Accounting Policies of Honasa Consumer Ltd. Company

Mar 31, 2025

2.2 Material Accounting Policies

2.2.1 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;

• 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.

Deferred tax assets are classified as non-current assets.

A liability is current when:

• Expected to be settled in normal operating cycle;

• Held primarily for the purpose of trading;

• 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.

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

The Company classifies all other liabilities as non-current.

Deferred tax liabilities are classified as non-current
liabilities.

The operating cycle is the time between the acquisition
of assets for processing and their realisation in cash
and cash equivalents. The Company has identified
twelve months as its operating cycle.

2.2.2 Foreign currency translation

(i) Functional and presentation currency:

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

(ii) Transactions and balances:

Foreign currency transactions are translated into the
functional currency using the exchange rates at the
dates of the transactions. Foreign exchange gains
and losses resulting from the settlement of such
transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies
at the year end exchange rates are recognised in
standalone statement of profit and loss.

2.2.3 Fair value measurement

'' Fair value'' is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date in the principal market or, in its
absence, the most advantageous market to which
the Company has access at that date. The fair
value of a liability reflects its non-performance risk.
The fair value of an asset or a liability is measured
using the assumptions that market participants would
use when pricing the asset or liability, assuming that
market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes
into account a market participant''s ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant
that would use the asset in its highest and best use.
All assets and liabilities for which fair value is measured
or disclosed in the standalone financial statements are
categorised within the fair value hierarchy, described
as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active
markets for identical assets or liabilities

• Level 2 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is directly or indirectly observable

• Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is unobservable

For assets and liabilities that are recognised in the
standalone financial statements on a recurring
basis, the Company determines whether transfers
have occurred between levels in the hierarchy by re¬
assessing categorisation (based on the lowest level
input that is significant to the fair value measurement
as a whole) at the end of each reporting period.

2.2.4 Property, plant and equipment

Under the previous GAAP (Indian GAAP), property, plant
and equipment were carried in the balance sheet on
the basis of historical cost. For the transition to Ind AS,
the Company has elected to continue with the carrying
value for all of its property, plant and equipment
recognised as of April 01, 2020 (date of transition to
Ind AS) measured as per the previous GAAP and use
that carrying value as its deemed cost as at the date
of transition.

Property, plant and equipment is stated at cost, net
of accumulated depreciation and accumulated
impairment losses, if any. Capital work-in-progress is
stated at cost, net of accumulated impairment loss, if
any. Such cost comprises of the purchase price and
any directly attributable cost of bringing the asset to
its working condition for its intended use. Any trade
discounts and rebates are deducted in arriving at
the purchase price. Such cost includes the cost of
replacing part of the property, plant and equipment.

When significant parts of property, plant and
equipment are required to be replaced at intervals, the
Company depreciates them separately based on their
specific useful lives. All other repair and maintenance
costs are recognised in the statement of profit and loss
as incurred.

The Company identifies and determines cost of
each component/part of the asset separately, if the
component/part has a cost which is significant to
the total cost of the asset and has useful life that is
materially different from that of the remaining asset.
Items of stores and spares that meet the definition of
property, plant and equipment are capitalised at cost
and depreciated over their useful life. Otherwise, such
items are classified as inventories.

The exchange differences arising on translation/
settlement of long-term foreign currency monetary
items pertaining to the acquisition of a depreciable
asset are charged to the statement of profit and
loss. Gains or losses arising from derecognition of
property, plant and equipment are measured as the
difference between the net disposal proceeds and
the carrying amount of the asset and are recognised
in the statement of profit and loss when the asset
is derecognised.

Leasehold improvements are amortised on a straight
line basis over the period of lease or estimated useful
lives of the assets, which ever is lower.

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

The useful lives have been determined based on
managements'' judgement which in certain instances
are different from those specified by Schedule II to the
Act, in order to reflect the actual usage of the assets.
The assets residual values and useful life are reviewed,
and adjusted if appropriate, at the end of each
reporting period. An asset''s carrying amount is written
down immediately to its recoverable amount if the
asset''s carrying amount is greater than its estimated
recoverable amount.

2.2.5 Intangible assets

Under the previous GAAP (Indian GAAP), intangible
assets were carried in the balance sheet on the
basis of historical cost. For the transition to Ind AS, the
Company has elected to continue with the carrying
value for all the intangible assets recognised as of April
01, 2020 (date of transition to Ind AS) measured as per
the previous GAAP and use that carrying value as its
deemed cost as at the date of transition.

I ntangible assets acquired separately are measured
on initial recognition at cost. The cost of intangible
assets acquired in a business combination is their
fair value at the date of acquisition. Following initial
recognition, intangible assets are carried at cost less
any accumulated amortisation and accumulated

impairment losses. Internally generated intangibles are
not capitalised and the related expenditure is reflected
in profit or loss in the period in which the expenditure
is incurred.

