3.11 Provisions and contingent liabilities
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not
recognised for future operating losses.
Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations under the
contract exceed the economic benefits expected to be received under it, are recognised when it is probable that an outflow of
resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event based on a
reliable estimate of such obligation.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to
the passage of time is recognised as interest expense.
The disclosure of contingent liability is made when, as a result of obligating events, there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of resources.
3.12 Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current
liabilities in the balance sheet.
3.13 Cash flow statement
Cash flows are reported using the indirect method, whereby net profit/ (loss) before tax is adjusted for the effects of transactions
of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating,
investing and financing activities of the Company are segregated.
3.14 Earnings per share
The basic earnings per share is computed by dividing the net profit/ (loss) attributable to owner's of the Company for the year by
the weighted average number of equity shares outstanding during reporting period.
There are no potential dilutive equity shares with the Company.
3.15 Contributed equity
Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
3.16 Recent Accounting Pronouncements
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under the Companies
(Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2026, MCA notified
amendments to various Indian Accounting Standards under the Companies (Indian Accounting Standards) Amendment Rules,
2025 and the Companies (Indian Accounting Standards) Second Amendment Rules, 2025, applicable to the Company with effect
from April 1, 2025.
(i) Amendments to Ind AS 21 - The Effects of Changes in Foreign Exchange Rates
The amendments specify how an entity should assess whether a currency is exchangeable into another currency and how it
should determine the spot exchange rate when exchangeability is lacking. The amendments also require additional disclosures to
enable users of financial statements to understand the impact of a currency not being exchangeable into another currency on the
entity’s financial performance, financial position and cash flows.
The Company has evaluated the amendments and concluded that they do not have a material impact on the financial statements.
(ii) Amendments to Ind AS 1 - Presentation of Financial Statements
The amendments clarify the requirements for classification of liabilities as current or non-current, including liabilities arising
from loan arrangements containing covenants. The amendments specify that the right to defer settlement of a liability must exist
at the end of the reporting period and that classification is based on rights existing at the reporting date. The amendments also
introduce additional disclosure requirements for non-current liabilities subject to covenants.
The Company has evaluated the amendments and concluded that they do not have a material impact on the financial statements,
(iii) Amendments to Ind AS 7 - Statement of Cash Flows and Ind AS 107 - Financial Instruments: Disclosures
The amendments introduce disclosure requirements relating to supplier finance arrangements. The amendments require entities to
provide information regarding the terms and conditions of such arrangements, the carrying amounts of related liabilities and the
effects of such arrangements on the entity’s cash flows and liquidity risk.
The Company has evaluated the amendments and concluded that they do not have a material impact on the financial statements,
except for additional disclosures, where applicable.
(iv) International Tax Reform - Pillar Two Model Rules - Amendments to Ind AS 12
The amendments introduce a temporary mandatory exception from the recognition and disclosure of deferred tax assets and
liabilities related to Pillar Two income taxes arising from the OECD Global Anti-Base Erosion (“GloBE”) rules. The amendments
also require entities to provide specified disclosures regarding their exposure to Pillar Two income taxes.
The Company has evaluated the amendments and concluded that they do not have a material impact on the financial statements.
Further, the Company is currently not within the scope of the Pillar Two rules.
(v) Other Amendments
The amendments to Ind AS 101 - First-time Adoption of Indian Accounting Standards, Ind AS 108 - Operating Segments, Ind
AS 109 - Financial Instruments, Ind AS 115 - Revenue from Contracts with Customers and Ind AS 32 - Financial Instruments:
Presentation are primarily consequential, clarificatory or editorial in nature. The Company has evaluated these amendments and
concluded that they do not have any material impact on the financial statements.
(b) The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends
and the repayment of capital:
Equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in
the Company’s residual assets on winding up. The equity shares are entitled to receive dividend as declared from time to time,
subject to preferential right of preference shareholders to payment of dividend. The voting rights of an equity shareholder on a
poll are in proportion to his/its share of the paid-up equity share capital of the Company. Voting rights cannot be exercised in
respect of shares on which any call or other sums presently payable has not been paid.
Failure to pay any amount called up on shares may lead to their forfeiture. On winding up of the Company, the holders of equity
shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts, in
proportion to the number of equity shares held.
