The Board of Directors present you the Eighth Annual Report on business
and operations along with the audited financial statements and the
auditor''''s report of your Company for the financial year ended 31st
Financial Highlights: Amount In Rs. million
(Except per share data.)
Particulars Coffee Day
Enterprises Coffee Day
Enterprises Coffee Day
Global Coffee Day
FY16 FY15 FY16 FY15
(including 28,937 25,487 13,865 12,717
Expenses 29,415 26,894 13,682 12,788
tax and (478) (1,407) 183 (71)
Items, net - - - -
Tax Expenses 329 150 77 71
Associates 990 903 - -
Minority Interest (258) (184) - -
Profit after Tax (75) (838) 106 (143)
Earnings per (0.47) (7.18) 0.65 (0.91)
Share (0.47) (7.18) 0.65 (0.91)
During the fiscal year ended March 31, 2016, consolidated net
operational revenue grew by 14.4% YoY driven by a strong impetus from
Coffee and Financial Services. The retail coffee contributed by a
growth of 14%. Consolidated Loss after tax and exceptional items came
down from Rs.838 Million for Fy 2015 to a loss of Rs. 75 million for Fy
A detailed performance analysis is provided in the Management
Discussion and Analysis segment which is annexed to this report.
State of Company''''s Affairs
The state of Company affairs forms a part of the Management Discussion
& Analysis Report.
In view of the losses, current and accumulated, your Directors regret
their inability to recommend dividend for the year 2015-2016.
Transfer to Reserves
The Company has not transferred any amount to reserves during the year
and hence no information as per the provisions of Section 134 (3) (j)
of the Companies Act, 2013 has been furnished.
Successful Initial Public Issue
The Company has successfully completed initial public offering (IPO) in
the current year pursuant to applicable SEBI Rules and Regulations. The
IPO of the Company received an overwhelming response from the investors
and the public issue was oversubscribed thereby making this IPO a
successful one. Shares have been listed with both BSE and NSE w.e.f
02nd November 2015. Consequently, the Company''''s paid up capital
increased from Rs. 1,709,407,440/- to Rs.2,060,017,190/-. The equity
shares of Rs.10/- each were issued at a price of Rs.328/- per share.
No fixed deposits accepted from the public.
Particulars of Loans, Guarantees or Investments
The Company makes investments or extends loans/guarantee to its wholly
owned subsidiaries for their business purpose. The details of loans,
guarantees and investments are covered under section 186 of the
Companies Act 2013 along with the purpose for which such loan or
guarantee is proposed to be utilised by the recipient, form part of the
notes to the financial statements provided in this annual report.
The Company has formulated a policy for determining ''''material''''
subsidiaries pursuant to the provisions of the SEBI LODR. The said
policy is available at the Company website www. coffeeday.com.
The Company has 40 subsidiaries (including indirect subsidiaries) as on
March 31, 2016.
As per section 129(3) of the Companies Act 2013, the consolidated
financial statements of the Company and its subsidiaries form part of
the Annual Report. A statement containing the salient features of the
financial statements of its subsidiaries in the prescribed Form AOC-1
is attached as Annexure to Consolidated Financial Statements.
In accordance with section 136 (1) of the Companies Act 2013, the
financial statements of the subsidiaries companies are available on our
website www. coffeeday.com post approval of the members.
Management Discussion & Analysis Report
The Management Discussion & Analysis forms a part of this annual
The report on Corporate Governance as stipulated by under SEBI LODR
forms part of the Annual Report. The requisite Certificate from a
practicing Company Secretary confirming compliance with the conditions
of Corporate Governance is attached to this Report as Annexure 1.
Policy on Directors'''' Appointment and Remuneration
In accordance with Clause 178(3) of the Companies Act 2013 and
Regulation 19 of SEBI LODR, the Board had adopted a Policy on
Director''''s appointment and remuneration as recommended by the
Nomination and Remuneration Committee. The policy is attached as
A diverse Board enables efficient functioning through differences in
perspective and skill, and also fosters differentiated thought
processes at the back of varied industrial and management expertise,
gender, knowledge and geographical background. The Board recognises the
importance of a diverse composition and has adopted a Board Diversity
Policy which sets out the approach to diversity. The policy is
available at www.coffeeday.com.
