Allied Blenders & Distillers Ltd Management Discussions

OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our Financial Information on page 340. Unless otherwise indicated or the context otherwise requires, the financial information for Fiscal 2021, 2022 and 2023 and the nine months ended December 31, 2022 and December 31, 2023 included herein is derived from the Restated Consolidated Financial Statements, included in this Red Herring Prospectus, which have been derived from our audited financial statements and restated in accordance with the SEBI ICDR Regulations and the Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the ICAI, as amended from time to time, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. For further information, see “Financial Information” on page 340.

Unless otherwise indicated or the context otherwise requires, in this section, references to “the Company” or “our Company” are to Allied Blenders and Distillers Limited on a standalone basis, and references to “the Group ”, “we”, “us”, “our”, are to Allied Blenders and Distillers Limited on a consolidated basis.

Unless otherwise indicated, industry and market data used in this section has been derivedfrom industry publications, in particular, the report titled “Industry Report On Indian Alco-Beverage Market” dated May 31, 2024 (the “Technopak Report”) prepared and issued by Technopak Advisors Private Limited appointed pursuant to an engagement letter October 11, 2023, and exclusively commissioned and paid for by us to understand the industry in which we operate in connection with the Offer. A copy of the Technopak Report is available on the website of our Company at https://www.abdindia.com/investor-relations/investor-information/reports/. There are no parts, data or information (which may be relevant for the proposed issue), that has been left out or changed in any manner. Unless otherwise indicated, financial, operational, industry and other related information derivedfrom the Technopak Report and included herein with respect to any particular year refers to such information for the relevant calendar year. For more information, see “Risk Factors - Internal Risks - Other risks - 60. Industry information included in this Red Herring Prospectus has been derived from an industry report prepared by Technopak Advisors Private Limited exclusively commissioned and paidfor by us for such purpose. ” on page 87. Also see, “Certain Conventions, Currency of Presentation, Use of Financial Information and Market Data - Industry and Market Data ” on page 29.

OVERVIEW

We are the largest Indian-owned Indian-made foreign liquor (“IMFL”) company and the third largest IMFL company in India, in terms of annual sales volumes between Fiscal 2014 and Fiscal 2022. (Source: Technopak Report) We are one of the only four spirits companies in India with a pan-India sales and distribution footprint, and a leading exporter of IMFL, and had an estimated market share (in terms of sales volume) of 11.8% in the Indian whisky market for Fiscal 2023. For further information, see “Industry Overview on page 174.

Our flagship brand, Officers Choice Whisky was launched in 1988 with our entry into the mass premium whisky segment. Officers Choice Whisky has been among the top selling whisky brands globally in terms of annual sales volumes between 2016 and 2019. (Source: Technopak Report) Over the years, we have expanded and introduced products across various categories and segments. As of December 31, 2023, our product portfolio comprised 16 major brands of IMFL across whisky, brandy, rum and vodka. Certain of our brands, such as, Officers Choice Whisky, Sterling Reserve, Officers Choice Blue and ICONiQ Whisky, are ‘Millionaire Brands or brands that have sold over a million 9-litre cases in one year. (Source: Technopak Report)

The following table sets forth annual sales volumes for our Millionaire Brands for the periods indicated^*:

Particulars	Fiscal			Nine months ended December 31, 2022	Nine months ended December 31, 2023
	2021	2022	2023
	Annual Sales Volumes (million cases)
Whisky
- Officers Choice Whisky	15.54	17.55	18.89	14.42	14.56
- Officers Choice Blue	5.84	5.81	5.56	4.38	3.40
- Sterling Reserve	2.97	3.75	5.30	4.00	3.85
- ICONiQ Whisky*	-	-	-	-	1.43

* Please note that the table includes details of ICONiQ Whisky only for the nine months ended December 31, 2023 since it became a millionaire brand in September 2023.

As on the date of this Red Herring Prospectus, our product range includes five main categories of IMFL, i.e., whisky, brandy, rum, vodka and gin. We also sell packaged drinking water under our Officers Choice, Officers Choice Blue and Sterling Reserve brands.

The following table sets forth certain details in relation to sales volume according to category of IMFL for the fiscals indicated:

Particulars	Fiscal
	2021		2022		2023
	Sales volume (million cases)	Percentage of total sales volume (%)	Sales volume* (million cases)	Percentage of total sales volume (%)	Sales volume* (million cases)	Percentage of total sales volume (%)
Whisky	24.60	96.39	27.49	96.79	30.59	94.88
Brandy	0.67	2.63	0.55	1.94	0.91	2.83
Rum	0.20	0.78	0.32	1.13	0.61	1.89
Vodka	0.05	0.20	0.04	0.14	0.13	0.40
Gin*	-	-	-	-	-	-
Volume Sold	25.52	100.00	28.40	100.00	32.24	100.00

* Launched in January 2024, i.e., subsequent to December 31, 2023.

The following table sets forth certain details in relation to sales volume according to category of IMFL for the periods indicated:

Particulars	Nine months ended December 31, 2022		Nine months ended December 31, 2023
	Sales volume (million cases)	Percentage of total sales volume (%)	Sales volume* (million cases)	Percentage of total sales volume (%)
Whisky	23.26	94.97	23.63	96.10
Brandy	0.67	2.74	0.65	2.64
Rum	0.44	1.80	0.28	1.14
Vodka	0.12	0.49	0.03	0.12
Gin*	-	-	-	-
Volume Sold	24.49	100.00	24.59	100.00

* Launched in January 2024, i.e., subsequent to December 31, 2023.

The following table sets forth our revenues from operations relating to our IMFL product categories for the years indicated:

Category	Fiscal
	2021		2022		2023
	Revenue from contracts* ( million)	Percentage of Revenue from contract** (%)	Revenue from contracts* ( million)	Percentage of Revenue from contract** (%)	Revenue from contracts* ( million)	Percentage of Revenue from contract** (%)
Whisky	62,245.79	98.82	69,734.30	98.86	67,770.97	97.36
Brandy	413.67	0.66	418.81	0.60	1,026.12	1.48
Rum	223.89	0.36	278.82	0.40	661.04	0.95
Vodka	65.56	0.10	51.89	0.07	128.37	0.18
Others***	40.42	0.06	52.46	0.07	23.41	0.03
Total	62,989.33	100.00	70,536.28	100.00	69,609.91	100.00

*Revenue from contracts refers to revenue from contracts with customer - Sale of goods (IMFL)

* * Percentage of revenue refers to contracts with customer means percentage of revenue from contracts with customer - Sale of goods (IMFL)

*** Others primarily include sales made at our retail store in Mumbai, Maharashtra.

The following table sets forth our revenues from operations relating to our IMFL product categories for the periods indicated:

Category	Nine months ended December 31, 2022		Nine months ended December 31, 2023
	Revenue from contracts* ( million)	Percentage of Revenue from contract** (%)	Revenue from contracts* ( million)	Percentage of Revenue from contract** (%)
Whisky	51,604.12	97.85	55,758.28	96.95
Brandy	589.36	1.12	1,233.42	2.14
Rum	379.03	0.72	430.09	0.75
Vodka	118.98	0.23	43.44	0.08
Others***	41.27	0.08	47.75	0.08
Total	52,732.76	100.00	57,512.98	100.00

*Revenue from contracts refers to revenue from contracts with customer - Sale of goods (IMFL)

* * Percentage of revenue refers to contracts with customer means percentage of revenue from contracts with customer - Sale of goods (IMFL)

*** Others primarily include sales made at our retail store in Mumbai, Maharashtra.

We have over the years established market leadership in the alcoholic beverages market in India with a market share of 8.2% in IMFL market by sales volumes in Fiscal 2023 (Source: TechnopakReport), with sales across 30 States and Union Territories, as of December 31, 2023. Over the years, we have developed an extensive pan-India sales footprint and as of December 31, 2023 we have 12 sales support offices, and pan-India route-to-market capabilities covering all channels and alcohol permitted States and Union Territories. Our pan-India distribution network has enabled us to support the growth in annual sales volumes of our products. As of March 31, 2023, our products were retailed across 79,329 retail outlets across 30 States and Union Territories in India (Source: Technopak Report). We believe that our industry position, strength of our brands, our pan-India sales footprint and logistics arrangements have further consolidated our position leading to significant business growth and financial performance. In addition, as of December 31, 2023 we exported our products to 14 international markets, including countries in the Middle East, North America, Africa, Asia and Europe.

Over the years, we have invested in strengthening our brand awareness and the goodwill of our brands. Our key brands have been awarded at recognised award functions including at the Design and Packaging Masters, The Spirits Business London, Monde Selection Bruxelles, International Taste Institute- ITQI Brussels, DMAasia ECHO, exchange4media Indian Digital Marketing Awards, Adgully Digixx, Afaqs Marketers Xcellence, Ambrosia Awards, Ambrosia Awards, INDSPIRIT, Spiritz Achievers Awards, Product of the Year awarded to Officers Choice Whisky at the Channelier FMCG Awards 2022, among others. We have adopted a lifestyle approach towards our brand positioning by focusing on building awareness, enhancing the appeal of our products sold under various brands, ensuring affordability of our products, maintaining the quality of products sold and building consumer engagement. Our brand-building initiatives have in the past included partnerships with teams participating in the Indian Premier League, the Pro Kabbadi League and partnerships with regional football leagues for our focus markets of West Bengal and the Northeast. We have also in the past appointed celebrity brand ambassadors including a leading cricket personality.

We own and operate our distillery located in Rangapur, Telangana that is spread over 74.95 acres with a built-up area of over 25,000 square meters. Our in-house distillation capacity of extra neutral alcohol (“ENA”), the key material used in the manufacture of our products, is 600.00 lakh litres per year. We also have extensive bottling capabilities across India. As of December 31, 2023, we relied on 32 bottling facilities, including bottling facilities owned and operated by us and contract bottling facilities both on exclusive and non-exclusive basis, for bottling our products. As of December 31, 2023, we owned and operated nine bottling units, and had entered into arrangements with five third-party bottling facilities where the entire licensed capacity is utilized by us. Over the years, we have developed relationships with third-party bottlers and as of December 31, 2023, we have entered into 18 bottling agreements on a non-exclusive basis including one where we have entered into a royalty arrangement dated March 30, 2021 with a third-party manufacturer for a period of five years to manufacture, blend, bottle, process and package our products at its distillery under our brand name for which royalty is paid to our Company.

The table below provides details of our total Net Revenue from Operations from our owned bottling facilities (including leased bottling facilities) and third-party bottling facilities in the years indicated therein:

Particulars			Fiscal
	2021	2022	2023
	Amount ( million)	Percentage of Revenue from Operations (%)	Amount ( million)	Percentage of Revenue from Operations (%)	Amount ( million)	Percentage of Revenue from Operations (%)
Net Revenue from Operations from owned bottling facilities (including leased bottling facilities)	45,330.08	71.06	56,221.17	78.12	54,008.38	76.01
Net Revenue from Operations from third- party bottling facilities	17,659.25	27.68	14,315.11	19.89	15,601.53	21.96
Total	62,989.33	98.74	70,536.28	98.01	69,609.91	97.97

The table below provides details of our total Net Revenue from Operations from our owned bottling facilities (including leased bottling facilities) and third-party bottling facilities in the periods indicated therein:

Particulars	Nine months ended December 31, 2022		Nine months ended December 31, 2023
	Amount ( million)	Percentage of Revenue from Operations (%)	Amount ( million)	Percentage of Revenue from Operations (%)
Net Revenue from Operations from owned bottling facilities (including leased bottling facilities)	41,148.32	76.36	44,789.69	75.77
Net Revenue from Operations from third-party bottling facilities	11,584.44	21.50	12,723.29	21.52
Total	52,732.76	97.85	57,512.98	97.30

We maintain oversight, quality control and technical input on the manufacturing process and further support this by facilitating the procurement of raw materials such as ENA and packaging materials to our third-party bottlers. We have also implemented quality control and assurance parameters by deploying internal teams at each of the third party bottling facilities who oversee the quality control system to ensure it complies with the quality standards of our owned bottling facilities (including leased bottling facilities), and continue to improve these processes with our third-party bottlers. Third-party bottling of our products provides us with flexibility to meet our production requirements. In addition, owing to our contractual arrangements with local and regional third- party bottlers we are not required to transport our products beyond state borders thereby limiting any additional excise import and export duty expenses that we would otherwise incur, which ensures that our products remain competitively priced.

Over the years our business has generated healthy operating cash flow despite the impact of COVID-19. Our net cash generated from operating activities was 2,466.18 million, 1,787.60 million, 2,298.55 million, 1,729.85 million and 1,439.12 million in Fiscal 2021, 2022 and 2023, and in the nine months ended December 31, 2022 and December 31, 2023, respectively. Further, our restated profit for the period/year was 25.08 million, 14.76 million, 16.01 million, 28.81 million and 42.29 million in Fiscal 2021, 2022 and 2023 and in the nine months ended December 31, 2022 and December 31, 2023, respectively. Our Net Worth was 3,817.82 million,

4,040.98 million, 4,060.99 million, 4,070.84 million and 4,092.56 million, as of March 31, 2021, 2022 and 2023, and as of December 31, 2022 and December 31, 2023, respectively.

The following table sets forth details of certain financial parameters as of and for the periods indicated:

Particulars	As of and for the Years ended March 31,			As of and for the nine months ended December 31, 2022	As of and for the nine months ended December 31, 2023
	2021	2022	2023
	( million, except percentages)
Revenue from Operations	63,787.76	71,969.20	71,056.80	53,890.41	59,111.44
Restated Profit after tax for the year/period	25.08	14.76	16.01	28.81	42.29
Gross Margin? (%)	39.49%	39.36%	37.26%	37.43%	36.34%
EBITDA?	2,129.96	2,075.51	1,960.61	1,458.09	1,862.01
EBITDA Margin?	9.07%	7.73%	6.23%	6.14%	7.27%
PAT Margin?	0.11%	0.05%	0.05%	0.12%	0.17%
ROE?	0.66%	0.37%	0.39%	0.71%*	1.03%*
ROCE(6)	26.45%	25.13%	25.87%	18.80%*	24.35%*
Net Debt / Equity?	2.39	2.05	1.85	1.89	1.88

• not annualized.

Notes:

1. Gross Margin is calculated as calculated as gross profit divided by net revenue from operations (i.e., revenue from operations less excise duty).

2. EBITDA is calculated as profit before finance costs, depreciation/amortisation, share in profit of investment accounted for using equity method, exceptional items and tax.

3. EBITDA Margin is calculated as EBITDA divided by net revenue from operations (i.e., revenue from operations less excise duty).

4. PAT Margin is calculated as restated profit for the year/period divided by net revenue from operations (i. e., revenue from operations less excise duty).

5. ROE is calculated as restated profit after tax for the year/period divided by total equity.

6. ROCE is calculated as EBITDA less depreciation and amortization divided by capital employed (total equity plus non-current borrowings).

7. Net Debt/Equity is calculated as non-current borrowings plus current borrowings less cash and cash equivalents divided by total equity.

PRESENTATION OF FINANCIAL INFORMATION

The restated consolidated financial information comprise the restated consolidated balance sheet as at December 31, 2023, December 31, 2022, March 31, 2023, March 31, 2022 and March 31, 2021, the restated consolidated statement of profit and loss (including other comprehensive income), the restated consolidated cash flow statement, the restated consolidated statement of changes in equity and statement of significant accounting policies and other explanatory information for the nine months ended December 31, 2023 and December 31, 2022 and the years ended March 31, 2023, March 31, 2022 and March 31, 2021 (collectively, the “Restated Consolidated Financial Information”).

The Restated Consolidated Financial Information have been compiled from:

• The audited special purpose interim consolidated financial statements as of and for the nine months period ended December 31, 2022 and December 31, 2023 prepared in accordance with Ind AS 34 “Interim Financial Reporting”, specified under section 133 of the Companies Act, 2013 and other accounting principles generally accepted in India.

• The audited consolidated Ind AS financial statements as of and for the years ended March 31, 2021, 2022 and 2023, prepared in accordance with the Ind AS as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION

We believe that the below mentioned factors have significantly affected our results of operations, costs and financial conditions during the periods under review, and may continue to affect our results of operations and financial condition in the prospective future:

Pricing of our products and product mix

Pricing of our products

Prices of alcoholic beverages in India is controlled by respective state governments with varying tax structures leading to high variation in prices across states. (Source: Technopak Report) Accordingly, our ability to price our products depends on multiple factors and primarily driven by pricing norms stipulated by respective States and Union Territories. Price is determined by two key factors: (i) Ex-distillery price (“EDP”) which covers the cost of production; and (ii) state excise policies which specify duties, license fees, cess and surcharges, wholesale margin and retail margin. Taxes and margin are calculated as a percentage of EDP. The contribution of taxes and margins progressively decreases as the EDP increases depending on the category of product. One of the key challenges in the industry is the revision of prices. Price revisions are approved and is the prerogative of excise department. While the window to revise cost many states is annual in nature, the revision can be every three to four years in some states such as Kerala and Telangana, even though price of raw material may increase or decrease through the year. There are exceptions like Maharashtra where maximum retail price can be revised through the year. (Source: Technopak Report) Accordingly, our ability to price our products depends on multiple factors and is primarily driven by state pricing norms. We are required to price our products in manner that ensures our products remain competitive while also factoring in our ability to account of increase in raw material prices and other costs such as manufacturing and transportation related expenses. Our ability to increase prices of our products ad-hoc is limited and applications for increase in EDP is as prescribed under the applicable state regulations or at the discretion of the relevant state agency.

