Auditor Report of Devyani International Ltd.

Mar 31, 2025

To the Members of Devyani International Limited Basis for Opinion

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

1. We have audited the accompanying standalone financial statements of Devyani International Limited (the Company''), which comprise the Standalone Balance Sheet as at 31 March 2025, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Cash Flow and the Standalone Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including material accounting policy information and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (''the Act'') in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (''Ind AS'') specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2025, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (''ICAI'') together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matters

How our audit addressed the key audit matters

Impairment assessment of franchisee rights, goodwill and other non-current assets

Refer note 2 (f) of material accounting policies information and the note 30 and 45 of the standalone financial statements of the Company for the year ended 31 March 2025.

As at 31 March 2025, the Company is carrying franchisee rights of '' 700.37 million, goodwill of '' 495.08 million and other non-current assets (representing property, plant and equipment, intangible assets, right-of-use assets net of lease liabilities and allocated corporate assets) of '' 9516.31 million representing identifiable group of assets pertaining to cash generating units ("CGUs") (refer note 45), in its standalone financial statements.

Our audit procedures for impairment assessment of franchisee rights, goodwill and other non-current assets included but were not limited to the following:

a) Obtained an understanding from the management with respect to process and internal financial controls implemented by the Company to identify impairment indicators and determine recoverable value of all CGUs and evaluated the design implementation and tested the operating effectiveness of key internal financial controls;

b) Assessed the professional competence and objectivity of the external valuation expert engaged by the management for performing the required valuations to estimate the recoverable value of CGUs;

Key audit matters		How our audit addressed the key audit matters
In accordance with the requirements of Ind AS 36,	c)	With the help of auditor''s valuation experts, performed
Impairment of Assets, the Company has performed an annual impairment assessment of such franchisee		the following procedures:
rights, goodwill and other non-current assets, (where		o Evaluated appropriateness of identification of
impairment indicators have been identified), in order		CGUs basis our understanding of the business
to determine whether the carrying value exceeds		and the valuation model used by the Company for
recoverable value as at 31 March 2025.		determining the recoverable value of the CGUs;
The management has determined that investment in		o Assessed the reasonableness of the key
each store as indicated by other non- current assets		assumptions used in the DCF Model for computation
constitutes a separate CGU which is tested for		of business projections and recoverable value as at
impairment as above. For this purpose, the Company,		31 March 2025 such as growth rates and discount
with the help of external valuation experts, as		rates.
applicable, has determined recoverable value of CGUs and also allocated franchisee rights and goodwill to		o Performed sensitivity analysis in respect of such
group of CGUs to which they relate. Recoverable value		key assumptions to verify its appropriateness and
is determined using Discounted Cash Flow Model (DCF Model) which required consideration of certain		impact on the recoverable value;
assumptions and estimates of future performance,		o Tested the arithmetical accuracy of the computation
operating margins, growth rates and discount rates.		of recoverable value of the CGUs;
Consequent to such impairment assessment, the	d)	Analysed the performance of the CGUs basis our
Company has recorded an impairment charge of		evaluation of the key assumptions and understanding of
INR Nil against franchisee rights and goodwill and		the business including current and expected market and
an impairment charge of INR 221.31 million against		economic conditions, and benchmarked growth rates for
other non-current assets.		projections used in approved business plans and;
Due to the materiality of the amounts, significance of	e)	Assessed the adequacy and appropriateness of the
these management estimates and judgements to the		accounting policy used and disclosures made by the
Company''s standalone financial statements, which		management included in note 30 and note 45 in respect of
are inherently subjective, we have identified this area		impairment of franchisee rights, goodwill and other non-
as a key audit matter for current year''s audit.		certain current assets, in accordance with the accounting standards respectively.
Impairment of investments in a subsidiary company	Our audit procedures relating to assessment of the carrying
(Continuing matter)	values of investment in subsidiary included, but were not limited to the following:
Refer note 2 (q) of material accounting policy information and the note 49 of the standalone	a)	Obtained an understanding from the management with
financial statements of the Company for the year		respect to process and controls implemented by the
ended 31 March 2025.		Company to identify impairment indicators and determine
The Company has investments in a subsidiary company amounting to '' 3,427.07 million as at 31 March 2025.		recoverability of the amounts from its subsidiary company and evaluated the design implementation and tested the operative effectiveness of key internal financial controls;
The recoverability of the aforesaid amount is	b)	Assessed the professional competence and objectivity of the external valuation expert engaged by the management
dependent on the operational performance of aforesaid subsidiary company including its step down subsidiaries. The actual business performance of one of the step-down subsidiaries has been lower than the		for performing the required valuations to estimate the recoverable value of subsidiary company considering operational performance of stem down subsidiary
anticipated performance which has been identified by
the management as possible impairment indicators	c)	With the help of auditor''s valuation experts, performed
under the principles of Ind AS 36.	c)	the following procedures:

Key audit matters		How our audit addressed the key audit matters
In accordance with the requirements of Ind AS 36, the	o	Evaluated appropriateness of the valuation model
Company has performed an impairment assessment		used by the Company for determining the recoverable
of investment in such subsidiary basis indicators		value of the step down subsidiary company;
identified as mentioned in paragraph above, to determine whether the carrying value exceeds	o	Assessed the reasonableness of the key assumptions
recoverable value as at 31 March 2025.		used in the DCF Model for computation of business projections and recoverable value as at 31 March
The recoverable value has been determined by carrying out a valuation of the step-down subsidiary''s		2025 such as growth rates and discount rates;
business with the help of an external valuation expert	o	Performed sensitivity analysis in respect of such
using the DCF Model, which requires management to		key assumptions to verify its appropriateness and
make significant estimates and assumptions related to forecast of future revenue, operating margins,		impact on the recoverable value; and
growth rate, expansion plans and selection of the	o	Tested the arithmetical accuracy of the computation
discount rates to determine the recoverable value to		of recoverable value of the step-down subsidiary
be considered for impairment testing of the carrying value of the aforesaid balances.		company;
d)	Analysed the performance of the that step down
Due to the materiality of the amounts, significance	subsidiary company basis our evaluation of the key
of these management estimates and judgements	assumptions and understanding of the business including
involved, which are inherently subjective, to the	current and expected market and economic conditions,
Company''s financial position, we have identified this	and benchmarked growth rates for projections used
area as a key audit matter for current year''s audit.	in	approved business plans and committed expansion
	plans and;
	a)	Assessed the adequacy and appropriateness of the accounting policy used and disclosures made by the management included in note 6A and note 49 in respect of impairment of subsidiary company respectively.

Information other than the Standalone Financial Statements and Auditor''s Report thereon

6. The Company''s Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditor''s report thereon. The Annual Report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are

required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

7. The accompanying standalone financial statements have been approved by the Company''s Board of Directors. The Company''s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and

estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

8. In preparing the standalone financial statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

9. The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

11. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

â¢ Conclude on the appropriateness of Board of Directors'' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern; and

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

12. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

13. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone

financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

15. As required by section 197(16) of the Act, based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

16. As required by the Companies (Auditor''s Report) Order, 2020 (''the Order'') issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

17. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the accompanying standalone financial statements;

b) Except for the matters stated in paragraph 17(h) (vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended)}, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The standalone financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2025 from being appointed as a director in terms of section 164(2) of the Act;

f) The reservation relating to the maintenance of accounts and other matters connected therewith

are as stated in paragraph 17(b) above on reporting under section 143(3)(b) of the Act and paragraph 17(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended);

g) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company as on 31 March 2025 and the operating effectiveness of such controls, refer to our separate report in Annexure B wherein we have expressed an unmodified opinion; and

h) With respect to the other matters to be included in the Auditor''s Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. The Company, as detailed in note 39 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2025.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2025;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2025;

iv. a. The management has represented

that, to the best of its knowledge and belief, as disclosed in note 53(e) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person or entity, including foreign entities (''the intermediaries''), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (''the Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;

b. The management has represented that, to the best of its knowledge and belief, as disclosed in note 53(f) to the standalone financial statements, no funds have been received by the Company from any person(s) or entity, including foreign entities (''the Funding Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (''Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under subclauses (a) and (b) above contain any material misstatement.

v. The Company has not declared or paid any dividend during the year ended 31 March 2025.

vi. As stated in Note 56 to the standalone financial statements and based on our examination which included test checks, except for matters mentioned below, the Company, in respect of financial year commencing on 1 April 2024, has used accounting software for maintaining its books of account which have a feature of recording audit trail (edit log) facility and the same have been operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with, other than the consequential impact of the exceptions given below. Furthermore, except for matters mentioned below the audit trail has been preserved by the Company as per the statutory requirements for record retention.

Nature of exception noted	Details of Exception
Instances of accounting software for maintaining	The audit trail feature was not enabled at the database
books of account for which the feature of recording	level for accounting software to log any direct data
audit trail (edit log) facility was not operated	changes, used for maintenance of accounting records,
throughout the year for all relevant transactions	sales invoicing and inventory management by the
recorded in the software	Company.

