Parag Milk Foods Ltd. के अकाउंट के लिये नोट

Mar 31, 2025

3.18 Provisions, contingent liabilities and contingent assets

The Company recognizes the provisions when a present obligation (legal or constructive) as a result of past event exists and it is
probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of
such obligation can be reliably estimated.

If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects when appropriate,
the risk specific to the liability. When discounting is used, the increase in provision due to passage of time is recognized as a
finance cost.

A disclosure for a contingent liability is made when there is possible obligation or a present obligation that may but probably will not
require an outflow of resources embodying the economic benefits or the amount of such obligation cannot be measured reliably
When there is possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying the
economic benefits is remote, no provision or disclosure is made.

Contingent assets are not recognized. However, when the realisation of income is virtually certain, then the related asset is no
longer a contingent asset, and is recognized as an asset.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

Commitments are future liabilities for contractual expenditure, classified and disclosed as estimated amount of contracts remaining
to be extracted on capital account and not provided for.

Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid
excessive details.

3.19 Employee Benefits
Short-Term Employee Benefits

All employee benefits falling due wholly within twelve months of rendering the services are classified as short-term employee
benefits, which include benefits like salaries, wages, and performance incentives and are recognized as expenses in the period in
which the employee renders the related service.

Post-Employment Benefits

Contributions to defined contribution schemes, such as, Provident Fund, Employees State Insurance are recognized as expenses
in the period in which the employee renders the related service. The Company has no further obligations beyond its monthly
contributions. The Company also provides for post-employment defined benefit in the form of gratuity The cost of providing
benefit is determined using the projected unit credit method, with actuarial valuation being carried out at each balance sheet

date. Re-measurement of the net benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding
interests) and the effect of the assets ceiling (if any, excluding interest) are recognized in OCI. The effect of any plan amendments
are recognized in net profit in the statement of profit and loss.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to
recognise the obligation on a net basis.

3.20 Earnings Per Share

Basic earnings per share

Basic earnings per share is calculated by dividing:

- the profit / loss attributable to owners of the Company

- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity
shares issued during the year and excluding treasury shares.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings shares to take into account:

- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all
dilutive potential equity shares.

3.21 Statement of Cash Flows

Cash flows are reported using indirect method, whereby net profits before tax is adjusted for the effects of transactions of a non¬
cash nature and any deferrals or accruals of past or future cash receipts or payments and items of income or expenses associated
with investing or financing cash flows. The cash flows from regular revenue generating (operating activities), investing and financing
activities of the Company are segregated.

Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available
for general use as at the date of Balance Sheet.

3.22 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision
Maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating
segments of the Company.

3.23 Recent Accounting Pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as amended from time to time. For the year ended 31 March, 2025, MCA has notified Ind -AS 117
Insurance Contracts and amendments to Ind-AS 116 Leases, relating to sale and leaseback transactions, applicable to the
Company w.ef. 01 April, 2024. The Company has reviewed the new pronouncements and based on its evaluation has determined
that the new pronouncement is not applicable to the Company.

(f) As per records of the Company, including its register of shareholders/members, the above shareholding represents legal ownerships
of shares. The above percentage have been computed after excluding 171,015 nos ( 31^st March, 2024 176,015 nos) of equity shares
issued to ESOP Trust.

(g) The Company has not issued any equity shares pursuant to contract without payment being received in cash or by way of bonus
shares or bought back any equity shares during the last five years preceding the balance sheet date.

(h) Shares reserved for issue under Employee stock purchase plan

Information relating to Employee stock purchase plan, including details of options issued, exercised and lapsed during the financial
year and options outstanding as at the end of the reporting period are set out in note 45.

Nature and purpose of reserves

(a) Securities premium

The amount received in excess of face value of the equity shares is recognised as securities premium. This reserve will be utilised in
accordance with the provisions of Section 52 of the Companies Act, 2013 (“the Act”).

(b) General reserves

General reserve is created from time to time by transferring profits from retained earnings and can be utilised for purposes such as
dividend pay-out, bonus issue, etc. Mandatory Transfer to general reserve is not required under the Act.

(c) Share options outstanding account

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

(d) Retained Earnings

Retained earnings are the profits that the Company has earned till date, net-off less any transfers to general reserve, dividends or
other distribution to the shareholders.

(e) Share warrants

Share warrants are instruments that give their holder the right to buy the stock of the issuing company at a predetermined price
within a stipulated time frame. They are similar to options, the holder of a warrant has the right (but not the obligation) to purchase the
shares of a company at a specified price in the future.

(f) Foreign Currency Convertible Bonds :

The conversion of the FCCBs will be at the option of IFC, the conversion price for the equity shares to be issued upon conversion
of the FCCBs is H135 per share which is subject to adjustments in accordance with the terms agreed between the parties and
applicable law. FCCBs shall be redeemed if not fully converted on the date that is 5 years plus one day from the date of subscription.

(g) Other comprehensive income:

Remeasurement of Net Defined Benefit Plans: Differences between the interest income on plan assets and the return actually
achieved, and any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within
the plans, are recognised in other comprehensive income and are adjusted to retained earnings.

Debt Instruments through Other Comprehensive Income: The fair value change of the debt instruments measured at FVOCI is
recognised in Debt instruments through OCI. Upon derecognition, the cumulative fair value changes on the said instruments are
reclassified to the Statement of Profit and Loss.

Fair value of cash flow hedges through Other Comprehensive Income: The effective portion of the fair value change of the cash
flow hedges measured at fair value through other comprehensive income is recognised in Cash flow hedges through Other
Comprehensive Income. Upon derecognition, if the hedged cash flow relates to a non-financial asset, the amount accumulated in
equity is subsequently included within the carrying value of that asset. For other cash flow hedges, amounts accumulated in other
comprehensive income are taken to the statement of profit and loss at the same time as the related cash flow.

Notes:

(a) Pursuant to resolution passed by the Board of Directors of the Company at the meeting held on 28^th May, 2021, the Company had
issued 10,680 Foreign Currency Convertible Bonds (FCCB) having face value of USD 1,000 each through private placement of
unlisted, unsecured, unrated to International Finance Corporation (IFC).

The conversion of the FCCBs will be at the option of IFC, the conversion price for the equity shares to be issued upon conversion
of the FCCBs is H 135 per share, as per IFC’s letter dated 03^rd January, 2024 for IFC’s in-principle approval for amendment to certain
provisions of the FCCB Subscription Agreement dated 8^th May 2021 executed between IFC and the Company.

FCCBs shall be redeemed if not fully converted on the date that is 5 years plus one day from the date of subscription. Coupon offered,
if any of FCCB’s, are repayable in 10 semi annual instalments starting from 15^th June, 2021.

No interest shall be payable if the volume weighted average price per equity share of the Company traded on the relevant stock
exchange for a 3 month period is equal to or greater than H 200 per share, accordingly no interest provision has been made for the
year ended 31^st March, 2025.

(b) Non-Convertible Debentures (NCDs) are payable as per redemption schedule w.e.f. 15^th June, 2023 to 15^th June, 2029 in thirteen
instalments, half yearly on 15^th June and 15^th December of H 11.54 crore each presently carrying interest @ 10.81% p.a. The company
shall use the proceeds from the issue of the debentures pursuant to this deed to finance its future expansion plans and working
capital requirements, in accordance with the financial plan and applicable law. The loan is secured by First pari passu charge by
hypothecation of movable and mortgage of immovable properties situated at Samudrapalle Village, Panchayathi Palamner Mandal,
Andhra Pradesh and Aawasari Phata Manchar, Taluka Ambegaon, Maharashtra together with all the erections and constructions of
every description which are standing, erected or attached to the properties.

(c) Term loan from a bank of H 42.93 crore ( 31^st March, 2024 : H 0.88 crore) carry interest @ 10.75% p.a. The loans are repayable over
60 monthly instalments maturing in January 2030 of H 0.90 crore along with interest. The loan is secured by exclusive charge on
fixed assets acquired from proceeds of such loan, Exclusive Mortgage Charge on Land & Building Convention Centre, Padma Nidhi
149/1 , Samudra Palli (Vi), Pengaragunta (P.O.), Palamaner (Mdl), Chittoor (Dist), A.P-517408, Subservient Charge on Factory land and
building at Samudrapalle Village, Panchayathi Palamner Mandal, Andhra Pradesh and Aawasari Phata Manchar, Taluka Ambegaon,
Maharashtra and mortgage of Entire (Present & Future) Plant & Machinery and other fixed assets owned by the company and
personal guarantee of Mr. Devendra Shah and Mr. Pritam Shah

(d) Hire purchase loan of H 0.30 crore ( 31^st March, 2024 : H 0.41 crore) from HDFC Bank Ltd carries interest @ 9.35 % p.a. The loans
are repayable in 60 monthly instalments maturing in November 2029 of H 0.01 crore each. The loan is secured by specific assets
financed (vehicle).

(e) Average interest rate for the non-current borrowings is 0% p.a. - 10.81% p.a.

(f) Refer Note 37 for information about liquidity risk and market risk of borrowings.

(g) All charges have been registered with the Registrar of Companies (RoC). The company does not have charges which is yet to be
registered with the Registrar of Companies (RoC) beyond the statutory period.

Notes :

(a) In accordance with Indian Accounting Standard (Ind AS) 20, Accounting for Government Grants and Disclosure of Government
Assistance, the Company has accounted for Industrial Promotion Subsidy under Package Scheme of Incentives, 2013 amounting to
H 76.60 crore ( 31^st March, 2024: H 26.92 crore), Production Link Incentives Scheme, 2021 amounting to H 11.61 crore ( 31^st March, 2024:
H 13.72 crore) as Other Operating Income in Statement of profit and loss.