Product mix

As on the date of this Red Herring Prospectus, our product range includes five main categories of IMFL, i.e., whisky, brandy, rum, vodka and gin. We also sell packaged drinking water under our Officers Choice, Officers Choice Blue and Sterling Reserve brands. As of December 31, 2023, our product portfolio comprised 16 major brands of IMFL with 10 brands of whisky that include our flagship Officers Choice Whisky, Sterling Reserve Whisky and ICONiQ White International Whisky, three brands of rum, three brands of brandy and one brand of vodka, respectively. Further, in order to have a complete product portfolio we have recently launched a gin product in the premium segment, on January 8, 2024 with initial sales in the state of Haryana and have commenced selling the product in Mumbai, Maharashtra recently in June 2024.

Our products are present across various price points of IMFL segments in India. However, our revenue and profitability remain substantially dependent upon the sale of our whisky products. Officers Choice Whisky has been among the top selling whisky brands globally in terms of annual sales volumes between 2016 and 2019. (Source: Technopak Report) Officers Choice Whisky is the market leader in the mass premium segment with a market share of 23.7% in terms of annual sales volumes in Fiscal 2022. (Source: Technopak Report)

As of December 31, 2023, our product range includes five main categories: whisky, brandy, rum, vodka and others. The following table sets forth information on our product mix in the years indicated:

Catego					Fiscal
ry		2021			2022			2023
	No. of Cases (millio n)	Revenue from Operatio ns ( million)	Percenta ge of Revenue from Operatio ns (%)	No. of Cases (millio n)	Revenue from Operatio ns ( million)	Percenta ge of Revenue from Operatio ns (%)	No. of Cases (millio n)	Revenue from Operatio ns ( million)	Percenta ge of Revenue from Operatio ns (%)
Whisky	24.60	62,245.79	97.58	27.49	69,734.30	96.90	30.59	67,770.97	95.38
Brandy	0.67	413.67	0.65	0.55	418.81	0.58	0.91	1,026.12	1.44
Rum	0.20	223.89	0.35	0.32	278.82	0.39	0.61	661.04	0.93
Vodka	0.05	65.56	0.10	0.04	51.89	0.07	0.13	128.38	0.18
Others(1 )	-	838.85	1.32	-	1,485.39	2.06	-	1,470.29	2.07

 

Catego					Fiscal
ry		2021			2022			2023
	No. of Cases (millio n)	Revenue from Operatio ns ( million)	Percenta ge of Revenue from Operatio ns (%)	No. of Cases (millio n)	Revenue from Operatio ns ( million)	Percenta ge of Revenue from Operatio ns (%)	No. of Cases (millio n)	Revenue from Operatio ns ( million)	Percenta ge of Revenue from Operatio ns (%)
Total	25.52	63,787.76	100.00	28.40	71,969.21	100.00	32.24	71,056.80	100.00

(1) Others primarily include ENA and by-products.

The following table sets forth information on our product mix in the periods indicated:

Category	Nine months ended December 31, 2022			Nine months ended December 31, 2023
	No. of Cases (million)	Revenue from Operations ( million)	Percentage of Revenue from Operations (%)	No. of Cases (million)	Revenue from Operations ( million)	Percentage of Revenue from Operations (%)
Whisky	23.26	51,604.12	95.76	23.63	55,758.28	94.33
Brandy	0.67	589.36	1.09	0.65	1,233.42	2.09
Rum	0.44	379.03	0.70	0.28	430.09	0.73
Vodka	0.12	118.98	0.22	0.03	43.44	0.07
Others(1)	-	1,198.92	2.23	-	1,646.21	2.78
Total	24.49	53,890.41	100.00	24.59	59,111.44	100.00

(1) Others primarily include ENA and by-products.

Our revenues are therefore dependent on our ability to upgrade and/or develop new products that are able to address consumer preferences. We place significant emphasis on research and development, in particular, to improve the packaging and quality of our products and expand our new product offerings, which we believe are factors crucial for our future growth and prospects. However, there can be no assurance that that our future research and development endeavours will be successful to the expected levels or be completed within the anticipated time frame or budget, or that our newly developed products will achieve commercial success. Even if such products can be successfully commercialised, there is no guarantee that they will be accepted by the market. In any such situation, , our results of operations may be significantly affected.

Manufacturing capabilities

Our distillery is located in Rangapur, Telangana and is spread over an area of 74.95 acres and a built-up area of over 25,000 square meters. We possess a pan-India footprint of bottlers with an optimal mix of owned and third- party bottling facilities. In Fiscal 2023 and in the nine months ended December 31, 2023, 51.40% and 53.07%, respectively, of our production was from our own bottling facilities and the remaining from contract or leased units. As of December 31, 2023, we owned and operated nine bottling units, and had entered into arrangements with five third-party bottling facilities, where the entire licensed capacity is utilized by us. In addition, we have entered into 18 bottling agreements on a non-exclusive basis with third-party bottling facilities, including one facility where we have entered into a royalty arrangement.As of December 31, 2023, we relied on 32 bottling facilities, including bottling facilities owned and operated by us and contract bottling facilities both on exclusive and non-exclusive basis.

While our extensive and pan-India network of bottling facilities ensures that we are able to manufacture our products locally and at optimum cost without overlaying tariffs associated with inter-state movement, which also ensures that delivery to our distribution network is in a timely manner while aligning with various regulatory requirements. For further information, see “Our Business - Business Operations - Capacity and Capacity Utilization” on page 248.

Excise duty and government regulations

Excise duty

Taxes on alcohol increases its price and can be a powerful lever for influencing alcohol consumption. More than 60% of gross revenue of leading alcoholic beverage companies in India constitutes of excise paid directly to the state governments. Share of excise in total gross revenues of leading alcoholic beverage companies in India has shown an increasing trend. In addition to excise some states also charge sales tax. In addition to these taxes there are one time or annual fees on label registration and related activities. The quantum of tax under different heads is also a function of distribution model and revenue maximation objective of the states. (Source: Technopak Report) For further information, see “ - Significant Factors Affecting our Results of Operations and Financial Condition - Distribution network and footprint on page 443.

State excise department also charge multiple annual fees including brand label registration fees before marketing of the given brand is allowed. This fee can be annual or once in three year or one time as well. Other fees can include bottling fees, stock transfer fees, import and export fees. (Source: Technopak Report)

As we are a manufacturer and distributor of alcoholic products, we are subject to excise duty that is administered by various State Governments in India. Excise duty is leviable on production, but payable on volume of goods dispatched from factory. Taxation on our products in the various states in which we operate comprises different taxes specific to each state, such as excise and other indirect taxes like import pass fee, export pass fee, amongst others. In many states where we operate, excise taxes make up a large proportion of the price paid by the consumers for our IMFL products. In Fiscal 2021, 2022 and 2023, and in the nine months ended December 31, 2022 and December 31, 2023, we paid 40,304.10 million, 45,112.68 million, 39,590.51 million, 30,133.35 million and 33,508.68 million in excise duty, which amounted to 63.18%, 62.68%, 55.72%, 55.92%, and 56.69% of our revenue from operations in those periods, respectively. Increases in excise and other indirect taxes applicable to our products either on an absolute basis or relative to the levels applicable to other beverages tend to adversely affect our revenue or margins, both by reducing overall consumption and by encouraging consumers to switch to lower-taxed categories of beverages. These increases also adversely affect the affordability of our products and our ability to raise prices.

Governmental regulations

Government regulations and policies in the states where we operate and in the countries to which we export can affect the demand for our products. Governmental restrictions on alcohol consumption in India and in particular the states in which we operate vary. The most relevant restrictions are:

• National and state alcohol policy reviews and the implementation of policies aimed at preventing the harmful effects of alcohol misuse (including, among others, relating to underage drinking, drunk driving, drinking while pregnant and excessive or abusive drinking);

• Restrictions on the sale of alcohol generally, including restrictions on distribution networks, restrictions on certain retail venues, requirements that retail stores hold special licenses for the sale of alcohol, restrictions on times or days of sale, minimum alcohol unit pricing requirements and variation in legal drinking age laws. For instance, Gujarat has banned its citizens from consuming liquor since 1961. However, outsiders with special licenses can still purchase. On the other hand, Bihar has prohibited alcohol consumption entirely. (Source: Technopak Report);

• The marketing of alcoholic beverages is highly regulated in India. The advertising restrictions for the alcohol industry in India affect, among other things, the media channels employed, the content of advertising campaigns for our products and the times and places where our products can be advertised. These restrictions and limitations relate to television, print and multimedia advertising of alcoholic beverages. These restrictions are on account of public concern over issues relating to alcohol abuse, health consequences, underage drinking and driving while under the influence of alcohol. Any additional restrictions, or the introduction of similar or more stringent restrictions, may constrain our brand building potential and thus reduce the value of our brands and related revenues. For further information, see “Key Regulations and Policies on page 267;

• Restrictions imposed by antitrust or competition laws or general consumer protection laws;

• Food safety standards;

• Heightened environmental regulations and standards, including regulations addressing emissions of gas

and liquid effluents and the disposal of waste and one-way packaging, compliance with which imposes costs; and

• Litigation associated with any of the above.

These tax regimes and regulations and policies to which we are subject could change at any time, with little or no warning or time for us to prepare. Our ability to comply with these regulations adequately and effectively will differ on a case by case basis, and such changes could have an adverse impact on our results of operations and financial condition.

Ability to maintain brand image and cater to consumer preferences

Over the years, we have introduced contemporary brands that appeal to consumer tastes and preferences. The results of our operations are substantially affected by our ability to build on our brands by relaunching or reinvigorating our existing brands in current markets, launching our brands in new markets and introducing brand extensions and packaging alternatives for our existing brands, as well as our ability to both acquire and develop innovative products to respond to changing consumer preferences. Strong, well-recognized brands that attract and retain consumers, for which consumers are willing to pay a premium, are critical to our efforts to maintain and increase market share and benefit from high margins. We have strategically undertaken brand-building initiatives through prudent use of resources and sustained investments to increase awareness and recall. Our consumer centric approach in building brands has enabled us to achieve high sales volumes. Our brands have been positioned basis relevant consumer insights. Over the last three Fiscals, we have undertaken several campaigns, including our “Jo Smooth Vahi Officer” campaign that was aimed at appealing to consumers. However, consumer preferences may shift due to a variety of factors, including changes in demographics, changes in social trends, such as consumer health concerns, product attributes and ingredients, changes in travel, vacation or leisure activity patterns, weather or negative publicity resulting from regulatory action or litigation.

Key raw ingredients prices and packaging material costs

Our key raw ingredients include grain, extra neutral alcohol, malt spirit, and scotch. We use certain materials for packaging, which includes glass bottles, plastic and aluminium caps, as well as cardboard containers (master and mono). Leading companies in India are nowadays largely using ENA produced from grain in their IMFL products. (Source: Technopak Report) ENA, the main raw material that we use is subject to price volatility and unavailability caused by external conditions such as availability of grain and government interventions like allocation for fuel blending, commodity price fluctuations within India and globally, weather conditions, supply and demand dynamics, logistics and processing costs, our bargaining power with the suppliers, inflation and governmental regulations and policies. Climatic conditions such as unseasonal rain, changing monsoon conditions and the drastic and sudden peaks of temperatures within the same season that have characterized the last few years in India, can significantly damage harvests and affect the cultivation of grain. As a result of these changes in climate, there is a risk that we may not be able to obtain adequate supply of grain required to manufacture ENA for our business operations.

We presently procure our raw materials from select manufacturers and distillers through a process of empanelment which involves conducting technical due diligence of the facility, process monitoring over a period of time and consistency of the quality of final product. We also do physical evaluation of products through our technical representative at the time of sourcing. Our procurement is based on our requirements on an on-going basis, through purchase orders, letters of intent and transport contracts at an “as needed" basis.

The cost of materials consumed in Fiscal 2021, 2022 and 2023, and in the nine months ended December 31, 2022 and December 31, 2023 was 13,904.44 million, 16,349.72 million, 19,956.87 million, 15,334.50 million and 16,363.29 million, and accounted for 22.48%, 23.35%, 28.84%, 29.19% and 28.56% of our total expenses (excluding finance cost and depreciation/ amortisation), respectively. We have significant exposure to fluctuations in the prices of raw materials, packaging materials, energy and transport services, each of which may significantly impact our cost of sales or distribution expenses. Increased costs or distribution expenses will reduce our profit margins if we are unable to recover these additional costs from our customers through enhanced selling prices. Any changes or significant increases in prices of raw ingredients or packaging material will, along with our inability to pass such cost increases on to our consumers by increasing our selling prices, will affect our results of operations.

Distribution network andfootprint

We have access to a pan-India multi-channel distribution network and are one of only four spirits companies in India with a pan-India sales and distribution footprint. (Source: Technopak Report) We depend on effective distribution networks to deliver products to consumers. We constantly seek to grow our product reach to underpenetrated geographies, increase the penetration of our products in markets in which we are currently present and widen the portfolio of our products available in those markets by growing our distribution network. Our ability to access an extensive distribution network ensures that we are able to serve consumers across India.

Regulated distribution is one of the tools used by state governments to control the sale of alcoholic beverages. As each state has its own model of distribution, there are multiple modes being used in the country including complete control of distribution network including state run wholesaling and retailing to control over either wholesaling or retailing. However, in some states, distribution is not carried out directly by the state where both wholesaling and retailing is in the hand of private parties. (Source: Technopak Report)

We use different distribution networks across different markets in which we operate, as appropriate, either because of historical market practice or for structural or regulatory reasons. Our multiple route to market capabilities cover all channels and include:

Open Market. We sell our products directly to wholesalers and retailers controlled by private distributors and retailers. This option is prevalent in States such as Maharashtra, Goa and Assam. (Source: Technopak Report)

Part Corporation Market. Part Corporation Markets, have the following types of model: (i) wholesale and distribution is undertaken by state beverage corporations while retail sales is undertaken by private players; and (ii) private retailers lift stock from the warehouses of the state beverage corporations and are invoiced based on the quantities of stock lifted by them. Part Corporation Market route is prevalent in States such as Rajasthan, Karnataka and Madhya Pradesh. (Source: Technopak Report)

Full Corporation Market. In Full Corporation Markets, wholesale and retail sales are controlled by state beverage corporations. Full Corporation Market route is prevalent in States such as Tamil Nadu. (Source: Technopak Report)

The table below sets forth certain details regarding the distribution of our products based on various channels for the periods indicated:

	Fiscal									Nine months ended December			Nine months ended December
	2021			2022			2023				31, 2022			31, 2023
Channel	Volum e (Millio n Cases)	Revenue from contract s* ( million)	Percenta ge of Revenue from contract* * (%)	Volum e (Millio n Cases)	Revenue from contract s* ( million)	Percenta ge of Revenue from contract* * (%)	Volum e (Millio n Cases)	Revenue from contract s* ( million)	Percenta ge of Revenue from contract* * (%)	Volum e (Millio n Cases)	Revenue from contract s* ( million)	Percenta ge of Revenue from contract* * (%)	Volum e (Millio n Cases)	Revenue from contract s* ( million)	Percenta ge of Revenue from contract* * (%)
Open Market	11.15	28,595.9 7	45.40	12.28	32,250.0 2	45.72	14.41	36,795.4 9	52.86	10.91	28,307.3 4	53.68	11.26	30,089.8 3	52.32
Part (Wholesal e) Corporati on Market	13.85	33,884.6 1	53.79	15.33	37,402.1 6	53.03	13.84	26,876.4 8	38.61	10.40	20,066.3 0	38.05	11.02	22,875.5 2	39.77
Full (Wholesal e and Retail) Corporati on Market	0.52	508.75	0.81	0.79	884.10	1.25	3.99	5,937.94	8.53	3.18	4,359.12	8.27	2.31	4,547.63	7.91
Revenue from contracts with customer - Sale of goods (IMFL)	25.52	62,989.3 3	100.00	28.40	70,536.2 8	100.00	32.24	69,609.9 1	100.00	24.49	52,732.7 6	100.00	24.59	57,512.9 8	100.00

*Revenue from contracts refers to revenue from contracts with customer - Sale of goods (IMFL)

** Percentage of revenue refers to contracts with customer means percentage of revenue from contracts with customer - Sale of goods (IMFL) *Revenue from contracts refers to revenue from contracts with customer - Sale of goods (IMFL)

* * Percentage of revenue refers to contracts with customer means percentage of revenue from contracts with customer - Sale of goods (IMFL)

Market potential of our products

IMFL is the largest segment of Indian alco-beverage market both in volume and value terms. IMFL segment recorded sales of 395 million cases in Fiscal 2023. IMFL market has recovered and grown to 395 million cases in Fiscal 2023 as compared to pre-COVID levels of 355 million cases in 2020. IMFL sales volume is projected to reach 520 million cases by Fiscal 2028. IMFL sales by value is estimated at 2,206,620 million in Fiscal 2023. Further, the IMFL sales value is projected to reach 3,371.89 billion by Fiscal 2028. During the period between Fiscal 2023 and Fiscal 2028, IMFL sales value is expected to grow at a CAGR of 9% and sales volume is expected to grow at a CAGR of 5.7%, respectively. (Source: TechnopakReport)

Flavoured local alcoholic beverages, popularly known as country liquor or Indian made Indian liquor was close to one third of the alcoholic beverage market by volume in Fiscal 2023. Country liquor market was estimated at 350 million cases in Fiscal 2023. However, market is projected to be range bound 445 million cases by Fiscal 2028. We believe we can address the requirements of large segments of audiences that currently consume country liquor or economy brands and are looking to upgrade. Our flagship brand, Officers Choice Whisky is the market leader in the mass premium segment with a market share of 20.9% in terms of annual sales volumes in Fiscal 2023. (Source: Technopak Report) We believe there exists significant market potential for our whisky products. Our market leading position in this segment augurs well for our growth and we expect to benefit from the potential growth in the mass premium segment going forward.