For Walker Chandiok & Co LLP For O P Bagla & Co LLP

Chartered Accountants Chartered Accountants

Firm Registration No: 001076N/N500013 Firm Registration No: 000018N/N500091

Ankit Mehra Neeraj Kumar Agarwal

Partner Partner

Membership No. 507429 Membership No.: 094155

UDIN: 25507429BMIXFL9467 UDIN: 25094155BMKSEH5152

Place: Gurugram Place: Gurugram

Date: 23 May 2025 Date: 23 May 2025

Mar 31, 2024

Devyani International Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

1. We have audited the accompanying standalone financial statements of Devyani International Limited (âthe Company''), which comprise the Balance Sheet as at 31 March 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including material accounting policy information and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âthe Act'') in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (âInd AS'') specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2024, and its loss (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

by the Institute of Chartered Accountants of India (âICAI'') together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter - Scheme of amalgamation

4. We draw attention to note 50 to the accompanying standalone financials statements, which describes that pursuant to a scheme of amalgamation (the âScheme'') as approved by the order of Hon''ble National Company Law Tribunal dated 13 July 2023, two of the Company''s erstwhile wholly-owned subsidiaries, namely, Devyani Food Street Private Limited and Devyani Airport Services (Mumbai) Private Limited (together âTransferor companies'') have merged with the Company with effect from the appointed date of 1 April 2022. The Scheme has been given accounting effect in accordance with the accounting treatment prescribed in such Scheme and accordingly, the comparative financial information presented as at and for the year ended 31 March 2023, has been restated to reflect the aforesaid business combination transaction from the beginning of the earliest period presented, as further described in the aforementioned note. Our opinion is not modified in respect of this matter.

Key Audit Matter

5. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

6. We have determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter	How our audit addressed the key audit matter
Impairment of investments (including loans) in subsidiary
Refer note 2(q) of summary of material accounting	Our audit procedures to test impairment of loans given
policies and other explanatory information and the note	to and investment in subsidiary companies included, but
48 of the standalone financial statements of the Company	were not limited to, the following procedures:
for the year ended 31 March 2024.
	a)	Obtained an understanding from the management
The Company has investments (including loans) in		with respect to process and controls implemented
subsidiary company amounting to INR 1,160.09 million		by the Company to determine recoverability of the
as at 31 March 2024 and has recognized impairment of		amounts from its subsidiary company including
INR 1,160.09 million as on 31 March 2024 (refer note 6,		testing of such controls;
7,32 and 48 of the standalone financial statements)
	b)	Assessed the professional competence, objectivity
The recoverability of the aforesaid amount is dependent		and capabilities of the external valuation expert
on the operational performance of aforesaid subsidiary		engaged by the management for performing the
company including its step down subsidiary. The actual		required valuations to estimate the recoverable
business performance of the step-down subsidiary has		value of the amounts receivable from the subsidiary
been lower than anticipated performance and there is		company;
significant devaluation of functional currency of step down
subsidiary which has a significant impact on translation	c)	Involved our valuation experts for review of valuation
for foreign currency denominated liabilities resulting into		methodology used by the management''s expert;
significant translation losses which has been identified
by the management as possible impairment indicators	d)	Traced the future cash flow projections to approved
under the principles of Ind AS 36, Impairment of Assets		business plans of the step down subsidiary by their
(''Ind AS 36'').		management and evaluated the reasonableness
		of the inputs used in the projections by comparing
Management has assessed the recoverability of the		past projections with actual results, and considering
aforesaid amounts by carrying out a valuation of the		our understanding of the business and market
step-down subsidiary''s business with the help of an		conditions, as relevant;
external valuation expert using the discounted cashflow
method, which requires management to make significant	e)	Evaluated sensitivity analysis performed by the
estimates and assumptions related to forecast of future		management and further performed independent
revenue, operating margins, growth rate, expansion		sensitivity analysis on these key assumptions to
plans and selection of the discount rates to determine		determine estimation uncertainty involved and
the recoverable value to be considered for impairment		impact on conclusions drawn; and
testing of the carrying value of the aforesaid balances.
	f)	Evaluated the appropriateness and adequacy
Considering the materiality of the above matter to the		of disclosures made in the standalone financial
standalone financial statements, complexities and		statements in accordance with the applicable
judgement involved, and the significant auditor attention		accounting standards.
required to test such management''s judgement, we have
identified this as a key audit matter for current year audit.

