| Textual Information(1) |
Notes to Unaudited Standalone Financial Results for the quarter ended June 30, 2026 1. The above Unaudited Standalone Financial Results of Honasa Consumer Limited (the 'Company') have been prepared in accordance with the recognition and measurement principles laid down in the applicable Indian Accounting Standards ('Ind AS') as prescribed under Section 133 of the Companies Act, 2013, as amended, read with relevant rules thereunder and in terms of the Regulation 33 of the Securities Exchange Board of India ('SEBI') (Listing Obligations and Disclosure Requirements) Regulations 2015, as amended. These Unaudited Standalone Financial Results have been reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on August 13, 2026. 2. During the year ended March 31, 2024, the Company had completed its Initial Public Offer (IPO) of 52,515,692 equity shares of face value of Rs. 10 each at an issue price of Rs. 324 per share (including a share premium of Rs. 314 per share). A discount of Rs. 30 per share was offered to eligible employees bidding in the employee's reservation portion of 22,678 equity shares. The issue comprised of a fresh issue of 11,267,530 equity shares aggregating to Rs. 3,650 Million and offer for sale of 41,248,162 equity shares by selling shareholders aggregating to Rs. 13,364.40 Million. Pursuant to the IPO, the equity shares of the Company were listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) on November 07, 2023. The utilisation of the IPO proceeds from fresh issue of Rs 3,504.92 Million (net of IPO expenses of Rs 145.08 Million) is summarized below: Amount to be utilised as per Prospectus (INR Million) Advertisement expenses towards enhancing the awareness and visibility of brands : 1820 Capital expenditure to be incurred by the Company for setting up new EBOs : 206 Investment in Subsidiary, BBlunt for setting up new salons : 260 General corporate purposes and unidentified inorganic acquisition : 1218.92 Total : 3504.92 Utilisation upto June 30, 2026 (INR Million) Advertisement expenses towards enhancing the awareness and visibility of brands : 1820 Capital expenditure to be incurred by the Company for setting up new EBOs : 91.56 Investment in Subsidiary, BBlunt for setting up new salons : 77.86 General corporate purposes and unidentified inorganic acquisition : 1218.92 Total : 3208.34 3. The Company is principally engaged in trading of variety of beauty and personal care products and related services with products across baby care, skin care, hair and other related personal care categories which are manufactured through third party contract manufacturers. Accordingly, these, in the context of Ind AS 108 on operating segments reporting, are considered to constitute one segment by the Chief Operating Decision Maker and hence the Company has not made any additional segment disclosures. 4. RSM General Trading LLC ('RSM'), an overseas distributor of the Company had filed a legal suit against the Company in the Court of First Instance in UAE on the grounds that the Distributorship Agreement between RSM and the Company was terminated illegally by the Company without complying with provisions of the Distributorship Agreement. RSM, in the legal suit, claimed damages to the tune of AED 45 million (equivalent to Rs 1,001.25 million), wherein the Court on May 16, 2024, ordered the Company to pay an amount of AED 25.07 million (equivalent to Rs 576.65 million) plus interest at the rate of 5% from the date of order till the date of payment (“UAE Court Order/Original Judgment”). The Company, subsequently, filed an appeal against the said order, which was subsequently dismissed by the Court of Appeal on October 15, 2024 (“Judgment”). The Company then filed an appeal against the Judgment before the Cassation Court, and the Cassation Court on March 26, 2025 allowed the Appeal referring the case back to Court of Appeal for a re-hearing by a panel composed of different judges. The Court of Appeal, composed of a different panel, issued a preliminary judgment on July 16, 2025 appointing 2 experts to review the case files and documents and directed the experts to submit an expert report. The Experts submitted a final expert report November 24, 2025 and supplemental report dated January 22, 2026 noting breaches of the Company as well as RSM and concluded that RSM is entitled to a compensation of only AED 1.75 million ( equivalent to Rs. 42.75 million). Thereafter, the Court of Appeal in its judgment dated February 11, 2026, affirmed the aforesaid compensation amount AED 1.75 million payable by Company. Both Parties challenged this judgment before the Cassation Court (Highest Court of Dubai, UAE), which issued its judgment on July 29, 2026 dismissing the appeals and upholding the