2.1 Summary of material accounting policies

(a) Current versus non-current classification

The Company presents assets and liabilities in
the balance sheet based on current/non-current
classification. An asset is treated as current when it is:

• expected to be realized or intended to be sold or
consumed in normal operating cycle;

• held primarily for the purpose of trading;

• expected to be realized within twelve months
after the reporting period; or

• cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

• expected to be settled in normal operating cycle;

• held primarily for the purpose of trading;

• due to be settled within twelve months after the
reporting period; or

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

The Company classifies all other liabilities as non¬
current.

Deferred tax assets and liabilities are classified as
non-current assets and liabilities. The operating
cycle is the time between the acquisition of assets
for processing and their realisation in cash and cash
equivalents. The Company has identified twelve
months as its operating cycle.

(b) Foreign currencies

The financial statements are presented in INR, which is
also the Company's functional currency. Transactions
in foreign currencies are initially recorded by the
Company at their respective functional currency
spot rates at the date, the transaction first qualifies
for recognition. However, for practical reasons, the
Company uses monthly rates.

Monetary assets and liabilities denominated in
foreign currencies are translated at the functional
currency spot rates of exchange at the reporting
date. Exchange differences arising on settlement or
translation of monetary items are recognised in the
Statement of Profit and Loss.

Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rates at the dates of the initial
transactions. Non-monetary items measured at fair
value in a foreign currency are translated using the
exchange rates at the date when the fair value is
determined. The gain or loss arising on translation
of non-monetary items measured at fair value is
treated in line with the recognition of the gain or loss
on the change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is
recognized in other comprehensive income ("OCI”) or

In determining the spot exchange rate for initial
recognition of the related asset, expense or income
(or part of it) on de-recognition of a non-monetary
asset or non-monetary liability relating to advance
consideration, the date of the transaction is the date
on which the Company initially recognises the non¬
monetary asset or non-monetary liability arising
from the advance consideration. If there are multiple
payments or receipts in advance, the Company
determines the transaction date for each payment
or receipt of advance consideration.

(c) 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 categorised
within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to
the fair value measurement as a whole:

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

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

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

For assets and liabilities that are recognised in the
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.

The Company's management determines the
policies and procedures for both recurring fair value
measurement, such as derivative instruments and
unquoted financial assets measured at fair value, and
for non-recurring measurement, such as assets held
for distribution in discontinued operations. External
valuers are involved, wherever considered necessary.

For the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the
asset or liability and the level of the fair value hierarchy,
as explained above. This note summarizes accounting
policy for fair value and the other fair value related
disclosures are given in the relevant notes.

(d) Revenue recognition

Revenue from contracts with customers is recognised
when control of the goods or services are transferred
to the customer at an amount that reflects the
consideration to which the Company expects to be
entitled in exchange for those goods or services.

Revenue is recognized to the extent 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 towards
satisfaction of performance obligations is measured
at the amount of transaction price (net of variable
consideration) allocated to that performance
obligation. The transaction price of goods sold and
services rendered is net of variable consideration on
account of various discounts and schemes offered by
the Company. The Company has concluded that it is
the principal in all of its revenue arrangements, except
in certain contract manufacturing arrangements as
explained below, since it is the primary obligor in all
the revenue arrangements as it has pricing latitude
and is also exposed to inventory and credit risks.

Based on the Educational Material on Ind AS 115
issued by the Institute of Chartered Accountants
of India ("ICAI”), the 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. Since the recovery of excise duty
flows to the Company on its own account, revenue
includes excise duty. However, sales tax/value added
tax (VAT), goods and services tax are not received
by the Company on its own account and are taxes
collected on value added to the commodity by the
seller on behalf of the government. Accordingly, these
are excluded from revenue.

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

SALE OF PRODUCTS

Revenue from the sale of products is recognised
at a point in time when control of the products is
transferred to the customer and there is no unfulfilled
obligation that could affect the customer's acceptance
of the products. Revenue from the sale of products is
measured at the amount of transaction price, net of
returns and allowances, discounts and incentives.