The useful lives of intangible assets are assessed as
either finite or indefinite.

I ntangible assets with finite lives are amortised over
the useful economic life and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortisation period
and the amortisation method for an intangible asset
with a finite useful life are reviewed at least at the
end of each reporting year. Changes in the expected
useful life or the expected pattern of consumption
of future economic benefits embodied in the asset
are considered to modify the amortisation period or
method, as appropriate, and are treated as changes
in accounting estimates. The amortisation expense on
intangible assets with finite lives is recognised in the
statement of profit and loss unless such expenditure
forms part of carrying value of another asset.

I ntangible assets with indefinite useful lives are not
amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level.
The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues to
be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.

An intangible asset is derecognised upon disposal (i.e.,
at the date the recipient obtains control) or when no
future economic benefits are expected from its use or
disposal. Any gain or loss arising upon derecognition
of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the
asset) is included in the statement of profit and loss.
when the asset is derecognised.

2.2.6 Impairment of non-financial 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) fair value less costs of disposal and its
value in use. The recoverable amount is determined
for an individual asset, unless the asset does not
generate cash inflows that are largely independent
of those from other assets or groups of assets. When
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 fair value less costs
of disposal, recent market transactions are taken into
account. If no such transactions can be identified,
an appropriate valuation model is used. These
calculations are corroborated by valuation multiples,
quoted share prices for publicly traded companies or
other available fair value indicators.

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

Impairment losses including impairment on inventories,
are recognised in the Statement of Profit and Loss,

except for properties previously revalued with the
revaluation surplus taken to OCI. For such properties,
the impairment is recognised in OCI up to the amount
of any previous revaluation surplus.

For assets excluding goodwill, 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
Standalone 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.

Goodwill and brand are tested for impairment annually
and when circumstances indicate that the carrying
value may be impaired.

Impairment is determined for goodwill and brand
by assessing the recoverable amount of each CGU
(or group of CGUs) to which the goodwill and brand
relate to. When the recoverable amount of the CGU
is less than it''s carrying amount, an impairment loss
is recognised. Impairment losses relating to goodwill
cannot be reversed in future periods.

Intangible assets with indefinite useful lives are
tested for impairment annually at the CGU level, as
appropriate, and when circumstances indicate that
the carrying value may be impaired.

2.2.7 Inventories

Traded goods are valued at lower of cost and net
realisable value. Cost includes cost of purchase and
other costs incurred in bringing the inventories to their
present location and condition. Cost is determined on
a weighted average basis.

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.

Obsolete, slow moving and defective/damage/
near expiry inventories are identified from time to
time and, where necessary, a provision is made for
such inventories.

2.2.8 Revenue recognition

Revenues are recognised when, or as, control of a
promised goods transfers to customer, in an amount
that reflects the consideration to which the Company
expects to be entitled in exchange for transferring those
goods or services. To recognise revenues the following
five step approach is applied: (i) identify the contract
with a customer, (ii) identify the performance obligation
in the contract, (iii) determine the transaction price,
(iv) allocate the transaction price to the performance
obligations in the contract, and (v) recognise revenues
when a performance obligations is satisfied.

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

Revenue from Sale of products

Revenue from the sale of products is recognised at a
point in time when control of the products is transferred
to the customer and there is no unfulfilled obligation
that could affect the customer''s acceptance of the
products, which is generally on delivery of the products.
Revenue from the sale of products is measured at
the value which reflects the consideration to which
the entity expects to be entitled in exchange of such
goods, net of returns and allowances, discounts
and incentives. Revenue is measured at amount of
"Transaction Price” as per Ind AS 115.

Non Cash consideration

The Company measures the non-cash consideration
at fair value to determine the transaction price for
contracts in which a customer promises consideration
in a form other than cash. In case the fair value cannot
be reasonably estimated, the company measures the
consideration indirectly by reference to the stand alone
selling price of the goods promised to the customer in
exchange for the consideration.

Variable consideration

I f the consideration in a contract includes a variable
amount (discounts and incentives), the Company
estimates the amount of consideration to which it will be
entitled in exchange for transferring the goods/services
to the customer and such discounts and incentives are
estimated at contract inception and constrained until
it is highly probable that a significant revenue reversal

in the amount of cumulative revenue recognised
will not occur when the associated uncertainty with
the variable consideration is subsequently resolved.
The rights of return and volume rebates give rise to
variable consideration.

