Coffee Day Enterprises Ltd

Dear Members,

Your Directors present herewith the 17th Annual Report on business and operations along with the Audited financial statements and the Auditor's report of the Company for the year ended 31 March 2025.

During the fiscal year ended 31 March 2025, Net revenues increased by 6% to 1,078 Crores in FY 2024-25, compared with 1,013 Crores in FY 2023-24.

The state of the Company affairs forms an integral part of Management Discussion & Analysis Report.

The Board of Directors of the Company has not recommend any dividend for the financial year 2024-25

In accordance to the provisions of Section 134(3)(j) of the Companies Act, 2013, (hereinafter "the Act") the Company has not proposed any amount to transfer to the General reserves of the Company for the financial year 2024-25.

The Company has not accepted any Deposits under Section 73 and Chapter V of the Act and the rules made thereunder.

The details of the loans, guarantees and investments are provided in the notes to the audited financial statements annexed with the Annual report.

As on 31 March 2025, the Company has 17 subsidiaries (including step-down subsidiaries), 5 Associate Companies and 3 Joint Ventures. The details of all the subsidiary companies including companies which are yet to commence operations and which have been liquidated or sold during the year are mentioned in "Form AOC-1", which is attached as an "Annexure VI." A statement containing the salient features of the financial statements of Subsidiaries, Associate Companies or Joint Ventures are mentioned specifically in the same annexure as mentioned above. In accordance with Section 136(1) of the Act, the financial statements of the subsidiaries companies are available on the Company's official website post approval of the members.

In line with Regulation 24 and Regulation 46(2)(h) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (hereinafter "the Listing Regulations") the Company has formulated a detailed policy for determining ‘material' subsidiaries and the said policy is available at the Company's official website and may be accessed at the link : https://coffeeday.com/Stakeholders/Policies/Material_Subsidiary.pdf

As stated in Regulation 34(2)(e) of the Listing Regulations, the Annual Report shall contain a detailed report on Management Discussion & Analysis, which is hereto attached with the Annual report in "Annexure-I."

The report on Corporate Governance along with a Certificate from the Practicing Company Secretary regarding proper compliance of Corporate Governance pursuant to the requirements of Schedule V of the Listing Regulations forms an integral part of the Annual Report stated in

"Annexure-II."

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016, the Board of the Company has adopted Dividend Distribution policy in their meeting held on 18 May 2017, which aims at marking the right balance between the quantum of dividend paid to its shareholders and the amount of profit retained for its commercial requirements. The said policy is available in the website of the company and may be accessed at the link: https://coffeeday.com/Stakeholders/Policies/DDP-CDEL.pdf

The Company recognizes and embraces the importance of diverse Board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, industry experience that will help us retain our competitive strength. The Company has evaluated the policy with a purpose to ensure adequate diversity in Board of Directors, which enables them to function efficiently and foster differentiated thought processes at the back of varied industrial and management expertise. The Board recognises the importance of a diverse composition and has therefore adopted a Board Diversity Policy. The policy is made available at the Company's official website via link: https://www.coffeeday.com/PDF/BOARD%20DIVERSITY%20POLICY.pdf

In accordance with Section 178(3) of the Companies Act, 2013, the Nomination and Remuneration Committee has specified the criteria and manner for effective evaluation of performance of ‘Board', its ‘Committees' and ‘Individual Directors' carried out either by the Board, by the Nomination and Remuneration Committee or by an independent external agency and reviewed its implementation and compliance.

The detailed policy in compliance with Section 178(3) of the Act read along with Regulation 19 of the Listing Regulations has been approved by the Board of Directors of the Company and is made accessible at the Company's official website at the following link: https://www.coffeeday.com/PDF/NOMINATION%20&%20REMUNERATION%20POLICY.pdf

As per the provisions of the Companies Act 2013 an evaluation of the performance of the Board, Committee and members were undertaken.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of various criteria such as Board structure, strategic discussions, effective reviews, process, Boards engagement with senior management team etc. The performance of the Committee was evaluated by the Board on the basis of composition, effective discharge of its function and recommendations provided. Performance of the Individual Directors was evaluated on the basis of Integrity, Commitment, ability to exercise independent judgment etc. The feedback was collated and discussed at the Board and action points for improvement were put in place.