NON-GAAP MEASURES

Earnings before Interest, Taxes, Depreciation and Amortization Expenses (“EBITDA”)/ EBITDA Margin/Gross Margin

EBITDA, EBITDA Margin and Gross Margin presented in this Red Herring Prospectus is a supplemental measure of our performance and liquidity that is not required by, or presented in accordance with, Ind AS, Indian GAAP, IFRS or US GAAP. Further, EBITDA, EBITDA Margin and Gross Margin is not a measurement of our financial performance or liquidity under Ind AS, Indian GAAP, IFRS or US GAAP and should not be considered in isolation or construed as an alternative to cash flows, profit/ (loss) for the years/ period or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS, Indian GAAP, IFRS or US GAAP. In addition, EBITDA, EBITDA Margin and Gross Margin is not a standardised term; hence a direct comparison of EBITDA, EBITDA Margin and Gross Margin between companies may not be possible. Other companies may calculate EBITDA, EBITDA Margin and Gross Margin differently from us, limiting its usefulness as a comparative measure. Although EBITDA, EBITDA Margin and Gross Margin is not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that it is useful to an investor in evaluating us because it is a widely used measure to evaluate a companys operating performance.

Reconciliation of EBITDA and EBITDA Margin to Profit Before Tax

The table below reconciles profit before tax to EBITDA. EBITDA is calculated as profit/loss for the year/ period, plus finance costs, depreciation and amortization expenses, less other income, while EBITDA Margin is the percentage of EBITDA divided by Net Revenue from Operations.

Particulars	Fiscal			Nine months ended December 31, 2022	Nine months ended December 31, 2023
	2021	2022	2023
			( million)
Profit before tax	127.45	38.22	59.46	61.02	141.95
Adjustments:
Add: Finance Costs	1,415.10	1,450.93	1,349.72	982.97	1,279.32
Add: Depreciation and Amortization expenses	587.41	586.36	551.43	414.10	390.88
Add: Exceptional Items	-	-	-	-	49.86
Earnings before interest, taxes, depreciation and amortization expenses (EBITDA) (A)	2,129.96	2,075.51	1,960.61	1,458.09	1,862.01
Revenue from operations (B)	63,787.76	71,969.20	71,056.80	53,890.41	59,111.44
Particulars	Fiscal			Nine months ended December 31, 2022	Nine months ended December 31, 2023
	2021	2022	2023
			( million)
Excise Duty (C)	40,304.10	45,112.68	39,590.51	30,133.35	33,508.68
Net Revenue from Operations (Revenue from Operations less excise duty) (D)	23,483.67	26,856.52	31,466.29	23,757.06	25,602.76
EBITDA Margin (EBITDA as a percentage of Net Revenue from Operations)(%) (A/D)	9.07%	7.73%	6.23%	6.14%	7.27%

Reconciliation of Gross Margin

Gross Margin is calculated as gross profit divided by net revenue from operations (i.e., revenue from operations less excise duty).

Particulars		Fiscal		Nine months	Nine months
	2021	2022	2023	ended December 31, 2022	ended December 31, 2023
		( mi	Ilion, except stated	otherwise)
Revenue from Operations	63,787.76	71,969.20	71,056.80	53,890.41	59,111.44
Adjustments (A)
Less: Excise Duty (B)	40,304.10	45,112.68	39,590.51	30,133.55	33,508.68
Net Revenue from Operations (Revenue from Operations less excise duty) (C=A-B)	23,483.67	26,856.52	31,466.29	23,757.06	25,602.76
Adjustments
Less: Cost of materials consumed (D)	13,904.44	16,349.72	19,956.87	15,334.50	16,363.29
Less: Purchase of stock-intrade (E)	37.30	48.56	56.27	42.63	42.55
Less: Changes in inventories of finished goods, stock-intrade and work-in-progress (F)	268.77	(111.28)	(272.70)	(512.55)	(108.24)
Gross Profit (G=C-D-E-F)	9,273.15	10,569.52	11,725.85	8,892.48	9,305.16
Gross Margin (%) (H=G/C)	39.49%	39.36%	37.26%	37.43%	36.34%

MATERIAL ACCOUNTING POLICIES Principles of consolidation and equity accounting

Subsidiaries

Subsidiaries are all entities over which we have control. We control an entity when we are exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to us. They are deconsolidated from the date that control ceases.

We combine the financial statements of our Company and our subsidiaries line by line, adding together like items of assets, liabilities, income and expenses. Inter-Company transactions, balances and unrealised gains on transactions between us are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company. Non-controlling interests, if any in the results and equity of subsidiaries are shown separately in the restated Consolidated Statement of Profit and Loss, restated Consolidated Statement of Changes in Equity and restated Consolidated Balance Sheet respectively.

Business combinations

A common control business combination, involving entities or businesses in which all the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination and where the control is not transitory, is accounted for in accordance with Appendix C to Ind AS 103 ‘Business Combinations.

Other business combinations, involving entities or businesses are accounted for using acquisition method.

Consideration transferred in such business combinations is measured at fair value as on the acquisition date, which comprises the following

• Fair values of the assets transferred

• Liabilities incurred to the former owners of the acquired business

• Equity interests issued by the Company

Goodwill is recognised and is measured as the excess of the sum of the consideration transferred, the amount of any non- controlling interests in the acquiree, and the fair value of the acquirers previously held equity interest in the acquiree, over the net consideration amounts, i.e, identifiable assets acquired and the liabilities assumed.

Revenue Recognition

Revenue is recognized on satisfaction of performance obligation upon transfer of control of promised products or services to customers, at an amount that reflects the consideration expected to be received by the Group in exchange for those products or services.

The Group satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met:

• The customer simultaneously receives and consumes the benefits provided by the Groups performance as the Group performs; or

• The Groups performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or

• The Groups performance does not create an asset with an alternative use to the Group and an entity has an enforceable right to payment for performance completed to date.

For performance obligations where none of the above conditions are met, revenue is recognised at the point in time at which the performance obligation is satisfied.

Revenue from sale of products are recognised by the Group at a point in time on which the performance obligation is satisfied.

Revenue from sale of products

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

Revenue from manufacture and sale ofproducts from tie-up manufacturing arrangements:

The Group has entered into arrangements with Tie-up Manufacturing Units (“TMUs”), where-in TMUs manufacture and sell on behalf of the Group. Under such arrangements, the Group has exposure to significant risks and rewards associated with the sale of products i.e., it has the primary responsibility for providing goods to the customer, has pricing latitude and is also exposed to inventory and credit risks. Accordingly, the transactions of the TMUs under such arrangements have been recorded as gross revenue, excise duty and expenses as if they were transactions of the Group. The Group also presents inventory lying with TMUs under such arrangements as its own inventory. The net receivables from/payable to TMUs are recognised under other financial assets/other financial liabilities as due from tie up units or due to tie up units respectively.

Interest

Interest income for all debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of the financial asset. When calculating the effective interest rate,

the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.

Foreign Currency Transactions

The functional currency of the Company and its subsidiaries is Indian rupee.

Transactions in foreign currency are recorded at exchange rate prevailing on the date of transaction. Foreign currency denominated monetary assets and liabilities are translated at the exchange rate prevailing on the Balance sheet date and exchange gain or loss arising on their settlement and restatement are recognized in the Statement of Profit and Loss. Non-monetary assets and liabilities that are recorded in terms of historical cost are not retranslated.

Income tax

Income tax expense comprises current tax expenses and net change in the deferred tax assets or liabilities during the year. Current and deferred taxes are recognised in the Statement of profit and loss, except when they relate to item that are recognised in other comprehensive income or directly in Equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in Equity respectively.

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

The current income tax charge is calculated on the basis of the tax laws enacted in relation to the reporting period. Deferred income tax is recognised using Balance sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount, except when the deferred income tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of recognition.

Deferred tax asset is recognised to the extent that sufficient taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively 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. The carrying amount of deferred tax assets are reviewed at each reporting date and reduced when it is no longer probable that sufficient taxable profit will be available to allow the full or part of deferred income tax assets to be utilised. At each reporting date, the Group re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

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.

Deferred tax assets include Minimum Alternate Tax (“MAT”) paid in accordance with the tax laws in India which is likely to give future economic benefit in the form of availability of setoff against future income tax liability. Accordingly, MAT is recognised as deferred tax assets in the Balance sheet when the assets can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised.

Leases

As a lessee

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group 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 Group 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, (if any) and adjusted for any re-measurement 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 are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.

The right-of-use assets are also subject to impairment. Refer to the accounting policies note g for impairment of nonfinancial assets.

Lease liabilities

At the commencement date of the lease, the Group 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 Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising 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 Property plant and equipment) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. 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 Groups lease liabilities are included in financial liability.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (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 of laptops, leaselines and office furniture and equipment 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.

Impairment of non-financial assets

The carrying amount of the non-financial assets are reviewed at each Balance Sheet date to confirm if there is any indication of impairment based on internal /external factors. An impairment loss is recognised whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. The recoverable amount of the assets (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. Impairment loss is recognised in the statement of profit and loss. After impairment, depreciation / amortisation is provided on the revised carrying amount of the asset over its remaining useful life.

A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation / amortisation if there were no impairment.

Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes 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, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

Trade receivable

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

Inventories

Raw materials, work-in-progress, finished goods and packing materials are carried at the lower of cost and net realisable value. Damaged, non-moving / obsolete stocks are suitably written down/provided for.

In determining cost of raw materials, packing materials, work-in-progress and finished goods, weighted average cost method is used. Cost of inventory comprises all costs of purchase, non-refundable duties and taxes and all other costs incurred in bringing the inventory to their present location and condition.

Cost of work-in-progress and finished goods includes the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads, excise duty as applicable and other costs incurred in bringing the inventories to their present location and condition.

Investments and financial assets

Classification

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

• those to be measured subsequently at fair value (either through other comprehensive income, or through statement of profit and loss), and

• those measured at amortised cost.

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

For assets measured at fair value, gains and losses will either be recorded in statement of profit and loss or other comprehensive income. For investments in equity instruments, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.

Measurement

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

Measurement of equity instruments

The Group subsequently measures all equity investments at fair value. Changes in the fair value of financial assets at fair value through profit and loss are recognised in the statement of profit and loss.

Impairment of financial assets

The Group assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables only, the Group applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised on initial recognition of the receivables.

De-recognition of financial assets

A financial asset is derecognised only when:

• the Group has transferred the rights to receive cash flows from the financial asset or

• retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

Where the Group has transferred an asset, the Group evaluates whether it has transferred 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 Group 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 Group has not retained control of the financial asset. Where the Group retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.

Offsetting financial instruments

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 Group or the counterparty.

Property plant and equipment (including Capital Work-in-Progress)

Freehold land is carried at historical cost less impairment loss, if any. All other items of property, plant and equipment are stated at historical cost less accumulated depreciation / amortisation, and impairment loss, if any. Historical cost includes expenditure that is attributable to the acquisition/ construction and all other costs (including borrowing related to qualifying assets), that are not refundable and are necessary to bring the asset to its working condition of use as intended.

Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is possible that future economic benefits associated with the item will flow to the Group 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 are charged to statement of profit and loss during the reporting period in which they are incurred.

The cost of property, plant and equipment which are incurred before the date they are ready for their intended use, are disclosed as capital work-in-progress before such date. Gains or losses arising from derecognition of property, plant and equipment 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.

Depreciation /Amortisation:

Depreciation is charged on written down value method as prescribed in Schedule II to the Companies Act, 2013 keeping a residual value of assets at 5% of the original cost, except in case of computers and data processing units where value is estimated at 1% of the original cost. Depreciation is calculated pro-rata from the date of addition/ or upto the date of disposal, as the case may be.

Capital costs in respect of upgradation of leased premises has been amortized over the initial lease period or its useful lives whichever is lower.

On transition to Ind AS, the Group has elected to continue with the carrying value of all of its property, plant and equipment recognised as at April 1, 2017 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

Intangible Assets and amortisation

Intangible assets with a finite useful life are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Cost includes expenditure that is attributable to the acquisition/ development of the intangible assets including cost necessary to bring the asset to its intended use or sale.

Identifiable intangible assets are recognised when it is probable that future economic benefits attributed to the asset will flow to the Group and the cost of the asset can be reliably measured.

Software and related implementation costs are capitalized where it is expected to provide enduring economic benefits and are amortized over a period of 5 years starting from the month of addition.

Manufacturing license is considered as an asset with indefinite useful life, since there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity. The acquisition cost of such asset is carried at deemed cost and is tested for impairment annually.

Patent, trademarks and design, and license other than manufacturing license acquisition cost are amortised over a period of 10 years from the month of acquisition Goodwill arising on business combination is carried at deemed

cost and is tested for impairment annually. Digital Content is amortised over a period of 18 months to 24 months from the month of capitalization. Gains or losses arising from derecognition 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.

On transition to Ind AS, the Group has elected to continue with the carrying value of all of its intangible assets recognised as at April 1, 2017 measured as per the previous GAAP and use that carrying value as the deemed cost of the intangible assets.

Borrowings

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

Borrowings are derecognized from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in statement of profit and loss. The gain / loss is recognised in other equity in case of transaction with shareholders.

Borrowing Costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time the assets are substantially ready for their intended use. All other borrowing costs are recognised as an expense in statement of Profit and Loss in the period in which they are incurred.

Provisions, Contingent Liabilities and contingent assets

A provision is recognised when the Group has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions are measured at present value of managements best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pretax rate that reflects the current market assessments of time value of money and the risks specific to the liability. The increase in the provision due to passage of time is recognised as interest expense. The provisions are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group, or a present obligation where outflow of resources is not probable or where outflow is probable but reliable estimate of the amount cannot be made.

Contingent assets are not recognised in the financial statements. However, they are disclosed only when an inflow of economic benefits is probable.

Employee Benefits

Short term employee benefits

All employee benefits which are due within twelve months of rendering the services are classified as short term employee benefits. Benefits such as salaries, wages, compensated absences, etc. and the expected cost of bonus, ex-gratia are recognised in the period in which the employee renders the related service.

Post-employment benefits

Defined Contribution Plans

Groups contribution to the state governed provident fund scheme, superannuation scheme, Employees State Insurance corporation (ESIC) etc. are recognised during the year in which the related service is rendered.

Gratuity

The Group has computed its liability towards future payments of gratuity to employees, on actuarial valuation basis which is determined based on project unit credit method and the charge for current year is debited to the Statement of Profit and Loss. The present value of the defined benefit obligation, which is unfunded at present, 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 the terms of the related obligation. Actuarial gains and losses arising on the measurement of defined benefit obligation is charged/ credited to other comprehensive income.

Compensated absences

Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end. Accumulated compensated absences, which are expected to be availed or encashed beyond 12 months from the end of the year are treated as other long term employee benefits. Our Companys liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognised in the Statement of Profit and Loss in the year in which they arise.

Termination Benefits

These are recognised as an expense in the statement of profit and loss of the year in which they are incurred, i.e. when employment is terminated or when an employee accepts voluntary redundancy in exchange for these benefits.

Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss (excluding other comprehensive income) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events such as bonus issue, bonus element in a right issue, shares split (sub-division) and reverse share splits (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss (excluding other comprehensive income) for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. Ordinary shares that are issued upon the conversion of a mandatorily convertible instrument are included in the calculation of basic earnings per share from the date the contract is entered into.

Exceptional items

When an item of income or expense within statement of profit and loss from ordinary activity is of such size, nature or incidence that its disclosure is relevant to explain more meaningfully the performance of the Group for the year, the nature and amount of such items is disclosed as exceptional items.

Critical Estimates and Judgements

The preparation of financial statements in conformity with Ind AS requires estimates and assumptions to be made by our management that affects the reported amounts of assets and liabilities and amounts disclosed as contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known.

We believe that these estimates are prudent and reasonable and are based upon the managements best knowledge of current events and actions. Actual results could differ from these estimates and differences between actual results and estimates are recognised in the periods in which the results are known or materialised.

The below provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to originally assessed estimates and assumptions turning out to be different than the actual results.