Right of return

The Company uses the expected value method to
estimate the variable consideration given the large
number of contracts that have similar characteristics.
The Company then applies the requirements on
constraining estimates of variable consideration
in order to determine the amount of variable
consideration that can be included in the transaction
price. A refund liability is recognised for the goods
that are expected to be returned (i.e., the amount not
included in the transaction price). A right of return asset
(and corresponding adjustment to cost of sales) is also
recognised for the right to recover the goods from
a customer.

Volume rebates

The Company applies the most likely amount method
or the expected value method to estimate the variable
consideration in the contract. The selected method
that best predicts the amount of variable consideration
is primarily driven by the number of volume thresholds
contained in the contract. The most likely amount is
used for those contracts with a single volume threshold,
while the expected value method is used for those
with more than one volume threshold. The Company
then applies the requirements on constraining
estimates in order to determine the amount of variable
consideration that can be included in the transaction
price and recognised as revenue.

Customer wallet points

The Company has a wallet points programme, which
allows customers to accumulate points that can be
redeemed for subsequent purchase. The wallet points
give rise to a separate performance obligation as they
provide a material right to the customer.

A portion of the transaction price is allocated to the
loyalty points awarded to customers based on relative
stand-alone selling price and recognised as a contract
liability until the points are redeemed. Revenue is
recognised upon redemption of points by the customer.

When estimating the stand-alone selling price
of the loyalty points, the Company considers the
likelihood that the customer will redeem the points.
The Company updates its estimates of the points
that will be redeemed on each reporting date and
any adjustments to the contract liability balance are
charged against revenue.

Interest income

I nterest income is recognised on a time proportion
basis taking into account the amount outstanding and
the applicable interest rate. Interest income is included
under the head ""other income"" in the statement of
profit and loss."

Contract balances

Contract assets

A 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 receivables

A trade receivable is recognised if an amount of
consideration 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.

Contract liabilities

A contract liability is recognised if a payment is
received or a payment is due (whichever is earlier)
from the customer before the Company transfers
the related goods or services. Contract liabilities are
recognised as revenue when the Company performs
under the contract (i.e., transfers control of the related
goods or services to the customer).

2.2.9 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.

The Company as a 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.

Right-of-use assets

The Company recognises 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.

I f ownership of the leased asset is transferred to the
Company at the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation
is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment.
Refer to the accounting policy on impairment of non¬
financial assets.

Lease liabilities

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present
value of lease payments 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 the
Company and payments of penalties for terminating
the lease, if the lease term reflects exercising of the
option to terminate. Variable lease payments that do
not depend on an index or a rate are recognised as
expenses in the period in which the event or condition
that triggers the payment occurs.

I n calculating the present value of lease payments,
the Company uses internal rate of return for the
assets which were earlier classified under finance
lease and incremental borrowing rate for Right of use
assets at the lease commencement date. 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 remeasured
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

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.

2.2.10 Employee Benefits

Short-term obligations

Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within 12 months after the end of the period in
which the employees render the related service are
recognised in respect of employee''s services up to the
end of the reporting period and are measured at the
amounts expected to be paid when the liabilities are
settled. The liabilities are presented as current financial
liabilities in the standalone balance sheet.

Accumulated leave, which is expected to be utilised
within the next 12 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 presents the accumulated leave
liability as a current liability in the balance sheet, since
it does not have an unconditional right to defer its
settlement for twelve months after the reporting date.

Post-employment obligations

The company operates the following post¬
employment schemes:

(a) defined benefit plans - gratuity, and

(b) defined contribution plans such as provident fund.

Gratuity: Defined benefits obligations

The liability or asset recognised in the balance sheet in
respect of defined benefit gratuity plan is the present
value of the defined benefit obligation at the end of
the reporting period less the fair value of plan assets.
The defined benefit obligation is calculated annually
by an independent actuary using the projected unit
credit method.

The present value of the defined benefit obligation is
determined by discounting the estimated future cash
outflows by reference to market yields at the end of the
reporting period on government bonds that have term
approximating the term of the related obligation. The
net interest cost is calculated by applying the discount
rate to the net balance of the defined benefit obligation
and the fair value of plan assets.

Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in which
they occur, directly in other comprehensive income.
They are included in retained earnings in the
statement of changes in equity and in the balance
sheet. Such accumulated re-measurement balances
are never reclassified into the statement of profit and
loss subsequently.

Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognised immediately in profit or
loss as past service costs.

Defined contribution plan

Retirement benefit in the form of provident fund scheme
are the defined contribution plans. The Company has
no obligation, other than the contribution payable.
The Company recognises contribution payable to
these schemes as an expenditure, when an employee
renders the related service.

2.2.11 Investment in subsidiary

The Company has elected to recognise its investments
in subsidiary companies at cost in accordance with
the option available in Ind AS - 27, ''Separate Financial
Statements'', less accumulated impairment loss, if any.
Cost represents amount paid for acquisition of the
said investments. The details of such investment is
given in note 7. Refer to the accounting policies in note
2.2.6 for policy on impairment of non-financial asset.
On disposal of an investment, the difference between
the net disposal proceeds and the carrying amount is
charged or credited to the statement of profit and loss.

