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Coffee Day Enterprises Ltd.

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Feb 01, 16:00
30.55 -1.60 (-4.98%)
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97,585
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92,316
30-Day
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    32.40

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NSE Live

Feb 01, 15:54
30.40 -1.60 (-5.00%)
Volume
AVERAGE VOLUME
5-Day
359,897
10-Day
371,980
30-Day
268,965
136,255
  • Prev. Close

    32.00

  • Open Price

    30.55

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    30.40 (14115)

Annual Report

For Year :
2018 2017 2016 2015

Director’s Report

The Directors have pleasure in presenting their 10th Annual Report on business and operations along with the Audited financial statements and the Auditor''s report of the Company for the financial year ended 31 March, 2018.

Financial Highlights:

Amount in Rs Million

Coffee Day Enterprises Limited

Coffee Day Enterprises Limited

Coffee Day Global Limited

Coffee Day Global Limited

Particulars

(Consolidated)

(Consolidated)

(Consolidated)

(Consolidated)

FY 18

FY 17

FY 18

FY 17

Gross Operational Revenue

43,305

35,519

20,161

17,728

Finance charges

3,491

3,172

683

479

Depreciation

2,604

2,268

1,743

1,633

Profit Before Tax

2,251

1371

647

498

Income Tax

768

555

276

230

Profit attributable to the owners

1,063

470

370

264

PERFORMANCE OVERVIEW

During the fiscal year ended 31 March 2018, consolidated gross revenue grew by 22% driven by strong impetus from Coffee, Financial Services & Multimodal Logistics. The retail gross revenue in coffee business contributed a growth of 12%. Consolidated Profit after tax and exceptional is Rs 1063 Million (Includes Rs 388 Million on account of sale of Global Edge Software Limited) for the year 2018 compared to Profit of Rs 470 Million for the previous year.

A detailed performance analysis is provided in the Management Discussion and Analysis segment which is annexed to this report.

STATE OF THE COMPANY''S AFFAIRS

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

DIVIDEND

The Board of Directors of the Company does not recommend any dividend for the financial year 2017-18.

TRANSFER TO RESERVES:

In accordance to the provisions of Section 134(3)(j) of the Companies Act, 2013, (hereinafter the Act) the Company has not proposed any amount to transfer to the General reserves of the Company for the financial year 2017-18.

CHANGES IN SHARE CAPITAL:

During the year under review, the paid-up equity share capital of the Company increased from Rs. 2,06,00,17,190/to Rs. 2,11,25,17,190/- pursuant to the Scheme of Amalgamation filed under Section 230 to 232 of the Act, whereby the Company has allotted 52,50,000 equity shares to the shareholders of Coffee Day Overseas Private Limited by virtue of final order dated 31 August 2017 passed by National Company Law Tribunal (NCLT).

With reference to the above, the said number of equity shares has been admitted for listing and trading purpose on both National Stock Exchange and Bombay Stock Exchange effective from 28 December 2017 and 29 December 2017 respectively.

MERGER U/S 233 OF THE ACT W.R.T. ''MATERIAL SUBSIDIARY'' OF THE COMPANY:

In line with the provisions of Section 233 of the Act and Rule 25(5) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, the Regional Director (RD) of Hyderabad had issued the order dated 30 January 2018 and approved the merger of Coffee Day Global Limited (''Material Subsidiary'') and its subsidiary Companies, namely Amalgamated Holdings Limited, Coffee Day Properties (India) Private Limited and Ganga Coffee Curing Works Limited.

DEPOSITS:

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

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

As on 31st March 2018, the Company has 45 subsidiaries (including indirect subsidiaries), 3 Associate Companies and 3 Joint Ventures. The details of the Companies which have become or ceased to be the Company''s Subsidiaries, Associate Companies or Joint Ventures are mentioned in “Form AOC-1”, which is attached as an “Annexure to the Consolidated Financial Statements.” A statement containing the salient features of the financial statements of Subsidiaries, Associate Companies or Joint Ventures are mentioned specifically in the same annexure as mentioned above. In accordance with Section 136(1) of the Act, the financial statements of the subsidiary companies are available on the Company''s official website post approval of the members.