Examples of such estimates include the useful life of property, plant and equipment, provision for doubtful debts/advances, future obligation in respect of retirement benefit plans, impairment of investments/assets, etc.

Property, plant and equipment and Intangible Assets

Our management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/amortisation to be recorded during any reporting period. The useful lives and residual values as per schedule II to the Companies Act, 2013 or otherwise are based on the Groups historical experience with similar assets and taking into account anticipated technological changes, whichever is more appropriate.

Income Tax

The Group reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to an adjustment to the amounts reported in the restated consolidated financial statements.

Contingencies

Our management has estimated the possible outflow of resources, if any at the end of each annual reporting financial year, if any, in respect of contingencies/claim/litigations against the Group as it is not possible to predict the outcome of pending matters with accuracy.

Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss. The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Groups past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

Impairment of non-financial assets

The carrying amounts of assets are reviewed at each balance sheet date to assess whether there is any indication that an individual asset / group of assets (constituting a cash generating unit) may be impaired. If there is any indication of impairment based on internal / external factors i.e. when the carrying amount of the assets exceed the recoverable amount, an impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed or reduced if there has been a favorable change in the estimate of the recoverable amount. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

Defined benefit obligation

The cost of post-employment benefits is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rate of return on assets, future salary increases and mortality rates. Due to the long term nature of these plans such estimates are subject to significant uncertainty. The assumptions used are disclosed in the notes to the financial statements.

Fair value measurements

Our management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.

CHANGES IN ACCOUNTING POLICIES

There have been no changes in our accounting policies during Fiscal 2021, 2022 and 2023, and the nine months ended December 31, 2022 and December 31, 2023.

PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE

Revenue

Our total revenue comprises: (i) revenue from operations; and (ii) other income.

Revenue from Operations

Revenue from operations comprises: (i) revenue from contracts with customers; and (ii) other operating revenue

Revenue from contracts with customers includes revenues from sale of goods (IMFL) and sale of goods (ENA). We produce ENA that is required for the manufacture of our IMFL products. ENA produced by us that is in excess of our requirements is sold to third parties. In addition, we also generate revenues from the sale of certain byproducts generated as part of our operations such as impure spirit, distillers wet grains with solubles (“DWGS”) and distillers dried grains with solubles (“DDGS”), amongst others.

Other operating revenue includes revenue from royalty arrangements with third parties for production and sale of our IMFL brand and other products such as water and on account of our export entitlements under Remission of Duties and Taxes on Export Products and Merchandise Export from India Scheme. We also generate other operating revenue from scrap and other sales.

Other Income

Other income includes (i) interest income on financial assets measured at amortised cost; (ii) interest on refund of income tax; (iii) profit on sale of investment; (iv) liabilities no longer required written back; (v) profit on sale of property, plant and equipment; (vi) provision no longer required written back; (vii) refund of excess statutory dues paid; (viii) foreign exchange gain (net); and (ix) miscellaneous income.

Expenses

Our expenses comprise (i) cost of materials consumed; (ii) purchases of stock-in-trade; (iii) changes in inventories of finished goods, stock-in-trade and work-in-progress; (iv) excise duty; (v) employee benefits expense; and (vi) other expenses.

Costs of Materials Consumed

Cost of material consumed consists of raw materials and packing materials consumed.

Purchases of Stock-in-Trade

Purchases of stock-in-trade consists of purchase of Indian made foreign liquor.

Changes in Inventories of Finished Goods, Stock-in-Trade and Work-in-Progress

Changes in inventories of finished goods, stock-in-trade and work-in-progress consists of opening stock less closing stock; increase / (decrease) in inventories; and increase in excise duty on finished goods.

Employee Benefits Expense

Employee benefits expense primarily comprises (i) salaries, wages and bonus; (ii) contribution to provident and other funds; and (iii) staff welfare expenses.

As of December 31, 2023, we had 3,627 personnel, including professional and contract workers. We believe that an equity component in compensation aligns objectives of an individual with those of the organization.

Other Expenses

Other expenses primarily comprises: (i) power and fuel incurred towards operation of manufacturing facilities; (ii) contract labour charges; (iii) rates and taxes incurred towards label registration fees, licence fees, permit fees, import permit fees, amongst others; (iv) excise levies and escort charges incurred towards hologram charges, government bottling fees for IMFL production, amongst others; (v) bottling charges; (vi) selling and distribution expenses incurred towards freight for IMFL transportation, loading/unloading charges for IMFL, truck detention charges, amongst others; (vii) sales and business promotion incurred towards brand-building television advertisements, website digital promotion expenses, gifts, counter salesmen incentives, bar promotions, visibility, design and artwork, amongst others; and (viii) commission paid to sales promoters or agencies for product promotion, handling our IMFL sales activities.

Finance Costs

Finance costs comprises primarily (i) financial liabilities measured at amortised cost; (ii) interest on delay in payment of statutory dues; (iii) reimbursement to tie-up units for interest on delayed payments; (iv) interest on loan from related party; and (v) interest others.

Depreciation and Amortisation Expenses

Depreciation and amortisation expenses comprises (i) depreciation of property, plant and equipment; (ii) depreciation of right to use assets; and (iii) amortisation of intangible assets.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED DECEMBER 31, 2022 AND DECEMBER 31, 2023

The following table sets forth certain information with respect to our results of operations on a consolidated basis for the nine months ended December 31, 2022 and December 31, 2023:

Particulars	Nine months ended December 31, 2022		Nine months ended December 31, 2023
	( million)	Percentage of Total Income (%)	( million)	Percentage of Total Income (%)
Revenue
Revenue from operations	53,890.41	99.81%	59,111.44	99.94%
Other income	104.13	0.19%	38.34	0.06%
Total Income	53,994.54	100.00%	59,149.78	100.00%
Expenses
Cost of materials consumed	15,334.50	28.40%	16,363.29	27.66%
Purchases of stock-intrade	42.63	0.08%	42.55	0.07%
Changes in inventories of finished goods, stock-in-trade and work-in-progress	(512.55)	(0.95)%	(108.24)	(0.18)%
Excise duty	30,133.35	55.81%	33,508.68	56.65%
Employee benefits expense	1,397.96	2.59%	1,270.45	2.15%
Other expenses	6,140.56	11.37%	6,211.04	10.50%
Total expenses (excluding finance cost and depreciation / amortisation)	52,536.45	97.30%	57,287.77	96.85%
Profit before finance costs, depreciation and amortisation expenses and tax	1,458.09	2.70%	1,862.01	3.15%
Finance Costs	982.97	1.82%	1,279.32	2.16%
Depreciation and amortisation expenses	414.10	0.77%	390.88	0.66%
Profit before exceptional items and tax	61.02	0.11%	191.81	0.32%
Exceptional Items	-	-	49.86	0.08%
Profit before tax	61.02	0.11%	141.95	0.24%
Tax expense/(credit), net
- Current tax	9.37	0.02%	67.96	0.11%
- Deferred tax	22.84	0.04%	32.50	0.05%
- Tax adjustments in respect of earlier years			(0.80)	(0.00)%
Restated Profit after tax	28.81	0.05%	42.29	0.07%

Other comprehensive income

Particulars	Nine months ended December 31, 2022		Nine months ended December 31, 2023
	( million)	Percentage of Total Income (%)	( million)	Percentage of Total Income (%)
Items that will not be reclassified to profit or loss
Remeasurement of the defined benefit plans gain	1.62	0.00%	(14.33)	(0.02)%
Income tax relating to these items	(0.57)	(0.00)%	3.61	0.01%
Other comprehensive income, net of tax	1.05	0.00%	(10.72)	(0.02)%
Total comprehensive income for the period/year	29.86	0.06%	31.57	0.05%

NINE MONTHS ENDED DECEMBER 31, 2023 COMPARED TO THE NINE MONTHS ENDED DECEMBER 31, 2022

Revenue

Total income increased by 9.55% from 53,994.54 million in the nine months ended December 31, 2022 to 59,149.78 million in the nine months ended December 31, 2023, primarily attributable to the following:

Revenue from Operations

Revenue from operations increased by 9.69% from 53,890.41 million in the nine months ended December 31, 2022 to 59,111.44 million in the nine months ended December 31, 2023, and comprises revenue from contracts with customer and other operating revenue. Our Net Revenue from Operations increased by 7.77% from 23,757.06 million in the nine months ended December 31, 2022 to 25,602.76 million in the nine months ended December 31, 2023.

Revenue from contracts with customers

Revenue from contracts with customers includes sale of goods comprising IMFL, ENA and by-products. Revenue from contracts with customer increased by 9.67% from 53,697.29 million in the nine months ended December 31, 2022 to 58,891.07 million in the nine months ended December 31, 2023. Sale of goods (IMFL) increased by 9.07% from 52,732.76 million in the nine months ended December 31, 2022 to 57,512.98 million in the nine months ended December 31, 2023.

Sale of goods (ENA) increased by 76.33% from 459.51 million in the nine months ended December 31, 2022 to 810.25 million in the nine months ended December 31, 2023 on account of higher production and reduced in house consumption of ENA by our Company as compared to previous periods.

Sale of goods (by-products) increased marginally from 505.02 million in the nine months ended December 31, 2022 to 567.84 million in the nine months ended December 31, 2023 on account of consistent production and sales.

Other operating revenue

Other operating revenue consists of royalty, export entitlements and scrap and other sales. Revenues from royalty decreased to 1.91 million in the nine months ended December 31, 2023 from 3.41 million in the nine months ended December 31, 2022. Export entitlements increased by 42.09% from 78.20 million in the nine months ended December 31, 2022 to 111.11 million in the nine months ended December 31, 2023 on account of increase in export sales, which increased export entitlement (duty draw back, GST refund, income from duty scrips purchases and incentives pursuant to the Merchandise Exports from India Scheme).] Scrap and other sales decreased marginally to 107.35 million in the nine months ended December 31, 2023 from 111.51 million in the nine months ended December 31, 2022.

Other Income

Other income decreased substantially to 38.34 million in the nine months ended December 31, 2023 from 104.13 million in the nine months ended December 31, 2022. The decrease was primarily on account of:

• A decrease in provision no longer required written back from 15.21 million in the nine months ended December 31, 2022 to 1.45 million in the nine months ended December 31, 2023 on account of lesser recovery of doubtful debts during the nine months ended December 31, 2023;

• A decrease in liabilities no longer required written back (i.e., provisions that is not paid in the respective period and hence written back) from 16.73 million in the nine months ended December 31, 2022 to 6.29 million in the nine months ended December 31, 2023 on account of liabilities/ claims not created in the previous periods required to be payable by our Company in the nine months ended December 31, 2023; and

• A decrease in recovery on account of loss of goods from 39.56 million in the nine months ended December 31, 2022 to nil in the nine months ended December 31, 2023 on account of proceeds received from insurance claim for fire at Batra Chandigarh Unit.

Expenses

Total expenses (excluding finance cost and depreciation / amortisation) increased by 9.04% from 52,536.45 million in the nine months ended December 31, 2022 to 57,287.77 million in the nine months ended December 31, 2023. This was primarily due to an increase in cost of materials consumed, excise duty and changes in inventories of finished goods, stock-in-trade and work-in-progress which was partially offset by decrease in employee benefit expenses.

Cost of Materials Consumed

Cost of materials consumed increased by 6.71% from 15,334.50 million in the nine months ended December 31, 2022 to 16,363.29 million in the nine months ended December 31, 2023 and the increase is primarily driven by an increase in raw materials consumed by 11.53% from 8,384.31 million in the nine months ended December 31, 2022 to 9,350.73 million in the nine months ended December 31, 2023 and an increase in packing materials consumed increased marginally from 6,950.19 million in the nine months ended December 31, 2022 to 7,012.56 million in the nine months ended December 31, 2023, on account of (i) increase in IMFL and ENA sale which resulted in increased raw material utilization and higher packing material consumption and (ii) increase in raw material and packing material prices.

Purchases of stock-in-trade

Purchases of stock-in-trade consists of purchase of IMFL, which remained consistent from 42.63 million in the nine months ended December 31, 2022 to 42.55 million in the nine months ended December 31, 2023.

Excise Duty

Excise duty increased by 11.20% from 30,133.35 million in the nine months ended December 31, 2022 to 33,508.68 million in the nine months ended December 31, 2023, on account of increase in revenue from contracts with customers - sale of goods comprising IMFL in the nine months ended December 31, 2023.

Employee Benefits Expenses

Employee benefit expenses decreased by 9.12% from 1,397.96 million in the nine months ended December 31, 2022 to 1,270.45 million in the nine months ended December 31, 2023. This was due to a decrease in salaries, wages and bonus by 9.16% from 1,291.81 million in the nine months ended December 31, 2022 to 1,173.45 million in the nine months ended December 31, 2023 on account of reduction in salary of chairman from July 1, 2023; and contribution to provident and other funds by 19.36% from 82.64 million in the nine months ended December 31, 2022 to 66.64 million in the nine months ended December 31, 2023. This was partially offset by an increase in staff welfare expenses by 29.12% from 23.51 million in the nine months ended December 31, 2022 to 30.36 million in the nine months ended December 31, 2023.

Other Expenses

Other expenses increased marginally by 1.15% from 6,140.56 million in the nine months ended December 31, 2022 to 6,211.04 million in the nine months ended December 31, 2023. This was primarily due to an increase in:

• Rent by 26.15% from 57.99 million in the nine months ended December 31, 2022 to 73.16 million in the nine months ended December 31, 2023;

• Contract labour charges by 14.41% from t 529.01 million in the nine months ended December 31, 2022 to t 605.22 million in the nine months ended December 31, 2023;

• Repairs to machinery by 57.62% from t 58.50 million in the nine months ended December 31, 2022 to t 92.21 million in the nine months ended December 31, 2023 on account of an increase in production;

• Rates and taxes from t 351.51 million in the nine months ended December 31, 2022 to t 391.80 million in the nine months ended December 31, 2023;

• Selling and distribution expenses marginally by 2.68% from t 878.75 million in the nine months ended December 31, 2022 to t 902.27 million in the nine months ended December 31, 2023;

• Commission by 29.36% from t 205.29 million in the nine months ended December 31, 2022 to t 265.57 million in the nine months ended December 31, 2023; and

• Provision for doubtful debts from t 23.31 million in the nine months ended December 31, 2022 to t 65.16 million in the nine months ended December 31, 2023.

This increase was partially offset by a decrease in:

• Power and fuel to t 452.92 million in the nine months ended December 31, 2023 from t 574.30 million in the nine months ended December 31, 2022 on account of lower coal price;

• Sales and business promotion to t 942.45 million in the nine months ended December 31, 2023 from t 1,070.14 million in the nine months ended December 31, 2022; and

• Foreign exchange loss - (net) to t (6.90) million in the nine months ended December 31, 2023 from t (48.27) million in the nine months ended December 31, 2022; and

• Excise levies and escort charges from t 957.35 million in the nine months ended December 31, 2022 to t 939.14 million in the nine months ended December 31, 2023 on account of increase in production and IMFL sales;

As such, total expenses (excluding finance cost and depreciation / amortisation) amounted to t 57,287.77 million in the nine months ended December 31, 2023 as compared to t 52,536.45 million in the nine months ended December 31, 2022. Profit before finance costs, depreciation and amortisation expenses and tax amounted to t 1,862.01 million in the nine months ended December 31, 2023 as compared to t 1,458.09 million in the nine months ended December 31, 2022.

Finance Costs

Finance costs increased by 30.15% from t 982.97 million in the nine months ended December 31, 2022 to t

I, 279.32 million in the nine months ended December 31, 2023. This increase is primarily attributable due to an increase in financial liabilities measured at amortised cost (on working capital facility from bank) from t 466.48 million in the nine months ended December 31, 2022 to t 618.88 million in the nine months ended December 31, 2023; interest on delay in payment of statutory dues by 33.09% from t 234.14 million in the nine months ended December 31, 2022 to t 311.61 million in the nine months ended December 31, 2023 on account of delayed collections from corporation markets resulting in delayed payment of interest bearing statutory dues; reimbursement to tie-up units for interest on delayed payments from t 39.68 million in the nine months ended December 31, 2022 to t 83.88 million in the nine months ended December 31, 2023; and interest others from t 16.51 million in the nine months ended December 31, 2022 to t 43.91 million in the nine months ended December 31, 2023.

This was partially offset by a decrease on financial liabilities measured at amortised cost - on lease liabilities to t

II. 17 million in the nine months ended December 31, 2023 from t 12.81 million in the nine months ended December 31, 2022; and interest on loan from related party to t 2.51 million in the nine months ended December 31, 2023 from t 7.42 million in the nine months ended December 31, 2022.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased marginally by 5.61% from t 414.10 million in the nine months ended December 31, 2022 to t 390.88 million in the nine months ended December 31, 2023, primarily due to a decrease in depreciation of property, plant and equipment by 7.60% from t 358.18 million in the nine months ended December 31, 2022 to t 330.97 million in the nine months ended December 31, 2023. This was partially offset by an increase in depreciation of right to use assets from t 27.12 million in the nine months ended December 31, 2022 to t 29.78 million in the nine months ended December 31, 2023; and amortisation of intangible assets from t 28.80 million in the nine months ended December 31, 2022 to t 30.13 million in the nine months ended December 31, 2023.

