full year for the Financial Year 2024.

• an increase in Revenue from operations from sales of services by 26.37% to Rs1,045.65 million for the Financial Year 2024 from Rs827.48 million for the Financial Year 2023. This increase was primarily attributable to increases in membership fees on account of an increase in our Lenskart Gold memberships to 5.82 million members as of March 31, 2024 from 3.41 million members as of March 31, 2023; and

• an increase in other operating revenue due to an increase in lease income by 70.03% to Rs1,463.34 million for the Financial year 2024 from Rs860.63 million for the Financial Year 2023, and an increase in customer support fees, sales of scrap and website licence fees by 11.77% to Rs105.05 million for the Financial year 2024 from Rs93.99 million for the Financial Year 2023.

Other income: Other income increased by 30.17% to Rs1,821.69 million for the Financial Year 2024 from Rs1,399.46 million for the Financial Year 2023. This increase was primarily attributable to increase in other non-operating income by 35.62% to Rs970.83 million for the Financial Year 2024 from Rs715.82 million for the Financial Year 2023, increase in interest income on fixed deposits by 24.40% to Rs820.39 million for the Financial Year 2024 from Rs659.48 million for the Financial Year 2023.

Total expense: Total expense increased by 37.88% to Rs55,495.94 million for the Financial Year 2024 from Rs40,250.74 million for the Financial Year 2023, due to increases in cost of materials consumed, purchased of stock-in-trade, other expenses, employee benefits expense, depreciation and amortisation expense, and finance costs.

Material Cost: Our Material Cost increased due to increase in cost of raw materials and components consumed by 30.91% to Rs14,829.42 million for the Financial Year 2024 from Rs11,328.03 million for the Financial Year 2023, increase in purchase of stock in trade by 29.92% to Rs3473.70 million for the Financial Year 2024 from Rs2,673.82 million for the Financial Year 2023, and increase in changes in inventory of traded and finished goods by 68.89% to Rs(541.72) million for the Financial Year 2024 from Rs(320.75) million for the Financial Year 2023. These changes in our cost of raw materials and components were driven by an increasing share of in-house production and synergies in procurement. Further, following the acquisition of Owndays, we integrated procurement operations across both entities and established a centralized sourcing team leading to synergies, including improved vendor terms, higher order consolidation, and better price discovery, while also helping us improve inventory planning and streamlined supply chain coordination across markets.

Employee benefits expense: Employee benefits expense increased by 51.42% to 00,864.91 million for the Financial Year 2024 from 0,175.58 million for the Financial Year 2023. In our India segment, as disclosed in segment disclosure as per Ind AS 108, employee benefits expense increased by 37.98% to 0,447.57 million in the Financial Year 2024 from 0,498.55 million in the Financial Year 2023. For our International segment, employee benefits expense increased by 58.59% to 0,417.34 million in the Financial Year 2024 from 0,677.04 million in the Financial Year 2023, primarily due to the acquisition of Owndays.

The increases were primarily due to increases in (i) salaries, wages and bonus by 51.08% to 0,936.03 million for the Financial Year 2024 from 0,576.49 million for the Financial Year 2023; (ii) contribution to provident and other funds by 52.88% to 092.22 million for the Financial Year 2024 from 021.97 million for the Financial Year 2023. (iii) staff welfare by 64.67% to 035.04 million for the Financial Year 2024 from 003.46 million for the Financial Year 2023; (iv) share based payments to employees by 52.03% to 03.70 million for the Financial Year 2024 from 01.90 million for the Financial Year 2023; and (v) gratuity by 19.40% to 07.92 million for the Financial Year 2024 from 01.76 million for the Financial Year 2023. These increases were primarily attributable to annual employee increments and an increase in our employee headcount.