Declaration by Independent Directors
The Company has received declarations from all the Independent
Directors confirming that they meet the criteria of independence as
prescribed under Section 149(6) of the Companies Act, 2013.
As per the provisions of the Companies Act 2013 and Listing Obligation
and Disclosure Requirements, an evaluation of the performance of the
Board, Committee and members were undertaken.
The performance of the Board was evaluated by the Board after seeking
inputs from all the Directors on the basis of various criteria such as
Board structure, strategic discussions, effective reviews, processes
and the Board''''s engagement with the senior management team etc. The
performance of the Committee was evaluated by the Board on the basis of
composition, effective discharge of its function and recommendations
provided. Performance of the Individual Directors were evaluated on the
basis of integrity, commitment, and the ability to exercise independent
judgement etc. The feedback was collated and discussed, and action
points for improvements were put in place.
Appointments/Resignation/Re-appointments of Board of Directors
During the year no new Director has been appointed except Mr. M.D.
Mallya being appointed as an Independent Director and there is no
resignation of Directors except Mr. Parag Saxena, Mr. Nainesh Jai
Singh, Mr. H.V. Santhrupth & Mrs. Niveditha Halappa during the
financial year 2015-16.
Mr.Sanjay Nayar shall retire by rotation at the ensuing Annual General
meeting and is eligible for re-appointment.
Committees of the Board
The details of the Board''''s Committees - the Audit Committee, the
Nomination and Remuneration Committee and the Stakeholders''''
Relationship Committee have been disclosed separately in the Corporate
Governance Report which is annexed to and forms a part of this annual
The Audit Committee comprises of Mr. S.V. Ranganath as Chairman, with
Dr. Albert Hieronimus and Mr. V.G. Siddhartha as members. The functions
performed by the Audit Committee and the particulars of meetings held
and attendance thereat are given in the Corporate Governance Report.
Meetings of the Board
The Board duly met 12 times (Twelve) in the financial year 2015-16.
Details of the meetings are mentioned in the Corporate Governance
Report which is annexed to this Report.
Related Party Contracts or Arrangements
The Company has formulated a policy on "materiality of related party
transactions" and the process of dealing with such transaction, which
are in line with the provisions of the Companies Act, 2013 and SEBI
(Listing Obligations and Disclosure Requirements) regulation 2015. The
same is also available on the website of the company www.coffeeday.com.
Prior omnibus approval from the Audit Committee are obtained for
transactions which are repetitive and also normal in nature. Further,
disclosures are made to the Committee on a quarterly basis.
There have been no material related party transactions undertaken by
the Company, under regulation 23 of the SEBI (Listing Obligations and
Disclosures Requirement) regulation 2015 and detail of the transaction
approved by the Board under section 188 of the Companies Act, 2013 have
been enclosed pursuant to clause (h) of subsection (3) of Section 134
of Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts)
There have been no material related party transactions undertaken by
the Company under Section 188 of the Companies Act, 2013 and hence, no
details have been enclosed pursuant to clause (h) of subsection (3) of
Section 134 of Companies Act, 2013 read with Rule 8(2) of the Companies
(Accounts) Rules 2014 - ''''AOC-2''''.
Material changes and commitments, if any, affecting the financial
position of the company which have occurred between the end of the
financial year of the company to which the financial statements relate
and the date of the report:
No material changes and commitments have occurred after the close of
the year till the date of this report, which affect the financial
position of the Company.
Change in Nature of Business:
There has been no change in the nature of business of the company.