During the year under report, the tenure of Mr. S V Ranganath, as an Independent Director concluded on 8 January 2025. Mr. Giri Devanur was resigned from the Board of Directorship of the Company on 3 October 2024 due to pre occupations. The Board of Directors of the Company, on 29 January 2025 appointed Mr. Chandrashekar Rao Bokkasa to the Board as an Additional Non-Executive Independent Director of the Company and on 17 March 2025 appointed Mrs. Sowrabhi Sandeep as Additional Non – Executive Director of the Company.

The approval from members is sought in this Annual General Meeting for regularization of Mr.Chandrashekar Rao Bokkasa and Mrs. Sowrabhi Sandeep as Non-Executive Independent Director and Non-Executive Director of the Company, respectively. Dr. I. R. Ravish, Director is liable to retire by rotation at the ensuing Annual General meeting and being eligible, has offered himself for re-appointment.

The tenure of Mrs Malavika Hegde as CEO and Whole time director will be completing on 30 December 2025.

The tenure of Mr K R Mohan as Independent director will be completing on 30 December 2025.

The tenure of Dr Vasundhara Devi as Woman Independent Director will be completing on 30 December 2025.

The Company, received Order from SEBI dated 24 January 2023, directing the Company to take all the necessary steps for recovery of dues from MACEL and its related entities along with due interest, that are outstanding to the subsidiaries of CDEL. Further, as per the order of SEBI the Company on 3 April 2023 appointed Crest Law Partners (Independent Law firm) in consultation with NSE to take effective steps for recovery of dues.

The SEBI had also imposed a penalty of 25 Crores under section 15HA and 1 crore under section 15HB of the SEBI Act, 1992. However, the company has appealed the said order before the Hon'ble Securities Appellate Tribunal (SAT) seeking grant of stay on the order issued by SEBI. The SAT has granted stay on the imposition of penalty.

Thereafter, under the guidance and supervision of CrestLaw Partners, with the prior approval of NSE and with the consent/acceptance of all the parties to the dispute, it was decided to resolve the dispute through Arbitral proceedings under the Arbitration and Conciliation Act, 1996 for recovery of money from MACEL and other related entities.

Further, all the parties to the dispute approved for appointment of Hon'ble Justice Sri Ajit J. Gunjal, Former Judge, High Court of Karnataka as the Sole Arbitrator in respect of SEBI's Order dated 24 January 2023.

The process of Arbitration is in progress.

In Compliance with section 134(5) of the Companies Act, 2013, the Board of Directors hereby confirms the following:

• In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to departures;

• The Directors had selected such accounting policies and applied them consistently with proper explanation relating to departures and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

• The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

• The Directors had prepared the annual accounts on a going concern basis; and

• The Directors are responsible for establishing and maintain adequate and effective internal financial controls with regard to it business operations and in the preparation and presentation of the financial statements, in particular, the assertions on the internal financial controls in accordance with broader criteria established by the Company. Towards the above objective, the directors have laid down the internal controls based on the internal controls framework established by the Company, which in all material respects were operating effectively as at 31 March 2025.

• The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate. The Company has substantially complied with material provisions of such acts and regulations as are relevant for its operations.

All the Independent Directors have given their declarations stating that they meet the criteria of independence as laid down under Section 149(6) of the Act read with Regulation 16(1)(b) of the Listing Regulations. In the opinion of the Board, they fulfil the conditions of independence as specified in the Act and the Listing Regulations and are independent of the management.

The Company has five Committees of the Board i.e.: (a.) Audit Committee (b.) Nomination and Remuneration Committee (c.) Stakeholder's Relationship Committee (d.) Corporate Social Responsibility Committee and (e.) Risk Management Committee

The detailed information on each of these committees including its composition, functioning and number of meetings are disclosed in the Corporate Governance report annexed with the Annual report of the Company.