Profit before Tax

For the reasons discussed above, profit before tax was 141.95 million in the nine months ended December 31, 2023 and 61.02 million in the nine months ended December 31, 2022.

Tax Expense/(Credit), net

Tax expense/(credit), net increased from 32.21 million in the nine months ended December 31, 2022 to 99.66 million in the nine months ended December 31, 2023. Current tax increased from 9.37 million in the nine months ended December 31, 2022 to 67.96 million in the nine months ended December 31, 2023 n account of increase in profit and unavailability of MAT credit set-off. Deferred tax increased from 22.84 million in the nine months ended December 31, 2022 to 32.50 million in the nine months ended December 31, 2023 as the Company decides to exercise the option of lower tax rate available under Section 115BAA of the Income Tax Act, 1961.

Restated Profit after Tax

For the various reasons discussed above, we recorded a restated profit for the period of 42.29 million in the nine months ended December 31, 2023 compared to 28.81 million in the nine months ended December 31, 2022.

Other Comprehensive Income for the Year, Net of Tax

Other comprehensive income was (10.72) million in the nine months ended December 31, 2023 while other comprehensive income was 1.05 million in the nine months ended December 31, 2022.

Total Comprehensive Income for the year

Total comprehensive income in the nine months ended December 31, 2023 was 31.57 million compared to 29.86 million in the nine months ended December 31, 2022.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and EBITDA Margin

EBITDA was 1,862.01 million in the nine months ended December 31, 2023 compared to 1,458.09 million in the nine months ended December 31, 2022, while EBITDA Margin (EBITDA as a percentage of our Net Revenue from Operations) was 7.27% in the nine months ended December 31, 2023 compared to 6.14% in the nine months ended December 31, 2022. For reconciliation of EBITDA and EBITDA Margin, see Non-GAAP Measures on

page 446.

RESULTS OF OPERATIONS FOR FISCAL 2021, 2022 AND 2023

The following table sets forth certain information with respect to our results of operations on a consolidated basis for Fiscal 2021, 2022 and 2023:

Particulars	Fiscal
	2021	2022	2023
	( million)	Percentage of Total Income (%)	( million)	Percentage of Total Income (%)	( million)	Percentage of Total Income (%)
Revenue
Revenue from operations	63,787.76	99.70%	71,969.20	99.84%	71,056.80	99.84%
Other income	190.36	0.30%	112.45	0.16%	110.69	0.16%
Total Income	63,978.12	100.00%	72,081.65	100.00%	71,167.49	100.00%
Expenses
Cost of materials consumed	13,904.44	21.73%	16,349.72	22.68%	19,956.87	28.04%
Purchases of stock-in-trade	37.30	0.06%	48.56	0.07%	56.27	0.08%
Changes in inventories of finished goods, stock-in-trade	268.77	0.42%	(111.28)	(0.15)%	(272.70)	(0.38)%

 

Particulars	Fiscal
	2021	2022	2023
	( million)	Percentage of Total Income (%)	( million)	Percentage of Total Income (%)	( million)	Percentage of Total Income (%)
and work-inprogress
Excise duty	40,304.10	63.00%	45,112.68	62.59%	39,590.51	55.63%
Employee benefits expense	1,722.38	2.69%	1,934.70	2.68%	1,856.68	2.61%
Other expenses	5,611.17	8.77%	6,671.76	9.26%	8,019.25	11.27%
Total expenses (excluding finance cost and depreciation / amortisation)	61,848.16	96.67%	70,006.14	97.12%	69,206.88	97.25%
Profit before finance costs, depreciation and amortisation expenses and tax	2,129.96	3.33%	2,075.51	2.88%	1,960.61	2.75%
Finance Costs	1,415.10	2.21%	1,450.93	2.01%	1,349.72	1.90%
Depreciation and amortisation expenses	587.41	0.92%	586.36	0.81%	551.43	0.77%
Profit before tax	127.45	0.20%	38.22	0.05%	59.46	0.08%
Tax expense/(credit), net
- Current tax	45.51	0.07%	13.38	0.02%	12.38	0.02%
- Deferred tax	68.76	0.11%	28.07	0.04%	31.49	0.04%
- Tax adjustments in respect of earlier years	(11.90)	(0.02)%	(17.99)	(0.02)%	(0.42)	(0.00)%
Restated Profit after tax	25.08	0.04%	14.76	0.02%	16.01	0.02%

Other comprehensive income

Items that will not be reclassified to profit or loss

Remeasurement of the defined benefit plans (loss)/gain	(5.31)	(0.01)%	8.57	0.01%	6.16	0.01%
Income tax relating to these items	1.86	0.00%	(2.99)	(0.00)%	(2.16)	0.00%
Other comprehensive income , net of tax	(3.45)	(0.01)%	5.58	0.01%	4.00	0.01%
Total comprehensive income for the period/year	21.63	0.03%	20.34	0.03%	20.01	0.03%

FISCAL 2023 COMPARED TO FISCAL 2022

Key Developments

• We launched five additional whisky brands, ICONiQ White Finest International Grain Whisky (launched in September 2022), X&O Barrel Premium World Grain Whisky (launched in November 2022), Srishti Premium blended Whisky (launched in October 2022), Sterling Reserve BX Hippy Deluxe Blended Whisky (launched in September 2022) and Sterling Reserve B7 Whisky Cola Classic Mix (launched in September 2022).

Revenue

Total income decreased to 71,167.49 million in Fiscal 2023 from 72,081.65 million in Fiscal 2022, primarily attributable to the following:

Revenue from Operations

Revenue from operations decreased to 71,056.80 million in Fiscal 2023 from 71,969.20 million in Fiscal 2022, and comprises revenue from contracts with customer and other operating revenue. Our Net Revenue from Operations increased from 26,856.52 million in Fiscal 2022 to 31,466.29 million in Fiscal 2023.

Revenue from contracts with customers

Revenue from contracts with customers includes sale of goods comprising IMFL, ENA and by-products. Revenue from contracts with customers decreased to 70,789.96 million in Fiscal 2023 from 71,698.76 million in Fiscal 2022 on account of decrease in excise duty rate in West Bengal. Sale of goods (IMFL) decreased to 69,609.91 million in Fiscal 2023 from 70,536.28 million in Fiscal 2022.

Sale of goods (ENA) increased from 413.39 million in Fiscal 2022 to 528.40 million in Fiscal 2023 on account of increase in demand of ENA and higher realisation.

Sale of goods (by-products) decreased by (13.01)% to 651.65 million in Fiscal 2023 from 749.09 million in Fiscal 2022 on account of decrease in market prices.

Other operating revenue

Other operating revenue consists of royalty, export entitlements and scrap sales. Revenues from royalty remained consistent at 4.40 million in Fiscal 2023 compared to 4.35 million in Fiscal 2022. Export entitlements decreased by (13.84)% to 118.07 million in Fiscal 2023 from 137.04 million in Fiscal 2022 on account of reduction in export business primarily in Haiti due to civil unrest, which decreased export entitlement (duty draw back, GST refund and incentives pursuant to the Merchandise Exports from India Scheme).Scrap and other sales increased by 11.87% from 129.05 million in Fiscal 2022 to 144.37 million in Fiscal 2023, on account of increase in production of IMFL and scrap generated.

Other Income

Other income decreased to 110.69 million in Fiscal 2023 from 112.45 million in Fiscal 2022. The decrease was on account of:

• A marginal decrease in interest income on financial assets measured at amortised cost - interest on deposits with bank to 20.88 million in Fiscal 2023 from 21.43 million in Fiscal 2022;

• A decrease in profit on sale of property, plant and equipment to nil in Fiscal 2023 compared to 8.02 million in Fiscal 2022;

• A decrease in refund of excess statutory dues paid to 0.93 million in Fiscal 2023 compared to 16.83 million;

• A decrease in foreign exchange gain - (net) to nil in Fiscal 2023 from 18.73 million in Fiscal 2022; and

• A marginal decrease in miscellaneous income to 21.11 million in Fiscal 2023 from 24.06 million in Fiscal 2022.

This was partially offset by an increase in recovery on account of loss of goods, from nil in Fiscal 2022 to 39.56 million in Fiscal 2023 on account of a fire incident at one of our exclusive tie-up unit located in Chandigarh resulted into damages to our inventory and insurance claim received for such loss of inventory.

Expenses

Total expenses (excluding finance cost and depreciation / amortisation) decreased marginally by (1.14%) to t 69,206.88 million in Fiscal 2023 compared to t 70,006.14 million in Fiscal 2022. This was primarily due to a decrease in changes in inventories of finished goods, stock-in-trade and work-in-progress, excise duty, and employee benefit expenses, partially offset by an increase in cost of materials consumed, purchase of stock-intrade and other expenses.

Cost of Materials Consumed

Cost of materials consumed increased by 22.06% from t 16,349.72 million in Fiscal 2022 to t 19,956.87 million in Fiscal 2023 and the increase is primarily driven by an increase in raw materials consumed by 29.13% from t 8,644.10 million in Fiscal 2022 to t 11,162.22 million in Fiscal 2023 and an increase in packing material consumed by 14.13% from t 7,705.62 million in Fiscal 2022 to t 8,794.65 million in Fiscal 2023, on account of (i) increase IMFL and ENA sale which resulted in increased raw material utilization and higher packing material consumption and (ii) due to increase in raw material and packing material prices.

Purchases of stock-in-trade

Purchases of stock-in-trade consists of purchase of IMFL, which increased by 15.87% from t 48.56 million in Fiscal 2022 to t 56.27 million in Fiscal 2023, on account of increase in wine shop sale of the company.

Excise Duty

Excise duty decreased by (12.24)% to t 39,590.51 million in Fiscal 2023 from t 45,112.68 million in Fiscal 2022, on account of decrease in excise duty rate in West Bengal

Employee Benefits Expenses

Employee benefit expenses decreased marginally by (4.03)% to t 1,856.68 million in Fiscal 2023 from t 1,934.70 million in Fiscal 2022. This was due mainly to a decrease in salaries, wages and bonus by (5.12)% to t 1,713.39 million in Fiscal 2023 from t 1,805.92 million in Fiscal 2022 on account of resignation of two directors in March 2022.

This was partially offset by an increase in contribution to provident and other funds from t 104.89 million in Fiscal 2022 to t 110.69 million in Fiscal 2023 and staff welfare expenses from t 23.89 million in Fiscal 2022 to from t 32.60 million in Fiscal 2023.

Other Expenses

Other expenses increased by 20.20%, from t 6,671.76 million in Fiscal 2022 to t 8,019.25 million in Fiscal 2023. This was primarily due to an increase in:

• Power and fuel by 29.52% from t 567.82 million in Fiscal 2022 to t 735.43 million in Fiscal 2023 on account of increase in IMFL and ENA sale which resulted in increased operations and hence higher consumption of power and fuel and significant increase in the price of coal;

• Rent by 28.06% from t 62.01 million in Fiscal 2022 to t 79.41 million in Fiscal 2023 on account of increase in rent of lease unit and for some additional warehouses;

• Contract labour charges marginally from t 626.94 million in Fiscal 2022 to t 695.25 million in Fiscal 2023 on account of an increase in production and increase in minimum wages

• Insurance by 11.41% from t 67.47 million in Fiscal 2022 to t 75.17 million in Fiscal 2023;

• Rates and taxes by 12.46% from t 433.54 million in Fiscal 2022 to t 487.55 million in Fiscal 2023 on account of increase in sale

• Excise levies and escort charges by 24.53% from t 996.99 million in Fiscal 2022 to t 1,241.55 million in Fiscal 2023 on account of increase of IMFL sales;

• Bottling charges by 52.89% from t 450.79 million in Fiscal 2022 to t 689.21 million in Fiscal 2023 on account of increase of IMFL sales ;

• Selling and distribution expenses by 15.04% from t 1,001.78 million in Fiscal 2022 to t 1,152.49 million in Fiscal 2023 on account of increase of IMFL sales ;

• Sales and business promotion by 38.94% from t 938.56 million in Fiscal 2022 to t 1,304.02 million in Fiscal 2023 on account of an increase in business promotion and campaigns primarily for the launch of new whisky brands; and

• Foreign exchange loss - (net) amounted to t (36.97) million in Fiscal 2023 compared to t nil in Fiscal 2022.

This was partially offset primarily by a decrease in repairs to machinery by (6.46)% from t 84.47 million in Fiscal

2022 to t 79.01 million in Fiscal 2023; a marginal decrease in repairs others from t 138.39 million in Fiscal 2022 to t 129.11 million in Fiscal 2023; a marginal decrease in commission from t 299.18 million in Fiscal 2022 to t 289.09 million in Fiscal 2023 on account of changes of route to Market in Delhi of IMFL sales.

As such, total expenses (excluding finance cost and depreciation / amortisation) amounted to t 69,206.88 million in Fiscal 2023 as compared to t 70,006.14 million in Fiscal 2022. Profit before finance costs, depreciation and amortisation expenses and tax amounted to t 1,960.61 million in Fiscal 2023 as compared to t 2,075.51 million in Fiscal 2022 primarily on account of increase in costs of material consumed, and other expenses.

Finance Costs

Finance costs decreased by (6.98)% to t 1,349.72 million in Fiscal 2023 from t 1,450.93 million in Fiscal 2022. This decrease is primarily attributable to a decrease in finance costs on financial liabilities measured at amortised cost (a) term loans to t 268.07 million in Fiscal 2023 from t 326.37 million in Fiscal 2022; and (ii) on working capital facility from bank to t 737.54 million in Fiscal 2022 from t 650.64 million in Fiscal 2023, on account of reduction in borrowings. In addition, interest on loan from related parties decreased to t 8.92 million in Fiscal

2023 from t 22.20 million in Fiscal 2022 on account of repayment of loans from related party.

This was partially offset by an increase in interest on delay in payment of statutory dues by 56.79% from t 212.58 million in Fiscal 2022 to t 333.30 million in Fiscal 2023 on account of delayed collections from corporation markets resulting in delayed payment of interest bearing statutory dues.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased marginally to t 551.43 million in Fiscal 2023 from t 586.36 million in Fiscal 2022, primarily due to a decrease in depreciation of property, plant and equipment to t 472.81 million in Fiscal 2023 from t 526.62 million in Fiscal 2022 and right to use assets to t 38.37 million in Fiscal 2023 from t 40.55 million in Fiscal 2022. This was partially offset by an increase in amortisation of intangible assets by from t 19.19 million in Fiscal 2022 to t 40.25 million in Fiscal 2023 on account of addition of certain intangible assets.

Profit before Tax

For the reasons discussed above, profit before tax was t 59.46 million in Fiscal 2023 and t 38.22 million in Fiscal 2022.

Net Tax Expense/(Credit)

Tax expense/(credit), net increased from t 23.46 million in Fiscal 2022 to t 43.45 million in Fiscal 2023. Deferred tax increased marginally from t 28.07 million in Fiscal 2022 to t 31.49 million in Fiscal 2023 on account of recognition of deferred tax liability on property, plant and equipment, goodwill and other intangible assets. This was partially offset by tax adjustments in respect of earlier years, which decreased to t (0.42) million in Fiscal 2023 from t (17.99) million in Fiscal 2022 on account of revision in computation of taxable income for fiscal 2022 and current tax decreased marginally to t 12.38 million in Fiscal 2023 from t 13.38 million in Fiscal 2022 on account of increase in taxable income.

Restated Profit after Tax

For the various reasons discussed above, we recorded a restated profit for the year of t 16.01 million in Fiscal 2023 compared to t 14.76 million in Fiscal 2022.

Other Comprehensive Income for the Year, Net of Tax

Other comprehensive income, net of tax was t 4.00 million in Fiscal 2023 while other comprehensive income was t 5.58 million in Fiscal 2022.

Total Comprehensive Income for the year, net of tax

Total comprehensive income for the year was t 20.01 million in Fiscal 2023 compared to t 20.34 million in Fiscal 2022.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and EBITDA Margin

EBITDA was 1,960.61 million in Fiscal 2023 compared to 2,075.51 million in Fiscal 2022, while EBITDA Margin (EBITDA as a percentage of our Net Revenue from Operations) was 6.23% in Fiscal 2023 compared to 7.73% in Fiscal 2022. For reconciliation of EBITDA and EBITDA Margin, see Non-GAAP Measures on page

FISCAL 2022 COMPARED TO FISCAL 2021 Revenue

Total income increased by 12.67% from 63,978.12 million in Fiscal 2021 to 72,081.65 million in Fiscal 2022, primarily attributable to the following:

Revenue from Operations

Revenue from operations increased by 12.83% from 63,787.76 million in Fiscal 2021 to 71,969.20 million in Fiscal 2022, and comprises revenue from contracts with customer and other operating revenue. Our Net Revenue from Operations increased by 14.36% from 23,483.67 million in Fiscal 2021 to 26,856.52 million in Fiscal 2022.

Revenue from contracts with customers

Revenue from contracts with customers includes sale of goods comprising IMFL, ENA and by-products. Revenue from contracts with customers increased by 12.76% from 63,586.61 million in Fiscal 2021 to 71,698.76 million in Fiscal 2022 on account of increase in sales volume of our products. Sale of goods (IMFL) increased by 11.98% from 62,989.33 million in Fiscal 2021 to 70,536.28 million in Fiscal 2022.

