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Coffee Day Enterprises Ltd.

BSE: 539436 Sector: Services
NSE: COFFEEDAY ISIN Code: INE335K01011
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OPEN 50.85
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VOLUME 951117
52-Week high 86.70
52-Week low 36.25
P/E 34.45
Mkt Cap.(Rs cr) 1,121
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 50.85
CLOSE 50.55
VOLUME 951117
52-Week high 86.70
52-Week low 36.25
P/E 34.45
Mkt Cap.(Rs cr) 1,121
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Coffee Day Enterprises Ltd. (COFFEEDAY) - Auditors Report

Company auditors report

To

Members of

Coffee Day Enterprises Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Disclaimer of Opinion

We were engaged to audit the accompanying standalone financialstatements of Coffee Day Enterprises Limited (‘the Company?) which comprise thestandalone balance sheet as at March 31 2022 and the standalone statement of profit andloss (including other comprehensive income) standalone statement of changes in equity andstandalone statement of cash flows for the year then ended and notes to the standalonefinancial statements including a summary of the significant accounting policies and otherexplanatory information (collectively referred to as the ‘standalone financialstatements?).

We do not express an opinion on the accompanying standalone financialstatements. Because of the significance of the matter described in the Basis forDisclaimer of Opinion section of our report we have not been able to obtain sufficientappropriate audit evidence to provide a basis for an audit opinion on the standalonefinancial statements.

Basis for Disclaimer of Opinion

1. We have not been provided with sufficient evidence with respect torecoverability of dues from group companies amounting to INR 1676 Crores (refer Note 7Bof the standalone financial statement). Further we have not been provided appropriateevidence about the recognition of fair value of the estimated loss allowance on corporateguarantee given to its subsidiary as required by Ind AS 109

‘Financial Instruments?. We are therefore unable to commenton the recoverability of the stated balance from group companies fair value of estimatedloss allowance on corporate guarantee given to a subsidiary and the impact on thestandalone financial statement.

2. It is observed that there has been a change in the percentage ofshares held by the Company in two of its subsidiaries as of March 31 2022 vis-?-visMarch 31 2019 due to the invocation of shares by the lenders of the subsidiaries.However while considering the amount invested in the subsidiaries the Management of theCompany has considered the erstwhile shareholding pattern prior to dilution as theManagement believes that the change in shareholding is temporary in nature and the sharespledged will be redeemed back by the Company (refer to Note 6 of the standalone financialstatement).

However these shares have been transferred to such lenders beforeMarch 31 2022. We have been informed that the lenders have not sold any of the sharesinvoked and consequently have not made any adjustments to the loan outstanding.Accordingly the Management believes that it is not possible to attribute any sale valueto the invoked shares. Consequently the impact of the said transfer on the book value ofinvoked shares of INR 156 Crores on the standalone financial statements cannot beascertained.

3. The Management of the Company has determined that no impairment isrequired to be recognized on its investments in subsidiaries associates and jointventures with a carrying value of INR 1865 Crore as at March 31 2022 as required by IndAS 36 ‘Impairment of Assets? particularly consequent to developments duringthis period (as detailed in Note 41 of the standalone financial statement). Consequentlythe value of investments held by the Company in a subsidiary which is the holding companyof this step subsidiary is required to be assessed for impairment. We have not beenprovided with the indicators used and the assessment performed by the Management in notconsidering impairment in respect of its subsidiaries associates and joint ventures. Weare therefore unable to comment on whether the value of investments recognized in thestandalone financial statement is appropriate.

4. Attention is drawn to Note 14 of the standalone financial statementwherein instances of non-compliance with certain debt covenants including interest &principal repayment defaults have been described. We also draw attention to the fact thatthe Company has not obtained the balance confirmations on loans from lenders. In theabsence of adequate and sufficient audit evidence to establish the amounts payable to thelenders we are unable to provide our opinion on the correctness of these amountsreflected in the standalone financial statement and also on their consequential impactincluding potential tax liabilities. We have been informed that during the year certainlenders have exercised their right to recall the loan and some lenders have initiatedlegal action to recover dues. However in the absence of the adequate evidence we areunable to comment on the consequential adjustments that might impact this Statement onaccount of non-compliance with debt covenants. Further in view of the loan recallnotices legal disputes and pending one-time settlement with the lenders of the Companythe Management has not recognised interest on the loans outstanding as of March 31 2022aggregated to INR 68.30 Crores. As the loan recall letters provided by the lendersrequires payment of interest and penal interest non-provision of such interest is not inline with the accrual concept of accounting.