Conservation of Energy, Research and Development technology absorption,
Foreign Exchange Earnings & Outgo:
The particulars as prescribed under section 134 (3) (m) of the
Companies Act 2013, read with Rule 8(3) of the Companies (Accounts)
Rules 2014 are attached as Annexure 3.
a) Statutory Auditors:
The members in their AGM held on September 30, 2014 had appointed M/s B
S R & Co LLP, Chartered Accountants as statutory auditors for a term of
5 consecutive years.
Hence, shareholders are hereby proposed to ratify the appointment of
auditors from conclusion of this AGM to the conclusion of the next AGM
b) Secretarial Auditor:
Pursuant to clause 204 of the Companies Act 2013 M/s HRB & Co was
appointed to conduct the secretarial audit of the Company for the FY
2015-16. The secretarial audit report is attached as Annexure 4
c) Cost Auditor:
Pursuant to Section 148 of the Companies Act 2013, the provisions for
appointment of Cost Auditors do not apply to the Company.
d) Internal Auditor:
In terms of Section 138 of the Companies Act, 2013 read with the
Companies (Accounts) Rules, 2014, the Company has appointed M/s. A B S
& Co, Chartered Accountants as Internal Auditors.
Significant and material orders passed by the Courts/Regulators
There is no significant orders passed by the regulator, Court or
tribunals impacting the going concern status and the Company''''s
operations in future.
Extract of Annual Return
An extract of the Annual return has been annexed to the Board''''s Report
in compliance with Section 92 of the Companies Act 2013 read with
applicable rules made thereunder annexed as Annexure 5 to this Report.
Adequacy of Internal Financial Controls with Reference to the Financial
It is management''''s responsibility to establish and maintain appropriate
controls over financial reporting. Controls are aimed at providing
reasonable assurance that external reports and statements are in
accordance with applicable accounting principles.
The Company has laid down certain guidelines, processes and structures,
which enable the implementation of appropriate internal financial
controls across the organisation. Such internal financial controls
encompass policies and procedures adopted by the Company for ensuring
the orderly and efficient conduct of business, including adherence to
its policies, safeguarding of its assets, prevention and detection of
frauds and errors, the accuracy and completeness of accounting records
and the timely preparation of reliable financial information. These
include control processes both on manual and IT applications including
the ERP application wherein the transactions are approved and recorded.
Appropriate review and control mechanisms are built in place to ensure
that such control systems are adequate and are operating effectively.
Because of the inherent limitations of internal financial controls,
including the possibility of collusion or an improper management
override of controls, material misstatements in financial reporting due
to error or fraud may occur and not be detected. Also, evaluation of
the internal financial controls are subject to the risk that the
internal financial control may become inadequate because of changes in
conditions, or that the compliance with the policies or procedures may
The Company has, in all material respects, an adequate internal
financial controls system and such internal financial controls were
operating effectively based on the internal control criteria
established by the Company, considering the essential components of
internal control. The Company has, in all material respects, an
adequate internal financial controls system and such internal financial
controls were operating effectively based on the internal control
criteria established by the Company considering the essential
components of internal control.
Whistle Blower Policy/Vigil Mechanism
The Company has established a Vigil Mechanism that enables the
Directors and Employees to report genuine concerns. The Vigil Mechanism
provides for adequate safeguards against victimization of persons who
use the Vigil Mechanism; and also provides direct access to the
Chairperson of the Audit Committee of the Board of Directors of the
Company in appropriate or exceptional cases. Details of the Vigil
Mechanism policy are made available on the Company''''s website, www.
Particulars of Employees
The Statement containing ratio of remuneration paid to each Director
and the median employee remuneration and other details in terms of
subsection 12 of section 197 of the Companies Act 2013 read with rule
5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are annexed in Annexure 6 of this report.
The Statement containing particulars in terms of subsection 12 of
section 197 of the Companies Act 2013 read with rule 5(2) and 5(3) of
the Companies (Appointment and Remuneration of Managerial Personnel)
Considering the first proviso to Section 136(1) of the Companies Act,
2013, the Annual Report, excluding the aforesaid information, is being
sent to the members of the Company and others entitled thereto. The
said information is available for inspection at the registered office
of the Company during business hours on working days of the Company up
to the date of the ensuing Annual General Meeting. Any shareholder
interested in obtaining a copy thereof, may write to the Company
Secretary in this regard.
