Notes:

1. Refer note 39 for information on property, plant and equipment pledged as security.

2. Refer note 23 for information on borrowing costs capitalised.

3. Refer note 29 for information on contractual commitments for acquisition of property, plant and equipment.

4. The Company has elected to measure the items of property, plant and equipment at previous GAAP carrying value as deemed cost on the date of transition (i.e. 1^st April, 2016). Accordingly the gross block reflecting above as at 1^st April, 2016 is based upon the net written down value of previous GAAP as of 1^st April, 2016. The below are the details of gross block, accumulated depreciation and net written down value as on 1^st April, 2016.

Notes:

1. Refer note 39 for information on property, plant and equipment pledged as security.

2. The Company has elected to measure the items of intangible assets at previous GAAP carrying value as deemed cost on the date of transition (i.e. 1^st April, 2016). Accordingly the gross block reflecting above as at 1^st April, 2016 is based upon the net written down value of previous GAAP as of 1^st April, 2016. The below are the details of gross block, accumulated amortisation and net written down value as on 1^st April, 2016.

(ii) Rights, preferences and restrictions attached to the equity shareholders:

The Company has only one class of equity shares having par value of Rs.10/- per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting. Further, the Board of Directors may also announce an interim dividend which would need to be confirmed by the shareholders at the forthcoming Annual General Meeting. In the event of liquidation, the shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings.

(i) Upto last year, the Excise Department had raised a demand against the Company amounting to Rs.11,719 lakhs on account of excise duty payable on the products of the Company and the Company had disclosed it in contingent liability. As per reclassification of the products filed by the Company, Nil excise duty is leviable on its products from 1^st December, 2007. The Excise Department had contested the reclassification filed by the Company. The Commissioner of Excise Duty (Appeals) had upheld the reclassification in favour of the Company. Further, the Excise Department had filed an appeal with Custom, Excise and Service Tax Appellate Tribunal against the order of Commissioner of Excise Duty (Appeals). During the year, Central Excise and Service Tax Appealate Tribunal (CESTAT) has dismissed the appeal filed by the department. Based on the favourable order by CESTAT during the year, the Excise department (Commissioner) has passed orders for dropping their demand notices. Based on the above orders of CESTAT, the Company has Nil contingent liability as on 31^st March, 2018.

1. Employee benefits

i) Defined contribution plans

The Company makes contribution towards employees' provident fund and employees' state insurance plan scheme. Under the schemes, the Company is required to contribute a specified percentage of payroll cost, as specified in the rules of the schemes, to these defined contribution schemes. The Company recognized H136 lakhs (31^st March, 2017 H136 lakhs) as provident fund and H18 lakhs (31^st March, 2017 H18 lakhs) as employees' state insurance plan during the year as expense towards contribution to these plans.

ii) Defined benefit plans Gratuity scheme

The amount of gratuity has been computed based on respective employee's salary and the years of employment with the Company. Gratuity has been accrued based on actuarial valuation as at the Balance Sheet date, carried out by an independent actuary. The amount is funded through trusts' group gratuity schemes managed by Life Insurance Corporation of India. The Company is contributing to trusts towards the payment of premium of such group gratuity schemes.

(G) The plan assets are maintained with LIC of India Gratuity Scheme. The details of investment maintained by LIC are not available and have therefore not been disclosed.

(H) The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(I) The employer's best estimate of contributions expected to be paid in next financial year is not ascertained and hence not disclosed above.

(J) The average expected future working life of members of the defined benefit obligation as at 31^st March, 2018 is 23.44 years (as at 31^st March, 2017: 23.51 years)

2 Segment reporting

Based on the guiding principles given in Ind AS 108 on " Operating Segments" the Company's business activity falls within a single operating segment, namely Snack Foods, the disclosure requirements in terms of Ind AS 108 on operating segment are not applicable.

3 Long-term contracts

The Company does not have any long term contracts including derivative contracts for which there is any material foreseeable losses as at 31^st March, 2018.

4. Share based payments

The Compensation Committee of Board of Directors of the Company has granted options to the employees pursuant to DFM Foods Employee Stock Option Plan-2014 ('the plan') on 31^st July, 2014. These options were granted at Rs.291.00, being the latest available closing market price prior to the date of grant of options in accordance with SEBI guidelines. The quoted price of share on grant and the exercise price of option were Rs.335.30 and Rs.291.00 respectively. The Company is following fair value method to amortise the compensation expense and accordingly recognised an expense of Rs.32 lakhs for the year ended 31^st March, 2018 (Previous year Rs.14 lakhs).

In respect of options granted under the Employees Stock Option Plan-2014 in accordance with Indian Accounting Standard (IND AS 102) employee share-based payments, the details of Options outstanding is as under:

Fair value of share options:

The weighted average fair value of stock options granted is Rs.194.96. The fair value at grant date is determined using the Black-Scholes valuation method which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The following tables list the inputs used for fair valuation of options for the ESOP plans:

*The decision of Compensation committee w.r.t. vesting of 20,000 options for the year 2017-18 is pending.

#The Compensation committee in its meeting decided that no option be vested for financial year 2016-17, the options so lapsed may be clubbed in subsequent vesting based upon the cumulative performance in the subsequent years and accordingly will be recognized as expense in the year in which the performance achieved.

Notes:

1. Vesting of options is a function of achievement of performance criteria or any other criteria as specified by the Nomination and Remuneration Committee and communicated in the grant letter.

2. During the year ended 31^st March, 2018, the weighted average share price of the options exercised at the date of exercise was H1616.95.

5 Capital management

The Company endeavours to optimize debt and equity balance and provide adequate strength to the Balance Sheet. The Company monitors capital on the basis of debt equity ratio.

