Accounting Policies of Sula Vineyards Ltd. Company

Mar 31, 2025

Note 2.1 Material Accounting Policies

i. Basis of Preparation

The standalone financial statements ("financials
statements") of the Company have been prepared to
comply in all material respects with the Indian Accounting
Standards ("Ind AS") as prescribed under Section 133 of
the Companies Act, 2013 (‘the Act'') read with Companies
(Indian Accounting Standards) Rules as amended from
time to time notified under the Companies (Accounting
Standards) Rules, 2015 and other accounting principles
generally accepted in India.

The financial statements have been prepared under
the historical cost convention with the exception of
certain financial assets and liabilities and share based
payments in accordance with Ind AS and Presentation
and disclosure requirements of Division II of Schedule III
to the Companies Act, 2013 (Ind AS Compliant Schedule
III) as amended from time to time.

The Company''s financial statements are reported in
Indian Rupees, which is also the Company''s functional
currency, and all values are presented in INR crore,
except when otherwise indicated. Further, "0.00" denotes
amounts less than fifty thousand rupees.

ii. Operating cycle and current, non-current classification

Based on the nature of services and the time between
acquisition of assets for processing and their realisation in

cash and cash equivalents, the Company has ascertained
its operating cycle as twelve months for the purpose of
current/ non-current classification of assets and liabilities.
The Company presents assets and liabilities in the Balance
Sheet based on current/ non-current classification.

An Asset is Current when:

• It is expected to be realised in normal operating
cycle.

• It is held primarily for the purpose of trading.

• It is expected to be realised within twelve months
after the reporting period, or

• It is cash or cash equivalent.

All other assets are classified as non-current.

A Liability is current when:

• It is expected to be settled in normal operating cycle.

• It is held primarily for the purpose of trading.

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

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

The Company classifies all other liabilities as non-current.

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

iii. Accounting Estimates

The preparation of the financial statements, in conformity
with the recognition and measurement principles of Ind
AS, requires the management to make estimates and
assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent liabilities
as at the date of financial statements and the results
of operation during the reported period. Although
these estimates are based upon management''s best
knowledge of current events and actions, actual results
could differ from these estimates which are recognised
in the period in which they are determined.

iv. Critical estimates and judgements

Management believes that the estimates used in the
preparation of the financial statements are prudent
and reasonable. Information about the estimates and
judgements made in applying accounting policies that
the most significant effect on the amount recognised in
the financial statements are as follows:

Estimates

a) Useful lives of property, plant and equipment and
intangible assets

The Company has estimated the useful life of each class of
assets based on the nature of assets, the estimated usage
of the asset, the operating condition of the asset, past
history of replacement, anticipated technological changes,
etc. The Company reviews the estimated useful lives and
residual values of the assets at each reporting period. This
reassessment may result in change in depreciation and
amortisation expense in the future periods.

b) Income Taxes

The tax jurisdictions for the Company is India. Significant
judgments are involved in determining the provision for
income taxes includingjudgment on whether tax positions
are probable of being sustained in tax assessments. A tax
assessment can involve complex issues, which can only be
resolved over extended time periods. The recognition of
taxes that are subject to certain legal or economic limits
or uncertainties is assessed individually by management
based on the specific facts and circumstances.

Deferred tax assets are recognised to the extent it is
probable that the underlying tax loss or deductible
temporary difference will be utilised against future
taxable income. This is assessed based on the Company''s
forecast of future operating results, adjusted for
significant non-taxable income and expenses and
specific limits on the use of any unused tax loss or credit.
The carrying amounts of deferred tax assets are reviewed
at the end of each reporting period and adjusted to the
extent that it is no longer probable that sufficient taxable
profit will be available to allow the benefit of part or all of
that deferred tax asset to be utilised.

c) Provision and Contingencies

The assessments undertaken in recognizing provisions
and contingencies have been made in accordance
with the applicable Ind AS. A provision is recognized if,
as a result of a past event, the Company has a present
legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic
benefits will be required to settle the obligation. Where
the effect of time value of money is material, provisions
are determined by discounting the expected future

cash flows. In the normal course of business, contingent
liabilities may arise from litigation and other claims
against the Company. There are certain obligations
which management has concluded, based on all available
facts and circumstances, are not probable of payment or
are very difficult to quantify reliably, and such obligations
are treated as contingent liabilities and disclosed in the
notes but are not reflected as liabilities in the financial
statements. Although there can be no assurance
regarding the final outcome of the legal proceedings
in which the Company is involved, it is not expected
that such contingencies will have a material effect
on its financial position or profitability. Provisions and
contingent liabilities are reviewed at each balance sheet
date and adjusted to reflect the current best estimate.

d) Share based payments

The Company uses the most appropriate valuation model
depending on the terms and conditions of the grant, including
the expected life of the share option and volatility. The
assumptions and models used for estimating fair value for share-
based payment transactions are disclosed in Note 42.

e) Accounting for defined benefit plans

In accounting for post-retirement benefits, several
statistical and other factors that attempt to anticipate
future events are used to calculate plan expenses and
liabilities. These factors include expected discount rate
assumptions and rate of future compensation increases.
To estimate these factors, actuarial consultants also use
estimates such as withdrawal, turnover, and mortality
rates which require significant judgment. The actuarial
assumptions used by the Company may differ materially
from actual results in future periods due to changing
market and economic conditions, regulatory events,
judicial rulings, higher or lower withdrawal rates, or longer
or shorter participant life spans.

f) Impairment of non-financial assets

An impairment loss is recognised for the amount by which an
assets or cash-generating unit''s carrying amount exceeds its
recoverable amount to determine the recoverable amount,
management estimates expected future cash flows from
each asset or cash generating unit and determines a
suitable interest rate in order to calculate the present value
of those cash flows. In the process of measuring expected
future cash flows, management makes assumptions about
future operating results. These assumptions relate to future
events and circumstances. The actual results may vary and
may cause significant adjustments to the Company''s assets.
In most cases, determining the applicable discount rate
involves estimating the appropriate adjustment to market
risk and the appropriate adjustment to asset-specific risk
factors.

In accordance with Ind AS 109, the Company applies the
expected credit loss ("ECL") model for measurement and
recognition of impairment loss on financial assets and credit
risk exposures.

The Company follows ‘simplified approach'' for recognition of
impairment loss allowance on trade receivables. Simplified
approach does not require the Company to track changes
in credit risk. Rather, it recognises impairment loss allowance
based on lifetime ECL at each reporting date, right from its
initial recognition.

For recognition of impairment loss on other financial assets
and risk exposure, the Company determines that whether
there has been a significant increase in the credit risk since
initial recognition. If credit risk has not increased significantly,
12-month ECL is used to provide for impairment loss. However,
if credit risk has increased significantly, 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 12-month
ECL.

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 entity expects to receive (i.e., all cash
shortfalls), discounted at the original EIR. Lifetime ECL are
the expected credit losses resulting from all possible default
events over the expected life of a financial instrument. The
12-month ECL is a portion of the lifetime ECL which results
from default events that are possible within 12 months after
the reporting date.

ECL impairment loss allowance (or reversal) recognised
during the period is recognised as income/ expense in the
Statement of Profit and Loss.v. Property, Plant and Equipment

v. Property, Plant and Equipment

Property, Plant and Equipment are stated at cost of
acquisition including attributable interest and finance
costs, if any, till the date of acquisition/ installation of the
assets less accumulated depreciation and accumulated
impairment losses, if any. Subsequent expenditure
relating to Property, Plant and Equipment is capitalised
only when it is probable that future economic benefits
associated with the item will flow to the Company and
the cost of the item can be measured reliably. All other
repairs and maintenance costs are charged to the
Statement of Profit and Loss as incurred. The cost and
related accumulated depreciation are eliminated from
the financial statements, either on disposal or when
retired from active use and the resultant gain or loss are
recognised in the Statement of Profit and Loss.