Information about the Company’s exposure to interest rate and liquidity risks is included in note 36
Notes:
(i) Secured, unlisted , redeemable non-convertible debentures issued to Credit Opportunities II Pte. Ltd. and India Special
Situations Scheme I
Company has entered into settlement agreement with Credit opportunities India Pte Ltd and India Special situations Scheme-I
(debenture holders of the company) to settle the loan in three tranches. The Company has paid ?289 millions on 9 April 2025 as
first tranche as agreed in the settlement agreement. The Company has also paid ? 823.22 millions on 10 July 2025 as Second
tranche and on 9 April 2025 the lender has realised ?550 million by way of sale of invoked CDGL shares, originally pledged by the
company. with this one time settlement the loan is completely settled.
However, the third tranche amounting to ? 500 millions is payable on 30 June 2028 upon achievement of the share price milestone
or EBITDA milestone as specified in the Settlement Agreement. Since the obligation to pay the third tranche arises only upon
occurrence of the specified milestones, the same is treated as contingent payment.
Consequent to the above settlement arrangement, the Company has recognised a gain of ? 785.56 million on settlement of the loan
liability and ? 550 million towards adjustment arising from sale of invoked shares by the lender. The aforesaid amounts have been
disclosed as exceptional items in the Statement of Profit and Loss for the year ended 31 March 2026.
(ii) From Axis Bank Limited
On 29 December 2025 company has received settlement letter from Axis Bank for settlement their outstanding dues at Rs 700
millions with the settlement terms of Rs 350 millions payable on or before 31 December 2025. Company has paid Rs 350 millions
on 29 December 2025 as part of loan settlement and On 4 February 2026 company has paid remaining amount of Rs 350 millions
and settled the loan in full and recognised a gain of Rs 354.29 millions as exceptional items during year ended 31 March 2026.
(iii) From Rare Asset Reconstruction Limited (Rare ARC)- ? 478.82 million [31 March 2025: Principal amount of loan amounting to
? 478.82 million including current maturities of long-term borrowings - Secured by
? Aditya Birla Finance Limited assigned its debt as per the provisions of SARFAESI Act, in favour of Rare Asset Reconstruction
Limited along with all the underlying securities, rights, title and interest through an Registered Assignment Agreement dated March
31, 2023
? Security
- Pledge of a proportion of the shares of Mindtree Limited (released), Coffee Day Global Limited held by the Company and Sical
Logistics Limited (Invoked and Sold) held by its subsidiary
- Personal guarantee of Late Mr. V. G. Siddhartha
? The loan carries an interest rate of 15.00% p.a. payable quarterly
? Any delay in repayment of interest entails payment of penal interest @ 24% p.a. for the period of delay.
? The Company has an option of voluntary prepayment under certain circumstances as set out in the arrangement. Further, the
Company has an option to repay the loan in advance with a prepayment premium of 2% on the principal amount outstanding as on
the date of prepayment.
? The repayment of the loan has been extended pursuant to the letter dated 24 September 2020 up to 31 March 2021 and During
the FY 2021-22,the lender has recalled the entire amount outstanding amount
? The loan has been outstanding for 60 months from the due date
? Due to default in repayment of interest and principal. In view of the loan recall notices, legal disputes and pending onetime
settlement with the lenders, the management has not paid interest of ? 143.64 millions.
(iv) Other current borrowings comprise of amount payable to 1 lender which is due more than 6 years and time barred by limitation
(v) The aggregate amount of borrowing secured by personal guarantee of Late Mr. V G Siddhartha amounts to ? 930.30 million (31
March 2025: ? 4,393.95 million).
(vi) On 7 April 2026, the Company made a Disclosure in terms of SEBI circular No. SEBI/HO/CFD/CMD1 /CIR/P /2019/140 for the
quarter ended 31 March 2026 regarding the disclosures of defaults on payments of Interest/Repayment of principal amount on loans
from Banks/ Financial institutions and unlisted debt securities.
(vii) Pursuant to the demise of Mr.V G Siddhartha on 31st July 2019, the lender have not made any changes to the terms with respect to
his personal guarantee for the above loans.