Key audit matter	How our audit addressed the key audit matter
Impairment assessment of goodwill and non-financial
assets
Refer note 2(f) of summary of material accounting policies	Our	audit procedures for impairment assessment of
and other explanatory information and note 30 and 45 of	goodwill and non-current assets included but were not
the standalone financial statements of the Company for	limited to the following:
the year ended 31 March 2024.
As at 31 March 2024 the Company is carrying goodwill	a)	Obtained an understanding of impairment of
amounting to INR 504.57 million and non-current assets		goodwill and non-financial assets process,
aggregating to INR 27,240.04 million in its standalone		evaluated the design, implementation and tested
financial statements.		the operative effectiveness of key internal financial controls followed by the management to determine
In accordance with the requirements of Ind AS 36		indicators of impairment and the recoverable
Impairment of Assets, the Company performs an impairment assessment of goodwill associated with		amounts of CGUs;
the cash generating units (CGUs) identified in the	b)	Evaluated appropriateness of identification of CGUs
Company, and of other non-current assets of CGUs where		basis our understanding of the business and the
impairment indicators have been identified, in order to		model used in determining the value-in-use of the
determine whether the recoverable value is below the		CGUs involving our valuation experts for assessment
carrying amount as at 31 March 2024.		of valuation assumptions for discount rates;
The management has determined that each store	c)	Analyzed the performance of the CGUs and evaluated
constitutes a separate CGU which is tested for impairment		the reasonableness of the assumptions used in
as above. For the purpose the Company determines		computation of business projections and value-in-
recoverable value of CGUs using Discounted Cash		use as at 31 March 2024 basis our understanding of
Flow Model (DCF Model) which require determination		the business including current and expected market
of certain assumptions and estimates of future trading		and economic conditions, and benchmarked growth
performance, operating margins, future growth rates and		rates for projections used in approved business
discount rates.		plans;
The assessment of the recoverable amount requires	d)	Performed sensitivity analysis in respect of the key
significant judgment relating to estimates of cash flow		assumptions used including revenue growth rates
projections, growth rates and discount rates.		and discount rate to verify appropriateness of such assumptions;
Consequent to such impairment assessment, the Company has recorded an impairment charge of INR NIL	e)	Tested the arithmetical accuracy of the computation
against goodwill and impairment charge of INR 43.26		of recoverable amounts of cash generating units;
million against non-current assets.		and
Due to the level of judgments and sensitivity of	f)	Assessed the appropriateness of the disclosures
recoverable amount being involved and their significance		included in note 45 in respect of impairment of non-
to the Company''s financial position, this is considered as a key audit matter.		current assets including goodwill.

Information other than the Financial Statements and Auditor''s Report thereon

7. The Company''s Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditor''s report thereon. The Annual Report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

8. The accompanying standalone financial statements have been approved by the Company''s Board of Directors. The Company''s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial

controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

9. In preparing the standalone financial statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

10. The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditorâs Responsibilities for the Audit of the Standalone Financial Statements

11. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

12. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material

misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

â¢ Conclude on the appropriateness of Board of Directors'' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern; and

13. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

14. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

15. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

16. The audit of financial statements of Devyani Food Street Private Limited and Devyani Airport Services (Mumbai) Private Limited (erstwhile wholly-owned subsidiaries), which have been merged with the Company, pursuant to the Scheme as mentioned in note 50, for the year ended 31 March 2023, included in the accompanying standalone financial statements was carried out by one of the joint auditors, O P Bagla & Co LLP, who have expressed unmodified opinions vide their audit reports dated 11 May 2023, and which has been relied upon by the other joint auditor for the purpose of joint audit of these standalone financial statements. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

17. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

18. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Order'') issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

19. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, that:

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books except for the matters stated in paragraph 19(h) (vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended);

c) The standalone financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024 from being appointed as a director in terms of section 164(2) of the Act;

f) The modification relating to the maintenance of accounts and other matters connected therewith are as stated in paragraph 19(b) above on reporting under section 143(3)(b) of the Act and paragraph 19(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended);

g) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company as on 31 March 2024 and the operating effectiveness of such controls, refer to our separate report in Annexure B wherein we have expressed an unmodified opinion; and

i. The Company, as detailed in note 39 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2024;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2024;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2024;

iv. a. The management has represented that,

to the best of its knowledge and belief, other than as disclosed in note 55 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any persons or entities, including foreign entities (âthe intermediaries''), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âthe Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;

b. The management has represented that, to the best of its knowledge and belief, as disclosed in note 53(f) to the standalone financial statements, no funds have been received by the Company from any persons or entities, including foreign entities (âthe Funding Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.

v. The Company has not declared or paid any dividend during the year ended 31 March 2024.

vi. The reporting requirement under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2024, is applicable from 1 April 2023. As stated in note 56 to the standalone financial statements and based on our examination which included test checks, except for instances mentioned below, the Company, in respect of financial year commencing on 1 April 2023, has used accounting softwares for maintaining its books of account which have feature of recording audit trail (edit log) facility and the same have been operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with, other than the observations mentione dbelow:

a. The audit trail feature was not enabled at the database level for accounting software to log any direct data changes, used by the Company for maintenance of accounting records, sales invoicing and inventory management;

b. The accounting software used for maintenance of payroll records of the Company is operated by a third-party software service provider. The âIndependent Service Auditor''s Report on a Description of the Service Organization''s System and the Suitability of the Design and Operating Effectiveness of Controls'' (based on the criteria for a description of a service organization''s system as set forth in DC Section 200, 2018 Description Criteria for a Description of a Service Organization''s System in a SOC 2 Report, in AICPA Description criteria), does not provide information on retention of audit trail (edit logs) for any direct changes made at the database level. Accordingly, we are unable to comment on whether audit trail feature with respect to the database of the said software was operated throughout the year.