judgment dated February 11, 2026 issued by the Court of Appeal. The Company had further filed a petition under Section 9 of Arbitration and Conciliation Act, 1996, in High court of Delhi seeking Anti-suit and enforcement injunction prohibiting RSM from continuing proceedings in UAE, which was subsequently allowed by the Court. RSM appealed against this judgment before the division bench of Delhi High Court seeking stay on the anti-suit enforcement and the direction to deposit Rs. 576.65 million to Delhi High Court. Further, the Court, on September 01, 2025 dismissed the appeal, on the grounds that arbitration has already commenced in India as per the dispute resolution clause of the Agreement. Pursuant to conclusion of the trial and subsequent completion of the arbitral proceedings, the Tribunal passed an award in favour of the Company on May 14, 2026, subsequently amended vide Amendment Order dated June 26, 2026. The Final Award categorically declared that (i) it has the jurisdiction to adjudicate the disputes raised in the proceedings; (ii) RSM breached the Arbitration Agreement, Exclusive Jurisdiction and Governing Law clause under the Authorized Distribution Agreement (ADA') by instituting proceedings before the Dubai Court; (iii) RSM is injuncted from initiating/continuing any proceedings before the Dubai Courts; (iv) Termination of the ADA by the Company was valid and not unlawful as held by Dubai Courts by virtue of the termination clause; and (v) RSM is liable to pay an amount of AED 9.92 million approx (INR 255.35 million approx), towards various claims filed by the Company, including a post award interest should the amount remain unpaid after a period of 30 days and (vi) In addition to the above amount of AED 9.92 million (INR 255.35 million), RSM shall also pay to Honasa damages aggregating to any amount sought to be recovered from Honasa pursuant to the decision of any court in Dubai in proceedings related to the termination of the Agreement. 5. During the quarter ended June 30, 2026, the Company has granted 574,400 options to employees under Employee stock options plan 2018, as approved by Nomination and Remuneration Committee. During the current quarter ended June 30, 2026, the paid-up equity share capital of the Company has increased from Rs. 3,253.70 million to Rs. 3,260.24 million pursuant to allotment of 654,422 equity shares on exercise of stock options by employees. 6. On November 21, 2025, the Government of India notified the Code on Wages, 2019, the Code on Social Security, 2020, the Industrial Relations Code, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 (collectively referred to as the “Labour Codes”). The Labour Codes consolidate various existing labour laws and introduce changes, including a harmonised definition of wages, which impacts the computation of employee benefit obligations such as gratuity and compensated absences. Based on the information currently available and the guidance issued by the Institute of Chartered Accountants of India, the Company has evaluated the impact of these changes and recognised an incremental cost of Rs. 47.97 million as past service cost as an exceptional item for the year ended March 31, 2026. The Company continues to monitor developments relating to the Labour Codes and will assess the impact, if any, on the measurement of employee benefit liabilities in future periods. 7. The Board of Directors of the Company at its meeting held on May 21, 2026 had recommended a final dividend of Rs. 3/- per equity share having face value of Rs. 10/- each subject to approval of shareholders in the ensuing Annual General Meeting. 8. On June 23, 2026, the Board of Directors of the Company approved acquisition of Fluence Pharma Private Limited. The Company will acquire :- i. 58% equity stake(majority), subject to closing adjustments and completion of conditions precedent. ii. 42% equity stake(remaining) in two tranches over the next 5-7 years from completion of acquisition of aforesaid stake. The above acquisition remains subject to conditions precedent and accordingly it has no impact on the standalone financial results for the quarter ended June 30, 2026. 9. The Board of Directors of the Company at its meeting held on June 23, 2026 approved the incorporation of a Wholly owned subsidiary, 'Honasa Health Private Limited'(Honasa Health) which will undertake business-to-consumer (B2C) operations of the Company's nutraceuticals business. Subsequent to the quarter ended June 30, 2026, Honasa Health was incorporated on July 7, 2026. 10. The figures for the quarter ended March 31, 2026 are the derived balancing figures between audited figures in respect of full financial year ended March 31, 2026 and the unaudited figures of nine months ended December 31, 2025. |