2.2.12 Employee share based payment

The Stock option plan of the Company is classified as
equity settled transaction based on the constructive
and legal obligation for settlement of option in equity.

The cost of equity-settled transactions is determined
by the fair value at the date when the grant is made
using a black Scholes model.

That cost is recognised, together with a corresponding
increase in share based payment reserves in equity,
over the period in which the performance and/or
service conditions are fulfilled in employee benefits
expense. The cumulative expense recognised for
equity-settled transactions at each reporting date
until the vesting date reflects the extent to which the
vesting period has expired and the Company''s best

estimate of the number of equity instruments that will
ultimately vest. The expense or credit in the statement
of profit and loss for a period represents the movement
in cumulative expense recognised as at the beginning
and end of that period and is recognised in employee
benefits expense.

When the terms of an cash-settled award are
modified, the equity-settled share-based payment
transaction is measured by reference to the fair value
of the equity instruments granted at the modification
date, the liability for the cash-settled share-based
payment transaction as at the modification date is
derecognised on that date and the difference between
the carrying amount of the liability derecognised and
the amount of equity recognised on the modification
date is recognised immediately in the standalone
statement of profit and loss.

When the terms of the equity-settled share-based
payment transaction are modified, pre-modification
valuation and post modification valuation is compared
and if the value of post modification is lower than
pre-modification, then the cost would be recognised
based on original plan, however if the value of post
modification is higher than pre-modification, then the
original cost would continue to be accounted and for
the additional fair value to the extent of vested options
recognised in the statement of profit and loss and to
the extent of unvested options, additional fair value is
accounted over the remaining vesting period.

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

2.2.13 Financial instruments

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

Financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition,
and subsequently measured at amortised cost and
fair value through profit or loss are recognised initially
at fair value plus, in the case of financial assets not
recorded at fair value through profit or loss, transaction
costs that are attributable to the acquisition of the
financial asset. Purchases or sales of financial assets
that require delivery of assets within a time frame
established by regulation or convention in the market

place (regular way trades) are recognised on the
trade date, i.e. the date that the Company commits to
purchase or sell the asset.

Subsequent measurement

A ''debt instrument'' is measured at the amortised cost,
if both of the following conditions are met:

(i) The asset is held within a business model
whose objective is to hold assets for collecting
contractual cash flows; and

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

After initial measurement, such financial assets are
subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised cost
is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included
in finance income in the statement of profit and loss.
The losses arising from impairment are recognised in
the statement of profit and loss. This category generally
applies to trade and other receivables.

A ''debt instrument'' is classified as FVTOCI, if both of the
following criteria are met:

(i) The objective of the business model is achieved
both by collecting contractual cash flows and
selling the financial assets; and

(ii) The asset''s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category
are measured initially as well as at each reporting date
at fair value. Fair value movements are recognised in
OCI. However, the Company recognises interest income,
impairment losses and foreign exchange gain or loss in
the statement of profit and loss. On de-recognition of
the asset, cumulative gain or loss previously recognised
in OCI is reclassified from the equity to the statement
of profit and loss. Interest earned whilst holding FVTOCI
debt instrument is reported as interest income using
the EIR method.

FVTPL is a residual category for debt instruments. Any
debt instrument, which does not meet the criteria for
categorisation as at amortised cost or as FVTOCI, is
classified as at FVTPL. Debt instruments included within
the FVTPL category are measured at fair value with all
changes recognised in the statement of profit and loss.

All equity investments in scope of Ind AS 109 are
measured at fair value. Equity instruments which
are held for trading are classified as at FVTPL. If the
Company decides to classify an equity instrument as
at FVTOCI, then all fair value changes on the instrument,
excluding dividends, are recognised in the OCI. There is
no recycling of the amounts from OCI to the statement
of profit and loss, even on sale of the investments.
Equity instruments included within the FVTPL category
are measured at fair value with all changes recognised
in the statement of profit and loss.

De-recognition

A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e. removed from
the balance sheet) when:

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

• The Company has transferred its rights to receive
cash flows from the asset and either (a) the
Company has transferred substantially all the risks
and rewards of the asset, or (b) the Company has
neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred
control of the asset.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies
expected credit loss (ECL) model for measurement
and recognition of impairment loss on the financial
assets and credit risk exposure. The Company follows
has established a provision matrix that is based
on its historical credit loss experience, adjusted for
forward-looking factors specific to the debtors and the
economic environment for recognition of impairment
loss allowance on Trade receivables. The application
of simplified approach does not require the Company
to track changes in credit risk. Rather, it recognises
impairment loss allowance based on lifetime ECLs at
each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial
assets and risk exposure, lifetime ECL is used. If, in a
subsequent period, credit quality of the instrument
improves such that there is no longer a significant
increase in credit risk since initial recognition, then the
entity reverts to recognising impairment loss allowance
based on twelve-month ECL.