For Walker Chandiok & Co LLP For O P Bagla & Co LLP

Chartered Accountants Chartered Accountants

Firm Registration No: 001076N/N500013 Firm Registration No: 000018N/N500091

Sandeep Mehta Neeraj Kumar Agarwal

Partner Partner

Membership No. 099410 Membership No.: 094155

UDIN: 24099410BKELFT8695 UDIN:24094155BKEPBE6436

Place: Gurugram Place: Gurugram

Date: 14 May 2024 Date: 14 May 2024

Mar 31, 2023

To the Members of Devyani International Limited

Basis for Opinion

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

1. We have audited the accompanying standalone financial statements of Devyani International Limited (the Company''), which comprise the Balance Sheet as at 31 March 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (''the Act'') in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (''Ind AS'') specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2023, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (''ICAI'') together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter

How our audit addressed the key audit matter

Impairment of investments (including loans) in subsidiary

Refer note 2(q) of Summary of significant accounting policies and other explanatory information and the note 48 of the standalone financial statements of the Company for the year ended 31 March 2023.

The Company has investments (including loans) in subsidiary company amounting to INR 1,123.16 million as at 31 March 2023.

The recoverability of the aforesaid amount is dependent on the operational performance of aforesaid subsidiary company including its step down subsidiary. The actual business performance of the step-down subsidiary has been lower than anticipated performance which has been identified by the management as possible impairment indicators under the principles of Ind AS 36, Impairment of Assets ("Ind AS 36'').

Our audit procedures to test impairment of loans given to and investment in subsidiary companies included, but were not limited to, the following procedures:

a) Obtained an understanding from the management with respect to process and controls implemented by the Company to determine recoverability of the amounts from its subsidiary company including testing of such controls;

b) Assessed the professional competence, objectivity and capabilities of the external valuation expert engaged by the management for performing the required valuations to estimate the recoverable value of the amounts receivable from the subsidiary company;

Key audit matter		How our audit addressed the key audit matter
Management has assessed the recoverability of the	c)	Involved our valuation experts for review of the
aforesaid amounts by carrying out a valuation of the		valuation methodology including appropriateness of
step-down subsidiary''s business with the help of an		valuation assumptions used by the management''s
external valuation expert using the discounted cashflow method, which requires management to make significant		expert;
estimates and assumptions related to forecast of future	d)	Traced the future cash flow projections to approved
revenue, operating margins, growth rate, expansion plans		business plans of the step down subsidiary by their
and selection of the discount rates to determine the		management and evaluates the reasonableness of
recoverable value to be considered for impairment testing		the inputs used in the projections by comparing past
of the carrying value of the aforesaid balances.		projections with actual results, and considering our understanding of the business and market conditions,
Considering the materiality of the above matter to the standalone financial statements, complexities and		as relevant;
judgement involved, and the significant auditor attention	e)	Evaluated sensitivity analysis performed by the
required to test such management''s judgement, we have		management and further performed independent
identified this as a key audit matter for current year audit.		sensitivity analysis on these key assumptions to determination estimation uncertainty involved and impact on conclusions drawn basis headroom available; and
	f)	Evaluated the appropriateness and adequacy of disclosures made in the standalone financial statements in accordance with the applicable accounting standards.
Impairment assessment of goodwill and non-financial	Our	audit procedures for impairment assessment of
assets	goodwill and non-current assets included but were not
Refer note 2(f) of Summary of significant accounting	limited to the following:
policies and other explanatory information and the note 30	a)	Obtained an understanding of impairment of goodwill
of the standalone financial statements of the Company for		and non-financial assets process, evaluated the
the year ended 31 March 2023.		design, implementation and tested the operative effectiveness of key internal financial controls
As at 31 March 2023 the Company is carrying Goodwill		followed by the management to determine indicators
amounting to INR 504.57 million and Non-current assets aggregating to INR 21,536.98 million in its standalone		of impairment and the recoverable amounts of CGUs;
financial statements.	b)	Evaluated appropriateness of identification of CGUs basis our understanding of the business and the
In accordance with the requirements of Ind AS 36		model used in determining the value-in-use of the
Impairment of Assets, the Company performs an annual		CGUs involving our valuation experts for assessment
impairment assessment of goodwill associated with the cash generating units (CGUs) identified in the Company,		of valuation assumptions for discount rates;
and of other non-current assets of CGUs where impairment	c)	Analyzed the performance of the CGUs and evaluated
indicators have been identified, in order to determine		the reasonableness of the assumptions used in
whether the recoverable value is below the carrying amount		computation of business projections and value-in-use
as at 31 March 2023.		as at 31 March 2023 basis our understanding of the business including current and expected market and
The management has determined that each store		economic conditions, and benchmarked growth rates
constitutes a separate CGU which is tested for impairment as above. For the purpose the Company determines		for projections used to approved business plans;
recoverable value of CGUs using Discounted Cash Flow	d)	Performed sensitivity analysis in respect of the key
Model (DCF Model) which require determination of certain		assumptions used including revenue growth rates
assumptions and estimates of future trading performance,		and discount rate to verify appropriateness of such
operating margins, future growth rates and discount rates.		assumptions;

