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

Further, we manufacture our products through job workers and incur sub-contracting charges as expenses. Sub-
contracting charges incurred by us were % 204.52 million, = 275.83 million, = 118.19 million, = 7.63 million and
% 24.73 million, or 7.17%, 7.04%, 4.72%, 7.40% and 7.98%, respectively, of our revenue from operations for the
Fiscals 2019, 2020 and 2021 and in the three months ended June 30, 2020 and June 30, 2021, respectively.
Changes in quantity of products manufactured through our job workers and increase in costs of production of job
workers (which may increase in the future, including due to increase in the cost of labour and other utilities) may
affect expenses incurred towards fabrication charges and consequently our profitability and results of operations.

Consumer spending and general economic and market conditions

While we are engaged in the business of retailing essential wear, our success partially depends to a significant
extent on customer confidence and spending, which is influenced by general economic condition and discretionary
income levels. Many factors affect the level of customer confidence and spending in the retail sector, including
recession, inflation, political uncertainty, availability of consumer credit, taxation and unemployment. Our
performance may decline during recessionary periods or in other periods where one or more macro-economic
factors, or potential macro-economic factors, negatively affect the level of customer confidence and spending.

Women’s bottom-wear market contributes 8% of women’s apparel market amounting to = 13,547 crores in Fiscal
2020. This bottom-wear market is expected to grow at a CAGR of 12.35% to reach 24,315 crores by Fiscal
2025. The share of organised retail in ethnic and fusion bottom-wear is expected to increase from 47% in Fiscal
2020 to 52% in Fiscal 2025. The overall share of bottom-wear category in women’s apparel is expected to increase
from 8.3% in Fiscal 2020 to 9.6% in Fiscal 2025 (Source: Technopak Report). We intend to capitalize on the
growing industry opportunity and leverage our position as the market leader in the bottom-wear segment in India,
to continue to grow our business.

Employee benefit expenses

We incur employee benefits expenses towards employee remuneration and benefits includes salaries and wages,
contributions to the provident fund, gratuity expenses and staff welfare expenses. The growth of our retail
operations, particularly through EBOs and LFS (where we position our employees) results in the increase of our
retail staff and corresponding increase in our employee benefits expenses. As of March 31, 2019, 2020 and 2021
and as of June 30, 2020 and June 30, 2021, we had 2,150, 2,914, 2,794, 2,709 and 2,623 employees, respectively,
of which 85.49%, 88.33%, 88.62%, 88.00% and 88.37%, respectively, were employed at our EBOs and LFS. In
Fiscals 2019, 2020 and 2021 and in the three months ended June 30, 2020 and June 30, 2021, our employee benefit
expenses were % 419.63 million, = 619.54 million, = 614.87 million, = 157.62 million and % 158.97 million that
represented 14.71%, 15.80%, 24.53%, 152.96% and 51.29% of our revenue from operations in such periods,
respectively. We expect employee benefit expenses to increase in line with the growth of our operations and
effective manpower planning and by maintaining optimal employee strength in corporate, logistics and front-end
retail, thereby endeavouring to maximise revenue per employee.

CHANGES IN ACCOUNTING POLICIES IN THE LAST THREE FINANCIAL YEARS

There have been no changes in the accounting policies of the Company during the last three financial years, except
for with respect to Ind AS 116, which was effective for accounting periods beginning on or after April 1, 2019.

Ind AS 116

On March 30, 2019, the Ministry of Company Affairs (“MCA”) notified that Ind AS 116 would be effective for
accounting periods beginning on or after April 1, 2019.

We adopted Ind AS 116 'Leases' with the date of initial application being April 1, 2019. Ind AS 116 replaces Ind
AS 17 — Leases and related interpretation and guidance. We have used simplified transition approach under Ind
AS 116, under which the difference between right-to-use asset and lease liabilities is adjusted against retained
earnings as on the date of transition. For the purpose of Restated Financial Information, the proforma transition
date has been considered as April 1, 2018, resulting in net impact of = 55.52 million (net of deferred tax asset) in
the restated 'Other equity’ and 'Total comprehensive income’.

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