Bearer plants comprising of grapevines are stated at
cost less accumulated depreciation and accumulated
impairment losses. Immature bearer plants, including
the cost incurred for procurement of new seeds and
maintenance of nurseries, are carried at cost less any
recognized impairment losses under capital work-in¬
progress. Cost includes the cost of land preparation, new
planting and maintenance of newly planted bushes until
maturity. On maturity, these costs are classified under
bearer plants.

vi. Capital work-in-progress

Capital work-in-progress representing expenditure
incurred in respect of assets under development and
not ready for their intended use, are carried at cost. Cost
includes related acquisition expenses, construction cost,
related borrowing cost and other direct expenditure.

vii. Intangible Assets

Intangible assets are stated at cost, only when it is probable
that future economic benefits associated with the item
will flow to the Company and the cost of the item can
be measured reliably, less accumulated amortisation and
accumulated impairment losses, if any. Other Intangible
assets mainly comprise of implementation cost for
software and other application software acquired.

viii. Depreciation and Amortisation

Depreciation on Property, plant and equipment (‘PPE'')
is calculated using the straight-line method as per the
estimated useful lives of assets as below:

Asset category	Useful life (in years)	Basis of determination of useful lives
Building	30 - 60	Assessed to be in line with Schedule II to the Act
Leasehold improvement	Over the lease period	-
Plant and equipment	10 - 25	Assessed to be in line with Schedule II to the Act
Furniture and fixtures	5 -10	Management estimateA
Vehicles	8 -10	Assessed to be in line with Schedule II to the Act
Office equipment	3 - 10	Management estimateA
Computers	3 -6	Assessed to be in line with Schedule II to the Act
Oak barrels	4	Management estimateA
Bearer plants	20	Management estimateA

^A Useful lives of asset classes determined by management
estimate, which are generally lower than those prescribed
under Schedule II to the Act are supported by internal
technical assessment of the useful lives.

The estimated useful lives and residual values are
reviewed at the end of each reporting period, with the
effect of any change in estimate accounted for on a
prospective basis.

Depreciation on additions is provided on a pro-rata basis
i.e. from the date on which asset is ready for use.

Gains and losses on disposals are determined by
comparing proceeds with the carrying amounts. These
are accounted in Statement of profit and loss within
Other income/ Other expenses.

xv. Amortisation on Intangible Assets

Intangible assets are amortised on a straight-line basis,
from the date they are available for use, over their
estimated useful lives as below.

		Basis of
Asset category	Useful life (in years)	determination of useful lives
Brand	5	Management estimate
		Assessed to be in
Computer software	3-6	line with Schedule II to the Act

ix. Fair Value Measurement

The Company measures financial instruments, at fair
value at each balance sheet date. (Refer note 34).

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

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

- In the absence of a principal market, in the most
advantageous market for the asset or liability.

The principal or the most advantageous market must be
accessible by the Company.

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.

The Company uses valuation techniques that are
appropriate in the circumstances and for which sufficient
data is available to measure fair value, maximising the
use of relevant observable inputs and minimising the
use of unobservable inputs. All assets and liabilities for
which fair value is measured or disclosed in the financial
statements are categorized 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 prices (unadjusted) in active markets
for identical assets or liabilities.

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

Level 3 - Inputs for the assets or liabilities that are not
based on observable market data (unobservable inputs).

For assets and liabilities that are recognised in the
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. At each reporting date, the
Management analyses the movements in the values of
assets and liabilities which are required to be remeasured
or re-assessed as per the Company''s accounting policies.
For this analysis, the Management verifies the major
inputs applied in the latest valuation by agreeing the
information in the valuation computation to contracts
and other relevant documents. The Management also
compares the change in the fair value of each asset
and liability with relevant external sources to determine
whether the change is reasonable.

x. Financial Instruments

Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual
provisions of the financial instrument.

Initial measurement, classification and subsequent
measurement of financial assets

Except for those trade receivables that do not contain
a significant financing component and are measured at
the transaction price in accordance with Ind AS 115, all
financial assets are initially measured at fair value plus,
in case of financial assets other than classified as fair
value through profit and loss account, transaction costs
that are attributable to the acquisition of financial asset.
The Company applies Expected Credit Loss (ECL) model
for measurement and recognition of impairment loss.
Different criteria to determine impairment are applied
for each category of financial assets, which are described
below.

Financial assets, other than those designated and
effective as hedging instruments, are classified into one
of the following categories:

• Amortised cost

• fair value through profit or loss (FVTPL), or

• fair value through other comprehensive income (FVOCI)
The classification is determined by both:

• the entity''s business model for managing the
financial asset, and

• the contractual cash flow characteristics of the
financial asset

All revenue and expenses relating to financial assets
that are recognised in profit or loss are presented within
finance costs or other income, except for impairment of
trade and other receivables which is presented within
other expenses''. Interest income and expenses are
reported on an accrual basis using the effective interest
method.

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

Financial assets at amortised cost

Financial assets are measured at amortised cost if
the assets meet the following conditions (and are not
designated as FVTPL):

• they are held within a business model whose
objective is to hold the financial assets and collect its
contractual cash flows, and;

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

After initial recognition, these are measured at amortised
cost using the effective interest method.

The Company accounts for financial assets at FVOCI if
the assets meet the following conditions:

• they are held under a business model whose
objective it is "hold to collect" the associated cash
flows and sell, and

• the contractual terms of the financial assets give rise
to cash flows that are solely payments of principal
and interest on the principal amount outstanding

Financial assets at FVTPL

Financial assets held within a different business model
other than ‘hold to collect'' or ‘hold to collect and sell''
are categorised at FVTPL. Further, irrespective of the
business model used, financial assets whose contractual
cash flows are not solely payments of principal and
interest are accounted for at FVTPL. All derivative
financial instruments fall into this category, except for
those designated and effective as hedging instruments,
for which the hedge accounting requirements apply.

For all equity investments the Company accounts for
the investment at FVTPL. The fair value is determined
in line with the requirements of Ind AS 113 ‘Fair Value
Measurement''.

Assets in this category are measured at fair value with
gains or losses recognised in profit or loss. The fair values
of financial assets in this category are determined
by reference to active market transactions or using a
valuation technique where no active market exists.

De-recognition of Financial Assets

The Company de-recognises a financial asset only when the
contractual rights to the cash flows from the asset expire, or
it transfers the financial asset and substantially all risks and
rewards of ownership of the asset to another entity.

If the Company neither transfers nor retains substantially
all the risks and rewards of ownership and continues to
control the transferred asset, the Company recognizes its
retained interest in the assets and an associated liability
for amounts it may have to pay.

If the Company retains substantially all the risks and
rewards of ownership of a transferred financial asset,
the Company continues to recognise the financial asset
and also recognises a collateralised borrowing for the
proceeds received.

b) Equity Instruments and Financial Liabilities

Financial liabilities and equity instruments issued by
the Company are classified according to the substance
of the contractual arrangements entered into and the
definitions of a financial liability and an equity instrument

Equity Instruments

An equity instrument is any contract that evidences
a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments which
are issued for cash are recorded at the proceeds received,
net of direct issue costs. Equity instruments which are
issued for consideration other than cash are recorded at
fair value of the equity instrument.

Financial Liabilities

• Initial Recognition

Financial liabilities are classified, at initial recognition,
as financial liabilities at FVPL, loans and borrowings
and payables as appropriate. 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, as described below

Financial liabilities at FVPL:

Financial liabilities at FVPL include financial liabilities
held for trading and financial liabilities designated
upon initial recognition as at FVPL. Financial liabilities
are classified as held for trading if they are incurred for
the purpose of repurchasing in the near term. Gains or
losses on liabilities held for trading are recognised in the
Statement of Profit and Loss.

Financial liabilities at amortised cost

After initial recognition, interest-bearing borrowings
and other payables are subsequently measured at
amortised cost using the EIR method. Gains and losses
are recognised in 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 of Financial Liabilities

Financial liabilities are de-recognised when the obligation
specified in the contract is discharged, 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
de-recognition of the original liability and recognition of
a new liability. The difference in the respective carrying
amounts is recognised in the Statement of Profit and Loss.

xi. Inventories

Inventories which comprise of raw materials, work-in-progress
/ semi-finished goods, finished goods, stock-in-trade, packing
materials and consumables, chemicals, stores and spares
are carried at the lower of cost or net realisable value. The
comparison of cost and net realisable value is made on an
item-by-item basis.

Cost of inventories comprises all costs of purchase, cost of
conversion and other costs incurred in bringing the inventories
to their present location and condition. Costs of purchased
inventory are determined after deducting rebates and
discounts. The cost is determined as follows:

• Raw Materials, Traded goods, Packing Materials and
Consumables, chemicals, stores and spares are valued
using the weighted average method.

• Finished goods and work-in-progress / semi-finished
goods are valued at the cost of raw materials along with
fixed production overheads being allocated on the basis
of normal capacity of production facilities.