(b) The Company has also accounted for Milk subsidy amounting to H 7.2 crore (31^st March, 2024: H Nil) as Other operating income in
statement of profit and loss, based on government circular dated 02^nd August, 2024.

(c) Performance obligation in respect of sale of goods is satisfied when control of the goods is transferred to the customer, generally
on delivery of the goods and payment is generally due as per the terms of contract with customers. As at year end there are no
unsatisfied performance obligation.

Note 36: Disclosure pursuant to Indian Accounting Standard (Ind AS) 107, Financiallnstruments - Disclosures

A. Accounting classification and fair values

The under mentioned table shows the carrying amounts and fair values of financial assets and financial liabilities, including their
levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at
fair value if the carrying amount is a reasonable approximation of fair value.

B. Measurement of fair value

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale.

Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short
term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of
these instruments.

C. Fair Value Hierarchy

The fair value of financial instruments as referred to above have been classified into three categories depending on the inputs used
in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities
(Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

Level 1: Includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds that have
quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at
the reporting period and the mutual funds are valued using closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which
maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required
to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the
case for unlisted equity securities included in level 3.

i) The carrying values of current financial liabilities and current financial assets are taken as their fair value because of their short
term nature.

ii) The carrying values of non-current financial liabilities and non-current financial assets are taken as their fair value based on their
discounted cash flows.

iii) The Company has used quoted market price for determining fair value of investments in equity instruments and mutual funds.

iv) There have been no transfers between level 1, level 2 and level 3 for year ended 31^st March, 2025 and 31^st March, 2024 respectively

Note 37: Financial Risk Management
Risk management framework

The Company has in place a mechanism to inform the Board about the risk assessment and the risk minimization procedures in place
and periodical review to ensure that management controls risk through means of a properly defined framework. The Company has
formulated and adopted Risk Management Policy to prescribe risk assessment, management, reporting and disclosure requirements of
the Company to comply with the rules of the regulator

The Company’s audit committee also oversees how management monitors compliance with the Company’s risk management policies
and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit
committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management
controls and procedures, the results of which are reported to the audit committee.

The Company’s principal financial liabilities, comprises of borrowings, trade and other payables. The main purpose of these financial
liabilities is to finance the Company’s operations. The Company’s principal financial assets include investments in equity shares, loans,
trade and other receivables, and cash and cash equivalents that the Company derives directly from its operations. The Company also
holds FVOCI/FVTPL investments.

The Company’s activities expose it to credit risk, liquidity risk and market risk. The Company’s primary focus is to foresee the
unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

This note explains the sources of risk to which the Company is exposed to and how the entity manages the risk.

(A) Credit risk

Trade and Other receivables

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. The risk arises principally from the Company’s trade and other receivables. The carrying amounts of financial assets
represent the maximum credit risk exposure.

The company has adopted a policy of dealing with credit worth counter parties and obtaining collateral where appropriate as a
means of mitigating the risk of financial loss from defaults

Concentration of credit risk with respect to Trade receivables are limited, due to the customer base being large, diverse and across
sector and countries. All trade receivables are reviewed and assessed for default on quaterly basis.

Trade receivables are typically unsecured and are derived from revenue earned from customers located in India. Credit risk has
always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the
creditworthiness of customers to which the Company grants credit terms in the normal course of business. In monitoring customer
credit risk, customers are grouped according to their credit characteristics, including whether they are General trade, Modern
trade, Institutional and Horeca customers. Outstanding customers dues are regularly monitored. The company exposure are
continously monitored.

Cash and bank balances:

Credit risk on cash and bank balances is limited as the company generally transacts with banks and financial institutions with high
credit ratings assigned by domestic credit rating agencies.

(B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as
possible, that it will have sufficient liquidity to meet its liabilities when they are due. Management monitors rolling forecasts of the
Company’s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected
cash flows. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank
overdraft/ cash credit facility The Company also monitors the level of expected cash inflows on trade receivables together with
expected cash outflows on trade payables and other financial liabilities. The Company has access to a sufficient sources of short
term funding with existing lenders that could be arrange upon should there be need.

(i) Maturities of financial liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross
and undiscounted.

(C) Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates
and prices (such as interest rates and foreign currency exchange rates) or in the price of market risk-sensitive instruments as a result
of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all
foreign currency receivables and payables and all current and non current. The Company is exposed to market risk primarily related
to foreign exchange rate risk and interest rate risk.

(i) Foreign currency exchange rate risk

The Company is subject to risk of changes in foreign currency values that impact costs of imported raw material and import
of equipment for expansion of plants, primarily with respect to USD and EURO. The Company’s business model incorporates
assumptions on currency risks and ensures any exposure is covered through the normal business operations.

The Company has not entered into any derivative transactions during the year and there were no derivative transactions
outstanding as on 31^st March, 2025

(a) The Company unhedged exposure to foreign currency risk at the end of the reporting year are as follows

(ii) Cash flow and fair value interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose
the Company to cash flow interest rate risk.

The company’s borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS
107, Financial Instruments: Disclosures, since neither the carrying amount nor the future cash flows will fluctuate because of a
change in market interest rates.

(a) Interest rate risk exposure

Company’s interest rate risk arises from borrowings. The interest rate profile of the Company’s interest-bearing financial
instruments as reported to the management of the Company is as follows :

(b) Cash flow sensitivity analysis for variable-rate instruments

The sensitivity analysis below has been determined based on the exposure to interest rates at the end of the reporting
period. For floating rate liabilities, the analysis is prepared assuming that the amount of the liability as at the end of the
reporting period was outstanding for the whole year. A 100 basis point increase or decrease is used when reporting interest
rate risk internally to key management personnel and represents Management’s assessment of the reasonably possible
change in interest rates. This analysis assumes that all other variables, in particular foreign currency exchange rates,
remain constant.

Note 38: Capital Management

(a) Risk Management

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves
attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to safeguard the
Company’s ability to remain as a going concern and maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating
plans, long term and other strategic plans and the requirements of the financial covenants. To maintain or adjust the capital structure,
the Company may adjust its dividend payment ratio to shareholders, return capital to shareholders or issue fresh shares.

The Company monitors capital using a ratio of ''adjusted net debt'' to ''equity''. For this purpose, adjusted net debt is defined as
liabilities, comprising interest-bearing loans and borrowings less cash and cash equivalents. Equity comprises all components of
equity including share premium and all other equity reserves attributable to the equity share holders.

(b) Dividend

The Board of Directors of the Company has recommended dividend of H 1 (One Rupee) per equity shares of the face value of H
10 each for the financial year ended 31^st March, 2025 which is subject to the approval of the shareholders in the ensuring Annual
General Meeting.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets
financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have
been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year.

No changes were made in the objectives, policies or processes for managing capital of the Company during the current and
previous year.

Note 39:- Disclosure pursuant to Indian Accounting Standard (Ind AS) 116, Leases

The company has entered into commercial leases for taking building (office spaces), land and Plant & Equipment on lease. There are no
restrictions placed upon the Company by entering into these leases. Some of the lease arrangements also include a non-cancellable
period, purchase option and escalation clauses.The Company has not given any sub lease during the year.

B. Defined benefit plan- Gratuity

The Company operates a defined benefit gratuity plan, which is governed by the Payment of Gratuity Act, 1972. The plan entitles
an employee who has completed at least five years of continuous service, to gratuity at the rate of fifteen days wages for every
completed year of service or part thereof in excess of six months, based on the last drawn wage by the employee concerned, subject
to the maximum limit specified under the Payment of Gratuity Act, 1972 as amended from time to time. The gratuity amount is payable
on termination of the emoployee or retirement whichever event is earlier, the benefit vest after five years of continuous service.

The defined benefit gratuity plan is administered by a Trust that is legally separate from the Company. The gratuity plan is a funded
plan, managed by Life Insurance Company (“LIC”) and the Company’s makes annual contributions to Group Gratuity cum Life
Assurance Scheme managed by LIC.

The most recent actuarial valuation of the defined benefit obligation was carried out as at 31^st March, 2025. The present value of
the defined benefit obligations and the related current service cost and past service costs were measured using Projected Unit
Credit Method.

Notes:

i. The Company is involved in other disputes, lawsuits, claims, inquiries and proceedings including commercial matters that arise from
time to time in the ordinary course of business. The Company believes that there are no such pending matters that are expected to
have any material adverse effect on its financial statements in any given accounting period.

ii. The amounts shown above represent the best possible estimates of pending litigations/disputes arrived at on the basis of available
information. The above do not include potential risks/demands, if any, for ongoing issues where no claims have been made against
the Company.

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

Note 45: Disclosure pursuant to Indian Accounting Standard (Ind AS) 102, Share-Based Payments

The Board of Directors constituted the equity settled Employee Stock Option Plan (“ESOP 2022”) vide its resolutions dated 13^th August,

2022 for issue of 5,00,000 stock options to the key employees of the Company, which has been approved in the Company’s Annual
General meeting dated 30^th September, 2022 further ESOP 2022 was amendend in the Annual General meeting dated 27^th September

2023 by increasing the pool size from erstwhile 5,00,000 Stock Options to 25,00,000 Stock Options. Additionally as per ESOS 2015
approved by member''s resolution dated 03^rd April, 2015 which was further amended vide special resolution dated 16^th May 2015 and
which was ratified post IPO by the shareholders in the 26^th AGM held on 19^th September, 2018 the balance 1,76,015 shares avaliable under
ESOS 2015 got transfered to ESOP 2022 vide amended to ESOS 2015

The number of shares allocated for allotment under ESOP 2022 is 25,00,000 equity shares of H 10 each (including 1,76,015 shares held by
ESOP trust vide amendment to ESOS 2015. The scheme are monitored and supervised by Nomination and Remuneration Committee of
the Board of Director in compliance with provision of Securities and Exchange Board of India (Shares Based Employee Benefits & Sweat
Equity) Regulation, 2021 and any circulars/notifications/guidance/frequently asked question issued thereunder as amended from time
to time.