During the financial year 2024-25, 5(five) meetings of the Board of Directors were held and two circular resolutions were passed. Details of these meetings and other Committee/General meetings are given in the report on Corporate Governance Report attached with the Annual report.

All the repetitive Related Party Transactions that were entered into during the FY 2024-25 were on an arm's length basis and in the ordinary course of business. There were no materially significant Related Party Transactions made by the Company during the year that required shareholders' approval under Regulation 23 of the Listing Regulations. Prior omnibus approval from the Audit Committee is obtained for transactions which are repetitive in nature. Further, disclosures are made to the Committee on a quarterly basis.

Further, Particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the Form AOC-2 have been enclosed as Annexure-VII pursuant to clause (h) of subsection (3) of Section 134 of Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014.

The Company has adopted a Policy for dealing with Related Party Transactions and is made available on the Company's official website via web link: https://www.coffeeday.com/PDF/RPT%20POLICY.pdf

There has been no material change and commitment, affecting the financial performance of the Company which has occurred from the end of the financial year of the Company to which the financial statements relate to till the date of this report.

There has been no change in the nature of business of the Company.

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is provided in "Annexure-III" to this Annual report.

The Members of the Company at the 12th Annual General Meeting ("AGM") held on 31 December 2020 had appointed M/s. Venkatesh & Co., Chartered Accountants (Firm Registration No. FRN 004636S), as the Statutory Auditors of the Company for a period of five (5) consecutive years to hold office from the conclusion of the 12th AGM until the conclusion of the 17th AGM, to be held in the year 2025.

Pursuant to the provisions of Section 204 of the Companies Act, 2013, read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors, on the recommendation of the Audit Committee, has proposed the appointment of M/s. M/s G. Akshay & Associates, Practicing Company Secretaries (Firm Registration No S2018KR612500) as the Secretarial Auditors of the Company for a term of five consecutive financial years commencing from FY 2025-26.

The said appointment is subject to the approval of the Members of the Company at the ensuing Annual General Meeting, in compliance with the amended provisions of Regulation 24A of the SEBI LODR Regulations, which now require shareholders' approval for appointment/re-appointment of Secretarial Auditors in listed companies.

The Secretarial Audit Report for the financial year ended March 31, 2025 issued by. M/s G. Akshay & Associates, Practicing Company Secretaries (Firm Registration No FCS No. S2018KR612500) is annexed to this Report as "Annexure-IV" (including Secretarial Audit Reports of material subsidiaries i.e Coffee Day Global Limited(CDGL), Coffee Day Trading Limited(CDTL) and Tanglin Developments Limited(TDL)).

In terms of the provisions of Section 148 of the Act, the appointment of the Cost Auditors does not apply to the Company.

Pursuant to the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014, the Company has appointed M/s A B S & Co., Chartered Accountants as Internal Auditors of the Company.

During the year under report there were no significant and material orders passed/notices served by Courts/Regulators except the following:

1. An application has been filed against the Company under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy Rules, 2019 by IDBI Trusteeship Services Limited before the National Company Law Tribunal ("NCLT"), Bengaluru for alleged default of 228,45,74,180/-. On 8 August 2024 the NCLT Bengaluru admitted the petition filed by IDBI under Section of Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP). The Company appealed against the Order in National Company Law Appellate Tribunal ("NCLAT") Chennai and on 14 August 2024, has stayed the operation of the impugned order passed by NCLT, Bangalore. Further, Lender approached the Hon'ble Supreme Court, and the matter was listed on 31 January 2025 wherein the Hon'ble Supreme Court has directed the concerned NCLAT, Chennai to dispose of the appeal pending before it on or before 21 February 2025. In the event the appeal is not disposed of by then, the impugned order passed by the Appellate Tribunal shall stand vacated automatically. On 27 February 2025 NCLAT has allowed the appeal filed by the company.

