(b) The fair valuation is based on current prices in the active market for similar properties. The main input used are quantum, area, location, demand, age of building and trend of fair market rent in the location of the property.

(c) The fair value is based on valuation performed by an accredited independent valuer. Fair valuation is based on replacement cost method. The fair value measurement is categorised in level 3 fair value hierarchy.

Note 6 : Leases

Leases in which the company is a Lessee Land & Buildings

The Company has leasing arrangements for its land, head office, godowns and other office buildings. Non-cancellable period for those lease arrangements vary. The Company pays lease charges as fixed amount as per the respective lease agreements. Right-of-use asset is measured, on a lease by lease basis, at carrying amount. Discounting to arrive the value of asset is done based on the incremental borrowing rate at the date of initial application.

Factories, Godowns and office buildings

The Company has leasing arrangements for its various factories, godowns and office buildings (other than mentioned above). Non-cancellable period for those leasing arrangements are less than 12 months and the Company elected to apply the recognition exemption for short term leases to these leases. The lease amount is charged as rent. The total lease payments accounted for the year ended March 31, 2025 is ' 36.81 crores (previous year ' 41.70 crores).

Leases in which the company is a Lessor:

The Company has entered into an agreement to give one of its office building on operating lease effective May 2020. The Company has also taken office building on operating lease for similar premises in the same building.

a) Impairment testing for Intangible assets with indefinite life- Goodknight and Hit brands

The recoverable amount of the brands are based on its value in use. The value in use is estimated using discounted cash flows over a period of 5 years. Cash flows beyond 5 years is estimated by capitalising the future maintainable cash flows by an appropriate capitalisation rate and then discounted using pre tax discount rate.

Operating margins and growth rates for the five years cash flow projections have been estimated based on past experience and after considering the financial budgets/ forecasts approved by management. Other key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key assumptions represent management’s assessment of future trends in the relevant industries and have been based on historical data from both external and internal sources.

According to Ind AS 36 “Impairment of Assets”, the annual impairment test for intangible assets with indefinite useful life may be performed at any time during an annual period, provided the test is performed at the same time every year. The Company has decided to perform impairment test for intangible assets with indefinite useful life at January 31 and same is being followed for future years.

With regard to the assessment of value in use, no reasonably possible change in any of the above key assumptions would cause the carrying amount of the Brands to exceed their recoverable amount.

No impairment has been charged to the Statement of Profit and Loss account during the financial year 31 March 2025 (31 March 2024 : Nil).

b) Impairment testing for Park Avenue and Kamasutra Cash Generating Unit (CGU) containing goodwill

The recoverable amount of Park Avenue and Kamasutra CGU to which this goodwill is allocated is determined at fair value less cost to disposal since acquisition happened in the last financial year. The fair value less cost of disposal is estimated using market approach which takes into account revenue multiple and margins multiple.

Other key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key assumptions represent management’s assessment of future trends in the relevant industries and have been based on historical data from both external and internal sources.

The pre-tax discount rate is based on risk free rate, beta variant adjusted for market premium and company specific risk factors.

According to Ind AS 36 “Impairment of Assets”, the annual impairment test for CGU containing goodwill may be performed at any time during an annual period, provided the test is performed at the same time every year. This year, the Company performed the impairment test as of January 31, aligning the timing with the impairment testing of other CGU and intangible assets. In the prior year, being the first year of a business acquisition (refer to Note 57), the Company conducted the impairment test for the CGU as at March 31, 2024.

With regard to the assessment of fair value less cost of disposal, no reasonably possible change in any of the above key assumptions would cause the carrying amount of the CGU (including Brands and Goodwill) to exceed their recoverable amount.

No impairment has been charged in this regard to the Statement of Profit and Loss account during the financial year 31 March 2025 (31 March 2024 : Nil)

(a) The Company offsets deferred tax assets and 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 tax authority.

(b) Significant management judgment is required in determining provision for income tax, deferred income tax assets (including MAT credit) and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income and the period over which deferred income tax assets will be recovered.

