Auditor Report of Sapphire Foods India Ltd.

Mar 31, 2025

Sapphire Foods India Limited

Report on the Audit of the Standalone Financial StatementsOpinion

We have audited the accompanying standalone financial statements of Sapphire Foods India Limited ("the Company”), which comprise the Balance sheet as at March 31 2025, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of material accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended ("the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, its loss including other comprehensive loss, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of

the Standalone Financial Statements'' section of our report. We are independent of the Company in accordance with the ''Code of Ethics'' issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2025. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Key audit matters	How our audit addressed the key audit matter
(a) Impairment assessment of Goodwill (as described in Note 34(a) of the standalone financial statements)
As at March 31, 2025, the Company has carrying amount of Goodwill of '' 1,019.86 million pertaining to a single cash generating unit (CGU) i.e KFC brand. The company has planned closure of 1 KFC store which was acquired in earlier years and a goodwill of '' 38.75 million was recorded. Accordingly, the Company has impaired such goodwill of '' 38.75 million during the current year.	Our audit procedures included the following: • Obtained an understanding of the process followed by the management to determine the recoverable amounts of cash generating units determined by the Company. • Evaluated the design and implementation and tested the operating effectiveness of key internal financial controls related to the Company''s process relating to review of the annual impairment analysis.

Key audit matters	How our audit addressed the key audit matter
In accordance with the requirements of Ind AS 36	• Assessed Company''s valuation methodology applied
Impairment of Assets, the company performs an annual	in determining recoverable value including the
impairment assessment of Goodwill and the corresponding	reasonableness of identification of cash generating
cash generating units to determine whether the recoverable	units and around the key drivers (cash flow forecasts,
value is below the carrying amount as at March 31, 2025.	discount rates, expected growth rates, forecasted margins and terminal growth rates) based on our
For this purpose, the recoverable value of the cash	knowledge of the Company and Industry. Compared
generating unit is based on the value in use model, which	the historical accuracy by comparing past forecasts to
has been derived from the discounted cash flow model.	actual results achieved.
The model requires the Company to make significant assumptions such as discount rate, near and long-term	• Assessed the recoverable value headroom by
revenue growth rate and projected margins which involves	performing sensitivity testing of key assumptions used
inherent uncertainty since they are based on future business prospects and economic outlook.	by the Company.
	• Tested the arithmetical accuracy of the computation of
Changes in certain methodologies and assumptions can lead to significant changes in the assessment of the	recoverable amounts of cash generating unit.
recoverable value.	• Assessed the disclosures made in the standalone
	financial statements.
Due to the level of judgments involved and its significance to the Company''s financial position, this is considered to be a key audit matter.
Impairment assessment of Investments and Inter Corporate Deposit in Subsidiaries (as described in Note 34(b) of
the standalone financial statements)
The Company has a gross investment amounting to '' 143.50 million (investment net of impairment is NIL) and gross inter-corporate deposit including interest (ICD) amounting to '' 26.14 million (ICD net of impairment is NIL) as at 31 March 2025 in its subsidiary Gamma Island Food Private Limited. During the year considering continuous losses in subsidiary Gamma Island Food Private Limited and the closure of the stores in the subsidiary, the company has revisited the value of use of its investment and inter-corporate deposit and assessed these for impairment. Accordingly, an impairment loss of '' 169.64 million towards investment amounting to '' 143.50 million and provision for inter- corporate deposit of '' 26.14 million (including interest receivable) has been recorded as at March 31, 2025. Further, the Company has a gross investment amounting to '' 215.96 million as at March 31, 2025 in its wholly owned subsidiary namely Gamma Pizzakraft (Lanka) Private Limited. In the current year, the macroeconomic challenges faced by Sri Lanka in the earlier years has stabilized during the year with better performance of the subsidiary in terms of revenue and profit before tax. Basis the performance of the current year, the Management has computed the recoverable amounts of its investments based on value-in-use method after taking into consideration the current situation. This is a key audit matter as the testing of investment	Our audit procedures in respect of impairment evaluation of Investment and ICD in Gamma Island Foods Private Limited and investment in Gamma Pizzakraft (Lanka) Private Limited included the following: • Evaluated the design and implementation and tested the operating effectiveness of key internal financial controls related to the Company''s process relating to impairment review. • Analyzed the Company''s projected cashflow from Gamma Island Foods Private Limited and evaluated management''s assessment for impairment of investment
	and provision for intercorporate deposit. • Evaluated the assumptions applied by the Company in relation to the future projections of Gamma Pizzakraft (Lanka) Private Limited including understanding of management''s assessment of business impact based on current market and economic conditions. • Company''s valuation methodology applied in determining recoverable value including the reasonableness of the key drivers (cash flow forecasts, discount rates, expected growth rates, forecasted margins and terminal growth rates) based on our knowledge of the Company and Industry. Compared the historical accuracy by comparing past forecasts to actual results achieved. • We also assessed the recoverable value headroom by performing sensitivity testing of key assumptions used. • Assessed the disclosures made in the standalone
impairment is complex and involves significant judgement.	financial statements.