Sale of goods (ENA) also increased from 294.89 million in Fiscal 2021 to 413.39 million in Fiscal 2022 on account of increase in demand of ENA.

Sale of goods (by-products) increased by 147.73% from 302.39 million in Fiscal 2021 to 749.09 million in Fiscal 2022 on account of increase in production and sale of ENA during Fiscal 2022.

Other operating revenue

Other operating revenue consists of royalty, export entitlements and scrap sales. Revenues from royalty decreased by (27.65%) from 6.02 million in Fiscal 2021 to 4.35 million in Fiscal 2022 on account of cancellation of certain royalty arrangements. Export entitlements increased by 31.80% from 103.98 million in Fiscal 2021 to 137.04 million in Fiscal 2022 on account of export business improving in Fiscal 2022 compared with Fiscal 2021, which increased export entitlement (duty draw back, GST refund and incentives pursuant to the Merchandise Exports from India Scheme). Scrap and other sales increased from 91.15 million in Fiscal 2021 to 129.05 million in Fiscal 2022, on account of increase in production of IMFL and scrap generated.

Other Income

Other income decreased by (40.93%) from 190.36 million in Fiscal 2021 to 112.45 million in Fiscal 2022.

The decrease was on account of:

• A decrease in interest income on financial assets measured at amortised cost (interest on deposits with bank) by (18.59%) from 26.33 million in Fiscal 2021 to 21.43 million in Fiscal 2022 on account of decrease in fixed deposits placed as lien with statutory authorities;

• A decrease in refund of excess statutory dues paid, by (64.16%) from 46.97 million in Fiscal 2021 to 16.83 million in Fiscal 2022 on account of lesser refund of statutory dues;

• A decrease in liabilities no longer required written back, by (86.78%) from 60.61 million in Fiscal 2021 to 8.01 million in Fiscal 2022 on account of higher liabilities/ claims created in the previous reporting periods not payable by our company in Fiscal 2021; and

• A decrease in provision no longer required written back, by (56.92%) from 24.53 million in Fiscal 2021 to 10.57 million in Fiscal 2022 on account of lesser recovery of doubtful debts.

This was partially offset by an increase in foreign exchange gain (net), from nil in Fiscal 2021 to 18.73 million in Fiscal 2022 on account of foreign exchange loss reported under other expenses in Fiscal 2022.

Expenses

Total expenses (excluding finance cost and depreciation / amortisation) increased by 13.19% from t 61,848.16 million in Fiscal 2021 to t 70,006.14 million in Fiscal 2022. This was primarily due to an increase in cost of materials consumed, purchases of stock-in-trade, excise duty, employee benefits expense, and other expenses, partially offset by decrease in changes in inventories of finished goods, stock-in-trade and work-in-progress.

Cost of Materials Consumed

Cost of materials consumed increased by 17.59% from t 13,904.44 million in Fiscal 2021 to t 16,349.72 million in Fiscal 2022 and the increase is primarily driven by an increase in raw materials consumed by 37.25% from t 6,297.87 million in Fiscal 2021 to t 8,644.10 million in Fiscal 2022 and an increase in packing material consumed marginally by 1.30% from t 7,606.57 million in Fiscal 2021 to t 7,705.62 million in Fiscal 2022, on account of (i) increase IMFL and ENA sale which resulted in increased raw material utilization and higher packing material consumption and (ii) due to increase in raw material and packing material prices.

Purchases of stock-in-trade

Purchases of stock-in-trade consists of purchase of IMFL, which increased by 30.19% from t 37.30 million in Fiscal 2021 to t 48.56 million in Fiscal 2022, on account of increase IMFL sales which resulted in higher purchases of stock-in-trade.

Excise Duty

Excise duty increased by 11.93% from t 40,304.10 million in Fiscal 2021 to t 45,112.68 million in Fiscal 2022, on account of an increase in the IMFL sales.

Employee Benefits Expenses

Employee benefit expenses increased marginally by 12.33% from t 1,722.38 million in Fiscal 2021 to t 1,934.70 million in Fiscal 2022. This was due mainly to an increase in salaries, wages and bonus by 12.77% from t 1,601.48 million in Fiscal 2021 to t 1,805.92 million in Fiscal 2022 on account of an increase in the salaries and wages payable to employees of our Company.

Other Expenses

Other expenses increased by 18.90%, from t 5,611.17 million in Fiscal 2021 to t 6,671.76 million in Fiscal 2022. This was primarily due to an increase in:

• Power and fuel by 115.35% from t 263.67 million in Fiscal 2021 to t 567.82 million in Fiscal 2022 on account of increase in IMFL and ENA sale which resulted in increased operations and hence higher consumption of power and fuel and significant increase in the price of coal;

• Contract labour charges by 13.19% from t 553.88 million in Fiscal 2021 to t 626.94 million in Fiscal 2022 on account of an increase in production and sales;

• Repairs to machinery by 51.52% from t 55.75 million in Fiscal 2021 to t 84.47 million in Fiscal 2022 on account of an increase in production and sales;

• Repairs (others) by 96.98% from t 70.26 million in Fiscal 2021 to t 138.39 million in Fiscal 2022 on account of major repairs in our distillery located in Rangapur;

• Insurance by 35.11% from t 49.94 million in Fiscal 2021 to t 67.47 million in Fiscal 2022;

• Excise levies and escort charges by 8.97% from t 914.94 million in Fiscal 2021 to t 996.99 million in Fiscal 2022 on account of an increase in production and sales;

• Bottling charges by 11.55% from t 404.11 million in Fiscal 2021 to t 450.79 million in Fiscal 2022 on account of an increase in production;

• Selling and distribution expenses, by 33.98% from t 747.74 million in Fiscal 2021 to t 1,001.78 million in Fiscal 2022 on account of increase in IMFL sales that resulted in increased selling and distribution expenses and increase in fuel prices leading to increase in transportation costs;

• Sales and business promotion by 3.52% from t 906.63 million in Fiscal 2021 to t 938.56 million in Fiscal 2022 on account of increase in IMFL sales; and

• Commission by 24.13% from t 241.03 million in Fiscal 2021 to t 299.18 million in Fiscal 2022 on account of increase in IMFL sales leading to higher commission expense.

This was partially offset primarily by the decrease in rent by (14.53%) from t 72.55 million in Fiscal 2021 to t 62.01 million in Fiscal 2022 on account of vacating certain premises in North India due to change in route to

market; and a marginal decrease in rates and taxes by (2.43%) from t 444.34 million in Fiscal 2021 to t 433.54 million in Fiscal 2022.

As such, total expenses (excluding finance cost and depreciation / amortisation) amounted to t 70,006.14 million in Fiscal 2022 as compared to t 61,848.16 million in Fiscal 2021. Profit before depreciation, finance costs and tax amounted to t 2,075.51 million in Fiscal 2022 as compared to t 2,129.96 million in Fiscal 2021 on account of increase in costs of material consumed, employee benefit expenses and other expenses.

Finance Cost

Finance costs increased marginally by 2.53% from t 1,415.10 million in Fiscal 2021 to t 1,450.93 million in Fiscal 2022. This increase is primarily attributable to an increase in interest on delay in payment of statutory dues by 128.93% from t 92.86 million in Fiscal 2021 to t 212.58 million in Fiscal 2022 as a result of non-payment of statutory dues on account of delayed collections from corporation markets resulting in delayed payment of interest bearing statutory dues.

This was partially offset by a decrease in financial liabilities measured at amortised cost (on working capital facility from bank) from t 794.39 million in Fiscal 2021 to t 737.54 million in Fiscal 2022 and a decrease in financial liabilities measured at amortised cost (on term loans) from t 337.58 million in Fiscal 2021 to t 326.37 million in Fiscal 2022 on account of repayment of term loans and working capital facilities.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased marginally by (0.18%) from t 587.41 million in Fiscal 2021 to t 586.36 million in Fiscal 2022, primarily due to a decrease in depreciation of right to use assets by (18.07%) from t 49.49 million in Fiscal 2021 to t 40.55 million in Fiscal 2022. This was partially offset by an increase in depreciation of property, plant and equipment, from t 521.70 million in Fiscal 2021 to t 526.62 million in Fiscal 2022 and an increase in amortisation of intangible assets by 18.32% from t 16.22 million in Fiscal 2021 to t 19.19 million in Fiscal 2022 on account of addition of certain intangible assets.

Profit before Tax

For the reasons discussed above, profit before tax was t 38.22 million in Fiscal 2022 and t 127.45 million in Fiscal 2021.

Net Tax Expense/(Credit)

Tax expense/(credit), net decreased by (77.09%) from t 102.37 million in Fiscal 2021 to t 23.46 million in Fiscal 2022. Current tax decreased from t 45.51 million in Fiscal 2021 to t 13.38 million in Fiscal 2022 on account of decrease in our restated profit after tax. Deferred tax decreased by (59.18%) from t 68.76 million in Fiscal 2021 to t 28.07 million in Fiscal 2022 on account of utilisation of MAT credit entitlement. This was partially offset by tax adjustments in respect of earlier years, which increased, by 51.19% from t (11.90) million in Fiscal 2021 to t (17.99) million in Fiscal 2022 on account of adjustment of certain items considered in computation of taxable income while filing income tax returns and completion of assessment of previous periods.

Restated Profit after Tax

For the various reasons discussed above, we recorded a restated profit for the year of t 14.76 million in Fiscal 2022 compared to t 25.08 million in Fiscal 2021.

Other Comprehensive Income for the Year, Net of Tax

Other comprehensive income was t 5.58 million in Fiscal 2022 while other comprehensive income was t (3.45) million in Fiscal 2021.

Total Comprehensive Income for the year, net of tax

Total comprehensive income for the year was t 20.34 million in Fiscal 2022 compared to t 21.63 million in Fiscal 2021.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and EBITDA Margin

EBITDA was t 2,075.51 million in Fiscal 2022 compared to t 2,129.96 million in Fiscal 2021, while EBITDA Margin (EBITDA as a percentage of our Net Revenue from Operations) was 7.73% in Fiscal 2022 compared to

9.07% in Fiscal 2021. For reconciliation of EBITDA and EBITDA Margin, see Non-GAAP Measures" on page

FINANCIAL CONDITION

Total assets of certain subsidiaries increased from t 240.57 million, as of March 31, 2021 to t 1,066.40 million as of March 31, 2022. The increase was primarily on account of our acquisition of two Subsidiaries, ABD Dwellings Private Limited and Madanlal Estates Private Limited in Fiscal 2022. Total assets of certain subsidiaries decreased marginally from t 1,066.40 million, as of March 31, 2022 to t 1,036.37 million as of March 31, 2023. Total assets of certain subsidiaries decreased marginally from t 1,043.02 million as of December 31, 2022 to t 1,024.38 million as of December 31, 2023.

Net cash outflows of certain subsidiaries increased from t 0.03 million in Fiscal 2021 to t 202.32 million in Fiscal 2022. The increase was primarily on account of acquisition of assets by two Subsidiaries, ABD Dwellings Private Limited and Madanlal Estates Private Limited acquired by us in Fiscal 2022. In Fiscal 2023 net cash inflow from certain subsidiaries was t 0.03 million while net cash outflows from certain subsidiaries in Fiscal 2022 was t 202.32 million. Net cash outflows of certain subsidiaries increased from t 0.35 million in the nine months ended December 31, 2022 to t 6.57 million in the nine months ended December 31, 2023.

Financial assets - loans reduced from t 86.34 million, as of March 31, 2021 to t 41.11 million, as of March 31, 2022, primarily on account of repayment of loan given to a Director. Financial assets - loans reduced from t 41.11 million, as of March 31, 2022 to t 0.77 million, as of March 31, 2023, primarily on account of repayment of loan given to a Director. Financial assets - loans increased from t 0.70 million, as of December 31, 2022 to t 1.67 million, as of December 31, 2023, primarily on account of increased in employee loan.

Financial assets - trade receivables increased from t 8,669.29 million, as of March 31, 2021 to t 9,540.31 million, as of March 31, 2022. Financial assets - trade receivables remained consistent from t 9,540.31 million, as of March 31, 2022 to t 9,576.14 million, as of March 31, 2023. Financial assets - trade receivables increased from t 10,459.54 million, as of December 31, 2022 to t 12,698.72 million, as of December 31, 2023.

Financial assets - other financial assets decreased from t 293.00 million, as of March 31, 2021 to t 192.97 million, as of March 31, 2022, primarily on account of decrease in due from tie-up units. Financial assets - other financial assets increased from t 192.97 million, as of March 31, 2022 to t 260.29 million, as of March 31, 2023, primarily on account of increase in due from tie-up units and export entitlement receivables. Financial assets - other financial assets increased from t 228.66 million, as of December 31, 2022 to t 270.66 million, as of December 31, 2023, primarily on account of export entitlements receivables.

Other current liabilities increased from t 2,196.92 million, as of March 31, 2021 to t 2,599.97 million, as of March 31, 2022, primarily on account of increase in statutory dues. Other current liabilities increased from t 2,599.97 million, as of March 31, 2022 to t 4,998.13 million, as of March 31, 2023, primarily on account of increase in statutory dues. Other current liabilities decreased from t 5,184.25 million, as of December 31, 2022 to t 5,096.45 million, as of December 31, 2023, primarily on account of decrease in statutory dues and advance from customer.

LIQUIDITY AND CAPITAL RESOURCES

We have historically financed the expansion of our business and operations primarily through debt financing and funds generated from our operations. From time to time, we have obtained loan facilities to finance our short term working capital requirements.

CASH FLOWS

The following table sets forth certain information relating to our cash flows in the periods indicated:

Particulars	Fiscal			Nine months ended December 31, 2022	Nine months ended December 31, 2023
	2021	2022	2023	2022	2023
	(t million)
Net cash generated from operating activities	2,466.18	1,787.60	2,298.55	1,729.85	1,439.12
Net cash (used in) / generated from investing activities	(593.67)	321.34	(183.94)	(146.75)	(292.31)

 

Particulars	Fiscal
	2021			Nine months ended December 31, 2022	Nine months ended December 31, 2023
	million)			2022	2023
Net cash used in financing activities	(2,160.44)	(2,557.70)	(2,028.50)	(1,540.59)	(1,125.75)
Cash and cash equivalents at the end of the period / year	434.89	196.70	275.45	231.98	296.18

Operating Activities

Nine months ended December 31, 2023

Net cash generated from operating activities was 1,439.12 million. Profit before tax was 141.95 million in the nine months ended December 31, 2023. Primary adjustments consisted of depreciation and amortisation of 390.88 million; finance costs of 1,279.32 million; exceptional items of 49.86 million; and provision for doubtful debts of 65.16 million. Operating profit before working capital changes was 1,925.19 million in the nine months ended December 31, 2023. The main working capital adjustments in the nine months ended December 31, 2023, included decrease in inventories of 396.53 million; increase in trade receivables of 3,178.82 million; increase in financial assets and other assets of 5.48 million; and an increase in liabilities and provisions of 2,344.42 million. Cash generated from operating activities in the nine months ended December 31, 2023 was 1,481.84 million. Direct taxes paid (net) was 42.72 million.

Nine months ended December 31, 2022

Net cash generated from operating activities was 1,729.85 million. Profit before tax was 61.02 million in the nine months ended December 31, 2022. Primary adjustments consisted of depreciation and amortisation of 414.10 million; finance costs of 982.97 million; provision for inventory of 57.58 million; unrealized foreign loss of 42.18 million and provision for doubtful debts of 23.31 million. Operating profit before working capital changes was 1,534.09 million in the nine months ended December 31, 2022. The main working capital adjustments in the nine months ended December 31, 2022, included an increase in inventories of 2,130.44 million; increase in trade receivables of 939.05 million; increase in financial assets and other assets of 483.70 million; and an increase in liabilities and provisions of 3,776.98 million. Cash generated from operating activities in the nine months ended December 31, 2022 was 1,757.88 million. Direct taxes paid (net) was 28.03 million.

Fiscal 2023

Net cash generated from operating activities was 2,298.55 million. Profit before tax was 59.46 million in Fiscal 2023. Primary adjustments consisted of depreciation and amortisation of 551.43 million; provision for doubtful debts of 32.95 million; provision for inventory of 62.22 million and finance costs of 1,349.72 million. Operating profit before working capital changes was 2,011.87 million in Fiscal 2023. The main working capital adjustments in Fiscal 2023, included increase in inventories of 2,129.10 million; increase in trade receivables of 58.07 million; increase in financial assets and other assets of 533.58 million; and an increase in liabilities and provisions of 3,047.32 million. Cash generated from operating activities in Fiscal 2023 was 2,338.44 million. Direct taxes paid (net) was 39.89 million.

