2A. MATERIAL ACCOUNTING POLICIES

This note provides a List of the material accounting
policies adopted in the preparation of these standalone
financial statements. These policies have been
consistently applied to all the years presented, unless
otherwise stated.

To determine whether an acccounting policy is
material, reference is taken to the transaction, other
event or condition to which the accounting policy
relates and whether it is material in size or nature
and such material transaction itself is material to the
financial statements and can reasonably be expected
to influence decisions of the primary users of the
financial statements.

a Basis of preparation

i) Compliance with Ind AS

The standalone financial statements comply
in all material aspects with Indian Accounting
Standards (Ind AS) notified under Section 133 of
the Companies Act, 2013 (the Act) [Companies
(Indian Accounting Standards) Rules, 2015] and
other relevant provisions of the Act.

ii) Historical cost convention

The financial statements have been prepared on
the historical cost basis, except for the following:

a) Certain financial assets and liabilities that are
measured at Fair Value.

b) Defined benefit plans - Plan assets are
measured at Fair Value

c) Employee Stock appreciation rights are
measured at Fair Value

iii) Current and Non Current Classification.

All assets and liabilities have been classified as
current or non-current as per the Company's
operating cycle and other criteria set out in the
Schedule III to the Companies Act, 2013. Based
on the nature of products and the time between
the acquisition of assets for processing and their

realisation in cash and cash equivalents, the
Company has ascertained its operating cycle as 12
months for the purpose of current - non-current
classification of assets and liabilities.

(iv) New and amended standards adopted by
the Company

The Ministry of Corporate Affairs vide notification
dated 9 September 2024 and 28 September
2024 notified the Companies (Indian Accounting
Standards) Second Amendment Rules, 2024 and
Companies (Indian Accounting Standards) Third
Amendment Rules, 2024, respectively, which
amended/ notified certain accounting standards
(see below), and are effective for annual reporting
periods beginning on or after 1 April 2024:

• Insurance contracts - Ind AS 117; and

• Lease Liability in Sale and Leaseback -
Amendments to Ind AS 116

These amendments did not have any material
impact on the amounts recognised in prior periods
and are not expected to significantly affect the
current or future periods.

b Foreign currency translation

i) Functional and presentation currency

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

ii) Transactions and balances

Foreign currency transactions are translated into
the functional currency using the exchange rates
at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement
of such transactions and from the translation
of monetary assets and liabilities denominated
in foreign currencies at year end exchange rates
are generally recognised in the statement of
Profit and loss. All the foreign exchange gains and
losses are presented in the statement of Profit
and Loss on a net basis within other expenses.

Non-monetary items that are measured at fair
value in a foreign currency are translated using
the exchange rates at the date when the fair
value was determined. Translation differences

on assets and Liabilities carried at fair value are
reported as part of the fair value gain or loss.

c Revenue recognition
Sale of goods:

Recognition: The Company manufactures and sells a
range of luggage and bags in the wholesale and retail
market. Sales are recognised when the company
satisfies a performance obligation by transferring
control of the products to the customer. The control
of the products is said to have been transferred to
the customer when the products are delivered to
the customer, the customer has significant risks and
rewards of the ownership of the product or when the
customer has accepted the product.

The revenue is recognised net of estimated rebates/
discounts pursuant to the schemes offered by the
Company, estimated additional discounts and expected
sales returns. Accumulated experience is used to
estimate and provide for the rebates/discounts and
revenue is only recognised to the extent that is highly
probable that significant reversal will not accrue. A
refund liability (included in other current liabilities) is
recognised for expected volume discounts payable to
customers in relation to sales made until the end of
the reporting period. The assumptions and estimated
amount of rebates/discounts and Returns are
reassessed at each reporting period. The Company's
obligation to repair or replace faulty products under the
standard warranty term is recognised as a provision.

Measurement of revenue:

Revenue is measured at the amount of transaction
price. Amounts disclosed as revenue are net of returns
(including expected returns), rebates and discounts,
goods and service tax.

d Income tax and Deferred tax

The income tax expense or credit for the period is the
tax payable on the current year's taxable income based
on the applicable income tax rate adjusted by changes
in deferred tax assets and liabilities attributable to
temporary differences.

The current income tax charge is calculated on
the basis of the tax laws enacted or substantively
enacted at the end of the reporting year. Management
periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes
provisions, where appropriate, on the basis of amounts
expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the
liability method, on temporary differences arising
between the tax bases of assets and liabilities and their
carrying amounts in the financial statements.

Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted
by the end of the reporting period and are expected to
apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for all deductible
temporary differences only if it is probable that
future taxable amounts will be available to utilise
those temporary differences and losses. Recognition
of Deferred Tax Assets on losses would be based on
the management estimates of reasonable certainty of
future projections of profitability.

Deferred tax assets and liabilities are offset when
there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred tax
balances relate to the same taxation authority. 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.

Current and deferred tax is recognised in the
statement of profit and loss, except to the extent that
it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly
in equity, respectively.

e Leases
As a lessee

Leases are recognised as right-of-use assets and a
corresponding liability at the date at which the leased
asset is available for use by the Company.

Assets and liabilities arising from a lease are initially
measured on present value basis. Lease liabilities
include the net present value of the following
lease payments:

• Lease payments less any lease incentives receivable

• Amounts expected to be payable by the Company
under residual value guarantees, if any

The lease payments are discounted using Company's
incremental borrowing rate (since the interest rate
implicit in the lease cannot be readily determined).

incremental borrowing rate is the rate of interest
that the Company would have to pay to borrow
over a similar term, and a similar security, the funds
necessary to obtain an asset of a similar value to the
right-of-use asset in a similar economic environment.

Lease payments are allocated between principal and
finance cost. The finance cost is charged to profit or
loss over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of
the liability for each period.

Variable lease payments that depend on any key
variable / condition, are recognised in profit or Loss in
the period in which the condition that triggers those
payments occurs.

Right-of-use assets are measured at cost comprising
the following:

• The amount of the initial measurement of
lease liability

• Any lease payments made at or before
the commencement date less any lease
incentives received

Right-of-use assets are generally depreciated over the
shorter of the asset's useful life and the lease term on
a straight-line basis.

Payments associated with short-term leases and
leases of low-value assets are recognised on a
straight-line basis as on expense in profit or loss.
Short-term leases are leases with a lease term of 12
months or less.

f Property, plant and equipment

Freehold land is carried at historical cost. All other
items of property, plant and equipment are stated
at historical cost less depreciation. Historical cost
includes purchase price including import duties, non¬
refundable taxes and directly attributable expenses
relating to the acquisition of the items.

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 and the cost of the item can be measured
reliably. The carrying amount of any component
accounted for as a separate asset is derecognised when
replaced. All other repairs and maintenance expenses
are charged to the statement of profit and loss during
the reporting period in which they are incurred.

Capital Work in Progress (‘CWIP') comprises of cost of
assets not ready for intended use as on the Balance
sheet date. CWIP is not depreciated until such time
as the relevant asset is completed and ready for its
intended use.

Depreciation methods, estimated useful lives
and residual value

Depreciation is provided on a pro rata basis on the
straight-line method over the estimated useful lives
of the assets which is as prescribed under Schedule II
to the Companies Act, 2013, except for furniture and
fixtures in the Company run stores, Computer Servers,
Pallets used in warehousing operations, Soft luggage
Moulds and Hard Luggage Moulds, where useful life is
based on technical evaluation done by management's
expert, in order to reflect the actual usage of the
assets. The depreciation charge for each period is
recognised in the Statement of Profit and Loss. The
useful life, residual value and the depreciation method
are reviewed atleast at each financial year end. If the
expectations differ from previous estimates, the
changes are accounted for prospectively as a change
in accounting estimate.

Gains and Losses on disposals are determined by
comparing proceeds with carrying amount. These are
included in the statement of profit and Loss account.

g Impairment of assets

Assets that are subject to depreciation and amortisation
are tested for impairment annually or more frequently
whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which
the asset's carrying amount exceeds its recoverable
amount. Recoverable amount is higher of an asset's or
cash generating unit's fair value and its value in use.
Value in use is the present value of estimated future
cash flows expected to arise from the continuing use
of an asset and from its disposal at the end of its
useful life. For the purpose of assessing impairment,
assets are grouped at the lowest levels for which
there are separately identifiable cash inflows which
are largely independent of the cash flows from other
assets or group of assets (cash generating units). Non
financial assets that suffered impairment are reviewed
for possible reversal of the impairment at the end of
each reporting period.

h Inventories

Raw materials, packing materials, stores and spares,
work in progress, stock-in-trade and finished goods are
stated at the lower of cost or net realisable value. Cost
of raw materials, packing materials, stores and spares
and stock-in-trade comprise of cost of purchases
determined using moving average method. Cost of
work-in-progress and finished goods comprise direct
materials, direct labour and an appropriate proportion
of variable and fixed overhead expenditure, the latter
being allocated on the basis of normal operating
capacity. Cost of inventories also include all other costs
incurred in bringing the inventories to their present
location and condition. Cost of purchase inventory are
determined after deducting rebates and discounts. 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.

i Investment in subsidiaries

Investment in subsidiaries which are of equity in nature
are carried at cost less impairment, if any. Other
Investments in subsidiaries are carried at Fair Value
and gain/loss on fair valuation are recognised through
the statement of profit and loss.