Depreciation and amortisation expense: Depreciation and amortisation expense increased by 61.00% to 0,722.40 million for the Financial Year 2024 from 0,175.53 million for the Financial Year 2023. These increases in depreciation and amortisation expense was attributable to increases in (i) depreciation of right-of-use assets by 51.85% to 0,403.32 million for the Financial Year 2024 from 0,241.19 million for the Financial Year 2023, primarily due to the opening of new stores during the Financial Year 2024; (ii) depreciation of property, plant and equipment by 77.94% to 0,519.25 million for the Financial Year 2024 from 053.79 million for the Financial Year 2023, due to additions to property, plant and equipment of 0,130.22 million during th e Financial Year 2024; (iii) depreciation of investment property by 71.12% to 0,199.43 million for the Financial Year 2024 from 000.91 million for the Financial Year 2023; and (iv) amortization of intangible assets by 58.15% to 000.40 million for the Financial Year 2024 from 079.64 million for the Financial Year 2023.

Finance costs: Finance costs increased by 47.68% to 0,229.89 million for the Financial Year 2024 from 032.78 million for the Financial Year 2023. These increases in finance costs was attributable to (i) interest on lease liabilities by 51.75% to 087.04 million for the Financial Year 2024 from 084.53 million for the Financial Year 2023, primarily on account of the opening of new stores during the Financial Year 2024; and (ii) interest on long term borrowings by 71.00% to 021.47 million for the Financial Year 2024 from 087.99 million for the Financial Year 2023, primarily on account of the extension of a term-loan facility which was repaid during the Financial Year 2024. These increases were partially offset by a decrease in interest on cash credit and short term borrowings by 70.11% to 07.95 million for the Financial Year 2024 from 00.05 million for the Financial Year 2023.

Other expenses: Other expenses increased by 31.50% to 08,917.34 million for the Financial Year 2024 from 04,385.75 million for the Financial Year 2024. Commission and incentive expenses, which were the largest component of our other expenses, increased by 30.53% to 0,614.68 million for the Financial Year 2024 from 0,833.79 million for the Financial Year 2024, primarily on account of increased commissions and incentives on sales paid to franchisees, attributable to increased number of franchisee-operated and franchisee-owned stores (FoFo), as compared to total number of stores consistent with the growth of our business. Other key components of our other expenses that increased were (i) marketing and promotion expenses by 19.83% to 0,521.06 million for the Financial Year 2024 from 0,938.36 million for the Financial Year 2023, consistent with the growth of our business; (ii) rent expenses by 81.64% to 0,080.83 million for the Financial Year 2024 from 095.03 million for the Financial Year 2023, primarily on account of increased rental expenditure such as variable rent, common area charges and common area maintenance associated with the opening of new stores during the Financial Year 2024; (iii) information technology support expenses by 36.09% to 0,023.47 million for the Financial Year 2024 from 052.06 million for the Financial Year 2023; (iv) postage and courier expenses by 31.43% to 096.39 million for the Financial Year 2024 from 005.93 million for the Financial Year 2023; and (v) contractual labour by 25.21% to 097.37 million for the Financial Year 2024 from 056.98 million for the Financial Year 2024. These increases were partially offset by decreases in our (i) loss allowance for doubtful debt and advances and trade receivables, to nil for the Financial Year 2024 from 08.03 million for the Financial Year 2023; and (ii) FVTPL loss on deferred consideration by 93.53% to 00.00 million for the Financial Year 2024 from 009.02 million for the Financial Year 2023.

Share of (loss) of associates and joint ventures, net of tax. Share of loss of associates or joint ventures, net of tax decreased to 02.47 million in Financial Year 2024 from 00.76 million in Financial Year 2023.

Total tax expense/(credit): Total tax expenses increased significantly to 091.85 million for the Financial Year 2024 from a tax credit of 074.19 million for the Financial Year 2023. For the Financial Year 2024, we had a current tax expense of 093.22 million, income tax credit relating to previous year of 06.04 million and a deferred tax charge of 024.67 million. For the Financial Year 2023, we had a current tax expense of 042.25 million, income tax charge relating to previous year of 0.47 million and a deferred tax credit of 024.91 million.