The Employee Stock Option Plan includes employees of Parag Milk Foods Limited and its subsidiaries.

According to ESOP 2022, the employee selected will be entitled to stock options, subject to satisfaction of the prescribed vesting
conditions in the scheme. The fair valuation of the option have been computed as per the black scholes pricing model.

Note 48:

a) No provision for current tax is required to be made for the year ended 31^st March, 2025, in view of certain allowances and deductions
available under the Income Tax Act, 1961.

B) The Income Tax Department conducted a search under Section 132 of the Income Tax Act, 1961, on the Company and its associated
persons in the month of November 2021. The Company had only received a Panchanama dated 27^th November, 2021. Subsequently,
in the Assessment Order for A.Y 2021-22 dated 31^st December 2022, a reference has been made to the search and seizure and
appeal has been preferred against this order.

Note 49:

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year-
end, the Company has reviewed all such contracts and confirmed that no provision is required to be created under any law / accounting
standard towards any foreseeable loss.

Note 50: Audit Trail

The Company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit
log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except that audit trail
feature is not enabled at the database level insofar as it relates to the accounting software. Further, no instance of audit trail feature
being tampered with was noted in respect of the software where audit trail has been enabled & the audit trail has been preserved by the
Company as per the statutory requirements for record retention.

Note 51: Environmental, Social and Governance (ESG)

As a socially and environmentally responsible business, committed to the highest standards of corporate governance, the Company
is focused on growing sustainably to build long-term stakeholder value by embracing sustainable development. The Company aims to
deliver value to its employees, customers and stake holders.

Note 52: Events after the reporting period

The Board of Directors in their meeting on 2^nd May 2025 recommended a final dividend of H1 (One) per equity share for the financial year
ended March 31 2025. This payment is subject to the approval of shareholders in the Annual General Meeting of the Company and if
approved would result in a net cash outflow of approximately H11.92 crore. It is not recognised as a liability as at 31^st March, 2025.

Note 53:

Figures of the previous year have been regrouped wherever necessary The figures have been rounded off to the nearest crore of rupees
upto two decimal places. The figure 0.00 wherever stated represents value less than H 50,000.

Note 54:

Note No. 1 to 54 form integral part of the Standalone Balance Sheet and Standalone Statement of Profit and Loss.

Signatures to Notes 1 to 54

SHARP & TANNAN For and on behalf of the Board of Directors of

Chartered Accountants Parag Milk Foods Limited

Firm''s Registration No. 109982W
by the hand of

Edwin Paul Augustine Devendra Shah Pritam Shah

Partner Chairman Managing Director &

Membership No. 043385 DIN: 01127319 Interim Chief Financial Officer

DIN: 01127247

Virendra Varma

Company Secretary & Compliance
Officer

Membership No. F10520

Place: Mumbai Place: Mumbai

Date: 02^nd May 2025 Date: 02^nd May 2025

---

Mar 31, 2024

(l8)Provisions, contingent liabilities and contingent assets and commitments

The Company recognizes the provisions when a present obligation (legal or constructive) as a result of past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated.

If the effect of time value of money is material, provisions are discounted using a current pretax rate that reflects when appropriate, the risk specific to the liability. When discounting is used, the increase in provision due to passage of time is recognized as a finance cost.

A disclosure for a contingent liability is made when there is possible obligation or a present obligation that may, but probably will not require an outflow of resources embodying the economic benefits or the amount of such obligation cannot be measured reliably. When there is possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying the economic benefits is remote, no provision or disclosure is made.

Contingent assets are not recognized. However, when the realisation of income is virtually certain, then the related asset is no longer a contingent asset, and is recognized as an asset.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

Commitments are future liabilities for contractual expenditure, classified and disclosed as estimated amount of contracts remaining to be extracted on capital account and not provided for.

Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details.

(19) Employee benefits

Short-term employee benefits

All employee benefits falling due wholly within twelve months of rendering the services are classified as short-term employee benefits, which include benefits like salaries, wages, short-term compensated absences and performance incentives and are recognized as expenses in the period in which the employee renders the related service.

Post-employment benefits

Contributions to defined contribution schemes, such as, Provident Fund, Employees State Insurance are recognized as expenses in the period in which the employee renders the related service. The Company has no further obligations beyond its monthly contributions. The Company also provides for postemployment defined benefit in the form of gratuity. The cost of providing benefit is determined using the projected unit credit method, with actuarial valuation being carried out at each balance sheet date. Re-measurement of the net benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interests) and the effect of the assets ceiling (if any, excluding interest) are recognized in OCI. The effect of any plan amendments are recognized in net profit in the statement of profit and loss.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis.

Other long-term employee benefits

All employee benefits (other than post-employment benefits and termination benefits) which do not fall due wholly within twelve months after the end of the period in which the employees render the related services are determined based on actuarial valuation or discounted present value method carried out at each balance sheet date. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary as at every year end using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

(20) Earnings per share Basic earnings per share

Basic earnings per share is calculated by dividing:

- the profit / loss attributable to owners of the Company

- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings shares to take into account:

- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

(21) Statement of cash flows

Cash flows are reported using indirect method, whereby net profits before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments and items of income or expenses associated with investing or financing cash flows. The cash flows from regular revenue generating (operating activities), investing and financing activities of the Company are segregated.

Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as at the date of Balance Sheet.

(22) Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company.

3. Recent Accounting Policies

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated March 31, 2023 to amend the following Ind-AS which are effective for annual periods beginning on or after April 1, 2023. The Company has applied these amendments for the first time in the financial statements.

i. Amendments to Ind AS 1, Presentation of Financial Statements - disclosure of accounting policies

The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ''significant'' accounting policies with a requirement to disclose their ''material'' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments have had an impact on the disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the financial statements.

ii. Amendments to Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors -definition of accounting estimates

The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates.

The amendments had no impact on these financial statements.

iii. Amendments to Ind AS 12, income Taxes -deferred tax related to assets and liabilities arising from a single transaction

The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases.

The Company has previously recognized deferred tax on leases on a net basis. As a result of these amendments, the Company has recognized a separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its ROU assets. Since these balances qualify for offset as per the requirements of paragraph 74 of Ind AS 12, there is no impact on the balance sheet. There was also no impact on the opening retained earnings as at April 01, 2022.

iv. New standards and amendments issued but not effective

There are no such standards which are notified but not yet effective.

v. The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications.

Notes:

(a) Trade receivable represents the amount of consideration in exchange for goods or services transferred to the customers that is unconditional.

(b) No trade receivables are due from directors or other officers of the Company, either severally or jointly with any other person, nor any trade and other receivables are due from firms or private companies respectively in which any directors is a partner, a director or a member.

(c) For the Company''s exposure to credit and currency risk related to trade receivables - [Refer Notes 36 (a) and 36 (c)].

(d) Trade receivables are receivable in normal operating cycle and are shown net of an allowance for bad or doubtful debts.

(e) Trade receivables stated above are charged on a first pari-passu basis between working capital consortium members led by Union Bank of India, SVC Co-operative Bank Limited and IDBI Bank Limited.

(f) There are no unbilled dues during the year.

(g) Trade receivables are usually on trade terms based on credit worthiness of customers as per the terms of contract with customers

(c) Terms and rights attached to equity shares

The Company has only one class of shares referred to as equity shares having a par value of f10 per share. Each holders of equity shares carry one vote per share without restrictions. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their sharholding.

The Board of Directors of the Company has recommended dividend of f0.50 (Fifty Paisa) per equity shares of the face value of f10 each for the financial year ended March 31, 2024 which is subject to the approval of the shareholders in the ensuring Annual General Meeting.

(i) The Company had vide board resolution dated May 10, 2021 issued 50,00,000 warrants at a price of flll (including a premium of fl0l) to Mr. Devendra and 50,00,000 warrants at a price of flll (including a premium of fl0l) to Mrs. Netra P Shah, belonging to promoter and promoter group, entitling them for the subscription of equivalent number of equity shares of fl0 each at flll each (including premium of fl0l per share). The aforementioned issue of equity shares and share warrants are being made for general corporate purpose and working capital requirements.

During the financial year 2022-23, the Company has issued and allotted, 50,00,000 Equity Shares each, of face value fl0 each fully paid up to Mr. Devendra P. Shah and Mrs. Netra P. Shah (''warrant holders'') individually, consequent to the warrant holders having exercised their right for conversion of warrants into equity shares.The allotment has been made for cash, upon the receipt of the remaining exercise price of f83.25 per Share warrant (being an amount equivalent to the 75% of the warrant exercise price of flll per warrant), aggregating to f83,25,00,000.

(j) The Company had vide board resolution dated August 23, 2022 issued 20,00,000 warrants at a price of f93.75 (including a premium of f83.75) to Ms. Akshali Shah, belonging to promoter and promoter group, entitling them for the subscription of equivalent number of equity shares of fl0 each at f93.75 (including a premium of f83.75).The aforementioned issue of equity shares and share warrants are being made for general corporate purpose and working capital requirements.

During the financial year 2023-24, the Company has issued and allotted, 20,00,000 Equity Shares each, of face value fl0 each fully paid up to Ms. Akshali Shah (''warrant holder''), consequent to the warrant holder having exercised their right for conversion of warrants into equity shares.