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

1) Financial Assets

i) Classification

The Company classifies its financial assets in
the following measurement categories:

• At fair value either through other
comprehensive income (FVOCI) or
through profit and loss (FVTPL); and

• At amortised cost.

The classification depends on the entity's
business model for managing the financial
assets and the contractual terms of the
cash flows.

Gains and losses will either be recorded in
the statement of profit and loss or other
comprehensive income for assets measured
at fair value. The Company has made an
irrevocable election at the time of initial
recognition, to account for investments in
equity instruments that are not held for
trading, at FVOCI.

For investments in debt instruments, this will
depend on the business model in which the
investment is held.

The Company reclassifies debt investments
when and only when its business model for
managing those assets changes.

ii) Measurement

At initial recognition, in case of a financial
asset not at fair value through the statement
of profit and loss account, the Company
measures a financial asset at its fair value
plus transaction costs that are directly
attributable to the acquisition of the financial
asset. Transaction costs of financial assets
carried at fair value through the statement
of profit and loss are expensed in profit
or loss.

a) Debt instruments

There are three measurement
categories into which the Company
classifies its debt instruments:

Amortised cost: Assets that are held
for collection of contractual cash flows
where those cash flows represent solely
payments of principal and interest are
measured at amortised cost. A gain
or loss on a debt investment that is
subsequently measured at amortised
cost is recognised in the statement
of profit and loss when the asset is
derecognised or impaired. Interest
income from these financial assets
is included in other income using the
effective interest rate method.

Fair value through other comprehensive
income (FVOCI): Assets that are held for
collection of contractual cash flows and
for selling the financial assets, where
the assets' cash flows represent solely
payments of principal and interest,
are measured at fair value through
other comprehensive income (FVOCI).
Movements in the carrying amount are
taken through Other comprehensive
income (OCI), except for the recognition
of impairment gains or losses, interest
income and foreign exchange gains
and losses which are recognised in
profit and loss. When the financial
asset is derecognised, the cumulative
gain or loss previously recognised
in OCI is reclassified from equity to
the statement of profit and loss and
recognised in other income or other
expenses (as applicable).

Fair value through profit and loss
(FVTPL) : Assets that do not meet the
criteria for amortised cost or FVOCI
are measured at fair value through
the profit and loss. A gain or loss on a
debt investment that is subsequently
measured at fair value through profit
and loss is recognised in the statement
of profit and loss in the period in
which it arises. Interest income from
these financial assets is included in
other income.

b) Equity instruments

The Company measures all equity
investments (except Equity investment
in subsidiaries) at fair value. Where
the Company's management has

substantially all risks and rewards of
ownership of the financial asset. In such
cases, the financial asset is derecognised.
Where the entity has not transferred
substantially all risks and rewards of
ownership of the financial asset, the financial
asset is not derecognised.

Where the Company has neither transferred
a financial asset nor retains substantially
all risks and rewards of ownership of
the financial asset, the financial asset
is derecognised if the Company has not
retained control of the financial asset. Where
the Company retains control of the financial
asset, the asset is continued to be recognised
to the extent of continuing involvement in
the financial asset.

v) Cash and cash equivalents

Cash and cash equivalents include cash on
hand, deposits held at call with financial
institutions, other short-term highly liquid
investments with original maturities of
three months or less, that are readily
convertible to known amounts of cash and
which are subject to an insignificant risk of
changes in value. Bank overdraft are shown
within borrowing in current liabilities in the
financial statement.

vi) Trade Receivables

Trade receivables are amounts due from
customers for goods sold in the ordinary
course of business. Trade receivables
are recognised initially at the amount
of consideration that is unconditional
unless they contain significant financing
components, when they are recognised at
fair value. The Company holds the trade
receivables with the objective to collect
the contractual cash flows and therefore
measures them subsequently at amortised
cost using the effective interest method, less
expected credit losses.