Restated profit/(loss) for the year: As a result of the foregoing, our restated loss for the year decreased by 84.07% to 001.54 million for the Financial Year 2024 from 037.57 million for the Financial Year 2023.

Liquidity and Capital Resources

Our primary source of liquidity is cash generated from operations. As of March 31, 2025, we had liquid assets of Rs20,304.12 million consisting of deposits with remaining maturity of more than twelve months of Rs49.77 million, current investments - investments in mutual funds (at fair value through profit or loss) - quoted of Rs9,878.31 million, cash and cash equivalent of Rs6,542.19 million, bank balances other than cash and cash equivalents of Rs2,106.59 million, bank deposits remaining maturity within 12 months of the reporting date of Rs631.39 million, and other fixed deposits with non-banking financial institutions due to mature within 12 months of the reporting date of Rs1,095.87 million.

Our financing requirements are primarily for working capital and investments in our business such as capital expenditures. We expect that cash flow from revenue from operations will continue to be our principal source of cash in the long-term. We evaluate our funding requirements periodically in light of our net cash flow from operating activities, the requirements of our business and operations, and potential acquisition opportunities.

Cash Flows

The following table summarizes our cash flows data for the Financial Years 2025, 2024 and 2023:

Particulars	For the Financial Year
	2025	2024	2023
	(Rs in million)
Net cash flow from operating activities	12,306.32	4,873.83	947.40
Net cash flow (used in) / from investing activities	(2,658.67)	1,586.76	(29,764.87)
Net cash flow (used in)/ from financing activities	(5,347.76)	(7,217.68)	27,767.03
Net increase/(decrease) in cash and cash equivalents	4,299.89	(757.09)	(1,050.44)
Cash and cash equivalents at the beginning of the year	2,199.93	2,918.32	64.20
Cash and cash equivalent of acquired subsidiary	53.86	41.70	3,904.56
Effect of movement in exchange rates of cash held in Foreign Subsidiaries	(11.57)	(3.00)	-
Cash and cash equivalents at the end of the year	6,542.11	2,199.93	2,918.32

Operating activities

Net cash flow from operating activities was Rs12,306.32 million for the Financial Year 2025. We had restated profit before tax for the year of Rs3,853.56 million for the Financial Year 2025, which was primarily adjusted for depreciation and amortization expense of Rs7,965.69 million and finance costs of Rs1,458.90 million, which was partially offset by FVTPL gain on deferred consideration of Rs1,671.98 million, gain on redemption / fair valuation of mutual fund units of Rs726.59 million and interest income of Rs724.72 million. This was further adjusted for changes in working capital, comprising adjustments for changes in operating assets such as an increase in inventories of Rs4,027.48 million, a decrease in other financial assets of Rs3,969.81 million, an increase in other assets of Rs660.38 million, an increase in other financial liabilities of Rs122.78 million, an increase in other liabilities of Rs981.07 million, a decrease in trade receivables of Rs2,274.64 million, an increase in trade payables of Rs219.0 7 million and an increase in provisions of Rs204.47 million. As a result, cash generated from operations for the Financial Year 2025 was Rs13,363.58 million, before adjusting income tax paid (net of refund) of Rs1,057.26 million.

Net cash flow from operating activities was Rs4,873.83 million for the Financial Year 2024. We had restated profit before tax for the year of Rs590.31 million for the Financial Year 2024, which was primarily adjusted for depreciation and amortization expense of Rs6,722.40 million, finance costs of Rs1,229.89 million and provision for warranty of Rs117.69 million, which was partially offset by gain on redemption / fair valuation of mutual fund units of Rs641.43 million and interest income of Rs850.86 million. This was further adjusted for changes in working capital, comprising adjustments for changes in operating assets such as an increase in inventories of Rs1,152.41 million, an increase in other financial assets of Rs507.26 million, an increase in other assets of Rs578.31 million, a decrease in other financial liabilities of Rs12.39 million, an increase in other liabilities of Rs287.15 million, an increase in trade receivables of Rs949.84 million, an increase in trade payables of Rs1,245.44 million and an increase in provisions of Rs11.46 million. As a result, cash generated from operations for the Financial Year 2024 was Rs5,454.97 million, before adjusting income tax paid (net of refund) of Rs 581.14 million.