5. The Statement has been prepared by the Management and Board ofDirectors using the going concern assumption (Refer Note 39 of the standalone financialstatement). The matters detailed in the above paragraphs may have a consequentialimplication on the Company?s ability to continue as a going concern. We are thereforeunable to comment on whether the going concern basis for preparation of the standalonefinancial statement is appropriate.

Emphasis of Matter

1. In a letter dated July 27 2019 signed by late Mr. V. G.Siddhartha the Promoter and then Chairman and Managing Director of the Company which hascome to light it was inter-alia stated that the Management and auditors were unaware ofall his transactions. The Board of Directors had initiated an investigation into thecircumstances leading to the statements made in the letter and to scrutinize the books ofaccounts of the Company and its subsidiaries. The investigation report submitted to theBoard of Directors on July 24 2020 has concluded that Mysore Amalgamated Coffee EstatesLimited (‘MACEL?) a related entity owes a sum of INR 3535 Crore to thesubsidiaries of CDEL as on July 31 2019 of which a sum of INR 842 Crore was due to thesubsidiaries as of March 31 2019 leaving a balance of INR 2693 Crore as incrementaloutstanding which needs to be addressed. Further the Board of the Company in the boardmeeting on August 21 2020 appointed Retired Hon?ble Justice Sri K L Manjunathformer Judge of Hon?ble High Court of Karnataka to suggest and oversee actions forrecovery of the dues from MACEL and to help on any other associated matters. Due to thedemise of Sri K. L. Manjunath the Board in their meeting held on February 7 2022appointed Hon'ble Mr. Justice H N Nagamohandas a retired Judge of High Court ofKarnataka to suggest and oversee actions for recovery of the dues from MACEL and to helpon any other associated matters.

2. We draw attention to the Note 40 of the standalone financialstatement wherein the Company has stated that Corporate Insolvency Resolution Process hasbeen initiated in NCLT against one of its key step-subsidiary M/s. SICAL LogisticsLimited (SLL) pursuant to which an Interim Resolution Professional has been appointed tolook into the affairs of the key step-down subsidiary. The Management is of the view thatthe recoverability of above amount from SLL can be ascertained only after the receipt ofinitial report from the Resolution Professional and accordingly no provision is madeagainst the same.

3. We draw attention to Note 29 of the standalone financial statementdetailing facts relating to the sale of Way2Wealth Securities Private Limited and itscertain subsidiaries. Based on the sale agreement Rs. 4.63 Crore is receivable by thecompany in form of preceding year?s tax refunds and SEBI deposits from the purchaser(Shriram Ownership Trust) in form of reimbursement subject to realisation. Further a sumof Rs. 0.77 Crore has been withheld by the purchaser per the agreement. Exceptional Lossof Rs. 46.50 Crore has been recognised on the said sale transaction during the financialyear 2020-21.

4. As detailed in Note 38 of the standalone financial statement theCompany for the year 2019-20 has filed an application seeking a onetime exemption fromregistering itself as a Non-Banking Financial Company (NBFC) as required by Section 45-IAof the Reserve Bank of India Act 1934 and other related provisions. As at the date ofthis Statement a response from the Reserve Bank of India is awaited. In the absence ofsuch exemption we are unable to comment on the compliance with the aforesaid regulationsand consequential impact if any on the standalone financial statement.

5. A show cause notice has been served on the company in May 2021 underRule 4 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules 1995 in thematter of shares held by the company and its subsidiaries in Mindtree Limited (Refer Note42 of the standalone financial statement) and on December 7 2021 by SEBI in the matter oftransfer of funds by Subsidiaries of the Company to Mysore Amalgamated Coffee EstatesLimited (MACEL) (Refer Note 43 of the standalone financial statement). We are informedthat the matter is being discussed with the legal counsels and appropriate representationwill be made before the authorities.