6 Financial risk management

The Company's activities expose it to various financial risks : Credit risk, Liquidity risk and Market risk.

7 Credit risk management

The Company has negligible credit risk as it follows policy of sale against advance payments only, the credit risk is only limited to advance to capital goods vendors and security deposits . The Company continuously reviews and monitors the same and there is no write - off or provisions against advances and deposits.

8. Liquidity risk management

(a) The Company manages liquidity by ensuring control on its working capital which involves adjusting production levels and purchases to market demand and daily sales of production and advances from customers. It also ensures adequate credit facilities sanctioned from banks to finance the peak estimated funds requirements. The working capital credit facilities are continuing facilities which are reviewed and renewed every year.

(c) Sensitivity

With respect to the above unhedged exposure the impact of sensitivity is insignificant.

Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3 Inputs are unobservable inputs for the asset or liability.

9 Transition to Ind AS - Principle and reconciliation

These financial statements for the year ended 31^st March, 2018, are the Company's first annual financial statements prepared in accordance with Ind AS. The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31^st March, 2018, comparative information presented in these financial statements for the year ended 31^st March, 2017 and in the preparation of an opening Ind AS Balance Sheet as at 1^st April, 2016 (the date of transition). In preparing its opening Ind AS Balance Sheet, the Company has adjusted/reclassified the amounts reported previously in financial statements prepared in accordance with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (The Act) and other relevant provisions of the Act (Previous GAAP) to comply with Ind AS. An explanation of how the transition from previous GAAP to Ind AS has affected the Company's financial position, financial performance and cash flows is set out in the following notes.

10. Exemptions on first time adoption of Ind AS 101 (i) Share-based payment transactions

The Company has opted not to apply Ind AS 102 "Share-based Payment" to equity instruments that vested before date of transition to Ind ASs.

(ii) Property, plant and equipment, intangible assets and investment property at deemed cost

The Company has opted to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value and use that carrying value as its deemed cost.

11. The major reasons for adjustments in Previous GAAP numbers are as under

(i) Forward exchange contracts/derivative instruments

As per Ind AS 109, the Company has fair valued all forward contracts on transition date and difference between the fair value of such contracts and previous GAAP carrying amount have been recognised in the retained earnings in the opening Ind AS Balance Sheet.

(ii) Borrowings

Under previous GAAP, transaction costs incurred in connection with borrowings were charged to profit or loss as and when incurred. Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in profit or loss over the tenure of the borrowings as part of interest expense using effective interest rate method.

(iii) Investment in mutual funds

As per Ind AS 109, the Company has fair valued investment in mutual funds on transition date and difference between the fair value of such investment and previous GAAP carrying amount have been recognised in the retained earnings in the opening Ind AS Balance Sheet.

(iv) Share based payments

As per Ind AS 102, the Company has amortised the expense for share based payment based on fair value method and vesting period wise on transition date and difference between the expense as per Ind AS 102 and expense as per previous GAAP have been recognised in the retained earnings in the opening Ind AS Balance Sheet.

(v) Export promotion capital goods scheme

Under previous GAAP, the Company was disclosing export obligation as commitment in notes to accounts. Under Ind AS, the Company has reversed the benefit of EPCG by way of grossing up the Property, Plant and Equipments balance (net of accumulated depreciation) on transition date and recognition of deferred government grant to the extent of obligation not yet fulfilled.

(vi) Deferred tax

Deferred tax on account of Ind AS adjustments on transition date are recognised in the retained earnings in the opening Ind AS Balance Sheet.

(vii) Proposed dividend on equity shares and dividend tax thereon

Under previous GAAP, dividend proposed by the Board of directors after the Balance Sheet date but before the approval of the financial statements were considered as adjusting events and accordingly, it was recognised as provision in the books of account. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the Annual General Meeting. Accordingly, proposed dividend earlier recognised in the same financial year is reversed and recognised in the year of approval by the shareholders in the Annual General Meeting.

(viii) Actuarial gains/losses on defined benefit obligation

The Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP, the actuarial gains and losses on gratuity are charged to the statement of Profit and Loss. Under Ind AS, such actuarial gains or losses are required to be recognised in other comprehensive income. Accordingly, actuarial losses for financial year 2016-17 amounting to H30 lakhs are re-classified from Statement of Profit and Loss to 'other comprehensive income'. There is no impact on total equity as a result of this adjustment.

(ix) Leasehold land

Under previous GAAP, the leasehold land was considered as part of fixed asset and amortized over the period of the lease. As per Ind AS17, leasehold land has now been considered as operating lease and the premium paid on leasehold land is amortized over the period of the lease and unamortized amount is classified as prepayments.

(x) Government loan at a below-market rate of interest

The benefit of a Government loan at a below-market rate of interest is treated as a Government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises finance cost on loan for which the grants are intended to compensate.

12 Standards issued but not yet effective

Appendix B to Ind AS 21, Foreign Currency transactions and advance consideration: On 28^th March, 2018, Ministry of Corporate Affairs ("MCA”) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign Currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from 1^st April, 2018. The Company has evaluated the effect of this on the financial statements and noted that the impact is not material to the Company.

Ind AS 115- Revenue from Contract with Customers: On 28^th March, 2018, Ministry of Corporate Affairs ("MCA”) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts with customers.

The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (cumulative catch - up approach)

The effective date for adoption of Ind AS 115 is financial periods beginning on or after 1^st April, 2018. The Company will adopt the standard on 1^st April, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ended 31^st March, 2018 will not be retrospectively adjusted. The Management is of the view that the effect on adoption of Ind AS 115 is expected to be insignificant.

13 Previous year's figures

Previous year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/ disclosure.