(c) During the year the Company has utilised MAT credit of ' 129.35 crore (31-Mar-24 : ' 198.46 crore (net)). The Company has re-assessed its utilization of MAT credit, considering business projections, benefits available from tax holiday, remaining period for such benefits etc based on which the company is reasonably certain of not utilizing MAT credit of '51.05 crore in future years against the normal tax excepted to be paid in those years. Accordingly, the Company has derecognized MAT credit of '51.05 crore (31-Mar-24 : '95.00 crore)

(d) During the year ended March 31, 2025, the Company has reassessed tax benefits under section 80IE of the Income tax Act for financial year 2023-24 based on which incremental Minimum alternate tax credit of ' 8.26 crore (31-Mar-24 : '0.62 crore) has been utilised in the Standalone Financial Statements.

(e) New provision inserted in the Income tax Act (Sept 2019) with effect from fiscal year 2019-20, allows any domestic company to pay income tax at the rate of 25.17% subject to condition they will not avail any incentive or exemptions. The lower rate is an option and companies can continue to account based on the old rates. The Company has plants located in North-east region enjoying income tax exemption, and the effective rate based on the tax exemption plants is lower than 25.17%, so company decided to not opt for lower rate in FY 2024-25.

(f) Based on internal projections the Company plans to opt for the lower tax rate from FY 2025-26.

(g) Deferred tax assets have not been recognised in respect of long term capital losses as at 31^st March 2025 '-777.02 crore ('771.21 crore) as it is not probable that the future taxable long term capital gains will be available against which the Company can use the benefits therefrom.

d) Terms / rights attached to equity shares

The Company has one class of equity shares having a par value of '1 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in the proportion to their shareholding. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. ( Refer Note 47 for details of dividend paid during the year)

f) Shares Reserved for issue under options

The Company has 8,99,073 (31-Mar-25 year 11,05,168) equity shares reserved for issue under Employee Stock Grant Scheme as at March 31, 2025. (As detailed in Note 53 )

g) Information regarding aggregate number of equity shares issued during the five years immediately preceding the date of Balance Sheet:

The Company has not issued shares for consideration other than cash and has not bought back any shares during the past five years.

The Company has not allotted any shares pursuant to contract without payment being received in cash, other than under Employee Stock Grant Scheme.

h) There are no calls unpaid on equity shares, other than shares kept in abeyance as mentioned in Note (b) above.

i) No equity shares have been forfeited.

Note: (*)Pursuant to Regulation 31A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Company had received approval from the Stock Exchanges i.e., BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”) vide letters dated December 27, 2024 for reclassification of Jamshyd Naoroji Godrej, Pheroza Jamshyd Godrej, Raika Jamshyd Godrej, Navroze Jamshyd Godrej, Smita Godrej Crishna, Vijay Mohan Crishna, Nyrika Holkar, Rishad Kaikhushru Naoroji, Viveck Crishna, Vickram Crishna, Seetha Shearer, Cyrus Phiroze Shroff, Yeshwant Holkar, Arianne Amava Holkar, Freyan Crishna Bieri, Jamshyd Godrej And Others (Trustees of The Raika Godrej Family Trust), Jamshyd Godrej, Pheroza Godrej and Navroze Godrej (Trustees of JNG Family Trust), Jamshyd Godrej, Pheroza Godrej and Navroze Godrej (Trustees of PJG Family Trust), Jamshyd Godrej, Pheroza Godrej and Navroze Godrej (Trustees of RJG Family Trust), Jamshyd Godrej, Pheroza Godrej and Navroze Godrej (Trustees of Raika Lineage Trust), Jamshyd Godrej, Pheroza Godrej and Navroze Godrej (Trustees of NJG Family Trust), Jamshyd Godrej, Pheroza Godrej and Navroze Godrej (Trustees of Navroze Lineage Trust), Smita Godrej Crishna, V M Crishna, F C Bieri and Nyrika Holkar (Trustees of SGC Family Trust), Smita Godrej Crishna, V M Crishna, F C Bieri and Nyrika Holkar (Trustees of VMC Family Trust), Smita Godrej Crishna, Freyan Crishna Bieri and Nyrika Holkar (Trustees of FVC Family Trust), Smita Godrej Crishna, Freyan Crishna Bieri and Nyrika Holkar (Trustees of FVC Children Trust), Smita Godrej Crishna, Freyan Crishna