Other Information

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditor''s report thereon.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of Management for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

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

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

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

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

are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2025 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

In connection with the merger of two wholly owned subsidiaries Gamma Pizzakraft Overseas Private Limited and Gamma Pizzakraft Private Limited into the Company as more fully described in note 48 of the standalone financial statements (referred to as "merged subsidiaries”), we did not audit the comparative financial information of the merged subsidiaries as considered in these standalone financial statements for the year ended March 31, 2024, whose financial statements reflects total assets of '' 854.81 million as at March 31, 2024 and total revenues of '' 173.51 million and net cash outflows of '' 27.39 million for the year ended March 31, 2024.

These financial statements and other financial information have been audited by the independent auditors of such merged entities and auditor''s report have been furnished to us by the management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect to the merged subsidiaries, is based solely on the report of the

other auditor, as adjusted for the accounting effects of the Scheme recorded by the Company (in particular, the accounting effects of Ind AS 103 - Business Combinations) and other consequential adjustments, which have been audited by us.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, based on our audit, we give in the "Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report, to the extent applicable, that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books except for the matters stated in the paragraph 2(i)(vi) below on reporting under Rule

11(g).

(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

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

(f) The modification relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2(b) above.

(g) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements and the

operating effectiveness of such controls, refer to our separate Report in "Annexure 2” to this report;

(h) In our opinion, the managerial remuneration for the year ended March 31, 2025 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements -Refer Note 30 to the standalone financial statements;

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company;

iv. a) The management has represented

that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding

Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

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

v. No dividend has been declared or paid during the year by the Company.

vi. Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except that, audit trail feature is not enabled at database level insofar as it relates to accounting software as described in note 46 to the standalone financial statements. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with in respect of the accounting software where the audit trail has been enabled. Additionally, the audit trail of prior year has been preserved by the Company as per the statutory requirements for record retention to the extent it was enabled and recorded in the respective years.

For S R B C & CO LLP

Chartered Accountants ICAI Firm Registration Number: 324982E/E300003

per Poonam Todarwal

Partner

Membership Number: 136454 UDIN: 25136454BMOJUT7252

Place of Signature: Mumbai Date: May 07, 2025

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Mar 31, 2024

Sapphire Foods India Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Sapphire Foods India Limited ("the Company"), which comprise the Balance sheet as at March 31, 2024, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of material accounting policies and other explanatory information.in which are included the financial statements for the year ended on that date audited by the other auditors of the Company''s merged subsidiaries namely Gamma Pizzakraft Overseas Private Limited and Gamma Pizzakraft Private Limited, located in Mumbai, India.

