Accounting Policies of Brigade Hotel Ventures Ltd. Company

Mar 31, 2024

2.1 Summary of material accounting policies

(a) Use of estimates

The preparation of standalone financial statements in conformity with lnd AS requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting
period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions
and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities. The efTect of change in an
accounting estimate is recognized prospectively.

(b) Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

An asset is treated as current when it is:

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

- Held primarily for the purposes 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 current when:

- It is expected to be settled in normal operating cycle

- It is held primarily for the purposes 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.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has
evaluated and considered its operating cycle as one year and accordingly has reclassified its assets and liabilities into current and non-current.

Assets and liabilities, other than those discussed above, are classified as current to the extent they are expected to be realized/are contractually repayable
within one year from the Balance sheet date and as non-current, in other cases.

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

(c) Property, plant and equipment

Capital work in progress is stated at cost, net of accumulated impairment loss, if any. Property, plant and equipment are stated at cost, net of accumulated
depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and
directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at
the purchase price.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

This applies mainly to components for machinery. When significant parts of plant and equipment are required to be replaced at intervals, the Company
depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying
’ amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in
profit or loss as incurred.

Subsequent expenditure related to an item of property, plant and equipment is added to its book value only if it increases the future benefits from its
previously assessed standard of performance. All other expenses on existing property, plant and equipmenir^nTtod«^day-to-day repair and

maintenance expenditure and cost of replacing parts, arc charged to the statement of profit and loss for the period during which such expenses are
incurred.

Borrowing costs directly attributable to acquisition of property, plant and equipment which take substantial period of time to get ready for its intended
use are also included to the extent they relate to the period till such assets are ready to be put to use.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under
other non-current assets.

An item of property, plant and equipment and any significant part initially recognized is de-recognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on de-rccognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in the income statement when the Property, plant and equipment is de-recognized.

Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized to the extent
to which the expenditure is indirectly related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred
during the construction period which is neither related to the construction activity nor is incidental thereto is charged to the statement of profit and loss.

Costs of assets not ready for use at the balance sheet date are disclosed under capital work- in- progress.

Righl-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, as follows:
Leasehold land - 25 to 35 years

The management considers residual value at 5% as prescribed under Schedule II of Companies Act, 2013.

The management believes that the above estimated useful lives arc realistic and reflect fair approximation of the period over which the assets are likely
to be used.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted
prospectively, if appropriate.

(e) Intangible assets

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

Intangible assets comprising of computer software are amortized on a written down value basis over a period of six years, which is estimated by the
management to be the useful life of the asset. In case of certain hotels, the intangible assets comprising of computer software areamortized on a straight-
line basis over a period of six years as estimated by the management.

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The residual values, useful lives and methods of amortization of intangible assets are reviewed at each financial year end and adjusted prospectively,
if appropriate. ¹

Gains or losses arising from dc-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the canying
amount of the asset and are recognized in the statement of profit and loss when asset is derecognized.

(f) Impairment

A. Financial assets

The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired and measures the required
expected credit losses through a loss allowance. The Company applies the expected credit loss (ECL) model for measurement and recognition of
impairment losses on trade receivables. The Company follows the simplified approach for recognition of impairment allowance on trade receivables
wherein, it recognises impairment allowance based on lifetime ECLs at each reporting date. The Company recognizes lifetime expected losses for all
contract assets and / or all trade receivables that do not constitute a financing transaction.

For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses or at an amount equal to
the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

B. Non-fmancial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual
impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an
asset’s or cash-generating unit’s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the
asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset
or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such
transactions can be identified, an appropriate valuation model is used.

Impairment losses arc recognized in the statement of profit and loss. After impairment, depreciation is provided on the revised carrying amount of the
asset over its remaining useful life.

An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist
or have decreased. If such indication exists, the Company estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment
loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was
recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount
that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised
in the statement of profit and loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.

(g) Leases

The Company assesses 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 for consideration.

Where the Company is lessee

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

The Company at the inception of the lease contract recognizes a Right-of-Use (RoU) asset at cost and corresponding lease liability, except for leases
with term of less than twelve months (short term) and low-value assets. The cost of the right-of-use assets comprises the amount of the initial
measurement of the lease liability, any lease payments made at or before the inception date of the lease plus any initial direct costs, less any lease
incentives received. Subsequently, the right of-use assets are measured at cost less any accumulated depreciation and accumulated impairment losses,
if any. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life
of right-of-use assets.

For lease liabilities at inception, the Company measures the lease liability at the present value of the lease payments that arc not paid at that date. The
lease payments are discounted using the interest rate implicit in the lease, if that rate is readily determined, if that rate is not readily determined, the
lease payments are discounted using the incremental borrowing rate. 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 the Company
and payments of penalties for terminating the lease, if die lease term reflects the Company 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.

The Company recognizes the amount of the re-measurement of lease liability as an adjustment to the right-of-use assets. Where the carrying amount
of the right-of-use assets is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognizes any
remaining amount of the re-measurement in the statement of profit and loss.

The Company applies 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 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.

Where the Company is lessor

Leases in which the Company docs not transfer substantially all the risks and rewards incidental to ownership of an asset is classified as operating
leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an
operating lease are added to the canying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent
rents are recognised as revenue in the period in which they are earned.

