Note 1.B - Material Accounting Policies

Basis of Preparation and Presentation of Standalone
Financial Statements

The standalone financial statements of the Company have been
prepared in accordance with the Indian Accounting Standards
(referred to as Ind AS) prescribed under section 133 of the
Companies Act, 2013 ('the Act') read with the Companies (Indian
Accounting Standards) Rules 2015, as amended from time to time
and other accounting principles generally accepted in India and
presentation requirements of Division II of Schedule III of the Act
(as amended from time to time) (Ind AS compliant Schedule III), as
applicable to the standalone financial statements. The standalone
financial statements are presented in Indian Rupees (INR) which is
also the Company's functional currency. All amounts are rounded
to the nearest crores except when otherwise indicated. Figures less
than rupees 50,000 are represented as "0.00".

The standalone financial statements of the Company have been
prepared on a historical cost basis except for certain financial
instruments that are measured at fair values at the end of
each reporting period, as explained in the accounting policies
below. Historical cost is generally based on the fair value of the
consideration given at the date of the transaction, in exchange of
goods and services.

Current versus non-current classification

The Company segregates assets and liabilities into current and
non-current categories for presentation in the balance sheet after
considering its normal operating cycle and other criteria set out in
Ind AS 1, "Presentation of Financial Statements". For this purpose,
current assets and liabilities include the current portion of non-

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

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

Fair valuation

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, regardless of whether that
price is directly observable or estimated using another valuation
technique. In estimating the fair value of an asset or a liability, the
Company considers the characteristics of the asset or liability if the
market participants would take those characteristics into account
when pricing the asset or liability at the measurement date.

Fair value for measurement and/or disclosure purposes in these
standalone financial statements is determined on such a basis,
except for share-based payment transactions that are within the
scope of Ind AS 102, leasing transactions that are within the scope
of Ind AS 116, and measurements that have some similarities to
fair value but are not fair value, such as net realisable value in Ind
AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, the fair value
measurements are categorised into Level 1, 2 or 3 based on the
degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value
measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets
for identical assets or liabilities that the entity can access at the
measurement date.

• Level 2 inputs are inputs, other than quoted prices included
in Level 1, that are observable for the asset or liability, either
directly or indirectly: and

• Level 3 inputs are unobservable inputs for the asset or liability.

A) Going Concern:

The standalone financial statements of the Company have
been prepared on a going concern basis. The accounting
policies are applied consistently to all the periods presented
in the standalone financial statements except where a newly
issued accounting standard is initially adopted or a revision
to an existing accounting standard requires change in
accounting policy hitherto in use.

B) Revenue Recognition:

i) Sale of Goods & services:

Revenue is recognized on satisfaction of performance
obligation upon transfer of control of promised products
or services to customers for an amount that reflects
the consideration the Company expects to receive in
exchange for those products. The control of goods is
transferred to the customer depending upon agreed
terms with customer or on delivery basis. Control is
transferred to the customer when the customer has
ability to direct the use of such products and obtain
substantially all the benefits from it.

Payment of the transaction price is due immediately
when the customer purchases the goods and takes
delivery in store.

Sale of gift voucher is considered as advance received
from the customers till the time the vouchers are
redeemed by the customer for purchase of products
and products sold is qualified for revenue recognition.

The Company operates a loyalty points programme
which allows customers to accumulate points when
they purchase products in the Company's retail stores.
The loyalty points give rise to a separate performance
obligation as they provide a material right to the
customer to acquire goods or services in the future.

The points can be redeemed against consideration
payable for subsequent purchases. Consideration
received is allocated between the products sold and
number of points expected to be redeemed. The
consideration allocated to the loyalty points is measured
by reference to their relative stand-alone selling price.
The Company recognises the consideration allocated to
loyalty points, when the loyalty points are redeemed.
When estimating the stand-alone selling price of the
loyalty points, the Company considers the likelihood
that the customer will redeem the points. The Company
updates its estimates of the points that will be redeemed
on a quarterly basis and any adjustments to the liability
balance are charged against revenue.

II) Sales through E-commerce channels

The Company through marketplace and its own website
sells its products to customers. Revenue from sale of
goods through the website is recognised when control of
the products has transferred, being when the products
are delivered to the customer. For e-commerce sales,
it is the Company's policy to sell its products to the

end customer with a right of return within 15 to 60
days. The Company uses the expected value method
to estimate the sales return. Based on historical return
data of each product, expected return percentage is
determined. These percentages are applied to derive
the sales return.

iii) Interest and Dividend Income:

Dividend Income is accounted when right to receive the
dividend is established.

Interest Income is recognized on time proportion basis
considering the amount outstanding and the effective
interest rate applicable.

C) Property, Plant and Equipment and Intangible Assets:
Property, Plant and Equipment:

Property, plant, and equipment are carried at cost less
accumulated depreciation and impairment losses, if any. The
cost of property, plant and equipment comprises its purchase
price net of any trade discounts and rebates, any import
duties, and other taxes (other than those subsequently
recoverable from the tax authorities), any directly attributable
expenditure on making the asset ready for its intended use
and interest on borrowings attributable to acquisition of
qualifying property, plant, and equipment up to the date the
asset is ready for its intended use. Subsequent expenditure
on property, plant and equipment after its purchase /
completion is capitalised only if such expenditure qualifies
the recognition criteria.