In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on separate financial statements and on the other financial information of the merged subsidiaries, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2024. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Key audit matters	How our audit addressed the key audit matter
Impairment assessment of Goodwill (as described in Note 33(a) of the standalone financial statements)
As at March 31, 2024, the Company has carrying amount of Goodwill of 1,058.61 million pertaining to a single cash generating unit (CGU) i.e KFC brand In accordance with the requirements of Ind AS 36 Impairment of Assets, the company performs an annual impairment assessment of Goodwill and the corresponding cash generating units to determine whether the recoverable value is below the carrying amount as at March 31, 2024.	Our audit procedures included the following: • Obtained an understanding of the process followed by the management to determine the recoverable amounts of cash generating units determined by the Company. • Evaluated the design and implementation and tested the operating effectiveness of key internal financial controls related to the Company''s process relating to review of the annual impairment analysis.

Key audit matters	How our audit addressed the key audit matter
For this purpose, the recoverable value of the cash	• Assessed Company''s valuation methodology applied
generating unit is based on the value in use model, which	in determining recoverable value including the
has been derived from the discounted cash flow model.	reasonableness of identification of cash generating
The model requires the Company to make significant	units and around the key drivers (cash flow forecasts,
assumptions such as discount rate, near and long-	discount rates, expected growth rates, forecasted
term revenue growth rate and projected margins which	margins and terminal growth rates) based on our
involves inherent uncertainty since they are based on	knowledge of the Company and Industry. Compared
future business prospects and economic outlook.	the historical accuracy by comparing past forecasts to
Changes in certain methodologies and assumptions	actual results achieved.
can lead to significant changes in the assessment of the	• Assessed the recoverable value headroom by
recoverable value.	performing sensitivity testing of key assumptions used
Due to the level of judgments involved and its significance	by the Company.
to the Company''s financial position, this is considered to	• Tested the arithmetical accuracy of the computation of
be a key audit matter.	recoverable amounts of cash generating unit.
	• Assessed the disclosures made in the standalone
	financial statements.
Impairment assessment of Investments and Inter Corporate Deposit in Subsidiary (as described in Note 33(b) of the
standalone financial statements)
The Company has a gross investment amounting to	Our audit procedures in respect of impairment evaluation
'' 215.96 million and inter-corporate deposit (ICD)	of Investment and ICD in Gamma Pizzakraft (Lanka) Private
amounting to '' 241.56 million as at 31 March 2024 in	Limited included the following:
its wholly owned subsidiaries namely Gamma Pizzakraft	• Evaluated the design and implementation and tested
(Lanka) Private Limited.	the operating effectiveness of key internal financial
Considering the macroeconomic challenges faced by Sri	controls related to the Company''s process relating to
Lanka on account of high inflationary pressures, depletion	impairment review.
of forex reserves, significant depreciation of Sri Lankan	• Evaluated the assumptions applied by the Company
currency to INR, shortage of fuel, and the Sri Lankan	in relation to the future projections of the business in
government seeking financial assistance from International	Sri Lanka including understanding of management''s
Monetary Fund (IMF), the situation provides an indicator	assessment of business impact based on current market
for impairment in the investment. In the current year, there	and economic conditions arising from the ongoing
has been improvement in the economy, the forex rate has	macroeconomic challenges faced by Sri Lanka.
started stabilizing with controlled inflation.	• Assessed Company''s valuation methodology applied
Management has used external specialists for determination	in determining recoverable value including the
of discount rates to be applied to the future cash flows as	reasonableness of the key drivers (cash flow forecasts,
forecasted by the Company to support the computation	discount rates, expected growth rates, forecasted
of recoverable amounts of its investments based on value-	margins and terminal growth rates) based on our
in-use method after taking into consideration potential	knowledge of the Company and Industry. Compared
impact of ongoing crisis.	the historical accuracy by comparing past forecasts to
This is a key audit matter as the testing of investment	actual results achieved.
impairment is complex and involves significant judgement.	• Involved internal valuation expert to assist in evaluating
	the valuation methodology and assumptions around the key drivers of the cash flow forecasts including discount rates, expected growth rates and terminal growth rates used.
	• We also assessed the recoverable value headroom by
	performing sensitivity testing of key assumptions used.
	• Assessed the disclosures made in the standalone
	financial statements.

We have determined that there are no other key audit matters to communicate in our report.

Other Information

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditor''s report thereon.