Our opinion is not modified in respect of the above matters.

Other Matters

We further draw your attention to the Note 45 to the standalonefinancial statement which describes the extent to which the COVID-19 pandemic will impactthe company?s financial results. The same will depend on future developments whichare highly uncertain.

Information other than the Standalone Financial Statements andAuditor?s Report thereon

The Company?s management and Board of Directors are responsiblefor the other information. The other information comprises the information included in theCompany?s annual report but does not include the financial statements and ourauditors? report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express

any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Management?s Responsibilities for the Standalone FinancialStatements

The Company?s management and Board of Directors are responsiblefor the matters stated in section 134(5) of the Act respect to the preparation of thesestandalone financial statements that give a true and fair view of the state of affairsprofit/loss and other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under section 133 of the Act.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financial statements management and Boardof Directors are responsible for assessing the Company?s ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing theCompany?s financial reporting process.

Auditor?s Responsibilities for the Audit of the StandaloneFinancial Statements

Our responsibility is to conduct an audit of the standalone financialstatements in accordance with Standards on

Auditing and to issue an auditor?s report. However because of thematter described in the Basis for Disclaimer of Opinion section of our report we were notable to obtain sufficient appropriate audit evidence to provide a basis for an auditopinion on these standalone financial statements.

We are independent in accordance with the ethical requirements inaccordance with the Code of ethics and provisions of the Act that are relevant to ouraudit of the standalone financial statements and we have fulfilled our other ethicalresponsibilities in accordance with the code of ethics and the requirements under the Act.

Report on Other Legal and Regulatory Requirement

1. As required by the Companies (Auditors? Report) Order 2020("the Order") issued by the Central Government in terms of section 143 (11) ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by section 143(3) of the Act we report that: a. Asstated in Basis for Disclaimer of Opinion section above we sought but were unable toobtain all the information and explanations which to the best of our knowledge and beliefwere necessary for the purposes of our audit.

b. Due to the possible effects of the matters described in the Basis ofDisclaimer opinion section above we are unable to state whether proper books of accountas required by law have been kept by the Company so far as it appears from our examinationof those books.

c. The standalone balance sheet the standalone statement of profit andloss (including other comprehensive income) the standalone statement of changes in equityand the standalone statement of cash flows dealt with by this Report are in agreement withthe books of account except for matters described in the Basis of Disclaimer paragraph.

d. Due to the possible effects of the matter described in the Basis forDisclaimer Opinion and the Emphasis of Matter Section above we are unable to statewhether the aforesaid standalone IND AS financial statements comply with the Indianaccounting standards specified under section 133 of the Act read with relevant rulesissued thereunder.

e. On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2022 from being appointed as a director in termsof Section 164(2) of the Act. f. With respect to the adequacy of the internal financialcontrols with reference to financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B".

g. With respect to the matter to be included in the Auditors?Report under section 197(16) in our opinion and according to the information andexplanations given to us the Company has not paid any remuneration to its directorsduring the current year in accordance with the provisions of Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us. h. With respect to the other matters to beincluded in the Auditors? Report in accordance with Rule 11 of the Companies (Auditand Auditors) Rules 2014 in our opinion and to the best of our information and accordingto the explanations given to us:

i. The Company has disclosed the impact of pending litigations as atMarch 31 2022 on its financial position in its standalone financial statements - ReferNote 27 to the standalone financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses; and iii. Therewere no amounts which were required to be transferred to the Investor Education andProtection Fund by the Company.

iv. a) The Management has represented that to the best of itsknowledge and belief no funds (which are material either individually or in theaggregate) have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the

Company to or in any other person or entity including foreign entity("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;

b) The Management has represented that to the best of its knowledgeand belief no funds (which are material either individually or in the aggregate) havebeen received by the Company from any person or entity including foreign entity("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of the

Funding Party ("Ultimate Beneficiaries") or provide anyguarantee security or the like on behalf of the Ultimate Beneficiaries;

c) Based on the audit procedures that have been considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11(e) as providedunder (a) and (b) above contain any material misstatement.

v. The Company has not declared or paid any dividend during the yearHence we have no comments on the compliance with section 123 of the Companies Act 2013.