Lifetime ECL are the expected credit losses resulting from
all possible default events over the expected life of a
financial instrument. The twelve-month ECL is a portion
of the lifetime ECL which results from default events that
are possible within twelve months after the reporting
date. ECL is the difference between all contractual cash
flows that are due to the Company in accordance with
the contract and all the cash flows that the Company
expects to receive (i.e., all cash shortfalls), discounted
at the original EIR. ECL impairment loss allowance (or
reversal) recognised during the period is recognised as
income/expense in the statement of profit and loss. This
amount is reflected under the head ''other expenses'' in
the statement of profit and loss.

For assessing increase in credit risk and impairment
loss, the Company combines financial instruments on
the basis of shared credit risk characteristics with the
objective of facilitating an analysis that is designed
to enable significant increases in credit risk to be
identified on a timely basis.

Financial liabilities

Initial recognition and measurement

All financial liabilities are recognised initially at fair
value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.

Subsequent measurement

The measurement of financial liabilities depends on
their classification. Financial liabilities at fair value
through profit or loss include financial liabilities held
for trading and financial liabilities designated upon
initial recognition as fair value through profit or loss.
Financial liabilities are classified as held for trading
if they are incurred for the purpose of repurchasing
in the near term. Separated embedded derivatives
are also classified as held for trading, unless they are
designated as effective hedging instruments. Gains or
losses on liabilities held for trading are recognised in
the statement of profit and loss.

Financial liabilities designated upon initial recognition
at fair value through profit or loss are designated as such
at the initial date of recognition, and only if the criteria
in Ind AS 109 are satisfied. For liabilities designated as
FVTPL, fair value gains/losses attributable to changes in
own credit risk are recognised in OCI. These gains/losses
are not subsequently transferred to the statement of
profit and loss. However, the Company may transfer the
cumulative gain or loss within equity. All other changes
in fair value of such liability are recognised in the
statement of profit and loss.

After initial recognition, gains and losses are
recognised in the statement of profit and loss when
the liabilities are derecognised as well as through the
EIR amortisation process. Amortised cost is calculated
by taking into account any discount or premium on
acquisition and fees or costs that are an integral part
of the EIR. The EIR amortisation is included as finance
costs in the statement of profit and loss.

De-recognition

A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or
expired. When an existing financial liability is replaced
by another from the same lender on substantially
different terms, or the terms of an existing liability
are substantially modified, such an exchange or
modification is treated as the de-recognition of the
original liability and the recognition of a new liability.
The difference in the respective carrying amounts is
recognised in the statement of profit and loss.

2.2.14 Income taxes

Income tax

I ncome tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the
taxation authorities in accordance with the Income-tax
Act, 1961 enacted in India. The tax rates and tax laws used
to compute the amount are those that are enacted or
substantively enacted, at the reporting date.

Current income tax relating to items recognised
outside the statement of profit and loss is recognised
outside the statement of profit and loss (either in OCI or
in equity in correlation to the underlying transaction).
Management periodically evaluates whether it is
probable that the relevant taxation authority would
accept an uncertain tax treatment that the Company
has used or plan to use in its income tax filings,
including with respect to situations in which applicable
tax regulations are subject to interpretation and
establishes provisions, where appropriate.

The Company shall reflect the effect of uncertainty
for each uncertain tax treatment by using either most
likely method or expected value method, depending
on which method predicts better resolution of
the treatment.

Deferred tax

Deferred tax is provided on temporary differences
between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes at
the reporting date. Deferred tax liabilities and assets
are recognised for all taxable temporary differences
and deductible temporary differences, except:

• when the deferred tax liability or asset arises from the
initial recognition of goodwill or an asset or liability in
a transaction that is not a business combination and,
at the time of the transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor taxable
profit or loss and does not give rise to equal taxable
and deductible temporary differences;

• in respect of taxable temporary differences and
deductible temporary differences associated
with investments in subsidiary and associate,
when the timing of the reversal of the temporary
differences can be controlled and it is probable
that the temporary differences will not reverse in the
foreseeable future.

Deferred tax assets are recognised 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 utilised. The carrying amount of deferred
tax assets is reviewed at each reporting 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 tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at
each reporting date and are recognised to the extent
it has become probable that future taxable profits will
allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on
tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date. Deferred
tax relating to items recognised outside the statement
of profit and loss is recognised outside the statement
of profit and loss (either in OCI or in equity in correlation
to the underlying transaction).