The allotment has been made for cash, upon the receipt of the remaining exercise price of f70.3l per Share warrant (being an amount equivalent to the 75% of the warrant exercise price of f93.75 per warrant), aggregating to fl4,06,25,000.

(k) There was no equity shares bought back, bonus shares issued, or shares alloted as fully paid up pursuant to contract without payment in cash.

(l) There are no shares reserved for issue under options and contracts/ commitments for the sale of shares/ disinvestment.

Nature and purpose of reserves

(a) Securities Premium

The amount received in excess of face value of the equity shares is recognised as securities premium. This reserve will be utilised in accordance with the provisions of Section 52 of the Act.

(b) General Reserves

General reserve is created from time to time by transferring profits from retained earnings and can be utilised for purposes such as dividend pay-out, bonus issue, etc. Mandatory transfer to general reserve is not required under the Act.

(c) Retained Earnings

Retained earnings are the profits that the Company has earned till date, net-off less any transfers to general reserve, dividends or other distribution to the shareholders.

(d) Employee Stock option outstanding

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

(e) Share Warrants

Share warrants are instruments that give their holder the right to buy the stock of the issuing company at a predetermined price within a stipulated time frame. They are similar to options, the holder of a warrant has the right (but not the obligation) to purchase the shares of a company at a specified price in the future.

(f) Other Comprehensive Income:

Remeasurement of Net Defined Benefit Plans: Differences between the interest income on plan assets and the return actually achieved, and any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised in other comprehensive income and are adjusted to retained earnings.

Debt Instruments through Other Comprehensive Income: The fair value change of the debt instruments measured at FVTOCI is recognised in Debt instruments through OCI. Upon derecognition, the cumulative fair value changes on the said instruments are reclassified to the Statement of profit and loss.

Fair value of cash flow hedges through Other Comprehensive Income: The effective portion of the fair value change of the cash flows hedges measured at FVTOCI is recognised in Cash flow hedges through Other Comprehensive Income. Upon derecognition, if the hedged cash flows relates to a non-financial asset, the amount accumulated in equity is subsequently included within the carrying value of that asset. For other cash flow hedges, amounts accumulated in other comprehensive income are taken to the Statement of profit and loss at the same time as the related cash flows.

Notes:

(a) Pursuant to resolution passed by the Board of Directors of the Company at the meeting held on May 28, 2021, the Company had issued 10,680 Foreign Currency Convertible Bonds (FCCB) having face value of USD 1,000 each through private placement of unlisted, unsecured, unrated to International Finance Corporation (IFC).

The conversion of the FCCBs will be at the option of IFC, the conversion price for the equity shares to be issued upon conversion of the FCCBs is f145 per share which is subject to adjustments in accordance with the terms agreed between the parties and applicable law.

The Company has, vide it''s letter dated January 10, 2024, made an application to the Reserve Bank of India seeking prior approval for change in certain terms of aforesaid FCCBs. The approval for the same is awaited.

FCCBs shall be redeemed if not fully converted on the date that is 5 years plus one day from the date of subscription.

Coupon offered, if any of FCCB''s, are repayable in 10 semi annual instalments starting from June 15, 2021;

i. interest at the rate of 2.5% p.a.payable in dollars semi-Annually on each payment date on the outstanding unconverted amount of FCCBs till such time that the volume weighted average price per equity share of the Company traded on the relevant stock exchange for a 3 month period is below f175 per share;

ii. interest at the rate of 1.5% p.a. payable in dollars semi-Annually on each payment date on the outstanding unconverted amount of FCCBs till such time that the volume weighted average price per equity share of the Company traded on the relevant stock exchange for a 3 month period, is equal to or greater than f175 per share but below f200 per share; and

iii. no interest shall be payable if the volume weighted average price per equity share of the Company traded on the relevant stock exchange for a 3 month period is equal to or greater than f200 per share."

(b) Non-Convertible Debentures (NCDs) are payable as per Redemption Schedule w.e.f. June 15, 2023 to June 15, 2029 in thirteen instalments, half yearly on 15^th June and 15^th December of f115.38 Million each. The Company shall use the proceeds from the issue of the Debentures pursuant to this Deed to finance its future expansion plans and working capital requirements, in accordance with the Financial Plan and applicable law. The loan is secued by pari passu charge on Immovable Properties situated at Samudrapalle Village, Panchayathi Palamner Mandal, Andhra Pradesh together with all the erections and constructions of every description which are standing, erected or attached to the properties.

(c) Indian rupee loans from a bank of f8.84 Million (March 31, 2023 : f48.87 Million) carry interest @ 9.65%-11.05%. The loans are repayable over 48-60 monthly instalments starting from March 2018, June 2019, July 2019, August 2019, September 2019, December 2019, and September 2020 along with interest. The loan is secured by pari passu charge on fixed assets and second pari passu charge on current assets of the Company and personal guarantee of Promoter Directors.

(d) Hire purchase loan of f4.06 Million (March 31, 2023 : f13.65 Million) carries interest @ 7.45% to 9.35 % p.a. The loans are repayable in 60 monthly instalments to 36 monthly instalments starting from December 2018; November 2019 and May 2021. of f0.05 Million to f0.56 Million each. The loan is secured by specific assets financed (vehicles).

(e) Average interest rate for the non-current borrowings is 7.45 - 11.25%.

(f) Refer Note 36 for information about liquidity risk and market risk of borrowings.

(g) All charges have been registered with the Registrar of Companies (RoC). The Company does not have charges or satisfactory which is yet to be registered with the RoC beyond the statutory period.

Notes :

(a) In accordance with Indian Accounting Standard (Ind AS) 20, Accounting for Government Grants and Disclosure of Government Assistance, the Company has accounted for Industrial Promotion Subsidy under Package Scheme of Incentives, 2013 amounting to f269.24 Million (March 31, 2023: f240.01 Million), Production Link Incentives Scheme, 2021 amounting to f137.22 Million (March 31, 2023: f58.98) as Other Operating Income in Statement of profit and loss.

(b) The Company has also accounted for export subsidy and bio-gas subsidy amounting to f0.38 Million (March 31, 2023: f0.96 Million) and fNil (March 31, 2023: f10 Million) respectively as Other Operating Income in Statement of profit and loss.

(c) Performance obligation in respect of sale of goods is satisfied when control of the goods is transferred to the customer, generally on delivery of the goods and payment is generally due as per the terms of contract with customers.

(d) i) The Company does not have any contract asset as at March 31, 2024; (March 31, 2023 : Nil)

ii) The Company does not have any contract liability as at March 31, 2024; (March 31, 2023 : Nil)

iii) The Company does not receive 10% or more of its revenue from transaction with any single external customer.

(e) Cost to obtain the contract

i) Amoritisation in Statement of Profit and Loss :- Nil ( Previous Year :- Nil )

ii) Recognised as contract assets at March 31, 2024:- Nil ( Previous Year :- Nil)

32.2 Undisclosed income

There are no transactions which are not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

32.3 Details of Crypto Currency or Virtual Currency

The Company has not traded or invested in Crypto currency or Virtual currency during the financial year 2023-24 and 2022-23

Note 33: Disclosure pursuant to Indian Accounting Standard (Ind AS) 12, Income Taxes

(a) The major components of recognised deferred tax assets/ (liabilities) arising on account of timing differences are as follows:

A. Accounting classification and fair values

The under mentioned table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

B. Measurement of fair value

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.

C. Fair Value Hierarchy

The fair value of financial instruments as referred to above have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

Level 1: Includes financial instruments measured using quoted prices for identical instrument in an active market. This includes listed equity instruments, traded bonds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period and the mutual funds are valued using closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market inputs directly or indirectly and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Note 36: Financial Risk Management

Risk management framework

The Company has in place a mechanism to inform the Board about the risk assessment and the risk minimization procedures in place and periodical review to ensure that management controls risk through means of a properly defined framework. The Company has formulated and adopted Risk Management Policy to prescribe risk assessment, management, reporting and disclosure requirements of the Company to comply with the rules of the regulator.

The Company''s audit committee also oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

The Company''s principal financial liabilities, comprises of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include investments in equity shares, loans, trade and other receivables, and cash and cash equivalents that the Company derives directly from its operations. The Company also holds FVTOCI/FVTPL investments.

The Company''s activities expose it to market risk, liquidity risk and credit risk. The Company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

This note explains the sources of risk to which the Company is exposed to and how the entity manages the risk.

(A) Credit risk

Trade and Other receivables

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The risk arises principally from the Company''s trade and other receivables. The carrying amounts of financial assets represent the maximum credit risk exposure.

The company has adopted a policy of dealing with credit worth counter parties and obtaining colletral where appropriate as a means of mitigating the risk of financial loss from defaults

Concentration of credit risk with respect to Trade receivables are limited, due to the customer base being large, diverse and across sector and countries. All trade receivables are reviewed and assessed for default on quaterly basis.

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdraft/ cash credit facility. The Company also monitors the level of expected cash inflows on trade receivables together with expected cash outflows on trade payables and other financial liabilities. The Company has access to a sufficient sources of short term funding with existing lenders that could be arrange upon should there be need.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates and foreign currency exchange rates) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all current and non current. The Company is exposed to market risk primarily related to foreign exchange rate risk and interest rate risk.

(i) Foreign currency exchange rate risk

The Company is subject to risk of changes in foreign currency values that impact costs of imported raw material and import of equipment for expansion of plants, primarily with respect to USD and EURO. The Company''s business model incorporates assumptions on currency risks and ensures any exposure is covered through the normal business operations.

The Company has not entered into any derivative transactions during the year and there were no derivative transactions outstanding as on March 31, 2024

(i) Cash flow and fair value interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk.