If the consideration in a contract includes a variable
amount (discounts and incentives), the Company
estimates the amount of consideration to which it
will be entitled in exchange for transferring the goods
to the customer and such discounts and incentives are
estimated at contract inception.

Generally, the Company receives short-term advances
from its customers. Using the practical expedient
in Ind AS 115, the Company does not adjust the
promised amount of consideration for the effects
of a significant financing component if it expects,
at contract inception, that the period between the
transfer of the promised good or service to the
customer and when the customer pays for that good
or service will be one year or less.

SALE OF SERVICES

Royalty income is recognized, on an accrual basis,
at agreed rate on sale of branded products by
the licensee, in accordance with the terms of the
agreement. The Company provides license to the
parties to manufacture, sell and distribute its goods
in exchange of royalty fee which is based on the sales
made to the end customer. The Company recognises
revenue from sales-based royalty promised in
exchange for a license of intellectual property only
when (or as) the later of the events occurs - (a) the sale
occurs; and (b) the performance obligation for sales
has been satisfied (or partially satisfied). For other
services, revenue is recognized in proportion to the
completion of service after performance obligations
are fulfilled.

INCOME FROM CONTRACT MANUFACTURING
UNITS

The Company evaluates its revenue arrangements
with Contract Manufacturing Units ("CMUs”) to
identify agency relationship.

The Company is regarded as a principal if it controls
promised good or service before it transfers the good
or service to customer. In case if the Company is a
principal in a contract, it may satisfy a performance
obligation by itself or may engage CMU to satisfy
some or all of a performance obligation on its behalf.
In this case, the Company recognises revenue at the
gross amount of consideration to which it expects to
be entitled in exchange for those goods or services
transferred. Revenue is recognized on sale of products
to customers and the related cost of sales is also
recognized by the Company, as and when incurred.

The Company is regarded as an agent if its
performance obligation is to arrange for the provision
of goods or services by CMU. In this case CMU is
primarily responsible for fulfilling the contract and
the Company does not have discretion in establishing
prices and is also not exposed to inventory and credit
risks for the amount receivable from the customer.
In this case, the Company recognises revenue at
the net amount of consideration the Company is
eligible under the contract. This net consideration is
recognized as income, as per the terms of respective
agreement and on the basis of information provided
by respective CMU. Such income is included under the
head "other operating revenues” in the Statement of
Profit and Loss.

INTEREST

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.

DIVIDENDS

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

Contract balances
Contract assets

A contract asset is the right to consideration in
exchange for goods or services transferred to the

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

Trade receivables

A trade receivable is recognised if an amount of
consideration is unconditional (i.e., only the passage of
time is required before payment of the consideration
is due). Refer to accounting policies of financial assets.

Contract liabilities

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

(e) Government grants

Government grants are recognised where there is
reasonable assurance that the grant will be received,
and all attached conditions will be complied with. When
the grant relates to an expense item, it is recognised as
income on a systematic basis over the periods that the
related costs, for which it is intended to compensate,
are expensed. When the grant relates to an asset, it
is recognised as income in equal amounts over the
expected useful life of the related asset.

(f) Taxes

CURRENT INCOME TAX

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.

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

DEFERRED TAX

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

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

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

Deferred tax assets are recognised to the extent it is
probable that taxable profit will be available against
which the deductible temporary differences, and the
carry forward of unused tax credits and unused tax
losses can be utilized. The carrying amount of deferred
tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at
each reporting date and are recognised to the extent
it has become probable that future taxable profits will
allow the deferred tax asset to be recovered.

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

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

Sales/value added tax/goods and services tax paid
on acquisition of assets or on incurring expenses

When the tax incurred on purchase of assets or services
is not recoverable from the taxation authority, the tax
paid is recognised as part of the cost of acquisition of
the asset or as part of the expense item, as applicable.
Otherwise, expenses and assets are recognized net
of the amount of sales/value added taxes/goods and
services tax paid. The net amount of tax recoverable
from, or payable to, the taxation authority is included
as part of receivables or payables in the balance sheet.