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

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

Responsibilities of Management for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management

either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

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

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

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the

related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

• Obtain sufficient appropriate audit evidence regarding the financial statements of the merged subsidiaries to express an opinion on the standalone financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of the components which have been audited by us. For the merged subsidiaries included in the standalone financial statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2024 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

In connection with the merger of two wholly owned subsidiaries Gamma Pizzakraft Overseas Private Limited and Gamma Pizzakraft Private Limited into the Company as more fully described in note 41 of the standalone financial statements (referred to as "merged subsidiaries"),

we did not audit the comparative financial information of the merged subsidiaries as considered in these standalone financial statements for the year ended March 31, 2023, whose financial statements reflects total assets of '' 1,022.53 million as at March 31, 2023 and total revenues of '' 183.63 million and net cash inflows of '' 1.74 million for the year ended March 31, 2023.

We also did not audit the financial statements and other financial information of the merged subsidiaries included in the accompanying standalone financial statements for the year ended March 31, 2024 of the Company whose financial statements and other financial information reflect total assets of '' 854.81 million as at March 31, 2024 and the total revenues of '' 173.51 million and net cash outflows of 27.39 million for the year ended on that date.

The above financial statements and other financial information has been audited by another auditor whose report has been furnished to us by the management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect to the merged subsidiaries, is based solely on the report of the other auditor, as adjusted for the accounting effects of the Scheme recorded by the Company (in particular, the accounting effects of Ind AS 103 - Business Combinations) and other consequential adjustments, which have been audited by us.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, based on our audit and on the consideration of report of the other auditors on separate financial statements and the other financial information of the merged subsidiaries, as noted in the ''Other Matter'' paragraph we give in the "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report, to the extent applicable, that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper reports adequate for the purposes of our audit have been received from the other auditors except for the matters stated

in the paragraph 2(i)(vi) below on reporting under Rule 11(g).

(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account and with the reports received from the other auditors of the merged subsidiaries.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

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

(f) The modification relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2(b) above on reporting under Section 143(3)(b) and paragraph 2(i)(vi) below on reporting under Rule 11(g).

(g) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;

(h) In our opinion, the managerial remuneration for the year ended March 31, 2024 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements -Refer Note 29 to the standalone financial statements;

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company;

iv. a) The management has represented

that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

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

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

v. No dividend has been declared or paid during the year by the Company.

vi. Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except that, audit trail feature is not enabled for certain changes made, if any, using administrative access rights, as described in note 47 to the financial statements. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with in respect of the accounting software.

For S R B C & CO LLP

Chartered Accountants ICAI Firm Registration Number: 324982E/E300003

per Poonam Todarwal

Partner

Membership Number: 136454 UDIN: 24136454BKFOEO1610

Place of Signature: Mumbai Date: May 10, 2024

---

Mar 31, 2023

Sapphire Foods India Limited

Report on the Audit of the Standalone Financial StatementsOpinion

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

In our opinion and to the best of our information and according to the explanations given to us the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, its profit including other comprehensive loss, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Standalone Financial Statements'' section of

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements

Key audit matters	How our audit addressed the key audit matter
Impairment assessment of Goodwill (as described in Note 33(a) of the standalone financial statements)
As at March 31, 2023, the Company has carrying amount	Our audit procedures included the following:
of Goodwill of 1,058.61 million pertaining to a single cash	•	Obtained an understanding of the process followed by the management to
generating unit (CGU) i.e KFC brand		determine the recoverable amounts of cash generating units determined by
In accordance with the requirements of Ind AS 36 Impairment of		the Company.
Assets, the company performs an annual impairment assessment of Goodwill and the corresponding cash generating units to determine whether the recoverable value is below the carrying amount as at March 31, 2023.	•	Evaluated the design and implementation and tested the operating effectiveness of key internal financial controls related to the Company''s process relating to review of the annual impairment analysis.
	•	Assessed Company''s valuation methodology applied in determining
For this purpose, the recoverable value of the cash generating		recoverable value including the reasonableness of identification of cash
unit is based on the value in use model, which has been derived		generating units and around the key drivers (cash flow forecasts, discount
from the discounted cash flow model. The model requires the		rates, expected growth rates, forecasted margins and terminal growth rates)
Company to make significant assumptions such as discount rate,		based on our knowledge of the Company and Industry. Compared the
near and long-term revenue growth rate and projected margins which involves inherent uncertainty since they are based on		historical accuracy by comparing past forecasts to actual results achieved.
future business prospects and economic outlook.	•	Assessed the recoverable value headroom by performing sensitivity testing of key assumptions used by the Company.
Changes in certain methodologies and assumptions can lead to significant changes in the assessment of the recoverable value.	•	Tested the arithmetical accuracy of the computation of recoverable amounts of cash generating unit.
Due to the level of judgments involved and its significance to
the Company''s financial position, this is considered to be a key audit matter.	•	Assessed the disclosures made in the standalone financial statements