For Venkatesh & Co.
Chartered Accountants
Firm registration number: 004636S
Sd/-
CA Dasaraty V
Partner
Membership Number: 026336
Chennai May 30 2022
UDIN: 22026336AJXXPS4076

Annexure A to Independent Auditors Report

As referred to in our Independent Auditor?s Report to the membersof Coffee Day Enterprises Limited (‘the Company?) on the Standalone Ind ASfinancial statements of the Company for the year ended March 31 2022 we report that:

i) a. A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property plant andequipment. B) In respect of Intangible Assets there were no intangible Assets hencereporting under this clause is not applicable.

b. The Company has a regular programme of physical verification of itsfixed assets by which fixed assets are verified every year. In our opinion theperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. In accordance with the programme physicalverification of fixed assets was carried out during the year and no material discrepancieswere noted.

c. According to the information and explanations given to us and on thebasis of our examination of the records the Company does not have any immovableproperties except for a parcel of land held on long term lease. We have verified the leaseagreement in the name of the Company for the land taken on lease duly registered with theappropriate authority.

d. The Company has not revalued any of its Property Plant andEquipment (including right-of-use assets) and intangible assets during the year. e. Noproceedings have been initiated during the year or are pending against the Company as atMarch

31 2022 for holding any benami property under the Benami Transactions(Prohibition) Act 1988 (as amended in 2016) and rules made thereunder.

ii) A) According to the information and explanations given to us and onthe basis of our examination of the records the inventories of consumables have beenphysically verified by the Management during the year. In our opinion the frequency ofverification is reasonable. The discrepancies identified on physical verification ofinventories between physical stocks and book records were not material. However as at theyear-end there is no material value of physical inventory. B) The Company has not availedany working capital limits at any points of time during the year from banks or financialinstitutions on the basis of security of current assets and hence reporting under clause3(ii)(b) of the Order is not applicable.

iii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not made anyinvestments provided guarantee or security or granted any advances in the nature ofloans secured or unsecured to companies firms limited liability partnerships or anyother parties during the year. The Company has not granted any loans secured orunsecured to firms limited liability partnerships or any other parties during the year.

(a) Based on the audit procedures carried on by us and as per theinformation and explanations given to us the Company has granted loans to foursubsidiaries.

Particulars Loans Guarantees
`Balance outstanding as on 31/03/2022
--> Subsidiaries Rs.1675 Crores Rs.100 Crores
--> Others Rs.6 Crores

(b) According to the information and explanations given to us and basedon the audit procedures conducted by us we are of the opinion that the terms andconditions of the loans given are prejudicial to the interests of the company.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company in the case of loans giventhe principal are repayable on demand and no interest is charged on these loans.

(d) According to the information provided to us and based on ourexamination of the records of the company the company has not sought repayment of theloans till the date of Balance Sheet hence there is no amount overdue for a period ofmore than ninety days.

(e) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there is no loan given fallingdue during the year which has been renewed or extended or fresh loans given to settle theoverdue of existing loans given to the same party.

(f) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has granted loansrepayable on demand and without specifying terms or period of repayment.

Particulars All Parties Related Parties
Aggregate amount of Loans:
Agreement does not specify any terms or Rs.1675 Crores Rs.1675 Crores
period of repayment.
Percentage of Loans to the total loans 100% 100%

iv) According to the information and explanations given to us and onthe basis of our examination of the records the Company has complied with the provisionsspecified under Section 185 and 186 of the Companies Act 2013.

v) The Company has not accepted any deposits or amounts which aredeemed to be deposits from the public. Accordingly clause 3(v) of the Order is notapplicable.

