Devyani International Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2024
Auditor and Management Disclosures and Notes for the annual results dated 31 Mar 2024
Notes to standalone and consolidated financial results for the quarter and year ended 31 March 2024
(INR in million, except for share data and if otherwise stated)
1.In terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) 2015, as amended, these standalone and consolidated financial results ("financial results") for the quarter and year ended 31 March 2024 have been reviewed and recommended for approval by the Audit, Risk Management and Ethics Committee and accordingly have been approved by the Board of Directors of Devyani International Limited ("DIL" or the "Company") at their respective meetings held on 14 May 2024. The joint statutory auditors have audited these annual financial results.
2.The figures for the quarter ended 31 March 2024 and 31 March 2023 are the balancing figures between the audited figures for the full financial year and the unaudited year to date figures up to the end of third quarter of the respective financial years, which were subjected to a limited review by the statutory auditors.
3 These financial results have been prepared in accordance with the recognition and measurement principles of applicable Indian Accounting Standards ('Ind AS') notified under the Companies (Indian Accounting Standards) Rules, 2015 as specified in Section 133 of the Companies Act, 2013 (read with SEBI Circular CIR/CFD/FAC/62/2016 dated 05 July 2016) and other recognised accounting practices and policies.
4 During the quarter ended 31 March 2024, an aggregate 187,500 Employee Stock Options (“options”) were exercised by the employees under the ‘Employee Stock Option Scheme 2021’ of the Company. Subsequent to the quarter ended 31 March 2024, the Company has allotted 187,500 equity shares of INR.1/- each to such employees.
5 The Group operates in single reportable business segment “food and beverages” in terms of Ind AS 108- Segment Reporting.
6 a) The Board of Directors of the Company (“Board”) at its meeting held on 13 December 2021, had approved the amalgamation of Devyani Food Street Private Limited and Devyani Airport Services (Mumbai) Private Limited (erstwhile wholly-owned subsidiary companies) with the Company. The Hon'ble National Company Law Tribunal had approved the scheme vide Order dated 13 July 2023 with appointed date as 01 April 2022. The Scheme became effective upon filing of the certified true copy of the Order with the Registrar of Companies, NCT of Delhi & Haryana, on 18 August 2023. Accordingly, the Company has accounted for the above scheme using the pooling of interest method in accordance with Appendix C of Ind AS 103, Business Combinations of Entities under Common Control, and consequently, comparatives of standalone financial results have been restated from the beginning of the previous year, being 01 April 2022.
The aforesaid effects in the standalone financial results are further detailed as follows:
For the quarter ended For the year ended
31 March 2023 31 March 2023
Reported Restated Reported Restated
Revenue from operations 6,673.21 7,000.91 26,683.44 27,742.81
Profit after tax 522.37 572.85 2,460.72 2,601.84
Earning per share (basic) 0.43 0.48 2.04 2.16
b) Consequent to this merger being effective, the Company has availed certain income tax benefits for the previous year amounting to INR 106.42 and has recognised deferred tax assets on temporary differences available with the transferor companies (wholly owned subsidiaries) amounting to INR 131.29 during the quarter ended 30 September 2023.
7.(a) During the quarter ended 31 March 2024 and year ended 31 March 2024, due to significant devaluation of Nigerian currency, the Nigerian subsidiary of the Group (the Company and its subsidiaries collectively referred to as the 'Group') has recognized INR 423.74 million and INR 897.07 million devaluation impact on account of translation loss of USD denominated liabilities in Nigerian subsidiary’s financial information as at 31 March 2024 and year ended 31 March 2024 respectively. Considering the significance of the amount involved, the said exchange translation loss has been presented as an "exceptional items" in consolidated financial results of the Group.
Consequently, owing to the significant currency devaluation, the investments (including loans) made by the Company in Nigerian subsidiary through RV Enterprizes Pte Ltd, has been impaired during the quarter ended 31 March 2024 amounting to INR 1,160.09 million and has been presented as an "exceptional items" in standalone financial results of the Company.
(b) During the year ended, the Group has recorded an impairment of goodwill of INR 139.88, in relation to one of the erstwhile subsidiary [Devyani Food street Private Limited] – which merged with the Company (refer note 6a) and presented as an “exceptional item” in the consolidated financial results.
Consequently, basic and diluted (loss)/earnings per share for the quarter ended 31 March 2024 and year ended 31 March 2024, have been presented before and after considering effect of resultant impact of exceptional items in standalone and consolidated financials results.
8.The Company and Camas, an affiliate of Temasek, invested AED 150.47 million (~ INR 3,407.85) and AED 145.53 million (~ INR 3,295.96) respectively, in Devyani International DMCC, Dubai (‘DID’) under the Investment Agreement dated 18 December 2023 in ratio of 51:49%.
On 17 January 2024, DID acquired Restaurants Development Co. Ltd. (“RD”), operating chain of 283 KFC restaurants in Thailand, by way of acquiring controlling interest in RD and its related entities for the consideration of THB 4,681.99 million (~ INR 10,913.28 million) including payment of erstwhile shareholder’s loan, pursuant to the Share Purchase Agreement dated 18 December 2023.
Acquisition of the business is accounted for using the acquisition method of accounting as per Ind AS 103 “Business Combinations’. Further, the Company has accounted for such acquisition based on provisional fair values of assets and liabilities acquired determined by the management, resulting into recognition of goodwill of INR 3,782.43 millions. The fair valuation reports are in process and as allowed under Ind AS 103, the measurement period is open for a period of maximum of one year from the acquisition date.
Net assets Amounts in INR Million (Provisional amounts)
PPE (fair value increase INR 343.00) 3,770.10
Territory Rights (newly identified) 3,382.74
Right-of-use assets less lease liabilities 16.99
Franchise Rights 529.76
License fees 381.65
Others (net) (12.39)
Total (A) 8,068.85
Purchase consideration
Payment to shareholders (including loans) 9,428.06
Bank’s Loan repayments 1,485.22
Total (B) 10,913.28
Goodwill 2,844.43
(before deferred tax liability adjustments)
C= (B-A)
Deferred tax liability on fair value 938.00
adjustments and newly identified assets(D)
Goodwill [C+D] 3,782.43
17. Earnings per share before exceptional items (of INR 1/- each) (not annualised for quarters)