Fiscal 2022

Net cash generated from operating activities was 1,787.60 million. Profit before tax was 38.22 million in Fiscal 2022. Primary adjustments consisted of depreciation and amortisation of 586.36 million; bad debts and advances written off of 91.60 million; provision for doubtful debt of 61.96 million; and finance costs of 1,450.93 million. Operating profit before working capital changes was 2,200.81 million in Fiscal 2022. The main working capital adjustments in Fiscal 2022, included increase in inventories of 86.81 million; increase in trade receivables of 1,023.38 million; decrease in financial assets and other assets of 338.88 million; and an increase in liabilities and provisions of 413.48 million. Cash generated from operating activities in Fiscal 2022 was 1,842.98 million. Direct taxes paid (net) was 55.38 million.

Fiscal 2021

Net cash generated from operating activities was 2,466.18 million. Net profit before tax was 127.45 million in Fiscal 2021. Primary adjustments consisted of depreciation and amortisation of 587.41 million; provision for

doubtful debts of 114.42 million; and finance costs of 1,415.10 million. Operating profit before working capital changes was 2,147.17 million in Fiscal 2021. The main working capital adjustments in Fiscal 2021 included an decrease in inventories of 224.24 million; decrease in trade receivables of 583.27 million; increase in financial assets and other assets of 230.94 million; and decrease in liabilities and provisions of 233.31 million. Cash generated from operating activities in Fiscal 2021 was 2,490.43 million. Direct taxes paid (net) was 24.25 million.

Investing Activities

Nine months ended December 31, 2023

Net cash used in investing activities was 292.31 million in the nine months ended December 31, 2023, primarily on account of purchase of plant, property and equipment of 295.46 million and investment in bank deposits of 24.86 million, which was primarily offset by sale of property, plant and equipment of 14.78 million and interest received of 13.23 million.

Nine months ended December 31, 2022

Net cash used in investing activities was 146.75 million in the nine months ended December 31, 2022, primarily on account of purchase of plant, property and equipment of 149.17 million and investment in bank deposits of 18.40 million, which was primarily offset by sale of property, plant and equipment of 3.52 million and interest received of 17.30 million.

Fiscal 2023

Net cash used in investing activities was 183.94 million in Fiscal 2023, primarily on account of investment in bank deposit of 158.51 million, and purchase of plant, property and equipment of 201.97 million. This was partially offset on account of maturity of bank deposit of 148.26 million and interest received of 21.54 million.

Fiscal 2022

Net cash from investing activities was 321.34 million in Fiscal 2022, primarily on account of refund of capital advance for purchase of land of 1,110.00 million, which was offset by investment in compulsorily convertible debentures of 241.01 million, purchase of property, plant and equipment of 583.24 million and investment in bank deposits of 86.03 million.

Fiscal 2021

Net cash used in investing activities was 593.67 million in Fiscal 2021, primarily on account of investment in compulsorily convertible debentures of 221.04 million, purchase of plant, property and equipment of 356.27 million, and investment in bank deposits of 109.18 million. This was partially offset by proceeds from sale of investment of 53.00 million and interest received of 30.51 million.

Financing Activities

Nine months ended December 31, 2023

Net cash used in financing activities was 1,125.75 million in the nine months ended December 31, 2023, primarily on account of repayment of long term borrowings of 967.35 million, repayment of short term borrowings (net) of 329.73 million, finance costs paid of 1,268.15 million, repayment of lease obligations of 19.35 million and interest on lease liabilities of 11.17 million which was marginally offset by proceeds from long term borrowings of 1,470.00 million.

Nine months ended December 31, 2022

Net cash used in financing activities was 1,540.59 million in the nine months ended December 31, 2022, primarily on account of repayment of long term borrowings of 652.02 million, finance costs paid of 970.16 million, interest on lease liabilities of 12.81 million, and repayment of lease obligations of 19.57 million which was marginally offset by proceeds from short term borrowings (net) of 113.97 million.

Fiscal 2023

Net cash used in financing activities was 2,028.50 million in Fiscal 2023, primarily on account of repayment of long term borrowings of 820.80 million, finance costs paid of 1,351.34 million, and repayment of lease

obligations of 25.85 million and interest on lease liabilities of 17.53 million, which was marginally offset by proceeds of short term borrowings (net) of 187.02 million.

Fiscal 2022

Net cash used in financing activities was 2,557.70 million in Fiscal 2022, primarily on account of repayment of long term borrowings of 985.38 million, repayment of short term borrowings (net) of 899.46 million, finance costs paid of 1,484.61 million, and redemption of preference shares of 750.00 million, which was marginally offset by proceeds from long term borrowings of 601.00 million and issue of compulsory convertible debentures of 1,000.00 million.

Fiscal 2021

Net cash used in financing activities was 2,160.44 million in Fiscal 2021, primarily on account of repayment of long term borrowings of 746.45 million, repayment of short term borrowings (net) of 499.90 million, finance costs paid of 1,427.21 million, which was marginally offset by proceeds from long term borrowings of 505.38 million and deposits with bank towards margin money against borrowings (net) of 79.49 million.

INDEBTEDNESS

As of December 31, 2023, we had total borrowings (consisting of non-current borrowings and current borrowings) of t 7,981.14 million. Our total debt/ equity ratio was 1.95 as of December 31, 2023.

The following table sets forth certain information relating to our outstanding indebtedness as of December 31, 2023, and our repayment obligations in the periods indicated:

Particulars	As of December 31, 2023
	Payment due by period
	( million)
	Up to 1 year	1 - 5 years	More than 5 years	Total
Borrowings (including current maturities)	6,032.59	1,806.77	141.78	7,981.14
Lease liabilities	31.38	80.41	1.96	113.75
Trade payables	7,509.91	-	-	7,509.91
Other financial liabilities	2,310.10	-	-	2,310.10
Total	15,883.98	1,887.18	143.74	17,914.90

CONTINGENT LIABILITIES AND OFF-BALANCE SHEET ARRANGEMENTS

As of December 31, 2023, contingent liabilities that have not been accounted for in our Restated Consolidated Financial Statements were as follows:

S. No. Particulars	As at December 31, 2023
	( million)
1. Provident fund matter	Not ascertainable
2. Transport pass fees claimed by excise authorities	87.31
3. Water Charges claim by MIDC, Aurangabad	19.32
4. Additional license fees on account of restructuring of the Group, levied by, the Maharashtra State Excise Department, Aurangabad.	3.28
5. Differential Octroi Duty on Extra Neutral Alcohol / Rectified Spirit by Aurangabad Municipal Corporation	15.8
6. Demand notice from the Commissioner of Central Excise, Customs and Service Tax, Aurangabad, towards service tax on reverse charge basis on expenditure incurred in foreign currency on sales promotion, travelling and other expenditure	53.81
7. Income tax matters	33.31
8. Rajasthan VAT department has demanded sales Tax along with interest and penalty from a contract bottling unit on ENA produced by them to be used as intermediary product for the manufacture of IMFL	10.76
9. Debit memorandum from its customer - Canteen Stores Department	339.87
10 Excise demand relating to excess transit wastages for ENA supplied by Contract Bottling unit	28.6
11 Show cause notice from Canteen Stores Department (CSD) on account of differential trade rate relating to the period from October 2014 to December 2020	85.77
S. No. Particulars	As at December 31, 2023
	( million)
12 Demand notice by the Government of Andhra Pradesh	272.5
13 VAT / GST on ENA procured by the Group in Uttar Pradesh	162.9
14 A contract bottling unit had been issued notice of demand under the Assam Entry Tax Act by the Government of Assam	13.12
15 The Group was receiving taxable invoices from its CBUs at the rate of 18% on the bottling charges on manufacturing of IMFL for the Group (brand owner). However, based on the notification dated October 13, 2017, no. 31/2017 - Central Tax (rate), the Group has asked its bottlers to charge GST on bottling charge at 5%	94.06
16 Group has received summon notice dated August 11, 2020 from the Director General of GST Intelligence, Hyderabad on applicability of GST on Distillery Wet Grain Soluble (DWGS) and Distillery Dry Grain Soluble (DDGS). On 20 June 2022, group has received Show Cause Notice on the subject matter from Directorate General of Goods and Services Tax Intelligence (DGGI), Telangana.	72.62
17 Income Tax matter	1.73
18 GST on supply of ENA in the state of Uttar Pradesh and Kerala	42.08
19 Short payment of wages and levy to the Mathadi Workers	25.3
20 Excise demand relating to low strength of ENA	2.71
21 Intimation received under Section 73(5) (Form GST DRC-01A) alleging to pay GST on ENA	31.15
22 VAT liability on amount of Business Surplus received by the Group from tie-up unit arrangements with third parties.	530.25
Total	1,926.25

Contingent liability relating to determination of provident fund liability, based on a recent Supreme Court judgement, is not determinable at present, due to uncertainty on the period of impact of the judgement in absence offurther clarification relating to applicability, We will continue to assess any further developments in this matter for their implications on our financial statements, if any, which, based on the number of employees, is not expected to be significant. Further, there is no litigation nor any notices involving us, which is pending as on date with respect to this matter. For details, see "Restated Consolidated Financial Information -Note 48-Contingent liabilities and commitments" on page 409 of this Red Herring Prospectus

Commitments

Capital commitments (net of advances) of t 22.20 million (December 31, 2022: t 142.89 million, March 31, 2023: t 156.00 million, March 31, 2022: t 70.86 million, and March 31, 2021: t 25.67 million).

For further information on our contingent liabilities, see “Restated Consolidated Financial Information - Note 48 - Contingent liabilities and commitments" on page 409.

Except as disclosed in the Restated Consolidated Financial Statements or elsewhere in this Red Herring Prospectus, there are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that we believe are material to investors.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

The following table sets forth certain information relating to our future commitments:

Particulars		As of December 31, 2023
		Payment due by period
	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years
			(t million)
Capital commitments (net of advances)	22.20	22.20	-	-	-
Total	22.20	22.20	-	-	-

For further information on our capital and other commitments, see “Restated Consolidated Financial Information - Note 48 - Contingent liabilities and commitments"" on page 409.

CAPITAL EXPENDITURES

In Fiscal 2021, 2022 and 2023, and in the nine months ended December 31, 2022 and December 31, 2023, our capital expenditure towards additions to fixed assets (property, plant and equipment, capital work in progress and intangible assets) were 356.27 million, 583.24 million, 201.97 million, 149.17 million and 295.46 million, respectively. The following table sets forth our fixed assets for the periods indicated:

Particulars	Fiscal 2021	Fiscal 2022	Fiscal 2023	For the nine months ended December 31, 2022	Fir the nine months ended December 31, 2023
	( million)
Property, plant and equipment	4,463.03	4,942.91	3,775.86	3,867.72	3,705.13
Capital Work in Progress	169.34	148.53	140.28	114.13	154.73
Intangible assets including Goodwill	668.19	669.08	681.44	692.89	667.40
Rights of use assets	1,362.03	1,304.41	1,297.11	1,311.03	1,236.42
Total	6,662.59	7,064.93	5,894.69	5,985.77	5,763.68

RELATED PARTY TRANSACTIONS

We enter into various transactions with related parties in the ordinary course of business. These transactions principally include royalty income, interest income, promotional material and services, sale of assets, unsecured loans, interest on unsecured loans, rent expenses, investment in compulsorily convertible debentures, advance for purchase of land, commission, redemption of preference shares, sale of investments and managerial remuneration.

The table below provides details of our related party transactions and the percentage of such related party transactions to our revenue from operations in Fiscal 2021, 2022 and 2023 and in the nine months ended December 31, 2022 and December 31, 2023:

Particulars	For the year ended March 31,			For the nine months ended December 31, 2022	For the nine months ended December 31, 2023
	2021	2022	2023
Related party transactions ( million)	2,054.40	6,333.46	2,007.03	1,808.27	408.94
Revenue from operations ( million)	63,787.76	71,969.20	71,056.80	53,890.41	59,111.44
Related party transactions as a percentage of our Revenue from Operations (%)	3.22%	8.80%	2.82%	3.36%	0.69%

Note: Related party transactions calculated above is the aggregation ofabsolute amounts (before elimination) of items forming part of statement of profit and loss and balance sheet, i.e., total income, total expenses, unsecured loan /advances granted and refund of the same, redemption of preference shares, refund of customer advance, receipt of Money against receivables, repayment/reversal of rent, unsecured borrowing /compulsorily convertible debentures ("CCD") availed, repayment of unsecured borrowing and interest thereon, repayment of unsecured loan / advances granted, receipt and refund of advance towards debentures, liability component of compound financial instrument issued, repayment of liability component of compoundfinancial instrument issued and interest thereon, equity component of compoundfinancial instrument, issue of equity shares on conversion of CCD and investment in CCD.

For further information relating to our related party transactions, see “Restated Consolidated Financial Information - Note 46 - Related Parties Disclosures, as per IND AS 24” on page 399.

AUDITORS OBSERVATIONS

The Statutory Auditors have included the following Emphasis of Matters in the examination report on the Restated Consolidated Financial Information:

Nine months ended December 31, 2023

“ We draw attention to the matter stated in Note 48 (xxii) to the accompanying special purpose interim consolidated financial statements wherein it is stated that during the period ended December 31, 2023, one of the customer, Canteen Stores Department (CSD) had raised a debit memorandum amounting to Rs. 339.87 million on the Holding Company on account of differential trade rates for sales made to CSD during the period from 1 March 2012 to 31 October 2017, which is being contested by the Holding Company. Our opinion is not modified in respect of this matter. ”

Nine months ended December 31, 2022

“We draw attention to the matter stated in Note 66 (b) to the accompanying special purpose interim consolidated financial statements wherein it is stated that subsequent to period ended 31 December 2022, i.e., on 11 December 2023, one of the customer, Canteen Stores Department (CSD) had raised a debit memorandum amounting to Rs. 339.87 million on the Holding Company on account of differential trade rates for sales made to CSD during the period from 1 March 2012 to 31 October 2017, which is being contested by the Holding Company. Our opinion is not modified in respect of this matter. ”

Fiscal 2021

“Recoverability of dues receivable from a customer

We draw attention to the matter stated in Note 48 (n) to the consolidated financial statements which indicates that the Holding Company is in the process of recovering dues receivable from a customer - Canteen Stores Department, amounting to Rs. 340.30 million as at 31 March 2021, which have been withheld by the customer pursuant to a debit memorandum amounting to Rs. 366.14 million raised on the Holding Company on account of differential trade rates for sales made to the customer during the period from 1 March 2012 to 31 October 2017, which is being contested by the Holding Company. Our opinion is not modified in respect of this matter. ”

In addition, our Statutory Auditors have included a statement on certain matters specified in the Companies (Auditors Report) Order 2016, as amended (“CARO”), in their reports included as an annexure to the auditors report on our audited financial statements as of and for the year ended March 31, 2021, 2022 and 2023. These do not require any corrective adjustments to the Restated Consolidated Financial Information.

Observation	Company Response
Fiscal 2023
Clause (vii)(a) In our opinion, and according to the information and explanations given to us, undisputed statutory dues including goods and services tax, provident fund, income-tax, sales-tax, service tax, duty of customs, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though value added tax and duty of excise have not generally been regularly deposited with the appropriate authorities and there have been significant delays in a large number of cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.	The entire amount has been repaid post year end.
Clause (vii)(b) According to the information and explanations given to us, there are no statutory dues referred in sub-clause (a) which have not been deposited with the appropriate authorities on account of any dispute except for the following:	The matters are sub-judice and are currently pending with various government authorities and courts. Accordingly, these have been reported by our Statutory Auditors as disputed dues

 

Name of the statute	Nature of dues (Including interest and penalty, as the case may be)	Amount ( in million)	Amount paid/ adjusted under protest ( in million)	Amount unpaid ( in million)	Period to which the amount relates	Forum where dispute is pending
Income Tax Act, 1961	Income Tax	33.31	33.31	-	Assessment Year 20142015	Commissioner of Income Tax (Appeals)

 

Observation	Company Response
Income Tax Act, 1961	Income Tax	1.73	-	1.73	Assessment Year 20162017	Commissioner of Income Tax (Appeals)
Finance Act, 1994	Service Tax	53.81	2.01	51.80	April 2011 to March 2015	Customs, Excise and Service Tax Appellate Tribunal
Central Excise Act, 1944	Excise Duty	28.60	7.15	21.45	2016-2017	High Court of Madhya Pradesh, Jabalpur
MVAT Act, 2002	MVAT	324.89	0.99	323.90	2011-2012	Maharashtra Sales Tax Appellate Tribunal
Bombay Prohibition Act, 1949	Excise Duty- License Fee	3.28	3.28	-	Fiscal 2007-2008	High Court of Judicature of Bombay, Aurangabad Bench
Central Sales Tax Act, 1956	CST	1.40	0.72	0.68	Fiscal 2015-2016	Joint commissioner of State Tax
MVAT Act, 2002	VAT	61.40	0.05	61.35	Fiscal 2015-2016	Joint commissioner of State Tax
MVAT Act, 2002	VAT	58.26	-	58.26	Fiscal 2016-2017	Joint commissioner of State Tax
Central Sales Tax Act, 1956	CST	0.24	-	0.24	Fiscal 2016-2017	Joint commissioner of State Tax
Karnataka Stamp Act, 1957	Excise Duty - Stamp Duty	0.30	0.30	-	Fiscal 2016-2017 to Fiscal 2018-2019	Superintendent of Excise
MVAT Act, 2002	VAT	29.03	-	29.03	F i s c al 2012-2013	Maharashtra sales tax department
MVAT Act, 2002	VAT	35.69	-	35.69	F i s c al 2013-2014	Maharashtra sales tax department
Central Sales Tax Act, 1956	CST	2.24	1.22	1.02	F i s c al 2017-2018	Joint Commissioner of State Tax
MVAT Act, 2002	VAT	19.87	-	19.87	F i s c al 2017-2018	Joint Commissioner of State Tax
GST Act 2017	GST	72.62	-	72.62	July 2017 to July 2020	Telangana High Court

Fiscal 2022

Observation	Company Response
Clause (iii)(c)	The entire amount has been
In respect of loans granted by the Company to companies, the schedule of repayment of principal and interest has been stipulated wherein these amounts are repayable on demand and the repayments have been regular. Further, to the extent such repayments have not been demanded, in our opinion, repayment of the principal and interest amounts are also considered to be regular. The schedule of repayment of principal and payment of interest has been stipulated in the case of loans granted to the employee directors and the repayment/receipts of the principal amount and the interest are regular, except for the following instances:	repaid post year end.