The 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 at 2,050 millions in three tranches which includes the amount realized on sale of 12.41% of the pledged and invoked shares of Coffee Day Global Limited owned by the Company, by the lender to a third party for 550 millions on 9 April 2025. Debenture holders have waived the interest till date. The Company has paid 250 millions on 9 April 2025 as first tranche as agreed in the settlement agreement.

2. The National Company Law Tribunal (NCLT) had dismissed the application by one of the lenders of Coffee Day Global Limited (subsidiary) as a financial creditor for recovery of its dues. The lender filed an application in NCLAT, appealing against the order. The lender has assigned the loan to another lender on 31 October 2024 and initiated the process of withdrawing the application filed in NCLAT, appealing against the order.

In terms of Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the Annual Return for the financial year ended 31 March 2025 (prepared in Form MGT-7) is available on the Company's website at: https://www.coffeeday.com/stakeholders.html

The Regulation 34(2)(f) of the Listing Regulations, which pertains to report on Business Responsibility & Sustainability is not applicable to current reporting period, as the Company is not under top one thousand companies based on market capitalization as on 31 March 2024. (Under BSE and NSE, the Company stands on 1222 and 1174 ranks respectively).

The Company complies with all Secretarial Standards issued by Institute of Company Secretaries of India.

The Internal Financial Controls of the Company operate through well documented standard policies and guidelines. The Company has adequate internal financial control procedures commensurate with its size and nature of business, which helps in ensuring orderly and efficient conduct of its business. This system provide a reasonable assurance of financial and operational information, complying with applicable statutes, safeguarding of assets of the Company, prevention and detection of frauds, accuracy and completeness of accounting records and ensuring compliance with corporate policies.

Exceptions if any are reported under "Explanatory Notes of Management" for each financial quarter.

All the significant internal audit observations and management actions thereon are reported to Audit Committee on a quarterly basis. The Audit Committee reviews the operations and assesses the adequacy of the actions proposed as well as monitors their implementation. The internal auditors conduct a quarterly follow-up for implementation of all audit recommendations and the status report is presented to the Audit Committee regularly.

The Company's management has assessed the effectiveness of the internal control over financial reporting for the year ended 31 March, 2025 and based on the assessment; believe that the system is working effectively subject to statutory auditors observations.

As per the requirements laid down under Section 177(9) of the Act and Regulation 22 of the Listing Regulations, the Company has established the Whistle blower Policy which encourages Directors and employees to bring to the Company's attention, instances of unethical behaviour, actual or suspected incidents of fraud or violation of the Company's Code of Conduct that could adversely impact on Company's operations and business. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and takes appropriate action to ensure that requisite standards of professional and ethical conduct are always upheld. The practice of the Whistle blower Policy is overseen by the Audit Committee and no employee has been denied access to the Committee.

The Contact details of Chairman of Audit committee as under: Name: Mr. K. R. Mohan 43 New No.22, 3rd Floor 16th Cross, 8th Main, Malleswaram Bangalore Karnataka 560055 Cell No.: 9844152676 Email id:kr_mohan@hotmail.com

The Whistle Blower Policy is available on the Company's official website and may be accessed through web link: https://coffeeday.com/PDF/WhistleBlower.pdf

As stated in provisions of Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules which includes the name of top 10 employees in terms of remuneration, forms part of this annual report. Pursuant to the provisions of Section 136(1) of the Act, the Board report is being sent to the shareholders including the said statement.

Disclosure pertaining to the remuneration as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in "Annexure-V".

Pursuant to the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, and on the recommendations of the CSR Committee comprising of Mr. S.V. Ranganath as the Chairman (till 8 January 2025) and Mrs. Malavika Hegde and Mr. K.R. Mohan as Members and I R Ravish Chairman (w.e.f 13 February 2025), the CSR policy is adopted and approved by the Board of the Company. The said policy has been hosted on the Company's website and is available on the link: https://coffeeday.com/Stakeholders/Policies/CSR-Policy-CDEL.pdf it lays down the purpose of formulation of the policy, areas of focus, composition of Committee and CSR budget.