Property, plant, and equipment retired from active use and
held for sale are stated at the lower of their carrying amount
and fair value less cost to sell and are disclosed separately.
Any expected loss is recognised immediately in the Statement
of Profit and Loss. Losses arising from the retirement of, and
gains or losses arising from disposal of property, plant and
equipment are recognised in the Statement of Profit and Loss.

On transition to Ind AS the Company had elected to continue
with the carrying value for all its property, plant and
equipment as recognised in the financial statements as at the
date of the transition to Ind AS, measured as per the previous
GAAP and use as its deemed cost as at the date of transition.
This exemption has been used for intangible assets covered
by Ind AS 38 'Intangible Assets'.

Depreciation:

Depreciation is calculated on Straight Line method over the
estimated useful life of all assets.

Asset wise useful lives of assets are as follows.

• Buildings - 60 years

• Furniture and fittings - 10 years

• Machinery and equipment - 10 years

• Motor Vehicles - 8 years

• Computers - 3 years

These lives are in accordance with Schedule II to the
Companies Act, 2013, other than the following asset:
Leasehold improvements are amortised on straight line basis
over the lease term or useful life (Not exceeding 10 years)
whichever is lower.

Intangible Assets:

Intangible Assets with finite useful lives acquired separately
are carried at cost less accumulated amortisation and
accumulated impairment losses, if any. Amortisation is
recognised on straight line basis over their estimated useful
lives. The estimated useful lives and amortisation method
are reviewed at the end of each reporting period, with the
effects of any changes in estimate being accounted for on a
prospective basis. Intangible assets with indefinite useful lives
that acquired separately are carried at cost less accumulated
impairment loss.

Intangible assets are amortised over their estimated useful
life as follows: -

• Trademark - 10 years

• Copy Rights - 10 years

• Computer Software - 5 years

• Licences- 20 Years

• Non-Compete Fees- 5 Years
Capital Work in Progress:

Projects under which property, plant and equipment are not
yet ready for their intended use are carried at cost, comprising
direct cost and attributable interest.

Intangible Assets Under Development:

Expenditure on intangible assets under development
eligible for capitalisation are carried as Intangible assets
under development where such assets are not yet ready

for their intended use. The expenditure incurred only in the
development stage of intangible assets is capitalised.

D) Impairment Of Non-Financial Assets:

At the end of each reporting period, the Company reviews the
carrying amounts of its property, plant and equipment and
intangible assets to determine whether there is any indication
that those assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset
is estimated to determine the extent of the impairment loss
(if any). When it is not possible to estimate the recoverable
amount of an individual asset, the Company estimates the
recoverable amount of the cash generating unit to which the
asset belongs.

Goodwill arising on Business Combination is carried at cost
less any accumulated impairment losses.

Goodwill is annually tested for impairment. Impairment
loss, if any, to the extent the carrying amount exceeds the
recoverable amount is charged off to the Statement of Profit
and Loss as it arises and is not reversed. For impairment
testing, goodwill is allocated to Cash Generating Unit (CGU)
or group of CGUs to which it relates, which is not larger
than an operating segment, and is monitored for internal
management purposes. On disposal of the CGU or group
of CGUs, attributable amount of goodwill is included in
the determination of the profit or loss recognised in the
Statement of Profit and Loss.

Recoverable amount is higher of fair value less cost of
disposal and value in use. The fair value less costs of disposal
calculation is based on available data from binding sales
transactions, conducted at arm's length, for similar assets or
observable market prices less incremental costs for disposing
of the asset. In assessing the value in use, the estimated
future cash flows are discounted at their present value
using the pre-tax discount rate that reflects current market
assessment of time value of money and the risks specific to
assets for which the estimates of future cash flows have not
been adjusted. The management uses detailed budgets and
forecast calculations in assessing the value in use.

If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than it's carrying amount, the
carrying amount of the asset (or cash-generating unit) is
reduced to its recoverable amount. An impairment loss is
recognised immediately in the Statement of Profit or Loss.

When an impairment loss subsequently reverses, the carrying
amount of the asset (or a cash generating unit) is increased
to the revised estimate of its recoverable amount, so that
the increased carrying amount does not exceed the carrying

amount that would have been determined had no impairment
loss been recognised for the asset or cash generating unit in
prior years. A reversal of an impairment loss is recognised
immediately in the Statement of Profit or Loss.

E) Inventories:

Inventories are valued at the lower of cost and net realisable
value. Cost is determined on moving weighted average cost
basis. Net realisable value represents the estimated selling
price for inventories less all estimated costs of completion
and costs necessary to make the sale.

Inventory cost includes purchase price and other directly
attributable costs (such as taxes other than those subsequently
recovered from the tax authorities), freight inward and other
related incidental expenses incurred in bringing the inventory
to its present condition and location.