(g) Non-current assets held for sale

The Company classifies non-current assets as held
for sale if their carrying amounts will be recovered
principally through a sale rather than through
continuing use. Non-current assets classified as held
for sale are measured at the lower of their carrying
amount and fair value less costs to sell. Costs to sell
are the incremental costs directly attributable to the
disposal of an asset, excluding finance costs and
income tax expense.

The criteria for held for sale classification is regarded
as met only when the sale is highly probable, and the
asset is available for immediate sale in its present
condition. Actions required to complete the sale should
indicate that it is unlikely that significant changes to
the sale will be made or that the decision to sell will be
withdrawn. Management must be committed to the
sale and the sale expected within one year from the
date of classification.

Property, plant and equipment and intangibles are
not depreciated or amortised once classified as held
for sale. Assets and liabilities classified as held for
sale are presented separately from other items in the
balance sheet.

(h) Property, plant and equipment

Property, plant and equipment is stated at cost,
net of accumulated depreciation and accumulated
impairment losses, if any. Capital work-in-progress is
stated at cost. Such cost includes the cost of replacing
part of the plant and equipment and borrowing costs
for long-term construction projects, if the recognition
criteria is met.

When significant parts of plant and equipment are
required to be replaced at intervals, the Company
depreciates them separately based on their specific
useful lives. Likewise, when a major inspection is
performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement,
if the recognition criteria is satisfied. All other

Depreciation is calculated on a straight-line basis
over the useful lives of the assets, estimated by the
management, as follows:

For the assets acquired/disposed during the year,
depreciation has been provided on pro-rata basis.

For the purpose of depreciation calculation, residual
value is determined as 5% of the original cost for
all the assets, as estimated by the management.
The Company, based on management estimate,
depreciates following assets, not included above, over
the estimated useful lives which are different from the
useful life prescribed in Schedule II to the Companies
Act, 2013. The management believes that these
estimated useful lives reflect fair approximation of
the period over which the assets are likely to be used.

(i) Assets acquired on amalgamation, etc. (where
original dates of acquisition are not readily
available), are depreciated over the remaining
useful life of the assets, as certified by an expert.

(ii) Beer dispensers and coolers (included under
furniture and fixtures) and Kegs (included under
plant and equipment) are depreciated on a
straight-line basis over a period of 3 years being
useful life, as estimated by the management
considering nature of these assets.

An item of property, plant and equipment
and any significant part initially recognised
is derecognised upon disposal or when no
future economic benefits are expected from
its use or disposal. Any gain or loss arising on

de-recognition of the asset (calculated as the
difference between the net disposal proceeds
and the carrying amount of the asset) is included
in the Statement of Profit and Loss when the
asset is derecognised.

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

(i) Intangible assets

Intangible assets acquired separately are measured
on initial recognition at cost. The cost of intangible
assets acquired in a business combination is their
fair value at the date of acquisition. Following initial
recognition, intangible assets are carried at cost less
any accumulated amortisation and accumulated
impairment losses. Internally generated intangibles,
excluding capitalised development costs, are not
capitalised and the related expenditure is reflected
in the Statement of Profit and Loss in the period in
which the expenditure is incurred. The useful lives of
intangible assets are assessed as finite.

Intangible assets are amortized over the useful
economic life and assessed for impairment, whenever
there is an indication that the intangible asset
may be impaired. The amortisation period and the
amortisation method for an intangible asset are
reviewed at least at the end of each reporting period.
Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and
are treated as changes in accounting estimates.
The amortisation expense on intangible assets is
recognized in the Statement of Profit and Loss, unless
such expenditure forms part of carrying value of
another asset.

An intangible asset is derecognised upon disposal
(i.e., at the date the recipient obtains control) or
when no future economic benefits are expected from
its use or disposal. Gains or losses arising from de¬
recognition of an intangible asset are measured as
the difference between the net disposal proceeds and
the carrying amount of the asset and are recognised
in the Statement of Profit and Loss when the asset
is derecognised.

Licenses and rights are amortised on a straight-line
basis over useful life of 10 years, as estimated by
the management.

(j) Borrowing costs

Borrowing costs directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalised as
part of the cost of the asset. All other borrowing costs
are expensed in the period in which they occur.