During the year under Report, the Company was not required to spend any amount on CSR activities.

In commitment to keep in line with the Green Initiative and going beyond to it, electronic copy of the Notice of 17th Annual General Meeting along with Annual Report of the Company are sent to all Members whose email addresses are registered with the Company/Depository Participant(s).

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder. The Policy aims to promote a healthy work environment and to provide protection to employees at workplace and redress complaints of sexual harassment and related matters thereto. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to enquire into complaints of sexual harassment and recommend appropriate action.

Following are the Internal Complaints Committee members.

1. Ms. Bhavna Halappa – Presiding Officer

2. Ms. Arundhati Mukoo – Internal member

3. Mrs. G. Vanajakshi N – External Member

The details of the sexual harassment complaints received and redressed during the year are as follows:

1. Default in debt and breach in debt covenants, Non-Compliance with debt covenants and No Confirmation of Balance for Borrowings

In respect of the Holding Company and some of the subsidiaries, there are instances of non-compliance with certain debt covenants including interest & principal repayment defaults have been described. We also draw attention to the fact that the holding Company has not obtained the balance confirmations on loans from lenders. We have been informed that during the previous years certain lenders have exercised their right to recall the loan (refer Note 23, Note 23A and Note 29 of the consolidated financial statements). In the absence of adequate and sufficient audit evidence to establish the amounts payable to the lenders, we are unable to provide our opinion on the correctness of these amounts reflected in the standalone financial statement and also on their consequential impact including compliance with accrual concept of accounting and potential tax liabilities.

In the case of the Parent Company, The Management has not recognised interest in the case of one lender to the extent of 3.75 Crores on the loans outstanding as of 31 March 2025. The management has informed that the lender has waived off the interest for the financial year ended 31 March 2025, however no documentary evidence has been provided to us. Further we have highlighted in one subsidiary the company is currently undergoing a corporate restructuring process with its lenders, as detailed in Note No.58 of the Consolidated Financial Statements. This restructuring involves realigning the company's debt and interest obligations in accordance with the proposed plan, which remains pending for necessary approvals. The company has not recognized the impact of exchange fluctuation difference for the External commercial borrowings from one lender who are also a part of the proposed restructuring plan. The conversion of the foreign currency loan into rupee loans as well as applicable interest rate of 8.50% is subject to the necessary approval of the Reserve Bank of India. The company has recognized an interest expense of 43.98 Crores based on the proposed restructuring plan rather than the existing contracted rates.

We were not provided with the conformation of balances from the lenders. Hence, we are unable to comment on the completeness of such interest expenses and loan balances and its impact in these Consolidated Financial Statements until the completion of the restructuring process. Accordingly, the level of compliance with the requirements of the Indian Accounting Standards cannot be ascertained by us.

Management response: The Management has not recognised interest in the case of one lender to the extent of 3.75 Crores on the loans outstanding as of 31 March 2025. Based on the request made by the company the lender has waived off the interest for the financial year ended 31 March 2025.

In case of Coffee Day Global Limited(subsidiary) company has recognised interest @8.50% as per restructuring plan and letter receive from the lenders where they have agreed interest payable is @8.5%. Management is following up with lenders to get the balance confirmations. This will be taken care of during one time settlement process.

Attention is drawn to Note 65 of the consolidated financial statements wherein a final adjudication order dated 24 January 2023 has been served on the company under section 11 (11(4), 11(4A), 11B and 11B ( of the Securities and Exchange Board of India Act, 1992 read with Rule 5 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 by SEBI imposed with a total monetary penalty of 26,00,00,000 (Rupees Twenty-Six Crore) under Section 15HA and Section 15HB of the SEBI Act, 1992 respectively on account of violations of provisions of Section 12A(a), (b) & (c) of the SEBI Act, 1992 read with Regulations 3(b), (c) & (d) and 4(1) of the PFUTP Regulations as stated in Para 59 and 60 of its order relating to the advances to MACEL by the subsidiaries of the Company. The company appealed against the above order dated 24 January 2023 to the Hon'ble Securities Appellate Tribunal (SAT) which granted stay on the imposition of penalty. Further, the Company has initiated arbitration proceedings against MACEL as suggested by Crest Law in consultation with NSE. In this regard the subsidiaries of the company have filed claim statement as part of arbitration proceedings.

