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
2026, 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 2026, 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
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
|
Our audit procedures for impairment assessment of franchisee
|
|
other non-current assets
|
rights, goodwill and other non-current assets included, but were
|
|
Refer note 2 (f) for material accounting policy information and
|
not limited to the following:
|
|
the note 29 and 44 for financial disclosures in the standalone
|
a)
|
Obtained an understanding from the management
|
|
financial statements of the Company for the year ended
|
|
with respect to process and internal financial controls
|
|
31 March 2026.
|
|
implemented by the Company to identify CGU, impairment
|
|
As at 31 March 2026, the Company is carrying following balances
|
|
indicators, allocation of goodwill and franchisee rights to
|
|
in its standalone financial statements:
|
|
related group of CGUs and determine recoverable value
|
|
- franchisee rights of ' 700.37 million and goodwill of
|
|
of CGU/ group of CGUs (as applicable) and evaluated
|
|
' 504.57 million arising on account of business combination
|
|
the design implementation and tested the operating
|
|
and
|
|
effectiveness of key internal financial controls;
|
|
- other non-current assets of all the stores across various
|
b)
|
Assessed the professional competence and objectivity of
|
|
geographies (representing property, plant and equipment,
intangible assets, right-of-use assets net of lease liabilities
and allocated corporate assets) having aggregate carrying
|
|
the external valuation experts engaged by the management
for performing the required valuations to estimate the
recoverable value of CGUs;
|
|
value of ' 12,738.72 million representing identifiable group
|
c)
|
With the help of auditor’s valuation experts, as applicable,
|
|
of assets pertaining to cash generating units (“CGUs”)
(refer note 44), in its standalone financial statements.
|
|
performed the following procedures:
|
|
Key audit matters
|
How our audit addressed the key audit matters
|
|
In accordance with the requirements of Ind AS 36, Impairment
|
|
o Evaluated appropriateness of identification of CGUs
|
|
of Assets (Ind AS 36), the Company has performed an annual
|
|
basis our understanding of the business and the
|
|
impairment assessment of such franchisee rights and goodwill,
|
|
valuation model used by the Company for determining
|
|
and other non-current assets (where impairment indicators have
|
|
the recoverable value of the CGUs;
|
|
been identified), in order to determine whether the carrying
|
|
o Assessed the reasonableness of the key assumptions
|
|
value exceeds recoverable value as at 31 March 2026.
|
|
used in the DCF Model for computation of business
|
|
The management has determined that investment in each store
as indicated by other non- current assets constitutes a separate
CGU which is tested for impairment as above. For this purpose,
the Company, with the help of external valuation experts, as
applicable, has determined recoverable value of CGUs and also
allocated franchisee rights and goodwill to group of CGUs to
which they relate.
Recoverable value is determined using Discounted Cash Flow
Model (DCF Model) which required consideration of certain
|
d)
|
projections and recoverable value as at 31 March
2026 such as growth rates, discount rates etc.
o Performed sensitivity analysis in respect of such key
assumptions to verify its appropriateness and impact
on the recoverable value;
o Tested the arithmetical accuracy of the computation
of recoverable value of the CGUs;
Analysed the performance of the CGUs basis our evaluation
of the key assumptions and understanding of the business
|
|
assumptions and estimates of future performance, gross
|
|
including current and expected market and economic
|
|
margins, growth rates, discount rates, material price inflation,
|
|
conditions, and benchmarked growth rates for projections
|
|
rent expense, salary and wages and royalty and marketing fees.
|
|
used in approved business plans and;
|
|
Consequent to such impairment assessment, the Company has
|
e)
|
Assessed the adequacy and appropriateness of the
|
|
recorded an impairment charge of ' Nil against franchisee rights
|
accounting policy used and disclosures made by the
|
|
and goodwill and an impairment charge of ' 168.78 million
|
|
management included in note 29 and note 44 in respect
|
|
against other non-current assets.
|
|
of impairment of franchisee rights, goodwill and other
|
|
Due to the materiality of the amounts, significance of these
|
|
non- current assets, in accordance with the applicable
|
|
management estimates and judgements to the Company’s
standalone financial statements, which are inherently subjective,
we have identified this area as a key audit matter for current
year’s audit.
|
|
accounting standards respectively.
|
|
Impairment assessment of carrying values of investments in
|
Our audit procedures relating to assessment of the carrying
|
|
and loan given to subsidiaries
|
values of investment in and loan given to subsidiaries included,
|
|
Refer note 2 (q) for material accounting policy information and
|
but were not limited to the following:
|
|
the note 48 and 50 for financial disclosures in the standalone
|
a)
|
Obtained an understanding from the management
|
|
financial statements of the Company for the year ended
|
|
with respect to process and controls implemented by
|
|
31 March 2026.
|
|
the Company to identify CGU, impairment indicators,
|
|
The Company has investment of ' 3,427.07 million in Devyani
|
|
significant increase in credit risk relating to loan receivable
|
|
International DMCC, Dubai and ' 5,658.94 million in Sky Gate
|
|
and determine recoverability of the amounts from its
|
|
Hospitality Private Limited (both entities hereinafter referred
|
|
subsidiaries and evaluated the design implementation and
|
|
to as “subsidiaries”) and also has outstanding balance of loan
|
|
tested the operative effectiveness of key internal financial
|
|
receivable from Devyani International DMCC, Dubai amounting
|
|
controls;
|
|
to ' 1,178.17 million as at 31 March 2026.