(viii) The Company has not received balance confirmation in respect of certain lenders. This will be taken care off during one time
settlement process.
i) Pending resolution of the respective proceedings, it is not practicable tor the Company to estimate the timings ot cash outflows, it
any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are
required and disclosed as contingent liabilities where applicable, in its financial statements. Based on the advice from the Company's
legal counsel, management does not expect the outcome of these proceedings to have a materially adverse effect on its financial
position. The Company does not expect any reimbursements in respect of the above contingent liabilities.
iii) The company has received the demand of? 56.93 million in respect of AY 2011-12 pursuant to the re-assessment u/s 143(3) rws
147. the company had filed appeal in CIT (Appeals)for the above said order and the same disposed in company favor on 22.02.2024.
Income Tax Department went for an appeal before ITAT against the order passed by CIT(Appeals). ITAT has allowed the appeal filed
by the company in FY 2024-25
iv) The Supreme court of India in the month of February 2019 had passed a judgement relating to definition of wages under the
Provident Fund Act, 1952. However, considering that there are numerous interpretative issues relating to this judgement and in the
absence of reliable measurement of the provision for the earlier periods, the Company will evaluate its position and update its
provision, if required, on receiving further clarity on the subject. The Company does not expect any material impact of the same.
(v) The Company has pledged its investments in subsidiaries for the loans availed by its subsidiaries. All the shares pledged are invoked
by the lenders and the effect to the invocation has already been given in the financial statements. Refer note 6.
19 During the year, the Company entered into a settlement with Kotak Mahindra Capital Company in respect of outstanding dues
amounting to ?554.14 millions. Pursuant to the settlement, an amount of ?0.25 crores was paid in full and final settlement of the
liability. Consequently, the balance amount of ?553.89 millions, being no longer payable by the Company, has been written back and
recognised under Other Income in the Statement of Profit and Loss.
Effective April 1,2019, the company adopted Ind AS 116 “Leases” and applied to all lease contracts existing on April 1,2019 using the
modified retrospective method and has taken the cumulative adjustment to retained earnings, on the date of initial application.
Consequently, the company recorded the lease liability at the present value of the lease payments discounted at the incremental
borrowing rate and the right of use asset at its carrying amount as if the standard had been applied since the commencement date of the
lease, but discounted at the lessee’s incremental borrowing rate at the date of initial application.
The company's lease assets primarily consists of leases for land and buildings. The company has recognised right-of-use assets and lease
liability in respect of these leases on adoption of Ind AS 116. The lease liability is secured by the respective security deposits. The lease
liability terms varies between 2 to 20 years, and are payable in monthly instalments.
The weighted average incremental borrowing rate applied to lease liabilities as at April 1, 2019 is 12.50%.
Effects on adoption of Ind AS 116:
i) On transition, the adoption of the new standard resulted in recognition of 'Right of Use asset' of ? 22.42 million, and a lease liability
of ? 45.34 millions. The cumulative effect of applying the standard of was adjusted with opening balance of retained earnings. The
effect of this adoption is insignificant on the profit before tax, profit for the period and earnings per share. Ind AS116 will result in
decrease in cash out flows from operating activities and an increase in cash out flows from financing activities on account of lease
payments.
ii) On pre-mature termination of lease contract the related right-of-use asset and lease liability is de-recognised and the differential
amount is recognised in profit and loss account.
iii) Rental expenses recognised in Profit & Loss statement, in respect of low value leases and shortterm leases, for which Ind AS 116
has not been applied, is ? 0.71 million (Previous year ? 0.86 million)
33 Segment information
A Basis for segmentation
In accordance with Ind AS 108, Operating segments, segment information has been provided in the consolidated financial statements of
the Company and therefore no separate disclosure on segment information is given in these standalone financial statements.
The remuneration of key executives is determined having regard to the performance of individuals and market trends. Post
employment benefit comprising gratuity and compensated absences are not disclosed as these are determined for the Group as a
whole.
35 Employee benefits obligations
A Defined benefit plan
The Company has a defined benefit gratuity plan in India, governed by the Social Security Code - 2020 with effect from
21/11/2025 . Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity
payable on retirement/termination is the employees last drawn Wage per month computed proportionately for 15 days salary
multiplied for the number of years of service. The gratuity plan is a unfunded plan.