Bieri and Nyrika Holkar (Trustees of NVC Children Trust), Smita Godrej Crishna, Freyan Crishna Bieri and Nyrika Holkar (Trustees of NVC Family Trust), Rishad Kaikhushru Naoroji & Others (Partners of RKN Enterprises), Godrej & Boyce Manufacturing Co. Ltd., Future Factory LLP, Godrej & Khimji (Middle East) LLC, Godrej (Singapore) Pte. Ltd., Godrej (Vietnam) Co. Ltd., Godrej Americas Inc, Godrej Koerber Supply Chain Limited, Godrej Holdings Pvt. Ltd., Godrej Infotech (Singapore) Pte Ltd, Godrej Infotech Americas Inc, Godrej Infotech Ltd, J T Dragon Pte Ltd., JNG Enterprise LLP, Parakh Agencies Pvt Ltd, SVC Enterprise LLP, LVD Godrej Infotech NV, Sheetak Inc., Urban Electric Power Inc., Veromatic International BV, Godrej UEP (Singapore) Pte. Ltd., Shakti Sustainable Energy Foundation, Godrej UEP Private Limited,

India Weaves, Cymroza Art Gallery, Miniland School, Godrej Enterprises Private Limited from “Promoter” category to the “Public” category shareholder of the Company.

The shareholding of the promoter and promoter group of the Company has been updated accordingly.

Nature and purpose of reserves

1) Securities premium

The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve. The reserve is utilised in accordance with the provisions of the Companies Act, 2013

2) General reserve

The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies Act 2013.

3) Capital Investment Subsidy Reserve

Capital Investment Subsidy Reserve represents subsidy received from the government for commissioning of Malanpur plant in the nature of capital investment.

4) Capital redemption reserve

Capital Redemption reserve represents amount set aside by the company for future redemption of capital.

5) Employee Stock Options Outstanding

The shares option outstanding account is used to recognise the grant date fair value of options issued to employees under the Employee Stock Grant Scheme which are unvested as on the reporting date and is net of the deferred employee compensation expense.

Refer note 53 for details on ESGS Plans.

6) Debt instruments measured at fair value through other comprehensive income

This comprises changes in the fair value of debt instruments recognised in other comprehensive income and accumulated within equity. The company transfers amounts from such component of equity to retained earnings when the relevant debt instruments are derecognised.

7) Effective portion of Cash Flow Hedges

The cash flow hedging reserve represents the cumulative portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow reserve will be reclassified to Statement of Profit and Loss only when the hedged transaction affects the profit or loss or included as a basis adjustment to the non financial hedged item.

Sales Returns:

When a customer has a right to return the product within a given period, the Company recognises a provision for sales return. This is measured on the basis of average past trend of sales return as a percentage of sales. Revenue is adjusted for the expected value of the returns and cost of sales are adjusted for the value of the corresponding goods to be returned.

Legal Claims:

The provisions for indirect taxes and legal matters comprises numerous separate cases that arise in the ordinary course of business. A provision is recognised for legal cases if the company assesses that it is probable that an outflow of economic resources will be required. These provisions have not been discounted as it is not practicable for the Company to estimate the timing of the provision utilisation and cash outflows, if any, pending resolution.

For the year ended March 31, 2025, the Company has exceptional items in the Standalone Financial Results comprising of charge of partial write off in Investment in Godrej Mauritius Africa Holdings Limited of ' 283.9 crore post capital reduction in Mauritius and suitable regulatory approvals. The Company also took a write back of impairment provision for diminution in value of investment in Godrej Mauritius Africa Holdings Limited of ' 273.9 crore as this provision is no longer required. Further it includes severance pay of ' 1.83 Crore and other restructuring costs of ' 0.43 Crore.

During the year ended March 31, 2024 exceptional items comprise an amount of ' 273.90 crores on account of Impairment provision for diminution in the value of investments of Godrej Mauritius Africa Holdings Limited, acquisition related cost comprising of stamp duty and other cost in relation to business combination of Raymond Consumer Care business (Refer note 57) of ' 87.83 crores, restructuring cost of ' 0.64 crore and loss on sale of Godrej East Africa Holdings Limited of ' 792.63 crores offset by gain of ' 2.25 crores on account of sale of Godrej South Africa Proprietary Limited. (Sale of subsidiaries is pursuant to restructuring activities due to changes in business model and long term strategy within the group’s entities in Africa).

During the quarter ended March 31, 2024, the company refreshed its long term strategy for Africa (Including Strength of Nature), enhancing focus on 'profitable’ growth which resulted in various reorganisation actions during the year. Further, on account of indications from external and internal sources such as currency devaluation, increased competitive action etc resulting in revisions to future cash flow projections, an impairment of ' 273.90 Crores in the value of investments of Godrej Mauritius Africa Holdings Limited has been recognized under exceptional items in standalone financial statements.