The company''s borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, Financial Instruments. Disclosures, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

(a) Risk Management

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to safeguard the Company''s ability to remain as a going concern and maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating plans, long term and other strategic plans and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust its dividend payment ratio to shareholders, return capital to shareholders or issue fresh shares.

The Company monitors capital using a ratio of ''adjusted net debt'' to ''equity''. For this purpose, adjusted net debt is defined as liabilities, comprising interest-bearing loans and borrowings less cash and cash equivalents. Equity comprises all components of equity including share premium and all other equity reserves attributable to the equity share holders.

(b) Dividend

The Board of Directors of the Company has recommended dividend of f0.50 (Fifty Paisa) per equity shares of the face value of f10 each for the financial year ended March 31, 2024 which is subject to the approval of the shareholders in the ensuring Annual General Meeting.

B. Defined Benefit Plan- Gratuity

The Company operates a defined benefit gratuity plan, which is governed by the Payment of Gratuity Act, 1972. The plan entitles an employee who has completed at least five years of continuous service, to gratuity at the rate of fifteen days wages for every completed year of service or part thereof in excess of six months, based on the last drawn wage by the employee concerned, subject to the maximum limit specified under the Payment of Gratuity Act, 1972 as amended from time to time. The gratuity amount is payable on termination of the emoployee or retirement whichever event is earlier, the benefit vest after five years of continuous service.

The defined benefit gratuity plan is administered by a Trust that is legally separate from the Company. The gratuity plan is a funded plan, managed by Life Insurance Company ("LIC") and the Company''s makes annual contributions to Group Gratuity cum Life Assurance Scheme managed by LIC.

The most recent actuarial valuation of the defined benefit obligation was carried out as at March 31, 2024. The present value of the defined benefit obligations and the related current service cost and past service costs were measured using Projected Unit Credit Method.

Note 43: Disclosure pursuant to Indian Accounting Standard (Ind AS) 108, Operating Segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group''s other components, and for which discrete financial information is available. All operating segments'' operating results are reviewed regularly by the Group''s Chief Executive Officer (CEO) to make decisions about resources to be allocated to the segments and assess their performance. The Group is in the business of processing and selling milk and milk products. The Group''s Chief Executive Officer who is identified as Chief Operating Decision Maker (CODM) reviews the performance of the Group on the basis of economic performance for Liquid Milk, Products and Curd. For the purpose of reporting the operating segments, all the three segments have been aggregated as a single reporting segment under the provisions of Ind AS 108 ''Operating Segments'' as the nature of products, the production and distribution process, class of customers and the regulatory environment is similar for all the segment. Thus, the segment revenue, segment profit, total segment assets and liabilities are all as reflected in the consolidated financial statements as at and for the years ended 31 March 2024 and 31 March 2023.

Note 44: Disclosure pursuant to Indian Accounting Standard (Ind AS) 102, Share-Based Payments

The Board of Directors constituted the equity settled Employee Stock Option Plan ("ESOP 2022") vide its resolutions dated August 13, 2022 for issue of 5,00,000 stock options to the key employees of the Company, which has been approved in the Company''s Annual General meeting dated September 30, 2022 further ESOP 2022 was amendend in the Annual General meeting dated September 27, 2023 by increasing the pool size from erstwhile 5,00,000 Stock Options to 25,00,000 Stock Options. Additionally as per ESOS 2015 approved by member''s resolution dated April 3, 2015 which was further amended vide special resolution dated May 16, 2015 and which was ratified post IPO by the shareholders in the 26^th AGM held on September 19, 2018 the balance 1,76,015 shares avaliable under ESOS 2015 got transfered to ESOP 2022 vide amended to ESOS 2015

"The number of shares allocated for alloctment under ESOP 2022 is 25,00,000 equity shares of f10 each (including 1,76,015 shares held by ESOP trust vide amendment to ESOS 2015. The scheme are monitered and supervised by Nomination and Remuneration Committee of the Board of Director in compliance with provsion of Securities and Exchange Board of India (Shares Based Employee Benefits & Sweat Equity) Regulation, 2021 and any circulars/notifications/guidance/frequently asked question issued thereunder as amended from time to time. The Employee Stock Option Plan includes employees of Parag Milk Foods Limited and its subsidiaries.

Note 48:

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year-end, the Company has reviewed all such contracts and confirmed that no provision is required to be created under any law / accounting standard towards any foreseeable loss.

Note 49:

The Code on Social Security, 2020 (the ''Code'') relating to employee benefits during employment and postemployment benefits received the President''s assent on September 28, 2020. The Code has been published in the Gazette of India. The Ministry of Labour and Employment has released the draft Rules for the Code on November 13, 2020 and has invited suggestions from the stakeholders. However, the date on which the Code / Rules will come to effect has not been notified.

The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effective.

Note 50: Audit Trail

The Company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except that audit trail feature is not enabled at the database level insofar as it relates to the accounting software. Further, no instance of audit trail feature being tampered with was noted in respect of the software where audit trail has been enabled.

Note 51:

No significant subsequent events have been observed with may require an adjustment to the financial statements.

Note 52:

Figures of the previous year have been regrouped wherever necessary.

Signatures to Notes 1 to 52

sh^arp & ^tannan For and on behalf of the Board of Directors of

^Ch^artereci Parag Milk Foods Limited

Firm''s Registration No. 109982W by the hand of

Edwin Paul Augustine Devendra Shah Pritam Shah

Partner Chairman Managing Director &

Membership No. 043385 DIN: 01127319 Interim Chief Financial Officer

DIN: 01127247

Virendra Varma

Company Secretary & Compliance Officer Membership No. F10520

^{Place: Mumbai} Place: Mumbai

^{Date: Ma}y ^{18, 2024} Date: May 18, 2024

---

Mar 31, 2023

Provisions, contingent liabilities and contingent assets and commitments

The company recognizes the provisions when
a present obligation (legal or constructive) as
a result of past event exists and it is probable
that an outflow of resources embodying
economic benefits will be required to settle
such obligation and the amount of such
obligation can be reliably estimated.

If the effect of time value of money is material,
provisions are discounted using a current pre¬
tax rate that reflects when appropriate, the risk
specific to the liability. When discounting is
used, the increase in provision due to passage
of time is recognised as a finance cost.

A disclosure for a contingent liability is made
when there is possible obligation or a present
obligation that may, but probably will not
require an outflow of resources embodying
the economic benefits or the amount of such
obligation cannot be measured reliably.
When there is possible obligation or a present
obligation in respect of which likelihood of
outflow of resources embodying the economic
benefits is remote, no provision or disclosure
is made.

Contingent assets are not recognised.
However, when the realisation of income is
virtually certain, then the related asset is no
longer a contingent asset, and is recognised
as an asset.

Commitments are future liabilities for
contractual expenditure, classified and
disclosed as estimated amount of contracts
remaining to be extracted on capital account
and not provided for.

s) Employee benefits

Short-term employee benefits

All employee benefits falling due wholly within
twelve months of rendering the services are
classified as short-term employee benefits,
which include benefits like salaries, wages,
short-term compensated absences and
performance incentives and are recognised as
expenses in the period in which the employee
renders the related service.

Post-employment benefits

Contributions to defined contribution schemes
such as Provident Fund, Employees State
Insurance., are recognised as expenses in
the period in which the employee renders
the related service. The Company has no
further obligations beyond its monthly
contributions. The Company also provides
for post-employment defined benefit in
the form of gratuity. The cost of providing
benefit is determined using the projected
unit credit method, with actuarial valuation
being carried out at each balance sheet date.
Re measurement of the net benefit liability,
which comprise actuarial gains and losses,
the return on plan assets (excluding interests)
and the effect of the assets ceiling (if any,
excluding interest) are recognised in other
comprehensive income. The effect of any plan
amendments are recognised in net profit in
the Statement of Profit and Loss.

Other long-term employee benefits

All employee benefits (other than post¬
employment benefits and termination benefits)
which do not fall due wholly within twelve
months after the end of the period in which
the employees render the related services are
determined based on actuarial valuation or
discounted present value method carried out
at each balance sheet date. The expected cost

of accumulating compensated absences is
determined by actuarial valuation performed
by an independent actuary as at every year
end using projected unit credit method on
the additional amount expected to be paid /
availed as a result of the unused entitlement
that has accumulated at the balance
sheet date. Expense on non-accumulating
compensated absences is recognised in the
period in which the absences occur.

t) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by
dividing:

- The profit/loss attributable to owners
of the company

- By the weighted average number
of equity shares outstanding during
the financial year, adjusted for bonus
elements in equity shares issued
during the year and excluding treasury
shares

(ii) Diluted earnings per share:

Diluted earnings per share adjusts the
figures used in the determination of basic
earnings shares to take into account:

- The after income tax effect of interest
and other financing costs associated
with dilutive potential equity shares,
and

- The weighted average number of
additional equity shares that would
have been outstanding assuming
the conversion of all dilutive potential
equity shares.

u) Cash flow statement

Cash flows are reported using indirect method,
whereby net profits before tax is adjusted for
the effects of transactions of a non-cash
nature and any deferrals or accruals of past or
future cash receipts or payments and items of
income or expenses associated with investing
or financing cash flows. The cash flows from
regular revenue generating (operating
activities), investing and financing activities of
the Company are segregated.

v) Segment Reporting

Operating segments are reported in a manner
consistent with the internal reporting provided
to the Chief Operating Decision Maker (CODM)
of the company. The CODM is responsible
for allocating resources and assessing
performance of the operating segments of the
company.

w) Recent Accounting Developments

Ministry of Corporate Affairs (''MCA'') on March
31, 2023 notified amendments to the existing
standards under the Companies (Indian
Accounting Standards) Rules, 2015 by the
Companies (Indian Accounting Standards)
Amendment Rules, 2023 which are effective
from April 1, 2023, are as under:

Ind AS 1, Presentation of Financial Statements:

The amendments aim to help entities provide
accounting policy disclosures that are more
useful by replacing the requirement for entities
to disclose their ''significant'' accounting
policies with a requirement to disclose their
''material'' accounting policies and adding
guidance on how entities apply the concept
of materiality in making decisions about
accounting policy disclosures.