Key audit matter		How our audit addressed the key audit matter
The assessment of the recoverable amount requires	e)	Tested the arithmetical accuracy of the computation
significant judgment relating to estimates of cash flow		of recoverable amounts of cash generating units; and
projections, growth rates and discount rates.
	f)	Assessed the appropriateness of the disclosures
Consequent to such impairment assessment, the Company		included in note 45 in respect of impairment of
has recorded an impairment charge of INR NIL against		noncurrent assets including goodwill.
Goodwill and impairment reversal INR 5.40 million against
non-current assets.
Due to the level of judgments and sensitivity of recoverable
amount being involved and their significance to the
Company''s financial position, this is considered as a key
audit matter.

India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

8. In preparing the standalone financial statements, the Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to

Information other than the Financial Statements and Auditor''s Report thereon

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

influence the economic decisions of users taken on the basis of these financial statements.

â¢ Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

â¢ Conclude on the appropriateness of Board of Directors'' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern;

â¢ Evaluate the overall presentation, structure and content of the financial statements, including the

disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation; and

â¢ Obtain sufficient appropriate audit evidence regarding the financial statements of the Company to express an opinion on the financial statements.

14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

15. The audit of the standalone financial statements of the Company for the year ended 31 March 2022 was carried out and reported jointly by APAS & Co LLP and Walker Chandiok & Co LLP, who have expressed an unmodified opinion vide audit report dated 02 May 2022 which has been furnished to OP Bagla & Co LLP, the incoming joint statutory auditor of the Company and has been relied upon by them for the purpose of their joint audit of the standalone financial statements.

Report on Other Legal and Regulatory Requirements

16. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

17. As required by the Companies (Auditor''s Report) Order, 2020 (''the Order'') issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

18. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, that:

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The standalone financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2023 from being appointed as a director in terms of section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company as at 31 March 2023 and the operating effectiveness of such controls, refer to our separate Report in Annexure B, wherein we have expressed an unmodified opinion; and

g) With respect to the other matters to be included in the Auditor''s Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. The Company, as detailed in note 39 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2023;

ii. The Company did not have any long-term contracts including derivative contracts for

which there were any material foreseeable losses as at 31 March 2023;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2023;

iv. a. The management has represented

that, to the best of its knowledge and belief, as disclosed in note 56 (e) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any persons or entities, including foreign entities (''the intermediaries''), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (''the Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;

b. The management has represented that, to the best of its knowledge and belief, as disclosed in note 56 (f) to the standalone financial statements, no funds have been received by the Company from any persons or entities, including foreign entities (''the Funding Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (''Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

v. The Company has not declared or paid any dividend during the year ended 31 March 2023; and

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 requires all companies which use accounting software for maintaining their books of account, to

use such an accounting software which has a feature of audit trail, with effect from the financial year beginning on 1 April 2023 and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 (as amended) is not applicable for the current financial year.

Mar 31, 2022

Report on the Audit of the Standalone FinancialStatements

Opinion

1. We have audited the accompanying standalone financial statements of Devyani International Limited

(âthe Company''), which comprise the Balance Sheet as at 31 March 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âthe Act'') in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (âInd AS'') specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (âICAI'') together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

5. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matters

How our audit addressed the key audit matter

Recognition of deferred tax assets

As detailed in Note 33 to the accompanying Standalone financial statements, the Company has unused tax benefits (losses and depreciation) amounting to '' 1,378.26 million (approx.) as at 31 March 2022 which are available for set off against the future taxable income of the Company.

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carried forward unabsorbed depreciation and business losses can be utilized.