vi) According to the information and explanations given to us theCentral Government has not prescribed the maintenance of cost records under Section 148(1)of the Companies Act 2013 for the products manufactured by it (and/ or services providedby it). Accordingly clause 3(vi) of the Order is not applicable.

vii) a. According to the information and explanations given to us andon the basis of our examination of the records of the Company amounts deducted/ accruedin the books of account in respect of undisputed statutory dues including Provident FundIncome tax dues Goods and Service tax and other material statutory dues have generallybeen regularly deposited during the year by the Company with the appropriate authorities.

b. According to the information and explanations given to us there areno dues of Goods and Service tax and other material statutory dues which have not beendeposited with the appropriate authorities on account of any dispute except those referredto in note 27 to the financial statements and the amounts described in point (a) above. Asexplained to us the Company did not have any dues on account of Employees? StateInsurance Duty of Customs and Cess during the year. The Company has the below outstandingdisputes as of March 31 2022:

Name of the statute Nature of dues Amount (Rs. in Crore) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Tax and interest 0.29 (Nil) AY 2012-13 CIT (Appeals)

viii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has notsurrendered or disclosed any transactions previously unrecorded as income in the books ofaccount in the tax assessments under the Income-tax Act 1961 as income during the year.

ix) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company the Company has defaultedin repayment of following loans including interest as specified below:

Nature of borrowingincluding debt securities Name of Lender Amount not paid on due date Whether Principal or Interest No. of days delays or unpaid Remarks if any
Loans Aditya Birla Finance Limited 100.22 Crores Both More than 1 year Case has been filed and it is under Dispute
Loans Axis Bank 117.63 Crores Both More than 1 year
Debentures SSG 235.55 Crores Both

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not beendeclared a wilful defaulter by any bank or financial institution or government orgovernment authority.

(c) According to the information and explanations given to us by themanagement the Company has not obtained any term loans during the year during the year.Accordingly clause 3(ix)(c) of the Order is not applicable.

(d) According to the information and explanations given to us and on anoverall examination of the balance sheet of the Company we report that no funds have beenraised during the year on short-term basis by the Company during the year. Accordinglyclause 3(ix)(d) of the Order is not applicable.

(e) According to the information and explanations given to us and on anoverall examination of the financial statements of the Company we report that the Companyhas not taken any funds from any entity or person on account of or to meet the obligationsof its subsidiaries as defined under the Companies Act 2013. Accordingly clause 3(ix)(e)of the Order is not applicable

(f) According to the information and explanations given to us andprocedures performed by us we report that the Company has not raised loans during theyear on the pledge of securities held in its subsidiaries as defined under the CompaniesAct 2013. Accordingly clause 3(ix)(f) of the Order is not applicable.

(x) (a) The Company has not raised any moneys by way of initial publicoffer or further public offer

(including debt instruments). Accordingly clause 3(x)(a) of the Orderis not applicable.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly clause 3(x)(b) of the Order is not applicable.

(xi) (a) Based on examination of the books and records of the Companyand according to the information and explanations given to us considering the principlesof materiality outlined in Standards on Auditing we report that no fraud by the Companyor on the Company has been noticed or reported during the course of the audit.

(b) According to the information and explanations given to us noreport under sub-section (12) of Section 143 of the Companies Act 2013 has been filed bythe auditors in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors)Rules 2014 with the Central Government.

(c) We have taken into consideration the whistle blower complaintsreceived by the Company during

the year while determining the nature timing and extent of our auditprocedures.

(xii) According to the information and explanations given to us theCompany is not a Nidhi Company.

Accordingly clause 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanationsgiven to us the transactions with related parties are in compliance with Sections 177 and188 of the Companies Act 2013 where applicable and the details of the related partytransactions have been disclosed in the standalone financial statements as required by theapplicable Indian Accounting Standards.

(xiv) (a) Based on information and explanations provided to us and ouraudit procedures in our opinion the

Company has an internal audit system commensurate with the size andnature of its business.

(b) We have considered the internal audit reports of the Company issuedtill date for the period under

audit.