The amendments to Ind AS 1 are applicable
for annual periods beginning on or after
April 1, 2023. Consequential amendments have
been made in Ind AS 107.

The amendments are not expected to have a
material impact on the Company''s financial
statements.

Ind AS 8, Accounting Policies, Changes in
Accounting Estimates and Errors:

The amendments clarify the distinction
between changes in accounting estimates
and changes in accounting policies and the
correction of erro f It has also been clarified
how entities use measurement techniques
and inputs to develop accounting estimates.

The amendments are effective for annual
reporting periods beginning on or after April
1, 2023 and apply to changes in accounting
policies and changes in accounting estimates
that occur on or after the start of that period.

The amendments are not expected to have a
material impact on the Company''s financial
statements.

Ind AS 12, Income Taxes:

The amendments narrow the scope of the
initial recognition exception under Ind AS 12,
so that it no longer applies to transactions
that give rise to equal taxable and deductible
temporary differences.

The amendments should be applied to
transactions that occur on or after the
beginning of the earliest comparative period
presented. In addition, at the beginning of
the earliest comparative period presented,
a deferred tax asset (provided that sufficient
taxable profit is available) and a deferred
tax liability should also be recognised for all
deductible and taxable temporary differences
associated with leases and decommissioning
obligations. Consequential amendments have
been made in Ind AS 101.

The amendments to Ind AS 12 are applicable
for annual periods beginning on or after
April 1, 2023.

The Company has evaluated these
amendments and there are no impacts on its
financial statements.

---

Mar 31, 2018

1. CORPORATE INFORMATION

Parag Milk Foods Limited (formerly Parag Milk Foods Private Limited) (“the Company”) was incorporated under the provisions of the Companies Act, 1956 and its equity shares are listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India. The Company is engaged in the business of procurement of cow milk mainly in western and southern region, undertakes processing of milk and manufacture of various value added products namely cheese, butter, ghee, fresh cream, milk powder, flavoured milk, lassi, curd etc. which are marketed under its registered brand name “Gowardhan”, “Go” and “Topp up”. The registered office of the Company is situated at Flat No. 1, Plot No. 19, Nav Rajasthan Society, S. B. Road, Shivaji Nagar, Pune-411016.

2. BASIS OF PREPARATION

A. Statement of compliance

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act.

The financial statements up to and for the year ended 31 March 2017 were prepared in accordance with the Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act.

As these are the Company’s first standalone financial statements prepared in accordance with Indian Accounting Standards (Ind AS), Ind AS 101, First-time Adoption of Indian Accounting Standards has been applied. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance is provided in Note 52.

The standalone financial statements were authorised for issue by the Company’s Board of Directors on May 9, 2018.

Details of the Company’s accounting policies are included in Note 3.

B. Functional and presentation currency

These standalone financial statements are presented in Indian Rupees (‘), which is also the Company’s functional currency. All amounts have been rounded-off to two decimal places to the nearest millions, unless otherwise indicated.

C. Basis of measurement

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

D. Current / non-current classification of assets/ liabilities

The Company has classified all its assets/liabilities into current/non-current portion based on the time frame of 12 months from the date of the financial statements. Accordingly, assets/liabilities expected to be realised /settled within 12 months from the date of financial statements are classified as current and other assets/liabilities are classified as non-current

E. Use of estimates and judgements

In the preparation of the financial statements, the Company makes judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively. Information about assumptions, judgements and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending 31 March 2018 are as below and also been discussed in detail in the relevant section of accounting policies.

- Measurement of defined benefit obligations: key actuarial assumptions;

- Useful life of property, plant and equipment

- Fair value measurement of financial instruments

- Impairment of financial assets.

F. Measurement of fair values

Certain accounting policies and disclosures of the Company require the measurement of fair values, for both financial and non-financial assets and liabilities.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into a different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

Further information about the assumptions made in the measuring fair values is included in the following notes:

- Share-based payments

- Financial instruments.

(a) Securities premium reserve represents premium received on equity shares issued, which can be utilised only in accordance with the provisions of the Companies Act, 2013 (the Act) for specified purposes.

(b) General reserve is created from time to time by transferring profits from retained earnings and can be utilised for purposes such as dividend payout, bonus issue, etc

(c ) Debenture redemption reserve represents reserve created out of profit / retained earnings at specified value of debentures to be redeemed. The Company has transferred the balance to general reserve as the debentures have been redemeed during the year.

(d) Retained earnings represents surplus/ accumulated earnings of the Company and are available for distribution to shareholders.

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

Indian rupee loans from a bank of Rs.164.12 million (31 March, 2017 : Rs.64.53 million, April 01, 2016 : Rs.180.64 million) carry interest @ 10.50%-13.00%. The loans are repayable in 38-59 monthly instalments starting from Feb 2013, November 2013 and March 2018 along with interest .The loan is secured by pari passu charge on fixed assets and second pari passu charge on current assets of the Company and personal guarantee of Promoter Directors.

Foreign currency loan from a financial institution of Rs.461.50 million (31 March, 2017 : Rs.616.66 million, April 01, 2016 : Rs.791.36 million) carries interest @ 5.15%-5.92%. The loans are repayable in 12 semi annual instalments along with interest starting from June, 2016. The loan is secured by first pari passu charge on movable and immovable fixed property of the Company and second pari passu charge of entire current assets of the Company along with other banks and personal guarantees of Directors and their relatives.

Hire purchase loan from banks of Rs.0.43 million (31 March, 2017 : Rs.1.58 million, April 01, 2016 : Rs.2.63 million) carries interest @ 9.38% to 11.24 % p.a. The loans are repayable in 36 to 60 monthly instalments starting from the respective date of finance. The loan is secured by specific assets financed (vehicle).

Indian rupee loans from financial institutions of Rs.9.10 million (31 March, 2017 : Rs.20.30 million, April 01, 2016 : Rs.27.52 represents loan secured by hypothecation of equipments and vehicles. The loans are repayable over 36 - 78 instalments and carry interest in the range of 9.75 - 12.98%.

The Company had made an issue of 18,000,000 Nos of Non Convertible Debentures of nominal value of Rs.10 each aggregating Rs.180.00 million at 0% interest to the Promoters. The life of such debentures is 10 years from the issue date, i.e., March 2013 or any time to be redeemed on demand after the Company’s IPO. During the year 2017-18, all debenture have been redeemed based on demand made by promoters.

A. Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

B. Measurement of fair value

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.

C. Fair Value Hierarchy

The fair value of financial instruments as referred to above have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

Level 1: Level 1 hierarchy includes financial instruments measured usingquoted prices. This includes listed equityinstruments, traded bonds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fairvalue of financial instrumentsthat are not traded in an active market is determined usingvaluation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: Ifone ormore ofthesignificant inputs is not based on observable market data,the instrumentis included in level3.This is the case for unlisted equity securities included in level 3.

NOTE 3: FINANCIAL RISK MANAGEMENT

Risk management framework

The Company has in place a mechanism to inform the Board about the risk assessment and minimisation procedures and periodical review to ensure that management controls risk through means of a properly defined framework. The Company has formulated and adopted Risk Management Policy to prescribe risk assessment, management, reporting and disclosure requirements of the Company. The Company’s audit committee also oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimise potential adverse effects on its financial performance.

This note explains the sources of risk to which the Company is exposed to and how the entity manages the risk.

(A) Credit risk

Trade and Other receivables

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s trade and other receivables. The carrying amounts of financial assets represent the maximum credit risk exposure.

Trade receivables are typically unsecured and are derived from revenue earned from customers located in India. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are General trade, Modern trade, Institutional and Horeca customers. Outstanding customers are regularly monitored.

On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss. The Company computes the expected credit loss allowance as per simplified approch for trade receivables based on available external and internal credit risk factors such as the ageing of its dues, market information about the customer and the Company’s historical experience for customers. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is based on the ageing of the receivable days and the rates as given in the provision matrix.

The movement in the loss allowance in respect of trade receivables is as follows

(B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdraft/ cash credit facility. The Company also monitors the level of expected cash inflows on trade receivables together with expected cash outflows on trade payables and other financial liabilities. The Company has access to a sufficient sources of short term funding with existing lenders that could be arrange upon should there be need.

(i) Maturities of financial liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted.

(C) Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates and foreign currency exchange rates) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short-term and long-term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk and interest rate risk.

(i) Foreign currency risk

The Company is subject to risk of changes in foreign currency values that impact costs of imported raw material and import of equipment for expansion of plants, primarily with respect to USD and EURO. The Company’s business model incorporates assumptions on currency risks and ensures any exposure is covered through the normal business operations.

The Company has not entered into any derivative transactions during the year and there were no derivative transactions outstanding as on 31 March, 2018, 31 March, 2017 and 1st April 2016.

(a) The Company unhedged exposure to foreign currency risk at the end of the reporting period are as follows

(b) Sensitivity

A reasonably possible strengthening (weakening) of the Indian Rupee against various currency mentioned in the table below as at March 31 would have affected the measurement of financial instruments denominated in foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

NOTE 4: FINANCIAL RISK MANAGEMENT

Cash flow and fair value interest rate risk

Interest rate risk is the risk that the fair value or future cashflows of a financial instrument will fluctuate because of changes in market interest rates. The Company main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk.