The recoverable amount of such investment was calculated based on its value in use which was estimated using discounted cash flows over a period of 5 years at discount rate of 15.5% and a terminal value growth rate of 6.5%.

d) The Company has reviewed all its pending litigations and proceedings and has adequately made provisions wherever required and disclosed as contingent liability wherever applicable in the standalone financial statements. The Company does not expect the outcome of the proceedings to have a materially adverse effect on its Standalone financial statements.

It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above pending resolution of the respective proceedings, as it is determinable only on receipt ofjudgements / decisions pending with various forums/authorities

e) Other Matters

The proposed Social Security Code, 2019, when promulgated, would subsume labour laws including Employees’ Provident Funds and Miscellaneous Provisions Act and amend the definition of wages on which the organisation and its employees are to contribute towards Provident Fund. The Company believes that there will be no significant impact on its contributions to Provident Fund due to the proposed amendments. Additionally, there is uncertainty and ambiguity in interpreting and giving effect to the guidelines of Hon. Supreme Court vide its ruling in February 2019, in relation to the scope of compensation on which the organisation and its employees are to contribute towards Provident Fund. The Company will evaluate its position and act, as clarity emerges.

The Company uses forward exchange contracts to hedge its foreign exchange exposure relating to the underlying transactions and firm commitments in accordance with its forex policy as determined by its Forex Committee. The Company does not use foreign exchange forward contracts for trading or speculation purposes.

Note 51 : Hedge Accounting

The objective of hedge accounting is to represent, in the Company financial statements, the effect of the Company use of financial instruments to manage exposures arising from particular risks that could affect profit or loss. As part of its risk management strategy, the Company makes use of financial derivative instruments namely cross currency interest rate swaps for hedging the risk of currency and interest on some of the Floating/Fixed Foreign currency instrument.

For derivative contracts designated as hedge, the Company documents, at inception, the economic relationship between the hedging instrument and the hedged item, the hedge ratio, the risk management objective for undertaking the hedge and the methods used to assess the hedge effectiveness. The derivative contracts have been taken to hedge currency & interest rate risk on Floating/Fixed Foreign currency instrument. The tenor of hedging instrument may be less than or equal to the tenor of underlying.

Financial contracts designated as hedges are accounted for in accordance with the requirements of Ind AS 109 depending upon the type of hedge. The Company applies cash flow hedge accounting to hedge the variability in

a) Floating/Fixed foreign currency instrument.

The Company has a Board approved policy on assessment, measurement and monitoring of hedge effectiveness which provides a guideline for the evaluation of hedge effectiveness, treatment and monitoring of the hedge effective position from an accounting and risk monitoring perspective. Hedge effectiveness is ascertained at the time of inception of the hedge and periodically thereafter. The Company assesses hedge effectiveness on prospective basis. The prospective hedge effectiveness test is a forward looking evaluation of whether or not the changes in the fair value or cash flows of the hedging position are expected to be highly effective on offsetting the changes in the fair value or cash flows of the hedged position over the term of the relationship.

Hedge effectiveness is assessed through the application of critical terms match method & dollar off-set method. Any ineffectiveness in a hedging relationship is accounted for in the statement of profit and loss.

The table below enumerates the Company hedging strategy, typical composition of the Company hedge portfolio, the instruments used to hedge risk exposures and the type of hedging relationship:

a) DEFINED CONTRIBUTION PLAN

Provident Fund / Super annuation fund:

The contributions to the Provident Fund of certain employees (including some employees of the erstwhile Godrej Household Products Ltd) are made to a Government administered Provident Fund and there are no further obligations beyond making such contribution. The Superannuation Fund constitutes an insured benefit, which is classified as a defined contribution plan as the Company contributes to an Insurance Company and has no further obligation beyond making payment to the insurance company.

Employer’s Contribution to Provident Fund including contribution to Family Pension Fund amounting to ' 6.67 crores (31-Mar-24'5.03 crores) has been included in Note 40 under Contribution to Provident and Other Funds.

b) DEFINED BENEFIT PLAN

1. Provident Fund:

The Company manages the Provident Fund plan through a Provident Fund Trust for its employees which is permitted under The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 and is actuarially valued. The plan envisages contribution by the employer and employees and guarantees interest at the rate notified by the Provident Fund authority. The contribution by employer and employee, together with interest, are payable at the time of separation from service or retirement, whichever is earlier.