Deferred tax assets and deferred tax liabilities are offset
if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred
taxes relate to the same taxable entity and the same
taxation authority.

2.2.15 Segment reporting

The Company reports the standalone financial
statements along with the consolidated financial
statements. In accordance with Ind AS 108, Operating
Segments, the Company has disclosed the segment
information in the consolidated financial statements.

2.2.16 Earnings per share

Basic earnings per share are 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. 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.

---

Mar 31, 2024

2.2 Material Accounting Policies

2.2.1 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;

• 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.

Deferred tax assets are classified as non-current assets.

A liability is current when:

• Expected to be settled in normal operating cycle;

• Held primarily for the purpose of trading;

• 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.

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

The Company classifies all other liabilities as non-current.

Deferred tax liabilities are classified as noncurrent liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle."

2.2.2 Foreign currency translation

(i) Functional and presentation currency:

I tems included in the standalone financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The standalone

financial statements are presented in Indian rupee (?), which is functional and presentation currency of the Company.

(ii) Transactions and balances:

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the year end exchange rates are recognised in standalone statement of profit and loss.

2.2.3 Fair value measurement

'' Fair value'' is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal market or, in its absence, the most advantageous market to which the Company has access at that date. The fair value of a liability reflects its non-performance risk. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

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

All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:"

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 — Valuation techniques for which the

lowest level input that is significant to the fair value measurement is directly or indirectly observable

• Level 3 — Valuation techniques for which the

lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the standalone financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

2.2.4 Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Capital work-in-progress is stated at cost, net of accumulated impairment loss, if any. Such cost comprises of the purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Such cost includes the cost of replacing part of the property, plant and equipment.

When significant parts of property, plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. All other repair and maintenance costs are recognised in the statement of profit and loss as incurred.

The Company identifies and determines cost of each component/ part of the asset separately, if the component/ part has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset. Items of stores and spares that meet the definition of property, plant and equipment are capitalised at cost and depreciated over their useful life. Otherwise, such items are classified as inventories.

The exchange differences arising on translation/ settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset are charged to the statement of profit and loss. Gains or losses arising from derecognition of property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is derecognised.

Depreciation on property, plant and equipment is calculated on a written down value over the useful lives of assets estimated by the management, as below:

Leasehold improvements are amortised on a straight line basis over the period of lease or estimated useful lives of the assets, which ever is lower.

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

The useful lives have been determined based on managements'' judgement which in certain instances are different from those specified by Schedule II to the Act, in order to reflect the actual usage of the assets. The assets residual values and useful life are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.

2.2.5 Intangible assets

I ntangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.

2.2.6 Impairment of non-financial 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

The useful lives of intangible assets are assessed as either finite or indefinite.

I ntangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.

I ntangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss. when the asset is derecognised.

unit''s (CGU) fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When 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.

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

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

I mpairment losses of continuing operations, including impairment on inventories, are recognised in the Statement of Profit and Loss, except for properties previously revalued with the revaluation surplus taken to OCI. For such properties, the impairment is recognised in OCI up to the amount of any previous revaluation surplus.

For assets excluding goodwill, 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 Standalone 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.

Goodwill and brand are tested for impairment annually and when circumstances indicate that the carrying value may be impaired.

Impairment is determined for goodwill and brand by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill and brand relate to. When the recoverable amount of the CGU is less than it''s carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.

Intangible assets with indefinite useful lives are tested for impairment annually at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired.

2.2.7 Inventories

Traded goods are valued at lower of cost and net realisable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted average basis.

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.

Obsolete, slow moving and defective/damage/ near expiry inventories are identified from time to time and, where necessary, a provision is made for such inventories.

2.2.8 Revenue recognition

Revenues are recognised when, or as, control of a promised goods transfers to customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those goods or services. To recognise revenues the following five step approach is applied: (i) identify the contract with a customer, (ii) identify the performance obligation in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognise revenues when a performance obligations is satisfied. ''The following specific recognition criteria must also be met before revenue is recognised:

Revenue from Sale of products

Revenue from the sale of products is recognised at a point in time when control of the products is transferred to the customer and there is no unfulfilled obligation that could affect the customer''s acceptance of the products, which is generally on delivery of the products. Revenue from the sale of products is measured at the fair value of the consideration received or receivable, net of returns and

allowances, discounts and incentives. Revenue is measured at amount of "Transaction Price" as per Ind AS 115.

Non Cash consideration

The Company measures the non-cash consideration at fair value to determine the transaction price for contracts in which a customer promises consideration in a form other than cash. In case the fair value cannot be resonably estimated, the Company measures the consideration indirectly by reference to the stand alone selling price of the goods promised to the customer in exchange for the consideration.