• The net realisable value of work-in-progress is determined
with reference to the selling prices of related finished goods.

• Raw materials, components and other supplies held for
use in the production of finished products are not written
down below cost except in cases when a decline in the
price of materials indicates that the cost of the finished
products shall exceed the net realisable value.

• The comparison of cost and net realisable value is made
on an item-by-Item basis.

• Obsolete, slow moving and defective inventories are
identified and written down to net realisable valuexii.
Revenue Recognition.

xii. Revenue Recognition

Revenue comprises revenue from contracts with
customers for sale of goods and revenue from sale of
services representing revenue from hospitality services.
Revenue towards satisfaction of a performance obligation
is measured at the amount of transaction price (net of
variable consideration) allocated to that performance
obligation. The transaction price of goods sold or services
rendered is net of of variable consideration of various
discounts and schemes offered by the Company as part
of the contract. Revenue from sale of goods is net of
returns, trade allowances, rebates, value added taxes and
such amounts collected on behalf of third parties with an
exception for excise duties. The Company has assumed
that recovery of excise duty flows to the Company on
its own account and hence is a liability of the Company
irrespective of whether the goods are sold or not
.Revenue is recognised to the extent that it is probable
that the economic benefits will flow to the Company
and the revenue can be reliably measured, regardless of
when the payment is being made. Revenue is recognised
as and when performance obligations are satisfied by
transferring goods or services to the customer, as below:

(a) Revenue from sale of products

Revenue is recognised on transfer of control, being
on dispatch of goods or upon delivery to customer, in
accordance with the terms of sale.

(b) Revenue from sale of services

Revenue from sale of services represents revenue from
hospitality services which mainly comprise of sale of room
nights, food and beverages and allied services relating to
the resort and winery. Revenue is recognized at a point in
time when the services are rendered.

(c) Interest Income

Interest income is recognized using the effective interest
rate method. The effective interest rate is the rate that
discounts estimated future cash receipts through the
expected life of the financial asset to the gross carrying
amount of the financial asset. Interest income is included
under the head "other income" in the Statement of Profit
and Loss.

(d) Dividend Income

Dividend income is recognised when the right to receive
payment has been established, provided that it is probable
that the economic benefits will flow to the Company and
the amount of income can be measured reliably.

(e) Other Income

Other items of income are accounted as and when the
right to receive such income arises and it is probable that
the economic benefits will flow to the Company and the
amount of income can be measured reliably

xiii. Government Grants

Grants and subsidies from the Government are recognised
when there is reasonable assurance that the grant / subsidy
will be received and all attaching conditions are complied
with. Government grants related to revenue under Wine
Industry Promotion Subsidy linked with Value Added Tax,
are recognised in the Statement of Profit and Loss in the
period in which they become receivable. Where the grant
or subsidy relates to an asset (i.e. Export Promotion Capital
Goods scheme), it is presented in the balance sheet by
setting up the grant as deferred income which is recognised
as income in the statement of profit and loss over the useful
life of the related assets. Government grants related to
assets are treated as deferred income and are recognized
in the net profit in the Statement of Profit and Loss over
the useful life of the assets.

xiv. Borrowing

Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently

measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in Statement of profit and loss
over the period of the borrowings using the effective
interest method. Borrowings are derecognised from
the balance sheet when the obligation specified in the
contract is discharged, cancelled or expired. The difference
between the carrying amount of a financial liability that
has been extinguished or transferred to another party
and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in Statement
of profit and loss as other gains/(losses). Borrowings are
classified as current liabilities unless the Company has an
unconditional right to defer settlement of the liability for at
least 12 months after the reporting period.

xv. Employee Benefits

a) Defined Contribution Plan

Contributions to defined contribution schemes such as
provident fund, employees'' state insurance, labour welfare
fund are charged as an expense based on the amount of
contribution required to be made as and when services are
rendered by the employees. Company''s provident fund
contribution, in respect of certain employees, is made to a
government administered fund and charged as an expense
to the Statement of Profit and Loss. The above benefits
are classified as Defined Contribution Schemes as the
Company has no further obligations beyond the monthly
contributions.

b) Defined Benefit Plan

The Company provides for gratuity which is a defined
benefit plan the liabilities of which is determined based
on valuations, as at the balance sheet date, made by an
independent actuary using the projected unit credit
method. Re-measurement, comprising of actuarial gains
and losses, in respect of gratuity are recognised in the
OCI, in the period in which they occur and is not eligible
to be reclassified to the Statement of Profit and Loss
in subsequent periods. Past service cost is recognised
in the Statement of Profit and Loss in the year of plan
amendment or curtailment. The classification of the
Company''s obligation into current and non-current is as per
the actuarial valuation report.

c) Leave entitlement and compensated absences

Accumulated leave which is expected to be utilised
within next twelve months, is treated as short-term
employee benefit. Leave entitlement, other than short
term compensated absences, are provided based on
a actuarial valuation, similar to that of gratuity benefit.
However, as the Company does not have an unconditional
right to defer settlement for these obligations, the above
liabilities are presented as current. Re-measurement,
comprising of actuarial gains and losses, in respect of
leave entitlement are recognised in the Statement of
Profit and Loss in the period in which they occur.

d) Short-term benefits

Short-term employee benefits such as salaries, wages,
performance incentives etc. are recognised as expenses
at the undiscounted amounts in the Statement of Profit
and Loss of the period in which the related service is
rendered. Expenses on non-accumulating compensated
absences is recognised in the period in which the
absences occur.

xvi. Share Based Payments

Share based compensated benefits are provided to
certain grades of employees in consideration of the
services rendered. Under the equity settled share
based payment, the fair value on the grant date of
the instrument given to employees is recognised as
‘employee benefits expenses'' with a corresponding
increase in equity over the vesting period, which is the
period over which all the specified vesting conditions
are to be satisfied. The fair value of the options at the
grant date is calculated by an independent valuer basis
Black Scholes model. At the end of each period, the
entity revises its estimates of the number of options that
are expected to vest based on the non-market vesting
and service conditions. It recognizes the impact of the
revision to original estimates, if any, in profit or loss, with
a corresponding adjustment to equity. Upon exercise of
share options, the proceeds received are allocated to
share capital up to the par value of the shares issued with
any excess being recorded as securities premium.

xvii. Leases

The Company''s lease asset classes primarily consist of leases for

land and warehouses. The Company assesses whether a contract
contains a lease, at inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control the use of an
identified asset fora period of time in exchange of the consideration.

At the date of the commencement of the lease, the Company
recognises a right-of-use asset representing its right to use the
underlying asset for the lease term and a corresponding lease
liability for all the lease arrangements in which it is a lease, except
for leases with a term of twelve months or less (short-term leases)
and low value leases. For these short-term and low value leases, the
Company recognises the lease payments as an operating expense
on a straight-line basis over the period of the lease:

The right-of-use assets are initially recognised at cost, which
comprises the initial amount of the lease liability adjusted for any
lease payments made at or prior to the commencement date of
the lease. They are subsequently measured at cost less accumulated
depreciation and impairment losses. Right-of-use assets are
depreciated from the commencement date on a straight-line basis
over the shorter of the lease term and useful life of the underlying
asset. The estimated useful life of the assets are determined on the
same basis as those of property, plant and equipment.

Right-of-use assets are evaluated forrecoverabilitywhenever events
or changes in circumstances indicate that their carrying amounts
may not be recoverable. Carrying amount of right-of-use asset is
written down immediately to its recoverable amount if the asset''s
carrying amount is greater than its estimated recoverable amount.

Thelease liabilityis initiallymeasured at amortized cost at the present
value of the future lease payments. The future lease payments
are discounted using the interest rate implicit in the lease or, if not
readily determinable, using the incremental borrowing rates. For
a lease with reasonably similar characteristics, the Company, on a
lease by lease basis, may adopt either the incremental borrowing
rate specific to the lease or the incremental borrowing rate for the
portfolio as a whole.