Net cash flow from operating activities was Rs947.40 million for the Financial Year 2023. We had restated loss before tax for the year of Rs1,011.76 million for the Financial Year 2023, which was primarily adjusted for interest income of Rs683.64 million, unrealized foreign exchange gain(net) of Rs711.45 million and gain on redemption / fair valuation of mutual fund units of Rs199.88 million, which was partially offset by depreciation and amortization expense of Rs4,175.53 million, finance costs of Rs832.78 million and FVTPL loss on deferred consideration of Rs309.02 million. This was further adjusted for changes in working capital, comprising adjustments for changes in operating assets such as an increase in inventories of Rs2,305.84 million, a decrease in other financial assets of Rs96.23 million, an increase in other assets of Rs687.97 million, an increase in other financial liabilities of Rs256.50 million, a decrease in other liabilities of Rs12.05 million, an increase in trade receivables of Rs645.27 million, an increase in trade payables of Rs1,561.41 million and an increase in provisions of Rs115.49 million. As a result, cash generated from operations for the Financial Year 2023 was Rs1,183.95 million, before adjusting income tax paid (net of refund) of Rs236.5 5 million.

Investing activities

Net cash used in investing activities was 0,658.67 million in the Financial Year 2025. This was primarily due to investment in mutual funds of 0,359.62 million, purchase of property, plant and equipment, capital work-in-progress, investment property and right of use of 0,164.41 million, and partially offset by redemption of fixed deposits of Rs1,901.13 million, interest received on fixed deposits of 078.44 million and proceeds from sale of mutual funds of 0,823.54 million.

Net cash flow from investing activities was 0,586.76 million in the Financial Year 2024. This was primarily due to redemptio n of fixed deposits of 00,904.55 million, interest received on fixed deposits of 0,036.60 million, proceeds from sale of mutu al funds of 0,675.00 million, and partially offset by investment in fixed deposits of 0,400.36 million, Purchase of property, plant and equipment, capital work-in-progress, investment property and right of use of 0,306.44 million and investment in mutual funds of 0,135.00 million.

Net cash used in investing activities was 09,764.87 million in the Financial Year 2023. This was primarily due to investment in acquisition of investment in subsidiaries of 05,128.40 million, investment in fixed deposits of 0,713.75 million, investment in mutual funds of 0,242.08 million and purchase of property, plant and equipment, capital work-in-progress, investment property and right of use of 0,987.69 million, and partially offset by redemption of fixed deposits of 0,832.30 million, proceeds from sale of mutual funds of Rs11,413.99 million.

Financing activities

Net cash used in financing activities was 0,347.76 million in the Financial Year 2025. This was primarily due to repayment o f borrowings of 0,912.88 million, payment of principal portion of lease liabilities of 0,688.12 million and payment of intere st portion of lease liabilities of 0,245.67 million, partially offset by proceeds from issue of share capital (including share premium) of 0,597.87 million and proceeds from borrowings of 0,080.00 million.

Net cash used in financing activities was 0,217.68 million in the Financial Year 2024. This was primarily due to repayment o f borrowings of 0,486.21 million, payment of principal portion of lease liabilities of 0,886.27 million and payment of interest portion of lease liabilities of 087.04 million, partially offset by proceeds from issue of share capital (including share premium) of 0,244.41 million and proceeds from borrowings of 0,187.20 million.

Net cash flow from financing activities was 07,767.03 million in the Financial Year 2023. This was primarily due to proceeds from issue of share capital (including share premium) of 05,586.36 million, and proceeds from borrowings of 0,528.14 million, partially offset by payment of principal portion of lease liabilities of 0,424.22 million and payment of interest portion of lease liabilities of 084.53 million.