Key audit matters	How our audit addressed the key audit matter
Impairment assessment of Investments and Inter Corporate Deposit in Subsidiaries (as described in Note 33(b) of the standalone
financial statements)
The Company has a gross investment amounting to 1,817.12 i	Our audit procedures in respect of impairment evaluation of Investment and ICD
million and i	n Gamma Pizzakraft Overseas Private Limited included the following:
inter-corporate deposit (ICD)	• Evaluated the design and implementation and tested the operating
amounting to 360.00 million as at 31 March 2023 in its wholly	effectiveness of key internal financial controls related to the Company''s
owned subsidiary Gamma Pizzakraft Overseas Private Limited.	process relating to impairment review.
Gamma Pizzakraft Overseas Private Limited has further	• Evaluated the assumptions applied by the Company in relation to the
investments in four subsidiaries namely Gamma Pizzakraft	future projections of the business in Sri Lanka including understanding of
Private Limited, Gamma Pizzakraft (Lanka) Private Limited,	management''s assessment of business impact based on current market and
French Restaurants Private Limited and Gamma Island Food	economic conditions arising from the ongoing macroeconomic challenges
Private Limited, hereby referred to "Gamma Group". Gamma	faced by Sri Lanka.
Group majorly derives its cashflows from Gamma Pizzakraft	• Assessed Company’s valuation methodology applied in determining
(Lanka) Private Limited which is operating in Sri Lanka	recoverable value including the reasonableness of the key drivers (cash
Considering the ongoing macroeconomic challenges faced by	flow forecasts, discount rates, expected growth rates, forecasted margins
Sri Lanka on account of high inflationary pressures, depletion of	and terminal growth rates) based on our knowledge of the Company and
forex reserves, significant depreciation of Sri Lankan currency to	Industry. Compared the historical accuracy by comparing past forecasts to
INR, shortage of fuel, and the Sri Lankan government seeking	actual results achieved.
financial assistance from International Monetary Fund (IMF), the	• Involved internal valuation expert to assist in evaluating the valuation
situation provides an indicator for impairment in the investment.	methodology and assumptions around the key drivers of the cash flow
Management has used external specialists for determination of	forecasts including discount rates, expected growth rates and terminal
discount rates to be applied to the future cash flows as forecasted	growth rates used.
by the Company to support the computation of recoverable ''	• We also assessed the recoverable value headroom by performing sensitivity
amounts of its investments based on value-in-use method after	testing of key assumptions used.
taking into consideration potential impact of ongoing crisis.	• Assessed the disclosures made in the standalone financial statements
This is a key audit matter as the testing of investment impairment is complex and involves significant judgement.
Recognition of deferred tax assets (DTA) (as described in Note 15 of the standalone financial statements)
The Company had un-recognised DTA balance as at the end Our audit procedures included the following:
of previous year majorly arising on carry forward tax losses and •	• Evaluated the Company’s accounting policies with respect to recognition of
unabsorbed depreciation.	deferred taxes in accordance with Ind AS 12 "Income Taxes".
Basis the Company''s accounting policy, deferred tax assets are • recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carried forward unabsorbed depreciation and business	Evaluated the design and implementation and tested the operating effectiveness of key internal financial controls related to the assessment of recoverability of DTA balances
• losses can be utilised	Obtained and analysed the future projections of taxable profits estimated by management. Assessed the key assumptions used and the reasonableness
The Company''s ability to recognise previously un-recognised	of the future cash flow projections, assessment year wise utilisation of carry
deferred tax assets is assessed by the management at the end	forward losses and unabsorbed depreciation, the consistency of projections
of each reporting period, taking into account the current and	used for impairment assessment where applicable. Compared the historical
historical performance, forecasts of future taxable profits, future reversals of existing taxable temporary differences and ongoing	accuracy by comparing past forecasts to actual results achieved.
tax planning strategies. •	• Assessed the sensitivity analysis applied by the Company and evaluated if any change in the assumptions will lead to any material change the utilisation
Considering the profits made by the Company in the current year, the Company has assessed its position as at the Balance Sheet	of carry forward tax losses and unabsorbed depreciation before their expiry.
•	• Assessed the disclosures made in the standalone financial statements
date and recognised deferred tax asset amounting to 1,235.18 million in the current year.
The recognition and measurement of deferred tax balances is a key audit matter considering the significance of the amount, judgement involved in assessing the recoverability of such tax credits, estimation of the financial projections for utilisation of business losses and unabsorbed depreciation and judgements involved in the interpretation of tax regulations and tax positions adopted by the Company