The Company has an obligation to fund any shortfall on the yield of the trust’s investments over the administered interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and the actual return earned by the Company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumptions there is no shortfall as at March 31, 2025.

2. Gratuity:

The Company participates in the Employees’ Group Gratuity-cum-Life Assurance Scheme of HDFC Standard Life Insurance Co. Ltd., a funded defined benefit plan for qualifying employees. Gratuity is payable to all eligible employees on death or on separation / termination in terms of the provisions of the Payment of Gratuity (Amendment) Act, 1997, or as per the Company’s scheme whichever is more beneficial to the employees.

The Gratuity scheme of the erstwhile Godrej Household Products Ltd., which was obtained pursuant to the Scheme of Amalgamation, is funded through Unit Linked Gratuity Plan with HDFC Standard Life Insurance Company Limited.

The liability for the Defined Benefit Plan is provided on the basis of a valuation, using the Projected Unit Credit Method, as at the Balance Sheet date, carried out by an independent actuary.

The Company has a gratuity trust. However, the Company funds its gratuity payouts from its cash flows. Accordingly, the Company creates adequate provision in its books every year based on actuarial valuation.

These benefit plans expose the Company to actuarial risks, such as longevity risk, interest rate risk and investment risk.

c) OTHER LONG-TERM INCENTIVE

During the year ended March 31, 2025, Employee Benefits expense (Salary and Wages) includes reversal for long term incentive amounting to ' 12.00 crores (31-Mar-24 : ' 29.38 crores expense) recorded on achievement of certain parameters as at March 31, 2025 and certain parameters expected to be achieved during the financial year 202526, as per the long term incentive scheme in accordance with the accounting standards. This long-term incentive is payable in year 2025-2028, subject to fulfilment of all the defined parameters and therefore the provision is recorded at its present value.

The liability for the other long term incentive is provided on the basis of valuation as at the balance sheet date carried out by an independent actuary.

Note 53 : Employee Stock Benefit Plans

I. EMPLOYEE STOCK GRANT SCHEME

a) The Company set up the Employees Stock Grant Scheme 2011 (ESGS) pursuant to the approval by the Shareholders on March 18, 2011.

b) The ESGS Scheme is effective from April 1, 2011, (the “Effective Date”) and shall continue to be in force until (i) its termination by the Board or (ii) the date on which all of the shares to be vested under Employee Stock Grant Scheme 2011 have been vested in the Eligible Employees and all restrictions on such Stock Grants awarded under the terms of ESGS Scheme, if any, have lapsed, whichever is earlier.

c) The Scheme applies to the Eligible Employees of the Company or its Subsidiaries. The entitlement of each employee will be decided by the Compensation Committee of the Company based on the employee’s performance, level, grade, etc.

d) The total number of Stock Grants to be awarded under the ESGS Scheme are restricted to 2,500,000 (Twenty Five Lac) fully paid up equity shares of the Company. Not more than 500,000 (Five Lac) fully paid up equity shares or 1% of the issued equity share capital at the time of awarding the Stock Grant, whichever is lower, can be awarded to any one employee in any one year.

e) The Stock Grants shall vest in the Eligible Employees pursuant to the ESGS Scheme in the period of 1 to 5 years subject to conditions as may be decided by the Compensation Committee andthe Eligible Employee continues to be in employment of the Company or the Subsidiary company as the case may be.

f) The Eligible Employee shall exercise her / his right to acquire the shares vested in her / him all at one time within 1 month from the date on which the shares vested in her / him or such other period as may be determined by the Compensation Committee.

g) The Exercise Price of the shares has been fixed at ' 1 per share. The fair value is treated as Employee Compensation Expenses and charged to the Statement of Profit and Loss. The value of the options is treated as a part of employee compensation in the financial statements and is amortised over the vesting period.

Weighted average remaining contractual life of options as at 31^st March, 2025 was 1.32 years (31 Mar-24 1.82 years).

Weighted average equity share price at the date of exercise of options during the year was ' 1366.29 (31-Mar-24 ' 1012.09).

The fair value of the employee share options has been measured using the Black-Scholes formula. The following assumptions were used for calculation of fair value of grants:

II. Pursuant to SEBI notification dated January 17, 2013, no further securities of the Company will be purchased from the open market.