In line with Regulation 24 and Regulation 46(2)(h) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (hereinafter the Listing Regulations) the Company has formulated a detailed policy for determining ''material'' subsidiaries and the said policy is available on the Company''s official website and may be accessed at the link: http://www.coffeeday.com/PDF/ MATERIAL-SUBSIDIARIES.pdf

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

As stated in Regulation 34(2)(e) of the Listing Regulations, the Annual report shall contain a detailed report on Management Discussion & Analysis, which is hereto attached with the Annual report in Annexure-1.

CORPORATE GOVERNANCE:

The report on Corporate Governance along with a Certificate from the Practicing Company Secretary regarding proper compliance of Corporate Governance pursuant to the requirements of Schedule V of the Listing Regulations forms an integral part of the Annual Report stated in Annexure-2.

DIVIDEND DISTRIBUTION POLICY:

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016, the Board of the Company has adopted Dividend Distribution policy in their meeting held on 18th May 2017, which aims at marking the right balance between the quantum of dividend paid to its shareholders and the amount of profit retained for its commercial requirements. The said policy is annexed with this Report as Annexure-3.

BOARD DIVERSITY:

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

BOARD EVALUATION AND POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION:

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

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

APPOINTMENT/ RESIGNATION/ RE-APPOINTMENT OF BOARD OF DIRECTORS

There has been no change in the Composition of the Board this year.Mr. Sanjay Omprakash Nayar shall retire by rotation at the ensuing Annual General meeting and is eligible for re-appointment

DIRECTOR''S RESPONSIBILITY STATEMENT

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

(a). In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b). The Directors have 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 have 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 have prepared the annual accounts on a going concern basis; and

(e). The Company is responsible for establishing and maintaining adequate and effective internal financial controls with regard to its business operations and

in the preparation and presentation of the financial statements, in particular, the assertions on the internal financial controls in accordance with broader criteria established by the Company.

Towards the above objective, the directors have laid down the internal controls based on the internal controls framework established by the Company, which in all material respects were operating effectively as on 31st March 2018.

(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.

DECLARATION BY INDEPENDENT DIRECTORS:

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

COMMITTEES OF THE BOARD:

The Company has four main Committees of the Board i.e.:

(a). Audit Committee

(b). Nomination and Remuneration Committee

(c). Stakeholder''s Relationship Committee and

(d). Corporate Social Responsibility Committee.

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

AUDIT COMMITTEE:

The Board has constituted an Audit Committee comprising of Mr. S.V. Ranganath as Chairman, Dr. Albert Hieronimus and Mr. V.G. Siddhartha as its Members. There have been no instances during the year where recommendations of the Audit Committee were not accepted by the Board. The details of the composition of the Board and its Committees and number of meetings held and attendance of Directors at such meetings are provided in the Corporate Governance Report, which forms part of the Annual Report.

MEETINGS OF THE BOARD:

During the financial year 2017-18, the meetings of the Board of Directors were held Five (5) times. Details of these meetings and other Committee/General meetings are given in the report on Corporate Governance Report attached with the Annual report.

PARTICULARS OF CONTRACTS/ ARRANGEMENTS WITH RELATED PARTIES:

All Related Party Transactions that were entered into during the FY 2017-18 were on an arm''s length basis and in the ordinary course of business. There were no materially significant Related Party Transactions made by the Company during the year that required shareholders'' approval under Regulation 23 of the Listing Regulations. Prior omnibus approval from the Audit Committee is obtained for transactions which are repetitive in nature. Further, disclosures are made to the Committee on a quarterly basis. None of the transactions entered into with related parties falls under the scope of Section 188(1) of the Act and hence there is no such requirement to enclose ''Form AOC-2'' pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014.

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

MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY FROM THE END OF THE FINANCIAL YEAR TILL THE DATE OF THIS REPORT:

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

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 information on conservation on energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is provided in Annexure-4 to this Annual report.

AUDITORS:

a) Statutory Auditors:

As per the provisions of the Act, the period of office of M/s B.S.R & Co. LLP, Chartered Accountants (ICAI FRN: 101248W/ W-100022), Statutory Auditors of the Company, expires at the conclusion of the ensuing Annual General Meeting. It is proposed to appoint B.S.R. & Associates. LLP Chartered

Accountants (ICAI FRN: 116231W/W-100024), for a term of 5 (five) consecutive years and have confirmed their eligibility and qualification required under the Act for holding the office, as Statutory Auditors of the Company.

b) Secretarial Auditor:

In accordance with Section 204 of the Act and the rules made there under, the Company has appointed M/s HRB & Co. to undertake the Secretarial Audit of the Company for the financial year ended 31st March 2018. The Secretarial Audit report issued in this regard is attached as Annexure-5.