Financial Indebtedness

As of March 31, 2025, we had total borrowings amounting to 0,459.39 million, comprising current liabilities - financial liabilities - borrowings amounting to 0,344.09 million and non-current liabilities - financial liabilities - borrowings amounting to 0,115.30 million. For further details related to our indebtedness, see “Financial Indebtedness” on page 625.

Contractual Obligations

The table below analyses our financial liabilities into relevant maturity groupings based on their contractual maturities for all financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows as of March 31, 2025. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

Particulars	On demand	Less than 1 year	1 to 5 years	More than 5 years	Total
	(Rs in million)
Current Liabilities - Financial Liabilities - Borrowings	543.25	800.84	-	-	1,344.09
Non-Current Liabilities - Financial Liabilities - Borrowings	-	-	2,012.34	104.83	2,117.17
Current Liabilities - Financial Liabilities - Trade and other payables	-	7,399.56	-	-	7,399.56
Current Liabilities - Financial Liabilities - Lease liabilities	-	6,238.32	-	-	6,238.32
Non-Current Liabilities - Financial Liabilities - Lease Liabilities	-	-	14,860.61	5,830.26	20,690.87
Current Liabilities - Financial Liabilities - Other Financial liabilities	-	929.25	-	-	929.25
Non-Current Liabilities - Financial Liabilities - Other Financial liabilities	-	-	1,765.09	-	1,765.09

Capital and Other Commitments

As of March 31, 2025, we disclosed the following capital and other commitments in accordance with Ind AS 16-Property, Plant and Equipment and Schedule III of the Companies Act 2013, on a restated basis:

Particulars	As at March 31, 2025 (Rs in million)
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of capital advance)	369.17
Outstanding export obligation to be fulfilled over a period of 6 years, from respective date of import, under the EPCG scheme against import of plant and machinery	3,247.60
Other commitment (Information technology support expenses)	822.71

(1 In the absence of fulfilment of the related export obligation, the group will be liable to pay the amount of duty saved along with interest.

Contingent Liabilities

We recorded the following contingent liabilities, derived from our Restated Consolidated Financial Information in accordance with Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets, which are extracted below:

Particulars	As at March 31, 2025 (Rs in million)
Income tax litigation - not been acknowledged as claims	192.17
GST and Customs related matter	136.97

Notes:

(1) In addition to the above two cases, in respect of assessment year 2018-19, Income tax authorities have disallowed certain expenditure amounting to Rs519.56 million. Our Company has accepted the disallowance of T390.41 million and for the balance disallowance appeal has been filed with income tax authorities. Further, no demand has been issued against the above disallowances by the income tax authorities.

(2) We received an assessment order for assessment year 2013-14 from income tax authorities wherein the department raised demand on account of certain unexplained cash credits.

The contingent liability for GST and Customs cases is on account of classification ofzero power glasses. Such glasses were being sold @12% GST. However, the GST authorities are of the view that such glasses with zero power lenses are taxable @18%.

Off-balance sheet arrangements

We do not have any off-balance sheet arrangements, derivative instruments, swap transactions or relationships with affiliates or other unconsolidated entities or financial partnerships that would have been established for the purpose of facilitating off- balance sheet arrangements.

Capital Expenditure

Our historical capital expenditures were, and we expect our future capital expenditures to be, primarily related to purchase of property, plant and equipment, capital work-in-progress, investment property and right of use, and purchase of intangible assets and goodwill. For the Financial Years 2025, 2024 and 2023, our capital expenditures were as below:

Particulars	For the Financial Year
	2025	2024	2023
	(Rs in million)
Purchase of property, plant and equipment, capital work-in-progress, investment property and right of use (A)	4,164.41	4,306.44	3,987.69
Purchase of intangible assets and goodwill (B)	102.59	70.56	140.69
Total (A+B)	4,267.00	4,377.00	4,128.38

Quantitative and qualitative disclosures regarding market and other risks

We are exposed to various types of market risks during the normal course of business. The primary varieties of financial risks that we are exposed to include liquidity risk, credit risk and market risk (including interest rate risk and other price risk).

Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Considering the business requirements, the treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of our liquidity position and cash and cash equivalents on the basis of expected cash flows.

Liquidity risk is the risk that we will not be able to meet our financial obligations as they become due. We manage our liquidity risk by ensuring, as far as possible, that we will always have sufficient liquidity to meet our liabilities when due. We generate cash flows from operations to meet our financial obligations, maintains adequate liquid assets in the form of cash and cash equivalents and have undrawn short-term line of credits from banks to ensure necessary liquidity. See also, “- Contractual

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of our performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, our policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

Credit Risk

Credit risk is the risk of financial loss to us if a customer or counterparty to a financial asset fails to meet our contractual obligations, and arises principally from our receivables from customers, loans and other deposits. The carrying amounts of financial assets represent the maximum credit risk exposure.

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. We are exposed to credit risk from our operating activities (primarily trade receivables) and from our financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. We only deal with parties which have good credit rating/worthiness given by external rating agencies or based on our internal assessment.

All doubtful receivables are duly recognized from time to time post discussion with key stakeholders and provided for in the consolidated financial statements as deemed appropriate.

All the financial assets carried at amortized cost were considered good as at March 31, 2025, March 31, 2024 and March 31, 2023. We have not acquired any credit impaired asset. There was no modification in any financial assets. Set out below is the information about the credit risk exposure of our trade receivables and contract asset using provision matrix.

(Rs in million)

Particulars (as of March 31, 2025)	Trade Receivables
	Not due	Less than 1 year	1-2 year	2-3 years	More than 3 years	Total
Estimated total gross carrying amount at default	1.45	1,257.44	-	22.62	17.40	1,298.91
Expected credit loss - simplified approach		-	-	(22.62)	(17.40)	(40.02)
Net carrying amount	1.45	1,257.44	-	-	-	1,258.89

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by our treasury department. Investments of surplus funds are made only with reputed funds as aligned with our Board. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterpartys potential failure to make payments.

Security deposit and other advances

With regards to security deposit and other advances, the management believes these to be high quality assets with negligible credit risk. We believe the parties to which these deposits and other advances have been made have strong capacity to meet the obligations and where the risk of default is negligible or nil and accordingly no provision for expected credit loss has been provided on these financial assets.

Trade receivables (Expected credit loss for trade receivables under simplified approach)

We follow a simplified approach for recognition of impairment loss allowance on trade receivable. Under the simplified approach, we do not track changes in credit risk. Rather, we recognize impairment loss allowance based on lifetime ECLs at each reporting date, right from initial recognition.

For homogenous group of receivables, we use a provision matrix to determine impairment loss allowance on the portfolio of trade receivables. The provision matrix is based on historically observed default and delay rates over the expected life of the trade receivable and is adjusted for forward looking estimates. At year end, the historical observed default and delay rates are updated and changes in the forward-looking estimates are analysed.

For other debtors that are heterogenous in nature, individual receivables which are known to be uncollectible are written off by reducing the carrying amount of trade receivable and the amount of the loss is recognised in the Statement of Profit and Loss within other expenses.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include deposits, investments and foreign currency receivables and payables. The sensitivity analyses in the following sections relate to the position as at March 31, 2025, March 31, 2024 and March 31, 2023. The analyses exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations and provisions. The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2025, March 31, 2024 and March 31, 2023.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Liabilities: We have certain exposure of interest rate risk with respect to our borrowings taken during the year.

Assets: Our fixed deposits are carried at amortised cost and are fixed rate deposits. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Sensitivity analysis

The sensitivity of profit or loss to change in the interest rates on the borrowings with floating interest rates. The impact on profit/(loss) before tax is as below:

Particulars	As at March 31,
	2025	2024	2023
	(Rs in million)
Interest increase by 5 bps	(1.38)	(0.59)	0.38
Interest decrease by 5 bps	1.38	0.59	(0.38)

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Our exposure to the risk of changes in foreign exchange rates relates primarily to our operating activities and our net investments in foreign subsidiary. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the functional currency of any of our entities. We have taken some derivative instruments to manage our exposure and all instruments outstanding at the year-end have been accounted at fair value. We do not use forward contracts and swaps for speculative purposes.