The company’s borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

(a) Interest rate risk exposure

The exposure of the Company’s borrowing to interest rate changes at the end of the reporting period are as follows:

(b) Cash flow sensitivity analysis for variable-rate instruments

The sensitivity analysis below has been determined based on the exposure to interest rates at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming that the amount of the liability as at the end of the reporting period was outstanding for the whole year. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents Management’s assessment of the reasonably possible change in interest rates. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to safeguard the Company’s ability to remain as a going concern and maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating plans, long term and other strategic plans and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust its dividend payment ratio to shareholders, return capital to shareholders or issue fresh shares.

The Company monitors capital using a ratio of ‘adjusted net debt’ to ‘equity’. For this purpose, adjusted net debt is defined as liabilities, comprising interest-bearing loans and borrowings less cash and cash equivalents. Equity comprises all components of equity including share premium and all other equity reserves attributable to the equity share holders.

The Company’s adjusted net debt to equity ratio are as follows.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital of the Company during the current and previous year.

NOTE 5: EMPLOYEE BENEFITS

A. Defined Benefit Plan- Gratuity

The Company operates a defined benefit gratuity plan, which is governed by the Payment of Gratuity Act, 1972. The plan entitles an employee who has completed at least five years of continuous service, to gratuity at the rate of fifteen days wages for every completed year of service or part thereof in excess of six months, based on the last drawn wage by the employee concerned. The defined benefit gratuity plan is administered by a Trust that is legally separate from the Company. The gratuity plan is a funded plan, managed by Life Insurance Company (“LIC”) and the Company’s makes annual contributions to Group Gratuity cum Life Assurance Scheme managed by LIC.

The most recent actuarial valuation of the defined benefit obligation was carried out as at 31 March, 2018. The present value of the defined benefit obligations and the related current service cost and past service costs were measured using Projected Unit Credit Method.

These plans typically expose the Company to actuarial risks such as: investment risk, inherent interest rate risk, longevity risk and salary risk.

Notes:

a) The rate used to discount post-employment benefit obligations is determined by reference to market yields at the end of the reporting period on government bonds.

b) The estimates of future salary increases considered in the actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

c) The gratuity fund is managed by life insurance company, details of fund invested by insurer are not available with company.

d) The Company expects to make a contribution of Rs.9.83 million to the defined benefit plans (gratuity - funded) during the next financial year.

e) The average duration of the defined benefit plan obligation at the end of the reporting period is 6.59 years.

B. Defined contribution plan- Provident Fund/Employee State Insurance

The Company has recognised an amount of Rs.31.25 million as expenses under the Defined Contribution Plans in the Statement of Profit & Loss as below:

NOTE 6: GOVERNMENT GRANTS

In accordance with Ind AS 20- “Accounting for Government Grants and disclosure of Government assistance”, Company has accounted for Industrial Promotion Subsidy under Package Scheme of Incentives, 2013 amounting to Rs.184.83 million ( 31 March, 2017: Rs.310.03 million) as Other Operating Income in Statement of Profit and Loss. The Company has also made duty free imports resulting in custom duty saving amounting to Rs.17.07 million (31 March, 2017: 17.08 million), under Advance License Scheme. There is an export commitment, as disclosed under Note 41 f.

i. The amounts shown above represent the best possible estimates of pending litigations/disputes arrived at on the basis of available information. The above do not include potential risks/demands, if any, for ongoing issues where no claims have been made against the Company.

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

NOTE 7: COMMITMENTS

(a) Capital commitments

Capital expenditure contracted for at the end of the reporting period net of capital advance amounting Rs.146.64( Rs.288.52 million as on March 31, 2017 and 160.9 million as on April 1, 2016) but not recognised as liabilities.

(b) Other commitments

For commitments in respect of non-cancellable lease refer note 44

The company has entered into commercial leases for taking office spaces on lease. These leases have an average term of three to five years with renewal option and escalation clauses included in the agreements. There are no restrictions placed upon the Company by entering into these leases. The Company has not given any sub lease during the year. Some of the lease arrangements also include a non-cancellable period. Lease rental debited to Statement of Profit and Loss for the period is Rs.156.11 million (31 March, 2017: Rs.87.08 millions).

Basic: Basic earnings per share is calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year, excluding equity shares held as treasury shares.

Diluted: Diluted earnings per share is calculated by adjusting the weighted average number of equity shares outstanding during the year for assumed conversion of all dilutive potential equity shares. Employee share options are dilutive potential equity shares for the Company.

NOTE 8: SEGMENT REPORTING

The Managing Director of the Company acts as the chief operating decision maker (CODM) of the Company in accordance with Operating Segment (AS 108), for purpose of assessing the financial performance and position of the Company, and make strategic decisions. The Company’s business activities are mainly related to processing of milk and manufacturing of milk related products, which are primarily assessed as a single reportable operating segment in accordance with Ind AS 108 by the CODM. The information based on geographical areas in relation to revenue and non-current assets are as below:

(a) Revenue from operations

(b) Non-current operating assets

All non -current assets other than financial instruments, deferred tax assets of the company are located in India

(c) The Company does not have revenues from transactions with a single external customer amount to 10 per cent or more of the total revenues.

The Board of Directors constituted the equity settled Employee Stock Option Scheme (“ESOS 2015”) vide its resolutions dated 27 February, 2015 and 21 April, 2015 for issue of 696,339 stock options to the key employees of the Company, which has been further approved in the Company’s Extra ordinary General meeting dated 3 April, 2015 and 16 May, 2015.

Pursuant to the above scheme, the Board of Directors vide its circular resolution dated September 3, 2015, approved grant of 227,000 stock options to its employees on September 4, 2015.

According to ESOP 2015, the employee selected will be entitled to stock options, subject to satisfaction of the prescribed vesting conditions in the scheme. The contractual life (comprising the vesting period and the exercise period) of options granted is 3 years. The other relevant terms of the grant are as below

The expected life of the stock is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome

Expenses Arising from share based payment transactions

Total expenses arising from share-based payment transactions recognised in profit or loss as part of employee benefit expense were as follows:

NOTE 9: TRANSITION TO IND AS

These financial statements are the separate financial statements of the Company (also called standalone financial statements) prepared in accordance with Indian Accounting Standards (‘Ind AS’) notified under Section 133 of the Companies Act, 2013, read together with the Companies (Indian Accounting Standards) Rules, 2015. For all periods up to and including the year ended 31 March, 2017, the Company had prepared its financial statements in accordance with Accounting Standards notified under the Section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (‘Previous GAAP’). Detailed explanation on how the transition from previous GAAP to Ind AS has affected the Company’s Balance Sheet, financial performance and cash flows is given as under.

Optional exemptions availed and mandatory exemptions

In preparing these financial statements the Company has applied the below mentioned optional exemptions and mandatory exemptions.

A Optional exemptions availed

1 Property, plant and equipment and intangible assets:

IND AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant a equipment as recognised in the financial statements as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38.

Accordingly, the group has elected to measure all of its property, plant and equipment and intangible assets.

2 Investment in subsidiary

The Company has elected to measure investments in subsidiary as per the statement of financial position prepared in accordance with previous GAAP as a deemed cost at the date of transition as per exemption available under Ind AS 101. Interest in the subsidiary through fair valuation of financial guarantees at initial recognition on transition date had been accounted as investments in accordance with Ind AS 109. The Company has accounted such fair valuation of financial guarantees on transition date to the retained earnings.

3 Long Term Foreign Currency Monetary Items

A first-time adopter may continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP. The Company has chosed to continue this option provided under para D13AA of Ind AS 101.

4 Employee stock option

Ind AS 102 Share-based Payment has not been applied to equity instruments in share-based payment transactions that vested before April 1, 2016 in accordance with the option provided under para D2 and D3 of Ind AS 101.

5 Fair Value Measurement of Financial assets of Financial Liabilities of Indian region

The Group has elected to apply the requirements of Ind AS 109 “Financial Instruments” relating to accounting of day one gains or losses prospectively to transactions occurring on or after the date of transition for the financial instruments where there is no active market as provided under para D20 of Ind AS 101. Accordingly, 0% Non-Convertible Debentures issued to promoters of the Company in earlier years, have not been fair valued as on transition date and continued at carrying value.

B Mandatory exceptions

1 Estimates:

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at April 1, 2016 are consistent with the estimates as the same date made in conformity with previous GAAP, unless if those estimates were not required to be made under previous GAAP. :

2 Derecognition of financial assets and liabilities:

As per Ind AS 101, an entity should apply the derecognition requirements in Ind AS 109, Financials Instruments, prospectively for transaction occurring on or after date of transition to Ind AS. However, an entity may apply the derecognition requirements retrospectively from the date choosen by it if the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transaction was obtained at the time initially accounting for those transactions.

The Company has elected to apply the derecognition principal of Ind AS 109 retrospectively as reliable information was available at the time of initally accounting for these transactions.

3 Classification of financial assets:

As per the requirements of Ind AS 101 the Company has assessed classification of financial assets on the basis of the facts and circumstances that existed at the date of transition to Ind AS.