No provision is made in the books of accounts against the amount receivable from MACEL. In the absence of any conclusive evidence demonstrated by the company for recoverability of the same, we are unable to comment on the recoverability, requirement or otherwise of provision on those receivables and consequential impact on these financial statements.

Further, we have in respect of 3 subsidiaries and 2 step-down subsidiaries, based on our review, have issued a disclaimer of opinion due to the possible impact of the recoverability of dues from MACEL. Hence, we are unable to comment on the recoverability of amount due from MACEL amounting to 3,372.83 Crores to the group as a whole.

Similarly in the case of one other subsidiary, the other auditor has issued a disclaimer of opinion due to the possible impact of the recoverability of dues from MACEL. Management response: The company appealed the above order dated 24 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 3 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.

Under the above circumstances, no provision is made in the books of accounts against the amount receivable from MACEL.

As on 31 March 2025 the amount due by MACEL to various subsidiaries and joint venture of the company amounts 3,372.83 crores.

The Consolidated Financial Statements of the Group have been prepared by the Management and Board of Directors using the going concern assumption in view of the positive net-worth of the Group (refer Note 56 of the Consolidated Financial Statements). The matters detailed in the above paragraphs may have a consequential implication on the Group's ability to continue as a going concern. We have expressed the same in the reports of two subsidiaries and three step-down subsidiaries. Further, the auditors of one subsidiary and two step-down subsidiaries have also expressed material uncertainty over going concern in their reports.

Management response: The consolidated financial results for the year ended 31 March 2025 have been prepared on a going concern basis in view of the positive net worth of the Group amounting to 2,946 crores as of 31 March 2025.

1. Recoverability of Capital Advances to the related parties:

We draw attention to Note No.13 of the consolidated financial statements wherein in 1 subsidiary there are doubts on the recoverability of capital advance dues aggregating to 275 Crores. An agreement for the purchase of land at Mumbai had been entered into which has been acquired by City & Industrial Development Corporation (CIDCO) nodal agency for acquiring land for Navi Mumbai International Airport. CIDCO has proposed alternative land in lieu of the acquisition of land. However, the party has filed legal case for monetary compensation instead of alternate land. Hence, we are unable to comment on the recoverability of amount due.

Management response: An agreement for purchase of land at Mumbai had been entered into by the Tanglin Developments Limited (subsidiary) with Mrs.Vasanthi Hegde in FY 2017-18. Based on agreement to purchase the land the Tanglin Developments Limited (subsidiary) has advanced 275 crores to Mrs.Vasanthi Hegde. The land in the name of Mrs.Vasanthi Hegde has been acquired by City & Industrial Development Corporation (CIDCO) nodal agency for acquiring land for Navi Mumbai International Airport. CIDCO has proposed alternative land in lieu of the acquisition of land. However Mrs.Vasanthi Hegde has filed legal case for monetary compensation instead of alternate land.

2. Recoverability of advances

We draw attention to the consolidated financial statements wherein 2 subsidiary and 1 step down subsidiary had given advances to an extent of Rs.245 crores and a provision was made during the FY 2019-20 due to non-recoverability of dues. Hence, we are unable to comment on the recoverability of amount due.

Management response: After reviewing recoverability of the advance, in FY 2019-20, the subsidiaries of the company have created provision for doubtful advance amounting to 245 crores. Since 100% provision already created the impact on the financials nil.

3. Financial Guarantee

The subsidiary of the company has not recognized a financial guarantee given to erstwhile subsidiary amounting to 114.6 Crores, which has been invoked by the lenders. As detailed in Note no.58 of the consolidated financial statements, due to proposed restructuring plan with the lender regarding a settlement, we are unable to assess the impact of this matter on the financial statements. Accordingly, the level of compliance with the requirements of the Indian Accounting Standards cannot be ascertained by us.