We have determined that there are no other key audit matters to communicate in our report.

Other Information

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report but does not include the standalone financial statements and our auditor''s report thereon.

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

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

Responsibilities of Management for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

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

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

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, based on our audit we give in the "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) I n our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors

is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;

(g) I n our opinion, the managerial remuneration for the year ended March 31, 2023 has been paid by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 29 to the standalone financial statements;

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. a) The management has represented that,

to the best of its knowledge and belief, other than as disclosed in the note 45 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company

from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

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

v. No dividend has been declared or paid during the year by the Company.

vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w.e.f. April 1, 2023, reporting under this clause is not applicable.

For S R B C & CO LLP

Chartered Accountants ICAI Firm Registration Number: 324982E/E300003

per Vikram Mehta

Partner

Membership Number: 105938 UDIN: 23105938BGXGGH6611

Place of Signature: Mumbai Date: May 12, 2023

---

Mar 31, 2022

India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2022. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Sapphire Foods India Limited

Report on the Audit of the Standalone Financial StatementsOpinion

We have audited the accompanying standalone financial statements of Sapphire Foods India Limited ("the Company”), which comprise the Balance sheet as at March 31 2022, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information

In our opinion and to the best of our information and according to the explanations given to us , the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended ("the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022 , its profit including other comprehensive loss, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the Standalone Financial Statements’ section of our report. We are independent of the Company in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of

Key audit matters	How our audit addressed the key audit matter
Impairment assessment of Goodwill
(as described in Note 33(a) of the standalone financial statements)
As at March 31, 2022, the Company has carrying amount	Our audit procedures included the following:
of Goodwill of 1,058.61 million pertaining to a single cash generating unit (CGU) i.e KFC brand	• Obtained an understanding of the process followed by the management to determine the recoverable
In accordance with the requirements of Ind AS 36	amounts of cash generating units determined by
Impairment of Assets, the company performs an	the Company.
annual impairment assessment of Goodwill and the corresponding cash generating units to determine whether the recoverable value is below the carrying amount as at March 31, 2022.	• Evaluated the design and implementation and tested the operating effectiveness of key internal controls related to the Company’s process relating to review of the annual impairment analysis.
For this purpose, the recoverable value of the cash generating unit is based on the value in use model, which has been derived from the discounted cash flow model. The model requires the Company to make significant assumptions such as discount rate, near and long-term revenue growth rate and projected margins which involves inherent uncertainty since they are based on future business prospects and economic outlook.	• Assessed Company’s valuation methodology applied in determining recoverable value including the reasonableness of identification of cash generating units around the key drivers (cash flow forecasts, discount rates, expected growth rates, forecasted margins and terminal growth rates) based on our knowledge of the Company and Industry. Compared the historical accuracy by comparing past forecasts to actual results achieved.
Changes in certain methodologies and assumptions can lead to significant changes in the assessment of the recoverable value.	• Assessed the recoverable value headroom by performing sensitivity testing of key assumptions used.
Due to the level of judgments involved and its significance to the Company’s financial position, this is considered to be a key audit matter.	• Tested the arithmetical accuracy of the computation of recoverable amounts of cash generating units
	• Assessed the disclosures made in the standalone financial statements