c) Cost Auditor:

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

d) Internal Auditor:

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

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS/REGULATORS:

a) National Company Law Tribunal (NCLT)

Pursuant to the Scheme of Amalgamation filed under Section 230 to 232 of the Act, the National Company Law Tribunal has passed the final order dated 31st August 2017 and the Company has allotted 52,50,000 Equity shares to the Shareholders of Coffee Day Overseas Private Limited.

b) Regional Director, Hyderabad w.r.t. its Material Subsidiary, Coffee Day Global Limited:

In line with the provisions of Section 233 of the Act and Rule 25(5) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, the Regional Director (RD) of Hyderabad had issued the order dated 30th January 2018, and approved the merger of Coffee Day Global Limited (''Material Subsidiary'') and its subsidiary Companies, namely Amalgamated Holdings Limited, Coffee Day Properties (India) Private Limited and Ganga Coffee Curing Works Limited.

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-6 to this Report.

BUSINESS RESPONSIBILITY REPORT:

In compliance with the Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility Report forms a part of this Annual Report as Annexure-7.

SECRETARIAL STANDARDS:

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

INTERNAL FINANCIAL CONTROL (IFC) AND ITS ADEQUACY:

The internal controls of the Company operate through well documented standard policies and guidelines.

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

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

The Company''s management has assessed the effectiveness of the internal control over financial reporting for the year ended 31st March 2018 and based on the assessment, believe that the system is working effectively. The Statutory Auditors have issued a report on the adequacy and effectiveness of the internal control systems over financial reporting.

WHISTLEBLOWER POLICY/VIGIL MECHANISM:

As per the requirements laid down under Section 177 of the Act and Regulation 22 of the Listing Regulations, the Company has established the Whistleblower Policy which encourages Directors and employees to bring to the Company''s attention, instances of unethical behavior, actual or suspected incidents of fraud or violation of the Company''s Code of Conduct that could adversely impact on Company''s operations and business. The Policy provides that the Company investigates such incidents, when reported in an impartial manner and takes appropriate action to ensure that requisite standards of professional and ethical conduct are always upheld. The practice of the Whistleblower Policy is overseen by the Audit Committee and no employee has been denied access to the Committee. The Whistle Blower Policy is available on the Company''s official website and may be accessed through the web link: http://www.coffeeday.com/PDF/

PARTICULARS OF EMPLOYEES:

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

Disclosure pertaining to the remuneration as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in Annexure-8.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Pursuant to the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, and on the recommendations of the CSR Committee comprising of Mr. S.V. Ranganath as the Chairman and Mr. V.G. Siddhartha and Mrs. Malavika Hegde as Members, the CSR policy is adopted and approved by the Board of the Company. The said policy has been hosted on the Company''s website and is available on the link: http://www.coffeeday.com/PDF/CSR-Policy-CDEL.pdf. It lays down the purpose of formulation of the policy, areas of focus, composition of the Committee, responsibilities of the Board of Directors, and CSR budget. It also contains the CSR activities which can be carried out by the Company, governance structure and through implementation process.

GREEN INITIATIVES:

In commitment to keeping in line with the Green Initiative and going beyond to it, an electronic copy of the Notice of the 10th Annual General Meeting of the Company is sent to all Members whose email addresses are registered with the Company/Depository Participant(s). For members who have not registered their e-mail addresses, physical copies are sent through the permitted mode.

PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE:

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

During the financial year 2017-18, the Company has not received any complaints on sexual harassment.

BOARD''S RESPONSE ON AUDITORS QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE:

For the financial year 2017-18, there are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report or by the Practicing Company Secretary in the Secretarial Audit report of the Company.

RISK MANAGEMENT AND ASSESSMENT:

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

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12):

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

STATUTORY DISCLOSURES:

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

GENERAL DISCLOSURES:

a) Buy back of securities

In accordance with Section 68 of the Act, 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 under the provisions of Section 54 of the Act.

c) Bonus Shares:

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

d) Employee Stock Option Plan:

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

ACKNOWLEDGEMENT:

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

Place: Bangalore

Date: 09th August, 2018

For Coffee Day Enterprises Limited

Sd/- Sd/-

V. G. Siddhartha Malavika Hegde

Chairman & Managing Director Director

DIN: 00063987 DIN: 00136524

Director’s Report