Our audit procedures in relation to the recognition of deferred tax assets included, but were not limited to, the following:

a) Evaluated the design and tested the operating effectiveness of key controls implemented by the Company over recognition of deferred tax assets based on the assessment of Company''s ability to generate sufficient taxable profits in foreseeable future allowing the use of deferred tax assets within the time prescribed by income tax laws in accordance with the requirements of Ind AS 12, âIncome Taxes''.

b) Reconciled the future taxable profit projections to future business plans of the Company as approved by the Board of Directors.

Key audit matters

How our audit addressed the key audit matter

The Company''s ability to recover the deferred tax assets is assessed by the management at the end of each reporting period, taking into account forecasts of future taxable profits that Company expects to earn within the period by which the brought forward losses can be adjusted against such taxable profits as governed by the Income-tax Act, 1961, and expected future reversals of other existing taxable temporary differences.

The determination of business projections underlying aforesaid taxable profit forecasts involve use of assumptions and estimates are judgmental, subjective and depend on future market and economic conditions and materialization of the Company''s expansion plans. Any change in these assumptions could have a material impact on the carrying value of deferred tax assets.

Owing to the materiality of the balances, complexities and judgements involved as described above, we have identified the recoverability of deferred tax assets recognized on brought forward tax losses and unabsorbed depreciation and other timing difference as a key audit matter for the current year audit.

c) Tested the assumptions used in aforesaid future projections relating to the forecasts of future taxable profits and evaluated the reasonableness of the assumptions, including future growth rate underlying the preparation of these forecasts based on actual historical results, other relevant existing conditions, external data and market conditions.

d) Tested the mathematical accuracy of the projections including sensitivity analysis performed by management

e) Performed independent sensitivity analysis to test the impact of possible variations in key assumptions mentioned above to determine inputs that involved high estimation uncertainty of future projections.

f) Evaluated management''s assessment of time period available for adjustment of such deferred tax assets as per provisions of the Income-tax Act, 1961 and appropriateness of the accounting treatment with respect to the recognition of deferred tax assets as per requirements of Ind AS 12, Income taxes

g) Evaluated the appropriateness and adequacy of the disclosures made in the financial statements in respect of deferred tax assets in accordance with applicable accounting standards

Impairment of investments (including loans) in subsidiaries

Refer note 2(q) of Summary of significant accounting policies and other explanatory information and the note 32 of the standalone financial statements of the Company for the year ended 31 March 2022.

The Company has investments (including loans) in subsidiary companies amounting to '' 1,719.94 million as at 31 March 2022 and has recognized impairment of '' 197.19 million as on 31 March 2022 (refer Note 6A & 6B and 7 of the Standalone Financial Statements).

The recoverability of the aforesaid amounts is dependent on the operational performance of aforesaid subsidiary companies, and for certain subsidiary companies, the actual business performance has been lower than anticipated performance which has been identified by the management as possible impairment indicators under the principles of Ind AS 36, Impairment of Assets (âInd AS 36'').

Our audit procedures to test impairment of loans given to and investment in subsidiary companies included, but were not limited to, the following procedures:

a) Obtained an understanding from the management with respect to process and controls implemented by the Company to identify possible impairment indicators and to determine recoverability of the amounts from its subsidiary companies including testing of such controls;

c) 1 nvolved auditor''s valuation experts for review of the valuation methodology including appropriateness of valuation assumptions used by the management''s expert;

d) Traced the future cash flow projections to approved business plans of the subsidiary companies and evaluates the reasonableness of the inputs used in the projections by comparing past projections with actual results, and considering our understanding of the business and market conditions, as relevant;

Key audit matters

How our audit addressed the key audit matter

Management has assessed the recoverability of the aforesaid amounts by carrying out a valuation of the subsidiary''s business with the help of an external valuation expert using the discounted cashflow method, which requires management to make significant estimates and assumptions related to forecast of future revenue, operating margins, growth rate, expansion plans and selection of the discount rates to determine the recoverable value to be considered for impairment testing of the carrying value of the aforesaid balances.

Considering the materiality of the above matter to the standalone financial statements, complexities and judgement involved, and the significant auditor attention required to test such management''s judgement, we have identified this as a key audit matter for current year audit.

e) Evaluated sensitivity analysis performed by the management and further performed independent sensitivity analysis on these key assumptions to determination estimation uncertainty involved and impact on conclusions drawn basis headroom available; and

f) Evaluated the appropriateness and adequacy of disclosures made in the standalone financial statements in accordance with the applicable accounting standard

Impairment assessment of goodwill and non-current assets

Refer note 2(f) of Summary of significant accounting policies and other explanatory information and note 30 of the standalone financial statements of the Company for the year ended 31 March 2022.