NOTE 10: FIRST-TIME ADOPTION OF IND AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for comparable periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Notes to reconciliation

a. Financial Guarantees contract:

Under Ind AS, the Company has recognised fair value of financial guarantee provided to its subsidiary company. The fair value of such guarantee as at April 01, 2016 has been recognised as additional capital investment in its subsidiary Company and is amortised over tenure of the guarantee. The impact of amortisation of such fair value of guarantee has been recognised in the statement of profit and loss as interest income for the year ended 31 March, 2017. Under I-GAAP financial guarantee given was disclosed as contingent liabilities.

b. Trade receivable: ECL provision

Under Indian GAAP, the Company has created provision for impairment of receivables which consists only in respect of specific amount for probable losses. Under Ind AS, impairment allowance has been determined based on Expected Credit Loss (ECL) model. Due to ECL model, the Company impaired its trade receivable by Rs.130.78 million (net of related deferred tax) on April 1, 2016 which has been eliminated against other equity and Rs.130.78 million (net of deferred tax) during the year ended 31 March, 2017 which has been charged to the statement of profit and loss.

c. Borrowings: Transaction cost

Under Previous GAAP, the Company had recognised transaction costs incurred in respect of borrowings in the Statement of Profit and Loss in the year in which costs were incurred. Under Ind AS 109, such transaction costs are adjusted against carrying value of borrowing and are amortised using effective interest rate method over the tenure of the loan. Accordingly loan were debited and corresponding credit was given to retained earnings on date of transition. Under Ind AS, finance cost has been charged to statement of profit and loss for amortisation of such transaction cost during the year ended 31 March, 2017.

d. Deferred tax assets

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires accounting for deferred taxes using the balance sheet approach, which focuses on temporary difference between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences and the Company has accounted for such differences. Deferred tax adjustment are recognised in correlation to the underlying transaction either in retained earnings or a separate component in equity.

MAT credit entitlement is to be presented under loans and advance in accordance with Guidance Note on ‘Accounting for Credit available in respect of MAT under the Income Tax Act, 1961’ issued by ICAI. However, as per Ind AS, MAT credit entitlement is generally recognised as a deferred tax asset with a corresponding deferred tax benefit in the statement of profit and loss. Accordingly, the Company has reclassified the MAT credit entitlement from loans and advances to deferred tax assets.

e. Share based payments

Under Indian GAAP, the Company recognised only the intrinsic value for employee stock option plan as an expense. Under Ind AS, the Company is required to determine the fair value of share options using an appropriate model at grant date and recognised over the vesting period. Accordingly, the same has been recognised as a separate component of equity in Employee Stock Option outstanding (ESOP) as at April 1, 2016 and as an expense has also been recognised for the same during the year ended 31 March, 2017. Adjustment has been done to take additional charge arising due to change from intrinsic value to fair value of ESOSs outstanding.

f. Remeasure of defined benefit plan

Under Ind AS, remeasurement i.e. acturial gain and losses and the return on plan assets, excluding amounts included in the interest expenses on the net defined liability are recognised in other comprehensive income instead of statement of Profit and Loss. Under the previous IGAAP, these reimbursements were forming part of the profit and loss for the year. There is no impact on total equity as at 31 March, 2017 on account of this.

Under Ind AS, all items of income and expense recognised in a period should be included in the Statement of Profit and Loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the Statement of Profit and Loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

g. Interest free security deposits

Under the previous GAAP, interest free security deposits are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent.

h. Look through approach for employee welfare trust

Employee welfare trust, financed through interest free loan by the Company and warehousing the shares which have not vested yet, for distribution to employees of the Company, has been consolidated on line by line basis by reducing from equity share capital and security premium of the Company for such treasury shares held by the trust.

i. IPO related expenses:

Under the previous GAAP, expenses incurred by the Company aggregating to Rs.85.25 million in connection with filing of Draft Red Herring Prospectus and other related expenses were shown under Other current assets. Under Ind AS the same is considered as incremental costs directly attributable to the equity transaction and hence the same has been adjusted against other equity.

NOTE 11: EXCEPTIONAL ITEM

Exceptional items during the year ended 31 March, 2017 represent VAT tax liability for previous years and interest thereon in respect of inspection conducted by VAT authorities during the year, wherein certain transactions were identified which were to be considered as local sales instead of interstate transfer.

NOTE 12:

The Company has acquired the Danone Foods and Beverages India Pvt Ltd.’s manufacturing facility of Curd, Yogurt and other related products at Rai, Sonipat, Haryana near Delhi through agreement to sell dated April 18, 2018 for Rs.141 Mn.

NOTE 13:

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

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Mar 31, 2017

1. Earnings per Equity Shares

The basic earnings per equity share (EPS) are computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive. The EPS is calculated as under:

As per Accounting Standard 20, in case of bonus shares or consolidation of shares, the number of shares outstanding before the event is adjusted for the proportionate change in the number of equity shares outstanding as if the event has occurred at the beginning of the earliest period reported. Weighted average number of equity share outstanding during the previous period have been considered accordingly.

'' n all the cases mentioned above, outflow is not probable in accordance with Accounting Standard 29 ("AS-29") Provisions, Contingent Liabilities and Contingent Assets, hence not provided by the Company.

2 Foreign currency exposure

a) There are no foreign currency (FC) exposures that have been hedged by a derivative instrument or otherwise during the year ended March 31, 2017 or March 31, 2016.

3 Capital and other Commitments

Capital commitments as at March 31, 2017 '' 288.52 million (March 31, 2016: '' 160.29 million)

For other commitments relating to lease arrangements refer note no. 40.

4 Disclosure pursuant to Accounting Standard - 15 “Employee Benefits”

A. General description

i) Provident Fund/Employee State Insurance (Defined Contribution)

The Company''s Provident Fund and Employee State Insurance Scheme are defined contribution plans. The expense charged to the Statement of Profit and Loss under the head ‘Contribution to provident and other funds'' in respect to the above schemes is '' 24.24 million (March 31, 2016. '' 15.84 million).

ii) Gratuity (Defined benefit plan)

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service.

*The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. There has been significant change in expected rate of return on assets due to change in the market scenario.

# The estimates of future salary increase, considered in actuarial valuation, taken on account of inflation, seniority, promotion & other relevant factors such as supply and demand in the employment market.

vi) The Company expects to contribute '' 11.33 million to gratuity fund in the next one year (March 31 2016: 2.50 million)

Exceptional items represent VAT tax liability for previous years and interest thereon in respect of inspection conducted by VAT authorities during the year, wherein certain transactions were identified which were to be considered as local sales instead of interstate transfer.

* Specified Bank Notes (SBN)* shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

5. Related Party Disclosure

'' n accordance with the requirements of Accounting Standard 18, "Related Party Disclosures", the details of related party transactions are given below:

Nature of Relationship Nature of Related party

a) Key management personnel Mr. Devendra Shah - Chairman

Mr. Pritam Shah - Director Mr. Bharat Kedia - CFO

b) Subsidiary Company Bhagyalaxmi Dairy Farms Private Limited

c) Relatives of Key Management Personnel Relatives having transaction during the period

Late Mr. Parag Shah Miss. Akshali Shah Mrs. Priti Shah Mrs. Netra Shah Mrs. Prity Kedia

d) Enterprise over which Key Management Personnel exercise Enterprise having transactions during the period: significant influence / control Bharat Trading Company

# The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave benefits, as they are determined on an actuarial basis for the Company as a whole. Further, the remuneration to key managerial personnel does not include employee stock compensation expense.

@ Corporate guarantee issued on behalf of subsidiary is in relation to term loan taken by the subsidiary from bank for its business purpose particularly for capital expansion.

6.Segment Reporting Disclosure i) Primary (Business) Segment

In accordance with the requirements of the Accounting Standard 17 "Segment Reporting", the Company''s business consists of one reportable business segment i.e., "Manufacturing & Processing of Milk & Milk Products" hence no separate disclosures pertaining to attributable Revenue, Profits, Assets, Liability, Capital Employed are given.

7. Operating Lease

The company has entered into commercial leases for taking office spaces on lease. These leases have an average term of three to five years with renewal option and escalation clauses included in the agreements. There are no restrictions placed upon the Company by entering into these leases. The Company has not given any sub lease during the year. Some of the lease arrangements also include a non-cancellable period. Lease rental debited to Statement of Profit and Loss for the period is '' 87.08 million (March 31, 2016: '' 69.11 millions).

8.Amount due to Micro and Small Enterprises

Information required to be disclosed in accordance with Micro, Small and Medium Enterprises Development Act, 2006 has been determined based on the parties identified on the basis of information available with the Company, which has been relied upon by the auditors:

9. Employee Stock Option Scheme:

The Board of Directors constituted the equity settled Employee Stock Option Scheme ("ESOS 2015") vide its resolutions dated February 27, 201 5 and April 21, 2015 for issue of 696,339 stock options to the key employees of the Company, which has been further approved in the Company''s Extra ordinary General meeting dated April 3, 2015 and May 16, 2015.

Pursuant to the above scheme, the Board of Directors vide its circular resolution dated September 3, 2015, approved grant of 227,000 stock options to its employees on September 4, 2015.

The expected life of the stock is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

No cost has been recognized in respect of ESOS2015 during the period as the exercise price of the options is higher than the fair value of the options as at the grant date.

10. Due to inadequacy of profit in the current financial year. The Managerial remuneration paid by the Company is subject to the limits prescribed under Schedule V of the Companies Act, 2013. In view of the Company, further supported by a legal opinion in this regard. The shareholders'' approval by way of a special resolution to double the limit provided under Schedule V of the Companies Act, 2013, has already been obtained through the Extra Ordinary General Meeting dated April 3, 2015 when the company was a private limited company, and the same would cover the managerial remuneration paid during the current financial year, which is lower than the maximum amount payable with such Special Resolution.

However, as a matter of good governance, the management shall place the resolution for ratification of the remuneration paid to the Directors in the ensuing Annual General Meeting.

(a) Previous period/year''s figures have been regrouped/reclassified wherever necessary, to conform to current period/ year''s classification.

(b) Amounts mentioned as "0" in the financial statements denote amounts rounded off being less than Rupees five thousand.