Borrowing costs consist of interest and other costs
that an entity incurs in connection with the borrowing
of funds. Borrowing cost also includes exchange
differences to the extent regarded as an adjustment
to the borrowing costs.

(k) Leases

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

THE COMPANY AS A LESSEE

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

Right-of-use assets

The Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The cost
of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and
lease payments made at or before the commencement
date less any lease incentives received.

Right-of-use assets (disclosed under property, plant
and equipment) are depreciated on a straight-line
basis over the shorter of the lease term and the
estimated useful lives of the assets, as follows:

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

Lease liabilities

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present
value of lease payments to be made over the lease
term. The lease payments include fixed payments
(including in substance fixed payments) less any lease
incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected
to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase
option reasonably certain to be exercised by the
Company and payments of penalties for terminating
the lease, if the lease term reflects exercising of the
option to terminate. Variable lease payments that
do not depend on an index or a rate are recognised
as expenses (unless they are incurred to produce
inventories) in the period in which the event or
condition that triggers the payment occurs.

In calculating the present value of lease payments,
the Company uses its incremental borrowing rate at
the lease commencement date because the interest
rate implicit in the lease is not readily determinable.
The Company has applied practical expedient of
using a single discount rate to a portfolio of leases
with similar characteristics. After the commencement
date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for the
lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in
the lease payments (e.g., changes to future payments
resulting from a change in an index or rate used to
determine such lease payments) or a change in the
assessment of an option to purchase the underlying
asset. The Company's lease liabilities are included
under Interest-bearing borrowings.

Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition
exemption to its short-term leases (i.e., those leases
that have a lease term of 12 months or less from the
commencement date and do not contain a purchase
option). It also applies the lease of low-value assets
recognition exemption to leases that are considered to
be low value. Lease payments on short-term leases and
leases of low-value assets are recognised as expense on
a straight-line basis over the lease term.

THE COMPANY AS A LESSOR

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

(l) Inventories

Inventories are valued at the lower of cost and net
realisable value. Costs incurred in bringing each
product to its present location and condition are
accounted for as follows:

Raw materials, Packing materials and bottles, Stores
and spares: Cost includes cost of purchase and other
costs incurred in bringing the inventories to their
present location and condition.

Finished goods and Work-in-progress: Cost includes
cost of direct materials and labour and a proportion
of manufacturing overheads based on the normal
operating capacity but excludes borrowing costs.
Excise duty, as applicable, is included in the valuation.

Stock-in-trade: Cost includes cost of purchase and
other costs incurred in bringing the inventories to their
present location and condition.

Cost is determined on a weighted average basis. Net
realizable value is the estimated selling price in the
ordinary course of business, less estimated costs of
completion and the estimated costs necessary to
make the sale. Obsolete/slow moving inventories are
adequately provided for.

(m) Impairment of non-financial assets

The Company assesses, at each reporting date,
whether there is an indication that an asset may be
impaired. If any indication exists, or when annual

impairment testing for an asset is required, the
Company estimates the asset's recoverable amount.
An asset's recoverable amount is the higher of an
asset's or cash-generating unit's ("CGU”) fair value
less costs of disposal and its value in use. Recoverable
amount is determined for an individual asset, unless
the asset does not generate cash inflows that are
largely independent of those from other assets or
groups of assets. When the carrying amount of an
asset or CGU exceeds its recoverable amount, the
asset is considered impaired and is written down to
its recoverable amount.

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

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

For assets, an assessment is made at each reporting
date to determine whether there is an indication that
previously recognised impairment losses no longer
exist or have decreased. If such indication exists, the
Company estimates the asset's or CGU's recoverable
amount. A previously recognised impairment
loss is reversed only if there has been a change
in the assumptions used to determine the asset's
recoverable amount since the last impairment loss
was recognised.

The reversal is limited so that the carrying amount
of the asset does not exceed its recoverable amount,
nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment
loss been recognised for the asset in prior years.
Such reversal is recognised in the Statement of Profit
and Loss, unless the asset is carried at a revalued
amount, in which case, the reversal is treated as a
revaluation increase.