Variable consideration

I f the consideration in a contract includes a variable amount (discounts and incentives), the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods/services to the customer and such discounts and incentives are estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. The rights of return and volume rebates give rise to variable consideration.

Rights of return

The Company uses the expected value method to estimate the variable consideration given the large number of contracts that have similar characteristics. The Company then applies the requirements on constraining estimates of variable consideration in order to determine the amount of variable consideration that can be included in the transaction price. A refund liability is recognised for the goods that are expected to be returned (i.e., the amount not included in the transaction price). A right of return asset (and corresponding adjustment to cost of sales) is also recognised for the right to recover the goods from a customer.

Volume rebates

The Company applies the most likely amount method or the expected value method to estimate the variable consideration in the contract. The selected method that best predicts the amount of variable consideration is primarily driven by the number of volume thresholds contained in the contract. The most likely amount is used for those contracts with a single volume threshold, while the expected value method is used for those with more than one volume threshold. The Company then applies the requirements on constraining estimates in order to determine the amount of variable consideration that can be included in the transaction price and recognised as revenue.

Customer wallet points

The Company has a wallet points programme, which allows customers to accumulate points that can be redeemed for subsequent purchase. The wallet points give rise to a separate performance obligation as they provide a material right to the customer.

A portion of the transaction price is allocated to the loyalty points awarded to customers based on relative stand-alone selling price and recognised as a contract liability until the points are redeemed. Revenue is recognised upon redemption of points by the customer.

When estimating the stand-alone selling price of the loyalty points, the Company considers the likelihood that the customer will redeem the points. The Company updates its estimates of the points that will be redeemed on each reporting date and any adjustments to the contract liability balance are charged against revenue.

Interest income

I nterest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other income" in the statement of profit and loss.

Contract balances

Contract assets

A 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 receivables

A trade receivable is recognised if an amount of consideration 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.

Contract liabilities

A contract liability is recognised if a payment is received or a payment is due (whichever is earlier) from the customer before the Company transfers the related goods or services. Contract liabilities are recognised as revenue when the Company performs under the contract (i.e., transfers control of the related goods or services to the customer).

2.2.9 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."

The Company as a 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.

Right-of-use assets

The Company recognises 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 straightline basis over the shorter of the lease term and the estimated useful lives of the assets as follows:-

I f ownership of the leased asset is transferred to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the accounting policy on impairment of nonfinancial assets.

Lease liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments 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 the Company and payments of penalties for terminating the lease, if the lease term reflects exercising of the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs.

I n calculating the present value of lease payments, the Company uses internal rate of return for the assets which were earlier classified under finance

lease and incremental borrowing rate for Right of use assets at the lease commencement date. 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 remeasured 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 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.

2.2.10 Employee Benefits Short-term obligations

Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employee''s services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current financial liabilities in the standalone balance sheet.

Accumulated leave, which is expected to be utilised within the next 12 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 presents the accumulated leave liability as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for twelve months after the reporting date.

Post-employment obligations

The Company operates the following postemployment schemes:

(a) defined benefit plans - gratuity, and

(b) defined contribution plans such as provident fund.

Gratuity: Defined benefits obligations

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plan is the present

value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by an independent actuary using the projected unit credit method.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have term approximating the term of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet. Such accumulated re-measurement balances are never reclassified into the statement of profit and loss subsequently.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service costs.

Defined contribution plan

Retirement benefit in the form of provident fund scheme are the defined contribution plans. The Company has no obligation, other than the contribution payable. The Company recognises contribution payable to these schemes as an expenditure, when an employee renders the related service.

.2.11 Investment in subsidiary

The Company has elected to recognise its investments in subsidiary companies at cost in accordance with the option available in Ind AS - 27, ''Separate Financial Statements'', less accumulated impairment loss, if any. Cost represents amount paid for acquisition of the said investments. The details of such investment is given in note 7. Refer to the accounting policies in note 2.7 for policy on impairment of non-financial asset.

On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the statement of profit and loss."

.2.12 Employee share based payment

The Stock option plan of the Company is classified as equity settled transaction based on the constructive obligation for settlement of option in equity.

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using a black Scholes model.

That cost is recognised, together with a corresponding increase in share based payment reserves in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company''s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit and loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.

When the terms of equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through statement of profit or loss.

The Company''s employees are granted share appreciation rights (SAR) settled in cash upto May 30, 2022 and w.e.f. May 31, 2022 the scheme is modified as equity settled scheme. The liability for the share appreciation rights is measured, initially and at the end of each reporting period until settled, at the fair value of the SAR by applying an option pricing model, taking into account the terms and conditions on which the SAR were granted, and the extent to which the employees have rendered services to date.