2) Financial Liabilities

i) Measurement

Financial liabilities are initially recognised
at fair value, reduced by transaction costs
(in case of financial liabilities not recorded
at fair value through profit and loss), that
are directly attributable to the issue of
financial liability. All financial liabilities are

subsequently measured at amortised cost
using effective interest method. Under
the effective interest method, future cash
outflow are exactly discounted to the initial
recognition value using the effective interest
rate, over the expected life of the financial
liability, or, where appropriate, a shorter
period. At the time of initial recognition, there
is no financial liability irrevocably designated
as measured at fair value through profit
and loss.

ii) Derecognition

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

iii) Trade and other payables

These amounts represent liabilities for goods
and services provided to the Company prior
to the end of financial year which are unpaid.
The amounts are unsecured and are usually
paid as per payment terms. Trade and other
payables are recognised initially at their
fair value and subsequently measured at
amortised cost using the effective interest
rate method.

iv) Derivatives and hedging activities

Derivatives are only used for economic
hedging purposes and not as a speculative
investments. They are presented as current
assets or liabilities to the extent they are
expected to be settled within 12 months after
the end of the reporting period.

Derivatives are initially recognised at fair
value on the date a derivative contract
is entered into and are subsequently re¬
measured to their fair value at the end of
each reporting period. The Company enters
into derivative contracts to hedge risks which
are not designated as hedges. Such contracts
are accounted for at fair value through profit
or loss.

Financial assets and Liabilities are offset and
the net amount is reported in the balance
sheet where there is a legally enforceable
right to offset the recognised amounts and
there is an intention to settle on a net basis
or realise the asset and settle the liability
simultaneously. The legally enforceable right
must not be contingent on future events and
must be enforceable in the normal course
of business and in the event of default,
insolvency or bankruptcy of the Company
or the counter party.

k Employee benefits

(i) Short-term obligations

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

(ii) Other long-term employee benefit
obligations

The liabilities for earned leave are not expected to
be settled wholly within 12 months after the end
of the period in which the employees render the
related service. They are therefore measured as
the present value of expected future payments
to be made in respect of services provided by
employees up to the end of the reporting period
using the projected unit credit method. The
benefits are discounted using the appropriate
market yields at the end of the reporting period
that have terms approximating to the terms of
the related obligation. Remeasurements as a
result of experience adjustments and changes
in actuarial assumptions are recognised in the
statement of profit and loss.

(iii) Post-employment obligations

The Company operates the following post¬
employment schemes:

A) Defined benefit gratuity plan:

The Company provides for gratuity, a
defined benefit plan (the "Gratuity Plan")

covering eligible employees in accordance
with the Payment of Gratuity Act, 1972.
The Gratuity Plan provides a lump sum
payment to vested employees at retirement,
death, incapacitation or termination of
employment, of an amount based on
the respective employee's salary and the
tenure of employment. The liability or asset
recognised in the balance sheet in respect of
defined benefit gratuity plans is the present
value of the defined benefit obligation at the
end of the reporting period less the fair value
of plan assets. The defined benefit obligation
is calculated annually by actuaries using the
projected unit credit method.

The present value of the defined benefit
obligation denominated in Indian rupees is
determined by discounting the estimated
future cash outflows by reference to
market yields at the end of the reporting
period on government bonds that have
terms approximating to the terms of the
related obligation.

The net interest cost is calculated by
applying the discount rate to the net balance
of the defined benefit obligation and the fair
value of plan assets. This cost is included in
employee benefit expense in the statement
of profit and loss.

Remeasurement gains and losses arising
from experience adjustments and changes in
actuarial assumptions are recognised in the
period in which they occur, directly in other
comprehensive income, which are included
in retained earnings in the statement of
changes in equity and in the balance sheet.
Changes in the present value of the defined
benefit obligation resulting from plan
amendments or curtailments are recognised
immediately in the statement of profit and
loss as past service cost.

B) Defined benefit provident fund plan:

Provident Fund contributions are made to
a Trust administered by the Company. The
Company's liability is actuarially determined
(using the Projected Unit Credit method)
at the end of the year.Gains and losses,
if any, arising from changes in actuarial
assumptions are recognised in the period

in which they occur, directly in other
comprehensive income. They are included
in retained earnings in the statement of
changes in equity and in the balance sheet.

(iv) Bonus plans

The Company recognises a liability and an
expense for bonuses. The Company recognises
a provision where contractually obliged or
where there is a past practice that has created a
constructive obligation.

(v) Share-based payments

Share-based compensation benefits are provided
to employees via the Employee Stock Appreciation
Rights Plan.

Liabilities for the Company's share appreciation
rights are recognised as employee benefit
expense over the relevant vesting period. The
fair value of the rights are measured at grant
date and an Employee stock appreciation rights
reserve is created in the balance sheet over the
vesting period.