III. The Company has launched a new stock option scheme named as ‘Godrej Consumer Products Limited Employees Stock Option Scheme 2024’ on August 7, 2024. The total number of Stock Grants to be awarded under the scheme are restricted to 5,000,000 (Fifty Lac) fully paid up equity shares of the Company. The Company has not yet issued any grants under this new scheme.

Note 56 : Financial Risk Management

The activities of the Company exposes it to a number of financial risks namely market risk, credit risk and liquidity risk. The Company seeks to minimize the potential impact of unpredictability of the financial markets on its financial performance. The Company has constituted a Risk Management Committee and risk management policies which are approved by the Board to identify and analyze the risks faced by the Company and to set and monitor appropriate risk limits and controls for mitigation of the risks.

A. MANAGEMENT OF MARKET RISK:

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks: interest rate risk, price risk and currency rate risk. Financial instruments affected by market risk includes borrowings, foreign currency receivables/payables, EEFC bank account balances, investments and derivative financial instruments. The Company has international trade operations and is exposed to a variety of market risks, including currency and interest rate risks.

(i) Management of interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company does not have any exposure to interest rate risks since its borrowings and investments are all in fixed rate instruments.

(ii) Management of price risk:

The Company invests its surplus funds in various debt instruments including liquid and short term schemes of debt mutual funds, deposits with banks and financial institutions, commercial papers and non-convertible debentures (NCD’s). Investments in mutual funds, deposits and NCD’s are susceptible to market price risk, arising from changes in interest rates or market yields which may impact the return and value of the investments. This risk is mitigated by the Company by investing the funds in various tenors depending on the liquidity needs of the Company.

(iii) Management of currency risk:

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company has foreign currency trade payables and receivables and investment in non-convertible debentures in a subsidiaries and is therefore exposed to foreign exchange risk.

The Company mitigates the foreign exchange risk by setting appropriate exposure limits, periodic monitoring of the exposures and hedging exposures using derivative financial instruments like foreign exchange forward contracts and cross currency interest rate swaps . The exchange rates have been volatile in the recent years and may continue to be volatile in the future. Hence the operating results and financials of the Company may be impacted due to volatility of the rupee against foreign currencies.

B. MANAGEMENT OF CREDIT RISK:

Credit risk refers to the risk of default on its obligations by a counterparty to the Company resulting in a financial loss to the Company. The Company is exposed to credit risk from its operating activities (trade receivables) and from its investing activities including investments in mutual funds, commercial papers, deposits with banks and financial institutions and Non-convertible debentures, foreign exchange transactions (including derivatives) and financial instruments.

Credit risk from trade receivables is managed through the Company’s policies, procedures and controls relating to customer credit risk management by establishing credit limits, credit approvals and monitoring creditworthiness of the customers to which the Company extends credit in the normal course of business. Outstanding customer receivables are regularly monitored. The Company has no concentration of credit risk as the customer base is widely distributed.

Credit risk from investments of surplus funds is managed by the Company’s treasury in accordance with the Board approved policy and limits. Investments of surplus funds are made only with those counterparties who meet the minimum threshold requirements prescribed by the Board. The Company monitors the credit ratings and financial strength of its counter parties and adjusts its exposure accordingly. Derivatives are entered into with banks as counter parties, which have high credit ratings assigned by rating agencies.

Management believes that the unimpaired amounts that are past due are still collectible in full, based on historical payment behavior and extensive analysis of customer credit risk, including underlying customers’ credit ratings if they are available. The Company uses an allowance matrix to measure the expected credit loss of trade receivables from individual customers which comprise of large number of small balances.

C. MANAGEMENT OF LIQUIDITY RISK:

Liquidity risk is the risk that the Company may not be able to meet its present and future cash obligations without incurring unacceptable losses. The Company’s objective is to maintain at all times, optimum levels of liquidity to meet its obligations. The Company closely monitors its liquidity position and has a robust cash management system. The Company maintains adequate sources of financing including debt and overdraft from domestic and international banks and financial markets at optimized cost.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments.

Note 57 : Business Combination

Acquisition of Raymond consumer care business (Ref. with note 7)

On May 8, 2023, the Company acquired the FMCG business of Raymond Consumer Care Limited (“RCCL”) through a slump sale for consideration of ' 2,825 crores which included the intellectual property rights of brands like Park Avenue and Kamasutra.