When the terms of an cash-settled award are modified, the equity-settled share-based payment transaction is measured by reference to the fair value of the equity instruments granted at the modification date, the liability for the cash-settled share-based payment transaction as at the modification date is derecognised on that date and the difference between the carrying amount of the liability derecognised and the amount of equity recognised on the modification date is recognised immediately in the standalone statement of profit and loss.

Subsequently w.e.f December 15, 2022, SAR Scheme was further amended and rechristened by the Company to Employee stock options plan 2021 (ESOP scheme 2021) (""December 2022 Amendment") to redesignate

the erstwhile SAR''s as ESOP with fixed conversion ratio. When the terms of the equity-settled share-based payment transaction are modified, pre-modification valuation and post modification valuation is compared and if the value of post modification is lower than pre-modification, then the cost would be recognised based on original plan, however if the value of post modification is higher than pre-modification, then the original cost would continue to be accounted and for the additional fair value to the extent of vested options recognised in the statement of profit and loss and to the extent of unvested options, additional fair value is accounted over the remaining vesting period.

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

2.2.13 Financial instruments

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

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e. the date that the Company commits to purchase or sell the asset.

Subsequent measurement

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

• Debt instruments at amortised cost

• Debt instruments at Fair Value Through Other Comprehensive income (FVTOCI)

• Debt instruments and equity instruments at Fair Value Through Profit and Loss (FVTPL)

• Equity instruments measured at Fair Value Through Other Comprehensive Income (FVTOCI)

A ''debt instrument'' is measured at the amortised cost, if both of the following conditions are met:

(i) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows; and

(ii) Contractual terms of the asset give rise on specified dates to cash flows that are solely

payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit and loss. The losses arising from impairment are recognised in the statement of profit and loss. This category generally applies to trade and other receivables.

A ''debt instrument'' is classified as FVTOCI, if both of the following criteria are met:

(i) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets; and

(ii) The asset''s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognised in OCI. However, the Company recognises interest income, impairment losses and foreign exchange gain or loss in the statement of profit and loss. On de-recognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to the statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as at amortised cost or as FVTOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss.

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to the statement of profit and loss, even on sale of the investments. Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss.

De-recognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the balance sheet) when:

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

• The Company has transferred its rights to receive cash flows from the asset and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets

I n accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the financial assets and credit risk exposure. The Company follows ''simplified approach'' for recognition of impairment loss allowance on Trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on twelve-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The twelve-month ECL is a portion of the lifetime ECL which results from default events that are possible within twelve months after the reporting date. ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e., all cash shortfalls), discounted at the original EIR. ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/ expense in the statement of profit and loss. This amount is reflected under the head ''other expenses'' in the statement of profit and loss.

For assessing increase in credit risk and impairment loss, the Company combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.

Financial liabilities

Initial recognition and measurement

All financial liabilities are recognised initially at fair value. The Company''s financial liabilities include trade and other payables, and lease liabilities.

Subsequent measurement

The measurement of financial liabilities depends on their classification. Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Separated embedded derivatives are also classified as held for trading, unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit and loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/losses attributable to changes in own credit risk are recognised in OCI. These gains/losses are not subsequently transferred to the statement of profit and loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit and loss.

After initial recognition, gains and losses are recognised in the statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

De-recognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.

Reclassification of financial assets and liabilities

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no re-classification is made for financial assets which are equity instruments and financial liabilities.

For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. A change in the business model occurs when the Company

either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the re-classification prospectively from the re-classification date, which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.

Offsetting of financial instruments

Financial assets and financial liabilities are offset, and the net amount is reported in the balance sheet, if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

2.2.14 Income taxes Income tax

I ncome tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities in accordance with the Income-tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognised outside the statement of profit and loss is recognised outside the statement of profit and loss (either in OCI or in equity in correlation to the underlying transaction). Management periodically evaluates whether it is probable that the relevant taxation authority would accept an uncertain tax treatment that the Company has used or plan to use in its income tax filings, including with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions, where appropriate. The Company shall reflect the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment.

Deferred tax

Deferred tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities and assets are recognised for all taxable temporary differences and deductible temporary differences, except:

• when the deferred tax liability or asset arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• in respect of taxable temporary differences and deductible temporary differences associated with investments in subsidiary and associate, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are recognised 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 utilised. The carrying amount of deferred tax assets is reviewed at each reporting 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 tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside the statement of profit and loss is recognised outside the statement of profit and loss (either in OCI or in equity in correlation to the underlying transaction). Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

2.2.15 Segment reporting

The Company reports the standalone financial statements along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the consolidated financial statements.

2.2.16 Earnings per share

Basic earnings per share are 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. 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.