Right-of-use assets and lease liabilities have been separately
presented in the Balance Sheet. Further; lease payments have been
classified as financing cash flows.

xviii. Income Tax

Income tax comprises of current and deferred income
tax. Income tax is recognised as an expense or income
in the Statement of Profit and Loss, except to the extent
it relates to items directly recognised in equity or in OCI.

a) Current Income Tax

Current income tax is recognised based on the estimated
tax liability computed after taking credit for allowances
and exemptions in accordance with the Income Tax Act,
1961. Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid to
the taxation authorities. The tax rates and tax laws used
to compute the amount are those that are enacted or
substantively enacted, at the reporting date.

b) Deferred Income Tax

Deferred tax is determined by applying the Balance Sheet
approach. Deferred tax assets and liabilities are recognised
for all deductible temporary differences between the
financial statements'' carrying amount of existing assets and
liabilities and their respective tax base. Deferred tax assets
and liabilities are measured using the enacted tax rates or
tax rates that are substantively enacted at the Balance Sheet
date. The effect on deferred tax assets and liabilities of a
change in tax rates is recognised in the period that includes
the enactment date. Deferred tax assets are only recognised
to the extent that it is probable that future taxable profits
will be available against which the temporary differences can
be utilised. Such assets are reviewed at each Balance Sheet
date to reassess realisation.

Deferred tax assets and liabilities are offset when
there is a legally enforceable right to offset current
tax assets and liabilities. Current tax assets and tax
liabilities are offset where the entity has a legally
enforceable right to offset and intends either to
settle on a net basis, or to realise the asset and settle
the liability simultaneously.

xix. Operating Segments

Operating segments are reported in a manner
consistent with the internal reporting provided to the
chief operating decision maker. The chief operating
decision maker regularly monitors and reviews the
operating result of the whole Company as one segment
of "Manufacture and sale of alcoholic beverages (wines
and spirits)". Thus, as defined in Ind AS 108 "Operating
Segments", the Company''s entire business falls under
this one operational segment and hence the necessary
information has already been disclosed in the Balance
Sheet and the Statement of Profit and Loss.

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Mar 31, 2024

Note 2.1 Material Accounting Policies

i. Basis of Preparation

The financial statements of the Company have been prepared to comply in all material respects with the Indian Accounting Standards ("Ind AS”) as prescribed under Section 133 of the Companies Act, 2013 (''the Act'') read with Companies (Indian Accounting Standards) Rules as amended from time to time notified under the Companies (Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India.

The financial statements have been prepared under the historical cost convention with the exception of certain financial assets and liabilities, defined benefit plan and share based payments which have been prepared to comply with the Indian Accounting standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013, (as amended from time to time) and Presentation and disclosure requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS Compliant Schedule III) as amended from time to time.

The Company''s financial statements are reported in Indian Rupees, which is also the Company''s functional currency, and all values are presented in INR crore, except when otherwise indicated. Further, "0.00" denotes amounts less than fifty thousand rupees.

ii. Operating cycle and current, non-current classification

Based on the nature of services and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of

current/ non-current classification of assets and liabilities. The Company presents assets and liabilities in the Balance Sheet based on current/ non-current classification.

An Asset is current when:

• It is expected to be realised in normal operating cycle.

• It is held primarily for the purpose of trading.

• It is expected to be realised within twelve months after the reporting period, or

• It is cash or cash equivalent.

All other assets are classified as non-current.

A Liability is current when:

• It is expected to be settled in normal operating cycle.

• It is held primarily for the purpose of trading.

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

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

The Company classifies all other liabilities as non-current.

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

ii. Accounting Estimates

The preparation of the financial statements, in conformity with the recognition and measurement principles of Ind AS, requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operation during the reported period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates which are recognised in the period in which they are determined.

v. Key accounting estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to

market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

Critical estimates and judgements

Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Examples of such estimates include estimation of useful lives of property plant and equipment, employee costs, assessments of recoverable amounts of deferred tax assets, trade receivables and cash generating units and provisions against litigations and contingencies.

Estimates

a) Useful lives of property, plant and equipment and intangible assets

The Company has estimated the useful life if each class of assets based on the nature of assets, the estimated usage of the asset, the operating condition of the asset, past history of replacement, anticipated technological changes, etc. The Company reviews the estimated useful lives and residual values of the assets at each reporting period. This reassessment may result in change in depreciation and amortisation expense in the future periods.

b) Current income taxes

The tax jurisdictions for the Company is India. Significant judgments are involved in determining the provision for income taxes including judgment on whether tax positions are probable of being sustained in tax assessments. A tax assessment can involve complex issues, which can only be resolved over extended time periods. The recognition of taxes that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances.

c) Investment in / advances to subsidiary

The Company has performed valuation for its investments in equity of its subsidiary for assessing whether there is any impairment in the fair value. When the fair value of investments in subsidiaries cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow model. Similar assessment is carried for exposure of the nature of loans and interest receivable thereon. The inputs to these models are taken from

observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as expected earnings in future years, liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of these investments.

d) Provision and contingencies

Contingent Liability may arise from the ordinary course of business in relation to claims against the Company. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgments and the use of estimates regarding the outcome of future events.

e) Accounting for defined benefit plans

In accounting for post-retirement benefits, several statistical and other factors that attempt to anticipate future events are used to calculate plan expenses and liabilities. These factors include expected discount rate assumptions and rate of future compensation increases. To estimate these factors, actuarial consultants also use estimates such as withdrawal, turnover, and mortality rates which require significant judgment. The actuarial assumptions used by the Company may differ materially from actual results in future periods due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans.

f) Impairment of financial/ non-financial assets

An impairment loss is recognised for the amount by which an asset''s or cash-generating unit''s carrying amount exceeds its recoverable amount to determine the recoverable amount, management estimates expected future cash flows from each asset or cash generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows, management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary and may cause significant adjustments to the Company''s assets. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.

v. Property, Plant and Equipment

Property, Plant and Equipment are stated at cost of acquisition less accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditure relating to Property, Plant and Equipment is capitalised only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the Statement of Profit and Loss as incurred. The cost and related accumulated depreciation are eliminated from the financial statements, either on disposal or when retired from active use and the resultant gain or loss are recognised in the Statement of Profit and Loss.

Bearer plants comprising of grapevines are stated at cost less accumulated depreciation and accumulated impairment losses. Immature bearer plants, including the cost incurred for procurement of new seeds and maintenance of nurseries, are carried at cost less any recognized impairment losses under capital work-inprogress. Cost includes the cost of land preparation, new planting and maintenance of newly planted bushes until maturity. On maturity, these costs are classified under bearer plants.

vi. Capital work-in-progress

Capital work-in-progress representing expenditure incurred in respect of assets under development and not ready for their intended use, are carried at cost. Cost includes related acquisition expenses, construction cost, related borrowing cost and other direct expenditure.

vii. Goodwill and Other Intangible Assets

Goodwill represents the cost of acquired business as established at the date of acquisition of the business in excess of the acquirer''s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities less accumulated impairment losses, if any. Goodwill is tested for impairment annually or when events or circumstances indicate that the implied fair value of goodwill is less than its carrying amount.

Brands acquired in a business combination and recognised separately from Goodwill are initially recognised at their fair value at the acquisition value (which is regarded as their cost). Subsequent to initial recognition, these are reported at cost less accumulated amortisation and accumulated impairment losses, if any.

Other Intangible assets are stated at cost, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item

can be measured reliably, less accumulated amortisation and accumulated impairment losses, if any. Other Intangible assets mainly comprise of implementation cost for software and other application software acquired and brand acquired through business combination.

iii. Depreciation and Amortisation

Depreciation on Property, plant and equipment (''PPE'') is calculated using the straight-line method as per the estimated useful lives of assets as below:

Useful lives of asset classes determined by management estimate, which are generally lower than those prescribed under Schedule II to the Act are supported by internal technical assessment of the useful lives.

The estimated useful lives and residual values are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis.

Depreciation on additions is provided on a pro-rata basis i.e., from the date on which asset is ready for use.

Gains and losses on disposals are determined by comparing proceeds with the carrying amounts. These are accounted in Statement of profit and loss within Other income/ Other expenses.

Amortisation of Intangible Assets

Intangible assets are amortised on a straight-line basis, from the date they are available for use, over their estimated useful lives as follows:

ix. Fair value measurement

The Company measures financial instruments, at fair value at each balance sheet date.

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

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

- In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

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.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized 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 prices (unadjusted) in active markets for identical assets or liabilities.

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

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

For assets and liabilities that are recognised in the 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. At each reporting date, the Management analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Company''s accounting policies. For this analysis, the Management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents. The Management also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

c. 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.

a. Financial Assets

(i) Initial Recognition

In the case of financial assets, not recorded at fair value through profit or loss (FVPL), financial assets are recognised initially at fair value plus transaction costs that are directly attributable to the acquisition of the financial asset except for trade receivables which are initially measured at transaction price. 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.