F) Taxation:

Income Tax expense represents the sum of the current tax
and deferred tax.

Current Tax:

Current tax is the tax payable on the taxable profit for
the period. Taxable profit differs from profit before tax as
reported in the Statement of Profit and Loss because of
items of income or expense that are taxable or deductible in
other years and items that are never taxable or deductible.
The Company's current tax is calculated using tax rates that
have been enacted or substantively enacted by the end of
the reporting period, in accordance with The Income Tax
Act, 1961.

Deferred Tax:

Deferred tax is provided using the balance sheet approach
on temporary differences between the tax base of assets and
liabilities and their carrying amounts for financial reporting
purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary
differences, except:

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

• In respect of taxable temporary differences associated with
investments in subsidiaries and interests in joint venture,
when the timing of the reversal of the temporary differences

can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.

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

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

• In respect of deductible temporary differences associated
with investments in subsidiaries and interests in joint
venture, deferred tax assets are recognised only to the
extent that it is probable that the temporary differences
will reverse in the foreseeable future and taxable profit will
be available against which the temporary differences can
be utilised

The carrying amount of deferred tax assets is reviewed at
each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available
to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that it has
become probable that future taxable profits will allow the
deferred tax asset to be recovered.

Deferred tax relating to items recognised outside profit
or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items are
recognised in correlation to the underlying transaction either
in OCI or directly in equity.

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

G) Employee Benefits:

Employee Benefit Expenses comprise of salaries, wages and
bonus, contribution to provident and other funds, gratuity
expenses, share based payments expenses and staff
welfare expenses.

Short-Term Employee Benefits:

The undiscounted amount of short-term employee benefits
expected to be paid in exchange of the services rendered
by employees are recognised during the year when the
employees render the service. These benefits include
performance incentive and compensated absences which are
expected to occur within twelve months after the end of the
period in which the employee renders the related service.

In case of non-accumulating compensated absences, the cost
of short-term compensated absences is accounted when the
absences occur.

Long-Term Employee Benefits:

The Company has a policy on compensated absences which
are both accumulating and non-accumulating in nature.
The expected cost of accumulating compensated absences
is determined by actuarial valuation performed by an
independent actuary at Balance Sheet date using projected
unit credit method on the additional amount expected to be
paid / availed as a result of the unused entitlement that has
accumulated at the Balance Sheet date.

Liability recognised in respect of other long-term employee
benefits are measured at the present value of the estimated
future cash flows expected to be made by the Company
in respect of services provided by employees up to the
reporting date.

i) Defined Contribution Plan:

The Provident Fund is a defined contribution scheme.
The eligible employees of the Company are entitled
to receive post-employment benefits in respect of
provident fund, in which both employees and the
Company make monthly contributions at a specified
percentage of the employees' eligible salary. The
Company's contribution is recognised as an expense in
the Statement of Profit and Loss during the period in
which the employee renders the related service.

ii) Defined Benefit Plan:

The Company has Defined Benefit Plan in the form
of Gratuity.

Gratuity fund is recognised by the Income-tax authorities
and administered through an insurance fund. Liability

for Defined Benefit Plans is provided on the basis of
valuations, as at the Balance Sheet date, carried out by
an independent actuary.

The defined benefit obligation is calculated by
independent actuary using the projected unit credit
method at each reporting period. The present value
of the defined benefit obligation is determined by
discounting the estimated future cash outflows using
discount rate (interest rates of government bonds) that
have terms to maturity approximating to the terms of
the Gratuity.

Remeasurement gains and losses arising from
experience adjustments and the return on plan assets
and changes in actuarial assumptions are recognised
in the period in which they occur, directly in other
comprehensive income.

Net interest is calculated by applying the discount rate
to the net defined benefit liability or asset.

Defined Benefit Costs are split into:

• Service costs, which includes current service cost,
past service cost and gains and losses on curtailments
and settlements.

• Net interest expense or income.

• Remeasurements.

The Company recognises service costs within profit and
loss as employee benefit expense. Net interest expense
or income is recognised within finance cost.

0 Foreign Currencies:

i) Initial Recognition

Transactions in foreign currencies are initially recorded
by the Company at its respective functional currency
spot rates at the date the transaction first qualifies
for recognition. However, for practical reasons, the
Company uses average rate if the average approximates
the actual rate at the date of the transaction.

ii) Conversion

Foreign currency monetary items are translated using
the closing exchange rate as on Balance Sheet date. Non¬
monetary 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.

iii) Exchange Differences

Exchange differences arising on the settlement of
monetary items or on remeasurement of monetary
items at rates different from those at which they were
initially recorded during the period, or reported in
previous financial statements, are recognised as income
or as expenses in the period in which they arise and
disclosed as a net amount in the financial statements.

I) Employees Stock Option Plan (ESOP):

In respect of Employee Stock Options, the Company measures
the compensation cost using the fair value on grant date.
The compensation cost, if any, is amortised on a straight¬
line basis over the vesting period of the options, based
on the Company's estimate of equity instruments that will
eventually vest.