As at 31 March 2022 the Company is carrying Goodwill amounting to '' 504.57 million and Non-current assets aggregating to '' 15,012.57 million in its standalone financial statements.

In accordance with the requirements of Ind AS 36 Impairment of Assets, the Company performs an annual impairment assessment of goodwill associated with the cash generating units (CGUs) identified in the Company, and of other non-current assets of CGUs where impairment indicators have been identified, in order to determine whether the recoverable value is below the carrying amount as at 31 March 2022.

The management has determined that each store constitutes a separate CGU which is tested for impairment as above. For the purpose, the Company determines recoverable value of CGUs using Discounted Cash Flow Model (DCF Model) which require determination of certain assumptions and estimates of future trading performance, operating margins, future growth rates and discount rates.

The assessment of the recoverable amount requires significant judgment relating to estimates of cash flow projections, growth rates and discount rates.

Our audit procedures for impairment assessment of goodwill

and non-current assets included but were not limited to the

following:

a) Obtained an understanding of impairment testing of goodwill and non-current assets process, evaluated the design, implementation and tested the operative effectiveness of key internal financial controls relating to identification of indicators of impairment, identification of CGUs and the recoverable amounts of CGUs;

b) Evaluated appropriateness of identification of CGUs basis our understanding of the business and the model used in determining the value-in-use of the CGUs involving auditor''s valuation experts including assessment of valuation assumptions such as discount rates;

c) Analyzed the performance of the CGUs and evaluated the reasonableness of the assumptions used in computation of business projections and value-in-use as at 31 March 2022 basis our understanding of the business including current and expected market and economic conditions, and traced such projections to approved business plans;

d) Performed sensitivity analysis in respect of the key assumptions used including revenue growth rates and discount rate to verify appropriateness of such assumptions;

e) Tested the arithmetical accuracy of the computation of recoverable amounts of cash generating units; and

f) Assessed the appropriateness of the disclosures included in note 45 in respect of impairment of noncurrent assets including goodwill.

Key audit matters

How our audit addressed the key audit matter

Consequent to such impairment assessment the Company has recorded an impairment charge of '' NIL against Goodwill and '' 57.20 million against noncurrent assets.

Due to the significant level of judgments and subjectivity involved in determining recoverable amount and their significance to the Company''s financial position, we have identified this as a key audit matter in the current year audit

Information other than the Financial Statements and Auditorâs Report thereon

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

8. I n preparing the standalone financial statements, the Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditorâs Responsibilities for the Audit of the

Standalone Financial Statements

error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to financial statements in place and the operating effectiveness of such controls;

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

â¢ Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern;

â¢ Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation; and

â¢ Obtain sufficient appropriate audit evidence regarding the financial statements of the Company to express an opinion on the financial statements.

Report on Other Legal and Regulatory Requirements

15. As required by Section 197(16) of the Act, we report that the remuneration paid to its whole-time director for the year ended 31 March 2022 is in excess of the limits laid down under Section 197 read with Schedule V of the Act and consequently exceeded the overall limit of remuneration payable by the Company to its directors. As explained in note 57 to the accompanying standalone financial statements, the Company is in the process of seeking an approval from the shareholders by way of a special resolution in the ensuing Annual General Meeting.

16. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Order'') issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

17. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, that:

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The standalone financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 from being appointed as a director in terms of section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company as on 31 March 2022 and the operating effectiveness of such controls, refer to our separate Report in Annexure B wherein we have expressed an unmodified opinion; and

i. the Company, as detailed in note 39 to the standalone financial statements, has

disclosed the impact of pending litigations on its financial position as at 31 March 2022;

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2022;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2022;

iv.

a. The management has represented that, to the best of its knowledge and belief, as disclosed in note 60(e) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any persons or entities, including foreign entities (âthe intermediaries''), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âthe Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b. The management has represented that, to the best of its knowledge and belief, as disclosed in the note 60(f) to the accompanying standalone financial statements, no funds have been received by the Company from any persons or entities, including foreign entities (âthe Funding Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiaries'') or provide any

guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our attention that causes us to believe that the

management representations under sub-clauses (a) and (b) above contain any material misstatement.

v. The Company has not declared or paid any dividend during the year ended 31 March 2022.

For Walker Chandiok & Co LLP For APAS & Co LLP

Chartered Accountants Chartered Accountants

Firm Registration No.: 001076N/N500013 Firm Registration No.: 000340C/C400308

Nitin Toshniwal Sumit Kathuria

Partner Partner

Membership No.: 507568 Membership No.: 520078

UDIN: 22507568AIGHTZ2847 UDIN: 22520078AIGOYO9517

Place: Gurugram Place: Gurugram

Date: 2 May 2022 Date: 2 May 2022

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