(ii) Subsequent Measurement

• Financial Assets at Amortised Cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income

from these financial assets is included in other income using the effective interest rate ("EIR") method. Impairment gains or losses arising on these assets are recognised in the Statement of Profit and Loss.

• Financial Assets Measured at Fair Value

Financial assets are measured at fair value through Other Comprehensive Income (''OCI'') if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in the Statement of Profit and Loss.

Financial asset not measured at amortised cost or at fair value through OCI is carried at FVPL. In respect of equity investments (other than for investment in subsidiaries) which are not held for trading, the Company has made an irrevocable election to present subsequent changes in the fair value of such instruments in Statement of Profit and Loss. Such an election is made by the Company on an instrument by instrument basis at the time of transition for existing equity instruments/ initial recognition for new equity instruments.

(iii) Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. The Company has made an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to statement of profit or loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.

The equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognize changes in fair value through OCI rather than profit or loss as these are strategic investments and the Company considered this to be more relevant.

(iv) Impairment of financial assets

In accordance with Ind AS 109, the Company applies the expected credit loss ("ECL") model for measurement and recognition of impairment loss on financial assets and credit risk exposures.

The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables. Simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12 months ECL is used to provide for impairment loss. However, if credit risk has increased significantly, 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 12-month ECL.

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 entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/ expense in the Statement of Profit and Loss.

(v) De-recognition of Financial Assets

The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity.

If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the assets and an associated liability for amounts it may have to pay.

If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

b. Equity Instruments and Financial Liabilities

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments which are issued for cash are recorded at the proceeds received, net of direct issue costs. Equity instruments which are issued for consideration other than cash are recorded at fair value of the equity instrument.

Financial Liabilities

(i) Initial Recognition

Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loans and borrowings and payables as appropriate. 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.

(ii) Subsequent Measurement

The measurement of financial liabilities depends on their classification, as described below

Financial liabilities at FVPL:

Financial liabilities at FVPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.

Financial liabilities at amortised cost

After initial recognition, interest-bearing borrowings and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in 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.

(iii) De-recognition of Financial Liabilities

Financial liabilities are de-recognised when the obligation specified in the contract is discharged, 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 de-recognition of the original liability and recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.

(iv) Offsetting 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.

xi. Inventories

Inventories which comprise of raw materials, work-inprogress / semi-finished goods, finished goods, stock-in-trade, packing materials and consumables, chemicals, stores and spares are carried at the lower of cost or net realisable value. The comparison of cost and net realisable value is made on an item-by-item basis.

Cost of inventories comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Costs of purchased inventory are determined after deducting rebates and discounts. The cost is determined as follows:

• Raw Materials, Traded goods, Packing Materials and Consumables, chemicals, stores and spares are valued using the weighted average method.

• Finished goods and work-in-progress / semi-finished goods are valued at the cost of raw materials along with fixed production overheads being allocated on the basis of normal capacity of production facilities.

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

xii. Revenue Recognition

Revenue from contracts with customers is recognised at a point in time when control of the goods or services is 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 from sale of goods is inclusive of excise duties and is net of returns, trade allowances, rebates, value added taxes and such amounts collected on behalf of third parties.

Based on the Educational Material on Ind AS 115 issued by the Institute of Chartered Accountants of India ("ICAI"), the Company has assumed that recovery of excise duty flows to the Company on its own account and hence is a liability of the manufacturer which forms part of the cost of production, irrespective of whether the goods are sold or not. Therefore, revenue includes excise duty. However, sales tax/value added tax (VAT) and goods and services tax (GST) is not received by the Company on its own account and are taxes collected on value added to the commodities by the seller on behalf of the government. Accordingly, these are excluded from revenue.

(a) Revenue from sale of products

Revenue from sale of products is recognised at a point in time when control of the product transfers and there is no unfulfilled obligation that could affect

the customer''s acceptance of the products. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Taxes or duties collected on behalf of governments are excluded from revenue except for excise duty.

(b) Revenue from sale of services

Revenue from sale of services represents revenue from hospitality services which mainly comprise of sale of room nights, food and beverages and allied services relating to the resort and winery. Revenue is recognized at a point in time when the services are rendered. Revenue excludes taxes or duties collected on behalf of the government.

(c) Interest Income

Interest income is recognized using the effective interest rate method. The effective interest rate is the rate that discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of the financial asset. Interest income is included under the head "other income" in the Statement of Profit and Loss.

(d) Other Income

Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably

iii. Government Grants

Grants and subsidies from the Government are recognised when there is reasonable assurance that the grant / subsidy will be received and all attaching conditions are complied with. Government grants related to revenue under Wine Industry Promotion Subsidy linked with value added tax, are recognised in the Statement of Profit and Loss in the period in which they become receivable. Government grants related to assets (Ministry of Food Processing Industry and Electric Vehicles) are treated as deferred income and are recognized in the net profit in the Statement of Profit and Loss on a systematic and rational basis over the useful life of the assets.

iv. Borrowing

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in Statement of profit and loss over the period of the borrowings using the effective interest method. Borrowings are derecognised from the balance

sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in Statement of Profit and Loss as other gains/(losses). Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period

xv. Employee Benefits

a) Defined Contribution Plan

Contributions to defined contribution schemes such as provident fund, employees'' state insurance, labour welfare fund are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. Company''s provident fund contribution, in respect of certain employees, is made to a government administered fund and charged as an expense to the Statement of Profit and Loss. The above benefits are classified as Defined Contribution Schemes as the Company has no further obligations beyond the monthly contributions.

b) Defined Benefit Plan

The Company provides for gratuity which is a defined benefit plan the liabilities of which is determined based on valuations, as at the balance sheet date, made by an independent actuary using the projected unit credit method. Re-measurement, comprising of actuarial gains and losses, in respect of gratuity are recognised in the OCI, in the period in which they occur and is not eligible to be reclassified to the Statement of Profit and Loss in subsequent periods. Past service cost is recognised in the Statement of Profit and Loss in the year of plan amendment or curtailment. The classification of the Company''s obligation into current and non-current is as per the actuarial valuation report.

c) Leave entitlement and compensated absences

Accumulated leave which is expected to be utilised within next twelve months, is treated as short-term employee benefit. Leave entitlement, other than short term compensated absences, are provided based on an actuarial valuation, similar to that of gratuity benefit. However, as the Company does not have an unconditional right to defer settlement for these obligations, the above liabilities are presented as current. Re-measurement, comprising of actuarial gains and losses, in respect of leave entitlement are

recognised in the Statement of Profit and Loss in the period in which they occur.

d) Short-term benefits

Short-term employee benefits such as salaries, wages, performance incentives etc. are recognised as expenses at the undiscounted amounts in the Statement of Profit and Loss of the period in which the related service is rendered. Expenses on nonaccumulating compensated absences is recognised in the period in which the absences occur.

xvi. Share Based Payments

Share based compensated benefits are provided to certain grades of employees in consideration of the services rendered. Under the equity settled share based payment, the fair value on the grant date of the instrument given to employees is recognised as ''employee benefits expenses'' with a corresponding increase in equity over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. The fair value of the options at the grant date is calculated by an independent valuer basis Black Scholes model. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. Upon exercise of share options, the proceeds received are allocated to share capital up to the par value of the shares issued with any excess being recorded as securities premium.

xvii. Leases

The Company''s lease asset classes primarily consist of leases for land, building and vehicles. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange of the consideration.

At the date of the commencement of the lease, the Company recognises a right-of-use asset representing its right to use the underlying asset for the lease term and a corresponding lease liability for all the lease arrangements in which it is a lease, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the period of the lease.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease. They are subsequently

measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. The estimated useful life of the assets are determined on the same basis as those of property, plant and equipment.

Right-of-use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Carrying amount of right-of-use asset is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The future lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. For a lease with reasonably similar characteristics, the Company, on a lease by lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole.

