Coffee Day Enterprises Limited (erstwhile Coffee Day Enterprises
Private Limited) (''''CDEL'''' or ''''the Company'''') was incorporated as a
private limited company under the Companies Act, 1956 on 20 June 2008
by conversion of erstwhile partnership firm M/s Coffee Day Holding Co.
The registered office of the Company is located in Bangalore, India.
The Company converted into a public Company during the year 2014-15.
During the year, the Company undertook an Initial Public Offer of
equity shares and subsequently got the equity shares listed on the
Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) effective
2 November 2015.
CDEL is the holding company of the Coffee Day Group. The Company owns
and operates a resort and also renders consultancy services. The
Company is also engaged in the trading of coffee beans.
1.1 The details of subsidiary companies, joint ventures and associates
of the Company, together with the proportion of shareholding by the
Company are as follows:
The Company leases land for operating the resort under a
non-cancellable operating lease agreement. The Company intends to renew
such leases in the normal course of its business. Total rental expense
under non-cancellable operating lease was Rs. 6.32 million (Previous
year: Rs. 6.32 million).
Future minimum lease payments under non-cancellable operating lease as
at 31 March 2016 are as follows:
3 Related parties disclosures A. Enterprises where control exists
- The related parties where control exists also include subsidiaries as
referred in Note 1.1
IB. Parties which are under common control and with whom transactions
have taken place:
- Sivan Securities Private Limited
- Mysore Amalgamated Coffee Estates Limited
- Coffee Day Global Limited
C. Key management personnel
Executive key management personnel represented on the Board of the
- Mr. V.G. Siddhartha
- Mr. Sadananda Poojary
- Mr. R. Ram Mohan
The non-executive directors on the Board of the Company are:
- Mr. Sanjay Nayar
- Mrs. Malavika Hegde
- Mr. S V Ranganath
- Mr. Albert Hieronimus
- Mr. M D Mallya
4 Segment reporting
The Company is the holding company of the Coffee Day Group. The
subsidiary companies have business interests across multiple sectors
such as coffee and related business, leasing of commercial office
space, financial services, integrated multimodal logistics, hospitality
and IT/ ITeS. Other than being an investment company, on a standalone
basis, the Company owns and operates a resort and also renders
Effective 1 April 2014, the Company has reorganized its business units.
Consequently the financial reporting of the business unit performance
to the Management has also been updated with the new organization
structure. Pursuant to such re-organisation, Hospitality and Investment
operations are identified as reportable business segments.
The accounting principles consistently used in the preparation of the
financial statements are also consistently applied to record income and
expenditure in individual segments.
Assets, liabilities, revenues and direct expenses in relation to
segments are categorised based on items that are individually
identifiable to that segment, while other costs, wherever allocable,
are apportioned to the segments on an appropriate basis. Certain items
are not specifically allocable to individual segments as the underlying
services are used interchangeably. The Company therefore believes that
it is not practicable to provide segment disclosures relating to such
items, and accordingly such items are separately disclosed as
The only geographical segment is India. Since the relevant information
is available from the balance sheet and statement of profit and loss
itself, the Company is not required to disclose the secondary segment
information as per Accounting Standard 17 - Segment Reporting.
5 As per the requirements of Section 71(4) of the Companies Act 2013,
the Company is required to create a Debenture Redemption Reserve
(''''DRR'''') to which adequate amounts shall be credited out of its profits
every year until such debentures are redeemed, and shall utilize the
same exclusively for redemption of a particular set or series of
debentures only. In the absence of profits, the Company has not
transferred any amount to DRR during the year.
6 During the year, the Company has completed the initial public offer
(IPO) and raised a total capital of Rs. 11,500 million by issuing
35,060,975 equity shares of Rs 10 each at a premium of Rs 318 per
share. The equity shares of the Company were listed on the Bombay Stock
Exchange and National Stock Exchange effective 2 November 2015. The
proceeds from IPO is Rs. 10,738.63 million (net of issue expenses).
As per the terms set out in the prospectus on "Utilisation of IPO
Proceeds", the Company was required to utilise IPO proceeds aggregating
Rs 4,100 million towards repayment of existing loan as well as
financing of coffee business in one of its subsidiary company Coffee
Day Global Limited. The Company has transferred IPO proceeds to its
Subsidiary Company by investing in Compulsorily Convertible Debentures
having face value of Rs. 4,100 million. Of the Rs 4,100 million, the
Subsidiary Company has utilized an amount of Rs. 2,459 million towards
repayment of loan and financing of the coffee business and the balance
unutilised amount of Rs. 1,641 million is maintained in fixed deposits
Expenses incurred by the Company aggregating to Rs. 761.37 million
(including service tax), in connection with the IPO have been adjusted
towards the securities premium in accordance with Section 52 of the
Companies Act, 2013, of which Rs.47.37 million is accrued and
maintained in a separate escrow account.
7 Deferred Taxes
In accordance with Accounting Standard 22 - "Accounting for taxes on
income", the management believes that there is no virtual certainty
supported by convincing evidence for recognising deferred tax asset on
business losses incurred during the current as well as earlier years.
8 Corresponding figures for the previous year have been regrouped/
reclassified, where necessary, to conform to the current year''''s