The acquisition date was determined to be May 8, 2023, i.e. The date on which the Company obtained control of the business since the consideration was transferred and the business transfer agreement was executed on May 8, 2023.

The acquisition was in line with company’s strategy to build a sustainable and profitable personal care business in India by leveraging the categories of personal grooming and sexual wellness. RCCL was one of the key players in these categories with brands such as ‘Park Avenue’ and ‘Kamasutra’ which comprised of a wide product portfolio.

The acquisition had been accounted for using the acquisition accounting method under IND AS 103- “Business Combinations”. All identified assets acquired and liabilities assumed on the date of acquisition were recorded at their fair value.

The transactions cost of ' 87.83 crores that were not directly attributable to the identified assets are included under exceptional items in the standalone statement of profit and loss comprising mainly stamp duty expenses, legal fees and due diligence costs.

For eleven months ended 31^st March 2024, the RCCL acquired business contributed revenue from sales of products of ' 466 crores. If the acquisition had occurred on 1^st April 2023, the management estimates that combined standalone revenue from sales of prodcuts would have been ' 8,336.04 crores. In determining these amounts management has assumed that the fair value adjustments, that arose on the date of acquisition would have been the same if the acquisition had occured on 1^st April 2023. The profit or loss since acquisition date and combined standalone profit or loss from the beginning of annual reporting period cannot be ascertained as the acquired business is already integrated with the existing business of the company, thereby making it impracticable to do so.

a) Purchase consideration transferred

The total consideration was ' 2,825 crores which was cash settled. (Net of cash acquired)

c) Measurement of fair values :

Specified Intangible Assets - Brands :

Brands were valued based on an independent valuation using the relief from royalty approach, which values the intangible asset by reference to the discounted estimated amount of royalty the acquirer would have had to pay in an arms length licensing arrangement to secure access to the same rights.

Inventories :

The fair value is determined based on the estimated selling price in the ordinary course of business less the estimated cost of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventory.

Acquired Receivables :

The gross contractual value and fair value of trade and other receivables as at the dates of acquisition amounted to ' 62.70 crores which is expected to be fully recoverable.

d) Goodwill :

Goodwill amounting to ' 566.30 crores arising from acquisition has been recognised as the difference between total consideration paid and net identifiable assets acquired as shown above.

The goodwill is mainly attributable to the expected synergies to be achieved from integrating the business into Company’s existing personal care business. None of the goodwill recognized is expected to be deductible for tax purposes.

Note 58 : Capital Management

For the purpose of the company’s capital management, capital (total equity) includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the company’s capital management is to maximise the shareholder value. Management monitors the return on capital, as well as the level of dividends to ordinary shareholders. The Company’s policy is to keep the gearing ratio less than 1.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financials covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is net debt divided by adjusted equity. Net debt is calculated as total liabilities (as shown in the balance sheet) less cash and cash equivalents, other bank balances and current investments. Adjusted equity comprises all components of equity other than amounts accumulated in hedging. The company’s net debt to adjusted equity ratio i.e. capital gearing ratio as at 31^st March 2025 was as follows:

Amongst other things, the company’s objective for capital management is to ensure that it maintains stable capital management by monitoring the financials covenants attached to the interest bearing borrowings. The Company also takes into consideration the overall net cash of ' (101.85) crores (31-Mar-24'769.48 crores) arrived by reducing the total borrowings from total investments, cash and bank balances for capital management purposes.

Reasons for Change in Ratios :

i) Change in the current ratio is due to increase in current assets (reclassification of Investments from non-current to current )

ii) Change in the debt-equity ratio is due to increase in short term borrowings.

iii) Change in the debt service coverage ratio is due to increase in profits ( reduction in exceptional item Refer note 44)

iv) Change in net working capital turnover ratio is due to increase in current assets (reclassification of Investments from non-current to current )

v) Change in the return on equity ratio, net profit ratio and return on capital employed ratio is due to increase in profits ( reduction in exceptional item Refer note 44)

Note 60 : Utilisation of Borrowed Funds and Share Premium

i) To the best of our knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Company or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

ii) To the best of our knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Funding Party or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

Note 62 : Disclosure U/S 186 (4) of the Companies Act, 2013

Details of Investments made and loan given are disclosed under Note 9,10,17/18 and 22.

Note 63 : Subsequent Events

There are no significant subsequent events that would require adjustments or disclosures in the standalone financial statements except as disclosed in Note 47 to the standalone financial statements.