 

Name of the	Amount Due	Due Date	Extent of	Remarks (if
Entity	( in million)		delay (in days)	any)
Employee	1.17	April 8, 2021	357	The entire
Director	1.17	May 8, 2021	327	amount has
	1.16	June 8, 2021	296	been repaid
	1.14	July 8, 2021	266	post year end
	1.14	August 8, 2021	235
	1.14	September 8, 2021	204
	1.14	October 8, 2021	174
	1.14	November 8, 2021	143
	1.14	December 8, 2021	113
	1.14	January 8, 2022	82
	1.14	February 8, 2022	51
	1.14	March 8, 2022	23

Clause (iii)(d) The entire amount has been

repaid post year end.

The total amount which is overdue for more than 90 days as at March 31, 2022 in respect of loans granted to other parties is as follows:

Particulars	Amount ( in million)	No. of cases	Remarks, if any
Principal	9.00	1	The entire amount has been repaid
Interest	1.33	1	post year end
Total	10.33	1

 

Clause (vii)(b) In our opinion, and according to the information and explanations given to us, undisputed statutory dues including goods and services tax, provident fund, income-tax, sales-tax, service tax, duty of customs, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though value added tax and duty of excise have not generally been regularly deposited with the appropriate authorities and there have been significant delays in a large number of cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.	The entire amount has been repaid post year end.
Clause (vii)(a) There are no statutory dues referred in sub-clause (a) which have not been deposited with the appropriate authorities on account of any dispute except for the following:	The matters are sub-judice and are currently pending with various government authorities and courts. Accordingly, these have been reported by our Statutory Auditors as disputed dues.
Observation	Company Response
Name of the statute Income Tax Act, 1961 Income Tax Act, 1961 Finance Act, 1994 Central Excise Act, 1944 MVAT Act, 2002 Bombay Prohibition Act, 1949 Central Sales Tax Act, 1956 MVAT Act, 2002 MVAT Act, 2002 Central Sales Tax Act, 1956 Karnataka Stamp Act, 1957	Nature of dues (Including interest and penalty, as the case may be)	Amount ( in million)	Amount paid/ adjusted under protest ( in million)	Amount unpaid ( in million)	Period to which the amount relates	Forum where dispute is pending
	Income Tax	33.31	33.31	-	AY 20142015	Commissioner of Income Tax (Appeals)
	Income Tax	4.83	1.73	3.10	AY 20162017	Commissioner of Income Tax (Appeals)
	Service Tax	53.81	2.01	51.80	April 2011 to March 2015	Customs, Excise and Service Tax Appellate Tribunal
	Excise Duty	28.60	7.15	21.45	2016 2017	High Court of Madhya Pradesh, Jabalpur
	MVAT	324.89	0.99	323.90	2011 2012	Maharashtra Sales Tax Appellate
	Excise Duty- License Fee	3.28	3.28	-	FY 20072008	High Court of Judicature of Bombay, Aurangabad T> 1_
	CST	1.40	0.72	0.68	FY 20152016	Joint commissioner of State Tax
	VAT	61.40	0.05	61.35	FY 20152016	Joint commissioner of T
	VAT	58.26	-	58.26	FY 20162017	Joint commissioner of State Tax
	CST	0.24	-	0.24	FY 20162017	Joint commissioner of State Tax
	Excise Duty - Stamp Duty	0.30	0.30	-	FY 20162017 to FY 20182019	Superintendent of Excise

Fiscal 2021

Clause (iii)(b)	Loan to employee director:
The schedule of repayment of principal and payment of interest has been stipulated in the case of loans granted to the employee directors and the repayment/receipts of the principal amount and the interest are regular, except for four instalments of principal and interest with respect to a loan given to an employee director, wherein the delayed amounts have been received post year end. In the case of loans granted to companies, the schedule of repayment of principal and interest has been stipulated wherein these amounts are	There was a delay in receipt of instalment from the employee director, which was subsequently recovered post the balance sheet date.
repayable on demand and the repayments have been regular. Further, to the extent such repayments have not been demanded, in our opinion, repayment of the principal and interest amounts are also considered to be regular. However, in the case of loans given to a wholly owned subsidiary, the Holding Company has written off the entire amounts outstanding towards principal and interest aggregating 36.16 million and 9.23 million,	Loan to wholly owned subsidiary:
respectively, during the year ended 31 March 2021.	Our Company has paid 36.16 million to our
	Subsidiary, Chitwan Blenders & Bottlers Private
	Limited to fund its
Observation	Company Response
	operations. The Subsidiary was operating in the state of Bihar. The Government of Bihar has banned sale of IMFL in the state and hence our Company was not able to recover the loan amount of 36.16 million and interest thereon amounting to 9.23 million.
Clause (iii)(c) In view of our comments in (b) above, there are no amounts considered to be overdue in respect of loans granted to such companies or other parties except for a loan given to an employee director wherein the total amount overdue for more than 90 days as at 31 March 2021, in respect of one instalment, amounted to 1.17 million (including interest 0.17 million) which has been subsequently received post year end.	The overdue amount was received after a period of 90 days and therefore was reported by our Statutory Auditors.
Clause (vii)(a) Undisputed statutory dues including provident fund, employees state insurance, income- tax, sales-tax, service tax, goods and service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have not been regularly deposited to the appropriate authorities and there have been significant delays in a large number of cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.	Company was unable to collect receivables as per agreed trade norms and hence there was slight delay in few cases in payment of statutory dues.
Clause (vii)(b) There are no dues in respect of goods and service tax and duty of customs that have not been deposited with the appropriate authorities on account of any dispute. The dues outstanding in respect of income-tax, sales tax, service-tax, duty of excise and value added tax on account of disputes are as follows:	The matters are sub-judice and are currently pending with various government authorities and courts. Accordingly, these have been reported by our Statutory Auditors as disputed dues.

 

	Name of the statute	Nature of dues (Including interest and penalty, as the case may be)	Amount (Rs. in million)	Amount paid/ adjusted under protest ( in million)	Amount unpaid ( in million)	Period to which the amount relates	Forum where dispute is pending
	Income Tax Act, 1961	Income Tax	33.31	33.31	-	AY 20142015	Commissioner of Income Tax (Appeals)
	Income Tax Act, 1961	Income Tax	4.83	1.73	3.10	AY 20162017	Commissioner of Income Tax (Appeals)
Income Tax Act, Income 1961 Tax	50.58	-	50.58	AY 20102011 AY 20112012	Bombay High Court
	Finance Act, 1994	Service Tax	53.81	2.01	51.80	April 2011 to March 2015	Customs, Excise and Service Tax Appellate Tribunal
	Finance Act, 1994	Service Tax	0.70	0.02	0.68	August 2014 to July 2015	Commissioner (Appeals), Customs, Central Excise and

 

Observation	Company Response
Central Excise Act, 1944 MVAT Act, 2002 Bombay Prohibition Act, 1949 Central Sales Tax Act, 1956 MVAT Act, 2002 MVAT Act, 2002 Central Sales Tax Act, 1956 Karnataka Stamp Act, 1957	Excise Duty	28.60	7.15	21.45	2016 2017	High Court of Madhya Pradesh, Jabalpur
	MVAT	324.89	0.99	323.90	2011 2012	Maharashtra Sales Tax Appellate
	Excise Duty- License	3.28	3.28	-	FY 20072008	THriigbhunaCl ourt of Judicature of Bombay,
	CST	1.40	0.72	0.68	FY 20152016	Joint commissioner of State Tax
	VAT	61.40	0.05	61.35	FY 20152016	Joint commissioner of T
	VAT	58.26	-	58.26	FY 20162017	Joint commissioner of State Tax
	CST	0.24	-	0.24	FY 20162017	Joint commissioner of State Tax
	Excise Duty - Stamp Duty	0.30	0.30	-	FY 20162017 to FY 20182019	Superintendent of Excise

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our activities expose us to market risk, liquidity risk and credit risk. Our board of directors has overall responsibility for the establishment and oversight of our risk management framework.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: foreign currency risk, interest rate risk and price risk. Our exposure to market risk is primarily on account of foreign currency exchange rate risk and interest rate risk.

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. Our exposure to the risk of changes in market interest rates relates primarily to our debt obligations with floating interest rates.

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The risk primarily relates to fluctuations in receivables, trade payables, borrowings and other payables denominated in USD, GBP and AED against the functional currency INR of our Company and our Subsidiaries.

Our risk management policy is to assess our net exposures which is mainly represented by receivable and payable towards exports and imports respectively, and partly represented by the loans availed in foreign currencies. We can hedge our net exposures with a view on foreign exchange outlook. Since the net exposure is currently not material, this has not been hedged. Our exposure to foreign currency changes for all currencies is not material.

Credit Risk

Credit risk arises from cash and cash equivalents, financial assets measured at amortised cost and other balances with banks and financial institutions, as well as credit exposures to trade receivables.

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. Trade receivables are typically unsecured and are derived from revenue earned from two major classes of customers, receivable from sales to government corporations and receivables from sales to private third parties.

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to whom we grant credit terms in the normal course of business. We use expected credit loss model, which is applied to overdue receivables other than receivables from parties where the risk is assessed to be insignificant. Our credit risk is concentrated mostly to states where goods are sold to private third parties.

Bank balances and deposits are held with only high rated banks and security deposits are placed majorly with government agencies. Hence, in these case the credit risk is negligible.

Liquidity Risk

Liquidity risk is the risk that we may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. Our objective is to maintain optimum levels of liquidity and to ensure that funds are available for use as per requirement.

The liquidity risk principally arises from obligations on account of financial liabilities viz. borrowings, lease liabilities, trade payables and other financial liabilities.

The finance department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors our net liquidity position through trade receivables or through short term borrowings on need basis.

UNUSUAL OR INFREQUENT EVENTS OR TRANSACTIONS

Except as described in this Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.

SIGNIFICANT ECONOMIC CHANGES THAT MATERIALLY AFFECT OR ARE LIKELY TO AFFECT INCOME FROM CONTINUING OPERATIONS

Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect income from continuing operations identified above in Significant Factors Affecting our Results of Operations and Financial Condition" and the uncertainties described in “Risk Factors” on pages 439 and 34, respectively.

KNOWN TRENDS OR UNCERTAINTIES

Our business has been subject, and we expect it to continue to be subject, to significant economic changes arising from the trends identified above in “ - Significant Factors Affecting our Results of Operations and Financial Condition” and the uncertainties described in “Risk Factors” on pages 439 and 34, respectively. To our knowledge, except as discussed in this Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income from continuing operations.

FUTURE RELATIONSHIP BETWEEN COST AND INCOME

Other than as described in “Risk Factors”, “Our Business” and “Managements Discussion and Analysis of Financial Condition and Results of Operations” on pages 34, 226 and 435, respectively, to our knowledge there are no known factors that may adversely affect our business prospects, results of operations and financial condition.

NEW PRODUCTS OR BUSINESS SEGMENTS

Except as set out in this Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new business segments other than in the normal course of business.

COMPETITIVE CONDITIONS

We operate in a competitive environment. See “Our Business”, “Industry Overview and “Risk Factors” on pages 226, 174 and 34, respectively, for further information on competitive conditions that we face across our various business verticals.

EXTENT TO WHICH MATERIAL INCREASES IN NET SALES OR REVENUE ARE DUE TO INCREASED SALES VOLUME, INTRODUCTION OF NEW PRODUCTS OR SERVICES OR INCREASED SALES PRICES

Changes in revenue in the last three Fiscals and nine months ended December 31, 2022 and December 31, 2023 are as described in Nine months ended December 31, 2023 compared to the nine months ended December 31,

2022”, “— Fiscal 2023 compared to Fiscal 2022”, and “— Fiscal 2022 compared to Fiscal 2021" above on pages 458, 462 and 466, respectively.

SEGMENT REPORTING

We are engaged in the business of manufacture, purchase and sale of alcoholic beverages. Operating segment are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The CODM regularly monitors and reviews the operating result of the Group as one segment of ‘Alcoholic beverages/liquids. Thus, as defined in Ind AS 108 “Operating Segments”, our entire business falls under this one operational segment.

For further information, see “Restated Consolidated Financial Information — Note 51 — Segment Reporting" on page 419.

SIGNIFICANT DEPENDENCE ON SINGLE OR FEW CUSTOMERS

Our total revenue from operations derived from certain customers in Fiscal 2021, 2022 and 2023 and in the nine months ended December 31, 2022 and December 31, 2023, which individually accounted for more than 10% of our total revenue from sale of IMFL.

The table below sets forth details of our revenue from our top one, top two, top five and top 10 customers in the years indicated:

Customer	Fiscal
Concentration	2021	2022	2023
	Revenue from contracts* ( million)	Percentage of Revenue from contract** (%)	Revenue from contracts* ( million)	Percentage of Revenue from contract** (%)	Revenue from contracts* ( million)	Percentage of Revenue from contract* * (%)
Top 1	12,414.47	19.71%	12,271.46	17.40%	11,310.49	16.25%
Top 2	23,939.22	38.01%	25,281.82	35.84%	16,131.53	23.17%
Top 5	33,906.06	53.83%	37286.85	52.86%	29,103.06	41.81%
Top 10	39,956.90	63.43%	43729.04	62.00%	36,638.15	52.63%

*Revenue from contracts refers to revenue from contracts with customer — Sale of goods (IMFL).

** Percentage of revenue refers to contracts with customer means percentage ofrevenue from contracts with customer — Sale of goods (IMFL).

The table below sets forth details of our revenue from our top one, top two, top five and top 10 customers in the periods indicated:

Customer Concentration	Nine months ended December 31, 2022		Nine months ended December 31, 2023
	Revenue from contracts* ( million)	Percentage of Revenue from contract** (%)	Revenue from contracts* ( million)	Percentage of Revenue from contract** (%)
Top 1	8,549.61	16.21%	10,106.82	17.57%
Top 2	12,276.95	23.28%	14,466.10	25.15%
Top 5	21,933.20	41.59%%	25,070.76	43.59%
Top 10	27,997.04	53.09%%	30,594.79	53.20%%

*Revenue from contracts refers to revenue from contracts with customer — Sale of goods (IMFL).

** Percentage of revenue refers to contracts with customer means percentage ofrevenue from contracts with customer — Sale of goods (IMFL).

For further information, see “Risk Factors - Internal Risk Factors — Risks relating to our Business - 21. Our business is dependent on the sale of our products to our key customers and the loss of one or more such customers or a reduction for our products could adversely affect our business, result of operations, financial condition and cash flows. ” on page 51.

SEASONALITY/ CYCLICALITY OF BUSINESS

Seasonal consumption cycles and changes in weather conditions can affect our results of operations. Major holidays and festivals generally increase the demand for our products in India. Consumption of our products is particularly strong from October to March. Weaker consumer demand for our products as a result of these or other factors could adversely affect our business, financial condition, results of operations and prospects. Accordingly, our profitability and revenue from operations may fluctuate between periods. Further, the distribution structure is prone to sudden policy or regulatory changes by the various state governments, resulting in stock-out of our products in the market thereby resulting in loss of sales. For further information, see “Risk Factors - Internal Risk Factors - Other Risks - 64. Seasonal fluctuations in consumer demand could adversely affect our business, financial condition, results of operations and prospects" on page 88.

SIGNIFICANT DEVELOPMENTS AFTER DECEMBER 31, 2023 THAT MAY AFFECT OUR FUTURE RESULTS OF OPERATIONS

Except as disclosed below and elsewhere in this Red Herring Prospectus, to our knowledge no circumstances have arisen since December 31, 2023, that could materially and adversely affect or are likely to affect, the trading or profitability, or the value of our assets or our ability to pay our liabilities within the next 12 months:

• Pursuant to a letter dated February 1, 2024, we have terminated our arrangement with a non-exclusive third party bottling facility located at Muzaffarnagar, Uttar Pradesh. As on the date of this Red Herring Prospectus, we are not utilizing the bottling unit for our requirements.

• Pursuant to an agreement dated February 22, 2024, we have entered into a non-exclusive arrangement with a third party bottling facility located at Aligarh, Uttar Pradesh to manufacture our products, which as on the date of this Red Herring Prospectus, has commenced.