Right-of-use assets and lease liabilities have been separately presented in the Balance Sheet. Further, lease payments have been classified as financing cash flows.

xviii. Impairment of non-financial assets

As at each Balance Sheet date, the Company assesses whether there is an indication that a non-financial asset may be impaired and also whether there is an indication of reversal of impairment loss recognised in the previous periods. If any indication exists, or when annual impairment testing for an asset is required, the Company determines the recoverable amount and impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined:

- In case of an individual asset, at the higher of the assets'' fair value less cost to sell and value in use; and

- In case of cash generating unit (a Company of assets that generates identified, independent cash flows), at the higher of cash generating unit''s fair value less cost to sell and value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specified to the asset. In determining fair value less cost to sell, recent market

transaction are taken into account. If no such transaction can be identified, an appropriate valuation model is used. Impairment 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 taken to OCI. For such properties, the impairment is recognised in OCI up to the amount of any previous revaluation. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through the Statement of Profit and Loss.

xix. Income Tax

Income tax comprises of current and deferred income tax. Income tax is recognised as an expense or income in the Statement of Profit and Loss, except to the extent it relates to items directly recognised in equity or in OCI.

a) Current income tax

Current income tax is recognised based on the estimated tax liability computed after taking credit for allowances and exemptions in accordance with the Income Tax Act, 1961. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

b) Deferred Income Tax

Deferred tax is determined by applying the Balance Sheet approach. Deferred tax assets and liabilities are recognised for all deductible temporary differences between the financial statements'' carrying amount of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities are measured using the enacted tax rates or tax rates that are substantively enacted at the Balance Sheet date. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the period that includes the enactment date. Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Such assets are reviewed at each Balance Sheet date to reassess realisation.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current

tax assets and liabilities. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

xx. Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker regularly monitors and reviews the operating result of the whole Company as single segment of "Manufacture, purchase and sale of alcoholic wines and spirits". Thus, as defined in Ind AS 108 "Operating Segments", the Company''s entire business falls under this one single operational segment and hence the necessary information has already been disclosed in the Balance Sheet and the Statement of Profit and Loss.

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Mar 31, 2023

Note 1 Corporate Information

Sula Vineyards Limited (Formerly Sula Vineyards Private Limited) (the "Company" is a Company domiciled and headquartered in Mumbai, India and was incorporated under the provisions of the erstwhile Companies Act, 1956, has been converted from Private Limited Company to Unlisted Public Limited Company pursuant to special resolution passed at the Extraordinary General Meeting of the shareholders held on 30 December 2021 and consequently the name has been changed to Sula Vineyards Limited and a revised certificate of incorporation dated 11 February 2022, consequent to the aforementioned change, has been issued by the Ministry of Corporate Affairs.

The Company has completed its Initial Public Offer (‘IPO'') of its equity shares and the equity shares got listed on National Stock Exchange of India Limited (‘NSE'') and BSE Limited on 22 December 2022. The Company having CIN L15549MH2003PLC139352 is located at 901 Solaris One N.S. Phadke Marg, Andheri East, Mumbai-400069.

The Company is principally engaged in the business of manufacture, purchase and sale of premium wine and other alcoholic beverages. The Standalone financial statements of the Company for the year ended 31 March 2023 were authorised for issue in accordance with resolution of Board of Directors on 3 May 2023

Note 2.1 Significant Accounting Policies

i. Basis of Preparation

The financial statements of the Company have been prepared to comply in all material respects with the Indian Accounting Standards ("Ind AS") as prescribed under Section 133 of the Companies Act, 2013 (‘the Act'') read with Companies (Indian Accounting Standards) Rules as amended from time to time notified under the Companies (Accounting Standards) Rules, 2015.

The financial statements have been prepared under the historical cost convention with the exception of certain financial assets and liabilities and share based payments which have been prepared to comply with the Indian Accounting standards (‘Ind AS''), including the rules notified under the relevant

provisions of the Companies Act, 2013, (as amended from time to time) and Presentation and disclosure requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS Compliant Schedule III) as amended from time to time.

The Company''s financial statements are reported in Indian Rupees, which is also the Company''s functional currency, and all values are presented in INR million (INR 000,000), except when otherwise indicated.

ii. Operating cycle and current, non-current classification

Based on the nature of services and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current/ noncurrent classification of assets and liabilities. The Company presents assets and liabilities in the Balance Sheet based on current/ non-current classification.

An Asset is Current when:

o It is expected to be realised in normal operating cycle.

o It is held primarily for the purpose of trading.

o It is expected to be realised within twelve months after the reporting period, or

o It is cash or cash equivalent.

All other assets are classified as non-current.

A Liability is current when:

o It is expected to be settled in normal operating cycle.

o It is held primarily for the purpose of trading.

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

o There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Company classifies all other liabilities as noncurrent.

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

iii. Accounting Estimates

The preparation of the financial statements, in conformity with the recognition and measurement principles of Ind AS, requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operation during the reported period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates which are recognised in the period in which they are determined.

iv. Key accounting estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

Critical estimates and judgements

Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Examples of such estimates include estimation of useful lives of property plant and equipment, employee costs, assessments of recoverable amounts of deferred tax assets, trade receivables and cash generating units, provisions against litigations and contingencies.

Estimates

a) Useful lives of various assets

The Company has estimated the useful life if each class of assets based on the nature of assets, the estimated usage of the asset, the operating condition of the asset, past history of replacement, anticipated technological changes, etc. The Company reviews the estimated useful lives and residual values of the assets at each reporting period. This reassessment may result in change in depreciation and amortisation expense in the future periods.

b) Current Income Taxes

The tax jurisdictions for the Company is India. Significant judgments are involved in determining the provision for income taxes including judgment on whether tax positions are probable of being sustained in tax assessments. A tax assessment can involve complex issues, which can only be resolved over extended time periods. The recognition of taxes that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances.

c) Investment in / advances to Subsidiary

The Company has performed valuation for its investments in equity of its subsidiary for assessing whether there is any impairment in the fair value. When the fair value of investments in subsidiaries cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow model. Similar assessment is carried for exposure of the nature of loans and interest receivable thereon. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as expected earnings in future years, liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of these investments.

d) Provision and Contingencies

Contingent Liability may arise from the ordinary course of business in relation to claims against the Company. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgments and the use of estimates regarding the outcome of future events.

e) Accounting for defined benefit plans

In accounting for post-retirement benefits, several statistical and other factors that attempt to anticipate future events are used to calculate plan expenses and liabilities. These factors include expected discount rate assumptions and rate of future compensation increases. To estimate these factors, actuarial consultants also use estimates such as withdrawal, turnover, and mortality rates which require significant judgment. The actuarial assumptions used by the Company may differ materially from actual results in future periods due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans.

f) Impairment of financial/ non-financial assets

An impairment loss is recognised for the amount by which an asset''s or cash-generating unit''s carrying amount exceeds its recoverable amount to determine the recoverable amount, management estimates expected future cash flows from each asset or cash generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows, management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary and may cause significant adjustments to the Company''s assets. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.

v. Fair Value Measurement

The Company measures financial instruments, at fair value at each balance sheet date. (Refer note 34).

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

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

o In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

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.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized 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 prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or

liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

For assets and liabilities that are recognised in the 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. At each reporting date, the Management analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Company''s accounting policies. For this analysis, the Management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents. The Management also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

vi. Property, Plant and Equipment (Tangible Assets)

Property, Plant and Equipment are stated at cost of acquisition including attributable interest and finance costs, if any, till the date of acquisition/ installation of the assets less accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditure relating to Property, Plant and Equipment is capitalised only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the Statement of Profit and Loss as incurred. The cost and related accumulated depreciation are eliminated from the financial statements, either on disposal or when retired from active use and the resultant gain or loss are recognised in the Statement of Profit and Loss.

Bearer plants comprising of grapevines are stated at cost less accumulated depreciation and accumulated impairment losses. Immature bearer plants, including the cost incurred for procurement

of new seeds and maintenance of nurseries, are carried at cost less any recognized impairment losses under capital work-in-progress. Cost includes the cost of land preparation, new planting and maintenance of newly planted bushes until maturity. On maturity, these costs are classified under bearer plants.

vii. Capital work-in-progress

Capital work-in-progress representing expenditure incurred in respect of assets under development and not ready for their intended use, are carried at cost. Cost includes related acquisition expenses, construction cost, related borrowing cost and other direct expenditure.

viii. Goodwill and Other Intangible Assets

Goodwill represents the cost of acquired business as established at the date of acquisition of the business in excess of the acquirer''s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities less accumulated impairment losses, if any. Goodwill is tested for impairment annually or when events or circumstances indicate that the implied fair value of goodwill is less than its carrying amount.