Key audit matters	How our audit addressed the key audit matter
Impairment assessment of Investments and Inter Corporate Deposit in Subsidiaries (as described in Note 33 (b) of the standalone financial statements)
The Company has a gross investment amounting	Our audit procedures in respect of impairment
to 1,685.99 million and inter-corporate deposit (ICD)	evaluation of Investment and ICD in Gamma Pizzakraft
amounting to 120.00 million as at 31 March 2022 in its	(Overseas) Private Limited included the following:
wholly owned subsidiary Gamma Pizzakraft (Overseas) Private Limited.	• Evaluated the design and implementation and tested the operating effectiveness of key internal
Gamma Pizzakraft (Overseas) Private Limited has further investments in four subsidiaries namely Gamma Pizzakraft Private Limited, Gamma Pizzakraft (Lanka) Private Limited, French Restaurants Private Limited and Gamma Island Food Private Limited, hereby referred to "Gamma Group”. Gamma Group majorly derives its cashflows from Gamma Pizzakraft	controls related to the Company’s process relating to impairment review. • Evaluated the objectivity, competency and independence of the specialist engaged by the Company and reviewed the valuation reports issued by such specialist.
(Lanka) Private Limited which is operating in Sri Lanka	• Involved internal valuation expert to assist in
Considering the macroeconomic challenges currently faced by Sri Lanka on account of rising prices, depletion of forex reserves, significant depreciation of Sri Lankan currency to INR, shortage of fuel, inflationary pressures	evaluating the valuation methodology and assumptions around the key drivers of the cash flow forecasts including discount rates, expected growth rates and terminal growth rates used.
and the Sri Lankan government seeking financial	• We also assessed the recoverable value headroom
assistance from International Monetary Fund (IMF), the	by performing sensitivity testing of key assumptions
situation provides an indicator for impairment in the	used.
investment.	• Evaluated the assumptions applied by the Company
Management has used external specialists to	in relation to the future projections of the business in
support the recoverable amounts of its Investment	Sri Lanka including understanding of management’s
based on value-in-use computation after taking into	assessment of business impact based on current
consideration potential impact of ongoing crisis.	market and economic conditions arising from the
This is a key audit matter as the testing of investment	macroeconomic challenges faced by Sri Lanka
impairment is complex and involves significant	• Assessed the disclosures made in the standalone
judgement.	financial statements

Other Information

The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report but does not include the standalone financial statements and our auditor’s report thereon.

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

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

Responsibilities of Management for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates

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

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

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

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

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

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether

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

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

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

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

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the

standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2020 ("the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act,we give in the "Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:

or the like on behalf of the Ultimate Beneficiaries;

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

c) Based on such audit procedures performed that have been considered reasonable and appropriate in the

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account ;

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

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

(f) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2” to this report;

(g) In our opinion, the managerial remuneration for the year ended March 31, 2022 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements -Refer Note 29 to the standalone financial statements;

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company

iv. a) The management has represented

that, to the best of its knowledge and belief, other than as disclosed in the note 46 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries”) or provide any guarantee, security

circumstances, nothing has come to our notice that has caused us to believe that the representations under subclause (a) and (b) contain any material misstatement.

v. No dividend has been declared or paid during the year by the Company.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Vikram Mehta

Partner

Membership Number: 105938

UDIN: 22105938AJBYGB6944

Place of Signature: Mumbai

Date: May 17, 2022