|
b)
|
Assessed the professional competence and objectivity of
|
|
At end of each reporting period, the management reviews
|
|
the external valuation experts engaged by the management
|
|
whether any impairment indicators exist in the carrying value
|
|
for performing the required valuations to estimate the
|
|
of investments, in accordance with the requirements of Ind AS
|
|
recoverable value of its subsidiaries;
|
|
36, “Impairment of Assets” (‘Ind AS 36’), and whether there is
|
c)
|
With the help of auditor’s valuation experts, performed the
|
|
any significant increase in credit risk in loan receivable from
|
|
following procedures:
|
|
subsidiary in accordance with the requirements of Ind AS 109,
|
|
o Evaluated appropriateness of the valuation model
|
|
“Financial instruments” (‘Ind AS 109’). In respect of investments
|
|
used by the Company for determining the recoverable
|
|
and loan where impairment indicators are identified or significant
increase in credit risk is noted, the management performs a
detailed impairment test by determining the recoverable value
of such balances.
|
|
value of such subsidiaries;
|
|
Key audit matters
|
How our audit addressed the key audit matters
|
|
The recoverability of the aforesaid amounts is dependent on
|
|
o Assessed the reasonableness of the key assumptions
|
|
the operational performance of aforesaid subsidiaries including
|
|
used in the DCF Model for computation of business
|
|
its step-down subsidiaries. The actual business performance
|
|
projections and recoverable value as at 31 March
|
|
of these subsidiaries/step-down subsidiaries has been lower
|
|
2026 such as growth rates and discount rates;
|
|
than the anticipated performance which has been identified by
|
|
o Performed sensitivity analysis in respect of such key
|
|
the management as possible impairment indicators under the
|
|
assumptions to verify its appropriateness and impact
|
|
principles of Ind AS 36.
|
|
on the recoverable value; and
|
|
The recoverable value has been determined by carrying out
|
|
o Tested the arithmetical accuracy of the computation
|
|
valuation of underlying business of subsidiaries with the help of
|
|
of recoverable value of its subsidiaries;
|
|
an external valuation experts using the DCF Model, which requires
management to make significant estimates and assumptions
related to forecast of future revenue, gross 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.
|
d)
|
Analysed the performance of its subsidiaries basis our
evaluation of the key assumptions and understanding of
the business including current and expected market and
economic conditions, and benchmarked growth rates
for projections used in approved business plans and
committed expansion plans; and
|
|
Due to the materiality of the amounts, significance of these
management estimates and judgements involved, which are
inherently subjective, to the Company’s financial position, we
have identified this area as a key audit matter for current year’s
|
e)
|
Assessed the adequacy and appropriateness of the
accounting policy used and disclosures made by the
management included in note 48 and note 50 in respect
|
|
audit.
|
|
of impairment of its subsidiaries and assessment of credit
risk on loan receivable respectively, in accordance with the
requirement of the applicable accounting standards.
|
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:
• 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;
• 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;
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management;
• 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
• 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 2026 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 2026 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 38 to the
standalone financial statements, has disclosed
the impact of pending litigations on its financial
position as at 31 March 2026.;
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 2026.;
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 2026.;
iv. a. The management has represented that, to
the best of its knowledge and belief, other
than as disclosed in note 54 (e) and 56 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 of the Ultimate Beneficiaries;
b. The management has represented that, to the
best of its knowledge and belief, as disclosed
in note 54 (f) to the standalone financial
statements, no funds have been received by
the Company from any person(s) or entity(ies),
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
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 2026.
vi. As stated in Note 57 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 2025, 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
exception given below. Furthermore, except for
matters mentioned below the audit trail have 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 books of
account for which the feature of recording audit trail (edit
log) facility was not operated throughout the year for all
relevant transactions recorded in the software
|
The audit trail feature was not enabled at the database level
for accounting software to log any direct data changes, used
for maintenance of accounting records, sales invoicing and
inventory management records by the Company.
|
For Walker Chandiok & Co LLP For O P Bagla & Co LLP
Chartered Accountants Chartered Accountants
Firm’s Registration No.: 001076N/N500013 Firm’s Registration No.: 000018N/N500091
Lalit Kumar Neeraj Kumar Agarwal
Partner Partner
Membership No.: 095256 Membership No.: 094155
UDIN: 26095256FTSBEZ3554 UDIN: 26094155QJNTAW8122
Place: Gurugram Place: Gurugram
Date: 15 May 2026 Date: 15 May 2026
|