Brands acquired in a business combination and recognised separately from Goodwill are initially recognised at their fair value at the acquisition value (which is regarded as their cost). Subsequent to initial recognition, these are reported at cost less accumulated amortisation and accumulated impairment losses, if any.

Other Intangible assets are stated at cost, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably, less accumulated amortisation and accumulated impairment losses, if any. Other Intangible assets mainly comprise of implementation cost for software and other application software acquired and brand acquired through business combination.

ix. Investment Property

Investment properties are held to earn rentals (except for short-term purposes) or for capital appreciation, or both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment properties are measured initially at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognised in Statement of Profit and Loss as incurred.

Though the Company measures investment property using cost-based measurement, the fair value of investment property is disclosed in the notes. Fair values are determined on an annual basis.

x. Non-current assets or disposal Company classified as held for sale

Non-current assets that are available for immediate sale and where the sale is highly probable of being completed within one year from the date of classification are considered and classified as assets held for sale. Non-current asset classified as held for sale are measured at the lower of carrying amount or fair value less cost to sell. The determination of fair value less cost to sell includes use of management estimates and assumptions. The fair value of asset held for sale has been estimated using observable inputs such as price quotations.

xi. Borrowing

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in Statement of profit and loss over the period of the borrowings using the effective interest method. Borrowings are derecognised from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in Statement of profit and loss as other

gains/(losses). Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

xii. Depreciation and Amortisation

Depreciation on Property, plant and equipment (‘PPE'') is calculated using the straight-line method as per the estimated useful lives of assets as below:

Asset category	Useful life (in years)	Basis of determination of useful lives
Building	30 - 60	Assessed to be in line with Schedule II to the Act
Leasehold improvement	Over the lease period
Plant and equipment	10 - 25	Assessed to be in line with Schedule II to the Act
Furniture and fixtures	5 - 10	Management estimateA
Vehicles	0 1 00	Assessed to be in line with Schedule II to the Act
Office equipment	3 - 10	Management estimate"
Computers	3 - 6	Assessed to be in line with Schedule II to the Act
Oak barrels	4	Management estimate"
Bearer plants	20	Management estimate"

^A Useful lives of asset classes determined by management estimate, which are generally lower than those prescribed under Schedule II to the Act are supported by internal technical assessment of the useful lives.

The estimated useful lives and residual values are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis.

Depreciation on additions is provided on a pro-rata basis i.e. from the date on which asset is ready for use.

Gains and losses on disposals are determined by comparing proceeds with the carrying amounts. These are accounted in Statement of profit and loss within Other income/ Other expenses.

Amortisation on Intangible Assets

Intangible assets are amortised on a straight-line basis, from the date they are available for use, over their estimated useful lives that is a period of three to ten years.

Asset category	Useful life (in years)	Basis of determination of useful lives
Brand	5	Management estimate
Computer	3 - 6	Assessed to be in
software		line with Schedule
		II to the Act

xiii. 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.

a. Financial Assets

(i) Initial Recognition

In the case of financial assets, not recorded at fair value through profit or loss (FVPL), financial assets are recognised initially at fair value plus transaction costs that are directly 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.

(ii) Subsequent Measurement

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

o Financial Assets at Amortised Cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income from these financial assets is included in finance income using the effective interest rate ("EIR") method. Impairment gains or losses arising on these assets are recognised in the Statement of Profit and Loss.

o Financial Assets Measured at Fair Value

Financial assets are measured at fair value through Other Comprehensive Income (‘OCI'') if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in the Statement of Profit and Loss.

Financial asset not measured at amortised cost or at fair value through OCI is carried at FVPL. In respect of equity investments (other than for investment in subsidiaries) which are not held for trading, the Company has made an irrevocable election to present subsequent changes in the fair value of such instruments in

Statement of Profit and Loss. Such an election is made by the Company on an instrument by instrument basis at the time of transition for existing equity instruments/ initial recognition for new equity instruments.

(iii) Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. The Company has made an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-byinstrument basis. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to statement of profit or loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.

The equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognize changes in fair value through OCI rather than profit or loss as these are strategic investments and the Company considered this to be more relevant.

(iv) Impairment of Financial Assets

In accordance with Ind AS 109, the Company applies the expected credit loss ("ECL") model for measurement and recognition of impairment loss on financial assets and credit risk exposures.

The Company follows ‘simplified approach'' for recognition of impairment loss allowance on trade receivables. Simplified approach does not require the Company to track changes in credit risk. Rather, it

recognises impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, 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 12-month ECL.

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 entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/ expense in the Statement of Profit and Loss.

(v) De-recognition of Financial Assets

The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity.

If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes

its retained interest in the assets and an associated liability for amounts it may have to pay.

If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

b. Equity Instruments and Financial Liabilities

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments which are issued for cash are recorded at the proceeds received, net of direct issue costs. Equity instruments which are issued for consideration other than cash are recorded at fair value of the equity instrument.

Financial Liabilities

o Initial Recognition

Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loans and borrowings and payables as appropriate. 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.

o Subsequent Measurement

The measurement of financial liabilities depends on their classification, as described below

Financial liabilities at FVPL:

Financial liabilities at FVPL include financial liabilities held for trading and financial liabilities designated upon initial

recognition as at FVPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.

Financial liabilities at amortised cost

After initial recognition, interest-bearing borrowings and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in 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.

o De-recognition of Financial Liabilities

Financial liabilities are de-recognised when the obligation specified in the contract is discharged, 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 de-recognition of the original liability and recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.

o Offsetting 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.

xiv. Employee Benefits

a) Defined Contribution Plan

Contributions to defined contribution schemes such as provident fund, employees'' state insurance, labour welfare fund are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. Company''s provident fund contribution, in respect of certain employees, is made to a government administered fund and charged as an expense to the Statement of Profit and Loss. The above benefits are classified as Defined Contribution Schemes as the Company has no further obligations beyond the monthly contributions.

b) Defined Benefit Plan

The Company provides for gratuity which is a defined benefit plan the liabilities of which is determined based on valuations, as at the balance sheet date, made by an independent actuary using the projected unit credit method. Re-measurement, comprising of actuarial gains and losses, in respect of gratuity are recognised in the OCI, in the period in which they occur and is not eligible to be reclassified to the Statement of Profit and Loss in subsequent periods. Past service cost is recognised in the Statement of Profit and Loss in the year of plan amendment or curtailment. The classification of the Company''s obligation into current and non-current is as per the actuarial valuation report.

c) Leave entitlement and compensated absences

Accumulated leave which is expected to be utilised within next twelve months, is treated as short-term employee benefit. Leave entitlement, other than short term compensated absences, are provided based on a actuarial valuation, similar to that of gratuity benefit. However, as the Company does not have an unconditional right to defer settlement for these obligations, the above liabilities are presented as current. Re-measurement, comprising of actuarial gains and losses, in respect of leave entitlement are recognised in the Statement of Profit and Loss in the period

m \ a /i /" ~i ir

d) Short-term benefits

Short-term employee benefits such as salaries, wages, performance incentives etc. are recognised as expenses at the undiscounted amounts in the Statement of Profit and Loss of the period in which the related service is rendered. Expenses on non-accumulating compensated absences is recognised in the period in which the absences occur.

xv. Inventories

Inventories which comprise of raw materials, work-in-progress / semi-finished goods, finished goods, stock-in-trade, packing materials and consumables, chemicals, stores and spares are carried at the lower of cost or net realisable value. The comparison of cost and net realisable value is made on an item-by-item basis.

Cost of inventories comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Costs of purchased inventory are determined after deducting rebates and discounts. The cost is determined as follows:

o Raw Materials, Traded goods, Packing Materials and Consumables, chemicals, stores and spares are valued using the weighted average method.

o Finished goods and work-in-progress / semifinished goods are valued at the cost of raw materials along with fixed production overheads being allocated on the basis of normal capacity of production facilities.