Corporate Social Responsibility
As per section 135 of the Companies Act, 2013 the Company has a
Corporate Social Responsibility Committee. The Committee comprises of
Mr. S.V. Ranganath, Chairman and Mr. V.G. Siddhartha & Mrs. Malavika
Hegde as Members. The Committee has adopted a CSR policy which has been
hosted on the Company''''s website at www. coffeeday.com.
Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act 2013
The Company has in place a Prevention of Sexual Harassment policy in
line with the requirements of the Sexual Harassment of Women at the
Workplace (Prevention, Prohibition and Redressal) Act, 2013. An
Internal Complaints Committee has been set up to redress complaints
received regarding sexual harassment. All employees (permanent,
contractual, temporary, trainees) are covered under this policy.
During the year 2015-16, no complaints were received by the Company
related to sexual harassment.
Director''''s Responsibility Statement
In Compliance with section 134(5) of the Companies Act, 2013, the Board
of Directors hereby confirm the following:
(a) In the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) The directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit and
loss of the company for that period;
(c) The directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
(d) The directors had prepared the annual accounts on a going concern
(e) The Company is responsible for establishing and maintain adequate
and effective internal financial controls with regard to it business
operations and in the preparation and presentation of the financial
statements, in particular, the assertions on the internal financial
controls in accordance with broader criteria established by the
Towards the above objective, the directors have laid down the internal
controls based on the internal controls framework established by the
Company, which in all material respects were operating effectively as
at March 31, 2016.
(f) The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate. The Company has substantially complied with material
provisions of such acts and regulations as are relevant for its
operations. No material or significant non compliances were reported
or identified during the year.
None of the Directors of your Company are disqualified as per
provisions of Section 164(2) of the Companies Act, 2013. Your Directors
have made necessary disclosures, as required under various provisions
of the Act and SEBI (Listing Obligations and Disclosure Requirements)
Board''''s Response on Auditors qualification, Reservation or Adverse
Remarks or Disclaimers made
There are no qualifications, reservations or adverse remarks made by
the Statutory Auditors in their report or by the Company Secretary in
practice in the secretarial audit report.
Statement Concerning the Development and implementation of the Risk
Management Policy of the Company
Your company is exposed to a variety of risk sconsidering the
diversified business of the subsidiaries which include a coffee
business, technology park business, logistics business, financial
services business and resort business. We conduct a substantial
portion of our coffee and non-coffee business operations through our
subsidiaries. Hence our company''''s income is largely dependent on the
investment income and dividends from our subsidiary. Our success
depends on the value, perception and marketing of our brands, most
particularly the "Cafe Coffee Day" brand. We are also subject to strong
competition in the food & beverage industry and our logistics business.
Details in Respect of Frauds Reported by Auditors under Sub-section
(12) of Section 143:
There were no frauds reported by auditors.
a) Buy back of Securities
The Company has not bought back any of its securities during the year
b) Sweat Equity:
The Company has not issued any Sweat Equity Shares during the year
c) Bonus Shares:
The Board of Directors recommended the issue of bonus shares at the
ratio of 1:7 on May 5th, 2015 and the same was approved by the
shareholders on 8th May, 2015.
d) Employee Stock Option Plan:
The Company has not provided any Stock Option Scheme to the employee.
Your Directors place on record their sincere thanks to Bankers,
business associates, consultants and various Government authorities for
their continued support extended to your companies activities, during
the year under review. Your Directors are grateful to the shareholders
for their support and confidence reposed on your company.
For and on Behalf of the Board
By Order of the Board
Date: 20th May, 2016
For Coffee Day Enterprises Limited
V. G. Siddhartha
Chairman & Managing Director
DIN - 00063987
DIN - 00136524