B Reconciliation of the net defined benefit liability
The estimates of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotion and
other relevant factors such as supply and demand factors in the employment market.
Assumptions regarding future mortality have been based on published statistics and mortality tables. The current longevities
underlying the values of the defined benefit obligation at the reporting date are given below.
(ii)Sensitivity analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant,
would have affected the defined benefit obligation by the amounts shown below.
Fair value hierarchy
Fair value hierarchy explains the judgement and estimates made in determining the fair values of the financial instruments that are¬
a) recognised and measured at fair value
b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting
standard. An explanation of each level follows underneath the table:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair
value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which
maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is
included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration
and indemnification asset included in level 3
B Measurement of fair
values
(i) Valuation techniques and significant unobservable inputs
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or
liquidation sale. The following methods and assumptions were used to estimate the fair values:
- The fair values of the Company’s interest-bearing debentures and loans are determined by using DCF method using discount rate that reflects the issuer’s borrowing rate as at the end of the
reporting period. The own non-performance risk as at 31 March 2026 was assessed to be insignificant.
The following tables show the valuation techniques used in measuring Level 2 fair values. The significant unobservable inputs used have not been disclosed as no financial assets and liabilities
have been measured at fair value:
C Financial risk management
The Company has exposure to the following risks arising from financial instruments:
- credit risk (see (b));
- liquidity risk (see (c)); and
- market risk (see (d)).
(a) Risk management framework
The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are
established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems
are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a
disciplined and constructive control environment in which all employees understand their roles and obligations.
Board oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to
the risks faced by the Company. Board is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the
results of which are reported to the Audit Committee.
(b) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's
receivables from customers; loans and investments in debt securities.
The carrying amounts of financial assets represent the maximum credit risk exposure.
i) Trade receivables and loans:
The Company's trade receivable primarily includes receivables from related parties and others from Customers. The Company has established a credit policy under which each new customer is
analysed individually for creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The Company's review includes external ratings, if they are
available, financial statements, credit agency information, industry information and in some cases bank references.
The Company's loans include recoverable from loans given to wholly owned subsidiaries
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting
period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date
of initial recognition. It considers available reasonable and supportive forwarding-looking information.
Based on the above analysis, the Company does not expect any credit risk from its trade receivables and loans recoverable for any of the years reported in this financial statements.
(c) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial
asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company uses activity-based costing to cost its products and services, which assists it in
monitoring cash flow requirements and optimising its cash return on investments.
(d) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, which will affect the Company’s income or the value of its holdings of financial
instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
i) Currency risk
The Company is not exposed to any currency risk. The currencies in which these transactions are denominated is INR.
ii) Interest rate risk
The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk.
37 Capital management
For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The
primary objective of the Company’s capital management is to maximise the shareholder value.
The Company monitors capital using a ratio of net debt to equity. For this purpose, net debt is defined as total liabilities, comprising borrowings, trade payables and other liabilities less cash and
cash equivalents. Equity comprises all components of equity. The Company's net debt to equity ratio at 31 March 2026 was as follows.
40 SEBI issued an order dated January 24, 2023 directing CDEL in the matter of transfer of funds by Subsidiaries of the Company to Mysore Amalgamated Coffee Estates Limited to take all the
necessary steps for recovery of entire dues from MACEL and its related entities along with due interest, that are outstanding to the subsidiaries of CDEL. Further, SEBI has directed the Company to
appoint an Independent Law firm in consultation with NSE within 60 days of this order, to take effective steps for recovery of dues and imposed a penalty of ? 250 million under section 15HA
and ? 10 million under section 15HB of the SEBI Act, 1992.
Thereafter, the company appealed the above order dated 24th January 2023 to the Hon’ble Securities Appellate Tribunal (SAT). However, the SAT granted stay on imposition of penalty.
As per the instructions of NSE the Company appointed Independent Law Firm Crest Law on 3rd April 2023 to take effective steps for recovery of dues from MACEL. Subsidiaries of the Company
has initiated arbitration proceedings against MACEL. In this regard the subsidiaries of the company has filed claim statement as part of arbitration proceedings.
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