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

xvi. Cash and Cash Equivalents

Cash and cash equivalents in the Balance Sheet comprises of cash at banks and on hand and shortterm deposits with an original maturity of three month or less, which are subject to an insignificant risk of changes in value.

xvii. Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker regularly monitors and reviews the operating result of the whole Company as one segment of "Manufacture and sale of alcoholic beverages (wines and spirits)". Thus, as defined in Ind AS 108 "Operating Segments", the Company''s entire business falls under this one operational segment and hence the necessary information has already been disclosed in the Balance Sheet and the Statement of Profit and Loss.

xviii. Foreign currency transactions and balances

(a) Initial Recognition

Foreign currency transactions are initially recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(b) Conversion

Monetary assets and liabilities denominated in foreign currencies are reported using the closing rate at the reporting date. Nonmonetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

(c) Treatment of Exchange Difference

Exchange differences arising on settlement/ restatement of short-term foreign currency monetary assets and liabilities of the Company are recognised as income or expense in the Statement of Profit and Loss

xix. Revenue Recognition

Revenue from contracts with customers is recognised at a point in time when control of the goods or services is 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 from sale of goods

is inclusive of excise duties and is net of returns, trade allowances, rebates, value added taxes and such amounts collected on behalf of third parties.

Based on the Educational Material on Ind AS 115 issued by the Institute of Chartered Accountants of India ("ICAI"), the Company has assumed that recovery of excise duty flows to the Company on its own account and hence is a liability of the manufacturer which forms part of the cost of production, irrespective of whether the goods are sold or not. Therefore, revenue includes excise duty. However, sales tax/value added tax (VAT) and goods and services tax (GST) is not received by the Company on its own account and are taxes collected on value added to the commodities by the seller on behalf of the government. Accordingly, these are excluded from revenue.

(a) Revenue from sale of products.

Revenue from sale of products is recognised at a point in time when control of the product transfers and there is no unfulfilled obligation that could affect the customer''s acceptance of the products. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable (net of allowances, discounts and volume rebates), taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government with an exception to excise duty.

(b) Revenue from sale of services

Revenue from sale of services represents revenue from hospitality services which mainly comprise of sale of room nights, food and beverages and allied services relating to the resort and winery. Revenue is recognized at a point in time when the services are rendered. Revenue is measured at the fair value of the consideration received or receivable (net of allowances or discounts) excluding taxes or duties collected on behalf of the government.

(c) Interest Income

Interest income is recognized using the effective interest rate method. The effective interest rate is the rate that discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of the financial asset. Interest income is included under the head "other income" in the Statement of Profit and Loss.

(d) Dividend Income

Dividend income is recognised when the right to receive payment has been established, provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.

(e) Other Income

Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.

xx. Government Grants

Grants and subsidies from the Government are recognised when there is reasonable assurance that the grant / subsidy will be received and all attaching conditions are complied with. Government grants related to revenue under Wine Industry Promotion Subsidy linked with Value Added Tax, are recognised in the Statement of Profit and Loss in the period in which they become receivable. Where the grant or subsidy relates to an asset (i.e. Export Promotion Capital Goods scheme), it is presented in the balance sheet by setting up the grant as deferred income which is recognised as income in the statement of profit and loss linking to the fulfillment of the associated export obligations.

xxi. Trade receivables

A receivable is classified as a ‘trade receivable'' if it is in respect of the amount due on account of goods sold or services rendered in the normal course of business. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the EIR method, less provision for impairment. Trade receivables ageing has been presented based on the date of transaction. Further, in respect of trade receivables from Government Corporations, payment are received on lump-sum basis instead of an invoice-by-invoice settlement. Accordingly, the collections/ realisations from corporation trade receivables are accounted against the earliest outstanding invoice.

xxii. Trade payables

A payable is classified as a ‘trade payable'' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. These amounts are unsecured and are usually settled as per the payment terms stated in the contract. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the EIR method. Trade payables ageing has been presented based on the date of transaction.

xxiii. Income Tax

Income tax comprises of current and deferred income tax. Income tax is recognised as an expense or income in the Statement of Profit and Loss, except to the extent it relates to items directly recognised in equity or in OCI.

a) Current Income Tax

Current income tax is recognised based on the estimated tax liability computed after taking credit for allowances and exemptions in accordance with the Income Tax Act, 1961. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

b) Deferred Income Tax

Deferred tax is determined by applying the Balance Sheet approach. Deferred tax assets and liabilities are recognised for all deductible temporary differences between the financial statements'' carrying amount of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities are measured using the enacted tax rates or tax rates that are substantively enacted at the Balance Sheet date. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the period that includes the enactment date. Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Such assets are reviewed at each Balance Sheet date to reassess realisation.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

xxiv. Share Based Payments

Share based compensated benefits are provided to certain grades of employees in consideration of the services rendered. Under the equity settled share based payment, the fair value on the grant date of the instrument given to employees is recognised as ‘employee benefits expenses'' with a corresponding increase in equity over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. The fair value of the options at the grant date is calculated by an independent valuer basis Black Scholes model. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. Upon exercise of share options, the proceeds received are allocated to share capital up to the

par value of the shares issued with any excess being recorded as share premium.

xxv. Leases

The Company''s lease asset classes primarily consist of leases for land, building and vehicles. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange of the consideration.

At the date of the commencement of the lease, the Company recognises a right-of-use asset representing its right to use the underlying asset for the lease term and a corresponding lease liability for all the lease arrangements in which it is a lease, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the period of the lease.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. The estimated useful life of the assets are determined on the same basis as those of property, plant and equipment.

Right-of-use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Carrying amount of right-of-use asset is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The future lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates.

For a lease with reasonably similar characteristics, the Company, on a lease by lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole.

Right-of-use assets and lease liabilities have been separately presented in the Balance Sheet. Further, lease payments have been classified as financing cash flows.

xxvi. Business Combinations

Business combinations are accounted for using the acquisition method. The acquisition method involves the recognition of the acquiree''s identifiable assets and liabilities, including contingent liabilities, regardless of whether they were recorded in the financial statements prior to acquisition. On initial recognition, the assets and liabilities of the acquired business are included in the balance sheet at their fair values, which are also used as the bases for subsequent measurement in accordance with the Company''s accounting policies. Goodwill is stated after separating out identifiable intangible assets. Goodwill represents the excess of acquisition cost over the fair value of the Company''s share of the identifiable net assets of the acquiree at the date of acquisition. Any excess of identifiable net assets over acquisition cost is recognised in the other comprehensive income on the acquisition date and accumulated in equity as capital reserve.

Acquisition related costs are accounted for as expenses in the period in which they are incurred and the services are received.

xxvii. Impairment of Non-Financial Assets

As at each Balance Sheet date, the Company assesses whether there is an indication that a nonfinancial asset may be impaired and also whether there is an indication of reversal of impairment loss recognised in the previous periods. If any indication exists, or when annual impairment testing for an asset is required, the Company determines the recoverable amount and impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined:

o In case of an individual asset, at the higher of the assets'' fair value less cost to sell and value in use; and

o In case of cash generating unit (a Company of assets that generates identified, independent cash flows), at the higher of cash generating unit''s fair value less cost to sell and value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specified to the asset. In determining fair value less cost to sell, recent market transaction are taken into account. If no such transaction can be identified, an appropriate valuation model is used. Impairment 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 taken to OCI. For such properties, the impairment is recognised in OCI up to the amount of any previous revaluation. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through the Statement of Profit and Loss.

xxviii. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made of the amount of obligation. Provisions (excluding gratuity and compensated absences) are determined based on management''s estimate required to settle the obligation at the Balance Sheet date. In case the time value of money is material, provisions are discounted

using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

The Company recognises a provision in respect of an onerous contract when the expected benefits to be derived from a contract is lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at lower of the expected cost of terminating the contract and the expected net cost of fulfilling the contract. Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. A contingent liability also arises, in rare cases, where a liability cannot be recognised because it cannot be measured reliably. Contingent assets are disclosed where an inflow of economic benefits is probable.

xxix. Earnings per share

Basic earnings per share is computed by dividing the net profit or loss for the period attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources.

Diluted earnings per share is computed by dividing the net profit or loss for the period attributable to the equity shareholders of the Company and weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been

actually issued at fair value (i.e. the average market value of the outstanding equity shares).

xxx. Earnings Before Interest, Tax, Depreciation and amortisation (EBIDTA)

Earnings Before Interest, Tax, Depreciation and amortization (EBIDTA) is computed by adding interest, tax, depreciation and amortization expenses to net income.

xxxi. Exceptional Items

When items of income and expense within profit or loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such material items are disclosed separately as exceptional items.

xxxii. Borrowing

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in Statement of profit and loss over the period of the borrowings using the effective interest method. Borrowings are derecognised from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in Statement of profit and loss as other gains/(losses). Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period

xxxiii. Dividend

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

The Company declares and pays dividends in Indian rupees. Companies are required to pay / distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.