(xv) In our opinion and according to the information and explanationsgiven to us the Company has not entered into any non-cash transactions with its directorsor persons connected to its directors and hence provisions of Section 192 of theCompanies Act 2013 are not applicable to the Company.

(xvi) (a) In our opinion and according to the information andexplanations given to us as detailed in Note 38 of the Standalone financial statementsthe Company is required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934 during the FY 2019-20.

(b) The company has not conducted any Non-Banking Financial or HousingFinance activities and hence clause 3(xvi)(b) is not applicable.

(c) The Company is not a Core Investment Company (CIC) as defined inthe regulations made by the Reserve Bank of India. Accordingly clause 3(xvi)(c) of theOrder is not applicable.

(d) According to the information and explanations provided to us duringthe course of audit the Group

does not have any CIC. Accordingly the requirements of clause3(xvi)(d) are not applicable.

(xvii) The Company has incurred a Cash Loss of Rs.2.34 Crores in thePrevious Year and Rs.116.3 Crores in

the preceding previous year.

(xviii) There has been no resignation of the statutory auditors duringthe year. Accordingly clause 3(xviii) of

the Order is not applicable.

(xix) According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dates of realisation of financialassets and payment of financial liabilities other information accompanying the financialstatements our knowledge of the Board of Directors and management plans and based on ourexamination of the evidence supporting the assumptions. We were not been provided withsufficient appropriate audit evidence which causes us to believe that any materialuncertainty exists as on the date of the audit report that the Company is not capable ofmeeting its liabilities existing at the date of balance sheet as and when they fall duewithin a period of one year from the balance sheet date.

(xx) In our opinion and according to the information and explanationsgiven to us there is no unspent amount under sub-section (5) of Section 135 of theCompanies Act 2013 pursuant to any project. Accordingly clauses 3(xx)(a) and 3(xx)(b) ofthe Order are not applicable.

for Venkatesh & Co.
Chartered Accountants
Firm registration number: 004636S
Sd/-
CA Dasaraty V
Partner
Membership Number: 026336
Chennai May 30 2022
UDIN: 22026336AJXXPS4076

Annexure B to the Independent Auditors? report on the standalonefinancial statements of Coffee Day

Enterprises Limited for the year ended March 31 2022

Report on the internal financial controls with reference to theaforesaid standalone financial statements under

Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013

We have audited the internal financial controls with reference tofinancial statements of the Company as of March 31 2022 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.

Management?s Responsibility for Internal Financial Controls

The Company?s management and the Board of Directors areresponsible for establishing and maintaining internal financial controls based on theinternal financial controls with reference to financial statements criteria established bythe Company considering the essential components of internal control stated in theGuidance Note. These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company?spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor?s Responsibility

Our responsibility is to express an opinion on the Company?sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to financial statements. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to financial statements were established and maintained andwhether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor?s judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company?s internalfinancial controls with reference to financial statements.

Meaning of Internal Financial Controls with reference to FinancialStatements

A company?s internal financial controls with reference tofinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. Acompany?s internal financial controls with reference to financial statements includethose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company?s assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference toFinancial Statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Basis for Disclaimer of Opinion

Due to the possible effects of the matters described in the Basis forDisclaimer of Opinion paragraph in our main

audit report we are unable to obtain sufficient and appropriateevidence to provide a basis for our opinion on whether the Company has adequate internalfinancial controls over financial reporting with reference to these Ind AS financialstatements as at March 31 2021 and whether such internal financial controls wereoperating effectively. Accordingly we do not express an opinion on the internal financialcontrols over financial reporting with reference to the standalone financial statements ofthe Company.

Disclaimer of Opinion

Due to the possible effects of the matters described in the "Basisfor Disclaimer of Opinion" paragraph above we are unable to obtain sufficient andappropriate evidence to provide a basis for our opinion on whether the Company hasadequate internal financial controls over financial reporting with reference to these IndAS financial statements as at March 31 2022.

For Venkatesh & Co.
Chartered Accountants
Firm registration number: 004636S
Sd/-
CA Dasaraty V
Partner
Membership Number: 026336
Chennai May 30 2022
UDIN: 22026336AJXXPS4076

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