Management response: As the Coffee Day Global Limited(subsidiary) is in the process of restructuring of the debt, once the debt is restructured the respective corporate guarantee liabilities will be given effect in the financial statements to the extent required.

1. Recoverability of dues from Group Companies

We have not been provided with sufficient evidence with respect to recoverability of dues from group companies amounting to 1,630 Crores (refer Note 7B of the standalone financial statements). We are therefore unable to comment on the recoverability of the stated balance from group companies and the impact on the standalone financial statements.

Management response: The company is confident to collect the dues from group companies on realization of receivables by the group companies.

2. Default in repayment of debt and interest due, Non -Compliance with debt Covenants and No Confirmation of balances for Borrowings

Attention is drawn to Note 14 of the standalone financial statements, wherein instances of non-compliance with certain debt covenants including interest & principal repayment defaults have been described. We also draw attention to the fact that the Company has not obtained the balance confirmations on loans from lenders. In the absence of adequate and sufficient audit evidence to establish the amounts payable to the lenders, we are unable to provide our opinion on the correctness of these amounts reflected in the standalone financial statements and also on their consequential impact including compliance with accrual concept of accounting and potential tax liabilities.

The Management has not recognised interest in the case of one lender to the extent of 3.75 Crores on the loans outstanding as of 31 March 2025. The management has informed that the lender has waived off the interest for the financial year ended 31 March 2025, however no documentary evidence has been provided to us.

Management response: The Management has not recognised interest in the case of one lender to the extent of 3.75 Crores on the loans outstanding as of 31 March 2025. Based on the request made by the company the lender has waived off the interest for the financial year ended 31 March 2025. Management is following up with lenders to get the balance confirmations. This will be taken care of during one time settlement process.

3. Going Concern Assumption

The Statement has been prepared by the Management and Board of Directors using the going concern assumption (Refer Note 38 of the standalone financial statements). The matters detailed in the above paragraphs may have a consequential implication on the Company's ability to continue as a going concern. We are therefore unable to comment on whether the going concern basis for preparation of the standalone financial statements is appropriate.

Management response: These standalone financial results for the year ended 31 March 2025 have been prepared on a going concern basis in view of the positive net worth of the Company amounting to 16,171.08 million as of 31 March 2025.

For the financial year 2024-25, there are no qualifications, reservations or adverse remarks made by the Practicing Company Secretary in the Secretarial Audit report of the Company.

Risk Management and Assessment:

The Company is exposed to various risks considering the diversified parameters according to the different major business sectors of the Company that is coffee business, and resort business. The Audit Committee oversees the area of financial risks and controls. Major risks identified by the business and functions are systematically addressed through mitigating actions on continuing basis. The Company has incorporated sustainability in the process, which helps the Board to align potential exposures with the risk appetite and highlight risks associated with chosen strategies.

There was no instance of fraud during the year under review, which required the Statutory Auditors / Secretarial Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the rules made thereunder.

None of the Directors of your Company are disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015.

In accordance with Section 68 of the Act, the Company has not bought back any of its securities during the year.

The Company has not issued any Sweat Equity Shares under the provisions of Section 54 of the Act.

In terms of Section 63 of the Act, the Company had not issued Bonus Shares during the year under review.

Pursuant to the provisions of Section 62 of the Act, the Company has not provided any Stock Option to the Employees of the Company.

The Board acknowledges and places on record its' appreciation for the contributions and hard work of Chief Executive Officer, Chief Financial Officer, Company Secretary & Compliance officer and other Senior employees and their team specifically in the last 5 years for continued operations and effective interaction with all stakeholders and statutory agencies.

The Directors would like to express their gratitude towards the Company's employees, customers, Banks and institutions, investors and academic partners for their continuous support. They also thank the concerned government departments and agencies for their co-operation. The Directors appreciate and value the contribution made by every member of the ‘Coffee Day' family.