Price risk

Our exposure price risk arises from investments held and classified in the balance sheet at fair value through profit or loss. To manage the price risk arising from investments, we diversify our portfolio of assets.

Sensitivity

Impact on restated profit before tax are as follows:

Particulars	As at March 31,
	2025	2024	2023
	(Rs in million)
Mutual funds carried at fair value through profit or loss
Net assets value - increase by 100 bps	98.78	96.16	75.14
Net assets value - decrease by 100 bps	(98.78)	(96.16)	(75.14)

Other qualitative factors Related party transactions

We have in the past entered into, and in the future may enter into, transactions with several related parties in the ordinary course of our business. Such transactions could be for, among other things, purchase of materials and services, rent expenses, rental deposits, sale of assets, interest on loans, directors remuneration and reimbursement of expenses. For further d etails of our related party transactions, see “Summary of Offer Document - Summary of related party transactions on page 37.

Dependence on a few suppliers or customers

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

Significant economic changes

Other than as described above under “— Significant Factors Affecting our Results of Operations" on page 592, to the knowledge of our management, there are no other significant economic changes that materially affect or are likely to affect our income from continuing operations.

Unusual or infrequent events or transactions

Except as disclosed in this Draft Red Herring Prospectus, to our knowledge, there have been no “unusual" or “infrequent" events or transactions that have in the past, or may in the future, affect our business operations or future financial performance.

Known trends or uncertainties

Our business has been affected and we expect will continue to be affected by the trends identified above in “— Significant Factors Affecting our Results of Operations on page 592 and the uncertainties described in “Risk Factors" on page 53. To our knowledge, except as described or anticipated in this Draft Red Herring Prospectus, there are no known factors which we expect will have a material adverse impact on our revenues or income from continuing operations.

Future relationship between cost and income

Other than as described in this Draft Red Herring Prospectus, to the knowledge of our management, there are no known factors that might affect the future relationship between costs and revenues.

New products or business segments

Other than as described in “Our Business - Our Growth Strategies" on page 274, there are no new products or business segments in which we operate or propose to operate.

Competition

We expect competition in our industry from existing and potential competitors to intensify. For details, please refer to the discussions of our competition in the sections “Risk Factors" and “Our Business" on pages 53 and 245 respectively.

Seasonality of business

Our business is subject to seasonal fluctuations in demand for our eyewear products, which may affect our revenue, profitability and cash flows. We typically experience higher sales volumes during the festive season in the third and fourth quarters of the Financial Year. Conversely, we may experience lower sales volumes during the first and second quarters of the Financial Year. See also, “Risk Factors - Our business is subject to seasonality and our quarterly results published upon listing may not be indicative of our annual financial performance and results of operations" on page 79.

Significant developments occurring after March 31, 2025

Pursuant to a Share Purchase Agreement dated July 12, 2025, entered into by Lenskart Solutions Pte. Ltd., Stellio Ventures S.L., investor shareholders of Stellio Ventures S.L. and founders of Stellio Ventures S.L., Lenskart Solutions Pte. Ltd has agreed to acquire 32,226 shares of Stellio Ventures S.L., representing 80% of its share capital on a fully diluted basis, for a total consideration of Rs 2,118.55 million.

See “— The Proposed Stellio Ventures Acquisition and “History and Certain Corporate Matters - Shareholders agreements and other material agreements - Key terms of other material agreements" on pages 596 and 307, respectively.

Except as disclosed above and elsewhere in this Draft Red Herring Prospectus, there are no circumstances that have arisen since March 31, 2025, the date of the last financial statements included in this Draft Red Herring Prospectus, which materially and adversely affect or is likely to affect our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next 12 months.