(h) Borrowing costs

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get
ready for its intended use or sale are capitalized/inventorised as part of the cost of the respective asset. All other borrowing costs are charged to statement
, of profit and loss. ;

(i) Inventories

Inventories comprising of food, beverages and other items are valued at lower of cost and net realizable value. Cost of inventories is determined on a
weighted average basis.

Net realizable 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.

0) 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 the Company expects to be entitled in exchange for those goods or services. Revenue is measured based on the transaction
price, which is the consideration, adjusted for discounts and other credits, if any, as specified in the contract with the customer. The Company presents
revenue from contracts with customers net of indirect taxes in its statement of profit and loss.

The Company considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction
price needs to be allocated. In determining the transaction price, the Company considers the effects of variable consideration, the existence of significant
financing components, noncash consideration, and consideration payable to the customer, if any.

The following specific recognition criteria must also be met before revenue is recognized:

Revenue from hospitality services

Revenue from hospitality operations comprise revenue from room charges, food & beverage sales, facility usage charges and allied services, including
telecommunication, laundry, etc. Revenue is recognized as and when the services are rendered and is disclosed net of allowances.

Contract balances

Contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring
goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned
consideration that is conditional.

Trade receivable represents the Company’s 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).

Contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of
consideration is due) from the customer. If a customer pays consideration before the Company transfers 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 the
Company performs under the contract.

Income from lease rentals

Refer accounting policy under “Leases” above.

Interest income

Interest income, including income arising from other financial instruments measured at amortized cost, is recognized using the effective interest rate
(EIR) method. EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or
a shorter period, where appropriate, to the gross canying amount of the financial asset or to the amortised cost of a financial liability. When calculating
the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for
example, prepayment, extension, call and similar options) but does not consider the expected credit losses.

Dividend income

Dividend income is recognized when the Company’s right to receive dividend is established, which is generally when shareholders approve the
dividend. ..

(k) Foreign currency translation

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Items included in the standalone financial statements of the Company are measured using the currency of the primary economic environment in which
the Company operates (‘the functional currency’). The standalone financial statements are presented in Indian rupee (INR), which is the Company’s
functional and presentation currency.

Foreign currency transactions and balances

i) Initial recognition - Foreign currency transactions are initially recorded at the functional currency spot rate at the date the transaction first qualifies
for recognition.

ii) Conversion - Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monctary items, which
are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of initial transaction. Non¬
monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate
at the date when such value was determined.

iii) Exchange differences - The Company accounts for exchange differences arising on translation/ settlement of foreign currency monetary items as
income or as expense in the period in which they arise. The gain or loss arising on translation of non-monetary items measured at fair value is treated
in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss
is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively)

(l) Retirement and other employee benefits

Retirement benefits in the form of state governed Employee Provident Fund, Employee State Insurance and Employee Pension Fund Schemes are
defined contribution schemes (collectively the ‘Schemes’). The Company has no obligation, other than the contribution payable to the Schemes. The
Company recognizes contribution payable to the Schemes as expenditure, when an employee renders the related service. The contribution paid in
• excess of amount due is recognized as an asset and the contribution due in excess of amount paid is recognized as a liability.

Gratuity, which is a defined benefit plan, is accrued based on an independent actuarial valuation, which is done based on project unit credit method as
at the balance sheet date. The Company recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Gains and
losses through re-measurements of the net defined benefit liability/ (asset) are recognized in other comprehensive income. Remeasurements, comprising
of actuarial gains and losses, excluding amounts included in net interest on the net defined benefit liability, are recognised immediately in the balance
sheet with a corresponding debit or credit to retained earnings through OCI in the''period in which they occur. Remeasurements are not reclassified to
profit or loss in subsequent periods.

The Company recognises the following changes in the net defined benefit obligation as an expense in the standalone statement of profit and loss:

? Service costs comprising current service costs, past-sendee costs, gains and losses on curtailments and non-routine settlements; and

? Interest expense

Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. The Company measures
the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the
reporting date.

The Company treats 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, made at the
end of each financial year. Actuarial gains/losses are immediately taken to the statement of profit and loss. The Company presents the accumulated
leave liability as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for twelve months
after the reporting date.

(m) Income taxes

Income tax expense comprises current tax expense and the net change in the defened tax asset or liability during the year.

Current and deferred tax are recognized in the statement of profit and loss, except when they relate to items that are recognized in other comprehensive
income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity,
respectively.

i. Current income tax

Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based
on the taxable income for that period. The tax rates and tax laws used to compute the amount arc those that are enacted or substantively enacted by the
balance sheet date.

ii. Deferred income tax

Deferred income tax is recognized on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in
a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.

Deferred income tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the
extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilized.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Unrecognised deferred tax assets are re-

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assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset
to be recovered.

Deferred tax relating to items recognized outside profit or loss is recognized in correlation to the underlying transaction cither in OC1 or directly in
equity.

Deferred income tax assets and liabilities arc measured at the tax rates that arc expected to apply in the period when the asset is realized or the liability
is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

The Company offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and
current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the
same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and
settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or
recovered.